KHABAROVSK: Rosneft signed its second major agreement with BP since sanctions were imposed on the Russian oil company’s chief executive, a close ally of President Vladimir Putin, over the Ukraine crisis.
The five-term agreement, signed in Khabarovsk in Russia’s far east in the presence of BP’s Chief Executive Officer
Bob Dudley, will supply the
British company with up to 12 million tonnes of oil products which can be replaced by oil, Rosneft said.
It said the deal assumed a prepayment of at least $1.5bn which had been arranged by leading global financial institutions. Rosneft did not disclose the name of the banks but said supplies could start in July.
The signing followed an agreement in by BP and Rosneft in May to jointly explore for tight oil in Russia.
Rosneft Chief Executive Officer Igor Sechin is one of several Russian officials who had a visa ban and asset freeze imposed on them by the United States after Russia annexed the Black Sea peninsula of Crimea from Ukraine in March.
“I am working here with Rosneft. Its a business between the companies. I don’t comment on personal sanctions,” Dudley told reporters in Khabarovsk.
Rosneft itself has not had any sanctions imposed on it over the Ukraine crisis, in which Moscow denies Western accusations of orchestrating an uprising by pro-Russian separatists in east Ukraine that followed the
annexation of Crimea and the overthrow of a Ukrainian president sympathetic to Russia.
The sanctions have had a limited impact on the Russian energy sector, a cornerstone of the country’s $2-trillion economy, resulting mostly in higher borrowing costs for domestic companies.
Following the Western sanctions, which have also been imposed on a number of Russian companies, Lloyds Bank, which is part-owned by the British government, withdrew from a $1.5bn-$2bn trade finance deal involving Rosneft.
Lloyds, along with Deutsche Bank, HSBC and Bank of China, was a mandated lead arranger on the loan to finance BP’s purchase of crude oil and refined products from Rosneft, banking sources said. In an interview this month, Sechin said he saw “nothing dramatic” in Lloyds’ decision to pull out of the deal.
Last year, Rosneft announced deals worth more than $15bn to sell crude oil and other products to BP, a related party that owns almost one-fifth of the state-controlled oil company.
The prepayment deals have raised billions of dollars for Rosneft, which borrowed $30.1bn to finance its purchase of TNK-BP — a venture between BP and Russian oligarchs which was once Russia’s third largest oil producer — in two separate loans in 2012 and 2013.
Last year, Rosneft agreed an $8.32bn loan with commodity traders Glencore and Vitol and a $1.5bn prepayment loan with Swiss-based trading house Trafigura.
Reuters
