By RTT News, March 06, 2013, 10:00:00 PM EDT
(RTTNews.com) - Russian state oil company OAO Rosneft (ROSN.L) said Wednesday that it has signed long-term contracts with commodity traders Glencore International plc (GLEN.L) and Vitol Group to supply up to 67 million tons of crude oil in total. Under the deals, Rosneft will receive a prepayment of $10 billion before the supplies start.
Rosneft's agreement with Switzerland-based Glencore envisages supply volumes of up to 46.9 million tons of crude to that company, while its contract with the Netherlands-based Vitol envisages supply volumes of up to 20.1 million tons. The contracts were approved by Rosneft's board of directors on March 4.
In late December 2012, Rosneft said it agreed to the head of terms of long-term contracts with Glencore and Vitol. Under the heads of terms, Rosneft agreed to sign a five-year contract with a prepayment, to supply up to 67 million tonnes of crude in total.
Igor Sechin, Rosneft President and Chairman of the Management Board said, "We are happy to start the implementation of the long-term contracts after having agreed heads of terms late last year. A number of aspects constitute a landmark approach: on the one hand, we guarantee predictable supply volumes to our customers based on tender pricing, on the other - we receive prepayment that can be used for our strategic goals."
Sechin added that the opportunity for other partners joining these contracts was open.
Rosneft noted that the $10 billion prepayment can be used for corporate-wide and investment purposes. In February, Rosneft said it signed loan agreements with a group of international banks for a total amount of $14.21 billion that will be used to acquire a 50 percent stake in TNK-BP Ltd. from Alfa, Access, Renova Consortium or the AAR Consortium.
In December 2012, Rosneft agreed with Alfa-Access-Renova or AAR group to buy their 50 percent stake in TNK-BP for $28 billion.
TNK-BP is the third largest oil company in Russia. It is a 50:50 joint venture formed in 2003 by merging the Russian oil and gas assets of British oil giant BP plc (BP,BP.L) and the oil and gas assets of AAR, a consortium consisting of Russian billionaire oligarchs.
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