Rosneft Plans for Gas Exports to Europe
Russia's oil major Rosneft is planning to boost its gas business through sales to Europe, according to its 2022 strategy published December 19.
This represents another challenge to Gazprom's piped gas export monopoly, following Rosneft and BP's statement of intent in June to market gas through pipeline deliveries to Europe, and later remarks by Rosneft vice-president Vlada Rusakova, a former top Gazprom executive.
The strategy says that "an important condition for the gas business development is an increase of producibility and creation of a favourable regulatory environment, in particular to get access to gas export. This will efficiently monetise the company's gas resources through the export of pipeline gas to new European consumers."
So far Russia's president Vladimir Putin has resisted this push, with the exception of the Novatek-led Yamal LNG project, some cargoes from which will end up in European markets now served also by Gazprom. However, that plant was seen as vitally important to the government, which did much to facilitate it through cash, tax and other direct and indirect aid.
The success of the 2022 strategy also depends on bringing gas production projects onstream on time and on budget, increasing the positive free cash flow in 2018-2022 and will allow Rosneft to take a fifth of the Russian gas market with annual production growth to over 100bn m³.
It says new promising projects include Rospan, Harampur and the Kynsko-Chaselskaya group of fields, which are planned to be put into operation during this period.
Other elements of the strategy include separating the finances of its petrochemicals business and changing the basket of products and improving the capacity use. "The availability of raw materials in close proximity to existing and prospective assets will boost the profitability of this business to the level of leading rivals," it says.
Rosneft will also work on improving its management and systems through digitalisation, which will allow it to increase the transparency, controllability and speed of decision-making throughout the company's production chain, as well as to strengthen the basis of the developing digital economy in Russia.
CEO Igor Sechin said that the strategy would have a significant, positive influence on shareholder value of 15-20% of current market capitalisation.
The CEO of Rosneft shareholder BP, Bob Dudley, has endorsed the strategy. The chairman of the commission for strategic planning, he said he was "glad for the opportunity to take part in the development of the Rosneft-2022 strategy. I should note that all key issues were studied in detail."