Rosneft Gains $1 Billion Siberia Partner With China Backing

Updated on

Skyland Petroleum Group is registered in the Cayman Islands, has a staff of about 30 and an operating history of nine months. It also has a Siberian deal with international oil giants OAO Rosneft and BP Plc that could be worth as much as $1.1 billion.

Skyland’s backers are private investors from China and elsewhere in east Asia, founder and president, Briton David Robson, said in an interview last week. He declined to name them.

Rosneft hailed Skyland’s “extensive experience” when it announced the deal in June. BP, which will have a 20 percent stake in the project, said the choice of additional partners was up to Rosneft, according to spokesman Vladimir Buyanov.

The three partners will develop the Taas-Yuryakh project, an oil-and-gas-condensate field in Yakutia, one of the biggest oil fields in eastern Siberia that’s still largely untapped. Total production could reach more than 5 million tons of oil per year or 100,000 barrels per day after 2017, according to Rosneft.

Skyland may take a stake of as much as 29 percent in Taas-Yuryakh, with a possible value of $1.1 billion, Robson said. Skyland could limit its investment to 10 percent, which Robson valued at $375 million.

Chinese Investment

Chinese investors have long sought equity stakes in Russia’s oil fields, but the Russian government has for years been cautious about giving up control. Recently, pressured by international sanctions and plunging oil prices, Russian officials have signaled more openness to its Asian neighbor. With the risks of working in Russia high, Chinese companies are showing caution.

Rosneft first offered a 49 percent stake in the Taas-Yuryakh project to China National Petroleum Corp. back in 2013, but the deal didn’t happen. Last year, Rosneft pitched CNPC on a 10 percent stake in another field, Vankor, but no agreement has been reached.

Robson, 57, said his investors aren’t state companies and declined to provide more details. Before Skyland, he served as head of several energy companies listed in London and operating in the former Soviet Union, including Tethys Petroleum Ltd.

“I have worked with Rosneft since the early 1990s, I have worked in China since 1998,” Robson said in a phone interview from Guernsey. “Discussions with Rosneft and my friends in Russia and of course my contacts in China -- the two things began to blend together.”

Conservative, Aggressive

Robson said that while Chinese state companies have become “more conservative” in the last year, private investors can be “much more aggressive and prepared to take steps in places like Russia.”

Skyland plans to complete the Taas deal by year-end, Robson said.

Taas-Yuryakh operates the Srednebotuobinskoye oil and gas condensate field in Yakutia and holds 133 million tons of liquid hydrocarbons and 137 billion cubic meters of gas reserves.

Rosneft is in talks with Skyland about other projects as well as the stake in Taas, Rosneft’s press service said by e-mail last week.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE