CEFC China Energy Company (CEFC China) announced that CEFC China and the consortium of Glencore and QIA have substantially agreed terms on the purchase and sale of a 14.16% stake in the share capital of Rosneft Oil Company at a share price representing a 16.1% premium to the last 30-day volume weighted average price as of 8 September 2017. The envisioned transaction has received preliminary approval from the National Development and Reform Commission of China. The completion of the transaction is subject to final negotiations and the receipt of regulatory approvals of applicable government authorities.
“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,” Ye Jianming, Chairman of the Board of CEFC China, noted. “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.”
In response to this announcement, Christian Boermel, Senior Analyst – Russia Upstream Oil & Gas for Wood Mackenzie, said: “This 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. 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.”