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4-Traders Homepage  >  Equities  >  MOSCOW INTERBANK CURRENCY EXCHANGE  >  NK Rosneft' PAO    ROSN   RU000A0J2Q06

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Exclusive - Russia's Rosneft aims for big boost in oil exports to China: sources

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10/09/2017 | 09:29am CEST
FILE PHOTO: A logo of Russian state oil firm Rosneft is seen at its office in Moscow

(This October 6 story corrects figure in paragraph 1 to 360,000 bpd from 36,000 bpd.)

By Vladimir Soldatkin and Gleb Gorodyankin

Such a big increase may significantly drain flows of Urals blend to Europe at a time when Russian oil output has been reduced as part of a global pact to support prices.

"(Rosneft's head Igor) Sechin would like to boost oil supplies to China to 13 million tonnes per year with a possibility of further increase to 18 million tonnes," a source familiar with Rosneft's plans said, adding that there has been no decision yet at government level.

He didn't specify when the increase was likely to happen.

"This would mean significant oil supplies cuts to Europe," the source added.

Two other oil industry sources confirmed the plans.

Russian oil production has been steady, at around 10.9 million bpd due to a global pact to reduce total production by around 1.8 million bpd to support weak oil prices.

Rosneft did not respond to a request for comments.


Russia has steadily increased oil supplies to China over the past years to become the main supplier of oil to the country. This year, Rosneft's total oil supplies to China are set to reach a record high of 40 million tonnes (800,000 bpd).

Rosneft's influential head Igor Sechin has in the past said his ambition is for the company's exports to China to reach as much as 1 million bpd.

The bulk of oil supplies to China by Rosneft go via the Pacific port of Kozmino at the end of the East Siberia-Pacific Ocean pipeline, some via the pipeline's special spur to China and the remains via Kazakhstan and railway.

In August, Russia beat Saudi Arabia to become China's top crude oil supplier for a sixth month, as independent refiners ramped up purchases and as state-owned refiners bought seaborne shipments from the Russian Far East port of Kozmino.

China's crude oil imports from Russia last month were 4.426 million tonnes, or about 1.04 million barrels per day (bpd), down 4.5 percent over the same month last year.

Rosneft and China's CNPC agreed in January on an increase of oil supplies via Kazakhstan through to 2023 with total supplies of 91 million tones over a 10-year period.

Kazakhstan's energy ministry said Rosneft has not officially applied for an increase in transit volumes to China.

Currently, the supplies are made through Atasu - Alashankou pipeline, the capacity of which has already been upgraded to 20 million tonnes, according to the ministry, while between 2 and 3 million tonnes are used for Kazakstan's own exports to China.

"The necessity of further pipeline expansion would also depend on the level of volumes as well as the time frame of guaranteed supplies, oil transportation tariff, etc," the ministry said.

The Kremlin-controlled company has boosted ties with China after privately-run conglomerate CEFC China Energy bought a 14.2 percent stake in Rosneft for $9.1 billion.

(Reporting by Vladimir Soldatkin and Gleb Gorodyankin; additional reporting by Mariya Gordeyeva in ALMATY; Editing by Elaine Hardcastle)

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Financials ($)
Sales 2017 97 426 M
EBIT 2017 10 975 M
Net income 2017 4 630 M
Debt 2017 54 483 M
Yield 2017 2,83%
P/E ratio 2017 14,53
P/E ratio 2018 8,04
EV / Sales 2017 1,17x
EV / Sales 2018 1,21x
Capitalization 59 518 M
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Mean consensus OUTPERFORM
Number of Analysts 10
Average target price 6,58 $
Spread / Average Target 17%
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Igor Ivanovich Sechin Chairman-Management Board & Vice Chairman
Gerhard Schroeder Chairman
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Valeriy Vladimirovich Nikitin Director-Information Technology
Artur Matthias Warnig Deputy Chairman
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