NK Rosneft OAO, Russias state-owned and largest crude oil producer, is offering a stake in one of the companys biggest oil projects to China. The move comes as relations with the West sour over the crisis in Ukraine, and Moscow looks to new friends.
Russian President Vladimir Putin revealed the proposed acquisition on Monday, as Mr Putin and China Vice Premier Zhang Gaoli marked the start of the construction of a gas-pipe from Russia to China, part of a $400bn gas deal between the two countries.
“Mr. Sechin [CEO of Rosneft] said he has proposed that you [China] become a shareholder in one of our biggest oil production companies; the state authorities support this idea and we would welcome your participation. Overall, we take a cautious approach to letting in our foreign partners, but we of course set no restrictions for our Chinese friends. The state authorities support this idea and we would welcome your participation.”
Rosneft will probably propose about a 49% stake to China at the price in the range of between $4 to $5 billion, Valery Nesterov of Sberbank Investment Research said for Bloomberg. Mr. Nesterov explained that currently Vankor is the second-biggest oil producing project with nearly 500 million metric tons of recoverable reserves.
“China is a reliable partner, I can assure you. Now everything is under your control,” Mr Zhang said.
Rosneft manufactured about 440 000 barrels on a daily basis at its Vankor project over the second quarter of the fiscal year. This production represents about 4% of Chinas demand.
NK Rosneft OAO added 1.33% to trade at RUB229.00 per share by 6:14 GMT, marking a one year change of -6.23%. The company is valued at RUB2.40 trillion.
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