PJSC Rosneft Oil Company ( stylized as ROSNEFT) is a Russian integrated energy company headquartered in

Moscow Moscow ( , US chiefly ; rus, links=no, Москва, r=Moskva, p=mɐskˈva, a=Москва.ogg) is the capital and largest city of Russia. The city stands on the Moskva River in Central Russia, with a population estimated at 13.0 million ...

. Rosneft specializes in the exploration,

extraction Extraction may refer to: Science and technology Biology and medicine * Comedo extraction, a method of acne treatment * Dental extraction, the surgical removal of a tooth from the mouth Computing and information science * Data extraction, the pr ...

, production, refining, transport, and sale of petroleum, natural gas, and petroleum products. The company is controlled by the Russian government through the

Rosneftegaz Rosneftegaz is a Russian holding company managing assets in the oil and gas industry. Rosneftegaz is the owner of a controlling stake in Rosneft, 10.97% of the shares of Gazprom, as well as 26.36% of the shares of Inter RAO. 100% of Rosneftega ...

holding company. Its name is a

portmanteau A portmanteau word, or portmanteau (, ) is a blend of words Rosneft was founded in 1993 as a state enterprise and then incorporated in 1995, acquiring a number of state-controlled gas and oil assets. It became Russia's leading oil company after purchasing assets of the former oil company Yukos at state-run auctions. After acquiring OJSC

TNK-BP TNK-BP (Tyumenskaya Neftyanaya Kompaniya, Tyumen Oil Company) was a major vertically integrated Russian oil company headquartered in Moscow. It was Russia's third-largest oil producer and among the ten largest private oil companies in the world ...

in 2013, then one of the largest oil companies of Russia, Rosneft became the world's largest

publicly traded A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...

petroleum company. Rosneft is the third largest Russian company and the second-largest state-controlled company (after Gazprom) in Russia in terms of

revenue In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive rev ...

( ₽4,134 billion). Internationally, it is one of the largest oil companies,

ranking A ranking is a relationship between a set of items such that, for any two items, the first is either "ranked higher than", "ranked lower than" or "ranked equal to" the second. In mathematics, this is known as a weak order or total preorder of o ...

24 in terms of revenue. In the 2020 Forbes Global 2000, Rosneft was ranked as the 53rd-largest public company in the world. The company operates in more than twenty countries around the world.

History

Origins

Rosneft has played a major role in the history of Russia's

oil industry The petroleum industry, also known as the oil industry or the oil patch, includes the global processes of exploration, extraction, refining, transportation (often by oil tankers and pipelines), and marketing of petroleum products. The larges ...

. The first use of the name ''Rosneft'' dates back to the late 19th century, when

exploration Exploration refers to the historical practice of discovering remote lands. It is studied by geographers and historians. Two major eras of exploration occurred in human history: one of convergence, and one of divergence. The first, covering most ...

of oil fields in

Sakhalin Sakhalin ( rus, Сахали́н, r=Sakhalín, p=səxɐˈlʲin; ja, 樺太 ''Karafuto''; zh, c=, p=Kùyèdǎo, s=库页岛, t=庫頁島; Manchu: ᠰᠠᡥᠠᠯᡳᠶᠠᠨ, ''Sahaliyan''; Orok: Бугата на̄, ''Bugata nā''; Nivkh ...

began in 1889. Most of Rosneft's current assets were established during the

Soviet The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, ...

era.

1990s

Rosneft was established in 1993 as a unitary enterprise with assets previously held by Rosneftegaz, the successor to the

Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...

's Ministry of Oil Industry. During the early 1990s, almost all Russian oil companies and refineries were extracted from Rosneft to form ten integrated companies. Later their number was halved as a result of acquisitions. On 29 September 1995, an Order of the Government of Russia No. 971 transformed Rosneft into an open joint stock company. In March 1996, Rosneft founded the

Russian Regional Development Bank The Russian Regional Development Bank is a Russian bank founded on 27 March 1996 in a form of Open joint-stock company, PJSC. The RRDB offers a general variety of bank services. History The RRDB was founded by Rosneft on 27 March 1996. In early ...

. Rosneft struggled financially and operationally during the

1998 Russian financial crisis The Russian financial crisis (also called the ruble crisis or the Russian flu) began in Russia on 17 August 1998. It resulted in the Russian government and the Russian Central Bank devaluing the ruble and defaulting on its debt. The crisis had ...

with decreased production due to poor assets and decreased retail sales with an underused refining capacity. In July 1998 the Russian government tried to sell Rosneft, but it failed. In October 1998, the Russian government appointed Sergey Bogdanchikov as president. The company owned two obsolete refineries and several low-productive and poorly managed oil-producing assets. In the late 1990s, plans for Rosneft's

privatization in Russia Privatization in Russia describes the series of post-Soviet reforms that resulted in large-scale privatization of Russia's state-owned assets, particularly in the industrial, energy, and financial sectors. Most privatization took place in the ...

were made, but due to competition with equally influential pretenders, they were not carried out.

2000s

From 2002 to 2004, the main objectives of the company were to strengthen control over its assets, reduce the debt burden, and to obtain licenses in Eastern Siberia. The determining factor in enhancing the role of Rosneft in the Russian oil industry has been the support of the country's top leadership. The company, during this time, managed to restore its status after its rough start in the 1990s with the acquisition of Krasnodar Oil and Gas Company in 2002 and Northern Oil Company in early 2003. In addition, in 2002, the company received a license for the development of the Sakhalin-IV and Sakhalin-V project, and in 2003 a license for the development of the Sakhalin-III project. In 2005, Rosneft acquired a 25.94% stake in the company Verkhnechonskneftegaz and became the leading oil company of Russia in terms of production. In 2007, the company for the first time entered the annual list of one hundred most respected firms and companies in the world according to the weekly ''Barron's'', in 99th place. By the same year, Rosneft produced 100 million barrels of oil, 20% of Russia's output at the time. In March 2007, Rosneft had announced it hoped to increase production from 80 million tonnes to 103 million tonnes from 2006 to the end of 2007, extract 140 million tonnes of oil by 2012, and become a global top three energy company. When the

Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...

struck Russia in late 2008, Rosneft was able to endure the economic pains by improving and strengthening business lines, management, and transparency, and as a result, became a leading oil company domestically and internationally. In February 2009, a number of agreements were negotiated between Russia and China that provided a 20-year contract for an annual supply of 15 million tons of oil between the Chinese National Petroleum Corporation (CNPC) and Rosneft, cooperation between CNPC and Transneft to construct and operate a branch of the Eastern Siberia–Pacific Ocean (ESPO) oil pipeline to China, and the provision of loans for US$25 billion—US$15 billion from Rosneft and US$10 billion from Transneft—by the China Development Bank on the security of supplies.

Acquisition of assets of Yukos

Starting in 2004, the Russian government organized a series of auctions to sell the assets of Yukos Oil Company, of which Rosneft won the majority. On 22 December 2004, Rosneft had purchased Baikal Finance Group which bought Yuganskneftegaz (Yugansk), a main asset of Yukos, three days earlier at a state-run auction for US$9.35 billion to satisfy tax debts. According to some estimates, this operation was directed by Russian authorities in order to nationalize Russia's oil and gas industry. In response to the deal,

Andrei Illarionov Andrey Nikolayevich Illarionov (russian: Андре́й Никола́евич Илларио́нов, born 16 September 1961) is a Russian economist and former senior policy advisor to Vladimir Putin, the President of Russia, from April 200 ...

, then a senior Putin economic advisor, denounced it as "fraud of the year". In 2005, Mikhail Khodorkovsky (former chairman of

Menatep Bank "MENATEP", Bank "MENATEP SPb" (Russian: Банк "МЕНАТЕП Санкт-Петербург" / Банк «МЕНАТЕП СПб») and "Group Menatep Limited" were financial companies, created by Russian businessman Mikhail Khodorkovsky. " ...

) and Platon Lebedev (business partner of Khodorkovsky) were sentenced to nine years in prison for fraud and tax evasion. In February 2007, they were charged again and accused of stealing $25 billion worth of oil from Yukos subsidiaries. They were convicted, but in 2013 Putin pardoned Khodorkovsky and 2014 the Russian supreme court announced that Lebedev should also be freed early. The purchase of Yugansk in 2005 greatly increase the number of assets and production for Rosneft. Subsequently, Rosneft filed a lawsuit against Yukos in connection with the use of the understated transfer prices for the purchase of oil from Yuganskneftegaz prior to its breakup. At the same time, Rosneft itself also purchases oil and gas from its subsidiary, Yuganskneftegaz, at transfer prices. RF NG pipestoEU

In May 2007, Rosneft won a number of auctions for the sale of Yukos' assets, including five refineries and oil companies Tomsk Oil Company and Samara Oil and Gas Company, making it the largest oil company in Russia. According to experts on the Russian newspaper ''

Vedomosti ''Vedomosti'' ( rus, Ведомости, p=ˈvʲedəməsʲtʲɪ, ) is a Russian-language business daily newspaper published in Moscow. History ''Vedomosti'' was founded in 1999 as a joint venture between Dow Jones, who publishes ''The Wall ...

'', the assets of Yukos, bought by Rosneft at auction organized by the state, went to the company at a discount of 43.4% of the market price of this property. In 2007, the former assets of Yukos provided 72.6% of oil and gas condensate production and 74.2% of Rosneft's primary refining. In June, Rosneft paid $731 million for the transportation assets of Yukos, which had declared bankrupt in August 2006 after three years of litigation over tax arrears. In August, Bogdanchikov said that although the Yukos acquisitions had increased Rosnefts debt to $US 26 billion, he planned to reduce debt to 30% of total assets by 2010 by tripling refining capacity and expand into China.

Initial public offering of 2006

In July 2006, Rosneft placed 15% of its shares traded with a total value of US$10.7 billion in an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...

(IPO) at the

London Stock Exchange London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St Pau ...

, the Russian Trading System, and the

Moscow Interbank Currency Exchange The Moscow Interbank Currency Exchange (russian: Московская межбанковская валютная биржа) or MICEX (russian: ММВБ) was a stock exchange that operated in Russia from 1992 to 2011. MICEX was the leading Russi ...

. Part of the shares were distributed among the Russian population through banks such as Sberbank and Gazprombank. The Federal Service for Financial Markets authorized the placement and circulation outside the country of a 22.5% stake in Rosneft. Rosneft announced a placement value of US$5.85–7.85 per share and global depository receipt (GDR), based on the company's capitalization after consolidation of US$60–80 billion. It was planned to place shares for at least US$8.5 billion in order to repay loans to Western banks, including interest and taxes. On 14 July, the official results of the placement value were announced. Shares were priced at US$7.55, almost at the upper end of the price band, resulting in Rosneft's capitalization—taking into account the upcoming consolidation of its subsidiaries—at a value of US$79.8 billion, making Rosneft surpass Lukoil as the largest oil company in Russia. Investors bought 1.38 billion shares for US$10.4 billion: 21% of the shares were bought by strategic investors, 36% from international investors from North America, Europe, and Asia, 39% from Russian investors, and 4% from Russian retail investors. 49.4% of the total IPO volume accounted for four investors, including BP for US$1 billion, Petronas for US$1.5 billion, and the

CNPC The China National Petroleum Corporation (CNPC) () is a major national oil and gas corporation of China and one of the largest integrated energy groups in the world. Its headquarters are in Dongcheng District, Beijing. CNPC was ranked fourth ...

for $0.5 billion. Individuals submitted applications for the purchase of 99,431,775 shares of the oil company, and as a result, most of the new shareholders were individuals; partly because of this IPO was given the unofficial name of "people's." Rosneft's IPO became the largest in the history of Russia and the fifth in the world in terms of the amount of money raised at the time. The announced amount could increase by another US$400 million if the global placement coordinators realize the option of buying another 53 million GDRs of Rosneft at the price of placement within 30 days.

On Abkhazia

On 26 May 2009, a five-year cooperation agreement was negotiated between Rosneft and the Abkhazia's Ministry of Economy. The parties stated their intention to develop mutually beneficial cooperation in areas as geological prospecting, development of oil and gas fields, production of

hydrocarbon In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons are examples of group 14 hydrides. Hydrocarbons are generally colourless and hydrophobic, and their odors are usually weak or ...

s, and sale of oil, natural gas and oil products. Rosneft undertook

on the shelf in the Ochamchira area, discovering preliminary reserves estimated at 200 million to 500 million tons of oil equivalent. In addition to drilling and creating its own sales network, Rosneft also planned the construction of mini-refineries in Abkhazia. According to Rosneft, the company provides more than half of the retail sales of oil products in Abkhazia. In 2014, Rosneft exported 47 thousand tons of oil products to Abkhazia. Since 2015, Rosneft started supplying aviation fuel for Sukhumi Babushara Airport. As part of the project to develop the Gudauta area on the Black Sea shelf, Rosneft will carry out a full range of geophysical and geochemical research, conduct 2D and 3D seismic surveys, and start preparations for exploratory drilling. In June 2014, Rosneft extended the shelf study period to five years. In July 2015, however, the new President of Abkhazia,

Raul Khajimba Raul Jumkovich Khajimba ( ab, Рауль Џьумка-иҧа Ҳаџьымба, ka, რაულ ჯუმკას-ძე ჰაჯიმბა; born 21 March 1958) is an Abkhazian politician, and served as President of Abkhazia from 25 September ...

, who replaced Alexander Ankvab after his resignation, spoke out against the exploration and production of oil on the offshore shelf of Abkhazia and asked the People's Assembly to consider the possibility of establishing a "commission for the comprehensive study of issues related to the conclusion of contracts for exploration and production hydrocarbons by the previous Abkhaz leadership." A group of deputies of the People's Assembly drafted a bill banning the development of hydrocarbons in Abkhazia. Supporters of the bill demanded the prohibition of the development of the offshore shelf in Abkhazia for 30 years.

2010s

In September 2010, Eduard Khudainatov replaced Sergei Bogdanchikov as

CEO A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...

of the company. On 15 October 2010, Russian President Dmitry Medvedev signed an agreement with President of Venezuela Hugo Chávez for the

PDVSA Petróleos de Venezuela, S.A. (PDVSA, ) (English: Petroleum of Venezuela) is the Venezuelan state-owned oil and natural gas company. It has activities in exploration, production, refining and exporting oil as well as exploration and productio ...

to sell 50% of the shares of German company Ruhr Oel to Rosneft, giving Rosneft oil refining assets in Germany. Since 23 May 2012, former Deputy Prime Minister Igor Sechin became the company's CEO, succeeding Khudaninatov, who received the post of vice-president. In the summer of 2012, Rosneft purchased a fuel oil terminal from the United Shipbuilding Corporation (USC) located on the territory of the Murmansk Ship Repair Plant No. 35. The transaction value is estimated at US$28 million. According to '' Kommersant'', the Murmansk terminal can be used as a platform for Rosneft's activities in the Arctic. In October 2016, Rosneft bought a 49% stake in Essar Oil of India, along with Russian investment fund United Capital, in a deal worth $13 billion. On 7 December 2016, Rosneft signed a deal to sell 19.5% of the outstanding shares, or roughly US$11 billion, to the Anglo-Swiss multinational commodity trader Glencore and the Qatar Investment Authority. Officially, the stake was split 50/50 between Glencore and Qatar, but Glencore contributed only €300 million and claims only a 0.54% stake. The ownership structure includes a Cayman Islands company, QHG Cayman Limited, whose ownership can not be traced. After the transaction, Rosneft's

holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...

Rosneftegaz retained 50% + 1 share of the company. On 2 October 2017, the

PLA PLA may refer to: Organizations Politics and military * People's Liberation Army, the armed forces of China and of the ruling Chinese Communist Party * People's Liberation Army (disambiguation) ** Irish National Liberation Army, formerly called t ...

-linked CEFC China Energy bought a $9 billion stake in Rosneft. On 26 September 2017, the Russian government controversially approved the former

German chancellor The chancellor of Germany, officially the federal chancellor of the Federal Republic of Germany,; often shortened to ''Bundeskanzler''/''Bundeskanzlerin'', / is the head of the federal government of Germany and the commander in chief of the Ge ...

Gerhard Schröder Gerhard Fritz Kurt "Gerd" Schröder (; born 7 April 1944) is a German lobbyist and former politician, who served as the chancellor of Germany from 1998 to 2005. From 1999 to 2004, he was also the Leader of the Social Democratic Party of Germa ...

as chairman of Rosneft. In May 2018, it was announced that the Qatar-Glencore consortium is cancelling the plan to sell a $9.1 billion (14%) stake of Rosneft to CEFC China Energy. With the dissolution of the consortium, the Qatar Investment Authority purchased the shares instead, thereby solidifying its position as one of the biggest shareholders (19%) of Rosneft. In the 2010s, the extensive contact between Rosneft and ExxonMobil were further deepened, with Igor Sechin and

Rex Tillerson Rex Wayne Tillerson (born March 23, 1952) is an American engineer and energy executive who served as the 69th U.S. secretary of state from February 1, 2017, to March 31, 2018, under President Donald Trump. Prior to joining the Trump administ ...

getting to know each other personally.

Arctic shelf deals with BP and ExxonMobil

On 15 January 2011, Rosneft and British Petroleum (BP) announced a deal to develop the East-Prinovozemelsky field on the Russian arctic shelf between the Yamal Peninsula and Novaya Zemlya island. As part of the deal Rosneft was to receive 5% of BP's shares, worth approximately $7.8 billion, as of January 2011 and BP would get approximately 9.5% of Rosneft's shares in exchange. According to the deal, the two companies would create an Arctic technology centre in Russia to develop technologies and engineering practices for safe arctic hydrocarbons extraction. AAR, which represents four billionaires of Russian origin and is BP's Russian partner in the

joint venture, blocked the BP–Rosneft deal in international courts, arguing it breached earlier contracts between BP and AAR. The TNK-BP partners had previously signed a shareholding agreement which stipulated that their Russian joint venture would be the primary corporate vehicle for BP's oil and gas operations in Russia. On 30 August 2011, Rosneft announced that instead of BP the partner for EPNZ-1, EPNZ-2 and EPNZ-3 in the

Kara Sea The Kara Sea (russian: Ка́рское мо́ре, ''Karskoye more'') is a marginal sea, separated from the Barents Sea to the west by the Kara Strait and Novaya Zemlya, and from the Laptev Sea to the east by the Severnaya Zemlya archipel ...

will be ExxonMobil. In exchange, subject to approval by U.S. regulators, in addition to a share in oil production in Russian fields, Rosneft was granted participation in U.S. fields in Texas and the Gulf of Mexico.

Black Sea shelf deal with ExxonMobil

On 27 January 2011, Rosneft and the American company

ExxonMobil ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 3 ...

signed a deal to establish a

joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acces ...

for the purpose of prospecting and extracting oil from the

Tuapse field The Tuapse field is a large offshore oil field located in the Black Sea, roughly in size and between underwater, containing between of oil. History In August 2003, Rosneft was awarded a license to explore the field, allowing the company to carr ...

deepwater area on the Black Sea shelf, near the coast of the

Krasnodar Krai Krasnodar Krai (russian: Краснода́рский край, r=Krasnodarsky kray, p=krəsnɐˈdarskʲɪj kraj) is a federal subjects of Russia, federal subject of Russia (a krai), located in the North Caucasus region in Southern Russia and ...

. The value of the deal is unknown, but ExxonMobil is expected to invest $1 billion in the project. The venture will be shared 50–50 between the companies during prospecting phase, and two-thirds to one-third in Rosneft's favour during the extraction phase. The Tuapse Trough is estimated to contain 7.2 billion barrels of oil equivalent. The first well could be drilled in 2012. The deal also contains options for additional cooperation, such as extended exploration and production, deliveries to Rosneft's oil refinery in Tuapse, development of transport infrastructure and research on offshore oil production technologies. According to analysts, offshore areas are central to Rosneft's expansionist plans, and the company is looking for foreign cooperation to bring in new technology and share risks. In April 2017, the

Trump administration Donald Trump's tenure as the List of presidents of the United States, 45th president of the United States began with Inauguration of Donald Trump, his inauguration on January 20, 2017, and ended on January 20, 2021. Trump, a Republican Party ...

denied ExxonMobil permission to continue a deal with Rosneft to drill for oil in Russia.

TNK-BP acquisition

On 22 October 2012, it was announced that Rosneft will take over TNK-BP International, a parent company of TNK-BP Holding, which is the third largest oil company in Russia. BP will receive in exchange of its stake $12.3 billion of cash and 18.5% of Rosneft's share, while ARR will receive $28 billion in cash. According to Rosneft's CEO Igor Sechin, no discussion had been held on a buyout of minority shareholders in TNK-BP Holding. The deal was completed on 20 March 2013.

United States sanctions

On 16 July 2014, the Obama administration imposed sanctions through the US Department of Treasury's Office of Foreign Assets Control (OFAC) by adding Rosneft and other entities to the Sectoral Sanctions List (SSL) in retaliation for the annexation of the Crimean Peninsula by the Kremlin and the ongoing Russian interference in Ukraine. The

expanded further sanctions on its Swiss-incorporated company (Rosneft Trading S.A.) and its president

Didier Casimiro Didier Casimiro (born 1966) is a Russian government official, considered a close ally and "de facto deputy" of Igor Sechin. He is the chief executive officer, First Vice President of Rosneft, the Russian state oil company. His nickname is Hollywo ...

on 18 February 2020, for supporting Venezuela's Nicolás Maduro regime by operating in the oil sector of the Venezuelan economy.

2020s

On 27 February 2022, BP announced that it would divest its 19.75% stake in Rosneft in response to the Russian invasion of Ukraine that took place in February 2022. The week beginning 19 April 2022, Rosneft attempted to sell millions of barrels of Urals, one of three main export-grade crude oils sold by Russia. The offer failed to attract any customers.

Operations

Rosneft's daily average

crude oil Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crude ...

production in 2010 increased by 6.4%, to . Total crude oil output reached of oil and gas condensate. Rosneft is also among the largest

natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbon d ...

producers in Russia, with a total gas production of in 2010. Rosneft is engaged in exploration and production across all key oil and gas regions of Russia:

Western Siberia Western Siberia or West Siberia (russian: Западная Сибирь, Zapadnaya Sibir'; kk, Батыс Сібір) is a part of the larger region of Siberia that is mostly located in the Russian Federation. It lies between the Ural region ...

Southern Southern may refer to: Businesses * China Southern Airlines, airline based in Guangzhou, China * Southern Airways, defunct US airline * Southern Air, air cargo transportation company based in Norwalk, Connecticut, US * Southern Airways Express, M ...

and Central Russia,

Timan-Pechora The Timan-Pechora Basin is a sedimentary basin located between Timan Ridge and the Ural Mountains in northern Russia. The basin contains oil and gas fields. Oil and gas extraction A planned project to mine its oil and gas was conceived in the m ...

, Eastern Siberia, the

Far East The ''Far East'' was a European term to refer to the geographical regions that includes East and Southeast Asia as well as the Russian Far East to a lesser extent. South Asia is sometimes also included for economic and cultural reasons. The t ...

, and the shelf of Russia's

Arctic Ocean The Arctic Ocean is the smallest and shallowest of the world's five major oceans. It spans an area of approximately and is known as the coldest of all the oceans. The International Hydrographic Organization (IHO) recognizes it as an ocean, a ...

. As of year-end 2010, Rosneft's total proved oil and gas reserves under PRMS classification were of oil equivalent, among the highest for a

petroleum company worldwide. Rosneft is also second-to-none in terms of total proved liquid hydrocarbon reserves. In 2016, based on geological prospecting, 13 oil fields and 127 new deposits with the reserves totaling 207 million tons of oil equivalent were discovered. The replacement of hydrocarbon reserves of industrial categories ABC1 amounted to 354 million TOE or 126% of the production in Russia. The replacement factor for new reserves has been significantly above 100% for over ten years. According to Rosneft, the reserves increment in

amounted to 133 million tons of oil and condensate and of natural gas. 37 prospecting and exploration wells tests were completed with a success rate of 89%. 45 new deposits with the total reserve of 59 million tons of AB1С1 + В2С2 were discovered. In Eastern Siberia and the

, the total increase in reserves amounted to 21.2 million tons of oil and condensate and of gas. 11 exploration well tests were completed with a success rate of 55%. Five new deposits with reserves of 39 million tons of oil equivalent were discovered. In 2016, the total incremental of gas. 37 well tests were completed with a success rate of 76%. Rosneft owns and operates seven large refineries in Russia with an aggregate annual capacity of and four mini-refineries. The refineries are able to process about 45% of crude oil produced by Rosneft as a whole. Rosneft owns as well a 50% stake in Ruhr Oel GmbH, the owner of stakes in four refineries in Germany with overall capacity of 23.2 million tonnes. Rosneft is the second largest national oil company by retail network, which covers 41

regions of Russia In geography, regions, otherwise referred to as zones, lands or territories, are areas that are broadly divided by physical characteristics (physical geography), human impact characteristics (human geography), and the interaction of humanity and ...

and includes 1,800

filling station A filling station, also known as a gas station () or petrol station (), is a facility that sells fuel and engine lubricants for motor vehicles. The most common fuels sold in the 2010s were gasoline (or petrol) and diesel fuel. Ga ...

s. In March 2020, the company stopped its operations in Venezuela and sold all of its assets in the country to another unnamed company that is owned by the Russian government.

Corporate affairs

Shareholders

Prior to the

(IPO) in 2006, all of Rosneft's shares were owned by the Russian government through its

JSC

. After the placement of the company's shares on the stock exchange and the consolidation of shares of 12 subsidiaries (including Yuganskneftegaz) of Rosneft, the share of Rosneftegaz decreased to 75.16%. As of September 2012, Rosneft had over 160,000 shareholders. By December 2016, the number of individual shareholders was 138,000, with Rosneftegaz owning only 50% of the shares, BP owning 19.75%, and 30.25% owned by other shareholders. In August 2021 Igor Sechin increased his own share at Rosneft from 0.1273% up to 0.1288%.

Management

Board of directors

Members of the board of directors (as of February 1st 2022): *

– Chairman * Igor Sechin –

, Deputy Chairman * Matthias Warnig – Deputy Chairman, Independent director * Faisal Alsuwaidi * Hamad Rashid Al-Mohannadi * Robert Dudley * Karin Kneissl *

Bernard Looney Bernard Looney (born 1970) is an Irish businessman and CEO of BP. During Looney's tenure as CEO of BP, he promised to end BP's relationship with Rosneft, the Russian state-owned energy giant, amid Russia's 2022 invasion of Ukraine. Looney was ...

(BP CEO) *

Alexander Novak Alexander Valentinovich Novak (russian: Александр Валентинович Новак; born 23 August 1971) is a Russian politician who is the current Deputy Prime Minister of Russia since November 2020. Previously, he was the Minis ...

(former

Minister of Energy An energy minister is a position in many governments responsible for energy production and regulation, developing governmental energy policy, scientific research, and natural resources conservation. In some countries, environmental responsibilitie ...

) *

Maxim Oreshkin Maksim Stanislavovich Oreshkin (russian: Максим Станиславович Орешкин; born 21 July 1982) is a Russian economist and politician who served as the Minister for Economic Development from 30 November 2016 to 15 January ...

* Hans-Joerg Rudloff

Management board

Members of the management board: * Igor Sechin – CEO, Chairman * Yuri Kalinin – Deputy Chairman,

Vice President A vice president, also director in British English, is an officer in government or business who is below the president (chief executive officer) in rank. It can also refer to executive vice presidents, signifying that the vice president is on ...

* Eric M. Liron – First Vice President * Gennady Bukaev – Vice President, Head of Internal Audit *

– Vice President for Refining,

Petrochemical Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewabl ...

Commerce Commerce is the large-scale organized system of activities, functions, procedures and institutions directly and indirectly related to the exchange (buying and selling) of goods and services among two or more parties within local, regional, natio ...

, and

Logistics Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of ...

* Peter Lazarev – Financial director * Yury Narushevich – Vice President for Internal Services * Zeljko Runje – Vice President for Offshore Projects * Yuri Kurilin – Vice President, Chief of Staff * Andrey Shishkin – Vice President for Energy, Localization, and Innovation * Vlada Rusakova – Vice President

Social policy

In 2011, according to Rosneft, the company had donated $422 million to charity, 4 times than the previous year, becoming the leading Russian company devoted to philanthropy that year. At the same time, the composition of the beneficiaries were not disclosed as it was known that the oil company had previously committed to pay $180 million for the right to be the general sponsor of the 2014 Winter Olympics in Sochi. Since 2012, Rosneft, along with Gazprom, is the title sponsor of the

association football Association football, more commonly known as football or soccer, is a team sport played between two teams of 11 players who primarily use their feet to propel the ball around a rectangular field called a pitch. The objective of the game is ...

team FC Tom Tomsk based in Tomsk. Rosneft has been ranked as among the 13th best of 92 oil, gas, and mining companies on indigenous rights and resource extraction in the Arctic.

Controversies

Violations of anti-monopoly legislation

In October 2009, the

Federal Antimonopoly Service The Federal Antimonopoly Service of Russia (FAS) (russian: Федеральная антимонопольная служба России, ФАС России) is the federal-level executive governmental organ that controls the execution of the ...

(FAS) imposed on Rosneft a record fine of ₽5.3 billion ($175M) for violating anti-monopoly legislation. The fine was imposed for the abuse of power in the petroleum market recorded in the first half of 2009, which was expressed in the "seizure of goods from circulation, which led to higher prices in the wholesale segment of the oil products market, creating discriminatory conditions for the sale of oil products to individual counter-parties." As FAS has calculated, these actions led to an increase in prices in the wholesale markets of motor gasoline,

diesel fuel Diesel fuel , also called diesel oil, is any liquid fuel specifically designed for use in a diesel engine, a type of internal combustion engine in which fuel ignition takes place without a spark as a result of compression of the inlet air and ...

, and aviation

kerosene Kerosene, paraffin, or lamp oil is a combustible hydrocarbon liquid which is derived from petroleum. It is widely used as a fuel in aviation as well as households. Its name derives from el, κηρός (''keros'') meaning " wax", and was re ...

in the first half of 2009.

Western claims from Yukos Capital

On August 9 2010, a former subsidiary of Yukos, Yukos Capital Sarl of Luxembourg, was seeking to have Rosneft repay the debts of companies that previously belonged to Yukos. After the seizure of Rosneft's assets in the United Kingdom and the denial of an appeal by the

Supreme Court of the Netherlands The Supreme Court of the Netherlands ( nl, Hoge Raad der Nederlanden or simply ''Hoge Raad''), officially the High Council of the Netherlands, is the final court of appeal in civil, criminal and tax cases in the Netherlands, including Curaça ...

, Rosneft said that Yukos Capital paid Yuganskneftegaz its debt of ₽12.9 billion ($426M). On 16 August 2010, Yukos Capital appealed to the Federal Arbitration Court of the West Siberian District with a

cassation A court of cassation is a high-instance court that exists in some judicial systems. Courts of cassation do not re-examine the facts of a case, they only interpret the relevant law. In this they are appellate courts of the highest instance. In th ...

appeal against the decision of the Arbitration Court of Tomsk Oblast to refuse reclaiming from

Tomskneft JSC Tomskneft VNK — is a Russian oil and gas company, headquartered in Strezhevoy, Russia. Founded in 1966, Tomskneft is one of the largest companies of the Tomsk region and Siberia. As of 2022, the Independent Oil Company and Gazpromneft ow ...

, a Rosneft subsidiary, more than ₽7 billion ($231M) under loan agreements. Previously, Yukos Capital applied to international arbitration under the International Chamber of Commerce, and it obliged Tomskneft to pay ₽7,254.2 million ($239M), $275,200, and £52,960, with an

interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, t ...

of 9% per annum for the amount of ₽4,350 million ($144M), starting from 12 February 2009 until the day of payment of the debt. The Russian court had to bring the court's decision to Russian territory. However, the Arbitration Court of Tomsk Oblast, having considered the claim, ruled to refuse Yukos Capital in debt collection.

Ulyukayev lawsuit

On December 15 2017, a Moscow court sentenced Alexei Ulyukayev, a former Russian economy minister to paying ₽130M ($2.2M) and eight years in a penal colony for bribery and corruption. The case was widely seen as Rosneft CEO Sechin’s revenge for Ulyukayev opposing Rosneft’s takeover of

Bashneft Bashneft is a Russian oil company formed by the transfer of the oil related assets of the Soviet oil ministry in Bashkortostan to the regional government of the Republic of Bashkortostan by Boris Yeltsin Boris Nikolayevich Yeltsin ( rus, ...

, another oil company. The 61-year-old claimed that Sechin had lured him to Rosneft's offices, where he was subsequently caught red-handed by the authorities with a bag of bribe money. According to investigators, Ulyukayev, who was still economy minister at the time of his arrest, had taken the $2M bribe in exchange for permitting Rosneft's acquisition of a stake in Bashneft. Ulyukayev retorted that the "fabricated" accusations of bribery were "based solely on Sechin's claims," and that the whole exchange had been engineered by the Russian Federal Security Service, the successor of the KGB. Ulyukayev was seen as an economic liberal, Igor Sechin is viewed as a hawk, who supports greater state control over the economy. Ulyukayev, while influential, was not part of President Putin's inner circle.

Oil spills

The Russian branch of Greenpeace called Rosneft the dirtiest oil company in the world. In 2011, according to a survey conducted by the Federal Service for Supervision in the Sphere of Nature Management (Rosprirodnadzor) in Khanty-Mansi Autonomous Okrug, Rosneft allowed 2,727 oil spills, which is 75% of the total number of spills that occurs under the company. According to environmentalists, it is Rosneft's fault that more than 10,000 oil spills occur each year. The Hydrometeorological Centre of Russia has estimated that 4.5m tonnes of oil are spilled on the Russian mainland every year, that's seven times the BP Deepwater Horizon spill in the

Gulf of Mexico The Gulf of Mexico ( es, Golfo de México) is an ocean basin and a marginal sea of the Atlantic Ocean, largely surrounded by the North American continent. It is bounded on the northeast, north and northwest by the Gulf Coast of the United ...

in 2010. Often blamed is Rosneft's ageing infrastructure, so is the lack of government oversight. As a result of the environmental contamination, people have observed black water coming out of their taps, cattle has been stricken with tuberculosis, and fish have been found deformed.

Fracking

In the first half of the 2000s, Sergei Bogdanchikov, then president of Rosneft, along with some journalists and experts, criticized Yukos and Sibneft for their use of hydraulic fracturing. However, in early November 2006, a number of journalists pointed out that the Priobskoye oil field of which it is owned by RN-Yuganskneftegaz, a subsidiary of Rosneft acquired from Yukos, produced the largest oil fracture in Russia with specialists of Newco Well Service. The operation was conducted for seven hours and was broadcast live via the Internet to the office of Yuganskneftegaz. In 2007, the company planned to perform hydraulic fracturing of the formation at 440 wells. From 2009 to 2010, Rosneft remains one of the largest customers of the oilfield services company

Schlumberger Schlumberger Limited (), doing business as SLB, is an oilfield services company. Schlumberger has four principal executive offices located in Paris, Houston, London, and The Hague. Schlumberger is the world's largest offshore drilling comp ...

, which specializes in hydraulic fracturing.

Sanctions

On 20 March 2014, the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

government sanctioned Rosneft CEO Igor Sechin in response to the Russian government's role in the ongoing unrest in Ukraine. The sanctions include a travel ban to the United States, freezing of all assets of Sechin in the United States and a ban on business transactions between American citizens and corporations and Sechin and businesses he owns. On February 24 2022, his son Ivan Sechin was also sanctioned by the U.S. On February 28 2022, Igor Sechin was subjected to travel restrictions and had his assets frozen by the EU. Rosneft and many of its subsidiaries have been sanctioned in the past and appear on the Sectoral Sanctions Identification (SSI) List. Rosneft was added to the SSI on July 16 2014, and was sanctioned by the EU on September 8 2014. On February 18, 2020, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) added Rosneft Trading S.A., a Swiss subsidiary of Rosneft, and its president

to the Specially Designated Nationals (“SDN”) list.

Transparency

As of 1 May 2014, the heads of

Russian state corporations Russian(s) refers to anything related to Russia, including: *Russians (, ''russkiye''), an ethnic group of the East Slavic peoples, primarily living in Russia and neighboring countries *Rossiyane (), Russian language term for all citizens and peo ...

would provide information about their incomes and property to the Russian government to correspond to the presidential decree Anti-Corruption Issues, which was published on 8 July 2013. According to the ruling, websites of the companies should show the personal information of their top managers such as income, property, spouses, and children. However, Rosneft refused to publish its information of top managers, citing that it is only applicable to "state companies (corporations) and other organizations created by federal laws," to which it does not believe itself to be. However, this did not prevent the company from providing information regarding the incomes and property of Rosneft's top managers and their relatives to "competent authorities" in the prescribed "time and amount". According to the director of the Russian branch of Transparency International, Elena Panfilova, improvement of such legislation is necessary so that state corporations can unequivocally interpret the norm on the publication of personal information. In July, the Russian government announced that information of the income of top management of companies listed in Government Decree No. 613 July 22, 2013 which includes Rosneft, "are subject to placement in the information and telecommunications network 'Internet' on the official websites of these organizations."

References

External links

*
Rosneft Oil production, refining, reserves and capex by division, segment and period (Grmike, wikinvest)

Rosneft Oil analytics information

Rosneft ecosystem in Russia (2013)
{{Authority control 1993 establishments in Russia Companies based in Moscow Companies listed on the London Stock Exchange Companies listed on the Moscow Exchange Energy companies established in 1993 Government-owned companies of Russia Rus Natural gas companies of Russia Oil companies of Russia Russian brands Russian entities subject to the U.S. Department of the Treasury sanctions Yukos