Russia’s Rosneft oil and gas company has signed a contract on buying 5 billion cubic meters of gas from the nation’s energy giant Gazprom at a regulated price, several industry sources informed Kommersant.
The oil company needs gas to meet its obligations under long-term contracts. Initially, Rosneft planned to close those contracts with its own gas but was unable to increase production at the necessary pace and is now partially transferring customers to its competitors. At the same time, it also has to purchase gas from Gazprom.
According to one of Kommersant’s sources, under the new contract, Rosneft can purchase more than 5 billion cubic meters of gas if necessary.
However, the company is hardly interested in that, since it signed contracts with its customers under the “tariff minus” price formula, which means that Rosneft will be losing money buying gas from Gazprom and selling it at a lower price.
A source in Rosneft assured the paper that “the company uses various opportunities to optimize its portfolio and balance the uneven gas consumption. Transactions with third parties is an absolutely standard practice, which allows all parties to optimize their trade operations.”
The source added that Gazprom’s regional companies purchase about 6 billion cubic meters of gas from it annually.
Meanwhile, Vasily Tanurkov, an analyst with AKPA, noted that judging by some known terms of Rosneft’s contracts with large consumers, the company’s average discount is about 6%. Based on that premise, Rosneft’s losses, given the volume of the contract with Gazprom of 5 billion cubic meters, can amount to about 1.2 billion rubles ($21.2 million).