Russia, China to resume talks on $25 bn loan

November 18th, 2008 - 6:05 pm ICT by IANS  

Novy Urengovy (Russia), Nov 18 (RIA Novosti) Russia and China will soon resume talks on two loans to major Russian oil companies worth $25 billion, Russian energy minister Sergei Shmatko said Tuesday. State-controlled oil major Rosneft and pipeline monopoly Transneft suspended talks with China last week on $15 billion and $10 billion loans due to disagreements over interest rates and government guarantees.

Under the deal being negotiated, Rosneft would receive $15 billion and Transneft $10 billion.

The talks are seen as part of a broader oil supply deal that would allow energy-hungry China to secure an annual supply of 15 million tonnes of crude for 20 years and the Russian companies to receive funds to refinance their liabilities amid the ongoing global credit crunch.

Oil to China is expected to be pumped via a branch of the East Siberia-Pacific Ocean (ESPO) pipeline the construction of which will start later this year. The branch will run from Skovorodino in the Amur Region in Russia’s Far East to the Chinese border.

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