Page 7 - FSUOGM Week 35 2021

FSUOGM COMMENTARY FSUOGM

its rival under which Gazprom would serve as an Production capacity
agent for exporting its gas. Rosneft would only Rosneft produced 62.8 bcm of gas in 2020, down
be able to sell gas to customers that do not take 6.2% year on year. But this trend is due to reverse
supplies from Gazprom, he said, in order to limit thanks to recent growth at Rospan. The compa-
competition. ny’s target is to ramp up supply to 100 bcm per
Sechin pointed to the spike in European gas year, which Norway’s Rystad Energy estimates it
prices in recent months and said the govern- will achieve sometime in the late 2020s. Its pro-
ment needed to do more to take advantage of duction should reach 72 bcm in 2022, according
this trend. As it stands, Gazprom is understood to the consultancy, thanks to extra contributions
to be having difficulty sending as much gas as from Rospan and the Kharampurskoye field it is
it would like to Europe because of unfavourable developing with BP.
gas transit terms offered by Ukraine and disrup- Rosneft also has significant untapped gas
tions as a result of a fire in early August at its key reserves in Eastern Siberia, and is therefore also
gas condensate plant in Urengoy. lobbying to gain access to Gazprom’s Power of
At current gas prices, Sechin estimated that Siberia pipeline to China. Gazprom has fiercely
Rosneft could pay around RUB5,000 ($67.4) in defended its exclusive use of the pipeline,
MET for every 1,000 cubic metres of gas it sends although the government could allow Rosneft
to Europe, which he said was more than three access if Gazprom fails to increase production at
and a half times what Gazprom pays. In other its Eastern Siberian fields on schedule.
words, Rosneft’s 10 bcm per year would earn An investigation by Russian news agency
RUB37bn ($500mn) more for the government Lenta.ru in May 2020 found that Gazprom
in MET than the same amount supplied by would struggle to deliver on its deal to sup-
Gazprom. ply 38 bcm per year of gas to China’s CNPC
Rosneft would ramp up supplies further in over a 30-year period. Based on international
the future, the CEO said, increasing this revenue reports and audio tapes obtained from Gaz-
difference to RUB150bn. This implies Sechin prom employees and consultants, Lenta said its
was suggesting 40 bcm per year of supply. investigation showed the company had over-
Sechin did not say which routes Rosneft estimated the output potential of the Chayan-
would use to send gas to Europe, but he noted dinskoye and Kovyktinskoye fields, and that
that his proposal would “help life restrictions” its senior management had kept information
caused by EU antimonopoly legislation imposed about technical setbacks quiet, amid pressure
on Nord Stream 1 and Nord Stream 2, as well as from the government to fulfil the 2014 supply
the Opal pipeline in Germany that carries the deal.
former’s gas. EU energy law states that the same The estimate for Chayandinskoye’s recov-
companies cannot own pipelines and also the erable gas reserves has already been revised
gas that flows through them. As a result, Germa- downwards from 1.45 trillion cubic metres
ny’s refusal to grant Nord Stream 2 a waiver may to 1.2 tcm. But according to Lenta, the actual
mean that Gazprom can only use half of its 55 resources could be even smaller, and the num-
bcm per year capacity. It could have to offer the ber of planned wells has been cut from 335 to
remaining capacity to other Russian companies 278.
such as Rosneft. “The document shows numerous violations
The capacity that Gazprom can use at the in the field’s development, condoned by the
OPAL pipeline is likewise restricted, in turn lim- management by Gazprom,” the news agency
iting supplies via Nord Stream 1. said.™

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