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Rosneft CEO: No plans to work with OPEC on oil output

MOSCOW--OAO Rosneft Chief Executive Igor Sechin said there are no plans for Russia to cooperate with the Organization of Petroleum Exporting Countries on reducing production to support oil prices, even though state-controlled companies will own nearly 50% of the country' s output after Rosneft completes its purchase of competitor TNK-BP.

"For us to join in production cuts, OPEC would have to offer us something very attractive that would compensate all the risks. I haven' t seen any such offers," Mr. Sechin said in an interview with The Wall Street Journal late October. He added the extreme cold in parts of the country prevents Russia from turning production on and off.

Rosneft said last month it is acquiring TNK-BP from BP PLC and its partners for $55 billion in cash and shares, in deals that will make Rosneft the world' s largest publicly traded crude producer.

As part of the deals, BP will acquire a further 5.7% stake in Rosneft from state holding company Rosneftegaz, which Mr. Sechin also heads. He said the money from that deal--around $4.8 billion--would remain with Rosneftegaz after it paid taxes of around 20 billion rubles ($638 million).

Mr. Sechin has pushed for Rosneftegaz to use the profits from its stakes in Rosneft and OAO Gazprom (GAZP.RS) to buy up state energy and power assets that are slated for privatization. Some government members have resisted the idea, calling for the money to be sent to the federal budget.

"I think there will be an opportunity to use these funds to make necessary investments in the energy sector, but not only in it. I think that these funds can also be used in other sectors, where necessary and justified in terms of the economy. If there is a need to support the budget, it will also be done in accordance with the tasks set for Rosneftegaz," he said.

Mr. Sechin also said he believed Gazprom' s monopoly on natural-gas exports from Russia should continue, even as Rosneft expands its gas business.

"Rosneft also produces natural gas, but we believe that the Russian domestic market is very attractive. We are ready to work on the domestic market and to obtain results here," he said.

The co-owner of Russia' s leading independent producer OAO Novatek (NVTK.RS), Gennady Timchenko, told Forbes magazine' s Russian edition last month that his company was lobbying for changes to the law so it could also export gas.

Mr. Sechin said this position is "wrong."

"Gazprom has the huge responsibility of maintaining the gas pipeline system. And then let Mr. Timchenko finance Gazprom' s internal distribution system. I think that Gazprom' s monopoly on exports should continue," he said.

11/02/2012

 

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