Miner BHP Billiton is in talks with Petrobras to buy a stake in the Brazilian energy giant's Gulf of Mexico oil fields, according to an article in the Wall Street Journal published late Wednesday night.

Petrobras, the Brazilian state-owned oil company, has reportedly valued its US offshore fields at approximately $8bn and enlisted Morgan Stanley to find a buyer for some of these assets.

Reports in the Financial Times earlier in the week had suggested that Petrobras had narrowed the field to three possible bidders.

BHP Billiton, a FTSE-100 constituent, was down slightly in early morning trade. However, this is maybe a delayed reaction to concerns over the effects of a slowdown in China.

On Wednesday Sharecast reported that Bloomberg had cited ex-Morgan Stanley Chief Economist for Asia, Andy Xie, as forecasting that prices for iron ore - which reached a record $191.90 a metric ton on Feb. 16 last year - may plunge as low as $50 a tonne before the middle of next year. They haven't traded at that level since contract prices were set at $47 a ton in 2006.

Morgan Stanley, while reiterating its 'overweight' recommendation has also lowered its price target for BHP Billiton from 2,180p to 2100p.

CM

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