Talks Resume on $25Bln China Loan

ReutersChina is considering loaning Rosneft and Transneft $25 billion in exchange for securing oil supplies for 20 years.
Russia has resumed talks with China over a $25 billion loan as part of a broader oil supply deal, but negotiations could take longer than planned, an executive at Transneft said.

China is considering lending Rosneft and Transneft up to $25 billion in exchange for securing oil supplies for 20 years.

Sources said earlier this month that the two countries had suspended discussions because of disagreements over interest rates and state guarantees.

Energy Minister Sergei Shmatko said Tuesday that he hoped to finalize a long-term crude supply deal with China by the end of the year.

"The talks are going on," Mikhail Barkov, Transneft's vice president, said late Monday.

He added that the sides were not likely to sign final documents Tuesday, a date first mentioned after the first round of talks last month between Deputy Prime Minister Igor Sechin, the country's senior energy official, and Chinese Premier Wen Jiabao.

"The date Nov. 25 was not set for them to definitely sign it. The memorandum said the sides would make every effort to sign it by that date," Barkov said.

"We are not going to sacrifice the quality. We will not speed it up, and we will talk until compromise is found," he said.

Transneft is building a 600,000-barrel-per-day oil pipeline from the resource-rich region of eastern Siberia to Asia and is in talks with Beijing on constructing a spur to China.

Russia has said it would deliver half of the oil, or 300,000 barrels per day, via the spur to China. It will send the rest to the Pacific coast for further delivery to other Asian clients. Transneft plans to launch the pipeline in late 2009.