Rosneft, seeking to finance Russia's largest-ever takeover deal, has raised $16.8bn in bank loans and agreed on long-term trade finance deals with the world's largest oil traders, Glencore and Vitol.
The state-controlled company said on Monday the loans raised from Western banks would be sufficient to cover its acquisition of the 50 per cent of Anglo-Russian oil firm TNK-BP, which it is buying from BP for $27bn in cash and stock.
The company also said it had agreed terms with Glencore and Vitol to supply them with up to 67 million tonnes of crude oil over five years under a trade finance deal, equivalent to around 270,000 barrels a day of oil.
Reuters reports that Rosneft is due to buy the rest of TNK-BP from the AAR consortium of Russian-born business tycoons for $28bn, completing the takeover of Russia's third-biggest oil producer to make Rosneft the world's largest listed oil company, with daily output equivalent to 4.6 million barrels per day.
It was not clear whether the oil supply deals would help pay for the purchase of AAR's stake in TNK-BP but sources close to Rosneft and potential lenders told Reuters recently that Rosneft had been talks about using future oil exports as collateral to help pay for the TNK-BP deal.
Industry sources said the deals will give Rosneft around $10bn in advance payments from the traders, who will in turn borrow the money from their banks, in return for securing long-term access to oil from the world's largest-producing nation.
"The price formula is in line with the prices Rosneft receives for crude at medium-term tenders," Rosneft's chief executive Igor Sechin said in a statement.
Assuming the full volumes are delivered, Rosneft would supply the oil traders with around 270,000 barrels per day of oil – or over a tenth of its current output. The pricing terms were not disclosed, nor was the level of prepayment.
If the oil price averages $100 per barrel, the contracts would on paper be worth around $50 bn.
Glencore's Chief Executive Ivan Glasenberg said on Monday the announced agreement "further cements our relationship with one of the world's leading oil and gas companies."
