China’s Beijing Gas Group has completed the $1.1 billion purchase of a 20 percent stake in Rosneft subsidiary Verkhnechonskneftegaz.
As a result of the transaction, the duo will create a vertically integrated system of cooperation, Rosneft said on Thursday.
The Chinese company acquires a stake in one of the largest producing fields in Eastern Siberia with developed infrastructure and access to the ESPO pipeline while Rosneft gets an opportunity to enter China’s prospective domestic gas market, including end users via swap gas supplies.
The project evaluation proves the high potential of the Verkhnechonskneftegaz resource base: it is $3.2 per barrel of hydrocarbon reserves, the statement reads.
The sale of the stake in the project will allow Rosneft to fully implement the significant potential of the Verkhnechonskoye field, including natural gas production, as well as strenghten the strategic partnership with one of the largest natural gas sales companies in China.
The Implementation of the project of Beijing Gas corporation joining the Verkhnechonneftegaz enterprise will allow us to enter the rapidly growing Chinese market,” Rosneft Chief Executive Officer Igor Sechin said.
“The eastern direction is one of the most prospective and strategically important for us. Cooperation with Beijing Gas is a good example of Rosneft’s integral approach, which contributes to the creation of a reliable energy bridge between Russia and Asia-Pacific countries”, Sechin added.
Also, Rosneft and Beijing Gas are considering the options for the development of integrated cooperation in the Eastern Siberia and the Far East region, providing for exploration of hydrocarbons, fields development, production and sale of gas.