ST. PETERSBURG, June 15. /TASS /. Russian state-owned oil company Rosneft together with Norway's Statoil hopes to discover a new deposit in the Sea of Okhotsk with resources of over 100 million tonnes of oil equivalent, head of Rosneft Igor Sechin said speaking at the annual meeting of shareholders.
"Together with the Norwegian partner Statoil we started drilling two exploratory wells in the area Magadan-1 and Lisyansky depths in the Sea of Okhotsk. For these purposes modern drilling equipment, which underwent special testing and upgrading is used. Drilling of an exploratory well at the Lisyansky license block commenced this month, first 757 meters have been completed, and we hope to find a deposit with the resources of 100 million tonnes of oil equivalent," Sechin said.
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Rosneft’s market cap exceeds that of Gazprom by $5 bln
The top official has also pointed out that the market capitalization of Russia's top oil producer had exceeded that of the gas giant Gazprom by $5 bln.
"We’re well ahead of other Russian companies in terms of market capitalization while the gap in valuation with the second-biggest company (in the country) Gazprom has exceeded $5 bln," he said.
According to Sechin, the estimated value of Rosneft's hydrocarbon reserves exceeds the company’s current market capitalization more than twofold factoring in the base price of the Vankor deal.
"Taking into account the base price of the Vankor deal the estimated value of Rosneft’s hydrocarbon reserves exceeds the current market capitalization more than twofold. Analysts and the stock certainly have to take this into consideration as it confirms the massive potential of shareholder value’s growth in case the influence of geopolitical factors subsides," Sechin said.
In September 2015, Rosneft inked an agreement with Indian state-owned company ONGC on sale of a 15% stake in Vankor. The deal stipulates two seats in Vankorneft board of directors for ONGC, with Rosneft keeping control over the Vankor cluster infrastructure.
In March 2016, Rosneft signed with ONGC Videsh Limited a memorandum of understanding for cooperation in respect of the Vankor project, which stipulates the prospective increase to 26% of the share of the Indian company in Vankroneft. The document also oversees the analysis of the joint trading development’s potential, including the possibility of entering into long-term crude-oil supply contracts. Also, Rosneft, Oil India, Indian Oil and Bharat Petroresources signed a heads of agreement in respect to the acquisition by a group of Indian investors of a 23,9% share in Vankroneft.
Vankorneft, a subsidiary of Rosneft, was founded in 2004 to carry out the project of the Vankor field development, the largest field to have been discovered and brought into production in Russia in the last 25 years. It is located in the northern part of Eastern Siberia, in Turukhansky District of Krasnoyarsk Territory, 142 km from Igarka. As of January 1, 2016 the 2P hydrocarbon reserves of the Vankor field according to the PRMS Vankor field classification stood at 265 mln tonnes of oil and condensate and 88 bln cubic meters of gas.
Risks related to sanctions
According to the top manager the company is successfully taking measures on mitigating risks related to western sanctions, the company’s President Igor Sechin said at the annual shareholder meeting on Wednesday.
"We’re taking measures on reducing risks related to sanctions. So far it has been successful as you can see," Sechin said.
$14 bln on investments in 2016
The Russian oil gian plans to spend 922 bln rubles ($14 bln) on investments in 2016.
"This year the company plans to invest 922 billion rubles," he said adding that Rosneft may increase its investments by almost 30% in comparison with 2015. In 2015, Rosneft investments totaled about 660 bln rubles ($10 bln).
According to the company’s CEO Igor Sechin this will create additional jobs and possibilities for development, mainly at the fields in Eastern Siberia.
The official also noted that dividend rate of 35% of the net profit is not critical for Rosneft and does not pose operational risks.
"For this year, taking into account the government's requirements, we approved the level (of dividends - TASS) at 35%. We will not feel any kind of limitation of our investment activity. I would not like to jump to conclusions and say definitely that we will continue to make payments at the same level - this will depend on the wishes of our main shareholder," Sechin said, adding that the decision will depend on the company's investment and other factors.
Increasing share in Petromonagas JV to 40%
Rosneft will see around 2 mln tonnes of incremental crude production per year by increasing its share in the Petromonagas joint venture (with Venezuela’s PDVSA) to 40%.
"At the beginning of this year we increased our share in Petromonagas JV to 40%, which will ensure incremental production at the level of 2 mln tonnes per year," Sechin said, adding that the fields in Venezuela are unique and require the company’s deliberate attention.