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Rosneft may increase oil production in 2016 after Bachneft privatization

October 18, 2016, 10:59 UTC+3

Rosneft might increase oil production by 10%, according to the company’s vice president

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LONDON, October 18. /TASS/.

. Rosneft might increase oil production by 10% in 2016 after privatization of Bashneft, the company’s Vice President Eric Liron told journalists on the sidelines of the conference Oil & Money.

"By about 10%," he said, answering a question on how much Rosneft production will increase after the acquisition of Bashneft. Liron said that Bashneft plans to produce 20.1 mln tonnes of oil in 2016.

Head of Rosneft Igor Sechin said earlier Rosneft plans to seriously increase oil production by the end of 2016.

Rosneft lowered oil production by 0.1% year-on-year in the first half of 2016 to 100.7 mln tonnes. This figure was 100.9 mln tonnes in the first half of 2015.

Oil and gas condensate production rose 0.5% on a quarterly basis in the second quarter of 2016 to 4.1 mln barrels per day. Yuganskneftegaz, RN-Severnaya Neft and Sakhalin-1 producing assets showed positive dynamics, Rosneft said.

On October 12, Rosneft signed agreement on purchasing Bashneft shares (50.08%), and has fully complied with its obligations under the contract, transferring 329.7 bln rubles ($5.2 bln) to the Federal Treasury, Rosneft said on Wednesday.

Earlier Medvedev signed decree on selling a 50.08% stake in Bashneft. "I have signed today a decree on the sale of 50.08% of shares in oil company Bashneft to the public joint stock oil company Rosneft at the price of 329.7 bln rubles ($5.2 bln)," Prime Minister said at a meeting.

Medvedev noted that the decree for selling Bashneft shares applies to the federal budget, noting that VTB Capital will act as an agent in the deal.

"The payment for the shares needs to be carried out in a timely manner - before October 14 of this year of based on the purchase/sale agreement," the Prime Minister said.

He also noted that the Federal Agency for State Property Management (Rosimushchestvo) should make all the necessary decisions to include the revenues from this deal to the Russian federal budget.

The Prime Minister Dmitry also said that a 19.5% stake in Rosneft could be sold this year. "I hope that all the necessary decisions will be made in regard to the placement of Rosneft shares and needed investors for selling 19.5% of the company’s shares this year will be found," Medvedev said.

The Prime Minister noted that the sale of 19.5% of Rosneft shares will be held for "execution of decisions on replenishing the Russian budget for this year.".

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