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2006 December 6   11:43

Rosneft to invest $20 billion to take on oil giants

Rosneft, Russia's No. 2 oil company, plans to invest $20 billion over five years to transform itself into a rival to the oil industry's leaders, its chief executive said, Reuters reports according to the Financial Times.

Sergey Bogdanchikov also forecast output would increase from 1.8 million barrels per day (bpd) this year to more than 2 million bpd over the coming three years and hitting 3 million bpd by 2015, the newspaper reported on Wednesday.

Two-thirds of Rosneft's oil-product exports were destined for Europe, the FT noted.

"Even today we are dependent on the European market," Bogdanchikov said in an interview with the newspaper.

"What will be in demand in Europe is more crude oil and refined products ... we are opening more terminals to reach the European market," he said.

Bogdanchikov said his company would look to make downstream acquisitions, but he did not go into detail, the FT said.

As for the $20-billion investment, the newspaper said it would be financed from internal resources and 70 percent would be earmarked for upstream operations.

Growth was seen in Rosneft's western Siberia, eastern Siberia and Sakhalin fields, the FT said.

The Rosneft boss said his company would expand to the scale of BP Plc and ExxonMobil Corp. by the end of the decade. Bogdanchikov was speaking in Brussels, where he was to meet officials drafting the EU's energy strategy, the FT said.

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