BofA Merrill Lynch expects green fields to boost Rosneft’s income

MOSCOW, Jun 16 (PRIME) -- Russian oil major Rosneft’s revenues will rise thanks to new fields development including the Vankor group of fields and the Vostochno-Messoyakhsky fields, Bank of America Merrill Lynch said in a statement on Friday.

The Vankor group of fields, including the Tagulsky, Suzunsky and Lodochny deposits, will ensure the internal rate of return (IRR) of about 25% and the net present value of U.S. $3.4 billion, while investments in the projects have amounted to $1.5 billion so far.

The Vostochno-Messoyakhsky deposit, a joint venture between Gazprom and Rosneft, has received additional export duty exemptions and will ensure IRR of over 40% and a net present value of $2.5 billion.

According to the report, brown fields are not highly profitable for Russian oil companies due to heavy taxes, while green fields get tax preferences because of high capital expenditures needed.

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