Rosneft Struggles To Grow As Sanctions Hit Russia's Oil Champion

But with the European Union expected to impose similar lending bans soon, Rosneft boss Igor Sechin under personal sanctions owing to his closeness to Putin and any resolution to the Ukraine crisis a long way off, all Western lending to Rosneft has in fact stopped, finance and industry insiders say.

"The credit has stopped. All conversation has become purely theoretical. People fear everything is following the patterns of the Iranian (sanctions) scenario when credit and then oil flows were getting progressively hurt," said an executive with a Western trading house and a major buyer of oil from Rosneft.

Over the past year, BP and trading houses Vitol, Glencore and Trafigura provided Rosneft with $20 billion worth of loans syndicated by banks and guaranteed by oil exports.

But Rosneft's attempts to borrow more from them in recent months have stalled or been drastically curtailed because the banks refused to syndicate new deals.

Rosneft CEO Sechin was forced to ask for $40 billion in state help from one of Russia's sovereign wealth funds and Prime Minister Dmitry Medvedev said the company could get it.

"The company needs to maintain its production levels, because Rosneft is a major source of tax revenue," Medvedev told Vedomosti business daily on Monday. "As such, we should help it maintain its level of investment".

A Rosneft source told Reuters the company had no plans to borrow for the next 12-18 months and that credit lines offered by China's state oil firm CNPC meant the company had enough liquidity to see it through.


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