Rosneft in China Oil Talks

Russia's leading oil company Rosneft has been in talks with major Chinese oil companies about possible joint development of offshore oil on the Russian shelf, a plan which analysts said Tuesday could diversify China's oil imports and improve the country's energy security.

Rosneft said in a statement that the company's president Igor Sechin held talks on Monday with the heads of Chinese oil companies including Sinopec Group, China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC) about possible joint upstream projects offshore on the Russian shelf.

"Energy cooperation between China and Russia is complementary. Russia is currently seeking to expand beyond its major market, Europe, which is sluggish due to the prolonged debt crisis. And China is the most promising market for Russia," Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, told the Global Times.

"Cooperation with Russia could also help China diversify its oil imports and reduce its reliance on oil supplies from the Middle East, thus improving the country's energy security," Lin said.

Russia exported 24 million tons of crude oil to China in 2012, making it China's No.3 oil supplier for the year, the China Business News reported Tuesday.

Lü Dapeng, a Sinopec spokesperson, confirmed to the Global Times Tuesday that Rosneft held working meetings with the senior management of Sinopec on Monday, but said he has no knowledge of whether the two companies discussed possible cooperation offshore on Russia's shelf.

CNPC and CNOOC also declined to confirm the possible Russian-shelf cooperation with Rosneft.

CNPC's website announced Tuesday that Chairman Jiang Jiemin and General Manager Zhou Jiping were in talks with Sechin Monday, but said only that the discussion was about cooperation in upstream and downstream integration and expanding crude oil trade between the two nations.

According to Rosneft's Monday statement, the company and its Chinese counterparts have decided to set up a number of working groups on prospective areas of joint offshore operations. The company also said Sechin met Chinese Vice Premier Wang Qishan to discuss issues about increasing oil supplies to China.

Meanwhile, Reuters reported last week that Rosneft was seeking loans of up to $30 billion from CNPC in exchange for doubling oil supplies to China, citing unnamed industry sources. 

In a report on Monday, Rosneft denied it was in talks about obtaining a loan from China.

A Global Times request to Rosneft for comment on the issue was not returned Tuesday.

"Whether or not Rosneft is in talks with China about borrowing loans from Chinese companies, it is very possible that the Russian company will consider seeking loans from its Chinese counterparts as it is short of money to complete an important acquisition deal," said Lin from Xiamen University.

Rosneft struck a deal in 2012 to acquire half of its competitor TNK-BP in deals worth $55 billion. Rosneft raised $14.2 billion from international lenders last week and another $16.8 billion in bank loans in December to back its acquisition deal.