FSUOGM: Rosneft attracts more investors at Vostok Oil

Russian oil giant Rosneft has brought on board two more traders for its Vostok Oil megaproject in the Russian Arctic, the state-owned producer announced on June 10.

Rosneft sold a 10% stake in the project, which comprises a cluster of large oil and gas fields in the north of the Krasnoyarsk region, to commodities trader Trafigura in December. It has now signed a heads of terms (HoT) agreement to transfer a further 5% to a joint venture between Vitol and Mercantile & Maritime. The deal will be closed once the parties secure necessary regulatory and corporate approvals.

Rosneft has touted Vostok Oil as the next frontier for the Russian oil industry, and analysts have compared the project’s scope with that of the exploration of Western Siberia in the 1970s and the US Bakken oil play over the past decade. The company estimates that Vostok Oil could yield 1mn barrels per day of oil by 2027 and eventually as much as 2mn bpd, along with up to 50mn tonnes per year (tpy) of LNG.

Rosneft has sought out foreign investors to help shoulder Vostok Oil’s huge cost. The project is valued by the company at between $70-150bn, depending on future oil prices. It also needs partners to provide the necessary marketing and technical capabilities. In addition to traders, it has reached out to state-owned oil companies in India and China. Earlier it began talks with potential contractors and suppliers for the project, according to Reuters.

Russian petrochemicals group Sibur is considering involvement in a gas chemicals project in Kazakhstan’s western Atyrau region.

The company signed an agreement at the St Petersburg International Economic Forum (SPIEF) on possible co-operation on the project with Kazakhstan’s national oil company (NOC) KazMunayGas (KMG) and Kazakh national wealth fund Samruk-Kazyna. The complex would consist of a train capable of producing up to 500,000 tpy of polypropylene and another one turning out up to 1.25mn tpy of polyethylene. The plan is to build the complex at a special economic zone 33 km from the city of Atyrau.

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