Mubadala Petroleum and Rosneft have agreed to cooperate in the exploration and production of oil and gas assets in Siberia and elsewhere, as the Russian state-owned producer looks to mitigate US and European sanctions through new trade links and diversified business.
The Rosneft chief executive, Igor Sechin, and the UAE Energy Minister Suhail Al Mazroui signed the non-binding agreement yesterday in the presence of the Russian president Vladimir Putin at the St Petersburg International Economic Forum.
It provides for the participation of Mubadala Petroleum in the development of Rosneft assets in Eastern Siberia and Rosneft participation in international projects carried out by Mubadala Petroleum.
No further details were provided.
This is just one of a host of deals signed by Rosneft at the summit. The company also inked deals with Azerbaijan, Cuba, Vietnam, India, Mongolia and Venezuela.
Mr Sechin, a close ally of Mr Putin, was one of several targeted by US sanctions last month after Russia’s annexation of the Crimea from Ukraine. Though the company itself was not directly targeted by sanctions, Standard & Poor’s cut its credit rating to BBB-, one notch above junk.
A spokesman for Rosneft said the company had “signed a whole host of dealings with western partners such as ExxonMobil, Pirellii and BP and with Russian governmental structures and universities.”
Rosneft launched a joint venture yesterday with Azerbaijan’s state oil company, under which the two will cooperate on oil and gas production.
The Venezuelan state oil company PDVSA, which has just finalised credit arrangements worth US$2 billion dollars with Halliburton, Schlumberger, and Weatherford International, signed a long-term contract with Rosneft to provide oil and oil product supplies.
Union Cuba Petroleo, owned by the Cuban government, also signed an memorandum of cooperation with Rosneft at the forum.
Rosneft’s global depository receipts gained 1.1 per cent at close of trading in London on Friday.
The company also announced a joint venture with BP to extract “hard-to-recover” oil from Russia’s Volga-Urals region.
Bob Dudley, the chief of BP, which owns a 19.7 per cent stake in Rosneft, said that sanctions would not affect the company’s business with the Russian firm.
The US government urged senior executives of American energy firms not to attend the summit, according to Bloomberg News.
On Wednesday, Gazprom, Russia’s state-owned gas producer, announced that it had signed a $400bn deal to provide 38 billion cubic metres of gas annually to China.
Last year, the Russian Direct Investment Fund and Mubadala Development agreed jointly to launch a $2bn fund to invest in assets in Russia. Mubadala hired the Moscow-based investment firm Verno Capital to advise on the fund. The two had previously worked together in 2010, when Mubadala invested $100 million in funds managed by Verno.
Mubadala Petroleum, a wholly-owned subsidiary of Mubadala Development, holds oil and gas assets in the Arabian Gulf region, Africa, the Caspian Sea and across South East Asia, including in Thailand, Indonesia, Malaysia and Vietnam. The company is also a joint-venture partner with International Petroleum Investment Company in Emirates LNG, a gas import terminal being built in Fujairah.
Last year Mubadala Petroleum’s chief executive Maurizio La Noce told The National that the company aimed to double its business in the next decade to be worth $20bn.
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