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Wednesday, July 19, 2006

CNPC buys $500 million worth of Rosneft shares

BEIJING. July 19 (Interfax) - China National Petroleum Corporation (CNPC) has bought 66.2252 million shares of the Russian oil company Rosneft for $500 million, a source with the CNPC management told Interfax Wednesday. "Earlier reports disseminated by a number of media outlets alleging that the CNPC was willing to invest $3 billion in Rosneft shares are rumors and are untrue," the source said. CNPC bought the stock during Rosneft's recent IPO, the source said. "We did not have doubts about buying the shares. CNPC's participation in Rosneft's IPO meets the interests of both sides and is a sign of the strategic nature of our cooperation," the source said. CNPC is satisfied with the results of the deal, in which it took part at the Russian company's invitation, the source said. "Our corporation and Rosneft signed a long-term cooperation agreement in July 2005, which laid the foundation for mutually advantageous interaction," he said. "Having received an invitation from the Russian oil company, CNPC put together a group of specialists, who examined the terms and conditions and, based on their analysis and the corporation's strategic development objectives, notified Rosneft of its plans to buy the shares," he said. "In this project, CNPC has been guided by the need to provide support to Rosneft as its partner and its interest in expanding and deepening mutually advantageous long-term cooperation between the two oil companies," he said. Negotiations between the two companies concerned primarily the share price, to be in the range between $5.85 and $7.85. In the end, CNPC paid $7.55 per share, which "meets our plans and interests," he said. During Russian President Vladimir Putin's visit to Beijing, CNPC and Rosneft reached an agreement on the joint exploration and development of oil fields in Russian territory, the joint construction of oil refineries and the sale of their products in China, he said. "Along with the purchase of Rosneft shares by the Chinese side, this shows that relations between the two companies have entered a new phase of cooperation," the CNPC source said.

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