UPDATE 3: Rosneft to export 10 mln tns of oil per year to China’s CEFC

(Adds details in ninth paragraph)

VERONA, Oct 19 (PRIME) -- Russian oil major Rosneft will export 10 million tonnes of crude oil per year to CEFC China Energy under a five-year oil supply contract signed in early September, CEFC Executive Director Li Yong said on Thursday during the Eurasian Economic Forum.

“We’ve signed a five-year agreement on supplies of 10 million tonnes of crude per year,” he said.

He also said that the two companies signed a strategic agreement on gas cooperation. “We signed a new strategic agreement with Rosneft not so long ago on cooperation in the sphere of natural gas production…It adds a new direction for cooperation between CEFC and Rosneft. We will process gas and ensure further downstream chain,” he said.

“We signed a preliminary agreement on several issues regarding the purchase rights for fields that are under Rosneft’s management,” he said speaking about cooperation of the companies in oil production.

Rosneft said in early September that it had also signed a deal to cooperate with CEFC China Energy on projects to produce oil in West and East Siberia, which also envisages cooperation in oil refining and the petrochemical industry, oil and oil products trading.

Rosneft CEO Igor Sechin said that the company may prolong the contract. “Speaking about preparations of prolongation of the five-year contract – yes, we are preparing this prolongation. Volumes will be adjusted depending on the possibilities on free transportation capacities,” he said.

Currently, Rosneft is working on export routes for 10 million tonnes of oil per year to CEFC with Russian oil pipeline monopoly Transneft.

“We will supply it through any possible route, through all possible routes that have free capacities. We understand the volume at this stage. We are working with Transneft and with other transportation companies, and we will fulfill our liabilities,” he said.

Taking into account current Rosneft’s exports of oil to China and the contract with CEFC, the company will export 50 million tonnes of oil to the country in 2018, Sechin added.

Yong also said that Russia’s second largest bank VTB and China Development Bank will provide loans to CEFC to buy a stake in Rosneft.

On Monday, Swiss commodity trader Glencore said that CEFC will pay 3.906 billion euros and an equivalent of U.S. $4.576 billion to a consortium of the trader and Qatar’s sovereign fund Qatar Investment Authority (QIA) for 14.16% in Rosneft.

“Speaking of financing, it will be received in two directions. First, VTB will provide a loan, it will be a state loan. China Development Bank will partake in the second stage of financing, it will be a Chinese state loan,” Yong said.

End