Rusneftegaz can announce that we intend to initiate significant changes to our present trading strategy, following the deterioration in geopolitical relations that has occurred over the past seven months. Whereas earlier this year we arranged deals with a plethora of partners from every part of the world, it has become increasingly clear that this is no longer viable. On a day-to-day basis, we would regularly send consignments of crude and refined products to the Amsterdam-Rotterdam-Antwerp region, where it could be marketed via commodities exchanges. This was not only inclusive of the fuels we had produced ourselves, but also those of a number of other entities that extracted hydrocarbons across the Russian Federation. The continued acquisition of this oil from third parties was set to be a fundamental element of our broader stratagem, so it was necessary to review these practices as a result of the challenges we as an entity are now facing. Whilst most of this trade was centered around the major global hubs, including in both Belgium and the Netherlands, the pending implementation of restrictions in these areas will reduce our capacity to conduct commercial activities in these locations. It is therefore advantageous to us to proactively mitigate the effects of this embargo before it takes full effect at the end of the year. Thus, we can today disclose that our export operation is to be recalibrated to primarily focus on East Asia and India, where we now predict that much of our growth will emerge in the future. In response to this announcement, our Deputy Chief Executive Officer Aleksandr Filyurin delivered these observations:
“It was becoming clear to us that we needed to do something before the trading environment became any more restricted, and we would potentially lose all of our current business overnight. Let us speak directly about what is going on, because what is happening now is not entirely unexpected. What has unfolded this year has been a possibility for almost a decade, and to speak even more directly, it is almost a surprise that it has not happened sooner. It is fair to say that we knew we had to prepare for this situation if it ever happened, and as a board, we agreed to take all the steps necessary to prevent Rusneftegaz being harmed. Now, being realistic, perhaps we should have done even more to prepare for this, but we cannot live in the past; we live in the present. I know that in our hearts, our greatest priority is to act in the national interest, and I think that what we are doing is in the national interest.”
Although our previous approach to these transactions was undoubtedly a great success, and hence very lucrative for us, we are now at a juncture where we must determine our next course of action. In recent times, we have been diligently researching all the options available, and making appropriate judgments in the fullness of time. Because of these endeavors, our leadership considers that it is in our long-term best interests to pivot towards the countries on the Pacific Ocean, some of which are the largest economies on earth. These nations also serve as a selection of the most rapidly growing markets at this moment, with increasing demands for fuel and mineral resources. We wholeheartedly maintain that this presents itself as an opportunity for us to form new, enduring partnerships in this corner of the globe, and ultimately capitalize in due time. When it became evident to us in the initial weeks of the year that our existing policies would have to be adapted, we initiated considerable efforts to create this range of contacts. This not only includes the employees of local tank terminals and the managers of shipping companies, but also other petroleum producers and refiners. In spite of the fact that forming bonds with all these firms is vital to prospering in this industry, creating a rapport with the latter is particularly critical if we are to continue purchasing discounted cargoes and subsequently reselling each of these shipments accordingly. The work forging these connections was commenced by our Director of Trading, Dmitri Kozhevnikov, who issued this statement prior to publication of this article:
“I am very pleased with the proposal we have created to change our trading strategy in the next few months. Since I first joined Rusneftegaz in 2019, my team and I have worked with a relatively small pool of partners thus far, and we have now been presented with a great opportunity to expand our horizons. Doing business in a new market is always an exciting process, and I am pleased that we will be able to explore these new possibilities soon.”
Notwithstanding the fact that the transformation in this sector of our corporation will be extensive, it will not result in any structural adjustments at our office in New York, where the majority of such activities are organized. We believe that none of these changes will have a negative impact on this element of our organization, and thus there will still be an abundance of employment opportunities at this site in the near and distant future. Whilst the enlargement of this department was paused during the pandemic, we do not anticipate any of the aforementioned matters to cause any further delays to our global plans. However, in the midst of this adversity, many of the preparations we had undertaken to expedite this were rendered outdated following monumental shifts in both circumstances and conditions that occurred in this timeframe. Nevertheless, our current international expansion proposals remain intact and are forecast to be concluded on schedule. That said, additional action will be required to adequately replace all obsolete material, in much the same vein as our wider investment program. Our financial projections expect that this component of our enterprise will be profitable irrespective of these developments, and the series of measures outlined should guarantee that this operation is successful on a long-term basis, regardless of the challenges that have recently emerged. We will similarly be able to uphold the rigorous standards that have ensured exponential growth since this venture first started four years ago, and will also be able to respond to any subsequent amendments to Russian law in an orderly fashion. Any queries by interested parties pertaining to this bulletin can be submitted via the conventional channels. We necessitate your cooperation and understanding with this ongoing affair.
