The Russian oil firm Rosneft is to cut production and carry out a programme of redundancies. The state-owned group is also selling stakes in its Siberian oil fields as a result of sanctions imposed by the USA and the European Union in response to Russia’s military involvement in Ukraine.

The sanctions have reduced Rosneft’s access to western financing, causing difficulties with servicing its $55 billion debt. Despite these problems, the group still has earnings of around $30 billion a year, while billions more are available via Chinese credit lines and Russian state aid.

Rosneft — the world’s biggest listed oil company, producing more oil than Iraq or Iran — will reduce its 4,000-strong Moscow workforce by up to 25%. Russian president Vladimir Putin Putin performed a dramatic U-turn earlier this month, when he said Rosneft would welcome China buying a stake in its Siberian Vankor field.

Emily Stromquist, an analyst at the Eurasia risk consultancy, said: “Rosneft’s decision to offer China a stake in the ‘mega’ Vankor oil field in East Siberia signals that Moscow’s bargaining position has been further weakened by sanctions and that it needs the capital infusion.”