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Rosneft looks to attract oil traders to huge Arctic project

Rosneft aims to deliver Vostok oil to the Northern Sea Route by 2024, CEO Igor Sechin told Russian President Vladimir Putin in November at a meeting to discuss the project.

Moscow, January 18 - Neftegaz.RU. Russia’s top oil producer, state-controlled oil firm Rosneft, is in talks with some of the world’s largest oil trading houses, offering them to become investors in a major oil project in Russia’s Far North in exchange for oil supply contracts, sources close to the talks told Reuters.

Russia looks to develop the Vostok Oil mega project in Siberia, which includes the Vankor and Payakha clusters and which has resources estimated at 44 billion barrels. The Vostok Oil project in Russia’s Far North includes the Vankor cluster, the Zapadno-Irkinsky block, the Payakhskaya group of fields, and the East Taimyr cluster. All those clusters are close to the Northern Sea Route that Rosneft wants to use to ship oil to Europe and Asia.

Commodity trader Trafigura said in December it had bought 10 % in Vostok Oil, which would give Trafigura access to high-quality crude oil resources from a major new onshore oil-producing region in Siberia’s Taymyr province. The deal also provides Trafigura with access to long-term offtake supply of crude oil, including from Vostok Oil.

Now, according to Reuters’ sources, Rosneft is in talks with other major oil traders - including Vitol, Gunvor, and Glencore - to potentially attract them to invest in the Vostok Oil project by also offering future oil supply. Rosneft is offering the traders stakes in Vostok Oil in exchange for immediate contracts to supply crude and oil products.

Rosneft was previously looking to get financing for the project from investors in Japan, India, and China, but after the oil price collapse in early 2020, talks had stalled, sources familiar with the issue told Reuters.

Still, some of the traders may not be inclined to buy a stake in the multi-billion project because of Western sanctions on Russian shale and Arctic oil developments and the pullback by many banks from funding development in the Arctic, trading sources told Reuters.

Author: Tsvetana Paraskova

Source : Neftegaz.RU


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