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Vostok oil trafigura12/27/2023 In an interview with GTR, Trafigura’s Laurent Christophe, group treasurer at the Swiss-based trader, says the company will ink a new sustainability-linked multi-currency RCF in late March with two separate tranches. Having published its first ever emissions reduction target in a responsibility report last month – which will see the commodity trader work to cut its own direct and indirect emissions by 30% in the next three years – Trafigura is preparing to sign a sustainability-linked RCF in March. Global commodity trader Trafigura is set to secure a new sustainability-linked revolving credit facility (RCF) as it works to cut its carbon footprint and boost renewables, though the firm says it has no plans to shift away from oil in the coming years. “It is an issue of risk versus reward, and for some people, the maths are still not working,” explained one of the sources.Related News Trafigura secures facility renewal for North America operations Mercuria closes three financing deals worth over US$5bn Santander takes stake in Komgo to bolster digital trade finance offering US Exim looks to back Trafigura LNG exports India’s Russian oil re-exports seen as sanctions weak link Trading sources said that large traders had shown interest in securing volumes from Russia but exercised caution because of Western sanctions, which forbade long-term funding of Rosneft, and waning interest from banks in funding Arctic deposits. According to the trader’s spokesperson, the acquisition “builds on the longstanding commercial relationship between Trafigura and Rosneft, providing access to long-term offtake supply of crude oil including from Vostok Oil.” Thus, Trafigura is likely to remain the largest exporter of Rosneft fuels for the next five years. Reuters’ sources stated that the trading house would get an extension of its long-term deal to lift oil and products in exchange. Swiss-based Trafigura has already agreed to purchase a 10% stake in the project. Vostok Oil will cost dozens of billions of dollars to develop and is valued by Rosneft at $70-150 billion, depending on the price of oil and cost of capital, according to three sources close to talks. However, the project will require significant investments in new pipelines, roads and other infrastructure in East Siberia and the Arctic. The oil is supposed to be shipped to Asia via the Northern Sea Route. Earlier, Rosneft stated that the deposit could produce 1% of global crude later this decade. Vostok Oil is one of Russia’s biggest oil projects with resources estimated at 44 billion barrels, which is enough to supply the world for more than a year. Rosneft attempted to attract local investors from Japan, China and India in 2019, but negotiations stalled after the oil price collapse of 2020. According to unnamed sources, Rosneft has offered the trading houses to invest in Vostok Oil in exchange for immediate contracts for crude and refined products. Although trading houses usually avoid direct investment in production, Rosneft’s proposal may attract them by giving access to a long-term source of supply to the growing Asian market.Īt the moment, Rosneft is in discussions with such major traders as Vitol, Glencore and Gunvor. Russian state oil major Rosneft is courting investments from global trading houses to help develop the company’s Vostok Oil project in the Arctic, states Reuters citing industry sources. After selling a 10% stake in Vostok Oil project to Swiss commodity trader Trafigura last month, Rosneft continues to seek partners between key trading houses, as other potential investors seem to drop out amid the current oil market downturn.
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