Russ Oil-Gas

01-25-2007 Regnum News - Tajikistan has no other partners yet apart from Gazprom in exploring oil and gas fields, Tajik Energy and Industry Minister Sherali Gulov told reporters on January 24, a REGNUM correspondent informs. According to him, Gazprom obtained a license for exploring two prospects up to now. This year, to carry our prospecting works in Sargazon and Rengan, Gazprom is expected to spend $12 mln. Estimated gas reserves in Rengan total 35 billion cubic meters, in Sargazon 30 billion cubic meters. “Two more licenses, for prospecting West Shambara and Sarikamysh will be issued only under the results of works done at Sargazon and Rengan,” Gulov said. Speaking on Tajikistan’s cooperation with Uzbekistan, he informed reporters that the sides agreed on mutual energy supplies in 2007. According to the agreements, this winter Tajikistan is to receive 600 mln kwh of electric power. In summer, it is supposed to return to Uzbekistan 1.5 times more energy. Overall, since the beginning of the year, Uzbekistan imported 32 mln kwh. According to the minister, gas reserves in Tajikistan are estimated as over 1 trillion cubic meters.

01-18-2007 Regnum News - Gazprom’s investment program envisages $644 mln for development of the Shtokman field planned to be started in 2007. As BarentsObserver informs, Gazprom adopted its investment program on January 15. It allows stating that Gazprom confirmed its intention to start developing the Shtokman field in accelerate? pace. General amount of investments is 529.38 bln rubles (about $20 bln), which is higher than the sum of 459 bln rubles last year. 11.13 bln rubles are envisaged for development of Prirazlomnoye field in the Pechora Sea. Prirazlomnoye is to become the first developed oil field on Russia’s northern shelf. The shelf is to be placed in operation in 2008. The Shtokman field with capacity of 3.6 trillion of cubic meters of gas struck in late 1980s is one of the largest shelf deposits of gas in the world. It is located 600 km north from Murmansk on the depth of 350 m beneath the sea bed in the area with severe climate and is considered to one of Russia’s treasures in the Barents Sea.

01-16-2007 Regnum News - Moscow intends to contract a large-scale PR campaign to improve Russia’s image abroad. According to information of Kommersant newspaper (Russia), the Kremlin is now discussing who will be entrusted with such a mission. There are several contenders for $11 million including Weber Shandwick, Burson Marsteller, Barbour Griffith & Rogers, Ruder Finn, Hill & Knowlton, as well as Patton Boggs and Hogan & Hartson. The pr campaign will include actions to improve Gazprom’s image, which image, as analysts believe, suffered a lot during the recent talks on gas supplies to neighboring countries. The newspaper says that Gazpromexport is having talks with a consortium of PR agencies led by PBN Company. The negotiations can result in a three-year contract for service in the territory of the United States and the European Union. The PBN Company is an international consulting communications strategies agency serving worldwide via a network of its offices in Washington, London, Moscow, Kiev, Riga, Alma-Ata and Chisinau. The PBN Company was the first communications strategies company that was officially registered and accredited by the Ministry of Foreign Affairs of the USSR. Vlast magazine attaches to the PBN Company introducing the “PR” term into the Russian vocabulary.

23 January 2007 - Upstream onLine - Russian gas monopoly Gazprom said a report that it was seeking a $10 billion loan to buy half the Sakhalin 2 project and assets of bankrupt company Yukos was "wrong". Interfax news agency today quoted a banking source as saying that Gazprom was holding talks with bank organisers and could give a mandate within one month. "This report is wrong," said a Gazprom spokesman, who declined to give other details. Gazprom agreed last month to buy into the Sakhalin 2 project by paying $7.45 billion to existing shareholders Shell, Mitsui and Mitsubishi. The company also said it would look into buying gas and oil assets of bankrupt oil giant Yukos. Yukos's bankruptcy receiver is expected to begin auctioning the company's assets within months. Gazprom was forced to increase its borrowing by a third in 2006 to 118.9 billion roubles ($4.5 billion) after it bought minority stakes in Russia's second-largest gas producer, Novatek and Moscow city utility Mosenergo. The world's largest gas producer said it planned to stick to its long-term target to borrow no more than 90 billion roubles in 2007 to 2009 despite failing to deliver on its pledge in the past few years. Many analysts doubt the plan to cap borrowing is feasible in the wake of the Sakhalin 2 deal, which is due to close in the first half of this year.

19 January 2007 - Upstream onLine - Norway's Saga Oil has paid a final installment of $10 million to become the sole owner of Russian subsidiary Promgeotek and its Rodnikovsky licence. Saga said that well 102 on the licence is currently in a clean up phase and is shut-in as the company is establishing the reservoir properties. It added that well 106 is progressing towards its planned start of production.

11.01.2007 - [Neftegaz.ru] - Russia's Gazprom and US Chevron have set up a joint venture based in resource-rich northwestern Siberia. The joint venture would search and produce hydrocarbons, Gazprom officials said, but refused to elaborate further. Gazprom owns 30 per cent of the new company's shares and plans to increase its stock to over 50 per cent.

15.01.2007 - [Neftegaz.ru] - Gazprom is finally free to buy any Russian gas producing enterprises after it has succeeded in reversing the state competition watchdog’s regulation? Kommersant daily. There are now no obstacles for Gazprom to set up monopoly not only on exports but also on the whole gas production in Russia. Experts say that oil companies will remain the only alternative gas suppliers in Russia. Many of them, however, are already selling their gas business to Gazprom. A regulation of the Russian Federal Anti-Monopoly Service as of 2005 on the merger of Gazprom and Nortgaz restricting Gazprom in buying up gas assets has been invalidated in three instances last summer, Igor Artemyev, head of the competition watchdog said Friday. The order was substantially restricting the Russian gas giant in acquiring any new assets. Last summer, Gazprom bought 51 percent in Sibneftegaz, which owns a large gas deposit, and started negotiating other big gas deals.

16.01.2007 - [Neftegaz.ru] - Russia's Gazprom and Dresdner Kleinwort, the corporate and investment banking arm of Germany's Dresdner Bank are likely to establish a carbon trading venture. Gazprombank, part of the Gazprom Group, and Dresdner Kleinwort, owned by German insurer Allianz , would invest in projects generating "carbon credits" under the Kyoto protocol, largely in Russia and eastern Europe, the FT said. "This could help Russia attract inward investment in infrastructure and energy efficiency," Matthew Shaw, director of the joint venture, was quoted in the FT as saying. Ingo Ramming, emissions trading chief at Dresdner Kleinwort, added: "We expect this to be one of the top players in the carbon trading market."

RBC, 24.01.2007, Moscow 16:34:22.Gazprom Neft has not given up on the idea of creating a joint venture with LUKoil, the company's spokeswoman Natalya Vyalkina told RBC, commenting on the delay in signing an agreement between the two companies on establishing a joint venture. According to Vyalkina, the new management of Gazprom Neft needs time to get acquainted with the documents on the joint venture, but an agreement will ultimately be signed.

RBC, 24.01.2007, Moscow 10:00:07.Rosneft and Gazprom Neft will try to reach an agreement on joint operations on Asian markets. The Kremlin is thus hoping to raise the Gazprom subsidiary's cost efficiency. However, the first round of debates accomplished nothing, as the management of Gazprom Neft was soon after replaced. In the opinion of experts, the companies will only be able to reach a compromise after YUKOS assets are divided up. By then, Gazprom Neft will have determined its development strategy and Rosneft will have begun its expansion, the RBC Daily newspaper wrote today.

RBC, 24.01.2007, Moscow 09:45:37.A decision in principle has been passed in the Kremlin on Rosneft's secondary public offering, in the course of which up to 25 percent of the company's shares will be sold, the RBC Daily newspaper reports. The size of the flotation practically coincides with the amount of a loan the company was promised late last year by a western bank syndicate ($24.5bn) to acquire assets in Russia and abroad. Analysts believe that the new placing will take place no earlier than in the third quarter of 2007, and that the proceeds will be used to pay back an earlier loan secured by Rosneft to purchase YUKOS assets.

05/ 01/ 2007 MOSCOW. (Igor Tomberg for RIA Novosti) - Gazprom's latest moves on international markets have shown that the Russian gas monopoly is strengthening its positions and becoming integrated into the global economy. Gazprom CEO Alexei Miller and Gaz de France President Jean-Francois Cirelli have recently signed an agreement to extend contracts for Russian gas supplies until 2030. Under the contracts, Gazprom will sell up to 1.5 billion cubic meters of gas to French end consumers as of next year. In 2005, Russia supplied 13.1 billion cubic meters of gas to France. GdF's portfolio totals about 67 billion cubic meters of gas. Italy's Eni and Austria's OMV also agreed to make similar concessions as part of agreements to extend their long-term contracts. Eni will enable Gazprom to sell 2 billion cubic meters of gas on the Italian market, and to raise this amount to 3 billion cubic meters in 2010. OMV granted the Russian energy giant the right to sell 1.7 billion cubic meters in Austria through GWH and Centrex, which are affiliated to Gazprom Export and Gazprombank.
German E.ON-Ruhrgas refused to give the Russian gas company access to its sector of the German market. However, Gazprom has agreed to swap assets with German energy companies. As a result, Gazprom will exchange stakes in the Yuzhno-Russkoye deposit for access to European gas distribution networks. Agreement has also been reached to jointly build the Nord Stream pipeline under the Baltic Sea.
Dutch Gasunie has also offered Gazprom a stake in the BBL gas pipeline, which connects Belgium to Great Britain, and promised to give the Russian company access to the Dutch market in exchange for 9% in Nord Stream. All this clearly shows that a strategic assets swap, which Gazprom talked about last year, is being put into practice. Foreigners have secured long-term gas supplies and stakes in Russian gas fields, while Gazprom will get access to European gas distribution networks. Global hydrocarbon reserves are limited and mostly located in problem-ridden regions, hence the interest in Russian gas assets, which seem more secure than Venezuelan, Nigerian or Iraqi ones. Foreign investors' confidence in Russian companies, such as Gazprom, has grown significantly in the past few years. Early this century, Gazprom's capitalization was $45-$50 billion, and today it makes $273 billion. The global stock market has appreciated the Russian gas monopoly's play in the global arena. The agreement with Gaz de France actually means that Gazprom has made an advance payment to the French state-owned concern in the hope that it will buy some of its assets. During the forthcoming merger of GdF and Suez the two companies will have to cede control of some of their assets in Belgium and France. A decision has been made to sell stakes in Belgian Distrigaz, including its French assets, and in power engineering company SPE, a joint venture of GdF and British Centrica, as well as Cofathec Coriance, GdF's thermal network in France. "We will be open to outside proposals," said Gaz de France President Jean-Francois Cirelli. According to the mass media, during their negotiations Gazprom and GdF discussed every asset that could be sold in detail. Gazprom's access to end consumers in France and other European countries shows that Moscow is determined to build a balanced scheme of gas cooperation with Europe that would ensure the energy security of both parties. By issuing long-term guarantees of stable gas deliveries Gazprom is seeking access to distribution networks for stable gas sales. Gazprom CEO Alexei Miller said the agreement with Gaz de France was aimed at improving France's energy security. In turn, the head of the French monopoly said: "We consider Gazprom the best of all companies we would like to see on our market." In the outgoing year consolidations, mergers and takeovers became a characteristic feature of energy market growth. Most analysts in the West describe the merger of Norwegian companies Statoil and Norsk Hydro, and the forthcoming merger of Gaz de France and Suez as counterbalance to Gazprom, which has been strengthening its positions in Europe. However, the Russian company is also becoming integrated into the European gas market. Core companies have set a trend of swapping assets and giving one another access to lucrative sectors or deposits of natural resources. Gazprom's huge resources make it possible to suggest that it will be stepping up its acquisition of European gas transportation, storage and distribution assets. One can agree with the Russian gas monopoly's head, who said that the trend was aimed at strengthening European energy security, which is impossible without a balanced system that would take into account the interests of both consumers and producers.