CEFC China Energy to buy $9.1bn worth stake in Russian oil giant Rosneft
Energy acquisition : In the latest oil and gas industry news, CEFC China Energy Company has agreed to buy a stake of 14.16% in Russian oil giant Rosneft Oil Company for $9.1 billion from the consortium of Swiss mining company Glencore and Qatar Investment Authority (QIA).
The acquisition of the Chinese oil and gas company marks the strengthening of ties between Russia and China in the energy sector. It also comes at a time when the United States has been looking to put stricter imposition of sanctions on Russia over its annexation of Crimea.
CEFC China stated that the transaction showcases its strong belief in the quality reserve base of the Russian state-controlled Rosneft Oil Company along with its competitive position in the industry and the strength of its management team.
Commenting on the CEFC China acquisition of Rosneft stake, the company’s chairman of the board Ye Jianming said: “We are delighted at the opportunity of becoming a strategic shareholder of the world’s largest public oil producer and to develop strategic cooperation with Rosneft across the board in exploration, refining, storage, logistics, and sales of the upstream oil and gas resources.
“The transaction will consolidate and elevate the position of CEFC China in the oil and gas sector with incremental 2P reserves of more than 20 billion barrels. CEFC China looks forward to further in-depth cooperation with Rosneft.
“By bridging Rosneft and the Chinese market and promoting the bilateral cooperation, CEFC China will better serve the energy demand of China. I strongly believe that the transaction will inject new energy into the economic and trade cooperation between China and Russia.”
The National Development and Reform Commission of China has given a preliminary approval to CEFC China Energy Company’s proposal to acquire stake in Rosneft Oil Company.
As per the oil and gas industry news, The transaction will be completed based on the outcome of final negotiations and on relevant regulatory approvals of various government authorities.
Post completion of the transaction, Glencore and QIA would hold on to an economic stake in the shares of Rosneft shares corresponding to their original equity investment made in December 2016, which amounts to around 0.5% and 4.7% respectively.
The consortium of Glencore and the Qatar state-owned investment company – Qatar Investment Authority had paid around $11 billion to Rosneft for a 19.5% stake in the Russian oil company last year.
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