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Business

Russia and China sign landmark oil deal

Russia’s crude producer Rosneft and China's oil giant Sinopec have struck a new deal that will boost deliveries by another 10 million tons per year. The deal is a sign of closer energy ties between the two countries.

Russia plans to deliver an additional 100 million tons of crude oil to China over the next decade, Russian Prime Minister Dimitry Medvedev announced during a visit to Beijing on Tuesday.

Speaking to Chinese news agency Xinhua, Medvedev said the contract signed between Russian crude producer Rosneft and Chinese oil firm Sinopec was worth $85 billion (62 billion euros).

Under the agreement, Sinopec will make an advance payment of between 25 and 30 percent of the total cost of the 10-year contract, which will start in 2014.

"These are normal terms that apply to our clients," Russian news agency Interfax quoted Rosneft Chief Executive Igor Sechin as saying during the signing ceremony in Beijing.

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Russia and China strike oil deal

According to latest statistics, China imported 24 million tons of Russian crude oil in 2012. During the high-profile talks in Beijing, the leaders of the energy-hungry Asian powerhouse were also discussing Russian natural gas deliveries with the heads of Russia's top oil and gas producers, who were part of the government delegation.

Prime Minister Medvedev sounded optimistic that a gas delivery contract might be signed by the end of the year.

"We are now reaching a final agreement on a formula under which gas will start flowing from Russia to China. Now we still need to agree on a price," Medvedev said.

The gas deal, which is said to have a volume of 38 billion cubic meters of gas per year, has been held up for year by differences over the price of the gas. The dispute has caused China to turn to the Central Asian energy market for gas, which might lead Moscow to make price concessions toward Beijing.

uhe/kms (AFP, dpa)

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