FSUOGM: Rosneft finds more gas in Far East

Russian oil giant Rosneft has reported its second gas find in the remote Yakutia region in the Far East this year.

The discovery, named Kederginskoye, has had its reserves booked at 40bn cubic metres of gas and 2mn tonnes of condensate, according to Rosneft. It was made by Rosneft’s Taas-Yuryakh Neftegazodobycha (TYNGD) joint venture with BP and Indian firms Oil India, Indian Oil and Bharat Petroleum.

TYNGD made another discovery in Yakutia in January, containing 75 bcm of gas and 1.4mn tonnes of condensate. That one was named Ivan Kulbertinov.

Eastern Yakutia is gas prone, hosting a number of large-sized fields including Gazprom’s Chayandinskoye field. But commercialising this gas is a challenge. Gazprom sends Chayandinsoye’s gas to China via the 38 bcm per year Power of Siberia, launched in December. But other operators are barred from using the pipeline under Russian law.

In other news, the price of gasoline on the St Petersburg International Mercantile Exchange (SPIMEX) has approached its all-time record, amid rising international oil prices and higher summer demand for motor fuels.

Prices for AI-95 and AI-98 gasoline grades increased by 0.8% at SPIMEX on July 7 to RUB58,900 ($788) and RUB55,500 ($743) per tonne respectively. The holiday season has driven up fuel demand in Russia, while oil prices have grown increasingly bullish in recent weeks, especially since OPEC+’s failure this week to agree on production policy in August.

Gasoline prices are nearing the all-time high that they reached in 2018. During that crisis, high wholesale prices fed into high prices at pumps. That was until the government introduced the so-called damper mechanism in Russian oil taxation, which gives suppliers more incentive to keep costs for motorists low. Under this mechanism, suppliers must pay more into the budget when indicative domestic pump prices are higher than export netbacks. Conversely, they can collect a subsidy when the situation is reversed.

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