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Russia's state and private energy firms to get government support amid sanctions

October 08, 2014, 12:37 UTC+3 KOGALYM
Russia’s oil giant Rosneft and the country’s largest independent gas producer Novatek earlier requested assistance, while oil pipeline operator Transneft announced it needs no state support
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Arkady Dvorkovich

Arkady Dvorkovich

© ITAR-TASS/Mikhail Pochuyev

KOGALYM, October 8. /TASS/. The Russian government is ready to support both state and private oil and gas companies amid Western sanctions, using financial resources of Russia’s National Welfare Fund, Vice-Premier Arkady Dvorkovich said on Wednesday.

“The funds will be provided for a long term,” Dvorkovich said.

Russia’s oil giant Rosneft and the country’s largest independent gas producer Novatek earlier requested assistance from the National Welfare Fund.

Rosneft CEO Igor Sechin told TASS the oil company has requested funds from the government on a repayable basis. Russian Finance Minister Anton Siluanov said Rosneft and Novatek will be able to receive $2-3.9 billion from the National Welfare Fund this year.

Gazprom Neft, the oil arm of the Russian gas monopoly Gazprom, said it has not requested support from the National Welfare Fund but if funds are allocated for the oil industry, Gazprom Neft will participate as well.

The Russian vice-premier also said the government is ready to spend money from the National Welfare Fund both on specific oil and gas projects and investment in the securities of oil firms.

“First, oil companies can file requests for the financing of specific projects. Second, we consider temporarily placing the remainder of the National Welfare Fund into securities, including the securities of oil companies,” Dvorkovich said, adding this practice would apply both to state and private firms.

The sectoral sanctions imposed by the United States and the European Union against Russia bar Russian state-owned energy companies and banks from raising long-term financing on western markets. The same sanctions apply to Russian private firms whose owners were blacklisted by the US and the EU.

Russia’s oil pipeline operator Transneft needs no state support amid sanctions

The Russian oil pipeline operator Transneft needs no support from the National Welfare Fund amid Western sectoral sanctions, Transneft CEO Nikolai Tokarev said on Wednesday.

“We feel quite confident with regard to financing sources. We have our own resources. Moreover, the government has settled this issue when approving our investment program,” Tokarev said.

The Transneft CEO said the company is not planning borrowings on the market in the foreseeable future.

Infographics Economical sanctions against Russia Economical sanctions against Russia
The USA, EU, Canada and Australia have introduced sanctions against Russia over its involvement in the Ukrainian crisis. Infographics by ITAR-TASS

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