EXIMBANK FUNDING RUSSIA'S U.S. OIL. EQUIPMENT BUYS

The U.S. Export-Import Bank has signed a pact with the Russian Federation to provide financing for Russia's purchase of $2 billion of U.S. oil, gas, and petrochemical equipment and services. Eximbank said the accord, capping more than a year of negotiations, will help Russia revitalize oil and gas production and processing facilities and ultimately increase Russian exports and foreign exchange revenues. The World Bank in july is expected to waive certain regulations and allow Russia to

July 12, 1993

2 min read

The U.S. Export-Import Bank has signed a pact with the Russian Federation to provide financing for Russia's purchase of $2 billion of U.S. oil, gas, and petrochemical equipment and services.

Eximbank said the accord, capping more than a year of negotiations, will help Russia revitalize oil and gas production and processing facilities and ultimately increase Russian exports and foreign exchange revenues.

The World Bank in july is expected to waive certain regulations and allow Russia to establish escrow accounts required by the agreement.

AGREEMENT DETAILS

Standard documentation for individual transactions under the accord will be completed in 6 weeks, allowing Eximbank to begin approving individual transactions by September.

Under the framework, hard currency revenues from export sales of Russian oil and gas will be deposited in a foreign escrow account, which will provide security for Eximbank supported financing and cover payments of principal, interest, fees, and the like.

The Russian Ministry of Fuel and Energy will decide which potential transactions by its oil and gas producing associations will be included under the agreement. U.S. suppliers should contact the production associations directly to discuss potential transactions.

Eximbank's board will consider financing for each transaction case by case.

Talks on a U.S.-Russia oil and gas agreement began in May 1992. At an April summit in Vancouver, B.C., Presidents Clinton and Yeltsin discussed the plan and agreed to press for speedy conclusion as part of an international assistance package for Russia.

The two sides agreed Apr. 13 on the major principles of the agreement. They have not disclosed details of the pact.