China lends Russia $25 billion to get 20 years of oil

MOSCOW (Reuters) – China has agreed to lend Russian oil companies $25 billion in return for supplies from huge new East Siberian oilfields that will power its economy for the next two decades.

Russia’s state oil champion Rosneft (ROSN.MM) and pipeline monopoly Transneft (TRNF_p.RTS) on Tuesday signed a long-delayed deal to borrow the money from China Development Bank during talks in Beijing, sources close to the deal told Reuters.

“We agreed on supplies of 15 million tonnes of oil every year over a period of 20 years,” Russian Deputy Prime Minister Igor Sechin told state news channel Vesti 24. He said a separate loan deal was signed but gave no further details.

Transneft Vice-President Mikhail Barkov said his company would receive $10 billion of the loan and Rosneft the other $15 billion. Rosneft declined to comment.

“The maturity is around 20 years and this credit is linked to supplies,” Barkov told Reuters. “It is a historic event and the start of a big journey.”

Reuters