Sinosure provides Naftogaz with USD 1 billion insurance coverage

On 1 April, Naftogaz and China Export and Credit Insurance Corporation (Sinosure) concluded a memorandum of understanding regarding a USD 1 billion insurance quota for Naftogaz group. This will enable loans and foreign direct investments from China within the said amount

On 1 April, Naftogaz and China Export and Credit Insurance Corporation (Sinosure) concluded a memorandum of understanding regarding a USD 1 billion insurance quota for Naftogaz group. This will enable loans and foreign direct investments from China within the said amount.

This insurance coverage from Sinosure does not require sovereign guarantee, which means that Naftogaz will not rely on Ukraine’s state budget while enabling the group to attract USD 1 billion in investment into the oil and gas industry.

During the first stage, the insurance coverage provided by Sinosure will be used to borrow about USD 160 million to fund UGV’s current contracts with Chinese corporations supplying drilling equipment and turnkey drilling services.

At the second stage, another USD 800 million is planned for additional Naftogaz group projects that will be agreed upon with China in the near future.

This memorandum continues the cooperation of Naftogaz group with Sinosure. Thanks to Sinosure’s insurance coverage in 2018, UGV acquired 13 drilling rigs costing nearly USD 140 million with a five-year payment deferral. The rigs were bought from Honghua International, which is part of China Aerospace Science and Industry Corporation.

Background information:

Naftogaz is Ukraine’s national oil and gas group operating in production, import, transportation, storage and sales of natural gas, oil and petroleum products. The company is 100% state-owned. Naftogaz group is the biggest payer of taxes and dividends to Ukraine’s state budget, accounting for 15% of revenues. In 2018, Naftogaz group enterprises produced 16.6 bcm of gas, 1.9 million tons of oil and condensate, imported 7.0 bcm of gas, transported 114.6 bcm of gas (the business is being unbundled) and 15.4 million tons of oil, supplied 21.2 bcm of gas to Ukrainian consumers and produces 0.5 million tons of petroleum products. The group looking to increase its presence in energy efficiency and renewables.

Sinosure is a state-funded and policy-oriented insurance company tasked with the mission of promoting China’s foreign trade and international economic cooperation. Sinosure is the official Export Credit Agency (ECA) of the Chinese Government. Since its establishment in 2001, Sinosure has experienced exceptional strong growth while facilitating the financing of numerous strategic projects around the world.

Communications Department
NJSC Naftogaz of Ukraine




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