Russian oil major Rosneft has concluded a deal with a company linked to Qatar and commodities trader Glencore to supply up to 55m tons of crude in total over a 5-year period, Reuters reported.
Under the terms of the supply deal Rosneft will supply QHG Trading LLP with between 4.5mt/y and 11mt/y of oil with the price being set according to a formula pegged to global oil prices. A Rosneft representative said the firm is a Glencore subsidiary, according to Hydrocarbon Processing. It is noted that Qatar is the largest shareholder in the commodities trader.
The agreement follows Qatar Investment Authority (QIA) fund and Glencore acquisition of a 19.5% stake in Rosneft for around $11.8b. Under the terms of the acquisition, Glencore had said it would conclude a five-year supply agreement with Rosneft giving it an extra 220,000b/d to trade.
In December 2016, Glencore Plc and Qatar’s sovereign wealth fund used $3b in equity and $7.8b in financing from a bank consortium led by Italian lender Intesa Sanpaolo SpA to buy their stake in Russian oil company Rosneft PJSC, Bloomberg informed. Russia was selling assets to raise money as it battled the longest recession in two decades, triggered by a collapse in oil prices and the fallout from Western sanctions. The Rosneft deal helped close the nation’s budget deficit, which grew to the widest in six years.