Story by Bloomberg

Petroleo Brasileiro SA, the world’s most indebted oil producer, is turning to China for funding as a corruption scandal keeps it out of international bond markets.

Petrobras, as Brazil’s state-run driller is known, signed a contract with the China Development Bank as part of a $3.5 billion agreement to be implemented this year and next.

“Both parties confirmed their intention to work on further cooperation in the near future,” the Rio de Janeiro-based company said in a regulatory filing Wednesday.

Petrobras is slashing investments, selling assets and seeking alternative financing options as it grapples with ways to book corruption losses in its financial statements. Delays in reporting earnings have all but shut out the company from bond markets at a time of slumping crude prices.

Brazil’s President Dilma Rousseff said Tuesday that Petrobras’ recovery process would proceed by publishing a long-delayed audited financial statement by the end of April. In an exclusive interview in the presidential palace in Brasilia, Rousseff denied that she knew about the bribery that has shaken the company she chaired from 2003 to 2010.

The CDB contract was signed with Petrobras Global Trading BV during a trip to China by Ivan Monteiro, the Brazilian company’s chief financial officer.

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