Russia’s Rosneft signed agreements with Beijing Gas Group for the sale of a 20 percent stake in its unit Verkhnechonskneftegaz.
The two companies additionally signed an agreement with respect to the adjoining license areas as well as an agreement on the cooperation in the gas business, the statement reads.
According to the statement, the transaction is valued at US$1.1 billion, with an achieved evaluation of $3.2 per barrel of oil equivalent reserves and reflects the high potential of the Verkhnechonskneftegaz’s resource base.
The transaction will enable Rosneft to implement the development potential of the Verkhnechonsk field, including gas production.
Within the framework of the deal, the Chinese company will obtain a share in one of East Siberia’s largest producing fields with a developed infrastructure and access to the ESPO pipeline, whilst Rosneft will obtain the possibility to access the local gas market of China, including end-customers, by means of swap supplies of gas.
Rosneft noted that the decision of the Chinese government to converse Beijing power generation from coal to gas and the accelerated transition of automotive transport of China to the natural gas motor fuel open wide perspectives for a significant expansion of the company’s activities in the Chinese market.