Rosneft ‘maintains strategy’ despite sanctions

 

Rosneft’s cash flows will allow it to carry on with current projects in the face of sanctions imposed on the Russian oil behemoth by the US Treasury Department this week, the company has said.

The Moscow-based giant also vowed to still “deliver on the key indicators” of its strategy and to maintain its dividend policy in spite of the sanctions against it, compatriot independent Novatek, two Russian banks and other institutions and individuals.

Company president Igor Sechin had already labelled the measures “groundless, biased and illegal” in the immediate aftermath of the Treasury’s announcement.

In a statement released on Friday and which bore a remarkable resemblance to the one issued by Novatek the previous day, the company said: “Rosneft has no influence on either political or economic processes ongoing in Ukraine. For this reason, the ... sanctions are illegitimate and groundless.

“Rosneft is a public company traded on Russian and international exchanges. Therefore, the sanctions inflict damage upon the company shareholders, including US citizens and residents.

“The company is currently in the process of a legal review of the announced sanctions, and is consulting its international partners.

“The company will continue to work on the existing projects and agreements. Rosneft financial position is robust. Rosneft's operating cash flows allow us to carry on with our current projects. The company's financial position also allows us to deliver on the key indicators of our strategy and dividend policy.

“Rosneft possesses sufficient liquidity to service its debts and honour its contractual obligations. In June, for example, our company and its shareholder, (UK supermajor) BP, signed an oil products and oil supply agreement under which the advance payment amounted to about $2 billion.”

Shares in Rosneft had slipped more than 5% in London on Thursday, and were down almost 2% at around 10am on Friday.

On Thursday, Novatek had hit back at the sanctions, vowing that they would not disrupt its operations or affect its assets. The company is the 60% operator of the giant Yamal LNG liquefied natural gas project, alongside China National Petroleum Corporation and Total of France.

“Novatek is a privately-listed company not conducting any business activities in Ukraine, nor does it have any impact on the political and economic processes taking place on its territory,” it said.

“The inclusion on the list does not impede Novatek’s operations and business activities in any jurisdiction, nor does it affect the company’s assets and listed shares.”

The company was at pains to point out that it lists US citizens and major US investment funds and banks amongst its shareholders.

“Novatek’s financial position is stable, and the company’s cash flows are sufficient to fulfill its key strategic plans, service its existing debt portfolio and make payments according to the company’s dividend policy.

Undoubtedly with Yamal LNG in mind, it continued: “The implementation of large-scale projects with Novatek’s participation will continue as planned. Together with our international partners, the company will take all necessary measures to secure project financing and implement the LNG project as scheduled.”

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