ST PETERSBURG: Russia's Rosneft agreed to double oil supplies China, in a deal it valued at $270 billion on Friday, as the Kremlin energy champion shifts its focus to Asia from saturated and crisis-hit European markets.
Rosneft will supply China with 300,000 barrels per day over 25 years starting in the second half of the decade, on top of the 300,000 bpd it already ships to the world's largest energy consumer.
"The estimated value of the deal is $270 billion," Rosneft's boss Igor Sechin, a powerful ally of President Vladimir Putin, told reporters in what would be one of the biggest supply deals in the history of Russia, the world's top oil producer.
The speed of change in Russian export patterns has been dramatic - switching huge volumes from Europe in only five years.
Russia first started supplying China by railway and then by a new pipeline while opening a Pacific port, Kozmino, in 2009.
Together with supplies to Kozmino, it is already exporting around 750,000 barrels per day to Asia, or 17 percent of its overall exports of 4.4 million bpd.
Europe by contrast has lost out. A decline in deliveries in the past few years partially contributed to Russian Urals crude oil often trading at a premium to benchmark dated Brent.
Analysts have expressed doubts Rosneft could quickly and significantly boost supplies to China from depleted fields in West Siberia, the historic homeland of Soviet and Russian oil production.
A source familiar with the deal said the new agreement with China was timed to tie in with the launch of new streams of East Siberian crude to avoid big redirection of existing flows and allow time to expand export infrastructure.
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