I was originally intending to make my first post more of an introduction to the blog and to myself, but this piece of breaking news on the website Seeking Alpha grabbed my attention. According to SA, Igor Sechin, CEO of Russian oil giant Rosneft (ROSN:RM on Russia's Micex exchange, 215.23 rub, -0.85%), is considering a joint venture with ExxonMobil (XOM, 88.44, +0.40%) to exploit oil and gas production in Iraq. XOM has been wanting to reduce its large stake in the West Qurna-1 oil field and has expressed its intent last year to sell its entire 60% stake to focus on oil projects in Kurdistan.
More details are provided by this Reuters article, which states that an Iraqi delegation is to visit Moscow on May 10, and provides the following financial details:
* Rosneft plans to produce 100 bcm of gas a year by 2020
* Rosneft's 2013 capex seen at $20 bln post TNK-BP deal
* Sechin says market capitalisation of Rosneft to reach $120 bln in two-year time
The deal is expected to double Rosneft's share of the Russian gas market by 2020, and seems to be the next step in the oil company's gradual process of expansion. Quoting from Reuters: "Rosneft has been expanding since Sechin, a powerful long-standing ally of Russian President Vladimir Putin, was appointed to head Russia's top oil producer last May. It bought Anglo-Russian oil company TNK-BP from BP and the AAR consortium of Soviet-born tycoons for $55 billion, clinched deals with international majors to tap Russia's Arctic hydrocarbon reserves, and acquired domestic gas producer Itera."
This seems like a very interesting development to keep track of moving forward. I wonder how this will affect the dynamics of the Russian gas and energy market, given Gazprom's current monopoly yet Putin's support of Sechin?
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