LNG

Rosneft, the Russian oil and gas company and the largest refiner and former partner of international majors such as ExxonMobil and BP, reported a fall in profits but is still managing the Western sanctions storm better than pipeline natural gas company Gazprom and LNG project developer Novatek.

Rosneft said that in the nine months to the end of September 2023 revenues declined to 6,612 trillion roubles ($74.4 billion), down from last year 7,202 trillion roubles ($81.05Bln) during the same nine months.

Operating income dropped to 1,778 trillion roubles ($20.10 billion) from 2,014 trillion ($22.65Bln) in the same nine months of 2022.

BP had previously held a 20 percent shareholding in Rosneft but pulled out immediately following the Russian invasion of Ukraine in February 2022.

Sakhalin projects

ExxonMobil also ended its decades-long involvement in Russia, exiting major oil and gas joint ventures with Rosneft off Sakhalin Island in the Russian Far East.

Rosneft said its production of liquid hydrocarbons increased by 3.9 percent in the first nine months of 2023 to 4 million barrels per day, mainly due to resumption of production at the Sakhalin-1 oil project.

Total production of all hydrocarbons rose by 10.7 percent in the nine months to 5.5M barrels per day of oil equivalent, whereas output of hydrocarbons in the third quarter had amounted to 5.4 million barrels per day of oil equivalent.

Production of liquid hydrocarbons in the third quarter equalled 3.9M barrels per day amid Russian oil production restrictions since March 2023 to offset the effects of sanctions.

Rosneft’s natural gas production increased by 33 percent in the nine months year-on-year to 1.5M barrels of oil equivalent per day.

Natural gas and associated gas are produced by 35 subsidiaries and joint ventures of Rosneft in Western and Eastern Siberia, Central Russia, Southern European Russia and the Far East.

Refining

Over the years, Rosneft has been consistently implementing a programme to modernise its refineries, which has enabled it to expand its product range and improve the quality of its products such as gasoline, diesel and jet fuel.

The company's refining unit operates 13 major refineries in the Russian Federation and total design capacity of the company's refineries in Russia is 118.4 million tons of oil per year.

Rosneft, which has a 40 percent share of the Russian refining market, said its oil refining throughput increased by 3.3 percent in the reporting period year-on-year to 65.8M tons, and rose 0.9 percent quarter-on-quarter to 21.7M tons.

Global and natural gas stalwart companies BP of the UK and Equinor of Norway will face combined earnings hits of around $27 billion by exiting their Russian business ventures because of the Ukraine invasion, with BP taking the largest profits impairments by breaking up with Rosneft.

Dec 11 (LNGJ) - Russian energy company Rosneft has made a huge discovery in the Kara Sea area with estimated resources of 800 billion cubic metres of natural gas and the field has been named after the Soviet Union’s WWII hero, Marshal Georgy Zhukov, whose forces captured Berlin.

   “The drill hole is 1,621 metres deep and is located in the area where Rosneft and partners in 2014 found 130 million tons of oil,” said the company. “The results of drilling carried out by Rosneft in the Kara Sea have shown the high oil and gas content of these structures, which confirms the discovery of a new Kara offshore oil province,” said Rosneft. “In terms of resources, it may surpass such oil and gas provinces as the Gulf of Mexico, offshore Brazil or the largest resource areas in the Middle East,” added Rosneft.

The Russian government has reduced its target for energy cargo transportation to China and Asian nations by the Northern Sea Route with only shipments of LNG close to meeting projected volumes and cargoes of coal and oil falling short.

Elixir Energy, the Australian exploration and production company with plans for a small-scale liquefaction plant using coal-seam gas to provide clean fuel for trucks in Mongolia, is making progress in assessing resources in the South Gobi desert region.

Zvezda Shipbuilding in the Russian Far East has signed a technical assistance and license agreement with Gaztransport and Technigaz (GTT), the French designer of liquefied natural gas maritime and onshore storage systems, to build ice-breaking LNG carriers using GTT tanks.

The Northern Sea Route (NSR) from Arctic Russia to North Asia has reopened earlier than in recent years, providing scope for LNG shipments to be re-directed from the Atlantic Basin to Pacific Basin as prices remain low, though are rising faster in Asia.

The NSR is officially defined by Russian legislation as lying east of Novaya Zemlya archipelago and specifically running along the Russian Arctic coast from the Kara Sea to the Bering Strait to enter the Northern Pacific Ocean.

The 172,600 cubic metres capacity Arctic-class LNG carrier “Christophe de Margerie” left the Yamal LNG export plant in Northern Siberia, operated by Novatek, on May 18 and is scheduled to arrive at the Chinese Tangshan import terminal on June 11 after a transit of 23 days.

The Tangshan terminal is in the northern Chinese Hebei province and is operated by PetroChina.

Shipping data shows that the “Christophe de Margerie” is accompanied by another tanker and two nuclear-powered ice-breakers, the “Yamal” and the “Vaygach”.

It is only in recent years that the NSR has started to be used earlier by LNG carriers pushing ahead to deliver cargoes to North Asia.

The 172,600 cubic metres capacity LNG carrier “Vladimir Rusanov” was the first vessel to use the NSR in 2019, having lifted a cargo at the Yamal plant in mid-June.

However, the “Vladimir Rusanov” is in Western European waters and scheduled to discharge a cargo on May 24 at the Montoir-de-Bretagne terminal in Western France.

According to analysts, the early availability of the NSR, coupled with a slowly opening Europe-Asia LNG arbitrage window - at historically low values - will result in a redirection of many Yamal cargoes away from Europe and to be pointed at North Asia.

Three other carriers are currently heading back to the Yamal plant's port at Sabetta from Europe and at least one could lift an Asia cargo.

They are the two 172,000 cubic metres capacity vessels, the “Georgiy Brusilov” and the “Vladimir Vize”, and the 172,600 cubic metres capacity carrier “Vladimir Voronin”, with arrivals scheduled before the end of May, according to shipping data.

The re-opening of the NSR comes as the Platts Japan-Korea Marker spot cargo price for North Asia cargoes for July is at $2.280 per million British thermal units and at $2.425 per MMBtu for August, higher than several weeks ago.

That’s as the European LNG price indicators, the UK National Balancing Point and the Dutch Title Transfer Facility, were lower at the equivalents on May 20 of $1.40 per MMBtu and $1.55 per MMBtu respectively.

There is currently a wider debate in Russia about accommodating much more energy shipping traffic on the NSR as usage increases.

Russian oil company Rosneft is progressing with the development of its Vostok Oil Project, a venture that is projected to deliver 25 million tons of shipments from a special seaport via the NSR by 2024.

The oil project is based on the development of several fields, including at least three in the Vankor area.

Vostok Oil will also include the development of 15 new industry towns, two airports and about 800 kilometres of new pipelines.

The traditional NSR that has been the main reference point in Russian Arctic shipping is now being debated by the government.

Growth in shipments on a wider route have been rising. Russian government data shows that in 2019, a total of 31.5 million tons of shipments were transported on the NSR, an increase of over 55 percent from 2018.

Most of the extra shipments were LNG from the Yamal plant.

Now the Russian government is referring to the Northern Sea Transport Corridor and has drawn up a report on increasing traffic volumes.

According to the Association of Sea Trade Ports, the transport corridor will be clearly referred to in the new Russian Arctic Strategy, a document that now awaits approval by the government.

The document has been written by the Russian Ministry of the Far East and Arctic and was submitted to the government on 7th of May 2020. The strategy covers the period until 2035.

Saudi Aramco, the company with LNG plans and behind the global energy turmoil because of the Saudi government pledge to increase crude oil production, still has its shares trading at a high level of 30.90 riyals ($8.24) on the Saudi Tadawul stock exchange.

Italian energy company Eni has started natural gas production from the Sankofa gas field offshore Ghana as the West Africa nation still awaits firm progress on one of the various LNG import projects it has been involved in to meet its growing energy needs.

Egypt is on track to halt LNG imports by year-end as natural gas production was ramped up at its large-scale discovery in the East Mediterranean, about 180 kilometres offshore from Port Said and in waters of 1,500 metres in depth.