Russia, China sign $25 billion energy deal

(Agencies)
Updated: 2009-02-17 23:34

MOSCOW -- Russia and China signed a $25 billion energy deal in Beijing on Tuesday that will see the Asian country secure oil supplies from Moscow for the next 20 years in return for loans, Russia's state pipeline monopoly Transneft said.

Chinese Vice Premier Wang Qishan, right, shakes hands with his Russian counterpart Igor Sechin at the Great Hall of the People in Beijing, China, Tuesday, February 17, 2009. Russia and China signed a $25 billion energy deal in Beijing on Tuesday. [XInhua]

As part of the broader energy supply deal, China's Development Bank will lend $15 billion to Rosneft, Russia's state-owned oil major, and $10 billion to Transneft, a vital boost for energy companies as they struggle to raise capital amid straitened lending conditions and plunging oil prices, Transneft spokesman Igor Dyomin said.

Russia, the world's No. 2 oil exporter after Saudi Arabia, promised in return to supply 15 million tons of oil (300,000 barrels per day) annually for 20 years to China.

Russian Deputy Prime Minister Igor Sechin led the high-level delegation to Beijing to sign the deal that at times looked in danger of falling apart after the two governments disagreed over interest rates and state guarantees for the oil supply.

After completion of the talks, Chinese Premier Wen Jiabao hailed the deal as one of "political importance."

Sechin, who confirmed the details of Russian oil supplies, declined to elaborate on the loan aspect of the deal, saying only that credit terms were satisfactory to both parties, state-run RIA-Novosti news agency reported him as saying.

Russia is keen to shift some of its exports away from Europe, and views China and Japan as key markets for new oil coming out of the relatively untapped East Siberian oilfields.

Russian crude will be supplied through a long-delayed pipeline project agreed to late last year. The pipeline, which extends from western Siberia to the Pacific coast, is to be linked to China from the Siberian city of Skovorodino, 45 miles (70 kilometers) north of the Sino-Russian border.