Rosneft’s Sechin Calls for Russian Control of Eastern Oil, Gas

Igor Sechin, the U.S.-blacklisted head of Russia’s OAO Rosneft, called for the government to limit new oil and natural gas rights in the country’s east to domestic investors as President Vladimir Putin prioritizes Asian exports.

Sechin urged a government energy meeting headed by Putin to stimulate development of the region, to double Asian energy exports by 2030, while increasing Russian control over resource wealth in East Siberia and the Far East.

Russia is promoting domestic investments and a pivot to China as the U.S. and European Union threaten to widen sanctions to target the former Soviet republic’s economy amid violence in eastern Ukraine. Sechin faces visa bans and asset freezes as one of 45 people sanctioned by the U.S.

“Analysis of the current cooperation with foreign partners, suggests that risks of implementation of our international projects are increasing,” Sechin told the meeting in Astrakhan, Russia. He urged the government to grant oil and gas licenses in the country’s east to companies “whose majority shareholders are Russian legal entities or individuals.”

Sechin asked the government to undermine Gazprom’s export monopoly by expanding the right to sell gas abroad to companies developing new fields in the east.

Export Rights

“It’s a question open for discussion,” Sechin said. Still, “such a measure would give an additional stimulus for the development of the region.”

Gas output in East Siberia and the Far East may reach 200 billion cubic meters, Sechin said. Russia produced a total 670 billion cubic meters last year, according to the Energy Ministry’s website. National production of the fuel may reach 900 billion cubic meters by 2035, Energy Minister Alexander Novak said May 23.

Russia should also consider expanding the East Siberia Pacific Ocean oil pipeline, which runs to the coast and has a spur to China, use project financing, including pension funds, and contributions from companies interested in working in the largely undeveloped east.

Rosneft will spend 1.5 trillion rubles ($43 billion) on developments in East Siberia and the Far East to 2020, Putin said at the meeting.

Rosneft sees its total spending in the region at 3 trillion rubles after signing Asian oil deals, according to Sechin. Gazprom, the world’s biggest gas producer, is separately planning $55 billion of spending to develop eastern gas fields and build a pipeline to China, after clinching a $400 billion, 30-year contract last month.

To contact the reporters on this story: Stephen Bierman in Astrakhan, Russia, at sbierman1@bloomberg.net; Elena Mazneva in Moscow at emazneva@bloomberg.net

To contact the editors responsible for this story: Torrey Clark at tclark8@bloomberg.net Rob Verdonck

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