China, for over six years, has been the largest trading partner of Russia and Russia is one of the main sources of import of energy resources for China.

In 2016, Russia became the largest supplier of crude oil to China - accounting for almost 14% of the Chinese import. In the last year, the share of China in the structure of the Russian oil export achieved 20.6% which made it our key trading partner in this sphere. In 1Q 2017, the export of the Russian oil to PRC increased by another 12% relative to 1Q 2016. In last year, Rosneft supplied 34.5 mln. t of oil to PRC - two times more than three years ago. Now Rosneft delivers every tenth ton of crude  imported by China.

But energy resource trading is only a base of Rosneft and Chinese companies' cooperation. Its overall potential is much broader and took active efforts to deepen and develop it through joint work in the energy markets and creation of interstate vertically integrated chains, mutual investments, cooperation in technology, service sectors, delivery of equipment. An important example of the interstate vertical integration is a Rosneft joint Tianjinого refinery project which implement in partnership with CNPC. Rosneft is ready to consider joint investment activities in all segments of the technology chain - upstream, infrastructure, downstream and midstream.

There is a strong potential in implementation of joint projects in the petrochemical industry which is demonstrated by Rosneft interaction with Chinese national chemical company ChemChina in Far Eastern Petrochemical Co. (FEPCO) project.

In the same area, Rosneft work hand in hand with Sinopec implementing our Boguchany project. They plan to build a high-tech multiproduct facility in Boguchany.

Also Rosneft sees the growth of cooperation with Chinese companies in the sphere of high tech services and equipment. An important example of cooperation in this sphere is supply of equipment for Zvezda Shipyard in the area of Vladivostok.  A contract for delivery of cranes for Zvezda Shipyard was signed with Chinese company China Heavy Industries Corporation Nantong. In June 2016 a contract for construction and delivery of a unique 40,000 load-out barge was signed with Beihai Shipbuilding Heavy Industry Ltd.

Development of cooperation between Russia and China in the gas business also has strong outlooks and Rosneft plans to take active part in this cooperation. Rosneft and Beijing Gas Group Company Limited ("Beijing Gas") closed the deal for sale and purchase of 20% shares in Verkhnechonskneftegaz (a Rosneft subsidiary). Entry of Beijing Gas in Verkhnechonskneftegaz opens broad opportunities for development of cooperation in the sphere of Rosneft natural gas export to China. Rosneft and Beijing Gas consider options of development of integrated cooperation in Eastern Siberia and Far East region implying exploration of hydrocarbons, development of fields, production and sale of gas. The parties also analyze opportunities for joint work for expansion of utilization of the gas motor fuel.