Trafigura Group closed the purchase of a stake in 10% of the operator Vostok Oil from Russia with which he landed on one of the most important oil projects in the Arctic.
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Although at first the cost did not transcend, last week it was known that was financed by a $ 7 billion loan from a Russian bank.
Both companies announced the purchase a few weeks ago without disclosing the value of the transaction. Trafigura had only said that the purchase had been financed mostly by “long-term debt”, not to mention banks.
However, the multinational commodities firm agreed a line of credit for 5.775 million euros with the Credit Bank of Moscow PSJC on December 23. A good way to graph the scale of Trafigura’s stake in the project.
According to the CEO of Rosneft, -Vostok Oil’s controlling company-, Igor Sechin, the Arctic project could produce 1 million barrels of oil a day by 2027. The investment runs counter to the reluctance among many Western companies and investors to back large new oil projects, especially in environmentally fragile areas like the Arctic.
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It is also estimated that in addition to the loan assumed by Trafigura, the firm used a good part of its own cash to finance its income.
This implies that the deal was worth more than $ 7 billion, making it the company’s largest acquisition to date, and values the 10% stake in Vostok Oil at roughly the same level as Trafigura’s book value.
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