Rosneft, Transneft expect to resolve oil issues with China by June 10 - source
MOSCOW. June 8 (Interfax) - Rosneft (RTS; ROSN) and Transneft expect to resolve issues connected to oil deliveries to China by June 10, a source with knowledge of the talks told Interfax.
The source said the Chinese had only paid some of the debt for Russian oil.
"The Russian companies are hoping that in the framework of the gas negotiations that are taking place in Beijing the oil issue will be resolved too," the source said.
"The sides expect the talks to end on June 10. The companies have adopted a waiting position," the source said.
A 2009 intergovernmental agreement between Russia and China provides for state companies Rosneft and Russian oil pipeline company Transneft to start this year delivering oil to China at 15 million tonnes per year that will run through the ESPO spur to Skovorodino. China extended Rosneft and Transneft credits of $15 billion and $10 billion in return for guaranteed oil shipments.
The Russian companies began shipping oil to China in January.
China National Petroleum Corporation (CNPC) has been trying to force down prices for the Russian oil it buys from Rosneft and Transneft. CNPC thinks it is paying 2%-3% over the odds for oil sent through the ESPO spur. China is asking for a review of the pricing formula and that it be calculated not as sent from the port at Kozmino (the endpoint of the ESPO pipeline), but from the inception of the spur to China. This means China is requesting that Russia not consider the haul distance in shipping oil to China and has asked for a change to the tariff for pumping oil from the spur to Kozmino. China has also stopped paying Russia the amount it is seeking to have the tariff reduced by. This has generated a debt of $250 million and the Russian companies have said court action is possible.
China paid around three-quarters of the debt following their Energy Dialog in Moscow last week, and eased its original demands to change the price formula.