The Russian oil giant Rosneft and the independent gas producer Novatek may receive support from the National Welfare Fund (NWF) for the running projects in 2014 on common grounds and within the limit of 60 percent of the fund's money designed for investment in self-liquidating infrastructural projects, Finance Minister Anton Siluanov told journalists.
"We discussed this matter and agreed on the following. We have the decision that up to 60v of the NWF money may be invested in infrastructural projects and Rosatom's and the Russian Direct Investment Fund's projects. We agreed that we can additionally reconsider the structure of the investments and redistribute some of the money within the 60 percent share to major companies that have lost foreign borrowing markets. This concerns primarily Rosneft and Novatek," he said.
Both companies appealed to the government for financial support to compensate for the foreign sources of financing, Siluanov said. "In principle, we are prepared to consider these proposals on common grounds, within the limit of 60 percent of the NWF money allotted for investment," he said.
If Rosneft and Novatek undergo all the necessary project analysis procedures, they may receive the money as early as this year, Siluanov said. "This would concern money for projects that already exist and for which Chinese money, money from other investors, and their own money is being used. This is the money that we will invest to compensate for the foreign loans that have become unavailable," he said.
The government does not plan to use the NWF's money beyond the 60 percent ceiling set for investment in infrastructural projects," he said.
"It's been decided so far not to unseal the remaining 40 percent. This is our strategic reserve," he said.
At the same time, Siluanov suggested that, if the economic situation worsens, this can happen. "Certainly, if the situation escalates and worsens, we could revisit this matter. But there have been no proposals so far on increasing the investment of the NWF money above the volumes that were endorsed earlier," Siluanov said.
Russian Prime Minister Dmitry Medvedev earlier pledged to support the Russian business community affected by Western sanctions. "You can have no doubt that in the face of such unfair actions the state has always supported and will support Russian business," Medvedev said at a meeting with Novatek CEO Leonid Mikhelson.
The U.S. Department of the Treasury announced earlier that it put Rosneft and Novatek on the list of companies to which U.S. creditors cannot extend financing in any form for longer than 90 days.
Medvedev earlier ordered increasing the ceiling of the NWF money that can be used for the implementation of self-liquidating infrastructural projects to 60 percent from 40 percent.
The prime minister's instruction set the ceiling of NWF money allotted for the implementation of self-liquidating infrastructural projects and invested in deposits and bank accounts with banks, financial institutions and Vnesheconombank in an amount of 40 percent of the NWF's overall assets as of January 1, 2014; another 10 percent from the NWF can be spent on projects implemented together with the Russian Direct Investment Fund, and 10 percent on projects implemented by the state nuclear corporation Rosatom.
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