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Rosneft signs multiple contracts for projects in Russia, Asia, the Middle East and Latin America

27th May 2014

Rosneft has boosted its international profile by signing a slew of contracts with service providers, technology developers, major oil and gas companies and various national licensing agencies at the St. Petersburg International Economic Forum over the weekend

Rosneft signs contracts to develop projects across Russia, Asia, the Middle East and Latin America at St Petersberg event
The event, attended by Russian president Vladimir Putin, saw the signing of a broad spread of contracts to boost Rosneft's presence across the emerging markets

The event, attended by Russian president Vladimir Putin, saw the signing of a broad spread of contracts to boost Rosneft's presence across the emerging markets.

North Atlantic Drilling and Seadrill signed an investment and cooperation agreement to form a long-term partnership to develop Rosneft’s offshore and onshore projects until at least 2022.

 

The agreement allows Rosneft the right to acquire a significant stake in North Atlantic Drilling. The parties also signed a letter of award for six harsh environment offshore drilling rigs. Overall, the use of up to nine offshore drilling rigs is possible.

“Participation in a leading company that specialises in harsh environment drilling operations is an important step in the journey to develop Russia’s Arctic shelf. Signing large-scale long-term contracts will enable Rosneft to secure what’s needed to develop offshore projects in parallel with implementing the onshore drilling costs optimization program,” said Rosneft chairman, Igor Sechin.

Alf Ragnar Lovdal, chief executive officer of North Atlantic Drilling, said: "We have sought to access the growth opportunity represented by the Russian market for several years, and we are very pleased to have reached an agreement with Rosneft for this landmark transaction. By partnering best in class drilling with a supermajor which produces over 5m barrels per day, we, after closing of this transaction, will have created a powerful force in the Russian market and for Arctic regions on a global basis.”

Rosneft and BP Exploration Operating Company Limited signed a heads of agreement contract for development of the Domanik formations.

The agreement provides for implementation of a joint pilot project by Rosneft and BP relating to the Domanik formations and, in the event of success, the possible development of unconventional Domanik resources in the Volga-Urals region. The joint venture company (Rosneft 51 per cent, BP 49 per cent) will be incorporated in Russia.

 

In the Latin American markets Rosneft signed a memorandum of cooperation regarding project implementation in Cuba with Juan Torres Naranjo, head of state oil company Cuba Petroleo .

It also signed a long-term contract for oil and oil products with PDVSA, the Venezuelan national oil company on a pre-paid basis. The document envisages the supplies of over 1.6 million tonnes of oil and 7.5 million tonnes of oil products within five years. The pre-payment within the contract will be USD 2bn.

“This agreement represent a new phase of partnership between Rosneft and PDVSA. Following the partnership in the upstream sphere our companies start to cooperate in the sphere of trading. I am sure we will be able to achieve great results in every Rosneft-PDVSA joint project,” said Sechin.

 

Turning east, the companysigned agreements across the Middle East and Asia.

Rosneft signed a memorandum of understanding with Indian oil company ONGC Videsh. The memorandum paves the way for the companies’ cooperation in subsurface surveys, exploration and appraisal activities and hydrocarbons production in Russia’s offshore Arctic.

Downstream, Rosneft signed an agreement with PetroVietnam president Nguyen Xuan Son, defining major terms for long-term oil supplies to Dung Quat oil refinery in Vietnam. The agreement provides supply of the ESPO oil up to 6 million tons annually via Kozmino terminal in 2014-2039 after the accomplishment of the final stage of the refinery modernization.

Igor Sechin said: “PetroVietnam is one of the main Rosneft partners among Asian-Oceanian countries. Long-term contracts for oil supplies are the crucial phase in the development of cooperation between the two companies.”

Rosneft expanded its presence in the oil products market of Mongolia by signing a 5-year contract for oil products supplies with the leading importer of Mongolia - NIC.

This will allow Rosneft to supply up to 80 per cent of the needs of oil products of the Mongolian market.

The company also signed a cooperation agreement with Azerbaijan’s state oil company, Socar, regarding oil and gas exploration and production projects in different jurisdictions, including Azerbaijan and Russia.

Commenting on the signing, Igor Sechin and Rovnag Abdullayev noted that this agreement will enable start of specific joint operations in the region of selection and implementation of large-scale projects in Siberia, in the Russian shelf of the Caspian Sea, and other water areas. It will also create opportunities for both companies to enter new markets.

An agreement was also signed with the United Arab Emirate energy minister, H.E. Suhail bin Mohammed Faraj Faris Al Mazrouei, to foster greater co-operation between the two companies in the exploration and production sector.

 

The company also signed a working agreement with St. Petersburg Academic University to develop nanotechnology.

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