Rosneft will have to lower oil price for traders - Timchenko
MOSCOW. April 16 (Interfax) - Russian state oil major Rosneft will in future have to lower the price at which it sells oil to traders, the co-owner of oil trader Gunvor, Gennady Timchenko said.
This will naturally depend on the market, but Rosneft will likely have to lower the price, Timchenko said in an interview with Neue Zurcher Zeitung published on Tuesday.
Perhaps companies that are now paying inflated prices are doing so in the hope of winning other business with Rosneft, such as developing joint upstream projects, he added.
Timchenko said that when his company began doing business in Russia, particularly with Rosneft, it was aggressive and paid very high prices in order to win tenders to purchase oil. As a result, the company's margins were very low, and this went on for several years, he said, explaining why Gunvor stopped buying oil from Rosneft.
He said Gunvor continues to work with companies such as TNK-BP , which was recently acquired by Rosneft, Gazprom Neft and Surgutneftegas .
However, Gunvor no longer wants to pay more than the market price, and it no longer works exclusively with Russia, but buys oil where it can be found at the most attractive price, Timchenko said.
The company now operates in 35 countries, but is confident that in future it will again have an opportunity to buy oil in Russia, he said.
Gunvor continues to work with Rosneft, exporting a substantial amount of the company's oil products, including fuel oil, he remarked.
Opportunities might arise in order to again trade their oil, Timchenko said, adding that the current situation does not mean that Gunvor does not want to work with Rosneft, it just does not want to pay the current high price.
In March, before closing the deal to buy 100% of TNK-BP, Rosneft announced that it would get an advance for oil supplies of $10 billion from traders Glencore and Vitol. Rosneft will supply up to 46.9 million tonnes under the contract with Glencore and up to 20.1 million tonnes under the deal with Vitol.
Glencore increased the amount of oil it traded by 55% to 421.4 million barrels in 2012 from 271.4 million barrels in the previous year. Russian oil was the key driver of this growth, the company said in its report.
