Rosneft to Refine LUKOIL
Rosneft pledged to boost refining capacity 15 fold, up to 150 million tons, planning to attain this purpose by acquiring assets of YUKOS, European refineries and facilities in Asia. In ambition, the plans of Rosneft leave behind even LUKOIL, which target is the annual processing of 100 million tons. The competition of Russia’s companies may drive up prices for European refineries, the analysts speculate.
Rosneft President Sergey Bogdanchikov vowed his company is set to reach the level of world majors in terms of production-to-processing ratio, which is one to two, French La Tribune reported Monday. Rosneft produced 73.5 million tons of crude oil in 2005 and estimates this year’s output at 78 million tons. Therefore, judging by Bogdanchikov’s statement, the company’s processing should jump to at least 150 million tons.
To this effect, Bogdanchikov said, Rosneft will triple capacity of refineries by 2011, spending $2.9 billion for it. Rosneft currently owns two refineries with the total capacity of 10.4 million tons, which will go up to 19 million tons after rebuilding. Moreover, Rosneft will probably be able to acquire the YUKOS assets and add 53.2 million tons to its aggregate refining. Besides, Rosneft intends to buy some assets in Bashkiria (32 million tons) and construct a 20-million ton refinery at the endpoint of Eastern Siberia-Pacific Ocean pipeline (project investments stand at around $5 billion). But even the most optimistic scenario leads to capacity of no more than 124.2 million tons.
But Rosneft eyes abroad assets for further extension. The assets in Asia and Europe are being considered, Bogdanchikov confirmed, adding that in Europe they are negotiating the buyout of either a stake or complete ownership of some refineries.
www.kommersant.com
All the Article in Russian as of Oct. 24, 2006
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