Energy Ministry awaits final Rosneft proposal on routes for add'l oil deliveries to China
MOSCOW. July 9 (Interfax) - The Russian Energy Ministry is waiting for a final proposal from Rosneft on routes for additional oil deliveries to China, which could go through Kazakhstan, in order to calculate the resource base.
"Inasmuch as the issue is the long-term period - the intergovernmental agreement is valid until 2018, and could possibly be extended - we especially anticipate in it the possibility of adjusting the volume of deliveries," Energy Minister Alexander Novak said in an interview given to the business daily Kommersant.
"Whether there will be a resource base or not will be shown by the final geological prospecting work at certain deposits. Such work is already being done now, and there is a great likelihood that these reserves will be confirmed. The Chinese are requesting still more, and if we can we will sign off on bigger amounts. Their need for oil will be growing, because the proportion of coal consumption will be falling. Now its share of the structure of the Chinese People's Republic's balance is around seventy percent. China consumes half the coal produced in the world," Novak said.
"And here we've chosen very appropriate policy. Even though it's hard now to say whether in 2028-2030 in Russia that amount of oil will be extracted for China, now we are working on this niche and setting ourselves the task of ensuring that volume of oil by that time - factoring in the development of new deposits and the construction of the necessary infrastructure. But we are ensuring a guaranteed market for the export of our energy resources for future generations. In time our successors will resolve the issue with Europe, having built the corresponding infrastructure, and we are now making use of these benefits. So, thinking about the future, it is necessary to create infrastructure to the East, to build oil and gas pipelines in this direction. And in ten years to talk about expanding infrastructure," the energy minister said.
China is going to be an important driver of growth in the demand for oil, Novak said. "And this opens a large niche for us. It's good that we are working on this, because otherwise someone else would," he said.
The possibility of oil deliveries from Russia to China through Kazakhstan is associated with an agreement per which Russia will this coming January be putting a halt to duty-free oil deliveries to Kazakhstan, Novak said. "The rules will be as follows. Russia will continue to deliver seven million tonnes of oil to Pavlodar Oil Refinery. In exchange, Kazakhstan will be delivering that amount of crude to Novorossiysk. There is an option for delivering this oil in the framework of swap operations to China," he said.
Europe need not worry about a possible decrease in oil deliveries from Russia in association with increased deliveries to China, the minister said. All agreements will be fulfilled in their entirety, he said. "For Russia, Europe will remain the basic strategic direction," he said.