Rosneft signed a record breaking 58 agreements (out of the 205 contracts) at the XIX St Petersburg International Economic Forum for a total sum of US$293.4 billion. Despite the external economic pressure, the contracts have expanded the previously reached agreements with Russian and foreign partners and opened new prospects for cooperation within all the companies business divisions.
Exploration and production
One of the most important agreements signed at the forum was the final binding agreement with BP regarding a joint venture based on Taas-Yuryakh Neftegazodobycha. Under the agreement, Rosneft will sell BP its 20% stake in Taas-Yuryakh Neftegazodobycha. The venture will further develop the Srednebotuobinskoye oil and gas condensate field, which is one of the largest fields in eastern Siberia, currently producing about 20 000 bpd. The Taas venture will also undertake the development of suitable infrastructure for further exploration and development of the region’s reserves. Rosneft and BP will also jointly undertake the exploration of an associated Area of Mutual Interest (AMI) in the region, covering approximately 115 000 km2.
Furthermore, Rosneft and Skyland Petroleum Group signed Heads of Agreement providing for Rosneft’s sale of its 29% share of Taas-Yuryakh Neftegazodobycha and the creation of a joint venture for developing the Srednebotuobinskoye oil and gas condensate field.
Rosneft and BP have also agreed jointly to explore two additional Areas of Mutual Interest (AMI) in the West Siberian and Yenisey-Khatanga basins covering a combined area of about 260 000 km2. This agreement commits BP and Rosneft jointly to conduct studies and, if successful, establish new joint ventures to obtain licences and perform exploration activities. Any joint ventures will be owned 51% by Rosneft and 49% by BP. As part of this agreement Rosneft and BP will also form a joint venture to carry out further appraisal work on the 2009 Rosneft discovered Baikalovskiy field inside the Yenisey-Khatanga AMI. Exploration activities in the two AMIs will include screening studies, acquisition of seismic data, and drilling of exploration wells as new licences are added.
Rosneft and PDVSA signed a Memorandum regarding joint projects of the two companies in Venezuela. Moreover, the parties confirmed their intention to create a joint venture for gas and condensate offshore production in Venezuela as part of the Mariscal Sucre project. The Memorandum also implies the parties’ intention to continue negotiations regarding the increase of Rosneft’s stake in the PetroMonagas project.
A Memorandum of Understanding was signed between Rosneft and Indonesian Pertamina. The document provides for a joint study of potential areas of cooperation between the two companies, particularly in hydrocarbons (upstream in Russia and Indonesia), marketing and logistics (storage, oil and oil products blending), as well as oil refining in Indonesia.
In 2014, refining throughput of both Russian and external assets of Rosneft amounted to 100 million t, a record breaking achievement. Besides supplying the domestic market with high quality products, one of the key goals of the company is to make refining a sustainable and long term profitable business, including that of the refineries abroad. That is why both Rosneft and its JV partner BP are implementing an integrated programme aimed at increasing the efficiency of refining processes, costs decrease for the ROG sites, and development of business in Germany.
During the forum, the parties continued their cooperation and signed a Heads of Terms to pursue a reorganisation of the German Ruhr Oel GmbH (ROG) refining joint venture. The document envisages restructuring the JV by dividing shares in four refineries and associated infrastructure between the parties. As a result of the planned deal, Rosneft will double its shareholding in the Bayernoil refinery to 25% from 12.5%; the MiRO refinery to 24% from 12%; and PCK Raffinerie to 37.5% from 18.75%. BP, in exchange, will consolidate 100% of the equity of the Gelsenkirchen refinery and the solvent production facility DHC Solvent Chemie. The restructuring of Ruhr Oel GmbH will enable Rosneft and BP to refocus their refining and petrochemicals strategies in Germany.
Another step aimed at strengthening Rosneft’s position as an integrated player in the Western European energy market is the signing of an agreement between Rosneft and Total S.A., confirming the execution of a sale and purchase agreement with regard to the 16.67% share in PCK Raffinerie GmbH.
Along with the planned reorganisation of Ruhr Oel GmbH, the deal with Total will allow Rosneft to shore up its position in the German market for refined oil products.
During the forum, Rosneft and ChemChina signed a Memorandum of Understanding regarding the planned purchase by Rosneft of a 30% stake in ChemChina Petrochemical Co. Ltd (CCPC). The document envisages Rosneft’s analysis of CCPC assets. It is assumed that the paying up of stocks will be performed from the proceeds of oil supplies to ChemChina. Moreover, the signed Memorandum foresees cooperation in the area of oil, oil products and petrochemical trading.
Adapted from press release by Rosalie Starling