Russia’s top crude producer Rosneft has agreed to cede a share of its oil riches to China, the world’s top oil importer, signing a memorandum on Friday to jointly develop East Siberia deposits.
Russia, the world’s top oil producer, has previously preferred to sign long-term supply deals with China backed by multi-billion-dollar loans.
The Russian state-owned company said it signed a memorandum with China National Petroleum Corp (CNPC) to jointly tap oil reserves including the recently acquired Srednebotuobinsk field, part of Taas-Yuriakh oil producer.
Rosneft would have a controlling state of 51 per cent in the future joint venture, while CNPC will own the remaining 49 per cent.
The deposit is close to the Eastern Siberia-Pacific Ocean (ESPO) pipeline. Rosneft delivers 300,000 barrels per day of oil to China via an ESPO pipeline spur and earlier this year agreed to double supply volumes.
Rosneft, which in March acquired Anglo-Russian oil firm TNK-BP for US$55 billion, needs to increase its upstream base to honour its pledge to increase sales to China. Some analysts and observers doubt that Rosneft has enough resources to boost the supplies to China to the agreed level.