* Rosneft wants to raise up to $30 bln from China
* Russia may double oil deliveries to China
* Share of oil deliveries to Europe steadily decreasing
By Dmitry Zhdannikov and Vladimir Soldatkin
LONDON/MOSCOW, Feb 13 Rosneft is
seeking to borrow up to $30 billion from China in exchange for
possibly doubling oil supplies, making Beijing the largest
consumer of Russian oil and further diverting supplies away from
Four industry sources familiar with the situation told
Reuters Rosneft was in talks with China's state firm CNPC about
the borrowing, which would echo a $25 billion deal the two
companies clinched last decade.
Back then, Rosneft and Russian pipeline monopoly Transneft
borrowed money to help Rosneft acquire the assets of
nationalised oil producer YUKOS while agreeing to build a
pipeline to supply China with 300,000 barrels per day for 15
This time, Rosneft wants to borrow money as it is close to
completing a $55 billion acquisition of rival TNK-BP to become
the world's largest oil producer among publicly traded firms.
Russia's leading oil company, controlled by the Kremlin, is
considering ultimately doubling supplies to China, sources said.
"It can be a combination of delivery options. The strategic
line is to increase supplies to China," one source familiar with
the situation said.
"The reason why China is willing to lend is simple. They sit
on over 3 trillion of dollars in reserves and are looking to
diversify their investments," he added referring to China's
forex reserves of $3.3 trillion.
Rosneft and CNPC declined comment.
The first loan-for-supply deal between the two companies
connected directly for the first time the world's largest energy
producer and consumer.
It came after a number of energy disputes between Russia and
its neighbours which cut gas and oil supplies to Europe several
times, drawing criticism and calls from the European Union for
diversification away from Russian energy resources.
Russian President Vladimir Putin retaliated by saying Moscow
would divert more energy resources to Asia.
Since then Russia has been steadily increasing crude exports
to Asia at the expense of deliveries to Europe with flows due to
amount to around 15 percent of total Russian oil exports this
year via pipelines to China and to the Pacific coast.
Should deliveries to China double, the share of Russian
exports to Asia will amount to over a fifth of overall exports
by the world's largest oil producer and the second largest
exporter after Saudi Arabia.
Energy relations between Moscow and Beijing has been,
however, complicated in the past years by disputes over oil
shipping tariffs along the existing pipeline.
They were ultimately resolved after Russia agreed to apply a
discount on supplies. The head of Russia's pipeline monopoly
Transneft, Nikolai Tokarev, said this week deliveries to China
would rise over time.
"We are neighbours and we need to develop ties, especially
given that China has a crazy oil deficit," he told business
Sources said it would take considerable time before a final
deal was reached and differences over various delivery options
The first source said discussions centred around doubling
capacity of the existing pipeline to China by building a
parallel link. Volumes could be also topped up with deliveries
from the Pacific port of Kozmino.
"Building a parallel link is certainly not nearly as
expensive as building the first one from scratch," he said.
A second source said a second link might be an overly
expensive option and Russia could opt to increase the throughput
capacity of the existing pipeline by adding pumping stations.
A third industry source said China was ready to lend as long
as Rosneft agreed to ship more oil via Kazakhstan's existing
pipeline to China, which would soon be short of volumes due to
depletion of some Kazakh fields.
However, Transneft fiercely opposes the plan as it would cut
its transport earnings.
Whatever the plan, the loan might be a pressing issue for
It needs to borrow up to $40 billion to complete the TNK-BP
acquisition. It has managed to cover its most immediate needs by
lining up a syndicated loan as well as a $10
billion financing from traders Vitol and Glencore.
But Rosneft also needs dozens of billions of dollars to
launch new huge fields in Russia's Arctic and finance a $25
billion refinery modernisation programme.
(Additional reporting by Alexander Ershov and Melissa Akin;
Editing by William Hardy)