Rosneft asked Russian President Vladimir Putin to meet with Intesa Sanpaolo, Glencore, and the Qatar Investment Authority to discuss development plans after they participated in the partial privatisation of the state-run oil producer.
The meeting would “underline the significance of this deal,” Rosneft chief executive officer Igor Sechin said in transcript of a meeting with Putin posted the Kremlin’s website. “We plan more activity with our partners and to inform you of new projects in which they will participate.”
Russia’s government sold a 19.5% stake in Rosneft to Glencore, a commodities producer and trader, and Qatar’s sovereign wealth fund for 710.8bn roubles (about $11bn), helping to plug the widest budget deficit in six years following the slump in oil prices. The deal was one of the biggest investments in the global energy industry this year despite attempts by the US and Europe to economically isolate Russia with sanctions following Putin’s incursion into Ukraine.
In response to the proposed meeting, plus details of Rosneft’s investment and supply plans for 2017, Putin said: “That’s good.”
Russia has joined with the Organisation of Petroleum Exporting Countries and several other major producers in cutting production in an effort to eliminate a global surplus. International oil prices have risen almost 20% since the deal, easing pressure on companies and potentially opening the way for renewed investments. Rosneft also has the opportunity to accelerate its international expansion this year as the political environment becomes more favourable, according to consultant Wood Mackenzie.
Rosneft plans to increase spending to 1.1tn roubles this year and 1.3tn roubles in 2018 compared with 750bn last year, according to Sechin. Investment will focus on new oil developments including Suzun, Lodochnoye, Russkoye, Kuyumba, Yurubcheno-Takhomsk, Taas-Yuriakh, and natural gas developments Rospan, Kharampur and Kynsko-Chaselskoye.
The company’s oil and gas output rose about 4% in 2016, with production of 210mn metric tons of crude and 67bn cubic metres of gas, Sechin said. Rosneft refined about 100mn tonnes of oil in 2016, a volume it plans to increase to 120mn tonnes this year.
Russia surpassed Saudi Arabia as China’s top crude supplier in 2016 with total shipments of 52.5mn tonnes, according to data released yesterday by China’s General Administration of Customs.
Rosneft, Russia’s largest producer, plans to ship as much as 31mn tonnes of crude to China this year and 71mn tonnes to Europe, including 10mn tonnes to Belarus, Sechin said. The company will supply 2mn tonnes of oil to India this year and plans to eventually increase that to as much as 20mn tonnes, equal to the capacity at Essar Oil’s Vadinar Refinery that Rosneft acquired last year, he said.
The logo of Rosneft is seen on a plaque outside the company’s headquarters in Moscow. Russia’s government has sold a 19.5% stake in Rosneft to Glencore, a commodities producer and trader, and Qatar’s sovereign wealth fund for 710.8bn roubles (about $11bn), helping to plug the widest budget deficit in six years following the slump in oil prices.
