All News.net | From global to regional. The head of Rosneft assessed the prospects of the market

Feb 06,2023

The head of Rosneft Igor Sechin took part in the events of the key South Asian forum. He spoke at the ministerial session of Indian Energy Week. The event is dedicated to the issues of ensuring energy security and environmental sustainability. As part of his speech, he voiced the key points taking place today in the energy market.

Igor Sechin in his speech focused on the fact that the actions of the world hegemon, trying to maintain its hegemony by any means, destroyed the single energy market. Today, there is no single global energy market, and energy security has ceased to be global, he stressed in his speech.
"As a result of these actions, all the principles of market trade have been destroyed, in fact, market pricing and contract law have been abolished, and logistics chains that have been built for decades have been broken. The illustration is the blown up Nord Stream," Igor Sechin said.
In response to the destruction of the global market, to the rupture of logistics chains, regionalization of energy will take place, new safe logistics schemes will be built.
Accordingly, the formation of regional payment systems with their settlement and reserve currencies will begin.
In this context, the next attempts to restrict trade in Russian energy resources, in the form of the same ceiling on prices for petroleum products, look absolutely powerless. As Igor Sechin notes, the reference price for our oil cannot be formed where there is none.
"If there are no supplies to Europe, then reference prices will be formed where it actually goes. As inscribed in Ecclesiastes: "The curve cannot become straight, and what is not, it cannot be considered," said the head of the Russian company.

According to him, a striking example is the reformatting of the European gas market. Contrary to common sense, Europe was forced to abandon long-term contracts and switch to spot pricing. Against the background of an accelerated green transition, underinvestment of traditional energy, this led to an unprecedented increase in prices. "And when, with the help of sanctions and pressure, the Russian competitor was eliminated from the European market, the Americans offered to return to long-term contracts that guarantee the return on investment. We are talking about banal unfair competition," Igor Sechin said.

As a result, Europe has completely lost its main advantage – energy security – access to cheap and reliable Russian energy resources and is now forced to pay 3 to 5 times more for gas. According to Bloomberg, the rejection of Russian gas has already cost Europe about 1 trillion euros. In the fourth quarter, Germany recorded a drop in GDP by 0.2%. The IMF predicts a recession in Europe's key economy. This applies not only to the energy sector, but to all industries.
"There is a flight of capital and the transfer of production, first of all, to the United States," the head of Rosneft said.

Beneficiaries of the crisis
The reporting of American oil majors over the past year shows that as a result of a reasonable rejection of the accelerated energy transition, focusing on the production of traditional hydrocarbons, they became leaders in capitalization, said Igor Sechin, He also noted that at the same time BP, the leader of the green agenda, showed a different dynamic, could not, like its competitors, take advantage of the current conjuncture.

"Tomorrow, according to the results of the annual reporting, we may see that BP will announce a return to the strategy of traditional production and a reduction in green investments that generate losses. The total volume of announced write-offs is $ 38 billion, "the head of Rosneft said.
"We also observe with interest in the audited annual reports that BP, as I have already said, which is our shareholder by 20%, having assessed the effectiveness of Rosneft' work, revised the cost of the Rosneft package, which belongs to them, to $ 24 billion. That is, BP is still with us, and I take this opportunity to say hello to our friends and partners. I want to assure you that we will work hard to justify the trust of our shareholders," Igor Sechin said.

The head of Rosneft noted that India, having become the most populated country in the world, is turning into a leader in world economic dynamics. According to the latest IMF calculations, half of the growth of the world economy this year will fall on India and its neighbors, while the United States and the eurozone - only 10%.
"A big country with a huge young ambitious population, where the most important thing is the dynamics. It is no coincidence that analysts and experts predict growth rates of up to 7% per year for India," Sechin said.

The head of Rosneft noted that Russia, in turn, was able to ensure a result more significant than that of many of the world's leading economies in the face of unprecedented sanctions, pressure and confrontation with almost the entire Western world.

"The implementation of major economic programs has already become, regardless of the developing situation around us, a great psychological victory. Which will predetermine our success in other areas," Igor Sechin emphasized.
India Energy Week 2023 is held with the support of the Government of India with the participation of all public sector enterprises and with the official support of the Federation of Indian Petroleum Industry.

Among the participants of the energy week are the Minister of Oil and Natural Gas of India Hardeep Singh Puri, OPEC Secretary General Haytham al-Gais and Deputy Head of the National Energy Administration of the People's Republic of China Lin Shanqing, Head of the International Energy Agency Fatih Birol, heads of Indian oil and gas corporations Indian Oil, ONGC, Gail, energy ministers of the region, top managers of Saudi Aramco, ADNOC, Petronas, Kuwait Petroleum Corporation, TotalEnergies, BP and a number of the largest companies.