Amid Western sanctions and stagnating demand in Europe, Russia plans to keep increasing its oil exports to Asia despite plummeting oil prices. Oil supplies to the region hit record levels this year.
“Certainly, Europe is the key consumer for us, but the growing market of the Asia-Pacific Region is extremely attractive for us. Now, despite rather big volumes in the direction of the APR, it does not exceed 13-15% in the overall structure of our exports,” said Russian state oil giant Rosneft chief Igor Sechin. He was speaking at the FT Commodities Conference.
Moscow now accepts yuan for oil payments.
Russia has overtaken Saudi Arabia as the largest supplier of oil to China, sending almost 930,000 barrels a day in May – up 21 per cent on April.
By increasing imports from Russia, Asian giants like China and Japan are reducing their reliance on Middle Eastern oil producers. Simultaneously this aids Moscow in meeting its target of sending a third of its crude exports to the east by 2020.
“The goods” will be sold to the market that offers the most attractive price, Rosneft chief Sechin said.
Russian oil production may be brought to 700 million tons annually in the near future, he claimed.
Oil production in Russia in 2014 reached 526.7 million tons.
The president of the Russian state-controlled energy company estimated oil consumption to grow in China two per cent annually by 2020.
During Putin’s China visit, Rosneft has signed a memorandum of understanding with Chinese oil giant Sinopec on a proposed joint development of Russkoye and Yurubcheno-Tokhomskoye fields.
Rosneft is the world’s top listed oil company by output.
Under the agreement, Sinopec has the right to acquire a 49 per cent stake in East Siberian Oil and Gas Company (ESOGC) and Tyumenneftegaz, that hold the exploration licenses for Russkoye and Yurubcheno-Tokhomskoye fields respectively.
Rosneft and China National Chemical Corporation (ChemChina) on Thursday also signed an agreement on the Russian oil giant’s planned subscription for a 30 per cent stake in the Chinese firm.
Russia, the largest oil and gas exporter, faces a recession this year as crude prices continue to fall.
TBP and Agencies