Please activate JavaScript in your browser to use all interface options.

« March, 2024
Mo Tu We Th Fr Sa Su
Main page News room Press releases
Press releases

Rosneft and Beijing Gas Sign Binding Documents for the Sale of 20% Stake in Verkhnechonskneftegaz

07 November 2016

Rosneft and Beijing Gas Group Company Limited (hereinafter, "Beijing Gas") signed a Purchase and Sale Agreement and a Shareholder and Operating Agreement for the sale of a 20% stake in Verkhnechonskneftegaz (a Rosneft subsidiary) to the Chinese company, an Agreement on the Area of Mutual Interest in respect of the adjoining license areas and an Agreement on the cooperation in the gas business. The transaction execution agreement was signed in the presence of the Prime Minister of the Russian Government Dmitry Medvedev and Premier of the State Council of the People's Republic of China Li Keqiang by Rosneft Chief Executive Officer Igor Sechin and Beijing Gas Group Chairwoman of the Management Board Li Yalan.

Legally binding documents were signed following the agreements reached by the companies in the course of the Russian President Vladimir Putin's visit to China in June 2016 and provide for the base value of the acquired 20% share is c. USD 1.1 bln. The closing of the deal will be performed in accordance with the required procedures, including the obtaining of needed regulatory approvals.

The achieved evaluation is USD 3.2 per barrel of oil equivalent reserves (in terms of 2P category using PRMS method) and reflects high potential of the Verkhnechonskneftegaz’s resource base.

This transaction will allow Rosneft to fully implement the significant development potential of the Verkhnechonsk field, including gas production, and to confirm the strategic partnership with one of the largest distributors of natural gas in China. Within the framework of the deal an integrated cooperation formation is being created: the Chinese company will obtain a share in one of East Siberia's largest producing fields with a developed infrastructure and access to the ESPO pipeline; whilst Rosneft will obtain the possibility to access the local gas market of China, including end-customers, by means of swap supplies of gas.

The decision of the Chinese government to converse Beijing power generation from coal to gas and the accelerated transition of automotive transport of China to natural gas motor fuel open wide perspectives for a significant expansion of Rosneft activities in the Chinese market.

In concluding the signing ceremony, Igor Sechin said: "The agreements reached with Beijing Gas, one of the leading companies in the growing market of natural gas distribution to end-users in China, is a new milestone of the energy dialog between Russia and China. I am confident that this deal will give a new impetus to the relations between the two countries in the area of energy cooperation, while the competences and capabilities of our partner on the key distribution market will generate significant synergies from our joint operation."

Note for editors:

Beijing Gas Group Limited is a part of Beijing Enterprises Group Limited and is one of the leading companies in the area of gas supplies, construction of gas infrastructure and power generation in the Beijing region. The company manages more the 20 gas projects in the People’s Republic of China. Beijing Gas is the first Chinese company supplying more 10 bcm of gas to on city. The company also owns a marine terminal for storage and loading of LPG in Guadao, with a capacity of 6mtpa.

Verkhnechonskneftegaz holds a license to develop the Verkhnechonsk oil, gas and condensate field. The current С1+С2 recoverable reserves of the field stand at 173 mmt of oil and gas condensate and 115 bcm of gas. In terms of the reserves volume, this field is in category of federal significance. The current oil production level is 8.5 mmtpa. 

Rosneft Information Division
Tel.: + 7 (499) 517-88-97
7 November 2016

These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.