CEFC China Energy has signed a deal with the consortium of Glencore and the Qatar Investment Authority (QIA) to purchase 14.16% stake of state-owned Russian oil firm Rosneft in a US$9.1 billion deal.
Image from Rosneft.
According to Glencore, CEFC will pay a premium of approximately 16% to the 30-day volume weighted average price of Rosneft shares today (8 September).
“Following the transaction, Glencore and QIA would retain an economic interest in Rosneft shares commensurate with their original equity investment announced in December 2016, which amounts to approximately 0.5% and 4.7%, respectively,” Glencore said in a statement.
In December 2016, Glencore and QIA bought 19.5% stake in Rosneft for $11 billion.
Christian Boermel, a senior analyst with Wood Mackenzie's Russia Upstream Oil & Gas team, says the deal intensifies the energy relationship between Russia and China.
“A direct stake in Rosneft will make CEFC China the main driver for the relationship of Rosneft with China, ahead of CNPC, Sinopec and Beijing Gas,” says Boermel.“Rosneft keeps its customers close to its heart – buy a stake, get an oil supply agreement.”
“CEFC China could soon take stakes in Rosneft projects, either in cash-intensive upstream projects, or in the downstream,” he says.
Earlier this month, Rosneft and CEFC signed an agreement for the supply of Russian crude oil to the Chinese market, opening up new opportunities for a strategic partnership.
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