OGZPY PJSC Gazprom (PK)

   (FROM THE WALL STREET JOURNAL 3/4/16) 
   By James Marson and Andrey Ostroukh 

MOSCOW -- State-owned PAO Gazprom has secured a 2 billion euro ($2.17 billion) loan from Bank of China Ltd., the largest single-bank credit in the Russian energy company's history and a sign of how Western sanctions are increasing Russia's economic reliance on China.

The deal, announced Thursday by Gazprom, is the latest in expanding Chinese investment in Russia's oil and gas sector, the country's main export earner that has been hamstrung by U.S. sanctions barring long-term dollar lending to some Russian firms.

Gazprom isn't among those companies, but the restrictions have effectively cut off Russian companies' access to Western capital markets.

The surge in investment is giving China, the world's biggest energy consumer, access to Russia's huge hydrocarbon reserves, tightening ties between the neighbors that share a desire to counterbalance U.S. influence in the world.

China agreed late last year to increase its stake in a $27 billion liquefied-natural-gas project in the Arctic that is blocked from dollar financing and is also awaiting long-hoped-for credits from Beijing. Chinese prepayments for supplies from Russian state oil firm OAO Rosneft have provided an alternative form of financing.

Gazprom, which accounts for more than 10% of Russia's export revenues, is hoping that a $55 billion project to supply gas to China will decrease its reliance on exports to Europe.

Russia has touted Asia as a funding alternative to the West, where some of its companies and banks have faced restrictions in response to its interventions in Ukraine in the past two years.

A Kremlin spokesman said it was disappointed by a decision by the U.S., announced Wednesday, to extend those sanctions.

(END) Dow Jones Newswires

March 04, 2016 02:48 ET (07:48 GMT)

PJSC Gazprom (PK) (USOTC:OGZPY)
Historical Stock Chart
From Mar 2024 to Apr 2024

PJSC Gazprom (PK) (USOTC:OGZPY)
Historical Stock Chart
From Apr 2023 to Apr 2024