Thursday, February 28, 2008
Itera completes investment in U.S. bio fuel production
MOSCOW, February 28 (RIA Novosti) - Russia's Itera Ethanol LLC, a subsidiary of the Itera Group, has made its final investment in a $265 million project to produce bioethanol in Clearfield, Pennsylvania, as part of an investment team. BioEnergy International LLC, a science and technology company committed to developing technologies to produce biological fuels and chemicals from renewable resources, plans to build a plant by late 2009 to produce 409.32 million liters of denatured ethanol a year, as well as pet foods. A similar plant is to be later built in Louisiana. "We consider it a priority to join the development and introduction of promising technology in the production of environmentally friendly fuels and alternative energy sources. We plan to develop similar projects in Russia and in the CIS," said Igor Makarov, Itera Group president, on Thursday. Itera made its first investment in BioEnergy international LLC in May 2006 to provide funds for initial infrastructure development, the company says on its website. The investment team also includes TD Banknorth, WestLB, Plainfield Asset Management, Camulos Capital and Context Capital Management. ITERA Ethanol LLC is a subsidiary of ITERA USA Inc. (based in Jacksonville, Florida), making part of Itera Group. ITERA USA Inc. specializes in attracting investment and develops high-technology projects.
Shell and Tatneft tie the knot
26 February 2008 - Upstream OnLine - Russian producer Tatneft and supermajor Shell plan to work together from the second quarter to tap heavy oil deposits in Russia as part of a broader deal set up by the two companies last year. Investments would make sense if the joint venture produced in the range of 5 million tonnes per year (100,000 barrels per day) at the 12 bitumen deposits in Tatarstan which Tatneft controls, Tatneft spokesman Vasily Mozgovoi told Reuters. Tatneft and industry analysts have said Tatarstan might hold between 1.5 billion tonnes and 7 billion tonnes of bitumen oil resources. If confirmed, the biggest figure would represent over half of Russia's total crude reserves as estimated by BP in its latest Annual Statistical Review. The two companies said they might also consider forging a joint venture in the future to acquire new exploration licences. The deal has allowed Shell to expand its presence in Russia again after it was forced to surrender control of the Sakhalin 2 project in 2006.
RussNeft ex-head sets up oil company in Azerbaijan - paper
MOSCOW, February 26 (RIA Novosti) - Structures close to RussNeft ex-head Mikhail Gutseriyev, currently wanted in Russia, completed a deal to buy two oil operators in Azerbaijan from Canada's Nations Energy, a Russian daily said on Tuesday. Vremya Novostei said Gutseriyev's allies began preparing the deal back last spring. As a result, Britain's Global Energy controlled by Gutseriyev paid $340 million for an 85% stake in the Karasu Operating Company and 80% in the Kura Valley Operating Company. Sources close to Gutseriyev say quite possibly these oil assets will not be the last acquisitions by Global Energy in Azerbaijan, suggesting that Gutseriyev and his allies are setting up a new oil company, this time in the South Caucasus republic. RussNeft former CEO Gutseriyev resigned July 30, 2007 amid accusations of tax evasion and running an illegal business. The Interior Ministry issued an arrest warrant last year and applied to Interpol for him to be put on the international wanted list. He is believed to be living abroad according to the ministry's investigators. RussNeft, one of Russia's top ten crude producers with recoverable reserves of more than 630 million metric tons (4.6 billion barrels), faces substantial back-tax claims.
Police raid Slavneft HQ in tax probe
21 February 2008 - Upstream OnLine - Police raided the headquarters of Russian producer Slavneft today, confiscating documents as part of a five-year-old tax evasion investigation, a company official said. Slavneft is a 50/50 venture between gas export monopoly Gazprom's oil arm Gazprom Neft and TNK-BP - itself a venture between BP and a group of Russian billionaire shareholders. Gazprom became a shareholder of mid-sized Slavneft in 2005 when it bought Sibneft, later renamed Gazprom Neft, from billionaire Roman Abramovich. That means any tax claim, if confirmed by a court, would have no recourse on Gazprom, but only on TNK-BP and Sibneft's former owners, a Reuters report said. A Slavneft spokesman told the news agency the tax evasion investigation related to allegations that a trading company registered in Kalmykia and later bought by Slavneft, had neglected to pay tax. "We undergo regular international standards audits and are regularly checked by tax authorities. Previous audits and checks have produced no claims for the period of 2003-2007," the spokesman told Reuters.
Friday, February 22, 2008
Rosneft secures $3 bln loan
MOSCOW, February 22 (RIA Novosti) - Rosneft (LSE: ROSN) has received a $3 billion loan from an international banking group, the Russian state-run oil company said on Friday. "The 5-year loan carries an interest rate of LIBOR+0.95% and is secured by export contracts for sale of crude oil," Rosneft said in a news release. Proceeds to the amount of $3 billion have been used to repay bridging loans raised last year to finance the purchase of Yukos assets. The Yukos assets were sold off as part of an auction last year, the acquisition firmly established Rosneft as a top crude producer in Russia. The Facility is arranged and fully underwritten by banks, including ABN Amro Bank N. V., Banco Bilbao Vizcaya Argentaria S. A., Barclays Bank PLC, Bayerische Landesbank, BNP Paribas, Deutsche Bank AG, ING Bank N. V., JPMorgan, Mizuho Corporate Bank, Ltd, JSB "Orgresbank" (part of Nordea), Societe Generale S. A., Sumitomo Mitsui Finance Dublin Ltd, The Bank of Tokyo-Mitsubishi UFJ, Ltd, WestLB AG (as the Mandated Lead Arrangers).
Wednesday, February 20, 2008
Rosneft lines up $2.6bn loan
19 February 2008 - Upstream OnLine - Russian oil giant Rosneft has appointed 13 banks to lead a $2.6 billion five-year loan secured on oil export revenue with the door open for more lenders to join as mandated lead arrangers which would increase the facility amount. The loan will partly refinance $11.75 billion of bridge loans extended last year to finance Rosneft's deal to buy assets belonging to bankrupt oil producer Yukos. So far, 13 mandated lead arrangers have committed $200 million each to the deal. They are ABN Amro, Bank of Tokyo-Mitsubishi, Barclays, Bayern, BBVA, BNP Paribas, Deutsche Bank, ING, JP Morgan, Nordea, Societe Generale, SMBC and West, a Reuters report said. Once the mandated lead arranger group has been finalised, the deal will be offered to a wider group of banks in syndication, expected to be from next week. Rosneft faces a rise in borrowing costs on the refinancing due to deteriorating loan market conditions as it seeks to refinance just under half of a $24.5 billion credit extended by eight banks in February last year. Around $5 billion of the credit has to be refinanced by mid-March and $6.5 billion matures in September.
Lukoil halts German flows in price row
18 February 2008 - Upstream OnLine - Russian producer Lukoil has halted oil supplies to Germany this month in a renewed pricing dispute with the monopoly importer of Russian crude to the country, trading sources said today. "February supplies are zero. The company was due to ship around 520,000 tonnes (by pipeline) this month, then it halved the plan and later scrapped it all together. It is the same old story with Sunimex," one trading source told Reuters. In August last year, Lukoil reduced supplies to Germany in a bid to win better terms from Sunimex, run by Sergei Kishilov, a prominent Russian oil industry figure. It later clinched a deal to restore supplies from September. "I don't know whether other Russian producers are supplying crude instead of Lukoil. But we have heard some talk that (German) refiners have been looking to import crude by sea," the source told the news agency.
Russia may cut energy export tax
15 February 2008 - Upstream OnLine - Russian presidential candidate Dmitry Medvedev today called for a reduction of duties on energy exports to allow oil companies to invest in new facilities and placed more emphasis on the importance of the rouble for the industry. The First Deputy Prime Minister, who is almost certain to succeed his mentor Vladimir Putin next month, was speaking at an economic forum in Siberia where he called for tax reform to support economic growth and pledged to reduce duties on energy exports. Energy exporters will in turn need to pledge to switch to the rouble in their dealings to help it become one of the world’s top currencies. “Today the global economy is going through uneasy times. People are reviewing the roles of key reserve currencies. And we must take advantage of it.The rouble will de facto become one of the regional reserve currencies,” Reuters quoted Mededev as saying. He said the government should review its tax system and cut the burden in some areas to ensure that the economy, which last year grew by 8.1%, can continue to grow. “Our tax system must be competitive with tax systems of other countries. The state should collect as much tax as needed to ensure that society functions effectively and our national businesses do not flee abroad, the economy doesn’t fail,” he said.
West Siberian & Alliance sign oil merger
February 18, 2008 - Russia Today - West Siberian and the Alliance Group have signed a merger agreement creating a new independent oil company operating in Russia and Kazakhstan. West Siberian is currently an upstream producer, and Alliance is primarily engaged in refining and processing. Analysts say the merger is a good example of how companies should combine their resources. Under the merger Russian oil company Alliance will become a wholly-owned subsidiary of Sweden's West Siberian. Registered in Bermuda and listed in Stockholm, West Siberian brings to its Russian partner increased access to international investors. The production of both companies is currently focused on west Siberia and the Russian Far East. With joint reserves estimated at almost half a billion barrels, the priority is meeting booming Asian demand. Aleksandr Fetisov, Managing Director at East Kommerce, says this deal is an example of good co-operation in the oil market. According to him, this merger reinforces Alliance's position as an oil exporter to Asian countries. "The unified company will bring together the partners' upstream (oil production) and downstream (refining and marketing) assets, producing a synergic effect," he said.
Oil makes 34.4% in Russian export in 2007
BRIEFLY 19.02.2008 - SKRIN - News - The share of oil in the overall Russian export in 2007 totaled 34.4% and 53.8% in the export of fuel and energy products (versus 34% and 52% in 2006 respectively), the Russian State Statistics Service reported.
Rosneft eyes Indian LNG Stake
14 February 2008 - Upstream OnLine - Russia's Rosneft may buy a stake in a liquefied natural gas processing plant planned by Indian state energy outfit Oil & Natural Gas Corporation (ONGC) for the southern city of Mangalore, Sergei Mikhailov, head of energy policy at Russia's Industry & Energy Ministry, said. India may also also consider investing in 12 upcoming oil and gas projects in Siberia and the Far East, Mikhailov said in New Delhi, where he was accompanying Russian Prime Minister Viktor Zubkov on a visit. "India has investments in Sakhalin 1. That is not sufficient to meet the country's rising energy demand," Reuters quoted Mikhailov as saying. "More opportunities to participate in oil exploration in Siberia and the Far East are coming up ... Such participation is quite realistic,” he said yesterday. Mikhailov said the government was considering the issue and would make a decision soon. The overseas investment arm of India's state-run ONGC, ONGC Videsh, owns 20% of the Sakhalin 1 oilfield, operated by US major ExxonMobil. ExxonMobil and its partners, Rosneft, Japan's Itochu and Marubeni and ONGC, have invested more than $12 billion in the Sakhalin 1 project. ONGC is also looking at participating in the development of the Sakhalin 3 project, a request raised by India during President Vladimir Putin's visit to the country in January last year.
Imperial pipes up in Siberia
12 February 2008 - Upstream OnLine - London-listed Imperial Energy said today that oil from its Snezhnoye field in Western Siberia is now flowing direct into the Transneft national oil transportation system. The first oil pumped into the Transneft system at Zavyalovo is about 35,000 barrels that had been kept in storage tanks until Imperial’s tie-in was opened. The direct connection unlocks the potential of the explorer’s blocks 74 and 77, north west of the Ob River in the Tomsk region. Both of Imperial’s west of the Ob pipelines, the 152 kilometre Maiskoye-Luginetskoye pipeline and the 49 kilometre Snezhnoye-Zavyalovo pipeline are now fully operational and flowing oil, saving road transportation costs previously incurred. Imperial also said that construction permits have been granted for its third pipeline, 152 kilometres in length, currently being built linking its block 80, east of the Ob River, to its Zavyalovo transfer station. First oil through that pipeline is targeted to flow in autumn this year.
LUKoil completes deal to buy RussNeft's filling stations
MOSCOW, February 15 (RIA Novosti) - LUKoil [RTS: LKOH], Russia's largest independent crude producer, said on Friday it had closed a deal to acquire around 150 filling stations from RussNeft, the country's seventh biggest oil firm. Under the deal, LUKoil acquired 122 filling stations in Moscow and the Moscow Region and 26 filling stations in the Pskov, Novgorod, Kaluga and Rostov Regions in northwestern, central and southern Russia with annual sales output of more than 300,000 metric tons of fuel, LUKoil said. RussNeft's shares were frozen in September as part of a criminal probe into the company's former owner, Mikhail Gutseriyev, who is currently being sought by Russian authorities on a variety of charges, including fraud and tax evasion. Gutseriyev has denied the charges. When the allegations were first announced, Gutseriyev said he had no plans to sell the company or move his assets overseas, but later said he would pass control of the holding to a new owner capable of resolving RussNeft's problems.
Siberian field to produce cheaper oil than Saudi crude - Rosneft
KRASNOYARSK, February 15 (RIA Novosti) - An oil deposit, which Russian state-controlled crude producer Rosneft [RTS: ROSN] is developing in East Siberia, will produce cheaper oil than Saudi crude, the company's president said on Friday. Sergei Bogdanchikov who attended the 5th economic forum in Krasnoyarsk in Russia's Far East, said the country's eastern regions held good prospects for oil production and refining, adding that the Krasnoyarsk Territory in East Siberia was an important site for hydrocarbon output in Russia. "Our company has been linked to the Krasnoyarsk Territory since the first economic forum was held here in 2004, when we started to develop the Vankor field," Bogdanchikov said. Rosneft has already invested 70 billion rubles ($2.8 billion) in the Vankor deposit, located some 150 kilometers (93 miles) west of the river port city of Igarka with production at the oil field expected to start in August 2008. Vankor crude will be pumped to the Eastern Siberia-Pacific Ocean pipeline, an ambitious multibillion-dollar project to send Russian hydrocarbons to the energy-hungry Asia-Pacific region countries. Rosneft also plans to start crude production at the Yurubcheno-Takhomsky oil deposit in East Siberia by 2012, Bogdanchikov said. In addition, Rosneft intends to refine 50% of its crude output in Siberian regions by 2020, Bogdanchikov said.
Lukoil bags Uzbek bounty
08 February 2008 - Upstream OnLine - Russian producer Lukoil is set to take control of eight gas fields in Uzbekistan - holding total reserves of about 100 billion cubic metres - from SoyuzNefteGaz. "The planned production is about 3 billion cubic metres of gas per annum. This level is expected to be attained in four years. Gas is to be exported via Gazprom trunk pipelines," Lukoil said in a statement. Implementation of the project, which was agreed on for a 36-year period as of 23 April 2007, will require roughly $700 million in investment, the statement said.
Nenets bounty on the block
05 February 2008 - Upstream OnLine - Russia's Federal Agency for Sub-soil Resources, Rosnedra, has put four blocks in the Nenets Autonomous Region up to tender, according to reports. Russian newspaper Kommersant said the blocks hold an estimated 80 million tonnes of oil and will be offered on 25-year licences. The four blocks contain 13 oil deposits with total category C1 reserves of almost 80 million tonnes, it added. The deadline for lodging applications for the auction is 7 March.
Lukoil cranks foreign taps
05 February 2008 - Upstream OnLine - The overseas exploration arm of Russian oil giant Lukoil said total production from its international oil and gas fields had grown by 10.8% last year compared with 2006. It said oil and gas output from all its foreign fields excluding the Tengiz field in Kazakhstan had hit 38.7 million barrels in 2007, or 5.3% of the company total oil production. Lukoil said gas production had surpassed 2.5 billion cubic metres, comprising 15.4% of the company’s total gas output. It said earnings before income tax, debt and amortisation had passed $1 billion for the first time. Much of the production came as Lukoil Overseas brought on line new production in Uzbekistan, Kazakhstan and Azerbaijan. The company also made discovering in Colombia, Saudi Arabia and Egypt and bought into exploration assets in Cote d’ivoire and Ghana.
Russia's Stroytransgaz starts building 2nd gas plant in Syria
MOSCOW, February 5 (RIA Novosti) - Stroytransgaz, one of Russia's largest engineering and construction companies, said on Tuesday it had started building the second natural gas processing plant in north-central Syria. The plant is being built for the Syrian Gas Company. Under the terms of the contract concluded in May 2007, Stroytransgaz, which is partly owned by Russian energy giant Gazprom, will design the plant, deliver equipment, and assemble and launch the facility, expected to process 1.3 billion cubic meters of gas per year. Stroytransgaz is already building a gas processing plant in Syria with capacity of 2.5 billion cubic meters at an estimated cost of $210 million. The Russian company is engaged in the construction of oil and gas facilities in 15 countries.
LUKoil reports 11% rise in overseas hydrocarbon output in 2007
MOSCOW, February 4 (RIA Novosti) - LUKoil Overseas, which handles foreign projects of Russia's leading independent crude producer LUKoil, said on Monday its oil and condensate output increased 10.8% year-on-year in 2007 to 5.17 million metric tons. LUKoil Overseas said its oil and condensate production in the reporting period accounted for 5.3% of LUKoil's crude output, while gas production contributed 15.4%. LUKoil Overseas also said last year's EBITDA (earnings before interest, taxes, depreciation and amortization) exceeded $1 billion for the first time.
LUKoil's crude output grows 1.5% to 708 mln bbls in 2007
MOSCOW, February 4 (RIA Novosti) - LUKoil [RTS: LKOH], Russia's largest independent crude producer, said on Monday its oil output increased by an estimated 1.5% year-on-year in 2007 to 96.6 million metric tons (708 mln barrels). LUKoil, which accounts for about 1.3% of global oil reserves and 2.1% of world crude output, said its natural gas production grew 2.5% year-on-year in 2007 to 13.96 billion cubic meters. The company develops its main deposits in Western Siberia, and contributes 18% of Russia's oil output and 18% of national oil refining.