RusEnergy

30/09/2005 (13:12) RZD News - The Sakhalin-1 oil and gas project operated by Exxon Neftegaz Limited (ENL) will start producing the first crude and gas over the weekend. ENL said the Yastreb (Hawk) platform on the northeastern coast of the island will begin on Saturday to pump hydrocarbons from the Chayvo field on the shelf of the Sea of Okhotsk. Ten inclined 8 to 11-km long wells have been drilled to the deposit. At the same time the Orlan platform is drilling 20 vertical wells to the reserves. Exxon Neftegaz said it had completed on Friday connecting its pipelines to Russian trunklines going from Sakhalin to Komsomolsk-on-Amur and De-Kastri settlement in Khabarovsk region. Sakhalin-1 annual production is to comprise 12.5 million tons. South Korea is building five tankers on Russian orders with a displacement of 100 thousand tons each for transportation of the crude. ENL Vice-President Mark Hackney told Tass natural gas from Chayvo will be used mostly for the needs of Khabarovsk region. By 2009 gas sales to the region will reach three billion cubic meters a year. Besides Chayvo, Exxon Neftegaz and its partners are developing the Odoptu and Arkutun-Dagi fields in the northeastern shelf of Sakhalin. Potential reserves of the fields are estimated at 307 million tons of oil and 485 billion cubic meters of gas. Capital investments into the development of all fields of the Sakhalin-1 project are estimated at over 12 billion US dollars. Production of hydrocarbons has been going on since 1999 at the Piltun-Astokh oil field of the Sakhalin-2 project. The Molikpak platform of the Sakhalin Energy Company is engaged in production. From 2008 five platforms will extract oil and gas on the Sakhalin shelf. The island will annually deliver to the world market over 20 million tons of oil and 9.6 million tons of liquefied natural gas, reports ITAR-TASS.

29.09.2005 14:49 MSK MosNews - Getty Petroleum Marketing, the U.S. subsidiary of Russia's largest oil company Lukoil, has secured a $475 million loan, Russian business daily Vedomosti reported on Thursday, Sept. 29. The Bloomberg agency originally reported about the loan two weeks ago, quoting an unidentified banker involved in the deal. The banker said that the unsecured loan is being arranged by ABN Amro and Calyon. Half of the loan will be spent on developing deliveries of Russian gasoline to the United States. There the gasoline will be refined at oil refineries purchased by Lukoil, and brought up to U.S. standards. Afterwards the gasoline will be sold through Lukoil's gas station network. The Russian oil major controls 8 percent of the retail oil products market in the Northeast of the United States and is the region's third largest market player. In 2000 Lukoil bought the Getty gas station network for $70 million, and then added another 795 gas stations, which belonged to ConocoPhillips and worked under the Mobil brand. The second deal was made in 2004 and the sum of the purchase was $265 million. Analysts note that in the first seven months of this year the export of oil products from Russia grew by 43 percent, while the export of crude oil grew by only 10 percent. This situation is brought about by the fact that export tariffs for oil products are considerably lower than those for crude oil, although they also keep rising along with world oil prices.

30.09.2005 12:48 MSK MosNews - Russia's largest oil company Lukoil has offered to buy Toronto-listed Nelson Resources, which holds rights to potentially huge Kazakh oil reserves, for $2 billion in cash. The price is a 15 percent discount on the market value of the firm, the Reuters agency reported on Friday, Sept. 30.
Nelson, with almost all its assets in the former ex-Soviet republic of Kazakhstan, said the price offered was equal to around 2.57 billion Canadian dollars, compared with Thursday's closing price of 2.96 billion Canadian dollars.
"The parties have agreed to negotiate the definitive agreements by Oct. 12," Nelson said in a statement, adding that it was keen to ensure that the offer would be for 100 percent of its shares.
Some analysts were surprised at the level of the offer. "It is 37 percent below our fair value, and the reasons for this discount are not clear," said Dmitry Lukashov from Aton Capital brokerage, quoted by the agency. "We will recommend to those of our clients, who are shareholders in Nelson, to vote against this deal," said Lukashov.
Lukoil is already heavily present in Kazakhstan and has said it wanted to further expand in the country, which is set to become one of the key global oil players in the next few decades as it sits on massive hydrocarbon reserves.
Nelson has stakes in several oil firms or separate fields in Kazakhstan, including Alibekmola, Kozhasai, Zhambai, North Buzachi, Karakuduk and Arman fields. The firm says its net proven and probable reserves are around 270 million barrels, but its reserves in place could be potentially as high as 2 billion barrels.

30.09.2005 00:10 [Neftegaz.ru] - Getty Petroleum Marketing, the U.S. subsidiary of Russia’s largest oil company Lukoil, has secured a $475 million loan, Russian business daily Vedomosti reported on Thursday, Sept. 29. The Bloomberg agency originally reported about the loan two weeks ago, quoting an unidentified banker involved in the deal. The banker said that the unsecured loan is being arranged by ABN Amro and Calyon. Half of the loan will be spent on developing deliveries of Russian gasoline to the United States. There the gasoline will be refined at oil refineries purchased by Lukoil, and brought up to U.S. standards. Afterwards the gasoline will be sold through Lukoil’s gas station network. The Russian oil major controls 8 percent of the retail oil products market in the Northeast of the United States and is the region’s third largest market player. In 2000 Lukoil bought the Getty gas station network for $70 million, and then added another 795 gas stations, which belonged to ConocoPhillips and worked under the Mobil brand. The second deal was made in 2004 and the sum of the purchase was $265 million. Analysts note that in the first seven months of this year the export of oil products from Russia grew by 43 percent, while the export of crude oil grew by only 10 percent. This situation is brought about by the fact that export tariffs for oil products are considerably lower than those for crude oil, although they also keep rising along with world oil prices.

MOSCOW, September 29 (RIA Novosti) - Russia's largest crude producer, LUKoil, and America's ConocoPhillips oil major have set up a joint group to acquire new assets in Russia and abroad, LUKoil's vice-president said Thursday. The group will look into the possibility of purchasing Lithuania's Mazeikiu Nafta oil company, Leonid Fedun said. It is the only crude oil refinery in the Baltic republics. "[LUKoil's] average annual production growth rate in the next 10 years will be 5%-6%. This concerns the assets the company owns at the moment and does not include future acquisitions," Fedun said. LUKoil head Vagit Alekperov met the Lithuanian prime minister Tuesday to discuss buying the government's share in Mazeikiu Nafta. LUKoil, which runs more than 100 gas stations in Lithuania, had proposed linking West Siberian oil deposits to Mazeikiu Nafta's refinery and to European consumers. Since the 1990s, it has tried twice to gain control of the Lithuanian company. In 1999, U.S. pipeline manufacturer Williams International bought stock in the company. LUKoil responded by suspending oil supplies to Mazeikiu. Several years later, the American company sold its shares to Yukos. Yukos Finance, a Yukos subsidiary registered in the Netherlands, holds 53.7% in Mazeikiu Nafta, and the Lithuanian government owns 40.66%. Earlier the Lithuanian prime minister called LUKoil one of the three main contenders for Mazeikiu Nafta along with the Russian-British TNK-BP concern, and Austria-based Baltic Holding. Fedun also said LUKoil was the only [oil] company in Russia with no tax problems. "The tax authorities reaffirmed LUKoil had paid off all its tax arrears," he said.

BRIEFLY RBC, 29.09.2005, Moscow 18:46:55.LUKoil and ConocoPhillips created a group to acquire new assets, LUKoil vice-president Leonid Fedun reported today. The group plans to consider issues, connected with Russia's new acquisitions abroad, including purchase of a stake in the Lithuanian refinery Mazeikiu Nafta (YUKOS subsidiary). ConocoPhillips holds more than 13 percent of LUKoil shares and projects to boost its stake to 20 percent.

BRIEFLY RBC, 29.09.2005, Moscow 18:02:36.Investments of $200bn up to 2020 will be needed to increase oil production by 3 to 5 percent per year, LUKoil's Vice President Leonid Fedun has told reporters today. This figure is the total volume of investments in oil production by Russian companies, he commented. "An increase of 10 percent will never happen again," he said. As reported earlier, production of oil with gas condensate grew 8.9 percent to 458.7m tons in Russia in 2004.

MOSCOW, September 29 (RIA Novosti) - LUKoil, Russia's largest oil producer, plans to start direct oil exports to China late this year or early next, the company's vice president said Thursday. Leonid Fedun said minimal supplies would be 1.5 million metric tons of oil per year. He also said LUKoil hoped to buy PetroKazakhstan Inc.'s 50% stake in Turgai Petroleum, operating in the northern sector of the Kumkol oil field in south-western Kazakhstan. LUKoil Overseas Kumkol BV owns the other 50% stake, worth an estimated $700 million. "In this case, exports to China may reach 2.5 million metric tons of oil per year," Fedun said. LUKoil accounts for 19% of Russia's and 2% of the world's crude oil output and has the equivalent of 20 billion barrels of oil in proved reserves, 1.5% of world reserves. The company has operations in 60 Russian regions and 25 other countries.

MOSCOW, September 29 (RIA Novosti) - A decision on whether to enlarge the U.S.-Russian joint venture Exxon Neftegaz's licensed hydrocarbon production area in Sakhalin, off Russia's Pacific Coast, will be made in two to three weeks, after an expert panel submits its conclusion, Russia's natural resources minister said Thursday. Yuri Trutnev told reporters that the oil and natural gas field currently being developed by the subsidiary of U.S. petroleum giant Exxon Mobil as part of the Sakhalin I project would be expanded into the Chaivo field if the company managed to prove a geological link between the two deposits. The Sakhalin I project, involving an international consortium of Exxon Neftegaz (30%), Russia's Rosneft (20%), India's ONGC (20%), and Japan's SODECO (30%), provides for the development of the Arkutun-Dagi, Odoptu, and Chaivo deposits in the island's northeastern shelf. Their recoverable reserves are estimated to total 2.3 billion barrels of oil and 17.1 trillion cubic feet of natural gas.