China and Russia agree on oil supplies.

By bne IntelliNews October 12, 2011
Russia and China settled all the disagreements on China's debt for oil supplies, deputy PM Igor Sechin announced to the press, adding that in the nearest future the agreements are going to be settled at company levels. As reported in August, Russia's oil pipeline monopoly Transneft threatened to repay ahead of schedule the USD 10bn 20-years loan granted by China in 2009 in exchange for the oil supplies contract, should the Chinese oil major CNPC not cover the debt for oil supplies that is accumulating since the beginning of the year. Transfneft also announced that it is preparing a joint appeal to London arbitrary court on the issue. Transneft claims that as of the beginning of this year CNPC was underpaying USD 12 per barrel of supplied oil, eventually bringing it down to USD 3 per barrel, with total debt to Russian oil companies currently amounting to USD 250mn (out of which about 40% accounts for Rosneft and Transneft). The conflict was already tackled on the government level in June, which resulted in settling USD 195mn of then owed amount. To remind, Transneft and Rosneft agreed on supplies of 300mn tons of oil to China (15mn tons annually) and under these agreements both companies were granted USD 10bn and USD 15bn loans. At the same time experts surveyed by gazeta.ru on the issue believe braking the supplies deal unlikely, given the coming elections and another major deal with China pending (on natural gas supplies to China by Gazprom).

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