Rosneft raises $1.5 billion through selling BP fuel in advance

Rosneft, Russia’s largest oil producer raised at least $1.5 billion through a five-year deal to supply crude oil and fuel to BP.

BP will pay in advance for as much as 12 million tons of oil products and crude to be supplied during the next five years, starting in July 2014.

State-run Rosneft is increasingly using more pre-payment deals to raise funds, a trend that may accelerate as deteriorating relations between Russia, the US and Europe make it more expensive to borrow in mainstream debt markets. Igor Sechin, Rosneft chief executive said in February that pre-payments could total more than $100 billion by 2017.

The Moscow-based company already has agreements with oil traders Glencore Plc and Vitol Group as well as Chinese customers including China National Petroleum Corp.

U.K. banks HSBC Holdings Plc and Lloyds Bank Plc withdrew from the group arranging the finance on concern that lending to Russian companies was too risky after the imposition of US and European Union sanctions, people familiar with the matter said earlier this month.