Bloomberg reports Russian Finance Minister Alexei Kudrin as saying that Rosneft borrowed US$6 billion from Chinese banks through State- owned Vnesheconombank in December.

Russia's stabilisation fund rose 218 billion roubles (US$7.8 billion) in January, which Timothy Ash, managing director of London’s Bear Stearns International, said was a massive increase, perhaps indicating inflows resulting from the sale of Yuganskneftegaz.

The Yugansk sale came after government attacks on Yukos, formerly Russia's biggest oil exporter, disrupted crude sales to China, helping drive up world oil prices to a record US$55 per barrel last October. The Russian authorities saddled Yukos with US$28 billion in taxes and jailed its former chief executive Mikhail Khodorkovsky.

Kudrin said Russia now had 646.5 billion roubles in the stabilisation fund, having yesterday repaid all of its US$3.3 billion debt to the International Monetary Fund ahead of schedule.

Russian Energy Agency director Sergei Oganesyan said Rosneft had agreed to send oil to China National Petroleum Corporation for five or six years in exchange for an advance payment of US$6 billion. He declined to give details of the contract, calling it a commercial secret.

“There's nothing unnatural about an advance payment for five or six years,” Oganesyan said at a press conference in Moscow.

If the US$6 billion advance payment covers all of those planned deliveries, then China is paying about US$17 per barrel for the oil, less than half of current world prices, according to Bloomberg calculations.

The price of Russian Urals blend crude for delivery to northwest Europe today fell 36 cents to US$40.82 per barrel.