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3 years ago
Russia says ready to help Rosneft and Novatek from wealth fund -Interfax
September 13, 2014 / 11:26 AM / 3 years ago

Russia says ready to help Rosneft and Novatek from wealth fund -Interfax

MOSCOW, Sep 13 (Reuters) - Russia is ready to support sanctions-hit energy companies Rosneft and Novatek from its National Wealth Fund, Finance Minister Anton Siluanov said on Saturday, according to Russian news agencies.

He stressed, however, that any support would be limited by an existing cap on the fund's investments.

State-owned oil company Rosneft and independent gas producer Novatek are both subject to Western sanctions imposed on Russia over its involvement in Ukraine. The sanctions limit the companies' access to foreign finance.

The EU and the United States introduced further sanctions on Friday.

"In general we are ready to consider these proposals (for financial support) under the general terms within the limits of 60 percent of NWF funds which are envisaged for investments," Siluanov said during a visit to Milan, in comments reported by Interfax.

The government has said it stands ready to provide financial backing to both companies but its own finances are stretched.

Rosneft has lobbied for assistance from the National Wealth Fund (NWF), an $83 billion sovereign fund that is supposed to be used to back the state pension system. Last month Rosneft requested $40 billion from the fund.

Siluanov's comments imply that any financial assistance to Rosneft and Novatek is likely to be a fraction of the amount requested by Rosneft, as the two companies will have to compete against other applicants and on the same terms.

The government has already earmarked much of the National Wealth Fund to infrastructure projects, such as modernisation of the Trans-Siberian railway and a ring road around Moscow, but discussions are continuing over which projects to support.

President Vladimir Putin said this month that Russia shouldn't increase the overall amount that the fund spends, but said there was room for discussion over which projects should be backed.

Russia recently raised the cap on the fund's domestic investments to 60 percent, leading to concerns the Kremlin is taking risks with fiscal reserves intended to provide future support for an overstretched pension system.

In his comments on Saturday, Siluanov said that Russia did not intend to lift the 60 percent cap on domestic projects, although this option wasn't ruled out if the economic situation worsened.

"Regarding the 40 percent (of the fund remaining) a decision was taken not to break into it. This is our strategic reserve," Siluanov said. (Reporting By Jason Bush; Editing by Susan Fenton)

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