Ministry of Economic Development of the Russian Federation Approves Rosneft APG Utilisation Investment Projects

The order, No. 112 of 12 March 2012, approves a project to reduce APG flaring and generate electricity at the Khasyreiskoye deposit and a project to utilise APG at Rosneft’s Priobskoye deposit. The projects for APG utilisation at the Khasyreiskoye and Priobskoye deposits were developed in line with Article 6 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

The Ministry’s decision means Rosneft can begin selling emission reduction units (ERU) acquired through its associated petroleum gas (APG) utilisation programme at deposits in Western Siberia to Carbon Trade & Finance SICAR S.A., an investment company. The APG utilisation programme at the Khasyreiskoye and Priobskoye deposits is an integral part of Rosneft’s gas programme that aims to achieve 95% APG utilisation. These projects mean this goal could be achieved in 2012.

Rosneft has already worked successfully on joint implementation projects at the Komsomolskoye deposit in the Yamalo-Nenets autonomous region and the Kharampurskoye field in Western Siberia. In 2009 Rosneft became the first large Russian company to secure investment in joint implementation projects, thus making use of article 6 of the Kyoto Protocol, which states companies are permitted to derive revenue from their emissions quotas.

Rosneft President Eduard Khudainatov said: “Selling ERUs will provide a significant boost to the economic efficiency of our APG utilisation programme. Our partnership with Carbon Trade & Finance serves as a strong example of mutually beneficial international environmental partnership. These projects have already generated over 20 million euros for Rosneft, which, in line with the Kyoto Protocol, will be channelled towards reducing greenhouse gas emissions.”