By June 14, 2016 Read More →

Russia’s Igor Sechin predicts dogfight for oil markets


Igor Sechin, chief executive of Russia’s oil company Rosneft. REUTERS/Sergei Karpukhin.

Igor Sechin says global market may face oil shortage in 3-5 years

MOSCOW, June 15 (Reuters) – Igor Sechin, head of Russia’s largest oil producer Rosneft and the country’s most influential energy executive, said in an interview that he expects the fight for global energy market share to intensify.

In the interview with Il Sole 24 published on Wednesday, Sechin questioned the rationale of Russia’s plans to sell almost 20 percent of Rosneft as part of a wider privatisation scheme, saying the company’s share price did not match its fundamentals.

“The main challenge for Russia’s energy sector is a sharp increase in competition on global energy markets. In future, a tenacious competition is expected for keeping a share of traditional markets and to increase the share of new energy markets,” Sechin was quoted as saying.

Russia has been muscling in on Asian markets, where Saudi Arabia was once the unchallenged dominant supplier. For its part, Riyadh has retaliated with aggressive discounting in Moscow’s backyard of Europe.

Last year, Sechin said Saudi Arabia had started supplying ex-communist Poland at “dumping” prices, while Russian Energy Minister Alexander Novak said Saudi’s entry into eastern European markets was the “toughest competition”.

Sechin, a staunch critic of the Organization of the Petroleum Exporting Countries, said the global market may face an oil shortage in three to five years and producers might need a deal to share output increases and release strategic reserves.

“The market is reaching its balance quicker than analysts had predicted,” he said.

In comments about the state’s plans to sell almost 20 percent of Rosneft, Sechin said that as weaker oil prices and international sanctions over Ukrainian crisis had hit the company’s share price, wider options should be considered.

“We believe that it would be prudent to consider different options, including inviting a strategic investor, in the current difficult conditions,” he said.

Sechin also did not rule out the possibility that Italy’s Eni might participate in upstream projects in Russia.

(Reporting by Vladimir Soldatkin; editing by David Clarke)

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