* Talks ongoing for several weeks about trade finance deal
* Rosneft needs over $40 bln to buy TNK-BP, invest in
* Deal would give majors, traders long-term access to
By Dmitry Zhdannikov and Melissa Akin
LONDON, Dec 13 Russia's Rosneft is
talking to oil majors and traders including Shell, Total and
Glencore to raise up to $10 billion, using future oil exports as
collateral, to complete its purchase of TNK-BP and become the
world's biggest listed oil producer.
Such trade finance is usually the least preferred option for
oil firms, as they like to keep their export flows free from
obligations, but the $55 billion acquisition of TNK-BP, a joint
venture between BP and Soviet-born billionaires, will
most likely be testing banks' exposure limits for one borrower.
Five sources close to Rosneft and the potential lender
companies told Reuters that talks between Rosneft and its
traditional oil buyers such as Royal Dutch Shell, Total
, Glencore and Vitol had been going on for
several weeks, with Rosneft collecting proposals on the amount
of money and terms from the companies.
Sources said the list of lenders could also include BP,
which may be keen to facilitate an end to its often fractious
Rosneft did not immediately respond to requests for comment.
Rosneft, headed by Igor Sechin - a close ally of President
Vladimir Putin - needs to borrow up to $40 billion to complete
the TNK-BP acquisition and is already talking to banks to raise
over three quarters of that in what would be Europe's
ninth-biggest syndicated loan.
Rosneft also needs money to launch new fields in Russia's
Arctic and finance a $25 billion refinery modernisation
Among its financing options, the sources said Rosneft wants
to raise up to $10 billion from oil majors and traders.
"It will easily be one of the biggest ever trade finance
deals. It will certainly dwarf anything Rosneft has done to buy
YUKOS," said a source familiar with the discussions.
Rosneft bought most of the assets of private oil firm YUKOS
at state-forced auctions in the middle of last decade. To buy
YUKOS, Rosneft borrowed heavily via syndicated loans, eurobonds
and trade finance deals, but most of those trade finance
export-backed deals have already expired or are about to expire.
"Rosneft has now most of its export flows free and ready to
be collateralised again," another source said.
MARKETS ON EDGE
Sources said so far Rosneft has had very preliminary
commitments from some majors and traders ready to contribute
between $500 million and $3 billion each, with the total still
being below $10 billion.
Talks have so far focused on terms such as maturity and
pricing, which include commitments to supply oil.
"Rosneft says deals could last for up to five years. Pricing
proposals are a bit funny. Rosneft says, 'Give us the money and
we will sell you crude at prices close to spot tenders that we
will continue to hold'. So I'm wondering where is my upside?"
one source involved in talks said.
A source close to Rosneft disagreed.
"(The upside is in) control of the flow. This is a natural
hedge, so you can trade around it," the source said.
Rosneft regularly sells crude at spot tenders, and the
latest tenders have been dominated by trading houses Vitol and
Glencore, which outbid previous winners such as Shell by
offering very high premiums.
"Europe's oil market will be on edge over this deal and who
wins access to crude. People are getting a bit tired of the
Vitol/Glencore current dominance," a source at one major said.
To pay back $10 billion, Rosneft would need to sell 125
average-size Urals crude cargoes, according to Reuters
calculations. Split over five years, it would represent only two
cargoes a month, a fraction of Rosneft's monthly sales of around
BP will also hold around 20 percent of Rosneft as part of
the deal to sell its half of TNK-BP.
"Because BP will be a big stakeholder in Rosneft, it is not
so obvious for them to also be on the lender and oil buyer side
because of a potential conflict of interest," one source said.
(Reporting by Dmitry Zhdannikov and Melissa Akin; Editing by
Will Waterman; Editing by Will Waterman)