Industry Consolidation Detrimental For Risk/Reward Profile
Further consolidation of Rosneft 's position in the Russian oil and gas sector will have a detrimental effect on the market ' s O&G score in our risk/reward ratings as it reflects a deterioration in the competitiveness of the Russian energy sector.
In a turn of events, the AAR consortium was reported on October 17 2012 to be selling its 50% stake in TNK-BP to Russian national oil company (NOC) Rosneft for US$28bn. Rosneft has also reportedly made an offer to buy out BP's 50% stake in TNKBP.
A main component of our risk/reward ratings is the level of state ownership in a country's oil and gas assets. If Rosneft proceeds with the acquisition (full or partial) of private ly-owned rival TNK - BP , it would add up to 1.7mn barrels of oil per day in oil production . This would bring its total to nearly 4.4mn b/d, eclipsin g other domestic producers such as Lukoil , Surgutneftegaz , Tatneft and Bashneft .
|Russia and CEE Oil and Gas Risk/Reward Ratings|