Monday, June 29, 2009
Rosneft, China Reach $15B Loan Deal
June 24, 2009 - Baker Botts L.L.P. - A US $15 billion loan agreement between Russian oil and gas company Rosneft and the Chinese government is the first step in the development of a major oil supply contract between the two countries. The agreement, which closed in April of 2009, is one of the largest private loans booked in Russia this year. The Chinese Development Bank (CDB) will fund the loan that will allow Rosneft and the China National United Oil Company (CNUOC) to enter in a 20-year oil supply contract. This agreement, coupled with a US $10 billion loan to Transnet for pipeline construction between the two countries, will significantly contribute to moving energy resources to the east from Russia. "These two transactions, totaling more than US $25 billion is seen as advancing cooperation between Russia and China in the energy industry," said Steven Wardlaw, Partner In Charge of the Moscow office of Baker Botts and a lead lawyer in the negotiations. "The agreement that was reached between Rosneft and Chinese representatives presented a number of complex international financial and legal issues that required detailed discussions about how the agreement needed to be structured in order to benefit both countries." Officials expect product covered by this agreement to start flowing from Russia on a spur of the East Siberian Pacific Ocean Pipeline that runs into the northwest corner of the People's Republic of China early in 2011. Baker Botts L.L.P., dating from 1840, is a leading international law firm with offices in Austin, Beijing, Dallas, Dubai, Hong Kong, Houston, London, Moscow, New York, Palo Alto (California), Riyadh and Washington. With approximately 800 lawyers, Baker Botts provides a full range of legal services to international, national and regional clients.