Rosneft in Talks to Increase Oil Supply to China

18.02.2013 -

Russia's top crude producer Rosneft said its chief executive had started talks in China over the possibility of increasing oil supplies to the world's largest energy consumer.

The company also said on Monday it was in talks with Chinese companies about possible joint development of Russian offshore oil and gas deposits.

Last week, industry sources told Reuters Rosneft was seeking to borrow from Chinese state firm CNPC in exchange for possibly doubling oil supplies, which would make Beijing the largest consumer of Russian oil and divert supplies away from Europe.

Rosneft said it was not in talks about obtaining a loan from China.

The company said on Sunday that CEO Igor Sechin, a powerful ally of Russian president Vladimir Putin, met Chinese Vice Premier Wang Qishan in Beijing.

"The sides have discussed a wide range of issues about increasing oil supplies to the People's Republic of China as well as participation of the companies in mutual work in upstream and downstream sectors, both in Russia and China," Rosneft said in a statement.

Russia, the world's largest oil producer and the second-largest exporter after Saudi Arabia, is already supplying China with 300,000 barrels per day of crude oil via a pipeline.

A doubling of deliveries to China would swell Russia's exports to Asia to more than a fifth of its overall exports.

On Monday the company said it had discussed the possibility of joint development of Russia's shelf with Sinopec and CNPC, parent of refiner PetroChina.

Rosneft also said that it and Chinese offshore oil and gas specialist CNOOC had held talks about the possibility of participation in joint projects to tap undersea deposits.

Rosneft had earlier signed deals with ExxonMobil, Statoil and Eni to tap Russia's vast Arctic offshore reaches.

Rosneft also said that Sechin offered to study a possible partnership with China in developing liquefied natural gas (LNG) after the state-controlled company and Exxon agreed last week to consider a project to build an LNG plant on the Pacific island of Sakhalin.

Rosneft had offered CNPC participation in offshore projects in the past, including some blocks in the Okhotsk Sea near the Far Eastern city of Magadan, but no agreement was ever reached.