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Simplification of foreign firms' access to shelf disadvantageous for Rosneft — CEO

September 29, 2014, 12:38 UTC+3 KARA SEA
A senior Russian lawmaker earlier asserted that Gazprom and Rosneft had come up with an initiative to simplify the access of foreign firms to the Russian continental shelf
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Rosneft CEO Igor Sechin

Rosneft CEO Igor Sechin

© ITAR-TASS/Rosneft press service

KARA SEA, September 29. /ITAR-TASS/. Russian oil giant Rosneft CEO Igor Sechin said on Monday that changing legislation on the admission of foreign operators to Russia’s continental shelf is disadvantageous for Rosneft.

“This is not true. Rosneft did not initiate this. This is disadvantageous for Rosneft,” Sechin said.

A senior Russian lawmaker earlier asserted that Gazprom and Rosneft had come up with an initiative to simplify the access of foreign firms to the Russian continental shelf.

Pavel Zavalny, deputy head of the State Duma energy committee, said at the time it was impossible today to “attract foreign investments, technologies and experience to the shelf without foreign companies’ full-fledged participation in the projects and this is impeded by the provisions of the current legislation on subsoil.”

Foreign investors in Russia's oil sector

Today the role of foreign investors is mainly reduced to holding stakes in the charter capital of companies performing the functions of an operator under a contract with a license holder, the lawmaker argued, adding that this practice made foreign companies uninterested in the development of natural resources deposits.

Therefore, the lawmaker further asserted, Gazprom and Rosneft proposed amending the legislation to envisage “a possibility to issue and re-issue an extraction license to a separate subsidiary of a legal entity.”

The Russian lawmaker asserted that in the opinion of Gazprom and Rosneft proposing such amendments, “this will create a legal framework for using the best international experience in developing the continental shelf without a loss of state control over continental shelf developers because the basic requirement will be kept for the presence of a share of the Russian Federation in the charter capitals and a possibility to control more than 50% of the charter capital of companies.”

The Russian lawmaker further argued that the amendments were important in the current geopolitical situation.

“In the conditions of sanctions, this could become an additional stimulus for foreign companies,” he said.

World's biggest oil company

Rosneft holds the 1st place in Russia and in the world by oil output and ranks 3rd in Russia in terms of natural gas extraction.

State-owned Rosneftegaz holds 69.5% of Rosneft shares while the British oil major BP possesses a 19.75% stake in Rosneft through BP Russian Investments Limited.

Rosneft posted a net profit of $4.3 billion in 2013.

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