Beijing signs $25bn oil deal with Russia

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Beijing: Beijing signed a deal with Moscow yesterday to lend $25 billion to two Russian oil firms, which in turn will sell 15 million tons of crude oil a year to China for the next 20 years.
The agreement will ensure the long-awaited extension of Russia's Siberia-Pacific coast pipeline to China, too. The pipeline project, agreed on late last year, will see the extension of the pipeline from the Siberian city of Skovorodino, 70 km north of the Sino-Russian border, to China.
China will lend $15 billion to Russia's state-owned oil firm Rosneft and $10 billion to pipeline monopoly Transneft. China Development Bank (CDB) provided the credit for the deal, according to the Associated Press (AP).
The Russian firms, on the other hand, will ensure China gets 300,000 barrels of crude a day for 20 years.
China and Russia signed seven agreements on energy cooperation package programs, Xinhua said, quoting a Foreign Ministry official.
The $25-billion deal is seen as a boost to Russian energy firms because the global financial crisis and a drastic drop in the crude prices have left them struggling to raise capital, AP said.
The agreement was signed by Vice-Premier Wang Qishan and Russian Deputy Prime Minister Igor Sechin in Beijing at the third round of energy talks between the two countries.
Russia, the largest oil exporter after Saudi Arabia, is seeking to shift its exports focus from the West, and eyeing China as the main new market. Last year, trade between Russia and China increased 18 percent to $56.8 billion.  [18/02/09]