Russia’s Rosneft enters oil supply deal with Chinese firm

Russia’s largest oil producer Rosneft has entered into a five-year crude oil supply deal with CEFC China Energy Company Limited. 

CEFC China is a private collective enterprise with energy and financial services as its core business.

State-owned Rosneft said on Monday that its board of directors had agreed to supply the Chinese company with 60.8 million tons of oil over the five-year period.

Deliveries will start from January 1, 2018, the Russian company added in a brief regulatory filing on Monday.

According to a report by Reuters, this deal will make CEFC a top-10 global oil merchant and a dominant player in the ESPO crude market.

The oil supply contract comes only two months after CEFC bought a 14.2 percent stake in Rosneft in a deal valued over $9 billion, the Financial Times reported.

Rosneft’s partnership with CEFC China includes a strategic cooperation framework agreement signed back in August. With this deal, the two companies agreed to expand opportunities for investment in the Chinese market and Asian-Pacific region and create favorable conditions for the Chinese and Russian energy industry and economic trade cooperation.

In related news, Rosneft earlier this week completed drilling of “the world’s longest well” from the Orlan platform at Chaivo field in the Sea of Okhotsk. The length of the well with horizontal completion was 15,000 meters which, according to the company, was a world record.

Offshore Energy Today Staff