Rosneft Denies Ties Between China And Yugansk

Yesterday Russian state oil company Rosneft has denied the recent information that Russian bank Vnesheconombank borrowed a $6 billion from Chinese banks to Rosneft's purchase of Yukos? key production unit Yuganskneftegaz. China allegedly lends money to Rosneft as 'advance payment' for the oil deliveries to China till 2010.

Rosneft insists that its agreement to supply oil to China is by no means linked to its takeover of Yuganskneftegaz.

Russia's Ministry of Finance now withholds comments. However, on Tuesday Russia's Minister of Finance Alexei Kudrin said that several Chinese banks lent Russian bank Vnesheconombank $6bilion, which was in turn lent to Rosneft to pay for Yuganskneftegaz.

Rosneft said that the deal to supply oil to
China is seen as part of Beijing's desire to secure long-term oil supplies to feed its booming economy, so the loan and oil supply contract were unrelated.

It also denied that the money borrowed from Chinese banks was used to pay Yukos? unit. It said, the money was to be used to finance current operations and "capital-intensive strategic projects