New director says Rosneft has exploration cost advantage

[ST PETERSBURG, Russia] Karin Kneissl, a former Austrian foreign minister who has joined the board of Rosneft, said low exploration costs give the Russian energy major an edge over rivals.

Ms Kneissl, who was confirmed as Rosneft's new independent board member last week, served as Austrian Foreign Minister from December 2017 to June 2019.

"I think that our advantage is the impressive low exploration costs, below US$3 per barrel, I think it's US$2.6, something like that," she told Reuters in an interview on the sidelines of the St. Petersburg Economic Forum last week.

"If you can be so cost-effective in the production with a volatile price, you're not as vulnerable as others, like in the unconventional oil production, as shale oil production." Rosneft has embarked on the new project called Vostok Oil, which is planned to start shipping oil in 2024 via the Northern Sea Route, an alternative to the Suez Canal, that shortens travels to the energy-hungry markets of Asia.

Igor Sechin, Rosneft's head, said on Saturday that the world is facing the acute shortage of oil as a result of underinvestment and the drive for green energy.

Ms Kneissl said that oil consumption will grow, particularly in Asia and Africa, adding that she expects global oil demand to vary between 90 million barrels per day (bpd) and 100 million bpd in the coming years.

REUTERS