Russia’s largest state oil major, Rosneft, along with CEFC China Energy Company, sealed a strategic cooperation deal for the joint development of oil and gas projects in Siberia at this year’s BRICS summit, the Russian company said in a press release.
In addition to joint upstream project development, the deal covers cooperation in other segments of the industry, including oil refining, petrochemicals production, and crude oil and oil product trade. No details about the value of the deal were disclosed.
CEFC China Energy is the largest private energy business in China and has been investing heavily both at home and abroad, including projects in Central Asia, Eastern Europe, and the Middle East. At home, the company has been buying and building oil storage capacity. CEFC has even been entrusted with storing part of China’s strategic petroleum reserve.
Besides its energy business, CEFC is also active in financial services and online insurance.
Earlier this month, Reuters said in an exclusive report that the Chinese company was in early talks to acquire a stake in Rosneft. Three sources close to the talks said these were preliminary, and it was unclear whether CEFC would buy existing stock or newly issued shares in the state giant.
One of the sources said CEFC could buy into the retail business of Rosneft, which includes a network of almost 3,000 filling stations, more than 1,000 gasoline tankers, and 150 crude storage facilities.
Russia is already the top supplier of crude oil to China, and securing long-term supply channels for future output, a lot of it from new fields in East Siberia, makes sense for Rosneft. The partnership makes equal sense for CEFC as part of its aggressive international expansion, which could in time make it a direct rival of majors such as Glencore and Trafigura.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.