Trading firms clinch Vostok Oil stake: Update

Adds background in final paragraph

Trading firms Vitol and Mercantile and Maritime Energy are ready to take a stake in state-controlled Rosneft's Vostok Oil project in the Russian Arctic, following in the footsteps of trading giant Trafigura, in a deal that is likely to provide access to future output from the project.

Vitol and Singapore-based Mercantile and Maritime Energy have signed a preliminary agreement with Rosneft to buy a 5pc stake in Vostok Oil, subject to regulatory and corporate approval. Based on the Trafigura deal, the partners could be paying around €3.5bn ($4.3bn) for their Vostok Oil stake.

Trafigura, the top buyer of Rosneft's seaborne crude exports, acquired a 10pc stake in Vostok Oil from Rosneft at the end of last year, paying €7bn. The deal is expected to provide the trading firm with long-term crude supply opportunities.

Rosneft has started construction of a 600,000 b/d crude terminal for Vostok Oil to be ready in 2024, with capacity expanding to 1mn b/d in 2027 and to 2mn b/d in 2030. Vostok Oil will unite fields operated by recently acquired Rosneft upstream subsidiary Taimyrneftegaz — including the 1.2bn bl Payakha group of fields and unexplored blocks on Taimyr — as well as the producing 3.8bn bl Vankor, 408mn bl Suzun and 1.8bn bl Tagul fields, and the under-development 533mn bl Lodochnoye field and Baikalovsky blocks in eastern Siberia. The project's total crude reserves could be 36.5bn bl, Rosneft says.

At last week's St Peterburg Economic Forum, before the latest deal was announced, Rosneft chief executive Igor Sechin reiterated an earlier invitation to foreign investors to join the "success story" of Vostok Oil. Initially. Rosneft hoped to attract international oil firms, including strategic parter BP for the project, but there has been little sign of interest amid the industry's increasing focus on the energy transition over the past year.

By John Gawthrop