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Russian government to help Rosneft keep investment level

September 08, 2014, 5:53 UTC+3 MOSCOW
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MOSCOW, September 08, /ITAR-TASS/. The Russian government intends to help state-owned oil company Rosneft to keep its investment level, Prime Minister Dmitry Medvedev said in an interview with the Vedomosti business daily when asked whether Rosneft’s request to finance a 1.5 trillion ($40.6 billion) debt was realistic.

“The figure only looks so impressive, but it’s not for one year. I recently held a meeting on Rosneft’s investment program: the company needs to keep the level of production because Rosneft is the key payer to the budget,” Medvedev said.

“In this sense, we should help them keep the level of investment. We are currently considering specific parameters and means of support,” he said.

Medvedev said the additional budget revenues from Rosneft operations will recoup state support.

“If we speak of the company’s performance in the mid- and long-term prospect, I have no doubts. Such investments are certainly recouped,” he said.

Earlier it was reported that Rosneft President Igor Sechin asked the government to render financial assistance to the company. Sechin suggested five ways to support Rosneft. The most expensive one for the government is to buy out new Rosneft bonds worth 1.5 trillion rubles using Russia’s National Welfare Fund.

Sechin said the need for assistance was caused by US sanctions against the company.

Russian officials and companies came under the first batch of Western sanctions, including visa bans and asset freezes, after Russia incorporated Crimea in mid-March. The West and Kiev refused to recognize the legality of Crimea’s reunification with Russia despite Moscow’s explanations that it was legal.

The West announced new sectoral sanctions against Russia in late July over Moscow’s position on Ukrainian events, in particular, what the West claimed was Moscow’s alleged involvement in mass protests in Ukraine’s war-torn southeast.

In response, Russia imposed on August 6 a one-year ban on imports of beef, pork, poultry, fish, cheeses, fruit, vegetables and dairy products from Australia, Canada, the EU, the United States and Norway.

Russia has repeatedly dismissed Western allegations that it could in any way be involved in protests in the southeast of Ukraine, which started after Crimea refused to recognize the authorities propelled to power during a coup in Ukraine in February and reunified with Russia in mid-March after some 60 years as part of Ukraine.

Fierce clashes between troops loyal to Kiev and local militias in the southeastern Ukrainian Donetsk and Lugansk regions during Kiev’s military operation to regain control over the breakaway territories have killed hundreds of civilians, brought massive destruction and forced hundreds of thousands to flee Ukraine’s embattled southeast.

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