Rosneft seeks capital from China

MOSCOW, Oct. 28 (UPI) -- Russian oil firm Rosneft Tuesday negotiated with Chinese officials to broker a 20-year deal for oil deliveries in exchange for a $13.5 billion line of credit.

Rosneft in 2005 agreed to supply China with oil for five years in exchange for $6 billion as part of a restructuring effort in the wake of the fallout of Russian petroleum firm Yukos.

Dmitry Peskov, a deputy press secretary for the Kremlin, confirmed Russian Prime Minister Vladimir Putin and his Chinese counterpart, Wen Jiabao, were in negotiations on the deal, the Russian business newspaper Kommersant reported.

"There are plans to sign a number of bilateral documents, including ones on energy issues," said Peskov.

Negotiations began during the weekend when Russian Deputy Premier Igor Sechin, also board chairman of Rosneft, met with Chinese Deputy Prime Minister Wang Qishan to discuss the provisions of the arrangement.

Russian economic analysts note that Rosneft and several other Russian energy firms are in dire need of capital amid falling oil prices. Russian energy giant Gazprom earlier this month petitioned Moscow for $1 billion in loans to refinance its debts.

The Russian pipeline firm Transneft is in negotiations with Chinese officials as well to broker a deal worth an estimated $9 billion.