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Russia’s state-run oil group Rosneft has agreed to supply its new partner CEFC China Energy with almost 61m tonnes of oil over the next five years, strengthening the most high-profile corporate link in the burgeoning relationship between Moscow and Beijing.

Russia has been keen to build stronger ties with its eastern neighbour as relations with the west have soured in recent years, encouraging its energy companies to strike trade and investment deals with Chinese partners and seeking funding from Chinese lenders to make up for credit lines severed by EU and US sanctions.

At the same time, China, which is the world’s largest oil importer, views Russia’s vast energy resources as useful for creating a fully-integrated crude supply chain.

Rosneft will supply CEFC, a private energy and financial services group that has grown rapidly in recent years thanks to overseas investments, with 60.8m tonnes of crude between 2018 and 2022, at a price determined by a formula pegged to the global oil market.

The deal will help Russia retain its current leadership over Saudi Arabia as China’s largest oil supplier, and represents a swift return on CEFC’s investment in Rosneft agreed in September.

CEFC is in the process of becoming a shareholder in Rosneft, having agreed to buy 14.16 per cent of the company for $9.1bn. The two companies have also said they will investigate joint projects in retail sales and petrochemical production.

The supply deal will also boost CEFC’s status as an oil trader, giving it access to about 244,000 barrels a day of crude. While that is small in comparison to global trading companies such as Glencore and Vitol, it will give CEFC significant clout in the Chinese market.

The deal, which will come into force on January 1, was agreed by Rosneft’s board on Friday, the company said in a filing. CEFC did not respond to a request for comment.

Over the past 18 months, Chinese companies have spent almost $15bn on Russian energy projects, including CEFC’s decision this month to invest $500m in EN+, the Russian metals and energy group owned by Oleg Deripaska, through an associated venture.

State-owned China National Petroleum Corporation also owns a 20 per cent stake in Russia’s $27bn Yamal LNG production project, and Chinese lenders put up $12bn of the costs after western sanctions cut off access to European and US finance.

Russia is also in the process of building a new gas pipeline to China, with a view to $400bn worth of supply deals over 30 years.

Separately, Rosneft said on Monday that it had signed an agreement with Greece’s Motor Oil Hellas that could see the company increase its annual imports of crude and crude products from the Russian supplier to 7.5m tonnes over the next five years, from 2m this year.

Additional reporting by David Sheppard in London

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