Chinese state owned oil company Sinopec has acquired a 40% stake in Spanish energy giant Repsol's operations in Brazil.
China has been expanding its global presence to guarantee its supply of energy for the future.
It means that the subsidiary, Repsol Brasil, now has enough money to develop its major offshore assets in the Guara and Carioca basins, near Rio de Janeiro and Sao Paulo, the BBC reports.
The Spanish company will retain the 60% controlling stake the company.
The agreement leaves the two oil giants free to compete with each other for new business in Brazil.
Last week, Brazil's state oil company Petrobras raised $US70 billion in the world's largest public share offering, to fund exploration in the waters off the country's south-eastern coast.
