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Chinese CEFC is in talks to buy a stake in Rosneft

Chinese energy company CEFC (Huaxin) is negotiating with Rosneft to acquire a stake in the largest Russian oil company.

17.Aug.17 12:43 PM
By Daria Zaytseva


Chinese CEFC is in talks to buy a stake in Rosneft

The top managers of both companies entered into preliminary negotiations, they said. The head of Rosneft Igor Sechin and the head of the CEFC Ye Jianmin have already held two meetings since early July.

It is not clear yet how much the Chinese corporation is going to invest in Rosneft, and whether it will buy new shares or a stake owned by the parent company - Rosneftegaz. In addition, according to a source close to Rosneft, the company can sell the CEFC stake in its retail business, which consists of almost 3,000 filling stations, about 150 oil depots and more than 1,000 gasoline tankers.

Russia is the largest oil supplier to China, and Rosneft is the largest and most influential Russian oil company with ties in the Kremlin.

Access to Rosneft's resources and its processing facilities will give impetus to the CEFC, which is building ambitious plans to become a major international energy trader to compete with such giants as Glencore.

CEFC, which has a rare right to store a share of Chinese oil from strategic reserves, for some four years has evolved from a relatively ordinary fuel trader to a huge energy conglomerate and since 2015 has been actively buying up foreign assets.

A representative of CEFC, commenting on the negotiations on a possible purchase, said that in the summer the companies signed an agreement on cooperation. The agreement provides for the possibility of joint work in the field of exploration and production, as well as refining and petrochemicals, trade in oil and oil products, retail sales and financial services.

He declined to comment on the participation of CEFC in the negotiations to buy a stake in Rosneft.

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