Rosneft Seeks Euros Payment In Naphtha Tender

(Reuters, 14.Aug.2019) — Russian state oil company Rosneft has for the first time asked buyers to use the euro as the default currency in a spot tender to sell naphtha, an official Rosneft document shows.

The tender, for naphtha loading from ports in Russia’s Far East, is the first time Rosneft has requested euros in an oil product tender and reflects the company’s attempts to offset any potential negative impact of U.S. sanctions on Russia, three traders said.

“The default payment currency should be euro,” the tender document published on Rosneft’s website showed. For years, Rosneft used U.S. dollars as a default currency in contracts.

Rosneft said in the document it may consider accepting payment in U.S. dollars or Russian roubles as well, but such a payment should be made ‘only upon mutual agreement between the parties’.

Rosneft was included in a list of some U.S. sanctions imposed on Russian companies in 2014, although those sanctions do not limit U.S. dollar usage in Rosneft tenders.

Last year, trading sources told Reuters that Russian energy majors were asking Western oil buyers to prepare for using euros instead of dollars for payments and introducing penalty clauses in contracts as protection against possible new U.S. sanctions.

In its naphtha tender, Rosneft will offers buyers up to 180,000 tonnes of naphtha loading from the ports of Nakhodka or Vostochniy in September-December. Bids are due by 1400 GMT on Friday and the results will be announced on Aug. 29.

Rosneft did not reply to a Reuters request for a comment.

Previously Rosneft used only U.S. dollars as a default currency for its oil and products sales, while the euro was considered an alternative currency in case payment in dollars was not available.

Reporting by Natalia Chumakova and Olga Yagova; Editing by Katya Golubkova and Susan Fenton

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