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    Rosneft Sells 20% of East Siberian VCNG to China's Beijing Gas for $1.1Bln

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    China's Beijing Gas Group Company Limited acquired a 20-percent stake in Verkhnechonskneftegaz (VCNG), according to official statement of Russian oil giant Rosneft.

    MOSCOW (Sputnik) — Russian oil giant Rosneft on Thursday said it closed the sale of a 20-percent stake in Verkhnechonskneftegaz (VCNG) to China's Beijing Gas Group Company Limited for $1.1 billion.

    "As a result of the transaction, the parties are going to create a vertically integrated system of cooperation. The Chinese company acquires a stake in one of the largest producing fields in Eastern Siberia with developed infrastructure and access to the ESPO pipeline while Rosneft gets an opportunity to enter China’s prospective domestic gas market, including end users via swap gas supplies," Rosneft said in a press release.

    The project is valued at $3.2 per barrel of hydrocarbon reserves and is category 2P calculated on the PRMS, Rosneft noted.

    "The Implementation of the project of Beijing Gas corporation joining the Verkhnechonneftegaz enterprise will allow us to enter the rapidly growing Chinese market. The eastern direction is one of the most prospective and strategically important for us. Cooperation with Beijing Gas is a good example of Rosneft's integral approach, which contributes to the creation of a reliable energy bridge between Russia and Asia-Pacific countries," Rosneft CEO Igor Sechin said, commenting on the deal.

    Rosneft stand at the 2017 St. Petersburg International Economic Forum
    © Sputnik / Konstantin Chalabov
    Rosneft and Beijing Gas are considering options for developing integrated cooperation in Eastern Siberia and the Far East, involving exploration of hydrocarbons, development of fields, production and sale of gas.

    Verkhnechonskneftegaz holds a license to develop the Verkhnechonsk oil and gas condensate field in Eastern Siberia. The field's current recoverable reserves (C1+C2 category) are 173 million tonnes of oil and gas condensate and 115 billion cubic meters of gas, so it qualifies as the subsoil area of federal significance. The company currently produces 8.5 million tonnes of oil per year on the field.

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    Verkhnechonskneftegaz, Beijing Gas Group, Rosneft, China, Russia
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