Sechin's plan: trillions of rubles of investment, growth of gas production and focus on petrochemistry

The implementation of the Rosneft-2022 strategy will increase the market value of the largest Russian oil company by 25-30%, Igor Sechin asserts.
Origin source
He is also ready to consider paying a dividend of 50% of net profit.

Rosneft's investments in 2017-2018 will amount to more than 1 trillion rubles, said the chairman of the company Igor Sechin, speaking at the annual general meeting of shareholders of Rosneft. The approved investment program for 2017-2018 assumes that investments will amount to over 1 trillion rubles, about half of which falls on new projects, "he said (quoted by TASS). Earlier, the company voiced plans to spend 0.6 trillion rubles for new exploration and production projects in the two years, and another 0.2 trillion rubles for processing, commerce and logistics.

Capital expenditures of Rosneft increased by 19.2% to 709 billion rubles by the end of 2016. The growth was due to the development of new projects and an increase in the volume of works on the development of deposits, including large-scale works on the construction of a central oil collection point at the Russkoye field, the linear part of the pressure oil pipeline for the transportation of oil from the Srednebotuobinskoye field, and the first start-up complex of the oil treatment unit The Suzunskoye field and the Suzun-Vankor oil pipeline.

Bashneft and synergetic effect

The effect of integrating Bashneft into the structure of Rosneft this year has already amounted to 40 billion rubles, Sechin told shareholders. "Only in the first two quarters of 2017, the synergistic effect from the integration of Bashneft amounted to more than 40 billion rubles," he said. In 2016, Rosneft acquired 50.08% of Bashneft, paying 329.7 billion rubles for the stake. Immediately after the purchase of the asset, Rosneft completely changed the management of Bashneft. After the offer to minority shareholders, Rosneft began to control 57.7% of the authorized capital of Bashneft.

Dividends in 50%

"Rosneft" will consider the possibility of paying dividends in 50% of the net profit in 2017, said the head of Rosneft Igor Sechin, stressing that the president did not raise the question of paying additional dividends to Rosneft by the end of 2016. Vladimir Putin on Tuesday, June 20, at a meeting with Sechin asked Rosneft at the annual meeting of shareholders to return to the issue of paying dividends in 50% of net profit.

"Vladimir Vladimirovich did not put so question, it's you who put it that way. Vladimir Vladimirovich said, work through the issue, go back to discussing the issue with shareholders about dividends in the amount of 50% of net profit. We will definitely return to this issue and look at all possibilities. But we are talking about paying in such a volume of dividends on the basis of 2017 results. We will discuss with shareholders, "Sechin told reporters (quotation on" Prime ").

Entering the Indian Essar

Rosneft has issued a legally guaranteed entry into the capital of Indian Essar, Sechin said. "We are informed that yesterday a legal decision was made, guaranteed to ensure the entry of Rosneft into Essar's capital," he explained.

In October 2016, Rosneft signed an agreement to acquire a 49% stake in Essar Oil Limited. As a result of the acquisition, the company will receive a stake in the modern oil refinery in the Asia-Pacific region in Vadinar, India, with an integrated infrastructure. The total investment is estimated at $ 12.9 billion. VTB will provide Essar Oil Limited with $ 3.9 billion to restructure the debt.

Essar Oil, a division of the diversified Essar Group, owns the second largest private refinery in India, located in the city of Vadinar.

Budget and oil prices

"Rosneft" in the formation of the company's budget for 2017-2018 is based on the price of oil $ 40 per barrel, said the head of the company Igor Sechin, speaking at the annual general meeting of shareholders. "We proceed on the whole from the price of $ 40 per barrel, in 2018, maybe a little more," he said, answering the question about the price of oil in the company's budget.

Dialogue with OPEC

According to Sechin, Rosneft supports the dialogue between the Ministry of Energy and the OPEC countries to reduce production, but is ready for any development of events.

"We support the dialogue conducted by the Russian Energy Ministry with the leading oil producing countries and OPEC," he said, adding that this led to an increase in oil prices. Nevertheless, Sechin noted, the company will monitor the situation and is ready for any development of events.

In addition, for a number of new projects, the company will make a decision based on the implementation of the agreements reached by the parties to the agreement. "We will ensure the volume of production to the extent that it will be effective for our consumers," Sechin said.

New prospects in the Laptev Sea

The head of the corporation also said that Rosneft has identified a number of promising oil structures on the Khatanga shelf in the Laptev Sea, in addition to the already announced discovery of a large field.

In early April, Rosneft began drilling the northernmost well on the Russian Arctic shelf, the Central Olginskaya-1 well, in the Khatanga license area. The start of exploratory drilling was given by Russian President Vladimir Putin during a teleconference with the head of Rosneft.

Sechin said that the resource potential only for the Laptev Sea, according to experts, is 9.5 billion tons of oil equivalent. At the same time, as a result of seismic exploration in the Laptev Sea, fourfold more promising structures were identified than previously thought, 114 against 28, he noted.

In June, Rosneft reported that during the drilling of the exploratory well Central-Olginskaya-1 opened a new field, its resource potential has not yet been announced.

Sechin noted that the company expects successful drilling in the Khatanga section, and also did not exclude the involvement of foreign partners in the project. Rosneft plans to intensify exploration drilling operations in the Arctic shelf and, until 2021, drill four exploratory wells on the Laptev Sea shelf and eight wells in the Kara and Barents Seas. At present, Rosneft owns 28 license areas on the Arctic shelf with total resources of 34 billion tons of oil equivalent. The share of Rosneft exceeds 78% of the total area of ​​licensed areas in the Arctic.

Growth in gas production

The average annual growth in Rosneft's gas production is expected at 10%. "Significant gas reserves and a highly efficient portfolio of projects will continue to actively increase gas production with an average annual growth rate of 10%," Sechin said, adding that in 2019 production at the Rospan gas project could reach 20 billion cubic meters.

"Rosneft" produces gas through 30 subsidiaries and joint ventures in Western and Eastern Siberia, Central Russia, in the south of the European part of Russia, the Far East, and also in Vietnam and Venezuela. According to the strategy for the development of the gas business, Rosneft plans to become the leader among independent gas producers by 2020 with annual production of 100 billion cubic meters.

At the same time, the corporation plans to work out the issue of transition to the holding structure of the management, the head of the company said. "The issue of transition to a holding structure of management will be worked out. With the implementation of a pilot project in the retail segment, "he said.


The strategic objective of Rosneft is to increase the share of oil and gas chemistry in the company's total refining capacity to 20%, Sechin said, speaking.
According to Sechin, to implement this goal, a new subdivision will be created in Rosneft, the department of petrochemicals, the correspondent of RBC reports.

Sechin said that the implementation of the "Rosneft-2022" strategy will increase the market value of the largest Russian oil company by 25-30%. "Realization of the development strategy of Rosneft-2022 in full will allow the company to increase long-term competitiveness in all key areas, increase the annual volume of oil produced at the level of 30 million tons in addition, and create 25-30% additional capitalization of Rosneft relative to the current market value "Sechin said.

The company's strategy is to ensure quality development through technological breakthrough and large-scale use of digital technologies in all areas of activity, as well as constant reduction of costs and increase of processing margins, said the head of Rosneft.

The company will also focus on attracting technology partners both in mining projects and in the oilfield service. In addition, a number of projects will involve small and medium-sized businesses engaged in innovation.

According to the materials for the shareholders meeting, Rosneft plans to increase the success of geological prospecting onshore up to 95% due to advanced geological exploration methods. Sechin also noted that the company will work out the issue of transition to a holding structure of management. "With the implementation of the pilot project in the retail segment," he added.

About teaspoons and fried eggs

Igor Sechin personally took off the issue of buying expensive teaspoons and other dishes, considered in one of the "daughters", the chief executive director of Rosneft told reporters.

"Purchase of forks-spoons - there was no such purchase. Although in one "daughter" in the Far East such a question was being worked out, but I personally took it off, "Sechin said.

On May 22, 2017, the founder of the Anti-Corruption Fund Aleksei Navalny announced the purchase of silver tea spoons by the company RN-Aerokraft (engaged in the operation of aircraft in the interests of Rosneft and owned entirely through RN-Active) by a cost of almost 15,000 rubles each , Glasses for water at 11,700 rubles and fried eggs for 83,000 rubles, as well as rugs for 124,000 rubles apiece and some other items worth a total of almost 5 million rubles. On May 24, the purchase was canceled.

"Now Mr. Navalny has the opportunity to smuggle us with cheaper and better quality forks and silverware, which he made unbearable work," Mikhail Leontiev, a Rosneft spokesman, commented on the cancellation of the purchase. Earlier Leontiev justified the purchase by saying that managers of Rosneft have to work on long-distance flights to the brink of human capabilities and that there are hands and can not leave the floor in the company.