State-controlled oil major Rosneft and pipeline monopoly Transneft suspended talks with China last week on $15 billion and $10 billion loans due to disagreements over interest rates and government guarantees.
The talks are seen as part of a broader oil supply deal that would allow energy-hungry China to secure an annual supply of 15 million metric tons (110 million bbls) of crude for 20 years and Russian companies to receive funds to refinance their liabilities amid the ongoing global credit crunch.
Oil to China is expected to be pumped via a branch of the East Siberia-Pacific Ocean (ESPO) pipeline whose construction will start later this year. The branch will run from Skovorodino in the Amur Region in Russia's Far East to the Chinese border.
