China will now have a direct interest in upgrading and expanding Russian oil infrastructure targeted by US sanctions
Chinese state-controlled Huarong Asset Management has bought a 36.2 percent stake in the unit of CEFC China Energy through which CEFC is acquiring a $9.1 billion stake in Russian oil giant Rosneft.
According to CEFC filings seen by Reuters, Huarong has bought the stake in CEFC in two tranches, one in December and one in February. Huarong is controlled by China’s Ministry of Finance.
In September, CEFC Energy announced plans to acquire 14.16 percent of Rosneft shares from Glencore and the Qatar Investment Authority (QIA).
“The final structure of Rosneft's shareholders has been formed,”Rosneft CEO Igor Sechin told Rossiya 24 television.
As part of a long-term agreement, Rosneft and CEFC Energy inked a deal on crude oil deliveries in 2017. According to the agreement, the Russian oil major will supply CEFC with 60.8 million tons of oil annually until 2023.
The agreement covers the development of exploration and production projects in Siberia. The two companies plan to cooperate in refining, petrochemicals and crude trading.
According to the Russian producer, the deal will increase direct supplies of crude oil to the “strategic Chinese market and ensure a guaranteed cost-efficient export channel for the company's crude sales.”