The Gazprom Neft Management Board has examined the issue of developing cooperation with Asia—Pacific companies.
A key strategic objective for Gazprom Neft in its engagement with companies in the Asia Pacific in exploration and production activities concerns the sourcing of partners for projects currently under geological prospecting. Gazprom Neft is developing the Badra field, Iraq, together with South Korean gas corporation KOGAS and Malaysian oil company PETRONAS. Commercial production at this field commenced in August 2014. Reserves in place at the Badra field are estimated at more than three billion barrels of oil.
In April 2015 Gazprom Neft CEO Alexander Dyukov and PetroVietnam Chairman Nguyen Xuan Son signed a Memorandum of Cooperation regarding the joint fulfilment of exploration and production projects on the continental shelf of the Pechora Sea. In addition to this, Alexander Dyukov and Nguyen Xuan Son also signed a Heads of Agreement letter regarding Gazprom Neft’s acquisition of a share in the Dung Quat oil refinery, Vietnam, giving Gazprom Neft the exclusive right to engage in negotiations with PetroVietnam on such acquisition throughout the duration of that agreement.
A further major focus in Gazprom Neft’s developing collaboration with Asia—Pacific companies concerns improving the viability of oil exports and implementing projects for the sale of oil products in premium retail sectors. Gazpromneft-Aero, operator of the Gazprom Neft aviation fuels business, provides “wing tip” refuelling services for Russian aviation companies under agreements with local aviation fuel suppliers at airports throughout China, Indonesia, Japan, the Philippines, Thailand, Vietnam and other countries of the Asia Pacific region.
March 2015 saw the first shipment of premium G-Energy oils produced by Gazprom Neft subsidiary Gazpromneft Lubricants to China, with a contract for the supply of G-Energy products to Taiwan having previously been signed in November 2014.
The practice of accounting for oil exports and oil products supplied to China in renminbi was introduced by Gazprom Neft in 2014, with all 2015 payments for Gazprom Neft oil delivered to China via the East Siberia—Pacific Ocean pipeline being made in renminbi.
Evidence of the considerable interest in Gazprom Neft on the part of Asian investors was clear in the assignment of the high “AA — Outlook Stable” long-term credit rating for liabilities in Russian currency by China’s most significant ratings agency, Dagong Global Credit Rating Company Limited, in March 2015.