10 Jun 2022 10:42

Trafigura intends to exit Vostok Oil project

MOSCOW. June 10 (Interfax) - Swiss trader Trafigura intends to withdraw from the Vostok Oil project in Russia.

"The Group ceased all trading of crude oil with sanctioned Russian organisations in advance of the European Union and Swiss sanctions taking effect on 15 May 2022, while substantially reducing the volume of oil products from sanctioned Russian organisations to solely supply essential fuels required by European customers," the company said in a statement.

"Trafigura will continue to comply in full with all applicable subsequent sanctions packages. In addition, the Group froze its investments in Russia and announced a review of its 10% non-operational, passive shareholding in Vostok Oil, with the intention of exiting," the trader said.

"Looking ahead, we see no let-up in the challenging market conditions. Global supply chains remain disrupted and the geopolitical situation will continue to be turbulent," Trafigura said.

Rosneft began largescale development of fields in Taimyr as part of the Vostok Oil project in 2020, including the assets of 52 licensed areas in the north of the Krasnoyarsk Territory. The areas comprise the Vankor, Suzun, Tagul, and Lodochnoye fields, as well as the new fields of Payakha, with reserves of more than 1 billion tonnes of oil, and Zapadno-Irkinskoye, with reserves of 0.5 billion tonnes oil. The potential for the production of liquid hydrocarbons could reach 115 million tonnes per year, and the company estimates the resource base at over 6 billion tonnes of liquid hydrocarbons. Rosneft has promised to ship 30 million tonnes of oil from Vostok Oil via the Northern Sea Route in 2024.

A 10% stake in Vostok Oil is owned by Swiss-based CB Enterprises Sarl - the stake is owned by Trafigura and was purchased from Rosneft in 2020 for 7 billion euros. In addition, the Russian company sold 5% of the project to a consortium of Vitol S.A. and Mercantile & Maritime Energy Pte. Ltd. (75% - Vitol, 25% - MME) for 3.5 billion euros - tis is owned by Amur Investments. The remaining 85% of Vostok Oil is owned by Rosneft's subsidiary, RN-Trade LLC.

Trafigura is a long-standing partner of Rosneft, carrying out trading activities with the Russian company's oil. In addition, Trafigura, as part of a a consortium with Rosneft and UCP Trafigura, owns the Indian company Nayara Energy Limited (formerly Essar Oil), which owns a refinery with a throughput capacity of 20 million tonnes with a refining depth of 95.5%. However, Trafigura also planned to sell its stake in the Indian company.