PDVSA to supply Rosneft with crude, oil products in 5-year deal

5/24/2014

PDVSA to supply Rosneft with crude, oil products in 5-year deal

JOSE OROZCO

SAINT PETERSBURG, Russia (Bloomberg) -- State-owned Petroleos de Venezuela SA will supply OAO Rosneft with $2 billion in crude and oil products, Rosneft said today, May 24.

Rosneft will make a “pre-payment” of $2 billion to PDVSA in exchange for more than 1.6 million tons of oil and 7.5 million tons of oil products during a five-year period, Rosneft said in a statement posted on its website. On March 7, Venezuela signed a memorandum of understanding with Rosneft for $2 billion in financing for oil projects in Venezuela.

“This agreement represents a new phase of partnership between Rosneft and PDVSA,” Rosneft CEO Igor Sechin said in the statement. “Following the partnership in the upstream sphere our companies start to cooperate in the sphere of trading.”

Rosneft is the world’s largest publicly traded oil company by output and reserves.

Venezuela is seeking external financing as it combats shortages of goods and medicines and 59% inflation in a country with the world’s biggest oil reserves.

Rosneft and PDVSA have 5 oil JVs in Venezuela, the company said.

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