ROSNEFT: OIL PRICE $75
PLATTS - Rosneft CEO Igor Sechin said that he expects oil prices to remain at around $75/barrel up to the end of the year, in an interview aired on Russia's Channel 1 on Sunday.
"Our own budget is based on a price of $63/b. Today we see that prices are around $75/b, I think that prices will be at around this level -- $75, or a maximum of $80/b," Sechin said when asked about his expectations for price levels by the end of 2018.
Sechin's comments come amid uncertainty over price dynamics over the next six months, fueled by concerns that output in key producing countries including Iran, Venezuela and Libya may drop significantly.
Regarding Rosneft's own operations, Sechin said he does not expect the company to complete any major new acquisitions in the near future and is focusing on improving efficiency.
"Speaking of non-organic growth, we have completed the main acquisitions. We are now focused on achieving organic growth and synergies that we expect to gain from these acquisitions," Sechin said.
He also sees Rosneft's current shareholder structure as stable.
"At this stage I think that the shareholder structure has been established, I don't think there should be any new changes," he said.
Sechin welcomed the Qatar Investment Authority's decision to take a direct stake in Rosneft, describing it as a positive decision.
"The initial decision to take loans from European banks is less effective in the current circumstances, and shifting to direct ownership will be more effective for the Qatari fund," he said.
There have been several changes to Rosneft's shareholder structure in the last year and a half. In May the planned sale of a 14.16% stake in the company to China's CEFC was cancelled amid an investigation into CEFC chairman Ye Jianming's alleged involvement in economic crimes. At the time the QIA and Glencore said a new ownership structure will be introduced, with Glencore holding a 0.57% equity stake, and QIA 18.93% in Rosneft.
QIA and Glencore acquired the Rosneft stake in late 2016, before agreeing to sell the majority to CEFC in a deal worth an estimated $9 billion, that had been slated for completion by the end of Q1 2018.
Other key stakeholders in the company are state holding company Rosneftegaz with 50% and BP with 19.5%.
Sechin reiterated Sunday that the company continues to operate despite Western sanctions that target Rosneft and Sechin directly.
"Our task is to guarantee that the company operates effectively in any conditions, we will do this in any case," Sechin said.
POSSIBLE GERMAN EXPANSION
Sechin said that Rosneft may also open its own network of filling stations in Germany. The company already supplies oil products to German consumers via outlets owned by its partners BP and Total. "But it is possible that we will develop our own network," he said.
He did not give specific timeframes, commenting that it would depend on the market and whether it makes more economic sense to purchase an existing chain or build a chain. "We will need some time to take a final decision," he said.
Rosneft owns around 12% of Germany's refining capacity.
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