Kremlin comes to rescue of Rosneft

MOSCOW, Sept. 8 (UPI) -- The Kremlin has a vested interest in ensuring sanctions-strapped oil company Rosneft can maintain operations, the Russian prime minister said Monday.

Western governments have enacted sanctions on Russia's energy and defense sectors in response to crises simmering on the Ukrainian border with Russia. When Russian oil company Rosneft was targeted, Chief Executive Officer Igor Sechin, himself sanctioned, he said the company's strategy was affected.

Russian Prime Minister Dmitry Medvedev told Russian business daily Vedemosti it was incumbent upon the government to prop up Rosneft with more than $40 billion from a national welfare fund.

"The company needs to keep up production, since Rosneft is a major contributor to the budget," he said. "In this regard, we have to help them by maintaining the investment level."

Sechin in July said the government-controlled oil company was operating under difficult conditions because of the sanctions, but added he was prepared for some "volatility."

Rosneft accounts for nearly half of all Russian oil production, a key driver of the nation's economy.

Medvedev said the $40 billion federal loan was reasonable, noting it's not designed to be repaid within the year.