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Wednesday, November 21, 2007

World Bank slams Russia`s dependence on oil

November 20, 2007 - Russia Today - Investment in Russia remains low relative to GDP, and plays only a “marginal role” in manufacturing and service sectors. That’s the gloomy conclusion of the World Bank, which lends money to developing nations, in a report published on Monday. The head of the World Bank in Russia, Klaus Rohland has revealed why the government will damage its own economy by putting up barriers to foreign direct investment in its uncompetitive service industries. He says the risks are springing from moving towards a protectionist economy. “The key temptation behind that raise would be for the government to raise protective barriers, and to shield companies from competition. Yet we believe that would be short-sided, because we know from worldwide expertise and experience that you only get competitive industries through competition,” Rohland said. The Chief Economist at Deutsche Bank Russia, Yaroslav Lassavolik revealed just how dependent the country was on its reserves of energy. “More than 2/3 of Foreign Direct Investment coming into Russia in the course of this year is going into the fuel sector which obviously a constraint from the point of view of quickly diversifying the economy. It’s no wonder that economic diversification given this polarisation especially centred around the fuel sector. This is the reason why economic diversification is such a priority,” Lassavolik said. Before his arrest, Deputy Finance Minister Sergey Storchak announced Russia would pay off 80% of its estimated $US 4 billion debt to the World Bank. Although experts call this as a prudent move, it also reveals a conservative fiscal policy which may not be prepared to liberalise its markets as foreign companies demand.

Turkmenistan Reaffirms Commitment To Russian-backed Caspian Gas-pipeline Plan

Berdymukhammedov11-21-2007 - Radio Liberty - In a speech to the cabinet in Ashgabat on November 19, President Gurbanguly Berdymukhammedov reaffirmed Turkmenistan's support for a Russian plan to construct a new natural-gas pipeline that would skirt the Caspian Sea, ITAR-TASS reported. He explained that "Turkmenistan adheres to its partnership obligations" and stressed that it "is making efforts to develop the Caspian pipeline project." The Russian project was first formulated in May, based on an agreement signed between the Turkmen, Kazakh, and Russian presidents. Speaking after his visit to Turkmenistan for an international energy conference, U.S. Energy Secretary Sam Bodman also said on November 20 that he "was not convinced" that Turkmenistan would fully support a rival U.S.-backed Caspian Sea gas pipeline that would bypass Russian territory.

Tuesday, November 20, 2007

Turkmenistan Opens Its Doors to Investors

turkmenistanNovember 15, 2007 - Reuters by Marat Gurt - ASHGABAT, Turkmenistan -- Global energy policy makers joined the race for Turkmenistan's vast oil and gas reserves Wednesday as two days of intense diplomacy kicked off in the reclusive Caspian nation. U.S. Energy Secretary Sam Bodman, EU Energy Commissioner Andris Piebalgs and executives from BP, Chevron and Russian companies flocked to Ashgabat for an oil conference marking the end of Turkmenistan's self-imposed isolation. Russia buys most of the country's natural gas at below market prices but Turkmenistan's new reformist leader, Gurbanguly Berdymukhammedov, is keen to cooperate closer with the West to ease reliance on Russia's pipeline network. "Turkmenistan has great potential which must be realized," Steven Mann, U.S. Deputy Assistant Secretary for South Asian Affairs, said on the sidelines of the conference. "And in this respect the United States of course will always support it." Turkmenistan, isolated from the world first under Soviet rule and later during the 21-year reign of former President Saparmurat Niyazov, is keen to showcase its improving investment climate and fresh opportunities for global oil companies. "Turkmenistan's potential to enter global markets depends on the possibilities of our gas transport system," Turkmen Oil Minister Baimurad Khojamukhammedov said. Since Niyazov's death last December, the West, Russia and China have intensified contacts with Turkmenistan, which plans to more than triple its gas production by 2030 from this year's planned 70 billion to 80 billion cubic meters of gas. Berdymukhammedov has agreed to build a pipeline that would boost supplies to Russia while tentatively agreeing to a U.S.-backed plan for a trans-Caspian pipeline designed to ease Europe's dependence on Russian gas imports. Speaking at the conference, Gazprom deputy chairman Valery Golubev said negotiations with Turkmenistan on a new Russia-backed Caspian Gas Pipeline were going as planned. "The Caspian Sea Pipeline is expected to be built by 2011 which will help double supplies [from Turkmenistan]," he said. "This would be the shortest way for European consumers." Golubev added that Gazprom was looking into the possibility of building a gas plant in the Caspian Sea port of Turkmenbashi but did not elaborate. Khojamukhammedov also said that Turkmenistan would hold a tender this year to build a petrochemical plant with a processing capacity of three million tons of oil per year. He said both domestic and foreign companies would be welcome to take part in the tender. "We will call an international tender to build a petrochemical complex in the east of the country with processing capacity of three million tons of oil and three billion cubic meters of gas," he said.

Russia will supply a third of European gas

11/15/2007 - MOSCOW -(RIA Novosti economic commentator Oleg Mityayev) - At the 20th World Energy Congress in Rome on November 11-15, Russian representatives confirmed that they have chosen Europe as a priority market of energy supplies for many years ahead. Gazprom, for instance, intends to increase its share in the European gas market from the current 26% to 33% by 2015. It seems that Russia is not particularly worried about the EU initiative to protect its domestic energy market, which was made public in October. Last month, the European Commission published a package of bills separating electricity transmission and distribution, and gas production and transportation. This may affect companies from the countries that supply energy resources to the European Union but are not part of it, such as the Russian gas monopoly Gazprom. The company is obviously interested in the purchase of electricity assets and gas infrastructure in Western Europe. Its deputy chairman Alexander Medvedev again voiced his discontent with the new EU legislation at the congress. Russian Energy and Industry Minister Viktor Khristenko was much more reserved at the forum. He observed that in changing the energy legislation the EU should understand that the consumers are only one link in the chain and it is important to consider the position of the suppliers as well. He added though that it would be inappropriate to speak about Russia's contradictions with the EU on the new legislative acts. "It is up to the EU to decide what laws to adopt," he said. Moreover, it is not yet clear what consequences these initiatives may have in the energy sphere if they are adopted. CEO of the German energy giant E.ON Dr. Wulf H. Bernotat said recently that Brussels' plans on reducing the size of companies are not likely to be carried out because major EU members such as France and Germany are against them. Even if Gazprom finds it difficult to acquire new energy assets in Europe, proceeds from gas exports to the EU are much more important for it and for the Russian budget. Gazprom's strategy is to build up its gas exports to Europe in the next few years. Despite the talks on gas supplies to China and Korea, the company still considers Europe its number one market. For the most part, gas exports will be based on long-term contracts. Judging by everything, it appears that Russia's role as an energy supplier of Europe will keep growing. However, experts are divided on the feasibility of Gazprom's ambitious plans. Some of them are confident that they will be carried out if apart from long-term contracts Gazprom attracts serious European investors. Others believe that it will be very difficult to build up exports because of the rapidly growing domestic demand for fuel.

Wednesday, November 14, 2007

Iraqi president says govt. controls 95% of oil export revenue

CAIRO, November 14 (RIA Novosti) - The government of Iraq controls 95% of proceeds from the export of the country's oil, President Jalal Talabani said on Wednesday. "We fully control the sources of oil, because that is our national wealth," the president said in an interview with the Cairo based Al-Ahram weekly. He said receipts from the crude sales are credited to a bank account in France with the government controlling 95%, and 5% being withheld by the United Nations to pay to other countries. The president said the United States troops deployed in Iraq do not control its oil resources, but help fight the illegal tapping of oil. Iraq has the world's third largest proven oil reserves, estimated by the country's Petroleum Ministry at 115 billion barrels, but experts say the country's oil potential is considerably higher. Iraq's official oil exports are roughly 1.7 million barrels per day, but according to local media, hundreds of thousands of barrels of oil are illegally exported on a daily basis.

StatoilHydro to specify Shtokman gas field investment in 2 years

MURMANSK, November 14 (RIA Novosti) - Norway's StatoilHydro, which holds a 24% stake in the Shtokman gas field in Russia's Arctic, said on Wednesday it will specify its investment in the project within two years. Russia's state-controlled natural gas giant Gazprom and StatoilHydro agreed on October 25 on the joint development of the Shtokman gas and condensate deposit in the Russian sector of the Barents Sea. Under the deal, StatoilHydro has a 24% interest, while France's Total and Gazprom have 25% and 51%, respectively. Per Kjaernes, the Norwegian company's manager in Russia, said: "So far, we have not carried out preparatory work and have not drafted a detailed plan to calculate the project's investments. StatoilHydro will be able to specify its investment in the project in two years." The ambitious project to develop the Arctic gas field, with estimated gas reserves of 3.7 trillion cubic meters, is intended to supply the Nord Stream pipeline from Russia to Germany, being built under the Baltic Sea. The Shtokman project cost is estimated at $30 billion

St. Petersburg bourse selected as trading floor for oil products

MOSCOW, November 14 (RIA Novosti) - A tender commission from Russia's economics ministry has selected the St. Petersburg exchange as the trading floor for crude derivatives, a deputy minister said on Wednesday. "Opinions differed, but the St. Petersburg exchange has been chosen by a majority," Kirill Androsov said. Russian President Vladimir Putin said in his state of the nation address to parliament last year that Russia, as a leading oil exporting nation, should establish its own oil exchange to trade crude and petroleum products in rubles. The economics ministry said in June that trading in the Russian Export Blend Crude Oil (REBCO) futures would move from the New York Mercantile Exchange (NYMEX) to a new commodity market in St. Petersburg. "Trading in the REBCO futures will move to St. Petersburg as soon as we register the new commodity exchange," Androsov said. The new blend, the third crude brand currently trading on the NYMEX, after WTI and Brent, is expected to replace Urals as Russia's price index used for calculating supply prices, export duties and mineral extraction tax. REBCO is expected to fetch a higher price than Urals, generally priced at a $5-6/bbl discount to Brent, as its quality is much nearer to Western standards.

Italy's ENI interested in Baltic LNG project

ROME, November 13 (RIA Novosti) - Italian oil and gas company Eni S.p.A. is interested in a project to build a liquefied natural gas plant.(LNG) on the coast of the Baltic Sea, the company's manager in Russia said on Tuesday. The Baltic LNG project, developed by Russian energy giant Gazprom [RTS: GAZP], stipulates the construction of a liquefied natural gas plant in Primorsk in northwestern Russia with a capacity of 5-7.2 million metric tons of liquefied natural gas a year. "We would be very much interested in joining this project," Carlo Meriggi told an Italian-Russian business forum held as part of the World Energy Congress in Rome. Meriggi also said Gazprom and Eni were jointly preparing feasibility studies for building a gas pipeline to run under the Black Sea directly from Russia to the European Union. Gazprom and Eni agreed in June to build the South Stream pipeline, which will deliver 30 billion cubic meters of gas annually via Bulgaria to Austria, Slovenia and Italy. The South Stream project replaces previous plans to extend the Blue Stream pipeline which runs from Russia to Turkey.

Rosneft plans to refine 1 mln barrels of oil a day in 2008

MOSCOW, November 13 (RIA Novosti) - Russia's state-controlled crude producer Rosneft [RTS: ROSN] intends to boost oil refining to 1 million barrels a day, a company vice-president said on Tuesday. Peter O'Brien told a Moscow business conference that Rosneft was increasing oil refining by 7% every year due to growing demand for fuel in Russia and a higher rate on return compared to crude sales, and that the company would "refine about 1 million barrels a day," next year. Rosneft, which became Russia's largest crude producer after acquiring most of the assets of bankrupt oil firm Yukos through liquidation auctions, earlier said it intended to boost oil output by 24.5% to 100.6 million metric tons (737 million barrels) in 2007.

Oil producer Rosneft to triple crude supplies to Asia by 2020

ROME, November 12 (RIA Novosti) - Russian state-controlled crude producer Rosneft [RTS: ROSN] intends to triple oil supplies to Asian countries by 2020 in a bid to diversify crude exports, the company's chief executive said on Monday. Speaking at the World Energy Congress in Rome, Sergei Bogdanchikov said the company's crude supplies to Asian countries would rise from the current 6% of its overall exports to 20% by 2020. Rosneft, which has become Russia's largest crude producer after acquiring most of the assets of bankrupt oil firm Yukos through liquidation auctions, earlier said it intended to boost oil output by 24.5% to 100.6 million metric tons (737 million barrels) in 2007.

Sakhalin-1 Launches Production

ARCHIVES Kommersant - OCTOBER 2005 - Commercial oil/gas production from Chaivo field, Sakhalin-1 consortium, started on Saturday, October 1, 2005. The crude oil from the field will be exported to Asian and Pacific countries. For the natural gas, no sales market has been determined yet with Khabarovskenergo and Khabarovskkraigaz as the sole clients and the management plans on Chinese shipment still undecided. Stephen Terni, president at Exxon Neftegaz Limited (subsidiary of ExxonMobil, Sakhalin-1 project operator), announced Saturday the Chaivo field will daily produce 6,300 tons of crude and 1.7 million cub m of gas by the end of this year and pile up production to 33,000 tons of crude and 7.1 million cub m of gas at close of the next year. At first, the crude will be sold in Russia (for instance, to Rosneft) with the export launch slated for the mid.-2006. Sakhalin-1 project covers three shelf fields of the northeastern Sakhalin – Chaivo, Odopty and Arkutun-Dagy and is implemented under the PSA of 1995. Exxon Neftegaz Limited holds 30 percent in Sakhalin-1, Japanese SODECO owns another 30 percent, Indian ONGC Videsh – 20 percent. Russian Rosneft holds the 20 percent interest via its subsidiaries – Sakhalinmorneftegaz-Shelf and RN-Astra. The aggregate recoverable reserves equal 307 million tons of crude and 485 billion cub m of gas; the required investment is estimated at $12.8 billion for the whole life of the project. Originally, the Sakhalin-1 project was targeted at the gas market of Japan, but failed to catch up with Sakhalin-2, which operator Sakhalin Energy was the first to clinch the contracts with Japan, meeting the LNG requirements of the latter till 2013. Therefore, Exxon Neftegaz is aggressively looking for other sales markets now. The talks with Chinese CNPC may finalize already next year. As reported earlier, the company intends to annually pump 8 billion cub m of gas through the yet in project Okha (Sakhalin)-Komsomolsk-on-Amur-Khabarovsk-China pipeline, which Exxon Neftegaz is designing. At present, the gas could be shipped only from Okha to Komsomolsk-on-Amur via a pipeline of 1-billion cub m annual capacity, which is to reach Khabarovsk before late 2006. The pipeline is constructed by Daltransgaz, where Russian Property Ministry owns 27.63 percent, Khabarovsk Region’s Property Ministry - 47.24 percent, Rosneft -14.32 percent, Rosneft-Sakhalinmorneftegaz – 10.68 percent, Perm Region’s authorities – 0.13 percent. In February, however, Rosneft President Sergey Bogdanchikov announced the intention to withdraw from Daltransgaz and offered the share to Russian gas monopoly Gazprom. The crucial hurdle was that Gazprom agreed to lay the pipe only to Khabarovsk, not to China and, therefore, faced strong opposition of the partners. The talks proved fruitless and Khabarovsk pipelining is likely to drag on, as the regional authorities lack the funds to independently construct the pipeline.

Oil Producers Step Up Political Pressure

Open Gallery...Nov. 13, 2007 - Kommersant - The prices for crude oil have hit all records this year, having soared to $98 per a barrel past week. No prerequisites for any decline have emerged so far. The rally on the global market of crude oil of this extent urges oil producing states to toughen control over their biggest oil fields. The influence on political arena is stepping up as well. As to the global consumers of crude oil, the current situation isn’t in their favor. The expanding nationalism of resources toughens the contract terms, driving down at the same time both investments and production efficiency. The winners are the biggest producers, such as Russia, Venezuela and Iran. Skyrocketing prices for crude oil fuel their super-profits and increase political pressure that they are exerting. Nowadays, the state-run oil companies control three-fourth of the crude oil worldwide, which negatively affects the assets of such giants as Exxon Mobil and Royal Dutch Shell. The OPEC is forecasted to generate record profits of $658 billion this year (vs. $605 billion in 2006). But producing states tend to inject funds not in development of new fields but in some other things, which curtails the reserves of crude oil. Venezuela’s President Hugo Chavez, for instance, uses the oil money to install Cuban-inspired socialism.

Friday, November 09, 2007

Societe General to Deal With Russia’s Assets

Daniel Bouton, the CEO of the French bank Societe GeneraleNov. 09, 2007 - Kommersant - Societe Generale Asset Management is getting ready for the market of Russia, where it will focus on individual clients of other Russia’s divisions of Societe Generale. Thanks to them, the analysts speculate, a new player may grab a sizeable share on the local market of asset management, which size goes up by 50 percent each year. Russia’s plans of Societe Generale Asset Management (SGAM) were officially confirmed at headquarters of Societe Generale, though the details would be given only in two or three months. The sources say SGAM prepares documents to be submitted to Federal Financial Market Service to get the asset management license. Societe Generale Asset Management (SGAM) is the subsidiary of France biggest bank group, Societe Generale Group. As of October 30, 2007, it managed the assets worth €375 billion. The company’s business extends to all types of securities. What’s more, SGAM manages €68.5 billion of alternative investments. The company renders services to all types of investors – the institutional, corporate and individual ones. In Russia, however, it is expected to focus on the individual clients, as the country’s retail sector evidently has money and the market of collective investments is booming here.

British Petroleum, Gazprom Step Up Talks on Purchase of TNK-BP Stake

November 9, 2007 - Reuters By Dmitry Zhdannikov – MOSCOW — BP and Gazprom are holding intensive talks on the possibility of Gazprom buying into BP’s Russian venture, TNK-BP, industry sources said Wednesday. Such a deal would mark another milestone in a Kremlin drive to reassert control over the energy industry, which has alarmed foreign oil majors but not deterred them from doing business in resource-rich Russia. BP chief executive Tony Hayward, who flew to Moscow for high-level talks in May and September, met Gazprom’s chief executive, Alexei Miller, again Tuesday night. “The last meeting took place in Germany at [Tuesday’s] Champion’s League football match between Schalke 04 and Chelsea,” a Gazprom source said. Photographs of the meeting showed the two bosses at the match, smiling and draped in blue-and-white Schalke scarves. BP has a 50 percent stake in TNK-BP, the country’s third-biggest oil producer, while a group of Russian and U.S. shareholders owns the remaining 50 percent. BP’s spokesman in Moscow, Vladimir Buyanov, confirmed that the two chief executives met Tuesday, but declined to comment on the nature of their talks. “It is natural for the companies’ heads to meet from time to time. I would also remind you that BP, Gazprom and TNK-BP signed a deal in June to set up a strategic alliance,” he said. Under the pact, Gazprom was to buy TNK-BP’s giant Kovykta gas field in eastern Siberia for $700 million to $900 million, while the three firms also plan a broader international venture. The Kovykta sale is due to close before the end of the year, but an industry source said that now it might not happen. “I see a chance of Kovykta never happening at all. It would make no sense if there is a broader deal,” he said. Another industry source said a five-year lock-up agreement that the shareholders signed when BP bought its stake in TNK-BP in 2003 would expire within months. “Talks have intensified,” said the source, who suggested that BP had become keener to link up with a Russian state company since Hayward took charge at BP from John Browne in May. A source close to TNK-BP’s owners said its billionaire shareholders, Viktor Vekselberg, Len Blavatnik, Mikhail Fridman and German Khan, were open to the idea of a sale. At market prices, 50 percent of TNK-BP would be worth $18.5 billion. Vekselberg and Fridman have both denied that they have plans to sell, but that has not quelled speculation of a deal before voters elect a successor to President Vladimir Putin in March. Gazprom served as the vehicle through which the Kremlin regained control of the vast Sakhalin-2 oil and gas project from Shell a year ago. Shell chief executive Jeroen van der Veer saying that the English-Dutch company would enter a “huge-scale” oil and gas project on the Yamal Peninsula.

Itera may IPO 25% of authorized capital

MOSCOW, November 8 (RIA Novosti) - Itera might place 25% of its charter capital during an initial public offering planned for 2008, the head of the Russian natural gas producer said on Thursday. Vladimir Makeyev said it would be up to shareholders to make a final decision. Itera plans to spin off its oil assets following recommendations from investment banks, and will only retain its gas assets and trading companies. Renaissance Capital bank will organize the sales. Sergei Vorobyov, deputy chairman of the company's board, said Itera would sell its oil assets by the end of the first quarter of 2008. Their appreciation is $500 million, and they will most likely be sold in parts, he said. Vorobyov also said the company expected its net profit to grow 40% in 2007 to reach 2.8 billion rubles. Earnings will total 30 billion rubles, or 25% more than last year, he said. The independent natural gas producer has authorized capital of 60 mln rubles ($2.4 mln). The company is 99.99% owned by Itera Holdings Limited

Wednesday, November 07, 2007

Shell Eyes Russian Northern Siberian Gas Field

07.11.2007 - [Neftegaz.RU] - Dutch oil giant Shell wants to participate in the exploitation of a Russian large gas field in northern Siberia. The Bovanenko field, owned by Russian gas giant Gazprom, could produce 250 billion cubic meters of gas a year, the report said. This is three times the gas production in the Netherlands. Shell had a big row with Gazprom over the Sachalin 2 gas project in the past years, but relations between the two have improved remarkably. Thanks to a joint venture with Rosneft, Shell has the prospect of new oil and gas projects in Russia and hopes to be able to augment its reserves in this way. Dutch Prime Minister Jan Peter Balkenende and Economic Affairs State Secretary Frank Heemskerk started a four-day visit to Moscowon Monday. They are accompanied by a big business delegation including Shell officials, and the primary aim is reportedly to lobby for Dutch companies in the Jamal project.

Thursday, November 01, 2007

Itera Targeted at Triplication

Nov. 01, 2007 - Kommersant - Itera has confirmed the intention to sell oil and other non-core assets, counting to generate up to $500 million from it and investing the money in gas business. The plan is to triple gas production to from 20 billion cu meters to 22 billion cu meters in the following five years and the company needs at least $700 million to $800 million for this purpose. Yesterday, Itera released the information memorandum elaborated for the future bond loan worth 5 billion rubles. The document confirms the plans for the asset restructuring, whereby Itera will gradually step up its direct ownership in gas production enterprises and sales companies and withdraw from non-core and oil assets. It will sell the latter to generate money for buying new promising gas production companies. According to the company’s representatives, the overall proven reserves of its oil fields equal 90.4 million barrels (12.3 million tons), the probable reserves are estimated at 127 million barrels (17.3 million tons) and the possible ones equal 457 million barrels (58.2 million tons). Under Itera’s estimate, their worth is $300 million to $500 million, depending on the market opportunities. Itera will attempt to dispose of the fields by late 2008, selling them not via a single lot, but one by one – the fields are located in different regions of Russia. The analysts say the fair value of the assets is $500 million. In Itera, they are going to spend money to develop gas business both in Russia and overseas, but mostly in Russia and mostly in Yamal-Nenets Autonomous District.

Sweden Looking for Alternative to Nord Stream

Nov. 01, 2007 - Kommersant - Treading in Poland’s steps, Sweden has called for additional environmental assessment for alternative routes of Nord Stream off-shore gas pipeline. The effort will require roughly $30 million in addition and the analysts say that Sweden will probably shelve the project implementation for a few years. Sweden’s Minister for the Environment Andreas Carlgren announced yesterday that, in the Sweden’s economic zone of the Baltic Sea, the Nord Stream pipeline runs through the problem and risky areas, including Natura 2000 nature conservation area and the places of mines and chemical weapons’ disposal. To decide on the project, the minister said, the government needs a complete and high-grade report that would compare potential environmental aftereffects of this route to potential aftereffects of alternative directions. In substance, this statement of the top-ranked bureaucrat urges Nord Stream AG (Gazprom has 51 percent, BASF and E.ON own 24.5 percent each) to conduct additional environmental impact assessment for alternative routes. But the route of the pipeline has been adjusted already. Past summer, Nord Stream was moved from the challenged area of Poland’s economic zone. Poland, however, never stopped calling for the additional environmental assessment, counting on the Sweden’s support, which it actually got yesterday.

Tatneft Offered Joint Work in Iraq

iraqOct. 30, 2007 - Kommersant - U.S. Hyperion Resources has urged Russia’s Tatneft to develop joint projects in Iraq. But no foreign company may operate in Iraq until a new act on crude oil that will govern the work with subsoil wealth of the country is signed there. U.S. Hyperion Resources has proposed to Tatneft to develop joint projects in Iraq, Russia’s company reported in its Neftyanye Vesti (Crude News) corporate newspaper. Tatneft delegation and delegation of Hyperion that was led by its Chief Executive Albert Huddleston met past week. Hyperion said it concluded a memorandum with Iraq’s Oil Ministry authorizing it to work in the country. Although quite a number of companies have approached them with the partnership offers, they would like to start with Tatneft, Huddleston said. As to Tatneft, its spokesman Rustam Rafikov said the parties have inked only the protocol on intentions that doesn’t specify any definite form of cooperation. Tatneft is involved in a few projects in the Arab world, operating, in particular, in Syria, Libya and Oman. It once worked in Iraq, rendering services to Iraq’s Northern Oil Company (drilling 45 wells for Iraqi partner), but it had to terminate all activities in March 2003, when the war began. Despite the strong will to revive that contract, the company hasn’t done it yet, representatives of Tatneft said. Tatneft’s potential partner, Texas Hyperion Resources drew the public attention in June by winning the contract for constructing a refinery of 20-million ton capacity in South Dakota. The project budget amounts to $8 billion, while the company’s turnover is no more than $12.3 million, according to the Dun & Bradstreet database. But Hyperion Resources has money. The farther in law of its chief, Mr Huddleston is the son of oil multimillionaire Haroldson Lafayette Hunt, the founder of U.S. Hunt Oil.

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