New China star sells first Russian oil from US$9-billion Rosneft deal
A Chinese firm which has grown from a small local trader to a global deal-making juggernaut sold its first cargo of Russian crude after buying a US$9-billion stake in Rosneft Oil Company.
CEFC China Energy Company sold a cargo of Sokol crude from the Sakhalin region for January loading, according to traders who asked not to be identified. It is the first sale of oil which the company will get access to as part of the September Rosneft deal. Under the agreement, the Russian energy giant will supply the Shanghai-based firm with as much as 60.8 million metric tons over five years.
The supplies are set to help CEFC stamp its mark on the oil-trading market as it pursues global ambitions that span everything from energy to metals and ports.
Apart from Sokol, the Chinese company has access to other grades — its marketing East Siberia-Pacific Ocean oil, known as ESPO, from eastern Russia, as well as Urals out of the Black and Baltic seas.
The firm also secured a 4% stake in Abu Dhabi’s largest oil concession in February.
Last month, in a note running longer than 12,000 Chinese characters which touched on everything from Chinese history and philosophy to the future of fossil fuels, CEFC Founder and Chairman Ye Jianming justified purchasing the Rosneft stake from Glencore Plc and Qatar’s sovereign wealth fund.
While there is a risk oil may slide below US$30/bbl as it is displaced by alternative energy sources, it will still be used to make petrochemicals, he said.