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25

Another Loan To Russian Oil Company

Rosneft expects a difficult fourth quarter after strong third-quarter results and hopes that state aid will help it refinance its massive foreign debt

CFO Peter O'Brien said in an interview that Rosneft had secured a $774 million government loan from state-owned bank VEB to refinance its foreign debt, which totaled $19.4 billion at the end of the third quarter.

"We have signed a facility with VEB for $774 million, and we have drawn approximately $350 million of that," O'Brien said, adding that Rosneft was due to refinance about $800 million by the end of this year.

He said Rosneft might ask for more state loans from the $50 billion package the government has allocated to help companies repay foreign debts in the face of the global liquidity crisis.

"We are a very large contributor to the Russian economy, GDP and tax revenues, and the government is strongly interested in our continuing ability to finance our investment program."

O'Brien said his company was considering different debt options next year, including a possible $15 billion loan from China, which the two countries are discussing as part of a broader long-term oil supply deal.

"As far as I can hear, progress is ongoing, and I am optimistic that the agreement will be in place before the year-end," O'Brien said.

Rosneft on Monday exceeded expectations by publishing strong financial results for the third quarter, during which it faced declining oil prices and record-high export duties.

Rosneft posted almost an 80 percent year-on-year rise in net profits to $3.47 billion, beating analysts' forecasts by almost $1 billion. Revenues were $20.69 billion, up from $13.74 billion last year and almost in line with analysts' expectations.

Author: Ksenia Kochneva