Perez works out oil supply deal with Russia in case of Iraq war

Energy Secretary Vincent S. Perez said yesterday he is firming up talks on a possible oil supply arrangement between Russia and the Philippines.

Perez said he met with Russian oil officials led by OJSC Rosneft Oil Co. vice-president, Jurij Matveev when they visited Russia for a series of oil diplomacy meetings in late October last year.

Perez, together with Speaker Jose de Venecia, visited Russia to look for alternative sources of oil and to tap the goodwill of major oil producers in Russia to use the Philippines as a springboard for their expansion in Asia.

The energy chief has expressed optimism that the series of dialogues with Rosneft officials could lead to a possible commercial transaction soon. He said Rosneft, considered among Russia’s largest oil companies, signified strong interest to supply crude oil to the country.

Rosneft, together with other foreign firms, are developing six oil and gas exploration projects in Sakhalin Island in the Russian Far East. The six projects are seen to yield 15 to 17 million tons of crude oil by 2015.

Aside from exploration activities in Sakhalin Island, Rosneft operates in 19 regions of Russia through more than 40 subsidiaries, including eight oil and gas producers, three oil refineries and 16 marketing subsidiaries. Last year, the Russian state oil firm produced about 17 million tons of crude oil.

"This is a positive development in our efforts to diversify our sources of oil supply in light of the international events. As such we strongly welcome a partnership between Russian and Philippine oil companies, knowing that Russia is the world’s second largest oil producer. This will give us alternative oil supply nearer to the Philippines than from the Middle East should the US and Iraq war erupt," Perez said.

Matveev, on the other hand, said: "We feel very strongly that there is a deep level of relationship between the Philippine and Russian governments both in the political and business areas."

The oil official said they are looking closely at the possibility of exploring business opportunities in the Philippines.

According to Matveev, initial indications show that the Sakhalin crude oil is of light and good quality which could met the requirements of the refineries in the country.

At the same time, Perez invited Rosneft to look into the Philippines’ oil and gas potentials.

"We hope that Rosneft will seriously consider opportunities for oil and gas exploration in the country. We note that Rosneft has strong expertise in prospecting and exploration of hydrocarbon deposits, crude oil and gas extraction in Russia and abroad. It would significantly boost our exploration sector if they will consider us an investment site," Perez said.