Overview

CDB provides $2 billion oil-backed loan to Rosneft for development of Vankor field in Krasnoyarsk and gas supply to China (Linked to Record ID#43069)

Commitments (Constant USD, 2023)$2,067,942,582

Commitment Year•2013Country of Activity•RussiaDirect Recipient Country of Incorporation•RussiaSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Jun 21, 2013

Last repayment (originally scheduled): Jun 17, 2029

Geospatial footprint

Map overview

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This project supported the development of Vankor field (an oil and gas field in Turukhansk District and Krasnoyarsk Krai within Eastern Siberia). More detailed locational information can be found at https://www.openstreetmap.org/node/1115460020.

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

China Development Bank (CDB)

Receiving agencies

State-owned companies

PJSC Rosneft Oil Company

Collateral providers

State-owned companies

PJSC Rosneft Oil Company

Loan desecription

CDB provides $2 billion oil-backed loan to Rosneft for development of Vankor field in Krasnoyarsk and gas supply to China

Interest type•UnknownMaturity•16 years

Collateral

As collateral for the loan, Rosneft Oil Company (Rosneft) signed an oil supply contract (or 'Crude Oil Delivery Agreement') with China National Petroleum Corporation (CNPC) in 2009 and agreed to sell it 180,000 barrels of crude oil per day (or 9 million tons of crude oil each year) for 20 years. CNPC agreed to pay market prices for the oil and deposit payments for the oil into a collection (escrow) account at China Development Bank (CDB) opened on behalf of Rosneft by OJSC Bank VTB (a Russian state-owned bank that acted as an agent for Rosneft). CDB was granted the right to directly debit cash funds from the pledged collection (escrow) account to secure repayment of principal, interest and other amounts payable under the loan agreement. The borrower (Rosneft) was expected to maintain a cash balance in the pledged collection (escrow) account equivalent to at least 120% of the total amount of principal, interest, and other charges under the CDB loan agreement payable in the respective month. In the event of a default, CDB had the right to debit the entire cash balance of the collection account. The collateral arrangement that underpins the loan agreement is described in greater detail at https://www.dropbox.com/s/4zi0bsvts9sdu20/prepare11en.pdf?dl=0. An Account Charge Agreement was signed by Rosneft (Pledger), OJSC Bank VTB, acting as the Agent of Rosneft (Pledger) and CDB (as the Underwriter and Settlement Bank) (Pledge Holder), whereby Rosneft and OJSC VTB Bank made a pledge in favor of CDB (as the Security Agent) of a portion of cash funds (at least 120% of the total amount of principal, interest, and other charges under the loan agreement payable in the respective month), remitted under the Crude Oil Delivery Agreement between Rosneft and CNPC. Under an Assignment Agreement, Rosneft (as Assignor) assigned partial revenue recovery right with respect to crude oil sales under the Crude Oil Delivery Agreement between Rosneft and CNPC to CDB (Underwriter and Assignee) in order to secure Rosneft's repayment obligations under the loan agreement with CDB. Additionally, a Four Party Agreement was signed by Rosneft (as Borrower), OJSC Bank VTB (as Passport Bank), CNPC (as Importer) and CDB (Agent, Underwriter and Settlement Bank). See https://www.rosneft.com/upload/site2/document_shareholdersmeeting/19062009/prepare10en.pdf

Narrative

Full Description

Project narrative

On March 22, 2013, PJSC Rosneft Oil Company (‘Rosneft’) — a Russian state-owned oil company — and China Development Bank (CDB) signed a framework facilities agreement. Then, on June 21, 2013, Rosneft announced that it had signed a $2 billion facility (loan) agreement with CDB. The facility agreement was signed by Rosneft President and Chairman of the Management Board Igor Sechin and President of China Development Bank Zheng Zhijie as part of the visit of Xi Jinping, President of the People's Republic of China, to Russia. The loan carries a 16 year maturity (and a final maturity date of May 2029) and an unknown interest rate. It was secured (collateralized) with a contract for crude oil supplies signed by Rosneft and CNPC in 2009 (see Record ID#43069). The proceeds of the loan were to be used by the borrower for the development of Vankor field (an oil and gas field in Turukhansk District and Krasnoyarsk Krai within Eastern Siberia) and to facilitate the supply of gas to China. OJSC VTB Bank was the agent and passport bank for the loan. On July 29, 2013, Rosneft disclosed that the $2 billion loan from CDB had fully disbursed in June 2013.

Staff comments

1. Official source confirmation of the framework facilities agreement agreement can be accessed via https://www.rosneft.com/press/news/item/114908/ 2. Evidence of loan disbursement can be accessed via https://www.rosneft.com/upload/site2/document_cons_report/SyxruWR7K0.pdf