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Rosneft, Beijing Gas sign deal on acquisition of 20% in Rosneft subsidiary

November 07, 2016, 18:24 UTC+3 MOSCOW

Base price of the acquisition deal is about $1.1 bln

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© Sergei Bobylev/TASS

MOSCOW, November 7. /TASS/. Rosneft and China’s Beijing Gas Group Company Limited (Beijing Gas) have signed the sale purchase agreement on the acquisition of 20% in Verkhnechonskneftegaz (a Rosneft subsidiary) by the Chinese company, as well as shareholders agreement on the deal, Rosneft said in a statement.

The documents were signed in the presence of Prime Minister Dmitry Medvedev and his Chinese counterpart Li Keqiang.

"Legally binding documents signed as attachments to the agreements between the companies reached during the visit of Russian President Vladimir Putin to China in June 2016, provide that the basic price of the acquired 20% will be about $1.1 bln. The transaction will be closed in accordance with the necessary procedures, including obtaining of regulatory approvals," the Russian company said in a press release.

According to the statement, the deal will result in establishment of a vertically integrated structure for cooperation: the Chinese company acquires a stake in one of the largest deposits in Eastern Siberia with a developed infrastructure and the access to the Eastern Siberia _Pacific Ocean pipeline, while Rosneft in its turn will get a possibility to enter the Chinese domestic gas market, including the end consumer, via swap gas supplies.

Verkhnechonskneftegaz is a subsidiary of Rosneft exploring and developing Verkhnechonskoe oil and gas condensate field, one of the largest fields in East Siberia. The company is also an operator of licensed sites of Rosneft in the Irkutsk region.

In 2015, Rosneft produced 8.6 million tonnes of oil at the Verkhnechonskoe oil and gas condensate field (which is 4.9% more than in 2014).

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