Rosneft May Have Terminated Oil Supply Deal With China CEFC
Rosneft has allocated April deliveries of the ESPO crude
blend to commodity trader Trafigura instead of to China’s CEFC, suggesting that
Russia’s largest producer may have altered or even terminated the terms of a
crude delivery deal with the Chinese company, four sources familiar with the
issue told Reuters on Monday.
Rosneft has a five-year deal with China’s CEFC to supply
between 2018 and 2022 volumes of the ESPO crude grade, which is popular with
the independent Chinese refiners, commonly known as ‘teapots.’
While the reason for leaving none of the ESPO supplies for
April to the Chinese firm was not immediately clear, Reuters’ sources suggest
that there may have been changes to the terms of the oil supply deal between
Rosneft and CEFC, which had expressed interest to buy a large stake in the
Russian oil giant three years ago.
Qatar Investment Authority paid some US$4.2 billion (3.7
billion euro) for a 14.16-percent stake in Rosneft, thus becoming the
third-largest single shareholder after the Kremlin and BP, the Russian company
said in November 2018.
The deal with the sovereign wealth fund of Qatar was the
final episode of a saga in which a little-known Chinese company until that
point, CEFC China, said in September 2017 that it had agreed with a consortium
of Glencore and Qatar Investment Authority (QIA) the terms of sale of the
consortium’s 14.16-percent stake in Rosneft.
However, in March 2018, Chinese authorities started
investigating the chief executive of CEFC China Energy, Ye Jianming, on
suspicion of economic crimes. The investigation was part of a wider crackdown
on private Chinese businesses after President Xi Jinping’s government warned
that no Chinese billionaire, no matter how well-connected, is safe from
scrutiny and investigation.
The investigation and troubles of CEFC China Energy raised
concerns over the agreement that it had signed to buy 14 percent in Rosneft
from Glencore and QIA.
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