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OPEC Cuts 2021 Oil Demand Forecast

OPEC Cuts 2021 Oil Demand Forecast

In this month’s report, OPEC…

Russian Oil Giant Rosneft Seeks Approval To Export Natural Gas

State-controlled Rosneft, the largest oil producer in Russia, has asked Russian President Vladimir Putin to be allowed to export natural gas with giant Gazprom acting as an export agent, Russian newspaper Kommersant reports, citing a letter which Rosneft’s boss has sent to Putin.

Gazprom is the sole exporter of natural gas in Russia.

Rosneft’s chief executive office Igor Sechin wrote a letter to Putin dated August 13, asking the Russian oil producer to be allowed to export 10 billion cubic meters of gas to Europe per year, Kommersant says.

Rosneft proposes to sign an agreement with Gazprom, in which the gas monopoly will act as the export agent for the gas Rosneft plans to ship to Europe, according to Sechin’s letter seen by Kommersant.

Such an agreement would not affect Gazprom’s monopoly in Russian exports, Sechin notes in the letter. Rosneft’s key argument for being allowed to export natural gas is that increased exports will raise the budget revenues for Russia at a time when gas prices in Europe are hitting records due to high demand and insufficient supply, including from Gazprom.

Additional revenues could bring Russia as much as US$502 million (37 billion Russian rubles) annually, Sechin’s letter says, as per Kommersant.

Rosneft did not indicate in the letter which pipeline route the company would use if it was allowed to export gas. However, gas exports from Rosneft could help lift the EU restrictions on Nord Stream 1 and Nord Stream 2 pipelines, according to the letter.

Back in 2017, Rosneft and its 20 percent shareholder BP agreed to cooperate in the gas business, including with delivering gas to Europe.

Meanwhile, a German court ruled last week that the Nord Stream 2 gas pipeline from Russia to Germany would have to obey European Union regulations that separate owners of the pipelines from suppliers of gas, dealing a blow to Russian gas giant Gazprom who had sought to have EU rules waived for the controversial pipeline.  

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on August 30 2021 said:
    This is a checkmate from a brilliant chess player. It also a brilliant idea which will allow Russia to earn more revenue from the additional natural gas exports from Rosneft and could help lift the EU restrictions on Nord Stream 2 pipeline. In this case, Gazprom which is the sole exporter of natural gas in Russia would act as the export agent for the gas Rosneft plans to ship to Europe.

    A German court ruled last week that the Nord Stream 2 gas pipeline from Russia to Germany would have to obey EU regulations that separate owners of the pipelines from suppliers of gas.

    The fact that back in 2017 Rosneft and its 20% shareholder BP agreed to cooperate in the gas business, including delivering gas to Europe will enable Gazprom to comply with EU regulations.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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