MOSCOW (Reuters) - Rosneft had signed an oil supply deal with CEFC China Energy Company Ltd, Russia’s largest oil producer said in a regulatory filing on Monday, confirming a Reuters report last week.
Access to Russian crude could help China, the world’s top crude importer, in its ambition to create a globally integrated oil supply chain.
As well as extending Russia’s lead over Saudi Arabia as China’s top oil supplier, the deal will make CEFC, a hitherto little-known fuel trader, a top-10 global oil merchant.
It will also make CEFC a dominant player in the ESPO crude market and may enable it to challenge dominant Western oil traders such as Vitol [VITOLV.UL] and Trafigura [TRAFGF.UL].
CEFC agreed in September to buy a 14.2 percent stake in Rosneft in a deal valued at more than $9 billion.
Rosneft said it would supply up to 60.8 million tonnes of oil over the five years starting from January 1, 2018.
The price of the oil deliveries will be based on a formula which is pegged to prices on the global market.
CEFC expects to receive 8 to 10 million tonnes of ESPO crude from Russia’s Far East next year, a source with direct knowledge of the matter told Reuters last week.
The source, who declined to be identified as they were not authorized to speak to media, said the rest of the supply would be Urals grade and a smaller amount of Sokol crude.
Another source close to CEFC said the company would receive two cargoes with Russian crude per month in the first quarter.
Reporting by Maria Kiselyova and Vladimir Soldatkin; additional reporting by Florence Tan in Singapore; editing by Dmitry Solovyov and Jason Neely