Russia oil firms face heavy fines for gas flaring

MOSCOW (Reuters) - Russian oil companies are facing fines of hundreds of millions of dollars or more for polluting the atmosphere with excess amounts of flared gas, the newly appointed resources minister said on Saturday.

Shrinking British oil company BP Plc announced quarterly profit down a fifth from a year ago, after it sold assets in preparation for what could be its biggest oil spill payout when the case comes to trial later this month. BP, the last of the big four western world oil companies to report fourth quarter figures, still beat expectations because of one-off taxes related to its divestments and liability payments, and its shares rose nearly 2%.

New exploration of the Russian oil province which supplies China and other growing Asian consumers will yield oil finds that allay disappointment over meager gains in output, the head of a seismic firm said in an interview. Russia, the world’s top oil producer, pumped 10.4 million barrels per day last year. Most comes from the Soviet-era oil heartland of western Siberia, while output at new export projects further east is rising from a low base.

By Tom Lydon: ETF Spotlight on Market Vectors Russia (RSX), part of an ongoing series. Assets: $1.7 billion. Objective: The Market Vectors Russia ETF tries to reflect the performance of the DAXglobal Russia+ Index, which holds publicly traded Russian companies.

Russia’s decision to give China a share of prized Arctic exploration licenses as part of a “breakthrough” deal signals how the world’s largest oil and gas producer and the biggest energy consumer are redrawing the global energy map.

Rosneft is seeking to borrow up to US$30-billion from China in exchange for possibly doubling oil supplies, making Beijing the largest consumer of Russian oil and further diverting supplies away from Europe. Four industry sources familiar with the situation told Reuters Rosneft was in talks with China’s state firm CNPC about the borrowing, which would echo a $25 billion deal the two companies clinched last decade.

By Jacob Steinberg:The Northern shores of Russia are believed to hold massive amounts of high quality oil yet to be discovered. Recently, Vagit Alekperov, CEO of Lukoil, the largest oil company in Russia announced that the Russian government is looking for offers from the multi-national oil companies to discover, extract and develop its oil in the Arctic.