MOSCOW Feb 6 Russia's largest oil firm Rosneft (ROSN.MM) has signed a deal to cut planet-warming emissions by making use of gas from two oilfields rather than flaring it, the state-controlled firm said on Friday.
Carbon Trade & Finance SICAR S.A., a joint venture between Germany's Dresdner Bank and Russia's Gazprombank, will purchase Rosneft emissions cuts made from 2008 to 2012 in the form of Emissions Reduction Units (ERUs).
Under the Kyoto Protocol, an international treaty to fight climate change, ERUs can be sold to developed countries, which buy them to meet their emissions reduction targets under the treaty.
The Rosneft statement did not say how many units it would produce and sell under the deal.
A similar agreement with the World Bank signed last year pledged to cut 5.3 million tonnes of carbon dioxide by 2012. Each tonne is equivalent to one ERU, and can be sold for around 10-20 euros each on the global carbon market.
Rosneft will achieve the emissions cuts by harnessing associated natural gas, a by-product of oil production, at its Kharampursk and Kasyreysk fields in southern Siberia.
Associated gas in Russia is most often burned, or flared, wastefully creating pillars of flame that spew carbon dioxide. Trapping the gas for use can result in vast emissions cuts.
Rosneft is ready to invest 5 billion roubles ($137.7 million) in associated gas projects and hopes to sell the resulting ERUs to make back some of these investments, it said.
Russian Prime Minister Vladimir Putin has asked Russian firms to cut gas flaring by 95 percent by 2012. When president, he originally set a deadline of 2011, but this was delayed as companies fell behind on their schedules.
Russia is one of the largest gas flarers in the world. (Reporting by Simon Shuster, Editing by Peter Blackburn) (email@example.com; +7 495 775 1242)) ($1=36.30 Rouble)