RusEnergy

MOSCOW, December 19 (RIA Novosti) - Russia's environmental regulator said on Wednesday it is fining the operator of the Sakhalin II oil and gas project in the Far East more than 390 million rubles ($15.8 million) for deforestation. Oleg Mitvol, deputy head of Rosprirodnadzor, said Sakhalin Energy had the option of paying the damages voluntarily. Otherwise, "the damages will be obtained through a procedure prescribed by law," he said. The ambitious Sakhalin II project, formerly led by Anglo-Dutch oil major Shell, was subjected to months of intense pressure last year from Russian authorities, who accused it of inflicting major environmental damage on Sakhalin Island, including deforestation, toxic waste dumping and soil erosion. The dispute was largely resolved after Russian natural gas monopoly Gazprom acquired a controlling stake (50% plus one share) in the project last December, and authorities coordinated in March 2007 a plan to fix the damage. The minority partners in the project, Royal Dutch Shell, Mitsui and Mitsubishi, currently hold 27.5%, 12.5% and 10% stakes in Sakhalin II.

BUDAPEST, December 7 (RIA Novosti) - A trans-Caspian gas pipeline project bypassing Russia would not hurt its interests or the interests of the country's energy giant Gazprom, a deputy industry and energy minister said on Friday. "That point of view only exists in the minds of the media," Ivan Materov said. The $6 billion pipeline project is expected to link energy-rich Central Asia to Europe through Turkey, Bulgaria, Romania, Hungary and Austria. Construction is scheduled to begin in 2009, enabling the pipeline to go on stream in 2012. The official also said that Russia does not regard the Nabucco project as a rival or alternative to the South Stream project, which is designed to carry gas to southern Europe from Russia. He said gas pumped along the Nabucco pipeline would be too expensive and uncompetitive, compared to South Stream. The European Union wants the project to diversify its supply routes away from Russia and to boost European energy security. Russia's energy giant Gazprom and Italy's Eni signed a deal in late November to set up a joint venture to conduct a feasibility study for South Stream at a ceremony in Moscow attended by President Vladimir Putin and Italian Prime Minister Romano Prodi. The pipeline is set to cover over 900 km (560 miles) under the Black Sea from Russia to Bulgaria and supply 30 billion cubic meters of gas annually. Possible routes for the land section of the pipeline in Europe are still being discussed. The project is set to strengthen Russia's position as Europe's main energy supplier. The country already provides 40% of the continent's natural gas needs. Russia has sought to build direct export routes to the EU since bitter disputes with the ex-Soviet republics Ukraine and Belarus, which affected supplies to Europe. European nations have expressed concerns over growing energy dependence on Russia and sought to diversify supplies to enhance their energy security. The Russian Kommersant daily said on Thursday that Hungary's oil and gas company MOL had suggested merging at least eight gas transportation companies in Central Europe into a consortium, tentatively called New Europe Transmission System, in a bid to secure more beneficial loans, including for Nabucco.

December 07, 2007 - RigZone - Caspian Services has broken ground for the construction of its Atash marine base facility at the Port of Bautino on Kazakhstan's Caspian Sea coast. Preliminary earth works have begun at the site with the expectation being that phase one of the facility, consisting of a level site area, wharf front, breakwater, dredged harbor and vessel maintenance area will be completed and operational by November 2008. Phase two of the marine base project, consisting of warehouse and office space, a water desalination plant and fueling station, is expected to be completed and operational by October 2009. The marine base facility is an 80 million USD project jointly funded by the European Bank for Reconstruction and Development and Caspian. The marine base will enable Caspian to provide an unparalleled range of services to the oil industry exploring the massive reserves of the Kazakhstan sector of the North Caspian Sea

ASTANA, December 4 (RIA Novosti) - U.S. oil major Exxon Mobil refused to transfer to Kazakhstan part of its stake in a project to develop a massive oil field on the country's Caspian shelf, the Kazakh energy minister said on Tuesday. Exxon Mobil is a member of an international consortium set up to develop the Kashagan oil field. Kazakhstan's state-run oil and gas company KazMunaiGas announced on Sunday that all the parties except one had agreed to transfer parts of their stakes in the project to increase the Kazakh government's share, as a compromise over delays and a cost rise. When asked which company had denied Kazakhstan a share in the project, Sauat Mynbayev named Exxon. The Kashagan field is currently operated by Eni under a production sharing agreement. The Italian oil company, Royal Dutch Shell, Exxon Mobil and Total hold 18.5% each in the project, while ConocoPhillips has 9.3%, and Japan's Inpex and Kazakhstan's KazMunaiGas own 8.3% each. The Kazakh government suspended Eni's license to develop the Kashagan field for three months in late August. The Kazakh Ministry of Environmental Protection said operations by Eni could cause disastrous environmental damage and destroy local flora and fauna. In late July, the project operator suggested that the deadline to begin commercial production should be shifted from the second half of 2008 to the second half of 2010, with operating costs increasing from $57 billion to $136 billion. In line with Sunday's compromise, fixed in a memorandum of understanding, the parties are to complete talks by December 20 on the transfer of shares. According to the latest estimates, Kashagan's recoverable reserves amount to 7-9 billion barrels of oil.

Dec. 04, 2007 - Kommersant - Russian authorities have taken direct control of the 31 largest natural gas deposits remaining in the undistributed fund by declaring them objects of federal significance, as having strategic importance for Russia's gas supply. That means that a license to develop one of them can be granted only an order of the government. They can be distributed beginning in 2009, when the government will have the right to do so without holding an auction or competition. Gazprom is the leading contender for them. The deposits include five in Yakutia, the largest of which is the Chayandinsko deposit with 1.3 trillion cu. m. of gas; 18 in the Yamal Nenets Autonomous Area, the largest of which are the Kruzenshternskoe deposit with 1.675 trillion cu. m., the Malyginskoe with 745.1 billion cu. m. and the Severo-Tambaiskoe with 929.1 billion cu. m.; and nine on the Barents, Karsk and Okhotsk Sea shelves. Three smaller deposits on a list drawn up by the Ministry of Natural Resources in February for designation as strategic do not appear on the list approved by Prime Minister Viktor Zubkov. Those are the Deryabinskoe deposit, with 50.6 billion cu. m.; the Vaneivisskoe with 85 billion cu. m.; and the Kumzhinskoe, with 94.2 billion cu. m. Under legislation, the government can grant the right to use deposits of federal significance without competition to organizations that explore them themselves, to the owner of the unified gas system (i.e., Gazprom) or to the owner of regional networks. The regional networks are Norilskgazprom, Sakhatransneftegaz, Daltransgaz, Rosneft and Sakhalin Energy, which Gazprom owns 51 percent of. The new status of the deposits will prevent them from falling into the hands of foreign investors. Analysts say that Gazprom and NOVATEK will be the main contenders for the deposits. Gazprom is not likely to receive all of them, however, since even its investment funds would be insufficient to develop that number of deposits at the pace the government is likely to desire to guarantee a stable income from them.

November 19, 2007 - Reuters by Emma Graham-Harrison - BEIJING -- Chinese oil company CNPC and Gazprom have agreed a gas pricing deal that should unlock a major pipeline plan, but it may come at a higher cost than Beijing wanted, the Xinhua news agency cited a Russian executive as saying Saturday. Alexander Medvedev, Gazprom's deputy chairman, said the two sides had reached consensus on the pricing mechanism for fuel piped from Russia to China after months of wrangling that had held up the start of work. However he added that negotiations "would not be influenced by China's low natural gas import prices," Xinhua said, without giving further details. Beijing holds state-set gas prices below international market levels, while Gazprom had demanded the gas export price for China should be at least comparable with supplies to Europe, after taking transportation costs into account. Russian media have reported that China was refusing to pay more than $100 per 1,000 cubic meters, similar to current Russian domestic prices and far below the European price of around $250 per 1,000 cubic meters. Gazprom, which has a monopoly on export of the fuel, was waiting for a deal to be reached to start construction. But eventually, under a deal signed last year, two pipelines either side of Mongolia could deliver up to 80 billion cubic meters of gas per year -- almost double the amount the company sells to Germany, its top customer in Europe. Moscow has agreed in principle to begin pumping gas to China through the west link in 2011 and by the east link in 2016, the country's top energy official said this summer. The first pipeline would be fed with output from western Siberian fields, Gazprom said last year. Gas for a second pipeline could come from Sakhalin and maybe the Kovykta field in East Siberia. China has hedged against the slow-going Russian deal and upped pressure on Moscow by pushing for imports from Turkmenistan and Myanmar. CNPC, parent of listed PetroChina, has agreed to import an annual 30 billion cubic meters of gas, or 60 percent of the country's total consumption last year, from Turkmenistan with the first gas flow targeted for as early as 2009. Turkmen media reported in August that construction had begun on a 7,000-kilometer pipeline to take the fuel to China by 2009, bypassing its traditional export market of Russia. In China, the gas will be fed through a pipeline linking the sparsely populated west with booming coastal regions, which can more easily afford to replace dirty-burning coal. Beijing wants to more than triple the use of the cleaner fuel, which now provides barely 3 percent of China's energy, to 200 bcm per year by 2020. Its domestic output is growing by around 20 percent per year, but cannot meet demand and import deals have been hampered by price controls as international markets soared. The government has pledged eventually to free up prices, but worries about inflation and unrest mean it has made little progress in recent years -- although this month it made the first rate increase since late 2005, adding 0.4 yuan ($0.539) per cubic meter to costs for industrial and transport users.

ASTANA, December 4 (RIA Novosti) - U.S. oil major Exxon Mobil refused to transfer to Kazakhstan part of its stake in a project to develop a massive oil field on the country's Caspian shelf, the Kazakh energy minister said on Tuesday. Exxon Mobil is a member of an international consortium set up to develop the Kashagan oil field. Kazakhstan's state-run oil and gas company KazMunaiGas announced on Sunday that all the parties except one had agreed to transfer parts of their stakes in the project to increase the Kazakh government's share, as a compromise over delays and a cost rise. When asked which company had denied Kazakhstan a share in the project, Sauat Mynbayev named Exxon. The Kashagan field is currently operated by Eni under a production sharing agreement. The Italian oil company, Royal Dutch Shell, Exxon Mobil and Total hold 18.5% each in the project, while ConocoPhillips has 9.3%, and Japan's Inpex and Kazakhstan's KazMunaiGas own 8.3% each. The Kazakh government suspended Eni's license to develop the Kashagan field for three months in late August. The Kazakh Ministry of Environmental Protection said operations by Eni could cause disastrous environmental damage and destroy local flora and fauna. In late July, the project operator suggested that the deadline to begin commercial production should be shifted from the second half of 2008 to the second half of 2010, with operating costs increasing from $57 billion to $136 billion. In line with Sunday's compromise, fixed in a memorandum of understanding, the parties are to complete talks by December 20 on the transfer of shares. According to the latest estimates, Kashagan's recoverable reserves amount to 7-9 billion barrels of oil.