08 September 2014, News Wires – Rosneft could be in line for a $40 billion-plus boost from the Russian state as the oil behemoth looks to fight off the effect of international sanctions against it and the country, according to a report.
The Russian government is considering “types of support” for the Moscow-based giant following a request last month from company president Igor Sechin for 1.5 trillion rubles ($40.45 million today) in a letter sent to the Ministry of Economic Development.
On Monday local newspaper Vedomosti quoted Prime Minister Dmitry Medvedev as saying that help could be on the way for Rosneft.
“This figure (of 1.5 trillion rubles) only looks imposing, but everything doesn’t have to be done in one year,” Medvedev told Vedomosti.
“I recently held a meeting on Rosneft’s investment programme. The company needs to maintain its production levels, because Rosneft is a major source of tax revenue,” he said.
“As such, we should help it maintain its level of investment. We are now considering specific variables and types of support.
“I have no doubts about the company’s performance in the medium to long term. The investment will certainly pay off,” Medvedev continued.
Sechin in mid-August was reported to have laid out five suggestions for support from the federal government, with help from the National Welfare Fund one possibility. Vedomosti reported at that time that Sechin suggested the fund spend 1.5 trillion rubles on Rosneft bonds.
Net debt at the Moscow-based player stood at 1.5 trillion rubles at the end of June.
Rosneft and Sechin himself have found themselves on the end of sanctions imposed by Western governments over the annexation of Crimea from Ukraine earlier this year. Sanctions were stepped up further in the wake of the downing of a Malaysia Airlines flight over eastern Ukraine in July, killing almost 300 people.