Monday, April 30, 2007
Officials Want Gazprom to Share Profits with Independent Producers
04-25-2007 Kommersant.com - Russia's competition watchdog is set to allow independent producers to have their shares in gas export. Gazprom will still be serving as a joint export channel, but it will have to share profits from deliveries with other gas firms to match the volumes of their production. Gazprom may have to lose some $2 billion in what is clearly another attempt to control the gas giant’s superprofit. Authorities are to come up with amendments to a gas export law which would open the door for independent gas producers to the Russian export channel, Deputy Director of the Federal Anti-Monopoly Service Anatoly Golomolzin told Kommersant Tuesday. The law on gas export, which was adopted last year, made Gazprom the sole gas exporter in Russia. Independent producers have repeatedly complained that they have to sell gas to Gazprom at domestic prices for the gas monopolist to export it eight times as expensive. Anti-monopoly officials would like to see Gazprom returning a portion of its profits to independent gas producers which would be equivalent to their shares in Gazprom’s transit system. Russia produces over 650 billion cu. meters of gas annually, 100 billon of which accounts for independent producers. Gazprom exports 200 billion cu. meters every year, which means independent producers could gain 30 billion in profits. The Anti-Monopoly Service suggests that Gazprom pays other gas firms for the price difference between domestic and export rates. Industry analysts have estimated that Gazprom will have to lose as much as $2 billion if the amendments are adopted. Government’s pressure to strip Gazprom of its excess profits has recently increased as Finance Minister suggested Gazprom and other state-run companies curb their borrowings and use profits to clear outstanding debts.
Gazprom's unit signs 160-mln-euro gas refinery deal with Syria
DAMASCUS. April 26 (RIA Novosti) - Gazprom's construction arm signed a 160-million-euro deal with its Syrian counterpart to build another gas refinery in the country, Russia's regional development minister said Thursday. The company, Stroitransgaz, a unit of the Russian energy giant, will build the refinery near the ancient Roman city of Palmyra, 150 miles northeast of Damascus, within two years, Vladimir Yakovlev said after a two-day session of the bilateral cooperation commission. The commission also signed an automotive traffic agreement and a MoU between Russian and Syrian business associations. "Syria is ready to sign up to $1 billion in contracts with Russia," Syria's Trade and Economy Minister Hosni Lutfi said. Yakovlev also said the two countries were committed to raising trade to a record $1 billion this year, up 35% from last year's $630 million. Economic cooperation between Russia and Syria rocketed after Russia wrote off a large part of Syria's 13-billion debt. This will be Stroitransgaz's third project in Syria, along with a gas refinery near the city of Homs in central Syria to be completed in 2008 and the construction of the Syrian part of the Jordan-Syria-Egypt gas pipeline.
Gazprom buys carbon emission reduction credits in Brazil
MOSCOW, April 24 (RIA Novosti) - The U.K. subsidiary of Russian energy giant Gazprom [RTS: GAZP] has signed a six-year agreement with Brazil's Propower to acquire carbon emission reduction credits, Gazprom said Tuesday. Established as a supplier of natural gas to major wholesale organizations, and also small and medium retail customers in the U.K.'s industrial and commercial sectors, Gazprom Marketing & Trading also seeks to implement Gazprom's strategy of providing active support for the global carbon business under the United Nations Kyoto Protocol. The 1998 Kyoto Protocol to the UN Framework Convention on Climate Change, which sets greenhouse gas emission targets for the period up to 2012, entered into force two years ago, following ratification by 141 countries, which together account for over 55% of global emissions. Gazprom Marketing & Trading and Propower have also agreed on joint investment in other projects in Brazil under the Kyoto Protocol's Clean Development Mechanism that will generate additional carbon emission reduction credits for the Gazprom subsidiary, the Russian energy giant said. Established in 2001, Brazil's Propower develops and introduces solutions for the use of renewable energy sources. The company also controls some renewable energy biomass power generation plants.
Tuesday, April 24, 2007
Eni 'on Gazprom's LNG short list'
24 April 2007 - Upstream OnLine - Italian giant Eni is said to be one of four shortlisted companies to build a liquefied natural gas terminal Gazprom has planned for St Petersburg, Italian media reports have claimed. The report was published in Il Corriere della Sera but did not cite sources. Il Corriere della Sera said the other contenders on the shortlist for the $1.5 billion to $2 billion project are Petrocanada, Mitsubishi and BP. In a recent newspaper interview Eni boss Paolo Scaroni said Eni wants to continue to increase its presence in Russia and is ready to invest $300 million in the LNG plant at St Petersburg. A list of qualified investors for the St Petersburg plant will be disclosed next week, he said. No one from Eni was immediately available to comment on the report.
Gazprom opens taps at Beregovoye
19 April 2007 - Upstream OnLine - Russian gas giant Gazprom has finally turned on the taps at the giant Beregovoye field, four years after the field, which holds the equivalent of Brazil's gas reserves, was scheduled to come on stream. 'The key to bringing Beregovoye on stream was its ownership. Until June last year, it was controlled by private Russian gas player Itera, which said Beregovoye had been ready to produce gas since May 2003 but Gazprom refused to link it to its pipelines. Last year Gazprom's banking arm paid Itera $130 million for 51% of Beregovoye's operating company, Sibneftegaz, resolving the dispute that had kept its gas locked up and off the market, a Reuters report said. The takeover by Gazprom, at a price that analysts said was little more than 10% of the stake's value, neutralised one of its last competitors and further strengthened the Kremlin's grip over the industry. Itera still has 28% of Sibneftegaz, while fertiliser company Acron , which opposed the gas players' plans for the field, has the remaining 21%. Gazprom said today that Beregovoye could produce up to 14 billion cubic metres of gas per year, above previous estimates of between 11 Bcm and 12 Bcm. Beregovoye lies in the Pur region near to Gazprom's existing production base and has reserves of 319.2 Bcm, making it one of Russia's largest gas fields. It also contains 4.9 million tonnes of gas condensate and 7.5 million tonnes of oil. Sibneftegaz chief executive Andrei Burbasov told a news conference that the company planned to produce 5 Bcm at the field this year and around 8 Bcm next year. Reuters quoted him as saying it might reach maximum output by 2009, provided it managed to produce between 2 Bcm and 2.5 Bcm from its lower deposits, a plan that is still being worked on. Investment in the field has already topped $450 million and another $50 million to 60 million will be needed to get up to full production, he said. The head of Gazprom's management at the field, Grigory Kucheryavenko, said the gas flow from Beregovoye to the pipeline network could also fall if Gazprom raised output from its nearby Zapolyarnoye field from 100 Bcm to the maximum of 130 Bcm. Gazprom is trying to expand the pipeline's capacity to cope with the added call on its network and would like to see other producers investing in its expansion.
Monday, April 23, 2007
Gazprom Lands in Sakhalin-2
04–19–2007 Kommersant – Nearly two-year effort of Russia’s gas monopoly to grab control over Sakhalin-2 has ended in success. Gazprom, Shell, Mitsui and Mitsubishi have inked a purchase and sale agreement for stocks of Sakhalin Energy. The deal was expected to be clinched Monday but was delayed by the Russian bureaucrats opposing extending the project budget to the detriment of the state one. The sources said Industry and Energy Ministry didn't surrender completely. It sanctioned the budget growth to $19.4 billion but refused to compensate $3.6 billion to participants. Gazprom Deputy Chief Executive Alexander Medvedev, head of Shell in Russia Chris Finlayson, Mitsui Vice President Hiroshi Tada and Mitsubishi Senior Executive Hisonori Yoshimura signed a deal in Moscow April 18, authorizing Gazprom to take 50 percent plus a stock in the Sakhalin-2 oil and gas project formally led by Royal Dutch Shell until very recently. Shell’s stake narrows from 50 percent to 27.5 percent, Mitsui sinks from 25 percent to 12.5 percent and Mitsubishi has to confine to 10 percent instead of 25 percent. In the next move, Gazprom will promote two executives to Sakhalin Energy, which will be taken over by a representative of Russian monopoly in 2008 once the contract of Ian Craig expires and a liquefied gas works is put into operation. The deal was expected to be clinched on Monday but was delayed on the need to settle environmental claims and agree on the project budget, Medvedev said. A few sources close to Gazprom, Shell and Industry and Energy Ministry explained that the state and the holders finally agreed to step up the budget to $19.4 billion till 2014 (the figure has been officially confirmed by Industry and Energy Ministry) in line with the actual desire of private holders. But the budget extension coupled with pro-rata growth in amount of state compensation will delay the revenues flow to government's budget. The sources said it was decided against adding $3.6 billion to the budget costs to be indemnified by the state. So, the amount paid by Gazprom to control Sakhalin-2 ($7.45 billion) may go up. At the same time, the chances that $3.6 billion will be for account of previous participants exclusively are very strong.
Gazprom finalizes deal to buy 50% stake in Sakhalin II
MOSCOW, April 18 (RIA Novosti) - Gazprom [RTS: GAZP] has finalized a $7.45 billion deal to buy 50% plus one share in formerly Shell-led Sakhalin II with the partners in the vast hydrocarbon project off Russia's Pacific Coast. "Joint work to complete the project is being carried out very proactively already," said Alexander Medvedev, deputy board chairman of the Russian energy giant. Shell Russia President Christopher Finlayson said the project was 80% completed. The partners said at the signing ceremony that liquefied gas (LNG) would be supplied in time and in full volume. As well as two fields with estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas, Sakhalin II comprises a pipeline, an LNG plant - due to be launched in 2008 - and an LNG export terminal. Most of the LNG from the project will be exported to Japan. Finlayson said Wednesday that shareholders were considering building an additional, fourth, gas liquefier at the plant, describing the project, implemented under a production-sharing agreement (PSA), as more difficult than any other. The partners in the project were reported earlier Wednesday to have coordinated the costs of its second stage at $19.4 billion until 2014 following months of pressure last year from authorities over foreign investors' demands to double spending and environmental damage accusations. Medvedev said Gazprom would appoint a general director of the LNG plant, who would oversee production from the beginning. Medvedev and Stanislav Tsygankov, head of foreign economic activities in Gazprom, have been nominated as non-executive directors of the project operator, Sakhalin Energy. "Gazprom, as a shareholder, is taking on the burden under the project as of tomorrow," Tsygankov said, adding it was unclear at the moment who would replace Ian Craig as Sakhalin Energy executive director. Gazprom acquired the controlling stake in the project in December 2006. The stakes of the other partners, Royal Dutch Shell, Mitsui and Mitsubishi, halved to 27.5%, 12.5% and 10% respectively, as a result of the deal.
Friday, April 13, 2007
Sakhalin 2 D-day looms
13 April 2007 - Upstream OnLine - Shell and Gazprom are due to meet with officials from Russia's Energy Ministry on Monday in an effort to close a deal on the state-controlled gas giant's entry into the massive Sakhalin 2 development. "It is premature to say it is set, but everything is in the final stages," a source close to Gazprom told the Moscow Times. The newspaper added that three sources involved in the talks confirmed next week's high-level meeting, but declined to give details or their names due to the sensitivity of the matter. Shell ceded majority control of Sakhalin 2 to Gazprom in December after a highly public battle over purported environmental violations at the project. Russian officials initially expected the deal to be concluded in March, but negotiations have dragged on through April as Gazprom and Shell wrangled over details of the split. Under the deal, Shell and its Japanese partners, Mitsui and Mitsubishi, each halved their stakes in the project, handing 50% plus one share to Gazprom for $7.5 billion. Shell will now have a stake of 27.5%. Talks have stumbled over Gazprom's wish to avoid taking on any potential liabilities that could arise from the allegations of environmental damage. The Audit Chamber has put the damage at $5 billion, while officials at the Natural Resources Ministry said that at the height of the environmental campaign last year that the damages ran as high as $30 billion. Project operator Sakhalin Energy submitted a new environmental action plan to the ministry last month. A ministry spokesman said a decision on whether to approve the plan would be made by Tuesday. "They're close to reaching a decision," ministry spokesman Rinat Gizatulin said. "I think everything will be fine." Shell spokesman Maxim Shub declined to comment on the details of the talks. "It's a huge project, there are a lot of questions to be reviewed and agreed," he told the paper. "We expect the deal to be closed in 2007." Energy Minister Viktor Khristenko said earlier this month that he expected the deal to be completed in April. A banking source close to the deal said indications were that the deal was close. "Something is happening. We're seeing large cash flows - there's a lot of activity," the banking source said. Meanwhile, a senior member of Russia's Federation Council said last night that the production sharing agreement that governs the project was unfair to Russia, RIA-Novosti reported. "The terms of the PSA infringe on Russia's interest," said Natural Resources Committee Chairman Viktor Orlov, who heads a working group formed to study Sakhalin 2.
Gazprom taps giant Siberian field
12 April 2007 - Upstream OnLine - Gazprom, the world's largest gas supplier, plans to start production next week at one of Russia's largest Siberian gas fields, an industry source said today. Gazprom plans to produce 11-12 billion cubic metres of gas a year at the west Siberian Beregovoye field, which has reserves of 320 billion cubic metres of gas, enough to supply Britain for more than three years. Gazprom's banking arm Gazprombank last year bought a 51% share in the field, located close to Gazprom's production base, from smaller rival Itera for $130 million. Itera, which still owns 28% share in the deposit, has been developing the field since 2003, but was unable to start commercial production as it failed to reach agreement with Gazprom on access to the pipeline system. "The Beregovoye gas was let into the trunk pipeline system in the beginning of April and commercial production at the field will start next week," the source said.
Shtokman boosts Gazprom reserves
10 April 2007 - Upstream onLine - Russian gas monopoly Gazprom said today that its gas reserves rose by 2.4% to 29.8 trillion cubic metres last year, reflecting a reserves revision for the Shtokman field, in the Barents Sea. "Gazprom's gas reserves falling into the ABC1 categories (under the Russian classification system) stood at 29.8 trillion cubic metres as of 1 January 2007," Nail Gafarov, deputy head of Gazprom's production department, told a conference. The increase from last year's figure of 29.1 Tcm is largely covered by a reassessment of reserves at Shtokman, which rose to 3.7 Tcm from the previous figure of 3.2 Tcm. Gazprom wants to start production at the Barents Sea field in 2013-2015 and is talking to potential partners, including ConocoPhillips, Total, Statoil and Norsk Hydro. Gazprom produced 552 billion cubic metres of gas last year. It has said its reserves could double by 2020 due to exploration of new regions such as East Siberia and the Arctic.
Eni lets Gazprom take Yukos bite
04 April 2007 - Upstream OnLine - By Vladimir Afanasiev - Russia's gas monopoly Gazprom will buy at least 51% of bankrupt producer Yukos' gas assets under a deal with Italian energy players Enel and Eni, a Gazprom executive said today. "The structure of what we will get is still being discussed, but we will definitely get 51%, that is a minimum," Gazprom's export chief Aleksandr Medvedev told Reuters. Eni and Enel won a Russian state auction for Yukos' gas assets this morning, paying 151.536 billion roubles ($5.83 billion) after competing hard with Russia’s Nefttradegrup, representing Russia’s state controlled Rosneft oil company. The sale included Yukos gas producers Arcticgaz and Urengoil which own fields in Gazprom’s core gas producing Yamal-Nenets autonomous region in West Siberia, with combined recoverable gas reserves of these fields close to 1 trillion cubic metres of gas. Under the deal, Gazprom aims to take the 51% shareholding in Arcticgaz and Urengoil while Eni and Enel will share the remaining 49% to comply with Russian requirements that foreign companies cannot own a controlling stake in strategic energy assets in the country. The lot has also included the Yukos’ 20% stake in Gazpromneft, the oil subsidiary of Gazprom and also the fifth largest oil producer in Russia. Gazprom has said it has a call option to buy the Gazpromneft’s stake off Eni and Enel and Medvedev said that this stake would be repurchased in full and the deal might close as early as tomorrow. Meanwhile, Eni said it would sell the 20% stake in Gazpromneft to Gazprom for $3.7 billion plus costs. Based on the price of Gazpromneft’s shares this week, the market value of this stake is estimated at $3.9 billion. Eni said the agreed option to sell the asset to Gazprom may be exercised at any time within two years. Robert Amsterdam, a US lawyer acting for former Yukos owner, Mikhail Khodorkovsky, lambasted the results of the today’s auction and a previous auction held on 27 March, stating that “these are not open free auctions but rather organised sales at knock-down prices and with predetermined winners. While Eni appears at first sight to have won this auction, in reality Gazprom is the winner.” “The willingness of Eni to participate in this farce says more about its surrender to the new gas Opec of Algeria and Russia than anything else," he added.
Gazprom, Romania's Conef Energy sign long-term gas deal
MOSCOW, April 4 (RIA Novosti) - Russia's energy giant Gazprom [RTS: GAZP] and Romania's Conef Energy SRL have signed a contract for natural gas deliveries to Romania in 2010-2030, Gazprom said in a press release Wednesday. Under the contract, Romania will receive up to 2 billion cubic meters of Russian gas annually, with an aggregate supply volume due to reach 42 billion cubic meters. Russia has supplied natural gas to Romania since 1979, and some 110 billion cubic meters of Russian gas was exported to the country as of April 1, 2007. Conef Energy SRL is a subsidiary of Ñonef SA and part of the Marco Investment and Industries Group, an international company that controls a vertically oriented aluminum holding, a number of financial and investment companies, developers and other companies around the world.
Ñonef SA has cooperated with Gazprom Export, Gazprom's export arm, since 2002. Russian natural gas deliveries, effectuated as part of the partnership, have significantly improved Romania's energy situation.
Ñonef SA has cooperated with Gazprom Export, Gazprom's export arm, since 2002. Russian natural gas deliveries, effectuated as part of the partnership, have significantly improved Romania's energy situation.
Chevron decides against joining Gazprom-led Shtokman gas project
MOSCOW, April 4 (RIA Novosti) - U.S.-based Chevron has given up plans to join the development of the vast Shtokman gas project off Russia's Arctic coast, the press secretary for the company's Moscow office said Wednesday. U.S. majors Chevron and ConocoPhillips, Norway's Statoil and Norsk Hydro and France's Total had been short-listed to develop the Shtokman offshore gas field, but Russian state-run energy monopoly Gazprom announced last October it would develop the gas deposit on its own. Gazprom also said it could attract partners with expertise in liquefying natural gas and development in "severe weather conditions" as contractors, but that it would be the sole license holder. "After a detailed study and long deliberations, Chevron has decided not to participate any longer in the discussions of Gazprom's current offer to develop the Shtokman project," Irina Rybalchenko said. The giant Shtokman field holds an estimated 3.2 trillion cubic meters of natural gas and 31 million metric tons of gas condensate in the Barents Sea, where Gazprom plans to build a liquefied natural gas plant. Some $12-14 billion will be invested in the project's first phase, and production will begin in 2011. The Shtokman deposit is the only source of natural gas for the ambitious Nord Stream gas pipeline that will link Russia to Germany along the Baltic seabed.
Eni offers Gazprom 20% in Gazprom Neft for $3.7 bln over 2 years
MOSCOW, April 4 (RIA Novosti) - Italy's oil and gas company Eni has offered Gazprom [RTS: GAZP] a 20% share in Gazprom Neft for $3.7 billion over two years, Eni said in a news release Wednesday. "Eni gives Gazprom the right to purchase the 20% package of Gazprom Neft shares at any time within the next two years for $3.7 billion plus financing and operating costs," Eni said. The statement also said Italy's Eni and Enel proposed that Gazprom buy 51% in Yukos assets bought at auction over two years as well. If Gazprom agrees, the assets will be managed through a joint venture of Eni and Gazprom. "The above-mentioned agreements are another step on the way toward the development of a strategic partnership between Eni and Gazprom, an agreement about which was signed in November 2006. In line with the agreement, the two companies establish an alliance to develop energy production, processing and sale projects in Russia and abroad," the news release said. It was reported earlier Wednesday that a subsidiary of Italy's energy company Eni has won a 20%-stake in Gazprom Neft at a second auction of Yukos assets, offering 151.53 billion rubles ($5.83 billion). Three companies bid in the second auction for the now bankrupt oil company's assets, Russia's Federal Property Fund said. It said a third auction, including Yukos' research and development assets, has been called off due to a lack of bids. A fund spokesman said the companies were EniNeftegaz (a subsidiary of Italy's oil and gas group Eni), Yunitex (to be acquired by independent Russian gas producer Novatek), and Neft Trade Group (affiliated with state-run oil producer Rosneft). According to informal reports, seven companies applied to participate in the auction. Gazprom said earlier it could acquire the Gazprom Neft stake if EniNeftegaz won the Yukos auction. The Russian energy giant said it has signed a call-option agreement with leading Italian energy companies Eni and Enel on the acquisition of assets, including the second lot of Yukos assets. The starting price for the lot was 144.77 billion rubles ($5.57 billion). Nikolai Lashkevich, the press secretary for the Yukos receiver, said $5.83 billion is a fair price. Rosneft [RTS: ROSN] reclaimed its 9.44% stake held by Yukos in the first auction through a 100%-controlled subsidiary, RN-Razvitiye, last Tuesday. The total worth of Yukos is an estimated 709 billion rubles ($27.3 billion). Once Russia's leading crude producer, Yukos was declared bankrupt in August. Rosneft said it will use the stock it bought back from Yukos to acquire core assets in Russia and abroad. RN-Razvitiye offered 197.84 billion (about $7.6 billion) for the stake, including 12 bills of exchange in the Yuganskneftegaz oil-producing unit, worth 3.558 billion rubles (about $136.8 million). The price paid by Rosneft at the auction was fair, a company representative said. But the chairman of the Yukos board of directors said the stake was sold below market value. "The buyer of this stock should understand what the market price is. If you pay less, you expose yourself to criticism from the company's majority and minority shareholders alike," Viktor Gerashchenko said at Yukos's central office, where the auction was held. Market watchers believe Rosneft's purchase will further strengthen the role of the state in the oil sector and enhance the company's attraction for foreign investors. Yukos, once Russia's largest oil company, was declared bankrupt August 1, 2006, after three years of litigation with tax authorities over the company's tax arrears. Yukos, whose founder Mikhail Khodorkovsky is serving an eight-year prison term in Siberia after being convicted of fraud in May 2005, faces a total of more than 700 billion rubles (about $26.9 billion) in claims from creditors.
Gazprom to get 20% of Gazprom Neft under agreement with Eni
MOSCOW, April 4 (RIA Novosti) - Gazprom [RTS: GAZP] will receive 20% of Gazprom Neft [RTS: SIBN] shares under an agreement with Italy's oil and gas group Eni, a deputy CEO of the Russian energy giant said Wednesday. Alexander Medvedev said an Eni subsidiary bought the stock at a Yukos asset auction Wednesday, and added that Gazprom will receive at least 51% of Yukos assets bought by the Italian company's subsidiary. "We will receive at least 51% of the assets from Eni. As for gas assets, obviously we will try to be included," Medvedev said. It was reported earlier Wednesday that a subsidiary of Italy's energy company Eni has won a 20%-stake in Gazprom Neft at a second auction of Yukos assets, offering 151.53 billion rubles ($5.83 billion). Three companies bid in the second auction for the now bankrupt oil company's assets, Russia's Federal Property Fund said. It said a third auction, including Yukos' research and development assets, had been called off due to a lack of bids. A fund spokesman said the companies were EniNeftegaz (a subsidiary of Italy's oil and gas group Eni), Yunitex (to be acquired by independent Russian gas producer Novatek), and Neft Trade Group (affiliated with state-run oil producer Rosneft). According to informal reports, seven companies applied to participate in the auction. Gazprom said earlier it could acquire the Gazprom Neft stake if EniNeftegaz won the Yukos auction. The Russian energy giant said it has signed a call-option agreement with leading Italian energy companies Eni and Enel on the acquisition of assets, including the second lot of Yukos assets. The starting price for the lot was 144.77 billion rubles ($5.57 billion). Nikolai Lashkevich, the press secretary for the Yukos receiver said $5.83 billion is a fair price. Rosneft [RTS: ROSN] reclaimed its 9.44% stake held by Yukos in the first auction through a 100%-controlled subsidiary, RN-Razvitiye, last Tuesday. The total worth of Yukos is an estimated 709 billion rubles ($27.3 billion). Once Russia's leading crude producer, Yukos was declared bankrupt in August. Rosneft said it will use the stock it bought back from Yukos to acquire core assets in Russia and abroad. RN-Razvitiye offered 197.84 billion (about $7.6 billion) for the stake, including 12 bills of exchange in the Yuganskneftegaz oil-producing unit, worth 3.558 billion rubles (about $136.8 million). The price paid by Rosneft at the auction was fair, a company representative said. But the chairman of the Yukos board of directors said the stake was sold below market value. "The buyer of this stock should understand what the market price is. If you pay less, you expose yourself to criticism from the company's majority and minority shareholders alike," Viktor Gerashchenko said at Yukos's central office, where the auction was held. Market watchers believe Rosneft's purchase will further strengthen the role of the state in the oil sector and enhance the company's attraction for foreign investors. Yukos, once Russia's largest oil company, was declared bankrupt August 1, 2006, after three years of litigation with tax authorities over the company's tax arrears. Yukos, whose founder Mikhail Khodorkovsky is serving an eight-year prison term in Siberia after being convicted of fraud in May 2005, faces a total of more than 700 billion rubles (about $26.9 billion) in claims from creditors.
Gazprom Neft posts 47.7% rise in 2006 net profit
MOSCOW, April 3 (RIA Novosti) - Gazprom Neft [RTS: SIBN] said Tuesday its unconsolidated net profit in 2006 increased 47.7% to 62.829 billion rubles ($2.4 billion). The company, known as Sibneft before it was taken over by Russian energy giant Gazprom, said its net profit in October-December 2006 was 15.162 billion rubles ($583 million). The company said its net profit in the fourth quarter of 2006 fell 14.2% on the third quarter of the same year, attributing the fall to "reduced prices of oil and oil derivatives, as well as declining sales."
Gazprom plans to become global energy leader
MOSCOW, April 3 (RIA Novosti) - Russia's energy giant Gazprom [RTS: GAZP] said Tuesday it plans to become the world's largest energy company. Alexander Medvedev, general director of Gazprom Export, said the energy giant's transition to the principle of equal prices from 2011 will facilitate this task. "It is not enough for us simply to meet 25% of global gas consumption. We want to become the largest energy company," Medvedev told the fifth All-Russian forum on the fuel and energy sector in the 21st century. Medvedev said Gazprom will diversify its operations to achieve this goal and add oil, oil refining and electric power to its natural gas component. Medvedev said this is an ambitious goal, considering that prices are regulated by the state in Russia. "But starting from 2011, a decision has been made to switch to the principle of equal prices and this goal will become easier," Medvedev said. Medvedev also said Gazprom exported 151.5 billion cubic meters of natural gas to 22 countries in 2006, with sales totaling $37.2 billion compared to $18.4 billion in 2005. Gazprom's market capitalization grew from $9 billion in 2000 to $270 billion in 2006.
Wednesday, April 11, 2007
'Gazprom risks gas shortages'
03 April 2007 - Upstream onLine - Russian gas monopoly Gazprom should invest more in upstream capacity development as - despite having massive reserves - it could be short of marketable gas in coming years, International Energy Agency (IEA) boss Claude Mandil warned today. "We have some concerns that Gazprom does not invest enough in upstream projects to develop gas, which means that it could be short of gas in the coming years," Mandil told a news conference today. Mandil said Hungary should not rely solely on the extension of Gazprom's Blue Stream pipeline to diversify its gas supply, 80% of which now comes from Russia, as that would not mean a new source, only a new route. He said three alternative projects should be considered together - Blue Stream, the European Union's Nabucco project, which would bring gas from the Caspian region, and a liquefied natural gas terminal on the Adriatic Sea. Both Blue Stream and the five-nation Nabucco are estimated to cost around €5 billion ($6.6 billion) and Hungary's government, which has closer ties with Moscow than most east European countries, has been accused of favouring the Russian alternative. The government said it had not picked either pipeline. "On diversification, Nabucco is much better, no doubt about that," Reuters quoted Mandil as saying. "The only problem is it is not a very clear project and not very well supported by industry and governments," he said. "LNG is certainly the best solution for diversification, it's gas that can come from anywhere in the world," he added. "The problem is that is has not started."
Sunday, April 08, 2007
Russia's Rosneft Won Itself on Yukos Assets Auction
28.03.2007 09:31 [Neftegaz.ru] - Russia's state-controlled oil company Rosneft won an auction to buy shares from an auction of Yukos' former assets. Rosneft was bidding against BP's joint venture in Russia, TNK-BP, but analysts believe that TNK-BP was only participating to give the auction a semblance of being a competitive process. Tim Osborne, a director of Menatep, which represents the founding shareholders of Yukos, said: "BP were told to turn up at the auction and told what to bid... these are stolen goods, sold through a fake auction." The shares were picked up by Rosneft yesterday after a brief auction, at 10 per cent below the current market price. It paid 197.84bn roubles for 9.44 per cent of its own shares.
Gazprom deal for Sakhalin II stake to be closed in April
MOSCOW, April 6 (RIA Novosti) - Gazprom's deal to buy a stake in the Sakhalin II oil and gas project will be completed in April, the Russian industry and energy minister said Friday. "In April, all decisions, not just legal, on the deal, will be completed," Viktor Khristenko said. Khristenko said Gazprom, Shell, Mitsubishi and Mitsui are finalizing legal documents. The ambitious oil and gas project, formerly led by Anglo-Dutch oil major Shell, was subjected to months of intense pressure last year from Russian authorities, who accused it of causing serious environmental damage to Sakhalin Island, including deforestation, toxic waste dumping and soil erosion. Earlier, Russia's Audit Chamber assessed environmental damage inflicted by the project at $5 billion. Russian energy giant Gazprom [RTS: GAZP] took over project operator Sakhalin Energy in late 2006. In December 2006, Gazprom acquired 50% plus one share in the Sakhalin II project for $7.45 billion. Shell previously held a 55% stake, while Japan's Mitsui and Mitsubishi owned 25% and 20%, respectively. Sakhalin II comprises an oil field with associated gas, a natural gas field with associated condensate, a pipeline, a liquefied natural gas plant (LNG), and an LNG export terminal. Most of the LNG from the project will be exported to Japan, which is seeking to diversify its energy imports. The project's two fields have estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.