Over the past few days, representatives of Rusneftegaz have joined a delegation of Russian companies in Tehran for talks with Iranian ministers, officials, and businessmen as part of the Iran-Russian Joint Economic Commission. At the meetings, which were led by the Russian Minister for Energy Aleksandr Novak and the Iranian Minister for Communication Mahmoud Vaezi, our organization was joined by leaders and representatives from Bashneft, Gazprom, Gazprom Neft, Surgutneftegas, Rosgeologia, Rosneft, Zarubezhgeologia in addition to the President of the Central Bank of Russia, Elvira Nabiullina. At the main session, our envoys made a series of presentations to the contingent from the Islamic Republic, highlighting possible opportunities for Rusneftegaz to work and do business in their nation. This includes the potential for collaborating with the National Iranian Oil Company and its subsidiaries, the second-largest petroleum corporation in the world, following the discovery of billions of new barrels of crude oil in the past two decades. Such extensive reserves have ultimately led to the nation becoming the largest producer of crude in the Organization of the Petroleum Exporting Countries, otherwise known as OPEC, accounting for over 5,0% of all global oil production last year. Despite this, the Iranian petroleum industry has faced an embargo since July 2012, as a component of the sanctions against its government, leading to international businesses easing operations in the state accordingly. However, following the adoption of the Joint Comprehensive Plan of Action, which came into effect less than one month ago, a significant proportion of the restrictions on trading in Iran are to be eased. This could ultimately lead to lucrative prospect for ambitious companies such as Rusneftegaz, with Deputy Chief Executive Officer Aleksandr Filyurin stating: 

“It is a great honor for us to have been invited by the Ministry to visit Tehran. The opportunity to explain to senior members of their government how we can benefit the Iranian oil industry shows how far we have come as a company. I also want to place on record my thanks to those members of our team who travelled out there, who worked hard, and those who worked hard to make our stay so comfortable. Overall, it was a very positive experience. We held interesting talks with Iranian oil companies, and talked about how we could be of assistance to them in the future. As well as all the work we have done in other countries over the course of the past year, I am really positive we are doing something good and positive for the long-term benefit of the company.” 

At the meeting of the commission, which was held over the past week, it was agreed that a joint Russo-Iranian bank should be formed, in conjunction to a $5,0 billion line of credit to enable foreign direct investment. Both plans were both fully endorsed by Rusneftegaz, with these proposals expected to facilitate the $500,0 billion of new oil and gas financing desired by the government of the Islamic Republic before 2025. Aside from this, our company can confirm that we remain interested in entering developing markets, including in both Algeria and Egypt, where there is active progress in discussions. Rusneftegaz is also engaged in proposals located in other territories, but our involvement is preliminary at this time. Should there be any further updates following these talks, announcements will be made promptly in due course.

Following the circulation of documents originating from intergovernmental meetings between the Russia Federation and Egypt, Rusneftegaz can confirm that we are considering new potential opportunities that are available in the North African nation. This is a continuation of the strategy that has in recent times seen our organization begin talks to enter the oil and gas industry of Algeria, another country that has strong potential for rapid growth in this sector. Despite the fact that Egypt is not a member of the Organization of the Petroleum Exporting Countries, otherwise known as OPEC, the Arab Republic maintains one of the largest fossil fuel industries in Africa. This component of their economy continues to hold significant reserves of crude yet to be extracted, and is a net exporter of refined products. However, it should be noted that their identified hydrocarbon reserves are largely depleted, and existing wells are becoming increasingly challenging to extract from. Consequently, the Egyptian petroleum sector requires considerable financial investment and technical expertise, similar to what is also required in Algeria. Therefore, as a large and successful corporation, we have accrued extensive experience and knowledge working on unconventional wells in remote regions of Russia that face extreme climatic conditions, making our organization an ideal partner for our Egyptian counterparts and contemporaries. In response to the prospect of our potential expansion into the region, Deputy Chief Executive Officer Aleksandr Filyurin stated: 

“We are looking at a number of different proposals at the moment in a number of different countries. Since we started this process, we have already determined that there are too many challenges for us to expand into the American and European markets. But after we did more research into developing and emerging regions, we found that the oil industries in these countries usually require large amounts of investment, and this could provide some good opportunities for us. Bearing this in mind, when we were given the opportunity to look at projects in countries like Algeria and Egypt, we quickly decided to seize the opportunity. We have put a lot of work into this over the past few months, I really hope that we will have something positive to announce soon.” 

Thus, our management has concluded that the preliminary research fund designated to investigate projects in Algeria should be sufficient to also include any inquiries for schemes in Egypt, although this sum will be expanded if necessary. Likewise, our board of directors also believes that our organization possesses adequate resources to engage in these potentially lucrative projects, which may ultimately deliver greater return on investment regardless of location. Rusneftegaz continues to be appreciative of the effort made by ministers, officials and public servants to ensure that our interests are represented at the highest levels possible, and we are delighted to report that our organization will send a delegation to attend another intergovernmental meeting shortly. We will continue to endeavor to provide updates regarding our international expansion plans, and will make any relevant announcements at an appropriate time.

As per the statement made by the Minister of Energy, Aleksandr Novak, last week at an intergovernmental commission, Rusneftegaz can confirm that our organization is interested in and has been actively pursuing new projects in Algeria. Whilst this is a significant divergence from our established policy of expanding further into the Russian oil and gas industry, in the early months of the year, our board of directors opted to change our existing business strategy. This ultimately entails engaging further with the prospect of international expansion into new and potentially lucrative markets. In this particular case, the North African country has one of the largest petroleum industries in the world, with oil products accounting for almost all exports from the nation. However, the Algerian hydrocarbon economy requires a considerable amount of new investment and foreign expertise to develop expansive reserves and increase production rates from current levels. As a consequence, Rusneftegaz has been invited to contemplate working in partnership with the largest company in Africa, Sonatrach, to expedite the expansion of the largest industry in Algeria. This arrangement may also involve us collaborating with other Russian entities, including Gazprom Neft, Lukoil, and Tatneft, to work on the proposed schemes and realize mutual benefits accordingly. In response to the possibility of commencing operations outside the Russian Federation for the first time, Deputy Chief Executive Officer Aleksandr Filyurin stated: 

​“The prospect of working with a large state-owned company in a country that produces over 1,5 million barrels per day was simply too good to ignore. We have been reviewing all this for some time now, and it is fair to say that some very interesting proposals have been presented to us. Although there is a lot more still to do and to look at, I am positive about the work we have been doing for the past few months, and I hope we are able to announce something more definitive about this soon.” 

Therefore, Rusneftegaz can also announce that we have reserved an appropriately-sized provision of funds to facilitate a preliminary investigation of the plans available to us, and will expand this sum accordingly if necessary. Similarly, we can also disclose that Rusneftegaz is also engaging with potential business opportunities in other OPEC member countries in addition to Algeria. However, our board of directors intends to review all viable options available to our organization at this present time, and will make any relevant announcements in due course.