RusEnergy

Dec. 7, 2006 Kommersant - In the following five years, Rosneft intends to invest $20 billion in development and attain capitalization of roughly $160 billion. By 2020, the company hopes to catch up ExxonMobil and ?? in terms of the output. Rosneft President Sergey Bogdanchikov shed light on ambitious plans of the company during the interview to The Financial Times. By 2011, Bogdanchikov said, the company that costs $100 billion now will step up to $160 billion on investments of $20 billion (less new acquisitions). The daily production will go up from 1.8 million bbl to more than 2 million bbl in the following three years and to 3 million bbl by 2015. By 2020, Bogdanchikov emphasized, Rosneft will match the output of global leaders - BP and ExxonMobil. BP’s produced 3.816 million bbl a day in the third quarter, while ExxonMobil had 4 million bbl; the capitalization was $223 billion and $453 billion respectively. “The purpose of Rosneft is to reach operating activities in extent equal to the biggest world companies. But even if it happens, Rosneft will hardly catch up with them in capitalization,” said Troika Dialog analyst Valery Nesterov. Rosneft has low liquidity, as only 15 percent of its stocks are in the free float now and the country’s risks are high. Besides, efficiency also affects capitalization, Nesterov explained. Nowadays, BP generates $15 in net profit from a produced bbl, Exxon has $27, but Rosneft posts no more than $7, according to Nadezhda Kazakova from MDM Bank. Another concern of Rosneft is to acquire foreign assets and anchor on the markets of Asia. The company is completing elaboration of documents to set up a venture with Petrochina, Sergey Goncharov, who is in charge of Rosneft office in China, said in Shanghai yesterday during the China’s-Kazakh Forum. The venture will deal with refining and selling petroleum in China. “The partners have made very good offer and I think we will be able to start working in 2007,” Goncharov said. Rosneft’s cooperation with Petronas of Malaysia will begin next year as well, the official specified.