Rosneft plans gas boost

Russian state-controlled Rosneft plans to increase the share of gas in its overall output to adjust its upstream balance in favour of more environmentally-friendly production, first vice-president Didier Casimiro said on 25 February.

The company is aiming to increase gas production to 25pc of total output by the end of 2022, from 20pc now. To reach this target, the company, which produced 62.83bn m³ of gas last year, plans to hike gas production at the Rospan and Kharampurneftegaz units, the latter co-owned with shareholder BP.

The gas programme comes against the background of a number of initiatives by Rosneft to reduce its carbon footprint, including improving energy efficiency, investment in associated gas utilisation and increasing use of low-carbon and renewable energy sources. Rosneft's 2035 carbon management plan, first announced in December, envisages zero routine flaring of associated gas, reduction of upstream emissions intensity by 30pc, prevention of 20mn t of CO2 equivalent of GHG emissions and reducing methane emissions intensity below 0.25pc by 2035.

"We find ourselves in a very unique position today in terms of hydrocarbon supply… we will lower the carbon footprint and we will try to satisfy growing global energy demand," Casimiro said. He adds that the company's goal is to produce more energy with less environmental impact. Rosneft's current investment focus is on the massive Vostok Oil project in the Arctic, started last year and designed as a low-carbon development.

The company wants to remain "a sustainable supplier of clean and affordable energy to the world" and at the same time achieve net zero by the middle of the century, Casimiro said, adding that the company will report its 2050 plans "in due course". "We always want to have specific targets and specific action plans and metrics," he said.

Rosneft and BP recently signed a strategic collaboration agreement on carbon management having agreed to identify carbon reduction activity and pursue low-carbon opportunities. "So, we will co-operate with BP in identifying but also in developing new low-carbon solutions and programmes that will actually support shared sustainability goals," Casimiro said.

Most Russian oil firms have been stepping up efforts to address the carbon intensity of their operations and hinting at the possibility of shifting strategies to prepare for the energy transition. But like Rosneft, most expect investment in oil production growth to remain at the heart of their spending plans in the years ahead.

Rosneft reiterated plans first released a year ago to spend 300bn roubles ($4bn) on "green" projects over five years, of which 30pc will be spent on emissions reduction. Casimiro adds that green investments will account for 5pc of the firm's overall annual spending over the next decade and that the share could rise in the future. Rosneft is planning Rbs1 trillion of capital expenditure this year.

By Oksana Yablokova