SAINT-PETERSBURG - Russian oil giant Rosneft and Chinese state firm CNPC on Friday signed a US$270 billion (S$343.3 billion) deal to supply China with oil over 25 years, an agreement hailed by Russian President Vladimir Putin as marking a new era of energy cooperation.
The agreement was signed by Rosneft chief executive Igor Sechin and CNPC head Zhou Jiping in the presence of Putin and visiting Chinese Vice Premier Zhang Gaoli at the annual Saint Petersburg International Economic Forum.
"Essentially, this is a new era of cooperation which means that in our cooperation with our strategic partners we shift from purely raw supplies to full-fledged cooperation in the engineering and manufacturing sphere," Putin said.
Putin has made a priority of stabilising Russia's sometimes prickly relations with its giant eastern neighbour at a time when its ties with the West are becoming ever more problematic.
Russia wants to diversify its base of energy customers away from Europe and is aware it has not fully exploited the colossal potential of the Chinese market.
Top Putin ally Sechin told reporters earlier that the deal would involve the delivery of more than 360 million tonnes of oil over 25 years with a total value of US$270 billion.
He said that deliveries could start as early as this year.
The initial agreement was agreed during a visit to Moscow in March by Chinese President Xi Jinping, his first foreign visit abroad after taking over from Hu Jintao as the country's leader.
That agreement pledged to gradually triple the supply of Russian oil to China over the next 25 years from their current level of 15 million tonnes per year.
The oil in the US$270 billion deal would be delivered to China from the existing Eastern Siberia-Pacific Ocean (ESPO) oil pipeline that would pump the oil directly to the Chinese region of Mohe.
Moscow is also working to finalise a potentially huge gas deal with China but a commercial contract has so far proved elusive as talks have become mired in pricing disputes.