Rosneft gives China access to East Siberia oil

18th October 2013, Comments 0 comments

Russia's top oil producer Rosneft signed a memorandum on Friday giving the world's largest crude importer China its first direct access to East Siberian energy fields.

The preliminary agreement with China National Petroleum Corp (CNPC) aims to help Rosneft meet the terms of a $270-billion deal signed in June doubling Russia's oil exports to its giant neighbour over 25 years.

Analysts believe that the state-owned Russian company -- the world's largest listed oil firm by output -- needs to make huge investments in its untapped East Siberian fields in order to meet the Chinese demand.

The agreement announced by Rosneft on Friday will give Rosneft a 51-percent stake and CNPC a 49-percent holding in a joint venture for upstream developments.

The venture will begin by expanding production at the Srednebotuobinsk field that Rosneft acquired fully on Monday and which sits close to the ESPO pipeline running across Eastern Siberia to China.

"The memorandum is another step in developing the strategic partnership between Rosneft and CNPC in various areas of cooperation," Rosneft chief executive Igor Sechin said in a statement.

"Our balanced strategic position will enable us to jointly develop and produce hydrocarbons, execute long-term supplies, jointly construct refining capacity and manage various assets," said Sechin.

Russia until now has resisted giving China direct stakes in its oil fields and instead preferred to sign long-term contracts in exchange for loans.

The deal signed in June in the presence of Russian President Vladimir Putin and Chinese Vice Premier Zhang Gaoli saw Rosneft receive a $70-billion upfront payment from CNPC for its promise to raise exports to by 300,000 barrels per day.

Rosneft said the Srednebotuobinsk field has oil and gas condensate reserves of more than 134 million tonnes. The deposit is also believed to hold over 155 billion cubic metres of gas.

© 2013 AFP

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