Putin’s War On Ukraine Puts Oil Giant Rosneft Under Mounting Pressure

Valentin Pikul at Vostok Oil Project in the Russian Arctic. (Source: Rosneft)

(Bloomberg) — Along Russia’s remote Arctic coast last month, Igor Sechin stood beside a waiting tanker in the freezing cold with a message for Vladimir Putin: After years of construction, the country’s next great oil frontier was finally coming to life.

Hundreds of miles of pipeline now connected oil fields to storage tanks and a new port for Vostok Oil, part of an almost $50 billion investment. With Putin watching by video link, Sechin, the powerful head of state-run Rosneft PJSC, asked to begin loading the first tanker with crude. “Permission granted,” Putin said.

The ceremony carried particular weight for Russia’s increasingly battered oil industry. Years of war and sanctions are making it harder for oil producers — including Rosneft, the nation’s largest — to maintain volumes today while developing reserves for tomorrow. Rosneft’s Vostok Oil project was supposed to show Russia could still do both. Sechin said it would add as much as 10% to the country’s current output by 2030 and supply millions of barrels to world markets for a century or more.

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