Rosneft, Gazprom Sign Major New Supply Contracts with CNPC

By Ben Priddy, March 26, 2013

CNPC was granted exploration rights at three offshore areas in Rosneft's Arctic zones. The Chinese company will be allowed to work in the Zapadno-Prinovozemelskiy field in the Barents Sea and in the Yuzhno-Russkiy and Medynsko-Varandeyskiy fields in the Pechora offshore basin. Rosneft also invited CNPC to participate in eight additional unspecified projects in Eastern Siberia, according to Russian energy news website OilCapital.ru. CNPC will become Rosneft's third foreign partner in the Barents Sea, following prior agreements with Eni and Statoil. Rosneft has also invited ExxonMobil to participate in projects in the Kara Sea.

Itar-Tass, citing an unnamed source, reported that Rosneft is also planning to attract an $8-10 billion loan advance from CNPC and its subsidiaries, in addition to a 25-year $2 billion line of credit offered to the Russian company by China's Development Bank last week in Moscow. Rosneft plans to direct the funds towards infrastructure development at its East Siberian Bankorskoye oilfield and to the company's natural gas program, which it announced in mid-February after acquiring an estimated 21 trillion cubic meters of gas in 12 new offshore Arctic development licenses.

Sinopec also took part in negotiations with Rosneft, signing several protocols with the Russian company aimed at increasing bilateral cooperation in oil refining and petrochemicals projects, as well as potential long-term LNG projects, according to several Russian news sources.

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