| LONDON, Sept 30
LONDON, Sept 30 BP is working on becoming
the first oil major with a long-term deal to buy seaborne crude
from Rosneft, trade sources said, after a number of
trading houses this year secured large volumes from the Kremlin
While trading houses Glencore, Vitol and Trafigura
agreed to lend Rosneft $11.5 billion in exchange for oil
supplies over five years, oil majors have largely stayed on the
sidelines, preferring to buy Russian crude at spot tenders.
BP has already received some volumes of Russian Urals crude
under the deal, which is still being finalised, three trading
sources told Reuters. BP and Rosneft declined to comment.
"BP is exploring options that are available to it as a major
shareholder in Rosneft. The deal will be somewhat different from
what Rosneft has with trading houses," a source familiar with
details of the deal said.
BP owns a fifth of Rosneft, which became the world's largest
listed oil firm by output after acquiring BP's venture in
Russia, TNK-BP, in a deal valued at more than $50 billion.
That left Rosneft, in which the Kremlin owns a controlling
stake, heavily indebted and looking for deals with the likes of
Glencore to lighten the burden on its balance sheet by reducing
debts to banks as the money is being borrowed by the traders.
Rosneft also hopes to obtain up to $70 billion from China
in prepayment for oil, in an attempt to cut its
debt further. The company has kept buying assets aggressively
even after the TNK-BP purchase.
Rosneft currently sells its oil from major ports via two
methods - long-term loan-for-oil schemes with traders, and
short-term, six-month tenders open to traders and majors.
Long-term deals with Rosneft allowed trading houses such as
Glencore and Vitol to build large positions in Urals, the most
important crude grade for European refiners.
But the deals also turned expensive as they are priced
against Rosneft's six-month tenders, in which majors and traders
often bid up prices to win volumes.
The first signs that BP is working on a new deal emerged
when the major offered to sell a cargo of Urals in the Baltic
Sea for early-October delivery, traders said.
"BP was simply not supposed to have this cargo as it didn't
win any volumes from Rosneft in the latest six-month tender. So
everyone realised that something new is coming," a trader at a
rival company said.
Trading sources said BP would be allocated a total of two
Urals cargoes from Rosneft in the Baltic during October. Sources
declined to give exact details on how the two cargoes would fit
into the new term deal.
"What it shows is that BP is not a dormant shareholder at
Rosneft, but tries to explore its options," a trader at another
Apart from their shareholding relationship, BP and Rosneft
also co-own German refinery venture Ruhr Oel.
The biggest buyers of Rosneft's oil, alongside trading
houses, are majors such as Shell, Eni, Statoil
and Total, which regularly win volumes in
Trading sources said other majors were unlikely to follow BP
"We are still viewing term deals as pretty expensive given
that for us it would mean lending money to Rosneft and buying
oil at pretty high levels," one of the trading sources said.