Page 6 - FSUOGM Week 43

FSUOGM COMMENTARY FSUOGM

Rosneft alone allowed to

bid for northern gas fields

Rosneft is hoping to use the resources to underpin LNG production as
part of its Vostok Oil megaproject

RUSSIA RUSSIA’S Rosneft has been cleared as the only Route (NSR) from a new terminal on the shore
company allowed to take part in an auction for of the Taymyr Peninsula.
WHAT: rights to the Deryabinskoye and Kazantsevskoye Rosneft now wants to add LNG and even coal
Rosneft will be the only fields in northern Krasnoyarsk, Russian Natural exports to the project. In addition to crude, it is
company allowed to Resources Minister Dmitry Kobylkin said last looking into options for shipping up to 35-50mn
bid for two gas fields in week. tonnes per year of LNG and 50mn tpy of coal
Russia's far north. Rosneft CEO Igor Sechin asked Russian from the terminal it intends to build in Sever
Prime Minister Mikhail Mishustin over the sum- Bay, its CEO Igor Sechin said at the Eurasian
WHY: mer for a contest to be held for the two fields, Economic Forum in Verona last week.
The company wants along with a third called Ushakovskoye. But the Ultimately, further appraisal is needed before
more gas to support government later agreed to ring-fence Ushak- Rosneft can be sure of any of its output predic-
the development of a ovskoye to provide gas supply for the local facil- tions. The new gas fields it hopes to acquire have
major hub for Arctic LNG ities of mining giant Norilsk Nickel. undergone only limited exploration, and their
production. Rosneft wants to add more gas resources to resources could disappoint.
its already sizeable Vostok Oil venture in the As for coal, there are currently no projects
WHAT NEXT: Russian Arctic, to underpin LNG production. in production in the area, and existing plans by
Supported by fresh tax Sechin requested that auction terms be set that company Vostokugol to extract 19mn tpy in the
breaks, Rosneft has prevent companies that do not already produce area by 2024 now look unrealistic, amid current
expanded the scope of its oil and gas in the area from participating. This weak market conditions. The company is also
Vostok Oil venture. reduces the selection pool to just Rosneft, the embroiled in a corporate conflict after the death
operator of the giant Vankor oilfield in northern of its former main owner, Dmitry Bosov, earlier
Krasnoyarsk. this year.
“The issue has been resolved. It will be an AEON Corp, controlled by businessman
auction with special conditions,” Kobylkin told Roman Trotsenko, intends to develop the Syr-
reporters. He was asked whether Rosneft would adasayskoye coalfield on the western coast of
be the only company allowed to take part and Taymyr. Syradasayskoye holds some 5bn tonnes
answered “yes.” of coal, but AEON intends to build its own sea-
“Our task to reap as much benefit for the state port, Severnaya Zvezda, to ship the resources to
as possible, so we will not delay,” he continued, buyers.
noting the contest would take place before the Commenting on developments, BCS Global
end of the year. Markets (BCS GM) said Rosneft’s growing
ambitions at Vostok Oil show that the company
Rising ambitions “retains material growth opportunities despite
Vostok Oil is Rosneft’s flagship project in the its large size.” Rosneft secured significant tax
Arctic, where the company has fallen behind its breaks at Vankor in the recently passed oil tax
rivals Gazprom and Novatek in developing new bill, including a waiver of mineral extraction tax
resources in recent years. (MET). The company hopes to use this support
The venture consists of Vankor and its sat- to cross-subsidise Vostok Oil’s other, undevel-
ellite fields, as well as other, undeveloped, oped deposits.
Rosneft acreage further north and the Paiyakh- “The LNG angle was expected, but the num-
skaya fields, operated by its private partner bers appear ambitious, leading us to think that
Neftegazholding. the fields in the lightly explored region may, as
Vostok Oil was originally conceived as an oil- is the case with the relatively nearby Yamal and
only venture. Rosneft earlier predicted it could Gydan peninsulas, be relatively gas prone,” BCS
supply up to 500,000 barrels per day of oil to GM said. “The coal is a new idea entirely. We are
global markets by 2024, rising 1mn bpd in 2027 unaware if Rosneft itself is considering coal pro-
and 2.3mn bpd by 2030. This crude would all duction, or if it anticipates handling cargoes for
be shipped via tankers along the Northern Sea third-party producers.” ™

P6 www. NEWSBASE .com Week 43 28•October•2020