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 Rosneft Headquarters, Sofiyskaya Embankment, Moscow, September 2005 | |
Native name | ПAO «Росне́фть» |
|---|---|
| Company type | Public (PJSC) |
| MCX: ROSN LSE: ROSN | |
| Industry | Petroleum |
| Predecessor | Ministry of Oil and Gas (Soviet Union) |
| Founded | 1993; 32 years ago (1993) |
| Headquarters | , Russia |
Area served | Russia |
Key people | |
| Products | Petroleum Natural gas Motor fuels Petrochemicals |
| Revenue |  $93.57 billion (2022) |
| $19.30 billion (2022) | |
| $10.11 billion (2022) | |
| Total assets | $223 billion[1] (2021) |
| Total equity | $88.1 billion[1] (2021) |
| Owner |
(2021[2]) |
Number of employees | 334,600 (2019)  |
| Subsidiaries | Nayara Energy (49.13%) |
| Website | rosneft |
PJSC Rosneft Oil Company (Russian:Роснефть,romanized:Rosneft',IPA:[ˌrosˈnʲeftʲ] stylized asROSNEFT) is a Russianintegrated energy company headquartered inMoscow. Rosneft specializes in the exploration,extraction, production, refining,transport, and sale of petroleum, natural gas, and petroleum products. The company is controlled by theRussian government through theRosneftegaz holding company. Its name is aportmanteau of the Russian wordsRossiyskaya neft (Russian:Российская нефть,lit. 'Russian oil').[3][4]
Rosneft was founded in 1993 as astate enterprise and then incorporated in 1995, acquiring a number of state-controlled gas and oil assets. It became Russia's leading oil company after purchasing assets of the former oil companyYukos at state-run auctions. After acquiringOJSCTNK-BP in 2013, then one of the largest oil companies in Russia, Rosneft became the world's largestpublicly traded petroleum company.[4][5]
Rosneft is thethird-largest Russian company and the second-largest state-controlled company (afterGazprom) in Russia in terms ofrevenue (₽4,134 billion).[6] Internationally, it is one of the largest oil companies,ranking 24 in terms of revenue.[citation needed] In the 2020Forbes Global 2000, Rosneft was ranked as the 53rd-largest public company in the world.[7] The company operates in more than twenty countries around the world.[3][4][8]
Rosneft has played a major role in the history of Russia'soil industry. The first use of the nameRosneft dates back to the late 19th century[citation needed], whenexploration of oil fields inSakhalin began in 1889. Most of Rosneft's current assets were acquired during theSoviet era.[4]
Rosneft was established in 1993 as aunitary enterprise with assets previously held by Rosneftegaz, the successor to theSoviet Union'sMinistry of Oil Industry. During the early 1990s, almost all Russian oil companies and refineries were extracted from Rosneft to form ten integrated companies. Later their number was halved as a result of acquisitions. On 29 September 1995, anOrder of the Government of Russia No. 971 transformed Rosneft into anopen joint stock company.[9]
In March 1996, Rosneft founded theRussian Regional Development Bank.[10][11]
Rosneft struggled financially and operationally during the1998 Russian financial crisis with decreased production due to poor assets and lower retail sales with an underused refining capacity. In July 1998 the Russian government tried to sell Rosneft, but it failed.[12]
In October 1998, the Russian government appointedSergey Bogdanchikov as president.[13] The company owned two obsolete refineries and several low-productive and poorly managed oil-producing assets. In the late 1990s, plans for Rosneft'sprivatization in Russia were made, but due to competition with equally influentialpretenders, they were not carried out.[4]
From 2002 to 2004, the company's primary objectives were strengthening control over its assets, reducing the debt burden, and obtaining licenses in Eastern Siberia. The determining factor in enhancing the role of Rosneft in the Russian oil industry has been the support of the country's top leadership.[vague] The company, during this time, managed to restore its status after its rough start in the 1990s with the acquisition of Krasnodar Oil and Gas Company in 2002 and Northern Oil Company in early 2003. In addition, in 2002, the company received a license for the development of the Sakhalin-IV and Sakhalin-V project,[14] and in 2003 a license for the development of theSakhalin-III project.[citation needed]
In 2005, Rosneft acquired a 25.94% stake in the companyVerkhnechonskneftegaz[15] and became the leading oil company of Russia in terms of production.[4][16]
In 2007, the company for the first time entered the annual list of one hundred most respected firms and companies in the world according to the weeklyBarron's, in 99th place.[17] By the same year, Rosneft produced 100 million barrels of oil, 20% of Russia's output at the time.[4] In March 2007, Rosneft had announced it hoped to increase production from 80 million tonnes to 103 million tonnes from 2006 to the end of 2007, extract 140 million tonnes of oil by 2012, and become a global top three energy company.[18]
When theGreat Recession struck Russia in late 2008, Rosneft was able to endure the economic pains by improving and strengthening business lines, management, andtransparency, and as a result, became a leading oil company domestically and internationally.[4]
In February 2009, a number of agreements were negotiated between Russia and China that provided a 20-year contract for an annual supply of 15 million tons of oil between theChinese National Petroleum Corporation (CNPC) and Rosneft, cooperation between CNPC andTransneft to construct and operate a branch of theEastern Siberia–Pacific Ocean (ESPO) oil pipeline to China, and the provision of loans for US$25 billion—US$15 billion from Rosneft and US$10 billion from Transneft—by theChina Development Bank on thesecurity of supplies.[19][20][21]
Starting in 2004, the Russian government organized a series of auctions to sell the assets ofYukos Oil Company, of which Rosneft won the majority. On 22 December 2004, Rosneft purchasedBaikal Finance Group, which boughtYuganskneftegaz (Yugansk), a main asset of Yukos, three days earlier at a state-run auction forUS$9.35 billion to satisfy tax debts.[22] According to some estimates,[who?] this operation was directed by Russian authorities in order to nationalize Russia's oil and gas industry. In response to the deal,Andrei Illarionov, then a senior Putin economic advisor, denounced it as "fraud of the year".[23]
In 2005,Mikhail Khodorkovsky (former chairman ofMenatep) andPlaton Lebedev (business partner of Khodorkovsky) were sentenced to nine years in prison for fraud andtax evasion. In February 2007, they were charged again and accused of stealing $25 billion worth of oil from Yukos subsidiaries. They were convicted, but in 2013Putin pardoned Khodorkovsky and 2014 theRussian supreme court announced that Lebedev should also be freed early.[22]
The purchase of Yugansk in 2005[24] greatly increased the number of assets and production for Rosneft. Subsequently, Rosneft filed a lawsuit against Yukos in connection with the use of the understated transfer prices for the purchase of oil from Yuganskneftegaz prior to its breakup. At the same time, Rosneft itself also purchased oil and gas from its subsidiary, Yuganskneftegaz, attransfer prices.[citation needed]
In May 2007, Rosneft won a number of auctions for the sale of Yukos' assets, including five refineries and oil companies Tomsk Oil Company and Samara Oil and Gas Company, making it the largest oil company in Russia. According to experts on the Russian newspaperVedomosti, the assets of Yukos, bought by Rosneft at auction organized by the state, went to the company at a discount of 43.4% of the market price of this property. In 2007, the former assets of Yukos provided 72.6% of oil and gas condensate production and 74.2% of Rosneft's primary refining.[25] In June, Rosneft paid $731 million for the transportation assets of Yukos, which had declared bankrupt in August 2006 after three years of litigation over tax arrears.[26] In August, Bogdanchikov said that although the Yukos acquisitions had increased Rosnefts debt to $US 26 billion, he planned to reduce debt to 30% of total assets by 2010 by tripling refining capacity and expand into China.[citation needed]
In July 2006, Rosneft placed 15% of its shares traded with a total value of US$10.7 billion in aninitial public offering (IPO) at theLondon Stock Exchange, theRussian Trading System, and theMoscow Interbank Currency Exchange. Part of the shares were distributed among the Russian population through banks such asSberbank andGazprombank.[4][27][28]
TheFederal Service for Financial Markets authorized the placement and circulation outside the country of a 22.5% stake in Rosneft.[29]
Rosneft announced a placement value of US$5.85–7.85 per share andglobal depository receipt (GDR), based on the company's capitalization afterconsolidation of US$60–80 billion. It planned to place shares for at least US$8.5 billion in order to repay loans to Western banks, including interest and taxes.[30]
On 14 July, the official results of the placement value were announced. Shares were priced at US$7.55, almost at the upper end of the price band, resulting in Rosneft'scapitalization—taking into account the upcoming consolidation of its subsidiaries—at a value of US$79.8 billion, making Rosneft surpassLukoil as the largest oil company in Russia. Investors bought 1.38 billion shares for US$10.4 billion: 21% of the shares were bought by strategic investors, 36% from international investors from North America, Europe, and Asia, 39% from Russian investors, and 4% from Russian retail investors. 49.4% of the total IPO volume accounted for four investors, includingBP for US$1 billion,Petronas for US$1.5 billion, and theCNPC for $0.5 billion. Individuals submitted applications for the purchase of 99,431,775 shares of the oil company, and as a result, most of the new shareholders were individuals; partly because of this IPO was given the unofficial name of "people's."[31][32]
Rosneft's IPO became the largest in the history of Russia and the fifth in the world in terms of the amount of money raised at the time. The announced amount could increase by another US$400 million if the global placement coordinators realize the option of buying another 53 million GDRs of Rosneft at the price of placement within 30 days.[4]
On 26 May 2009, a five-year cooperation agreement was negotiated between Rosneft and theAbkhazia's Ministry of Economy. The parties stated their intention to develop mutually beneficial cooperation in areas asgeological prospecting, development of oil and gas fields, production ofhydrocarbons, and sale of oil, natural gas and oil products. Rosneft undertookexploration on the shelf in the Ochamchire area, discovering preliminary reserves estimated at 200 million to 500 million tons of oil equivalent. In addition to drilling and creating its own sales network, Rosneft also planned the construction of mini-refineries in Abkhazia.[33][34]
According to Rosneft, the company provides more than half of the retail sales of oil products in Abkhazia. In 2014, Rosneft exported 47 thousand tons of oil products to Abkhazia. Since 2015, Rosneft has been supplying aviation fuel forSukhumi Babushara Airport.[35]
As part of the project to develop the Gudauta area on the Black Sea shelf, Rosneft carried out a full range of geophysical and geochemical research, conduct 2D and 3D seismic surveys, and start preparations for exploratory drilling.[35] In June 2014, Rosneft extended the shelf study period to five years.[citation needed]
In July 2015, however, the new President of Abkhazia,Raul Khajimba, who replacedAlexander Ankvab after his resignation, spoke out against the exploration and production of oil on the offshore shelf of Abkhazia and asked thePeople's Assembly to consider the possibility of establishing a "commission for the comprehensive study of issues related to the conclusion of contracts for exploration and production hydrocarbons by the previous Abkhaz leadership."[36]
A group of deputies of the People's Assembly drafted a bill banning the development of hydrocarbons in Abkhazia. Supporters of the bill demanded the prohibition of the development of the offshore shelf in Abkhazia for 30 years.[36]
In September 2010, Eduard Khudainatov replaced Sergei Bogdanchikov asCEO of the company.[37]
On 15 October 2010,Russian PresidentDmitry Medvedev signed an agreement withPresident of VenezuelaHugo Chávez for thePDVSA to sell 50% of the shares of German company Ruhr Oel to Rosneft, giving Rosneft oil refining assets in Germany."Stake in Ruhr Oel GmbH".Rosneft.
Since 23 May 2012, former Deputy Prime MinisterIgor Sechin became the company's CEO, succeeding Khudaninatov, who received the post of vice-president.[38]
In the summer of 2012, Rosneft purchased a fuel oil terminal from theUnited Shipbuilding Corporation (USC) located on the territory of the Murmansk Ship Repair Plant No. 35. The transaction value is estimated atUS$28 million. According toKommersant, the Murmansk terminal can be used as a platform for Rosneft's activities in the Arctic.[39]
In October 2016, Rosneft bought a 49% stake inEssar Oil of India, along with Russian investment fund United Capital, in a deal worth $13 billion.[40]
On 7 December 2016, Rosneft signed a deal to sell 19.5% of the outstanding shares, or roughly US$11 billion, to the Anglo-Swiss multinational commodity traderGlencore and theQatar Investment Authority.[41] Officially, the stake was split 50/50 between Glencore and Qatar, but Glencore contributed only €300 million and claims only a 0.54% stake. The ownership structure includes aCayman Islands company, QHG Cayman Limited, whose ownership can not be traced.[42] After the transaction, Rosneft'sholding company Rosneftegaz retained 50% + 1 share of the company.[43]
On 2 October 2017, thePLA-linkedCEFC China Energy[44] bought a $9 billion stake in Rosneft.[45]
On 26 September 2017, the Russian governmentcontroversially approved the formerGerman chancellorGerhard Schröder as chairman of Rosneft.[46]
In May 2018, it was announced that the Qatar-Glencore consortium is cancelling the plan to sell a $9.1 billion (14%) stake of Rosneft toCEFC China Energy. With the dissolution of the consortium, theQatar Investment Authority purchased the shares instead, thereby solidifying its position as one of the biggest shareholders (19%) of Rosneft.[47]
In the 2010s, the extensive contact between Rosneft andExxonMobil were further deepened, with Igor Sechin andRex Tillerson getting to know each other personally.[48]
On 15 January 2011, Rosneft andBP announced a deal to develop theEast-Prinovozemelsky field on theRussian arctic shelf between theYamal Peninsula andNovaya Zemlya island.[49][48] As part of the deal Rosneft was to receive 5% of BP's shares, worth approximately $7.8 billion, as of January 2011 and BP would get approximately 9.5% of Rosneft's shares in exchange.[50][48] According to the deal, the two companies would create an Arctic technology centre in Russia to develop technologies and engineering practices for safe arctic hydrocarbons extraction.[51] AAR, which represents four billionaires of Russian origin and is BP's Russian partner in theTNK-BP joint venture, blocked the BP–Rosneft deal in international courts, arguing it breached earlier contracts between BP and AAR.[52] The TNK-BP partners had previously signed a shareholding agreement which stipulated that their Russian joint venture would be the primary corporate vehicle for BP's oil and gas operations in Russia.[53] On 30 August 2011, Rosneft announced that instead of BP, the partner for EPNZ-1, EPNZ-2 and EPNZ-3 in theKara Sea will be ExxonMobil. In exchange, subject to approval by U.S. regulators, in addition to a share in oil production in Russian fields, Rosneft was granted participation in U.S. fields in Texas and the Gulf of Mexico.[54][55]
On 27 January 2011, Rosneft and the American companyExxonMobil signed a deal to establish ajoint venture for the purpose of prospecting and extracting oil from theTuapse field deepwater area on theBlack Sea shelf, near the coast of theKrasnodar Krai.[48] The value of the deal is unknown, but ExxonMobil is expected to invest $1 billion in the project.[48] The venture will be shared 50–50 between the companies during prospecting phase, and two-thirds to one-third in Rosneft's favour during the extraction phase. The Tuapse Trough is estimated to contain 7.2 billionbarrels of oil equivalent. The first well could be drilled in 2012.[56] The deal also contains options for additional cooperation, such as extended exploration and production, deliveries to Rosneft's oil refinery inTuapse, development of transport infrastructure and research on offshore oil production technologies.[57] According to analysts, offshore areas are central to Rosneft's expansionist plans, and the company is looking for foreign cooperation to bring in new technology and share risks.[56]
In April 2017, theTrump administration denied ExxonMobil permission to continue a deal with Rosneft to drill for oil in Russia.[58]
On 22 October 2012, it was announced that Rosneft will take over TNK-BP International, a parent company of TNK-BP Holding, which is the third largest oil company in Russia.[59] BP will receive in exchange of its stake $12.3 billion of cash and 18.5% of Rosneft's share, while ARR received $28 billion in cash.[60] According to Rosneft's CEOIgor Sechin, no discussion was held on a buyout of minority shareholders in TNK-BP Holding.[61] The deal was completed on 20 March 2013.[62]
On 27 February 2022,BP announced that it would divest its 19.75% stake in Rosneft in response to theRussian invasion of Ukraine that took place in February 2022.[63]
In 2022,Trafigura wound down its relationship with Rosneft, Rosneft asked2Rivers to take Trafigura's place.[64]
The week beginning 19 April 2022, Rosneft attempted to sell millions of barrels of Urals, one of three main export-grade crude oils sold by Russia. The offer failed to attract any customers.[65]
Following the2022 Russian invasion of Ukraine more than half of Rosneft's 11-member board had quit, forcing the company into a major reshuffle at its annual general meeting on 30 June 2022. Taieb Belmahdi, a former executive at Qatar's state-owned QE, has been elected chairman of the board to replace ex-German chancellorGerhard Schröder who stepped down in May.[66]
In November 2023 a Rosneft subsidiarySakhalinmorneftegaz-Shelf was given the job of managingSakhalin-I with an 11.5% interest in the project.[67]
In January 2024,Ukrainian retaliatory drone strikes hit at least four oil and gas terminals across Russia, including Rosneft'sTuapse oil terminal on the Black Sea coast.[68]
On 13 March 2024, Ukrainian drones set fire to Rosneft's oil refinery inRyazan, the seventh largest in Russia, causing injuries according to the regional governor. The refinery is responsible for 8% of Russian aviation fuel, 6.4% of gasoline, 4.1% of diesel and 7.7% of fuel oil. Another drone was shot down over the Kirishi refinery, Russia's second largest, without causing damage or injuries.[69]
On 16 July 2014, theObama administration imposedsanctions through theUS Department of Treasury'sOffice of Foreign Assets Control (OFAC) by adding Rosneft and other entities to the Sectoral Sanctions List (SSL) in retaliation for theannexation of the Crimean Peninsula by theKremlin and theongoing Russian interference in Ukraine.[70] On 12 September 2014 the United Kingdom also sanctioned Rosneft.[71]
Thefirst Trump administrationexpanded further sanctions on its Swiss-incorporated company (Rosneft Trading S.A.) and its presidentDidier Casimiro on 18 February 2020, for supporting Venezuela'sNicolás Maduro regime by operating in the oil sector of the Venezuelan economy.[72][73]
In March 2022, as a result of the2022 Russian invasion of Ukraine theEU imposed sanctions on Rosneft.[74]
Rosneft was sanctioned by New Zealand.[75]
Rosneft's daily averagecrude oil production in 2010 increased by 6.4%, to 2.3 million barrels (370 thousand cubic metres). Total crude oil output reached 847.4 million barrels (134.73 million cubic metres) of oil and gas condensate. Rosneft is also among the largestnatural gas producers in Russia, with a total gas production of 12.3 billion cubic metres (1.23×1010 cubic metres) in 2010. Rosneft is engaged in exploration and production across all key oil and gas regions of Russia:Western Siberia,Southern andCentral Russia,Timan-Pechora,Eastern Siberia, theFar East, and the shelf of Russia'sArctic Ocean. As of year-end 2010, Rosneft's total proved oil and gas reserves under PRMS classification was 22.8 billion barrels (3.62 billion cubic metres) of oil equivalent, among the highest for apublicly traded petroleum company worldwide. Rosneft is also second-to-none in terms of total proved liquid hydrocarbon reserves.[76][77]
In 2016, based ongeological prospecting, 13 oil fields and 127 new deposits[16] with the reserves totaling 207 milliontons of oil equivalent were discovered. The replacement of hydrocarbon reserves of industrial categories ABC1 amounted to 354 million TOE or 126% of the production in Russia. The replacement factor for new reserves has been significantly above 100% for over ten years.[78][independent source needed]
According to Rosneft, the reserves increment inWestern Siberia amounted to 133 million tons of oil and condensate and 87 billion cubic metres (8.7×1010 cubic metres) of natural gas. 37 prospecting and exploration wells tests were completed with a success rate of 89%. 45 new deposits with the total reserve of 59 million tons of AB1С1 + В2С2 were discovered. InEastern Siberia and theFar East, the total increase in reserves amounted to 21.2 million tons of oil and condensate and 29 billion cubic metres (2.9×1010 cubic metres) of gas. 11 exploration well tests were completed with a success rate of 55%. Five new deposits with reserves of 39 million tons of oil equivalent were discovered. In 2016, the total incremental 4.8 billion cubic metres (4.8×109 cubic metres) of gas. 37 well tests were completed with a success rate of 76%.[78][independent source needed]
Rosneft owns and operates seven large refineries in Russia with an aggregate annual capacity of 372 million barrels (59.1 million cubic metres) and four mini-refineries. The refineries are able to process about 45% of crude oil produced by Rosneft as a whole. Rosneft owns a 50% stake in Ruhr Oel GmbH,[77] the owner of stakes in four refineries in Germany with overall capacity of 23.2 million tonnes.[79] A 54% stake in the PCK refinery inSchwedt was put into trusteeship by the German government in September 2022 as a result of the Russian attacks on Ukraine.[80][81] In August 2024, it was revealed that Qatar was planning on purchasing Rosneft’s stakes through negotiations held between the Secretary of State of the German Chancellery,Joerg Kukies, and the CEO of the Qatar Investment Authority, Mansoor Ebrahim Al-Mahmoud.[82][83] In September 2024, the German government announced it would extend the trusteeship until 10 March 2025, with the anticipation of a sale of assets to Qatar.[84][85] Rosneft is the second largest national oil company by retail network, which covers 41 regions of Russia and includes 1,800 filling stations.[76][86] In March 2020, the company stopped its operations in Venezuela and sold all of its assets in the country to another unnamed company that is owned by the Russian government.[87]
Rosneft owns several subsidiaries, amongst which is Rosneftflot, its sea transportation unit to own and manage vessels.[88] By 2018 they had contracted 26 vessels, including 12 polar-capable oil tankers, withZvezda Shipyard.[88]
Prior to theinitial public offering (IPO) in 2006, all of Rosneft'sshares were owned by theRussian government through itsholding company JSCRosneftegaz. After the placement of the company's shares on the stock exchange and the consolidation of shares of 12 subsidiaries (including Yuganskneftegaz) of Rosneft, the share of Rosneftegaz decreased to 75.16%. As of September 2012, Rosneft had over 160,000 shareholders. By December 2016, the number of individual shareholders was 138,000, with Rosneftegaz owning only 50% of the shares,BP owning 19.75%, and 30.25% owned by other shareholders.[89][90] In August 2021Igor Sechin increased his own share at Rosneft from 0.1273% up to 0.1288%.[91]
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Members of the board of directors (as of June 2022):[92]
Members of the management board:[94]
In 2011, according to Rosneft, the company had donated$422 million to charity, 4 times than the previous year, becoming the leading Russian company devoted tophilanthropy that year. At the same time, the composition of the beneficiaries was not disclosed as it was known that the oil company had previously committed to pay $180 million for the right to be the general sponsor of the2014 Winter Olympics inSochi.[95]
Since 2012, Rosneft, along withGazprom, has been the title sponsor of theassociation football teamFC Tom Tomsk based inTomsk.[96]
Rosneft has been ranked as among the 13th best of 92 oil, gas, and mining companies on indigenous rights and resource extraction in the Arctic.[97]
In October 2009, theFederal Antimonopoly Service (FAS) imposed on Rosneft a record fine of ₽5.3 billion ($175M) for violating anti-monopoly legislation. The fine was imposed for the abuse of power in the petroleum market recorded in the first half of 2009, which was expressed in the "seizure of goods from circulation, which led to higher prices in the wholesale segment of the oil products market, creating discriminatory conditions for the sale of oil products to individual counter-parties." As FAS has calculated, these actions led to an increase in prices in the wholesale markets ofmotor gasoline,diesel fuel, and aviationkerosene in the first half of 2009.[98]
On 9 August 2010, a former subsidiary ofYukos, Yukos Capital Sarl of Luxembourg, was seeking to have Rosneft repay the debts of companies that previously belonged to Yukos. After the seizure of Rosneft's assets in the United Kingdom and the denial of an appeal by theSupreme Court of the Netherlands, Rosneft said that Yukos Capital paid Yuganskneftegaz its debt of ₽12.9 billion ($426M).[99]
On 16 August 2010, Yukos Capital appealed to the Federal Arbitration Court of the West Siberian District with acassation appeal against the decision of the Arbitration Court of Tomsk Oblast to refuse reclaiming fromTomskneft, a Rosneft subsidiary, more than ₽7 billion ($231M) under loan agreements. Previously, Yukos Capital applied to international arbitration under theInternational Chamber of Commerce, and it obliged Tomskneft to pay ₽7,254.2 million ($239M), $275,200, and £52,960, with aninterest rate of 9% per annum for the amount of ₽4,350 million ($144M), starting from 12 February 2009 until the day of payment of the debt. The Russian court had to bring the court's decision to Russian territory. However, the Arbitration Court of Tomsk Oblast, having considered the claim, ruled to refuse Yukos Capital in debt collection.[100]
On 15 December 2017, a Moscow court sentencedAlexei Ulyukayev, a former Russian economy minister to pay ₽130M ($2.2M) and eight years in a penal colony for bribery and corruption.[101] The case was widely seen as RosneftCEO Sechin’s revenge for Ulyukayev opposing Rosneft’s takeover ofBashneft, another oil company.[102] The 61-year-old claimed that Sechin had lured him to Rosneft's offices, where he was subsequently caught red-handed by the authorities with a bag of bribe money.[103] According to investigators, Ulyukayev, who was still economy minister at the time of his arrest, had taken the $2M bribe in exchange for permitting Rosneft's acquisition of a stake in Bashneft. Ulyukayev retorted that the "fabricated" accusations of bribery were "based solely on Sechin's claims," and that the whole exchange had been engineered by the RussianFederal Security Service, the successor of theKGB.
Ulyukayev was seen as an economic liberal, Igor Sechin is viewed as a hawk, who supports greater state control over the economy. Ulyukayev, while influential, was not part of President Putin's inner circle.[101]
The Russian branch ofGreenpeace called Rosneft the dirtiest oil company in the world. In 2011, according to a survey conducted by the Federal Service for Supervision in the Sphere of Nature Management (Rosprirodnadzor) inKhanty-Mansi Autonomous Okrug, Rosneft allowed 2,727 oil spills, which is 75% of the total number of spills that occurs under the company.[104] According to environmentalists, it is Rosneft's fault that more than 10,000 oil spills occur each year.[105][106]The Hydrometeorological Centre of Russia has estimated that 4.5m tonnes of oil are spilled on theRussian mainland every year, that's seven times theBPDeepwater Horizon spill in theGulf of Mexico in 2010.[107] Often blamed is Rosneft's ageing infrastructure, so is the lack of government oversight.[106][107] As a result of the environmental contamination, people have observed black water coming out of their taps, cattle have been stricken with tuberculosis, and fish have been found deformed.
In the first half of the 2000s, Sergei Bogdanchikov, then president of Rosneft, along with some journalists and experts, criticized Yukos andSibneft for their use ofhydraulic fracturing.[108] However, in early November 2006, a number of journalists pointed out that thePriobskoye oil field of which it is owned by RN-Yuganskneftegaz, a subsidiary of Rosneft acquired from Yukos, produced the largest oil fracture in Russia with specialists of Newco Well Service. The operation was conducted for seven hours and was broadcast live via the Internet to the office of Yuganskneftegaz.[109] In 2007, the company planned to perform hydraulic fracturing of the formation at 440 wells. From 2009 to 2010, Rosneft was one of the largest customers of the oilfield services companySchlumberger, which specializes in hydraulic fracturing.[110]
On 20 March 2014, theUnited States governmentsanctionedRosneft CEO Igor Sechin in response to the Russian government's role in theunrest in Ukraine. The sanctions include a travel ban to the United States, freezing of all assets of Sechin in the United States and a ban on business transactions between American citizens and corporations and Sechin and businesses he owns.[111][112] On 24 February 2022, his son Ivan Sechin was also sanctioned by the U.S.[113] On 28 February 2022,Igor Sechin was subjected to travel restrictions and had his assets frozen by theEU.[114]
Rosneft and many of its subsidiaries have been sanctioned in the past and appear on the Sectoral Sanctions Identification (SSI) List.[115] Rosneft was added to the SSI on 16 July 2014,[116] and was sanctioned by the EU on 8 September 2014.[117]
On 18 February 2020, the US Department of the Treasury’s Office of Foreign Assets Control ("OFAC") added Rosneft Trading S.A., a Swiss subsidiary of Rosneft, and its presidentDidier Casimiro to theSpecially Designated Nationals (“SDN”) list.[118]
As of 1 May 2014, the heads ofRussian state corporations provided information about their incomes and property to the Russian government to correspond to thepresidential decree Anti-Corruption Issues, which was published on 8 July 2013. According to the ruling, websites of the companies should show the personal information of their top managers such as income, property, spouses, and children. However, Rosneft refused to publish its information of top managers, citing that it is only applicable to "state companies (corporations) and other organizations created by federal laws," to which it does not believe itself to be. However, this did not prevent the company from providing information regarding the incomes and property of Rosneft's top managers and their relatives to "competent authorities" in the prescribed "time and amount". According to the director of the Russian branch ofTransparency International, Elena Panfilova, improvement of such legislation is necessary so that state corporations can unequivocally interpret the norm on the publication of personal information. In July, the Russian government announced that information of the income of top management of companies listed in Government Decree No. 613 22 July 2013 which includes Rosneft, "are subject to placement in the information and telecommunications network 'Internet' on the official websites of these organizations."[119]
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