CEO: Russia’s Rosneft needs no money from state rainy day funds

VLADIVOSTOK, Sep 4 (PRIME) -- Russian oil major Rosneft no longer needs any money from the National Wealth Fund, CEO Igor Sechin told reporters Friday on the sidelines of the Eastern Economic Forum.

Initially, the company asked for a 1.43 trillion ruble aid on four of its high-priority projects, while the government asked it to cut the bid amount. In June, Sechin said that the company will largely cope on its own but will still need 89 billion rubles on the Zvezda shipyard, which will produce equipment crucial for the industry as Western sanctions limit its access to purchases abroad.

President Vladimir Putin said that Rosneft will receive 60 billion rubles on Zvezda shipyard from its parent holding Rosneftegaz. “We will develop the shipbuilding industry for sure, I have told you so before. I want to inform you that I decided to invest the resources of company Rosneftegaz amounting to 60 billion rubles into the acceleration of modernization of Far East shipbuilding facility Zvezda,” Putin said.

Sechin told reporters, “We no longer need anything .. National Wealth Fund money is distributed through banks, not directly, interest rates are not very profitable for the company. This is why, like the president said, Rosneftgaz’ funds are more profitable for us. We have even agreed for a smaller sum compared to National Wealth Fund money. It is a more interesting instrument for us.”

Rosneft generates a “normal cash flow” and can cover expenses on its projects, Sechin said. The company does not rule out redemption of part of its debt early, in 2015, he said.

In the Far East, Rosneft will soon invest 1.3 trillion rubles in the development of its utilities, including 315 billion rubles in refineries, according to statements Putin and Sechin made during the forum.

Rosneft signed a memorandum of intent to supply 60,000–200,000 tonnes of liquefied petroleum gas to China per year at the forum, Sechin said separately. The total volume of Rosneft’s partnership with China will reach U.S. $500 billion until 2035, he said.

(67.0102 rubles – U.S. $1)

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