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Russia’s largest oil producing company Rosneft plans to sell some old underperforming oil fields, mostly to local companies, at least two Moscow-based brokerages said on Tuesday following a conference call with Rosneft’s management.
Sova Capital brokerage said in a note to its clients that Rosneft plans to sell some of its brownfields in southern Russia along with underperforming brownfields elsewhere, including Samaraneftegas, Orenburgneft, RN-Severnya Neft, Talinskoye, Varyeganneftegas and Sakhalinmoreneftegas.
Rosneft did not immediately responded to a request for comment.
Analysts at BCS brokerage also said Rosneft was planning a round of divestments of marginal assets to “streamline the company” and provide capital for developing its huge project, Vostok Oil, which is slated for development of hydrocarbons in the Russian Arctic.
Vostok Oil’s and gas condensate resources are estimated at 6 billion tonnes (44 billion barrels) by the company.
“Rosneft is currently in negotiations to sell brownfield assets in Southern Russia and elsewhere to ‘high-grade’ Rosneft’s overall asset base. Results of those negotiations should be announced in the coming months,” BCS said in a note.
Some of these projects have not been profitable or cash-flow positive for five years, according to the management, Sova Capital said in the note. The plan is to sell the equivalent of 20 million tonnes (400,000 barrels per day) of production a year over the next 18 months or so to mostly Russian buyers.
It said that Rosneft was selling reserves at as low as $1-$2 per barrel, but this low cost includes all “abandonment costs”, Sova Capital said.
It added that the average operating expenses for the fields are estimated above $9 per barrel. The total capex and open reduction until 2040 should be more than $30 billion. More than 200 licence areas could be sold starting next year, it said.
