Wires

Rosneft kicks off Russian oil's London charm offensive

LONDON/MOSCOW, Oct 5 (Reuters) - Rosneft Chief ExecutiveIgor Sechin met investors in London on Friday, launching a charmoffensive by Russia's oil industry which is trying to courtforeign capital after a decade in which it became almostsynonymous with resource nationalism.

An end to rapid gains in oil prices and domestic crude oiloutput over the past three years has pushed Russia's energycompanies into the arms of foreign investors, to meet theirgrowing needs for capital and technology to revive outputgrowth.

Sechin's meetings with London fund managers preceded asimilar meeting by oil minister Alexander Novak, scheduled forTuesday, and investor meetings by LUKOIL , Russia's No.2 oil producer, later in October.

A source familiar with Sechin's remarks said the RosneftCEO, an ally of President Vladimir Putin of more than 20 years,declined to answer questions about Rosneft's interest in BP's

50 percent stake in a Russian rival, TNK-BP .

Rosneft has said it wants to buy BP out of TNK-BP and isseeking as much as $15 billion in debt funding, bankers havesaid.

BP could then reinvest part of the proceeds in a sizeableequity stake in Rosneft itself, both companies have said.

But BP is obliged to negotiate in good faith untilmid-October with its partners, a quartet of Soviet-bornbillionaires who have also expressed interest in buying out BP,leaving talks on any strategic deal effectively on hold for now.

RISING DEMAND

Instead, the source said, the discussion focused on the costof plans to upgrade Rosneft's refineries, which risk fallingshort of rising Russian demand for gasoline and currentlyproduce fuel which lags European emissions standards.

Spending needs for a Venezuelan crude venture, Carabobo 2,were also discussed, the source said.

In tow was an executive from the Moscow office of ExxonMobil, which sealed a landmark Arctic drilling and shaleexploration venture with the Russian state company last year.

Exxon CEO Rex Tillerson, who has accompanied Sechinpersonally when the Rosneft CEO has made strategy presentationsto the Kremlin in recent months, has praised "politicalleadership (and) policy partnerships" with Russia as a model forthe rest of the world.

The Exxon deal and subsequent deals with Eni andStatoil , sealed when Putin was serving as primeminister and Sechin was his deputy, were aimed in part atsecuring Sechin's role as the industry's top dealmaker.

Russia's energy minister, Alexander Novak, told theFinancial Times that licenses to drill in Russia's Arcticwaters, currently the exclusive preserve of state oil companies,could eventually be co-owned by foreigners.

A source close to Rosneft said Sechin was aiming to showcasethe work of a presidential commission on energy chaired byPresident Vladimir Putin. Sechin is secretary of the commission,his only formal policy role since leaving the government.

He has clashed openly with Arkady Dvorkovich, his successorin the government of Prime Minister Dmitry Medvedev, inparticular over plans to privatise Rosneft and other key energycompanies.

Both men say, however, that they are reluctant to seeRussian energy companies privatised at low valuations.

(Reporting by Melissa Akin and Vladimir Soldatkin; Editing byDavid Holmes)

((melissa.akin@thomsonreuters.com)(+7 495 775 1242)(ReutersMessaging: melissa.akin.thomsonreuters.com@reuters.com))

Keywords: RUSSIA ROSNEFT/INVESTORS