Rosneft and BP sign long-term oil contract

Rosneft and BP Oil International Limited signed a set of agreements designed to organise long-term deliveries of oil products and oil on a pre-paid basis.

The terms of transaction provide for export deliveries of oil products with possible substitution with oil of up to 12 million t within five years in bulk on a pre-paid basis in an amount of not less than US$ 1.5 billion.

A number of world's leading financial institutions participated in the organisation of advanced payment. The price will be calculated by the formula similar to the one used by the Company when selling oil and oil products under regular annual tenders. Contractual deliveries may start as early as July 2014.

Period of validity of agreements meets interests of Rosneft in conclusion of long-term transactions with heavy consumers, and allows to effectively carry out long-term planning of the deliveries.

Commenting on the signing of the document President, Chairman of the Management Board Igor Sechin said: "Rosneft extends and strengthens its mutually beneficial co-operation with BP. This transaction opens up new opportunities for both companies: it provides BP with stable supply chain and guaranteed quality of oil products and allows Rosneft to support high profitability of its sales activities and acquire additional financial resources in accordance with the referential nature of such deals."

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/27062014/rosneft_and_bp_sign_long_term_oil_contract/