Rosneft to Achieve $2.4B Synergies with TNK-BP Integratioin

MOSCOW - OAO Rosneft sees $2.4 billion of synergies over the next three years from its integration with oil company TNK-BP, which it acquired last month, Chief Financial Officer Svyatoslav Slavinsky said Tuesday.

Total synergies from the merger are expected to reach $10 billion, he told a meeting of investors in London. Capex savings from the merger will be worth $3.4 billion, he said. 

Rosneft last month acquired TNK-BP from BP PLC (BP) and a group of Soviet-born billionaires in deals worth $60 billion.

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Lukoil Executive: Russia Unlikely to Sell Large Rosneft Stake Soon

MOSCOW - The Russian government is unlikely to sell a large stake in state-controlled oil giant OAO Rosneft in the near future and won't give up its dominant position in the energy sector, the deputy chief executive of Russia's biggest non-state oil producer, OAO Lukoil Holdings, said Thursday.

"The state will continue to dominate in the sectors of the economy where it can," Leonid Fedun told the Sberbank Russia Forum 2013.

He added that the current situation in the oil sector reminds him of the mid-1990s, when there were only two sizeable oil companies in Russia: a state-owned one and Lukoil.

The past decade has witnessed the forced bankruptcy of what was once the largest oil producer, OAO Yukos; the takeover of OAO Sibneft by state-owned natural-gas firm OAO Gazprom; and, last month, the acquisition of TNK-BP by Rosneft.

Mr. Fedun said the state will dominate the market until 2018-2019, when it may be faced with falling oil output and will start seeking to improve the management of the companies.

Russian Economy Minister Andrei Belousov said in April the state may reduce its stake in Rosneft by roughly 19% from 69.5% now. Rosneft Chief Executive Igor Sechin opposes the plan.

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Rosneft, Marubeni Sign LNG Deal

MOSCOW - Russian state oil giant OAO Rosneft and Japan's Marubeni Corp. signed a memorandum Wednesday on implementing a joint liquefied natural gas project and exploring and developing oil and gas fields, Rosneft said in a statement. 

The companies will consider cooperating on the construction of an LNG plant in Russia's Far East, the statement said. 

Rosneft has in recent months pressed for permission from the Russian government to export gas. By law, only state firm OAO Gazprom is allowed to sell supplies abroad. It is considering building a liquefaction plant with Exxon Mobil Corp. on Russia's Pacific Coast. 

Rosneft is also partnering with a number of foreign firms, including Exxon, to explore the Arctic shelf and onshore shale oil.

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BP Close to Securing Arctic Oil Deal With Rosneft

BP PLC is close to securing a deal to partner with Russia's Rosneft in a long-coveted offshore oil project in the Arctic, Rosneft President Igor Sechin said Thursday.

Mr. Sechin was speaking as the Russian oil giant just closed deals worth around $55 billion to take over TNK-BP from BP and a group of Soviet-born billionaires to become the world's largest listed oil producer.

Mr. Sechin said Rosneft had 41 offshore licenses and was working with BP to select an offshore oil project "in the nearest future."

Mr. Sechin said he saw $10 billion worth of synergies in the TNK-BP deal, with the upstream, or exploration and production, sector the division with the biggest potential for increasing efficiencies.

He said Rosneft will strengthen the exploration and production unit and as such create a new role of chief geologist at the company.

He also said Rosneft would form a new division to develop the company's gas business.

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BP Close to Securing Arctic Oil Deal With Rosneft

BP PLC is close to securing a deal to partner with Russia's Rosneft in a long-coveted offshore oil project in the Arctic, Rosneft President Igor Sechin said Thursday.

Mr. Sechin was speaking as the Russian oil giant just closed deals worth around $55 billion to take over TNK-BP from BP and a group of Soviet-born billionaires to become the world's largest listed oil producer.

Mr. Sechin said Rosneft had 41 offshore licenses and was working with BP to select an offshore oil project "in the nearest future."

Mr. Sechin said he saw $10 billion worth of synergies in the TNK-BP deal, with the upstream, or exploration and production, sector the division with the biggest potential for increasing efficiencies.

He said Rosneft will strengthen the exploration and production unit and as such create a new role of chief geologist at the company.

He also said Rosneft would form a new division to develop the company's gas business.

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Rosneft in Japan for Arctic Shelf Talks

MOSCOW - The head of Russia's state-controlled oil giant OAO Rosneft is traveling to Japan Tuesday to discuss partnerships on offshore projects, as the company tries to attract foreign firms to help tap the potentially vast but difficult-to-recover reserves on Russia's Arctic shelf.

The trip comes after Rosneft Chief Executive Igor Sechin spent two days in China for talks, including discussions on potential offshore projects with CNPC, Sinopec and CNOOC. Rosneft already has offshore partnerships with Exxon Mobil Corp., Eni SpA and Statoil ASA.

A spokeswoman for Rosneft declined to name the Japanese firms Mr. Sechin would meet with.

Russia is looking to the Arctic to maintain output in the long term as production at Soviet-era fields in western Siberia wanes.

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Rosneft in Japan for Arctic Shelf Talks

MOSCOW - The head of Russia's state-controlled oil giant OAO Rosneft is traveling to Japan Tuesday to discuss partnerships on offshore projects, as the company tries to attract foreign firms to help tap the potentially vast but difficult-to-recover reserves on Russia's Arctic shelf.

The trip comes after Rosneft Chief Executive Igor Sechin spent two days in China for talks, including discussions on potential offshore projects with CNPC, Sinopec and CNOOC. Rosneft already has offshore partnerships with Exxon Mobil Corp., Eni SpA and Statoil ASA.

A spokeswoman for Rosneft declined to name the Japanese firms Mr. Sechin would meet with.

Russia is looking to the Arctic to maintain output in the long term as production at Soviet-era fields in western Siberia wanes.

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Rosneft, Exxon Mobil Broaden Arctic Shelf Joint Venture

NOVO-OGARYOVO, Russia - U.S. energy giant Exxon Mobil Corp. and Russia's OAO Rosneft agreed Wednesday to broaden their joint venture by adding seven more licenses to develop oil and gas resources on Russia's Arctic shelf and mull a proposal to export liquefied natural gas from the Russian Far East.

The companies also signed a separate deal to give state-controlled Rosneft the option of buying a 25% interest in Exxon's Point Thomson Unit, which Exxon says is estimated to hold a quarter of the known natural gas resources buried beneath Alaska's North Slope. Exxon owns 62.5% of Point Thomson.

The deal, signed by Rosneft Chief Executive Igor Sechin and Exxon's Deputy Chief Executive Stephen Greenlee, further strengthens the budding relationship between two of the world's largest oil companies while competition to unlock the Arctic's vast trove of oil and gas wealth heats up.

The Arctic is one of the few remaining places that can move the needle for oil giants in terms of production and reserves, but the technical challenges are formidable. Earlier this week Royal Dutch Shell Plc said it was sending two Arctic ships operating in Alaska to Asia for repairs following a series of mishaps, a move that is likely to make the Anglo-Dutch oil giant miss the short summer drilling season that starts in July.

Exxon and Rosneft formed an alliance in 2011 to develop potentially huge but largely untapped reserves on Russia's Arctic shelf and shale oil in Western Siberia. The original deal also gave Rosneft the option of participating in U.S. shale developments. Fadel Gheit, an analyst with Oppenheimer & Co., says that Exxon's strategy to allow Russian participation shows that the most successful way to negotiate with Russian oil companies is to deal with them as equal partners. "They want to make it a two-way street," Mr. Gheit said.

Rosneft also has partnership deals with Italy's ENI SpA and Norway's Statoil ASA to develop offshore resources.

Rosneft is currently buying competitor TNK-BP in a deal worth $55 billion that will create the largest listed oil producer in the world and will hand BP PLC a 19.8% stake in the oil giant.

Exxon and Rosneft will conduct a feasibility study on constructing a liquefied natural gas plant on the island of Sakhalin off Russia's Pacific coast. Rosneft is lobbying to be allowed to export LNG, which only OAO Gazprom currently is permitted to do by law.

Angel Gonzalez contributed to this article.

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Rosneft Approves $14.2B Deal to Buy TNK-BP

Russia's Rosneft announced Wednesday that its board of directors has approved a $14.2 billion financing deal to pay for the acquisition of 50 percent of TNK-BP.

The firm said its board met Monday to make the decision to execute the financing from a group of international banks in order to purchase shares owned by the Alfa-Access-Renova (AAR) consortium.

The meeting also saw the directors agree to expand its cooperation with ExxonMobil and to remove Gani Galiyev from its management board, while appointing two new members: Vice President Yuri Kalinin and acting VP Andrey Votinov. 

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Rosneft Approves $14.2B Deal to Buy TNK-BP

Russia's Rosneft announced Wednesday that its board of directors has approved a $14.2 billion financing deal to pay for the acquisition of 50 percent of TNK-BP.

The firm said its board met Monday to make the decision to execute the financing from a group of international banks in order to purchase shares owned by the Alfa-Access-Renova (AAR) consortium.

The meeting also saw the directors agree to expand its cooperation with ExxonMobil and to remove Gani Galiyev from its management board, while appointing two new members: Vice President Yuri Kalinin and acting VP Andrey Votinov. 

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Rosneft Expects 2013 Output to Increase by 1%-2%

MOSCOW - OAO Rosneft expects to increase its output by between 1% and 2% in 2013 mainly due to production growth at its giant Vankor field in Siberia, the company said Friday as it reported its 2102 full year earnings.

In a conference call Dmitry Avdeev, the vice president for finance and economics, said he expects crude oil production from Vankor to reach between 430,000 barrels and 440,000 barrels per day, although he neither confirmed nor denied that oil production at the company's other main fields could decline.

Vankor was the main contributor to Rosneft's oil output growth of 2.5% to 2,43 million barrels a day in 2012 amid declining output at the company's other main fields.

Higher output and higher oil prices led to a 13% rise in revenue for the year to 3.08 trillion rubles ($102 billion) and a 7.2% rise in net profit to RUB342 billion.

However, the profit figure fell well below market expectations. "Reasons for such results are not exactly clear. There is an item called 'other expenditures' which unfortunately the company does not disclose," said Alexander Kornilov, an analyst with Alfa Bank, who called the results "disappointing".

The market is also worried by a sharp drop in free cash flow, which dropped to RUB45 billion for the full year from RUB99 billion a year before, partly due to increased investment and lower income from operations. Shares in the company closed down 2.1% RUB261.5 in Moscow, underperforming the wider index which was flat on the day.

Rosneft is buying competitor TNK-BP from BP PLC and its partners in a deal worth $50 billion that will create the world's largest traded oil producer. BP will increase its stake in Rosneft to 19.8% as part of the deal.

Mr. Avdeev said antitrust bodies in Russia and Ukraine have already approved the deal, and that the purchase, which is fully funded, is going ahead as planned.

To finance the purchase of the stake from BP, Rosneft has agreed to borrow $16.7 billion from international banks, the company said in its earnings report.

Mr. Avdeev added that the oil giant may also place a Eurobond later this year, as last year's debut issue showed "a very strong demand". He added that the company would hit the international bond market after considering the attraction of this instrument compared to domestic bonds, direct loans, or contracts with trading companies.

The company's net debt stood at RUB581 billion at the end of the fourth quarter compared to RUB542 billion at the end of the previous quarter, as Rosneft is yet to draw the agreed loans.

However, the acquisition of TNK-BP dented Rosneft's Earnings before interest, taxation, depreciation and amortization, or Ebitda, due to an increase in spending on audit and consulting services.

The company's Ebitda margin, the measure used to judge a company's profitability, dropped to 19.8% in 2012 from 24.4% in the previous year.

Mr. Avdeev said the company is aiming at paying dividend at 25% of its full-year profit, as announced before.

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Rosneft Expects 2013 Output to Increase by 1%-2%

MOSCOW - OAO Rosneft expects to increase its output by between 1% and 2% in 2013 mainly due to production growth at its giant Vankor field in Siberia, the company said Friday as it reported its 2102 full year earnings.

In a conference call Dmitry Avdeev, the vice president for finance and economics, said he expects crude oil production from Vankor to reach between 430,000 barrels and 440,000 barrels per day, although he neither confirmed nor denied that oil production at the company's other main fields could decline.

Vankor was the main contributor to Rosneft's oil output growth of 2.5% to 2,43 million barrels a day in 2012 amid declining output at the company's other main fields.

Higher output and higher oil prices led to a 13% rise in revenue for the year to 3.08 trillion rubles ($102 billion) and a 7.2% rise in net profit to RUB342 billion.

However, the profit figure fell well below market expectations. "Reasons for such results are not exactly clear. There is an item called 'other expenditures' which unfortunately the company does not disclose," said Alexander Kornilov, an analyst with Alfa Bank, who called the results "disappointing".

The market is also worried by a sharp drop in free cash flow, which dropped to RUB45 billion for the full year from RUB99 billion a year before, partly due to increased investment and lower income from operations. Shares in the company closed down 2.1% RUB261.5 in Moscow, underperforming the wider index which was flat on the day.

Rosneft is buying competitor TNK-BP from BP PLC and its partners in a deal worth $50 billion that will create the world's largest traded oil producer. BP will increase its stake in Rosneft to 19.8% as part of the deal.

Mr. Avdeev said antitrust bodies in Russia and Ukraine have already approved the deal, and that the purchase, which is fully funded, is going ahead as planned.

To finance the purchase of the stake from BP, Rosneft has agreed to borrow $16.7 billion from international banks, the company said in its earnings report.

Mr. Avdeev added that the oil giant may also place a Eurobond later this year, as last year's debut issue showed "a very strong demand". He added that the company would hit the international bond market after considering the attraction of this instrument compared to domestic bonds, direct loans, or contracts with trading companies.

The company's net debt stood at RUB581 billion at the end of the fourth quarter compared to RUB542 billion at the end of the previous quarter, as Rosneft is yet to draw the agreed loans.

However, the acquisition of TNK-BP dented Rosneft's Earnings before interest, taxation, depreciation and amortization, or Ebitda, due to an increase in spending on audit and consulting services.

The company's Ebitda margin, the measure used to judge a company's profitability, dropped to 19.8% in 2012 from 24.4% in the previous year.

Mr. Avdeev said the company is aiming at paying dividend at 25% of its full-year profit, as announced before.

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Rosneft CEO Sechin Keen for BP CEO to Join Board

MOSCOW – OAO Rosneft Chief Executive Igor Sechin has said he would "welcome" BP PLC boss Bob Dudley onto the board of the Russian oil giant, Interfax news agency reported Thursday.

BP will receive two seats on Rosneft's board after increasing its stake in Rosneft to 19.8% share in Rosneft as part of a deal to sell its stake in TNK-BP, Russia's No. 3 crude producer. Rosneft is buying out BP and its partners in TNK-BP in deals worth $55 billion.

"Robert Dudley is a very good candidate for the Rosneft board of directors. We would welcome a manager of this level joining the company's board of directors," Interfax cited Mr. Sechin as saying during a trip to Venezuela.

Mr. Dudley fled Russia in 2008 while working as chief executive of TNK-BP amid disputes with BP's partners, the AAR consortium of Soviet-born billionaires.

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