BEIJING: OAO Rosneft has signed a $270 billion supply deal with China National Petroleum Corp., making the Asian nation Russia’s biggest market for oil.
State-run Rosneft, the biggest publicly traded oil producer by output, will get a $70 billion prepayment under the deal, and will supply about 360 million metric tons of crude to China over 25 years, President Vladimir Putin said today at the St. Petersburg International Economic Forum, Bloomberg reported.
The deal, following a government accord in April, will redirect Russia’s oil away from Europe, where demand is stagnant, to the world’s second-biggest crude market after the U.S. Rosneft became the biggest producer by output after buying TNK-BP for $55 billion this year.
Russia produced 518 million tons of oil last year, or almost 10.5 million barrels a day.
Rosneft Chief Executive Officer Igor Sechin signed the deal today at a ceremony overseen by Putin.
The prepayment is more than Rosneft’s net debt, which surged to 1.78 trillion rubles or $54 billion at the end of March, following the acquisition of TNK-BP.
Rosneft and China Development Bank completed documents for a long-term $2 billion loan under an accord signed March 2013 and secured by a 2009 crude oil supply contract, the Moscow-based company said today. (QNA)
