OREANDA-NEWS. September 23, 2011. China's Sinopec and Rosneft could co-operate on the construction of a new oil refinery in Udmurtia on the basis of their joint venture, Sinopec President Wang Tianpu told journalists during his visit of the region.

¬Sinopec owns 49% in Udmurtneft, which accounts for more than 60% of the total production in the Udmurt region, with the remaining 51% stake owned by Rosneft. Tianpu said the oil reserves of the region make the refinery business reasonable.

“Yury Pitkevich, chairman of the government of the Udmurt Republic, asked me if there is a possibility of investing in the creation of an oil refinery in Udmurtia. I think there is a possibility.  Since we have sufficient oil resources and I am sure that this would be a base for the future development of an oil refinery,” Tianpu said.

Sinopec representatives discussed the possibility of building a refinery in Russia with Rosneft very. Yury Pitkevich said that he questioned Sinopec’s president about company’s view on further investment opportunities in Russia.

“No specific projects were mentioned at this meeting and it was rather a discussion of Chinese oil company plans in Russia in general,” Pitkevich said.

The project’s prospects are, however, quite opaque: it will require investments amounting to some USD 7 billion, while Rosneft does not possess free crude for the refinery.

Andrey Polishuk, an analyst from BCS, says Rosneft has another priority project on the way.

“What looks more realistic is an already-endorsed project for a petrochemical complex in the Far East, given the prospects of exports to Southeast Asia. Rosneft is deciding on a foreign partner in this project,” Polishuk believes.