Rosneft Vice President for Commerce and Logistics Otabek Karimov: Arctic Could Contribute a Lot to the Diversification of Crude Supplies to Asia

MOSCOW, October 2, 2017 /PRNewswire/ --

Russia crude production outlook is stable, with a potential for growth.

While Russia is maintaining its overall production profile at an even level, structurally the new fields are primarily located in the eastern part of the country making it natural to continue expand crude exports into Asia.

We view the Arctic region as the source of next-generation crude supply. Current resource estimates of Rosneft license areas on Russian arctic shelf amount for 34 billion barrels of oil equivalent, which is ~15% of global undiscovered conventional oil&gas resources.

Given its geographical location and significant resources, Arctic could contribute a lot to the diversification of crude supplies to Asia.

Rosneft is expanding its activities along the value chain in the key markets: Europe and Asia. This activity falls into our strategy to move from being an FOB-supplier to gain an asset-based access to end-consumers in our key markets of interest. We are developing a European trading hub based on our assets in Germany and crude flows from Russia, Africa and Middle East.And we are looking forward to develop the Asian trading hub based on our existing and future assets in India and China, and crude from Middle East, Latin America and Russia.

In order to diversify our business and follow market demand, we plan to significantly increase our gas production to 100 bcm per year, which is a 50% increase. Most of it will come from assets in Russia, including LNG, but we are also involved in the biggest gas field in the Mediterranean in Egypt, and also in Brazil and Mozambique.

With regard to the consumption of oil derived products, we see strong and long-term growth in petrochemicals demand and want to increase our presence in this business. Our goal is to reach a global petrochemicals capacity of ~20% of refining.  

Our main advantage in petrochemicals is our growing feedstock base in Russia. Not only these feedstocks are significant in volumes, they are available at competitive costs at production locations in Russia due to elimination of logistics expenses. Besides Russia, we are heavily focused on the growing Asian markets, and all our refining projects in Asia include options for integrated petrochemicals productions.