Price of Rosneft’s oil under new contract with CNPC to be based on quotations of ESPO grade

The price during supply of Rosneft’s oil under the new contract with Chinese CNPC will be based on the pricing formula on the assumption of the quotations of the ESPO grade, as under the previous contract, the company reports.

According to the contract, the assumed export to China will make up 13 million tons per year and up to 325.3 million tons over 25 years. The earlier signed contract for 15 million tons of oil per year was also based on the quotations of the ESPO grade.

But, the additional amounts that will be supplied to China, will take a significant part of oil amounts that could be transported to the port of Kozmino, where price quotations of the ESPO grade are formed, as analysts noted earlier. The narrowing of the base of the ESPO oil supply, of course, can lead to an increase in its quotations, but it also may cause some technical difficulties with the maintenance of technological parameters of the grade and, possibly, even reject the idea to form a benchmark of the ESPO oil.