Russian Rosneft may soon withdraw from its only project in Algeria, an exploration project which Russia’s oil giant considers to have doubtful prospects, Oil Price reported.
Rosneft is seeking to sell its share in the project concerning the development of the 245-South Block including the West- and East-Takuazet oil fields and the North-Tesselit gas condensate field, according to Sputnik News. A joint venture between Rosneft and Russian oilfield engineering company Stroytransgaz holds 60% in the block. The remaining 40% in the 245-S prospect block is held by Algeria’s state-run company Sonatrach.
Rosneft has not officially disclosed how much it has invested in Algeria to date. Yet, sources say the Russian company’s exit from Algeria could equate to a several-hundred-million-US-dollar write off in the form of a penalty owed to Algeria.
To minimize its losses and avoid the penalties, Rosneft may try to sell its stake to Sonatrach. Rosneft must also discuss and coordinate with the Russian Federation its withdrawal from Algeria