Posted on 09/09/2014 8:59:51 AM PDT by thackney
...faces unprecedented challenges to its long-term expansion and modernization plans....
Last week Rosneft said it would cut staff to reduce costs: Kommersant business daily said Rosneft's Moscow headquarters would see cuts of up to 25 percent from the current 4,000.
These would be the first significant job losses at a company that swelled via the acquisition of rivals such as YUKOS, pushed into bankruptcy some ten years ago by the government of President Vladimir Putin.
Since then Rosneft's output has risen 10-fold to exceed 4 million barrels per day or four percent of global supply. But last week it reported a 1.3 percent production drop in August, as production in West Siberia regions declines.
The firm, which alongside gas monopoly Gazprom is a top contributor to the Russian budget, needs to invest heavily to bring new east Siberian fields online - a costly endeavour now made more difficult by the sanctions squeeze.
In a sign of the challenge such a project now presents, Putin said last week Rosneft would welcome China buying a stake in the prized Siberian Vankor field. It was a major about-turn given the Kremlin's long resistance to allowing its powerful neighbour access to such deposits.
"Rosneft's decision to offer China a stake in the mega Vankor oil field in East Siberia signals that Moscow's bargaining position has been further weakened by sanctions and that it needs the capital infusion," said Emily Stromquist, analyst at Eurasia.
"CREDIT STOPPED"
Rosneft needs to invest more than $21 billion annually until 2017 to launch new fields and upgrade refineries.
It also needs to repay $12 billion by year-end and another $17 billion next year, after it borrowed heavily to buy rival TNK-BP for $55 billion last year – a deal that included BP taking a 20 percent stake in Rosneft.
(Excerpt) Read more at rigzone.com ...
Let Putin lend the money, he seems to have plenty to spend on his adventures
Russia needs over $101 per barrel to break even, and oil prices are way lower than that. What a plan.
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