China and Russia plan to swap loans for oil

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China and Russia plan to "swap" loans for oil

according to foreign media reports, insiders familiar with the inside story revealed that Russia will more than triple its crude oil supply to China in the next five years, making China Russia's number one oil customer. A series of agreements are expected to be signed later this week

according to Reuters, anonymous industry sources said that Russia's largest crude oil producer "Rosneft" will increase its crude oil exports to China from the current 16million tons to 50million tons by 2018, an increase of more than twice (equivalent to an average daily export of 1million barrels/day). In addition to crude oil export transactions, the broader agreement may also include weapons delivery and natural gas supply, which the two sides have been discussing for a long time

the source also said that the crude oil supply agreement may also involve up to $30billion in loans to Rosneft, which is currently in the process of acquiring oil company TNK-BP () at a price of $55billion. A company spokesman for Rosneft declined to comment on the news

Russia has been steadily increasing its crude oil exports to Asia recently, while its supply to Europe decreased in May. About 15% of its crude oil exports this year will be to China and the Pacific coast region. Putin has been urging Russia to reach closer cooperation with Asian countries, because the energy demand in the European market has been declining due to the impact of the sovereign debt crisis

according to the source, Rosneft plans to increase its crude oil supply through the East Siberia Pacific pipeline by 1million tons this year, further increase by 2million tons next year, and increase by 5million tons again between 2015 and 2017. From 2018, the total transportation volume of this pipeline will reach 30million tons, equivalent to twice the current transportation volume. In addition, Rosneft also decided to complete the spin off and reorganization in the second quarter of 2019. This year, it will also export 7million tons of crude oil to China through the Pacific port Kozmino, which will increase to 9million tons by 2014

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