11 Sep Chinese CEFC makes $9.1 billion investment into Russian state-owned oil giant Rosneft
Chinese energy major CEFC China Energy has announced it will purchase a 14.16% stake in Russian oil giant Rosneft at a cost of US$9.1 billion.
The Chinese firm will acquire the position from a consortium between Glencore and the Qatar Investment Authority (QIA), signalling a closer energy partnership between Moscow and Beijing.
CEFC has developed from a niche oil trader only a few years ago to a sprawling energy conglomerate, according to Reuters.
The transaction represents further opportunity for China, the world’s second largest energy consumer, to strengthen its relationship with the world’s top oil producer.
The announcement marks a new round of economic sanction placed on Russia by the United States, making it increasingly difficult for Western firms such as Glencore to retain interests in state-owned firms such as Rosneft.
Glencore said the Chinese company will buy shares at a premium of around 16%, and with Rosneft’s market capitalisation of $57 billion, it is one of the largest investments ever made by China into Russia.
Glencore and QIA will retain stakes of 0.5% and 4.7% in Rosneft respectively.