Rosneft to develop the shelf with companies from China and South Korea

The companies from China and South Korea will help it to develop the shelf.

Rosneft has found new partners among the Asian companies. Over the last few days the head of Rosneft, I. Sechin, has managed to visit 2 countries –South Korea and China where he negotiations with 5 largest companies of the region. The main result was the signing of the agreement with the Chinese companies on the joint work at the shelf of the Pechora and Barents Seas. Analysts assess positively such cooperation and say Rosneft will open a new market for hydrocarbons sales for itself on the account of new partners and accelerate the process of the shelf development.

The head of Rosneft, I. Sechin, today completes his 3-day working visit to China. Yesterday he met with the management of 3 largest companies of the country – CNPC, Sinopec and CNOOC. In the process of the negotiations the parties considered the issues of the possible participation of the Chinese companies in the joint projects on exploration and production at the Russian shelf and signed a number of documents on mutual cooperation, Rosneft reported. A source familiar with the process of negotiations told Kommersant it is about the shelf of the Barents and Pechora Seas where the Russian state company has licenses for 7 sites, at 2 of which – the Yuzhno-Russky and Medyisko-Varandei deposits – the primary geological exploration works have started. Similar agreements Rosneft has already signed with ExxonMobil, Eni and Statoil.

Moreover, the President of Rosneft met with the Vice Prime Minister of the State Council of China, V. Tsishan. They discussed the rise of the oil supply to China (now Rosneft supplies 15 mln tons of oil annually), participation of the companies in the hydrocarbons production and processing projects in Russia and China. Rosneft also suggested new variants of cooperation in the sphere of LNG transportation.

The LNG transportation issue was discussed at the meeting of the head of Rosneft and South Korean companies KOGAS and STX the day before his visit to China. The partnership with them will give the company the access to the technologies and open a new market for LNG exports, Rosneft said. STX is a South Korean corporation, one of the world leaders of shipbuilding that also constructs equipment for hydrocarbons production at the shelf. KOGAS is the largest LNG importer in Korea. The company realizes the projects in the sphere of pipeline transportation of hydrocarbons in the APR. Rosneft is one of the Russian companies that stand for the liberalization of the LNG exports.

Meanwhile the cooperation in the joint projects of Rosneft with its partners from APR hasn’t brought particular results. In 2010 inthe framework of the JV “Vostok Neftekhimiya” (49% belongs to Rosneft, 51%-to CNPC) the agreement on the technical-economic assessment of the construction of the oil refinery plant in Tianjin (China) was signed and even the ceremony of the construction start was held. The plant is planned to process 13 mln tons of oil a year, about 9 mln tons of which will be the Russian raw materials. However, the construction hasn’t started. The further realization of this project depends on the achievement of final agreements between the parties, is said on Rosneft’s website. Rosneft also plans to construct a plant in the Far Easton the processing of naphtha and LNG with the capacity of 3.4 mln tons and a sea terminal for the dispatch of finished products for exports. The target markets are to become the countries of the South-Eastern Asia and first of allChina. Meanwhile the project is not realized, Rosneft is looking for a foreign partner for it.

For Rosneft China and South Korea is one of the most perspective directions of its international cooperation, V. Nesterov from Sberbank Investment Research thinks. He explains it by the fact that the APR is the largest oil and oil products importer. Moreover, for the last few years Rosneft has changed its position on gas as in the perspective the development of the shelf sites is to set the issue of its monetization before the management of the company, the expert adds. The prices for LNG in Chinaand South Korea, according to him, by 1.5 times higher than in the European market. The analyst also says the Asian companies will help Rosneft to accelerate the process of realization of the shelf project by means of using the new technologies. Mr. Nesterov gives CNOOC as an example which is the 3rd largest company in the country and specializes only on offshore projects.



Translated by Galiya Musabekova

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