Reuters reported that Rosneft is talking to oil majors and traders, including Shell, Total and Glencore, to raise up to USD 10 billion using future oil exports as collateral to complete its purchase of TNK-BP and become the world's biggest listed oil producer.
Such trade finance is usually the least preferred option for oil firms, as they like to keep their export flows free from obligations but the USD 55 billion acquisition of TNK-BP, a JV between BP and Soviet born billionaires will most likely test banks' exposure limits for one borrower.
Five sources close to Rosneft and the potential lender companies said talks between Rosneft and its traditional oil buyers such as Royal Dutch Shell, Total, Glencore and Vitol had been going on for several weeks. Rosneft was collecting proposals on the amount of money and terms from the companies.
Sources said that the list of lenders could include BP, which may be keen to facilitate an end to its often-fractious TNK-BP partnership.
Rosneft headed by Mr Igor Sechin a close ally of President Mr Vladimir Putin needs to borrow up to USD 40 billion to complete the TNK-BP acquisition and is already talking to banks to raise more than Q3 of that in what would be Europe's ninth biggest syndicated loan. Rosneft also needs money to open new fields in the Arctic and finance USD 25 billion refinery modernization program.
The sources said that Rosneft wants to rise up to USD 10 billion from oil majors and traders. That is one financing option among others it is considering. It will easily be one of the biggest ever trade finance deals. It will certainly dwarf anything Rosneft has done to buy Yukos.
Rosneft regularly sells crude at spot tenders and the latest tenders have been dominated by trading houses Vitol and Glencore which outbid previous winners like Shell by offering very high premiums.
A source at one major said that Europe's oil market will be on edge over this deal and who wins access to crude. People are getting a bit tired of the Vitol and Glencore current dominance.
