The Chinese company said that the proposed transaction has received the preliminary approval from the National Development and Reform Commission of China.

The transaction is subject to final negotiations and the receipt of regulatory approvals of applicable government authorities.

CEFC chairman of the board China Ye Jianming said: "We are delighted at the opportunity of becoming a strategic shareholder of the world's largest public oil producer and to develop strategic cooperation with Rosneft across the board in exploration, refining, storage, logistics, and sales of the upstream oil and gas resources.

“The transaction will consolidate and elevate the position of CEFC China in the oil and gas sector with incremental 2P reserves of more than 20 billion barrels. CEFC China looks forward to further in-depth cooperation with Rosneft.”

After the completion of the transaction, the stakes to be owned by Glencore and QIA in Rosneft will be 0.5% and 4.7% respectively.

Earlier this month, Rosneft and CEFC China inked a strategic cooperation agreement for joint exploration and production in Western and Eastern Siberia.

Besides, the two companies have forged a contract for the supply of Russian crude oil.

While the contract is expected to result in a surge in direct supplies of crude oil to the strategic Chinese market, it will also provide a guaranteed cost-efficient export channel for the crude sales of Rosneft.

With a hydrocarbon production of more than 5,800 kilo barrels of oil equivalent per day (kboed), Rosneft is one of the world's largest integrated oil and gas companies.

Its portfolio includes nearly 1,100 licenses for hydrocarbon production, 13 refineries in Russia and stakes in five overseas refineries.

With a presence in 24 countries, the company employs about 300,000 people.

In June, Rosneft completed the sale of 20% stake in its subsidiary Verkhnechonskneftegaz to Beijing Gas Group Company (Beijing Gas) for $1.1bn.

Image: Rosneft and ExxonMobil drilling in the Kara Sea. Photo courtesy of © ROSNEFT.