Russia's number one oil producer OAO Rosneft (ROSN.RS) Thursday said it has received the first $800 million tranche of a $15 billion loan the company was awarded by China Development Bank in February.
In total, $10 billion of the loan will be available to Rosneft in 2009 and the rest in 2010, the company said in a first-quarter results presentation during which it reported a 20% drop in net profit for the first three months of 2009.
In February, Rosneft and pipeline operator Transneft (TRNF.RS) borrowed $15 billion and $10 billion, respectively, in exchange for long-term oil supply contracts to Chine over the next 20 years.
Rosneft said the loan has a five-year grace period and the crude will be sold at market prices.
Rosneft also said in the second quarter, it has repaid $2.3 billion it owed to international and Russian state-controlled banks. The company still has to repay $6.4 billion of debt by the end of 2009, of which $1.31 billion is due by the end of June. Rosneft said the payment is covered by cash in hand, expected free cash-flow and the Chinese loan.
Overall, Rosneft's net debt declined by $2.04 billion to $19.24 billion in the first quarter thanks to strong free cash-flow generation and a decrease in the dollar value of ruble-denominated debt.