Major oil player BP (BP.L) has announced that it has signed a supply deal with Russian oil major Rosneft in which it will pay at least $1.5Bn upfront for the supply of oil. This is the second agreement reached recently between the two companies since Rosneft’s Executive Chairman Igor Sechin had a visa ban and asset freeze imposed on him after the Annexing of Crimea by Russia earlier this year.
The agreement will run for 5 years on a pre paid basis and covers export deliveries of up to 12m tonnes of oil products which can be replaced by oil.
The company Rosneft has not been affected by any sanctions directly and the two companies are said to be looking for other opportunities of working together.
Rosneft chairman Sechin said in a statement today “It provides BP with stable supply chain and guaranteed quality of oil products and allows Rosneft to support high profitability of its sales activities and acquire additional financial resources in accordance with the referential nature of such deals.”