Russia's Rosneft plans to spend $18 bn in modernising old refineries

Russian state-owned oil giant Rosneft said over the weekend that the company will invest $18 billion to improve its refinery infrastructure over the next three years to augment gasoline production to meet growing domestic demand.

Rosneft president Igor Sechin highlighted fund managers and other investors in London about the company's $25-billion programme to revamp old refineries. It has already spent $7 billion on its refineries and an additional $18 billion will be spent on their modernisation before 2016.

The planned amount does not include the modernisation programme of Rosneft's German refinery operations.

The gasoline market is currently balanced, but most of the capacity is not compliant with Euro-5 specifications. Enforcement of the new technical regulation and growing domestic demand requires construction or upgrading of gasoline production units, Rosneft said.

The company plans a capital expenditure of $15.4 billion in 2012 against $13.2 billion last year.

Overall oil refining capacity is planned to increase by around 14 per cent to 1.18 million barrels per day from 1.04 million barrels per day.