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Russia’s largest oil producer, state-run Rosneft, plans to open a trading arm in Singapore in a bid to boost its crude sales on the fastest-growing oil market in the world, Reuters reported on Wednesday, citing six sources with knowledge of the company’s strategy.
Rosneft registered Rosneft Singapore at the end of last year and plans to relocate several employees from Moscow to Singapore this spring and summer, according to the sources.
The Russian oil giant has also reportedly picked a top crude trader, Andrey Bogatenkov, who is currently the first deputy head of crude and product exports for Rosneft in Moscow, to lead the new Asian trading division, some of the sources told Reuters.
Rosneft has started to pay more attention to the fast-growing Asian oil consumer market, aiming to seize more opportunities there, as U.S. sanctions have made Western financing for Russian firms more complicated. This has made many Russian energy firms, including Rosneft, to increasingly borrow more funds from Asian companies and banks.
According to Russia’s energy ministry data cited by Reuters, Rosneft’s crude oil exports to markets in Asia Pacific stood at 51 million tons, or 1 million bpd, in 2018. This was around half of Rosneft’s foreign crude oil sales.
In November last year, Rosneft signed a crude oil supply deal with China National Chemical Corporation (ChemChina) to send ESPO crude of up to 2.4 million tons through the Kozmino port for a year.
“Conclusion of the contract will lead to an increase in direct supplies of oil to the strategic Chinese market and ensure a guaranteed cost-effective export channel for the Company's crude sales,” Rosneft said in November, adding that its crude oil sales to China accounted for 6.5 percent of total Chinese crude oil imports in 2017.
In India, another key growth Asian market, Rosneft holds 49.13 percent in Nayara Energy Limited, which owns the second largest private refinery in the country.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.