Ready to talk again: Russia and China
Russia and China back on talking terms
Russia has resumed talks with China over a $25 billion loan as part of a broader oil supply deal, but negotiations could take longer than planned, an executive at Russian oil pipeline monopoly Transneft said.
China is considering lending Russian state-controlled oil major Rosneft and Transneft up to $25 billion in exchange for securing oil supplies for 20 years.
Sources told Reuters earlier this month the two countries had suspended discussions due to disagreements over interest rates and state guarantees.
Russian Energy Minister Sergei Shmatko said on 18 November the talks would resume and, speaking in India today, said he hoped to finalise a long-term crude supply deal with China by the end of the year.
"The talks are going on," Mikhail Barkov, Transneft's vice-president, told Reuters late yesterday.
He added the sides were not likely to sign final documents today, a date first mentioned after the first round of talks last month between Russia's senior energy official, Deputy Prime Minister Igor Sechin, and Chinese Premier Wen Jiabao.
"The date 25 November was not set for them to definitely sign it. The memorandum said the sides would make every effort to sign it by that date," said Barkov.
"We are not going to sacrifice the quality. We will not speed it up and we will talk until compromise is found," he said.
The deal is of crucial importance to both sides.
Russian oil companies desperately need cash to refinance their heavy debts and fund growth at a time of plunging oil prices, while Beijing is seeking direct access to some of Russia's biggest fields.
Transneft is building a 600,000 barrel per day oil pipeline from the resource-rich region of East Siberia to Asia - its first oil pipeline to the region - and is in talks with Beijing on constructing a spur to China.
Russia has said it would deliver half of the oil, or 300,000 barrels per day, via the spur to China.
It will send the rest to the Pacific coast for further delivery to other Asian clients.
Transneft plans to launch the pipeline in late 2009.
Rosneft, which is expected to be the main oil exporter via the route, is now supplying around 79 million barrels of oil to China by railways under the 2004 deal.
The deal helped Rosneft borrow $6 billion from China to fund its purchase of assets belonging to bankrupt oil company Yukos, but the Russian company has said it would not extend the deal beyond 2010 because it considered it poorly priced.