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Is Uranium On The Way Back?

Is Uranium On The Way Back?

Kazakhstan’s state-owned uranium miner has…

Rosneft Seeks, and Gets, Relief From Sanctions

Rosneft, Russia’s largest oil company, has received a new loan from Promsvyazbank to help it weather U.S. and European Union sanctions, and may yet get financial help from the Kremlin. But so far the assistance doesn’t add up to the amount the state-owned oil company says it needs to pay its debts.

Vladislav Khokhlov, Promsvyazbank’s chief financial officer, said Aug. 26 that Rosneft got loans of an unspecified size from the Russian bank because it couldn’t get access to cash in the West. Also getting a loan was Lukoil, another Kremlin-owned oil giant targeted by the sanctions, he said.

On the same day, Russia’s economy minister, Alexei Ulyukayev, said Moscow might offer some financial support for Rosneft, but not as much as the company had sought. “There are some options for the support but the sums’ order of magnitude is less than that,” he said.

The latest sanctions, imposed on July 16, sharply limit Russian oil companies’ access to Western loans at a time when Rosneft needs to refinance its large debt. They were imposed because of Russia’s unilateral annexation of Ukraine’s Crimean peninsula in March and its suspected support of pro-Russian separatists in eastern Ukraine.

The Russian financial journal Vedomosti reported Aug. 14 that Rosneft CEO Igor Sechin asked the Kremlin set aside 1.5 trillion rubles ($41.6 billion) from its National Wealth Fund to buy Rosneft bonds. That exactly matches the size of Rosneft’s net debt – 1.5 trillion rubles – at the end of the second quarter of 2014.

At the time, the newspaper said Russian Prime Minister Dmitry Medvedev immediately directed government financial analysts to evaluate the request, but it quoted one anonymous government officials as calling the Rosneft proposal “horrible,” and another who said Medvedev probably would reject it.

Meanwhile, Rosneft is exploring yet more ways to ease its financial burden. Moody’s reports that the company Rosneft and the Chinese National Petroleum Corp. (CNPC) have contracted to double the flow of Rosneft’s oil to China to 600,000 barrels per day between 2018 and 2037 in a deal worth $270 billion, with some prepayments from China.

The Norwegian energy giant Statoil said Aug. 25 that it plans to maintain its strategic partnership with Rosneft, sanctions or no sanctions. Yet Statoil CEO Helge Lund told Dow Jones Newswires, “Of course, [the sanctions regime] hasn’t made it any easier for either Rosneft or companies working with that company and other Russian companies.”

Lund, speaking on the sidelines of a news conference in Stavanger, Norway, said Statoil’s plan is to keep its partnership with Rosneft intact in the event of eventual “diplomatic solutions” to the crisis that led to the sanctions.

The Rosneft-Statoil partnership, announced in May 2012, involves joint energy exploration initiatives in the Arctic and in East Asia. It is Rosneft’s third such partnership with a Western company after alliances with ExxonMobil of the United States and Eni of Italy.

By Andy Tully of Oilprice.com



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  • Bob on August 28 2014 said:
    Mistake: Lukoil is a privately-owned company, not government-owned.

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