Deal Between Rosneft and Vitol Fizzled Out

It is reported that the deal between Rosneft and Vitol, the oil trader which is worth for 2 billion dollars has already fizzled out. It is the new indication that the upgrading sanctions by the Western are hindering the Russian state-owned oil corporation to realize its ambition.
Before, Vitol, the largest global independent oil trader has always been negotiating in order to raise 2 billion dollars from the American and European bank, using as advance payment for Russian to get oil supply in return. The earliest information about the negotiations came from Financial Times in March.
However, two insiders disclosed that the deal had already been laid aside, since the new sanctions came out in July. One of them claimed that the deal has been over.
The new sanctions by the Western for Russian failing to relieve crisis in Ukraine, have leaded to serious capital flights in Russia and stoke floundering Russian economy.
The deal between Rosneft and Vitol being laid aside is a signal which shows that the sanctions in July are striking the willing of reaching new advance payment between the Western and Russia. In the past two years, advancement payment contracts were the main financing method of Rosneft. The sanctions in July also limited Rosneft and Novtek, the second largest Russian gas producer to raise long-term capitals.
A banker shows that although the advance payment contract does not go against sanctions of the U.S., banks are unwilling to make an impression that banks assist Russian enterprises bypass sanctions. Both Rosneft and Vitol refuse to comment.
Last week, Igor Sechin, the CEO of Rosneft called for Moscow taking measures for helping the corporation keep out influence caused by sanctions. For example, buy 1.5 trillion roubles (about 42 billion dollars) of corporation bonds from Rosneft.
By the end of June, net debt of Rosneft was close to 1.5 trillion roubles. Among that, 1.1 trillion roubles need to be paid back before the end of the next year.
Deal Between Rosneft and Vitol Fizzled Out
Sep 23,2016
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