Rosneft is not experiencing financial problems but it can still count on allocations from the National Welfare Fund (NWF) for new projects if the company proves their usefulness to the national economy, Russian President Vladimir Putin said.
The NWF stood at 3.55 trillion rubles ($81.74 billion) as of November 1. Its ruble-priced volume had grown substantially in the recent months amid the Russian national currency's devaluation. Rosneft has applied for the allocation of 2.4 trillion rubles from the NWF for new projects and the application is being processed by agencies. Relevant ministers have already said that the Rosneft request will not be met fully. Rosneft CEO Igor Sechin said the company was ready to spend 1.5-2 trillion rubles of NWF money on new projects (the biggest of which was Far East Petrochemical Company).
"We are quite comfortable with this [the possible denial of the funding]. If we get the money it means the investment program will be bigger, the multiple effect will be higher. That would be normal, if not, we'd cope on our own. Some things will be adjusted but there'd be no drama on the whole," Sechin said.
"If I were a Rosneft CEO, I would ask for money, too," said Putin.
"Why not? Who doesn't ask for it today? Everyone's asking for money and hoping to get it. The Government Cabinet - I know their position because I discussed it both with the Cabinet and Rosneft - will make a decision based not just on the needs of the company which we truly treasure and which we will definitely help. It will also analyze the company's activities, analyze how it plans to use this money and what benefits the entire national economy will get from this investment. This will be a real assessment and I don't rule out that Rosneft may get some funds. Yet the amount of such allocations and the terms require a thorough analysis. No hurry here" Putin said in his interview with the TASS news agency ahead of the G20 summit in Australia.
"Recently, we checked the financial standing of Rosneft and didn't find any problems there whatsoever. No financial problems at all. I'd like to stress once again that if they need more money they must prove that these funds they get will be spent for specific purposes and there will be returns for the entire economy, on top of returns for the company," the president said. He recalled that during his recent visit to China Rosneft signed a framework agreement with a major Chinese corporation, CNPC, selling a 10% stake in the Vankor oilfield project and that deal was supposed to add to the financial stability of the company.
"Along with the stake, the Chinese will get seats on the board of directors. But we are also making arrangements on selling oil from that deposit, which is actually huge, for the yuans. In this situation, our Chinese partners will be ready to issue loans and to finance many transactions. Secondly, we're moving away from the diktat of the market that denominates all commercial oil flows in US dollars. We're encouraging in every way the use of national currencies - both the ruble and the yuan. Thirdly, this will additionally stabilize [Rosneft's] corporate finances," Putin said.
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