Peter O’Brian, chief of financial advisors of Rosneft president
Photo: Dmitry Dukhanin
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Rosneft Warns the Chinese
For the first time, Russia’s state-controlled Rosneft has declared it won’t renew the crude supply contract with China’s CNPC after 2010. The contract gives discount to the market price and was inked when Rosneft needed the funds to buy out Yuganskneftegaz. Nowadays, however, the company has five refineries of Yukos and is quite able to refine more crude in Russia.
Rosneft won’t extend the crude supply contract with CNPC after it expires in 2010 unless the terms are changed, Peter O’Brian, who leads a group of financial advisors of Rosneft president, announced during the Reuters Russian Investment Summit.
“The current contract we have is really not competitive with other netback options. We will not extend it as such after 2010,” Peter O’Brian said as quoted by Reuters.
According to a source with Rosneft, the cost of contract supplies is established based on the Brent market price, but some discount is specified. The negotiations with Chinese for changing the terms are underway, but no details have been agreed on.
The contract for supplying 48.4 million tons of crude oil to China guarantees the loan of $6 billion spent by Rosneft to buy out Yuganskneftegaz in 2004. It provides for shipping 4 million tons in 2005 and 8.88 million tons each following year till and through 2010.
www.kommersant.com
All the Article in Russian as of Sep. 12, 2007
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