BP Plc and OAO Rosneft, Russia’s largest oil producer, are seeking a loan of as much as $5 billion to fund a crude-purchase deal, according to two people with knowledge of the matter.
The five-year facility pays a margin of 200 basis points, or 2 percentage points, more than benchmark rates, said the people, who asked not to be identified because the terms are private. The two oil firms have set up a specially created company to raise the debt, which is backed by future oil production from Moscow-based Rosneft.
Rosneft has struck prepayment deals with commodity traders and petroleum companies this year supported by international bank loans. These include $8.3 billion of facilities with Glencore Xstrata Plc and Vitol SA and a $1.5 billion contract with Trafigura Beheer BV, according to data compiled by Bloomberg.
Toby Odone, a spokesman for London-based BP, confirmed the company was in discussions with Rosneft about a potential prepayment deal. He declined to comment on the financing. Officials at Rosneft didn’t respond to telephone calls and e-mails seeking comment on the debt.
Bank of China Ltd., Deutsche Bank AG, HSBC Holdings Plc and Lloyds Banking Group Plc are arranging the facility, which is being marketed to a wider group of lenders, said the people.
Last month, Rosneft agreed to supply China Petrochemical Corp., or Sinopec Group, with 100 million metric tons of crude over 10 years in exchange for prepayments of about $85 billion. That agreement followed a 25-year supply accord with China National Petroleum Corp. that has a value of $270 billion, according to the state-run Russian oil producer.
BP, Europe’s third-largest oil company, retained about a 20 percent stake in Rosneft after the Russian company bought out its half of their joint venture TNK-BP, data compiled by Bloomberg show.