Russian oil & gas industry news...

 Gasprom   RusEnergy   World   Pipeliners  Zee Beam 

Tuesday, April 29, 2008

Asia-Pacific to get 30% of Russia's natural gas exports by 2020

Pacific rimMOSCOW, April 29 (RIA Novosti) - Russia will increase natural gas exports to Pacific Rim countries from the current 3% to 30% of its total exports by 2020, a Russian envoy to the United Nations said on Tuesday. "This will be an important Russian contribution to ensuring energy security in the Asia-Pacific region," the Foreign Ministry quoted Yevgeny Afanasyev, envoy to the UN Economic and Social Commission for Asia and the Pacific, as saying. Afanasyev said the planned increase is due to the region's brisk economic growth against a backdrop of rising energy prices. The Russian envoy said the UN Economic and Social Commission for Asia and the Pacific could serve as a good platform for dialogue between energy producers and consumers in the Asia-Pacific region to ensure energy security and search for the most effective methods of solving energy problems. "Such cooperation could include information exchanges on energy polices, measures to determine areas for joint investment to develop energy infrastructure, analysis of regulatory and legal frameworks in the energy sphere, and efforts to harmonize standards and invest in energy and transit of energy products," Afanasyev said.

Monday, April 28, 2008

Russian oil giant to expand in the Caspian

April 28, 2008 - Russia Today - Russia's biggest private oil company Lukoil is attempting to expand its presence abroad, the Caspian region being among its top priorities. The oil giant plans to increase its gas output in Uzbekistan to a peak of 16 billion cubic metres in the next seven years. Lukoil was the first foreign company to gain access to Uzbekistan's huge reserves, setting up a joint venture with Uzbekneftegas to develop the Khauzak gas field. The company's latest project in the region is the purchase of the Gissar field operated by SNG Holdings. It plans to develop these projects on a bigger scale boosting investment by ten times. By 2015 it is expected to reach $US 5.5 billion. Lukoil, though, is investing not only in technology and equipment but also in human resources. The company's president Vagit Alekperov says the results could pay off for the company in other regions. “Historically Uzbekistan has developed a unique school for training specialists in the oil and gas sector. Thus, we're considering Uzbekistan as a platform for training staff for other of our projects, including those in regions, like the Persian Gulf,” Alekperov said.

Major oil company to be shared

Major oil company to be sharedApril 28, 2008 - Russia Today - Oleg Deripaska has said the Basic Element holding owned by him will not be the sole owner of Russneft. According to Deripaska, it will run the Russian oil company with Switzerland’s Glencore. Glencore International AG is one of the world's largest suppliers of commodities and raw materials headquartered in Baar, Switzerland. The company is a long-time partner of Russneft. It is also a partial owner of UC Rusal, the biggest enterprise of Basic Element. Both Basic Element and Glencore are now waiting for the Federal Antimonopoly Service to authorize the acquisition of the stake belonging to the Russneft's founder and former chief, Mikhail Gutseriyev. Gutseriyev has resigned from his chairmanship last July. Russneft is among top ten Russian oil companies and the only one that has been created not as a result of the 90-s privatization but due to the consolidation of assets of other enterprises.

TNK-BP hit by $US255.6 MLN tax bill

TNK-BP hit by $US255.6 MLN tax billApril 23, 2008 - Russia Today - Russo-British oil giant TNK-BP has been charged with back-tax claims for $US 255.6 million for the years 2004-2005. The claims involve several TNK-BP subsidiaries and a number of different taxes, according to Interfax news agency. This not the first time TNK-BP has faced back tax claims. In 2005 the company was charged with $US 1.8 billion for the period of 2002-2003. The company has since paid the debt in full. TNK-BP's press service told Russia Today that the claim, which is spread over about 20 subsidiaries, is a standard procedure and represents a non-critical amount for the company.

Russia to supply 8 mln tons of LNG to Japan in 2009

MOSCOW, April 25 (RIA Novosti) - From 2009, Russia will supply eight million metric tons of liquefied natural gas (LNG) annually to Japan through the Sakhalin II oil and gas project, a Kremlin source said on Friday. Contracts with Japan's eight largest electricity and gas companies have been signed under the project in Russia's Far East, controlled by Russian energy giant Gazprom. The supplies to Japan will account for 8.5% of the country's LNG imports. "Supplies to Japan will be launched no later than early 2009," the spokesman said ahead of a Saturday meeting between Japanese Prime Minister Yasuo Fukuda, Russian President Vladimir Putin, and president-elect Dmitry Medvedev, who chairs Gazprom. Alexander Medvedev, deputy chairman of Gazprom's management committee, announced on Wednesday that the first gas deliveries as part of Sakhalin II were expected in early 2009. He said Gazprom planned to invest $45 billion in LNG projects by 2030 to become a major player on the LNG market. The company is seeking to supply about 90 million metric tons of LNG annually to world markets by 2030. The Sakhalin-II project has estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas. Gazprom holds a 50% stake plus one share, British-Dutch Royal Dutch/Shell 27.5%, and Japan's Mitsui and Mitsubishi control 12.5% and 10%, respectively.

Gas exporters to meet in Tehran on April 28

MOSCOW, April 24 (RIA Novosti) - An alliance of the world's leading gas producers will hold a ministerial meeting in Tehran on April 28, the head of Russia's Gas Society said on Thursday. "The Gas Exporting Countries Forum will hold a ministerial meeting in Iran's capital on April 28, where the charter of the so-called gas 'OPEC' will be discussed," Valery Yazev said. He said there were two draft charters, a 'tough' one designed by Iran, and Russia's 'more delicate' version. Iran has proposed to regulate the functioning and principles of a gas equivalent of OPEC, while Russia's draft envisages fixing gas pricing mechanisms and gas transit routs. "We should build an alliance of gas producers to formulate fair trading rules," Yazev said. "Gas prices will not change, because they depend on the competitive situation with other energy prices," he said in an attempt to alleviate opponents' fears that a gas cartel will change radically the situation on the global markets. The idea of establishing a gas OPEC was put forward by Russian President Vladimir Putin and has always been supported by Iranian officials. The Gas Exporting Countries Forum (GECF) first held a meeting in Tehran in 2001. The organization has not yet adopted a charter and lacks a strict membership system. However, it involves Venezuela, Iran, Libya, the UAE and Russia, and a number of other countries. Norway has the status of an observer.

Monday, April 21, 2008

Russia Takes a Charter to Iran

Apr. 21, 2008 - Kommersant by Natalia Grib, Andrey Odinets –  Kommersant has learned that, during a session of the Gas Exporting Countries Forum in Tehran on April 28, Russia will present a draft charter for that organization, which it has long dreamed of turning into a “gas OPEC.” Moscow's formulation of the tasks and goals of the GECF is softer than Iran's proposal, which was similar to the charter of OPEC. The organization is to become an international platform for the development of a formula for the price of gas and discussion of routes for new pipelines. Experts say it will be hard for the potential participants in the gas OPEC to agree among themselves. That means that the June forum in Moscow may not be a success.
Russian-Style Cartel
A source in the Russian government told Kommersant that a draft charter of the GECF was sent to the appropriate agencies of the 15 member states late last week. According to the source, the document was authored by the Ministry of Industry and Energy and Gazprom at the end of last year and spent three months being conciliated in the ministries. A Gazprom spokesman confirmed on Friday that “A draft charter is being discussed. It is to be considered at the next ministerial session of the GECF.” The charter is the first in the process started last autumn of turning the GECF from an amorphous entity into a powerful gas suppliers' lobby along the lines of OPEC. According to information obtained by Kommersant, the draft charter will be presented by Deputy Minister of Industry and Energy Anatoly Yanovsky at a high-level GECF committee session in Tehran on April 28. Yanovsky himself declined to comment. Another Kommersant informant commented that the nature of its developers shaped the nature of the document, which proposes the necessity of creating an international platform for development of a universal formula for the price of gas, the use of spot deliveries with the goal compensating for shortages of volume in the course of fulfilling long-term contracts, determination of the expediency of the construction of new gas pipelines taking account of the forecast risk.” The GECF was first held in Tehran in 2001. He does not have a charter, exact membership system or permanent representation in any country. Algeria, Bolivia, Brunei, Egypt, Equatorial Guinea, Indonesia, Iran, Libya, Malaysia, Nigeria, Oman, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates and Venezuela continually take part in GECF sessions, and Turkmenistan has participated in some. Norway is considered an observer. The official goal of the organization is the development of mutual understanding between producers and consumers and governments and industrial sectors connected with energy and the creation of a stable and transparent fuel market. At the last forum, in Doha, the GECF member states agreed to form a committee on a high level that would meet every two months to discuss gas trade issues. It was also decided that the next forum would meet in Moscow in 2008. A Gazprom spokesman explained that details on the platform for dialog are still ”in the discussion stage.” Apparently, Moscow is expecting members of the transformed GECF to coordinate gas prices and agree on the routes of new gas pipelines. Gazprom and the Ministry of Industry and Energy deny that there will be nay analogy between GECF and OPEC, however. “We do not need a cartel agreement,” the source claimed.
Moderation Moscow-Style
Apparently, Moscow's current initiative is a response to a proposal for the future of the GECF made by Iran at the end of last year. Sources in the Russian government and Gazprom told Kommersant that the Iranian draft charter was largely copied from that of OPEC. The document proposed by Tehran was examined by the Russian ministries, but many of them gave it a negative assessment. The Russian Foreign Ministry was especially critical of it. Russian diplomats pointed out that support of the initiative would have a number of negative political consequences. The Foreign Ministry's was correct in its conclusions. In the West, conversations over the creation of a “gas OPEC” stir up strong reactions. In April of last year, a week before the GECF session in Doha, the deputy chairman of the U.S. House of Representatives Foreign Affairs Committee Ileana Ros-Lehtinen wrote to Secretary of State Condoleezza Rice vigorously demanding that she “make clear to all concerned that any movement to establish yet another menace to the world's energy supplies will have sharply negative consequences for all of those involved.” Ros-Lehtinen's call was supported by many in Congress and official spokesmen of the State Department and White House made a number of strongly-worded statements about a “gas OPEC.” The European Union was no less categorical. Not wanting to anger its partners needlessly, Russia has decided to tone down the rhetoric and get rid of the unwanted analogy between the future “gas OPEC” and the oil cartel. At the same time, Moscow has begun a project that could be an effective supplement to GECF, the International Alliance of Nongovernmental Natural Gas Organizations. That name was first heard of at the end of 2006, from the Russian Natural Gas Society, the main lobbyist for Gazprom, headed by State Duma member Valery Yazev. The IANNGO, in the conception of its organizers, would “create condition for the just distribution of income from the export of gas between producers and countries that transport gas, and form common investment sources for the development of the gas industry.” The main difference between IANNGO and GECF is that the former will unite “nongovernmental gas organizations and leading gas companies of the countries producing and transporting natural gas,” while the latter is an intergovernmental structure. The IANNGO project has been developing rapidly in recent years. At the beginning of April, the charter of the organization was presented to the parliamentary session of the Eurasian Economic Community. Belarus already supports the Russian initiative, which is sufficient to register it. Kazakhstan is waiting and Uzbekistan is considering it. “During the GECF in Moscow this June, we plan to present the IANNGO project as a platform for the settlement of problems among the gas business, consumers and the bodies of authority,” Russian Natural Gas Society vice president Oleg Zhilin told Kommersant. “We are frequently asked whether such states as Algeria, Qatar, Libya, Iran and Venezuela can become members of IANNGO. The answer is unambiguous. They can. It is unimportant how developed their democratic institutions are.”
Opposition Libyan-Style
Kommersant sources in government agencies were unwilling to predict which of the two competing draft GECF charters would be approved at the June forum, if they cannot be conciliated. There are abundant signs that the members of that organization have varying interests and differing expectations of it. For example, last week, Libyan leader Muammar Gaddafi stated at a lunch honoring Russian President Vladimir Putin that Tripoli supports “the idea of creating an organization of gas producing and exporting countries on the model of OPEC.” Gaddafi also stated what he expected from the new organization. Its members “should help countries suffering from soaring oil prices, especially African countries.” The likelihood of creating a natural gas analog to OPEC is viewed skeptically by experts. Vladimir Milov, president of the Institute for Energy Policy, explains that, in the next ten years, producers and consumers of natural gas will be linked by direct pipelines that, as a rule, will not intersect. “Qatar is the leading supplier to the United States and Great Britain, and Algeria to Spain and Italy. They cannot substitute each other's deliveries,” Milov said. Moreover, according to Milov, competition is mounting for transit routes. “As soon as Russia announced South Stream, Iran said it was ready to become the resource base for Nabucco and began making bilateral contracts for gas delivery to the EU on the Transadriatic Gas Pipeline from Turkey to Greece and, eventually, to Italy,” Milov noted. “The competitors cannot seriously be expected to conciliate routes between themselves.” Milov thinks such associations are only “political dances and PR” without a united Political base. “Russia and Iran are not leaders within the gas forum. Qatar is friendly to the U.S. and will not make intrigues with Russian or Iranian sponsorship,” he said. “In addition, Tehran, which preaches the Shia religion, is not trusted by the majority of Sunni gas exporting states in the Middle East. Russia, as a non-Muslim country, also has little trust in the region. Unlike them, Sunni Saudi Arabia is the political leader of the Middle East.” Mikhail Korchemkin, director of the U.S. firm East European Gas Analysis thinks that the formation of a “gas OPEC” and cartel price control would push EU consumers to refuse natural gas and turn to alternative fuels. “Every announcement of reduced deliveries of gas to Ukraine or Belarus drive up demand for heating oil sharply in Europe,” he explained. “I hope that the gas OPEC' will cause revolutionary changes in new sources of energy and the economy of energy usage.” Korchemkin thinks that, in that case, natural gas will be left as only a raw material for petrochemistry and fertilizer, and fall in price, as coal did between the two world wars.

Thursday, April 17, 2008

“EU simply wants timely gas supplies without any political games”

Marek Sivec, the vice-President of the European Parliament, is interviewed in Moscow April 16, 2008. // The European Parliament’s vice-president speaks on relations with Russia
Apr. 17, 2008 - Kommersant - Marek Sivec, the vice-President of the European Parliament, arrived on an official visit to Moscow yesterday. In his interview to Kommersant’s correspondent Alexander Gabuev, Sivec said why the signing of the EU-Russia cooperation agreement is stuck, and what Brussels expects of Dmitry Medvedev.
“The impossibility to sign the new partnership and cooperation treaty is nearly the chief difficulty in the EU-Russia relations. Already two EU-Russia summits have actually failed, and the treaty has never been signed. Why?”
“Moreover, it was not discussed yet, apart from not being signed. Poland’s and Lithuania’s veto is just the tip of the iceberg. We believe the new treaty will be signed in new conditions and it should reflect these conditions. The EU has expanded, it now has a new face. It now has more democracy and it is more sensitive to these issues. On the other hand, we have a Russia undergoing the restoration process. Certainly, it is a positive process, but there are negative features as well, which we do not understand and do not welcome.”
“So, technical difficulties with signing the treaty are due to the situation with democracy in Russia?”
“These are fundamental difficulties, and not technical. For Russia, there are ‘good guys’ in the EU, with whom she deals, and ‘bad guys’, with whom she doesn’t deal. In Russia, there is a difference between the relations with old EU members and the new ones, even if it is not acknowledged officially. Russian elites want to maintain a certain imperial entourage, and an empire should have a large army and influence its neighbors. However, the EU is much more united now, and we cannot start negotiations with that kind of attitude. Besides, the European Parliament attaches great importance to the respect for human rights in Russia, and it is not the only difficulty.”
“When the treaty’s discussion is to begin?”
“I hope that Poland and Lithuania lift their veto, and the talks will start then. The process itself might take around a year.”
“What will be the differences between the old treaty and the new one?”
“Let me cite just one instance. About a decade ago, when the old treaty was discussed, no one spoke about energy security, while now it is the key issue for the EU.”
“And Gazprom says that the issue does not exist, and that Russia is a reliable supplier of energy resources to the EU.” “Perhaps, it is not a difficulty for Gazprom, but if you live in Poland and your gas supplies are suddenly reduced by 50 percent,--what sort of security is that? Meanwhile, that is precisely what had already happened. Shall we recall the permanent difficulties with gas supplies to Ukraine or to Georgia? Today it is Georgia, and tomorrow – anyone else. By the way, Gazprom cannot at all act as a partner in the issue, for it is not a commercial company, but a political force. So, we can be in dialogue with the Russian state only.”
“Last week, the European Parliament stormily discussed the Nabucco project. Does the EU regard it as a way to decrease its energy dependence on Russia?”
“I believe there are no outer sources of energy for Europe except Russia. Atomic energy can be the only alternative source. Meanwhile, the presence of alternative supply routes is profitable both for the EU and Russia. We should explain to Russian gas suppliers a simple thought: our money is no less important than your resources, and vice versa. The EU simply wants timely gas supplies without any political games. And Russia needs to create the reputation of a reliable supplier. Otherwise, there will be no long-term relations.”
“You have said there are no energy supply sources for the EU except Russia. Yet, EU External Relations Commissioner Benita Ferrero-Waldner reached agreement with Turkmenistan last week that the country will reserve 10 billion cubic meters of gas for the EU in 2009.”
“How much does the EU import annually? It is 300 billion cubic meters, so Turkmenistan will provide just some 3 percent. I am sure there is no real alternative to Russia’s gas. There can be just some insignificant supplements. Certainly, we can resort to those resources in extreme cases, but we now speak about the long-term perspective. I believe the more alternative routes, the better. The Nabucco project poses no threat to Russia.”
“What would you say about the Nord Stream project then?”
“I think it is a very costly solution to the problem. Gazprom could have built the pipeline through Poland and Belarus, but Russia and Germany decided to do it differently. We can recall the ecologic issues caused by the project. There is something else: unless a project bypasses other countries for political reasons, it can be accepted. Yet, if Russia is simply unwilling to sell gas to Poland, and is looking for ways to sell it directly to Western Europe, then it is a threat to Poland’s energy security.”
“It is united, but not in the energy policy. Actually, this shouldn’t be happening. However, if gas is transported through Poland’s territory, we are 100-percent confident it will reach us as well.”
“There are ecologic claims to the Nord Stream project. What about Nabucco then?”
“There are same claims there, and in this respect one project is no better than the other.”
“Russia and the EU have differences not in their views on energy security only, but also in the general security issues. What do you think of the U.S. missile defense facilities’ deployment in Europe?”
“I am against any bilateral decisions. Certainly, the United States is an important country for the international security system. Consequently, they have the right to estimate threats. If they are afraid of Iran’s missiles, it is their legal right. Russia too has the legal right to ask questions, because new military facilities will appear close to its borders. Yet, Russia has no right to say ‘no’.”
“What would you say of NATO expansion?”
“It is quite strange actually that it is an issue at all. For instance, NATO carries out an operation in Afghanistan which is in Russia’s interests as well. Just imagine what would happen if the Taliban members come to North Caucasus. So, NATO’s part as the chief warrant of Europe’s security is unquestionable. If the alliance guarantees security to its members, why shouldn’t it expand? Russia’s protests would have been understandable if NATO had been aimed against her, but it is not so. Russia should change its public attitude to the alliance, because all tough statements of Moscow is just schizophrenia which brings no effect.”
“Will these issues be solved during Dmitry Medvedev’s presidency?”
“I am asking everyone here whether Dmitry Medvedev is going to bring any qualitative changes into Russia’s politics, but no one knows. The fact of a new president’s coming does not count by itself. We have objective difficulties. Let us look at him after May 7th. All doors in Brussels are open for him.”

Tuesday, April 15, 2008

Lukoil sells American holdings

April 11, 2008 - Russia Today - Russia’s largest private oil company, Lukoil, has announced it will sell 162 of its U.S. filling stations for $US138 MLN. The sale of the sites in Pennsylvania and New Jersey will be finalised in May. The company owns over 2200 stations in the United States and operates three brands: Getty, Mobil and Lukoil. The selling price of one filling station makes up $US 851,000. This price is relatively high for the American market, according to Lukoil Americas. Lukoil has said it will sell the stations because of low margins, but will continue to supply according to the contract signed with new owners.

Oil firms wary of Russian tax cut pledge

Oil firms wary of Russian tax cut pledgeApril 11, 2008 - Russia Today - The Russian government has pledged to cut taxes on oil production, which currently reach 90 cents in the dollar. But industry majors who've revealed record profits this week, remain sceptical. Lukoil and Rosneft stocks rebounded after Energy Minister Victor Khristenko vowed to slash oil taxes by July. But experts fear the government could mutate the charges into a tax on oil output. “The question of course is what happens now on the output side, how are profits going to be taxed,” supposed analyst Aleksandr Kotchubey from Renaissance Investment Management, Moscow. Within hours of Khristenko’s pledge Lukoil unveiled a $US 9.5 billion net profit for 2007. Its treasury chief was also dismissive of the government’s promises. “The Russian government still uses Russian oil companies as a main cash cow increasing of export tariffs, increasing of subsoil taxes,” Aleksandr Matytsyn, the head of Lukoil treasury, insisted. A hunt through the archives reveals Matytsyn may have reason to be cynical. Khristenko first called for a cut in June 2005, almost 3 years ago. In the event the government introduced a new mineral extraction tax in 2007, raising further the strain on oil companies. Some firms are still finding ways to grow. Lukoil’s biggest rival Rosneft showed its swallowing of Yukos assets was starting to bear fruit with a five-fold income rise to almost $US 3 billion. Energy expert Artyom Konchin at Unicredit Aton says Lukoil may be the most profitable oil company now, but the state-owned giant is the better investment. “It has one of the best portfolios in the world, not just in Russia, in terms of exploration that they can do - East Siberia, Sakhalin,” Konchin said.

Friday, April 11, 2008

TNK-BP Woes Might Be Inside Job

April 11, 2008 - The Moscow Times by Miriam Elder - The Russian billionaires who own half of TNK-BP are locked in a fierce struggle over the fate of the embattled oil firm, prompting the flurry of negative activity that hit the company last month, sources said Thursday. Mikhail Fridman, the head of Alfa Group and the country's fourth-richest man, is urging fellow shareholder Viktor Vekselberg, head of Renova, to sell their combined share in TNK-BP at a lower valuation, sources close to the company said. Fridman and Vekselberg, along with U.S.-based Russian businessman Len Blavatnik, own 50 percent of TNK-BP, with the rest held by British oil major BP. TNK-BP again denied on Thursday that the Russian shareholders were in talks to sell their stake to state-run Gazprom. TNK-BP's latest troubles began late last month, when officers from the Federal Security Service raided their Moscow head office and that of parent company BP. The FSB raid was followed by the announcement that a TNK-BP employee had been arrested, along with his brother, on charges of industrial espionage. Just one week later, TNK-BP was forced to suspend 148 employees assigned to the firm by BP, after the Federal Migration Service deemed their visas invalid. Analysts interpreted the events as the result of rival bids for the TNK-BP stake coming from national energy champions Gazprom and Rosneft. Yet the sources, who declined to be identified or quoted because of the sensitivity of the situation, said some of the aggressive tactics were the result of oligarch infighting, and not Kremlin pressure to sell. Konstantin Poltoranin, a spokesman for the Federal Migration Service, appeared to confirm that view. "We never had any problems with them, any complaints," Poltoranin said by telephone Thursday, commenting on the visa issues. "Go to the company if you have questions. They have their own problems within the company." Poltoranin said the visa issue was close to being resolved, with the Federal Migration Service last week approving the registration of a new BP subsidiary required to handle the employees assigned to TNK-BP. A BP spokesman confirmed that the subsidiary had been registered. "They will get their visas as soon as all the documents are handed in," Poltoranin said. A clause forbidding Vekselberg, Fridman and Blavatnik to sell their stakes in TNK-BP expired late last year, fuelling speculation that a state-run firm would soon buy into the country's fourth-largest oil company. The firm agreed to sell its flagship project, the Kovykta gas field in eastern Siberia, to Gazprom last summer for between $700 and $900 million. Both TNK-BP and Gazprom have said they expect the deal to be finalized by the end of the month. The shareholders issued a statement in February confirming their commitment to the venture, but Vekselberg had said one month earlier that he would consider selling his stake if the bidder met his $60 billion valuation. The firm's market capitalization currently stands at $31 billion. Vekselberg, the country's 11-richest man with a fortune of $11.2 billion according to Forbes, is deeply involved in the firm, employees say. He heads TNK-BP's gas-business development department, and maintains a regular office at the firm's offices on Arbat. Fridman, meanwhile, has thrown himself into expanding his group's telecoms business in recent years. Ilya Zaslavsky, the TNK-BP employee arrested in March on charges of industrial espionage, worked in the firm's gas-business development department. "We never comment on shareholder issues," said TNK-BP spokeswoman Marina Dracheva, referring all questions to the shareholders. Alfa Bank spokeswoman Maria Trubnikova declined to comment and, in turn, referred all questions to TNK-BP. A Renova spokesman did not respond to requests for comment. Further news on the Russian-British venture is expected next week, when Oleg Mitvol, deputy head of the Natural Resources Ministry's environmental watchdog, releases the results of an investigation into the firm's largest oil field, Samotlor. Mitvol said by telephone Thursday that the investigation was ongoing, with results expected early next week. Mitvol led a high-profile campaign against Shell at Sakhalin-2 for purported environmental violations. The pressure was lifted after Shell and its Japanese partners sold a majority stake to state-run Gazprom in late 2006. Yet, unlike the Sakhalin-2 onslaught, Mitvol said he was not personally carrying out the investigation in western Siberia.

LUKOIL Sells American Filling Stations

Apr. 11, 2008 - Kommersant - LUKOIL had decided to sell some of the filling stations in the United States that it bought in 2004 from its strategic partner ConocoPhillips. The company wants to sell of 162 low-profit stations in southern New Jersey and Pennsylvania for $138 million. That is mote than twice the price it paid for them. The company stated that it would continue to provide the stations with gas for the next 15 years. LUKOIL has been in business in the U.S. since 2000, when it bought a chain of about 1300 filling stations from Getty Petroleum. In 2004, it paid $269.5 million for another 795 stations to ConocoPhillips, which had become the owner of 7.6 percent of LUKOIL the same year and later raised its stake to 20 percent. According to the company's 2007 annual report, where the sale of the stations was announced, LUKOIL has a total of 6100 stations. American filling stations have a very low profit margin, which is why major oil companies prefer to sell contracts for gasoline delivery to stations rather than run them themselves. LUKOIL did not identify the buyer of its stations, which it stated made 50 percent less profit than the average for the rest of its stations, but mentioned that the buyer was not a Russian company.

Lukoil hits Bayandyskoye gusher

10 April 2008 Upstream OnLine by Rob Watts - Lukoil has announced a new oil discovery at the Bayandyskoye field in Russia's Timan-Pechora region. Company vice president Leonid Fedun said the find holds about 300 million barrels of 3P reserves. Flow rates on the field's first well hit about 5000 barrels per day, Fedun said at the company's capital markets day held in London today. Operations are continuing on a second well at the field, he added.

Thursday, April 10, 2008

Russia hits Total with $170bn suit

10 April 2008 - Upstream OnLine - Russian regions are claiming up to $170 billion from French oil giant Total in a legal case going back to the expansion at Elf Aquitaine, now part of Total, according to reports. French daily Le Figaro said a legal probe had been opened to study complaints by Volgorad and Saratov, filed in 2006. The two regions alleged they did not get enough profits from a revenue-sharing contract dating back to a 1990 deal between former French president Francois Mitterrand and Russia's Boris Yeltsin. The paper quoted a lawyer for Total as saying there were no grounds for a dispute between the regions and the company. Speaking on the sidelines of an oil industry summit in Paris, Total chief executive Christophe de Margerie told Reuters he was not aware of the matter. "I am not aware of anything," he told reporters. In the early 1990s, Elf's chairman and chief executive Loik le Floch-Prigent agreed, when the company was still majority state-owned, to develop an oilfield in an area of 20,000 square kilometres east of the Volga river. Media reports at the time said Elf would have a 30-year production agreement and receive 12.5% of the oil as royalty and 55% to recover expenses. The Russian government and the regions would get the remainder. Le Figaro said the two regions said the split was 50-50 between Elf and Saratov and Volgograd. The fields were not put into production. Le Flock Prigent moved from Elf to Gaz de France in August 1993, to be replaced by Philippe Jaffre who died in September. Elf was acquired by Total in 1999.

Monday, April 07, 2008

Russia says Fugitive Billionaire is in Britain

Gutseriev04/03/2008 - Moscow News Weekly - MOSCOW (Reuters) - The billionaire former head of Russian oil company Russneft is hiding in London from Russian police who want to arrest him for tax evasion, Russia's ministry of interior said on Wednesday. Mikhail Gutseriyev, whose personal fortune is estimated at around $2.6 billion, has countered the tax evasion charges by saying the accusations are false and designed to imprison him so that a pro-Kremlin businessman can buy Russneft cheaply. His last previously known location was in Turkey. "We have information that Gutseriyev is based in Britain and travels from there periodically to Azerbaijan," the deputy head of the interior ministry's investigation department, Oleg Logunov, told a news briefing. A British embassy spokeswoman declined to comment. "We are working through Interpol and with both the British and Azeri sides to ensure his extradition to Russia," Logunov said of Gutseriyev. "But as you know through experience the extradition procedure, especially with the British, takes a long time, but are resolved." Among Russians sheltering in Britain is Boris Berezovsky, the 62-year-old one-time ally of Russian President Vladimir Putin who is now one of his most vocal enemies. Berezovsky, who made his billions by buying up chunks of Russian state industry cheaply during the chaotic post-Soviet 1990s, has called for a revolution in Russia. Other Russian businessmen hiding in London from Russian prosecutors include executives from the now bankrupt oil company Yukos. In 2003, Britain refused to extradite Chechen rebel Akhmed Zakayev because a judge decided he would not face a fair trial. Moscow's relations with London dipped further after 2006 when former KGB officer Alexander Litvinenko died in London from a radioactive poison. British police accused a Russian of the killing but Moscow refused to extradite him.

Questions Linger Over Police Raid at TNK-BP

04/03/2008 -Moscow News Weekly - MOSCOW (Reuters) - Russian security officers who raided BP's Russian venture's headquarters last month were looking for files relating to state gas monopoly Gazprom , industry sources told Reuters. "They were scanning through pages of documents, looking for the word ‘Gazprom'," said one source familiar with details of the investigation. "The only thing that seemed to interest the officers, based on their questions, was information on Gazprom," a second source said, commenting on March raids by 78 officers at TNK-BP's central Moscow offices. TNK-BP, co-owned by BP and a group of Russian billionaires, is subject of long-running speculation that the Kremlin wants the Russian owners to sell out to a state firm to tighten further the state grip over the energy sector. Many analysts interpreted the raids by the Federal Security Service (FSB), the main successor to the Soviet KGB, and the subsequent arrest of an employee of TNK-BP on suspicion of industrial espionage, as a sign the Kremlin is stepping up pressure on TNK-BP and its owners. Gazprom, whose chairman Dmitry Medvedev will be sworn in as Russian president on May 7, has long been seen as the main contender for a stake in TNK-BP as part of its drive to become a global energy player. But Medvedev denied last week that the raids on TNK-BP had an ulterior motive. One industry source, speaking on condition of anonymity, said Gazprom's management was concerned that during recent gas talks with foreign firms, counterparties appeared to have more information about Gazprom than would normally be expected. "This prompted the suspicion that confidential information about Gazprom had been leaked," the source added. Gazprom and TNK-BP declined to comment. A source close to Gazprom described the raids as a "one-off, local incident." "People should not read too much into it."
THEORIES FLY Although Gazprom is seen as a front runner in the race for TNK-BP, some sources said they did not rule out state oil major Rosneft as another potential contender. Rosneft's chairman and deputy head of the Kremlin administration, Igor Sechin, is expected to remain one of Russia's most influential men even after President Vladimir Putin steps down to become prime minister under Medvedev. Medvedev and Sechin are often pitted against each other as informal leaders of the so-called liberal and hardliner clans inside the Kremlin, which vie for control of key assets. "The mere fact that the investigators said they were looking for files about Gazprom does not mean that the request for the raid came from Gazprom," said one source. "It may actually mean the opposite because you know well that corporate wars in Russia tend to be very complicated." Putin's administration has poor relations with Britain, following a spat over the murder in London last year of a former Russian agent that provoked a mutual expulsion of diplomats. TNK-BP is the largest single British investment in Russia and Putin blessed the creation of the venture in 2003. "I see very little reasons why Gazprom would want to do it (step up pressure on TNK-BP) now. They are perfectly well positioned to do it after the (Medvedev) inauguration. So I'd rather bet on the other (Sechin) clan," one source said. Another way of looking at the struggle, industry insiders say, is to consider that if Gazprom wants to buy into TNK-BP, then either the Russian billionaires or BP has to sell. Neither group wants to give up its stake in such a large and highly lucrative company so the temptation for both BP and the oligarchs is to try to cut their own deal with the Kremlin, which would involve removing the other shareholder. Some sources say a dispute between the Russian shareholders and BP has been rekindled. "I would not fully exclude this. The company itself has become a bargaining chip in this game," a TNK-BP source said. TNK-BP Russian shareholders, who include billionaires Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, have repeatedly denied plans to sell out.

Russian gas producer Itera reports 24% sales growth in 2007

MOSCOW, April 7 (RIA Novosti) - The Russian natural gas producer Itera said on Monday its revenues calculated to Russian Accounting Standards (RAS) grew 23.6%, year on year, in 2007 to 29.69 billion rubles ($1.2 billion). The independent natural gas producer said growth in revenues in the reporting period contributed to a 47.6% increase in net profit to 2.934 billion rubles ($122 million). Itera, which has authorized capital of 60 mln rubles ($2.5 mln), said its assets grew 15.4% in the reporting period to 29.985 billion rubles ($1.25 billion). The company is 99.99% owned by Itera Holdings Limited.

Thursday, April 03, 2008

Interpol Wants Mikhail Gutseriev

Open Gallery...Apr. 03, 2008 - Kommersant - The name of Russneft ex-chief Mikhail Gutseriev could be found at the official web of Interpol, the wanted list. It has the red mark, signaling the suspect should be detained to decide on his extradition to the country that issued the arrest warrant. Russia wants Gutseriev for fraud and money laundering, the web specifies. The enforcement bodies know whereabouts of Gutseriev, Oleg Logunov from the RF Interior Ministry’s Investigating Committee said April 2. According to the data available to Russia’s detectives, Gutseriev is in Britain, visiting Azerbaijan from time to time. Gutseriev is charged with tax evasion and illegal entrepreneurship. He was added to the wanted list August 24, 2007 and the warrant for his arrest was issued August 26, 2007 due to the violation of not-to-leave recognizance. Gutseriev had declared the sale of Russneft a month prior to those events. Russia currently demands from Britain to extradite a number of persons for various crimes. London granted political asylum to Boris Berezovsky, Ahmed Zakaev and a few top-managers of Yukos, having concluded that all of them were persecuted for political reasons. People in the Interpol National Bureau at the RF Interior Ministry specified that Gutseriev has been in the wanted list of Interpol since late 2007, Interfax reported. The web of Interpol shows his photo of 2007; the file number is 44537.

Wednesday, April 02, 2008

Kremlin tightens grip on E&P

02 April 2008 - Upstream OnLine - The State Duma, Russia's lower house of parliament, has passed a bill limiting foreign investment in key sectors of the nation's economy - including the upstream industry. The legislation, which also would increase the powers of Russian security services in business transactions, has raised concern among foreign investors, an Associated Press report said. The State Duma passed the bill in its final reading by 384 votes to 55. It now goes to the upper house, the Federation Council, where passage is likely, and to the president for his signature. The legislation stipulates that private foreign companies would need authorisation to buy more than 50% of a Russian company in one of 42 "strategic" sectors. A commission made up of Russian economic and security officials would review such deals. Foreign state-controlled companies would need permission to acquire a stake of more than 25% in a Russian company within the list of major industrial sectors. Those included on the list are either controlled by the Russian state or tied to state interests. The Kremlin has sought to set up state corporations in key industrial sectors, saying a tight government grip is necessary to bolster the economy. It also has pressured foreign oil companies as it consolidates control over the largest and most important hydrocarbon deposits, the AP report said.

Tuesday, April 01, 2008

Russia’s Tatneft eyes Chevron tie-up

01 April 2008 - Upstream OnLine - Russian middle weight Tatneft said today that it is considering a joint project with Chevron after the head of the US oil giant's Russian operations met the president of Tatarstan. "(Both) sides discussed partnership perspectives in extraction and refining of hard-to-get oil in Tatarstan," Tatneft said in a statement. The outfit which operates in the Russian republic of Tatarstan gave no further details. Mintimer Shaimev, the president of Tatarstan, a predominantly Muslim republic on Russia's Volga river, met with Chevron's head of Russian operations, John McDonald, in Tatarstan's capital Kazan over the weekend. If the partnership goes ahead, it would mark the second time Tatneft has joined forces with a western outfit to extract oil, reported Reuters. It hopes to set up a joint venture with Royal Dutch Shell in the middle of the year to tap heavy oil deposits. The joint venture could produce around 5 million tonnes per year (100,000 barrels per day) at 12 bitumen deposits which Tatneft controls, the company said. Tatneft and industry analysts have said Tatarstan might hold between 1.5 billion and 7.0 billion tonnes of bitumen oil resources. The bigger figure, if confirmed, would represent over half of Russia's total crude reserves of 79.54 billion barrels, or 10.85 billion tonnes, estimated by BP in its latest annual statistical review.

Political woes hit Russneft numbers

Gutseriev01 April 2008 - Upstream OnLine - Embattled Russian oil producer Russneft booked a loss last year after it was hit with back tax claims and fines. The mid-sized player said its loss, calculated under Russian Accounting Standards (RAS), amounted to 12.25 billion roubles ($521.3 million) in 2007 compared with a net profit of 9.94 billion roubles in 2006. Unlike other Russian oil producers, Russneft does not report results to International Financial Reporting Standards, and the RAS results therefore serve as the only guide to its financial performance. The company said its profits turned negative in the fourth quarter of 2007 when, despite record high oil prices, the loss totalled 16.73 billion roubles versus a profit of 703.35 million in the same period the previous year. The company said the fourth-quarter results were hampered by back tax claims and fines from the federal tax service for the years 2003-2005. Russneft faces more than $800 million in back tax claims. A Russian court froze Russneft's shares this year and issued a warrant for the arrest of its owner, billionaire Mikhail Gutseriyev, who has accused the state of bullying and using tax evasion charges to force him out of business. Gutseriyev agreed last year to sell Russneft to Basic Element, the investment vehicle of Kremlin-friendly magnate Oleg Deripaska, but the deal, bogged down in legal complications, has yet to be completed. Switzerland-based commodities trader Glencore, which already owns stakes in some of Russneft's production units, also filed a request with the anti-monopoly service last year to buy the company. The anti-monopoly service has said it would make a final decision on both bids after all the court proceedings on tax are over.

Yukos shareholders to split $850m

26 March 2008 - Upstream OnLine - A Dutch court has ruled that shareholders of Yukos should receive $850 million of a loan the embattled oil firm failed to pay back when it went bankrupt. In 2003 Cyprus-based Moravel gave Yukos a $1.6 billion loan, of which just over half remains. Moravel is a subsidiary of GML, which was Yukos' largest shareholder group, Reuters reported. "We have tried from day one of the Russian Federation's attack against the company to do everything in our power to fulfill management's obligations to legitimate creditors," Yukos' former chief financial officer, Bruce Misamore, said in a statement. Once Russia's largest oil company, Yukos was brought to its knees under a multibillion-dollar back-tax claim that led to its bankruptcy and asset sales at state-forced auctions, most of which were snatched up by state oil major Rosneft. Yukos' ex-owner and previously Russia's richest man, Mikhail Khodorkovsky, is serving a nine-year prison sentence in Siberia after what is seen as a vendetta against him by the Kremlin for his political ambitions. Moravel had unsuccessfully filed the case for unpaid debt through London and Moscow courts since Yukos declared bankruptcy in 2006. "(We are in) the arduous process of trying to identify over 50,000 shareholders who should receive compensation," Misamore said, adding that Dutch foundations, which allowed Moravel to mount the case in the Netherlands, were formed to protect Yukos' international assets.

Contact me:  

This page is powered by Blogger. Isn't yours?