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Wednesday, October 31, 2007

Miller New Chairman of Gazprom Media

miller_wOct. 30, 2007 - The St. Petersburg Times by Anna Smolchenko - MOSCOW — Gazprom CEO Alexei Miller on Friday was elected chairman of the board of Gazprom-Media, the media holding said. Miller, who was also recently elected the chairman of Gazprom’s pension fund, replaced Alexander Dybal, the previous board chairman, who earlier left for a post at Gazprom Neft. Gazprom-Media general director Nikolai Senkevich said Friday that the company was sure that the board’s new composition would make it “even more effective.” “That Alexei Borisovich is heading Gazprom-Media’s board of directors is not only a big honor for us but also a huge responsibility,” he said in a statement posted on the company’s web site. Irina Zenkova, a Gazprom-Media spokeswoman, said there was nothing surprising about Miller’s appointment, as he also chaired Gazprombank and Gazprom Neft. “This is just a recognition that the holding is a sound business,” she said. Some analysts suggested Friday that the move could be part of an exit strategy for Miller, who has suffered from poor health this year and was hospitalized with a kidney ailment in the summer. Alexei Mukhin, a media analyst with the Center for Political Information, said Miller’s new job was not related to the upcoming State Duma and presidential elections. “I believe it is a golden parachute for Miller, whose health has deteriorated recently,” he said. Gazprom spokesman Sergei Kupriyanov said the Gazprom-Media appointment was strictly a business decision. He said Miller had been involved in the media holding before the appointment and that Friday’s move meant that he would now do it formally. Kupriyanov dismissed claims that the appointment was a perk for Miller. “How many golden parachutes does one person need?” Such speculation was “nonsense,” he said. Miller has been Gazprom CEO since 2001 and is seen as a close ally of first deputy prime minister and Gazprom board chairman Dmitry Medvedev. Zenkova denied that the new post would be a sinecure for Miller, saying Gazprombank would be a better place if Miller was looking for a cushy job. Chris Weafer, chief strategist at UralSib, said that because of his recent illness, Miller had been less involved in Gazprom recently. “It is expected that he will leave as part of Gazprom’s move to the much more active expansion phase expected from next year,” Weafer said in e-mailed comments. He added that there had been speculation that Medvedev would change his role in the company to that of chief executive for the second quarter of 2008. “But the Kremlin will not want to lose Miller’s experience entirely, and hence, this may be to accommodate him in a different role but still within the group,” Weafer said. In addition to NTV and TNT entertainment television channels, Gazprom-Media controls, among other media outlets, Ekho Moskvy radio, Izvestia newspaper and Itogi magazine. Gazprom-Media reported revenues of $883 million and net profit of $120 million in 2006.

Tuesday, 30 October 2007

E.ON hopes for Yuzhno-Russkoye deal

30.10.2007 - Upstream OnLine -Germany's E.ON hopes to seal the long-discussed Yuzhno-Russkoye asset swap with Russian gas giant Gazprom by December, E.ON Russia boss Reiner Hartman said today. The companies have been weighing up a deal which Gazprom may sell a stake of 25% minus one share in Yuzhno-Russkoye to E.ON's Ruhrgas unit in return for some of the German player's European assets. E.ON has previously said it hoped to tie up talks by the end of last month. "Upstream and downstream asset swaps with Gazprom are under negotiations, and we hope to conclude these within the next month," Hartman told Reuters. He did not disclosed what assets the German company might offer Gazprom in exchange for the Siberian field stake. E.ON holds around 6.4% of Gazprom's stock, and has agreed to pay €1.2 billion ($1.73 billion) for the Yuzhno-Russkoye stake and to give Gazprom just under 50% of its Hungarian gas trading and storage units. But Gazprom has said it was not entirely happy with developments in Hungary's energy sector and was looking for other solutions in the talks with E.ON. E.ON said in August it was considering giving Gazprom stakes in gas-to-power plants in Britain as part of swaps under discussion. Last week, Gazprom and German chemicals group BASF completed a deal that gave BASF unit Wintershall 25% minus one share in Yuzhno-Russkoye and increased Gazprom's share in a joint German gas trading player, Wingas, to 50% minus one share from 35%.

Monday, October 29, 2007

Gazprom Puts into Operation Yuzhno-Russkoye Field Startup Complex

The Yuzhno-Russkoye oil and gas field is located in the Krasnoselkupsky District of the Yamal-Nenets Autonomous Okrug. The license for prospecting and development of the field is owned by Severneftegazprom, which is a 100 per cent subsidiary of Gazprom. The proved reserves of the Yuzhno-Russkoye field as of January 1, 2007 are at 805.3 bcm of gas, 5.7 mln tons of oil. Geological survey is in progress. The Company increases the fund of the existing wells and develops the field infrastructure. In the 4th Q 2007 the Company plans to produce 1.4 bcm of gas. The field is planned to reach a 25 bcm design capacity in 2009.
 October 26, 2007 – MOSCOW (RNWire) - Today Gazprom has put into operation the startup complex of the Yuzhno-Russkoye oil and gas condensate field. Currently, 26 gas wells are operating in the field producing 15 mcm of gas per day. A ceremony dedicated to the Yuzhno-Russkoye field startup complex commissioning is planned to be held in December 2007.

Friday, October 26, 2007

Shareholder Wins Suit against Gazprom

Oct. 22, 2007 - Kommersant - Sterlitamak resident Mikhail Renzhin has become the first Gazprom shareholder to be awarded compensation from the monopoly for losses. the sum of the award, 24 million rubles, is record-setting as well. Previously, the largest sum awarded in a case against a stock issuer was 11 million rubles, paid by Sibneft in 2005. The Moscow Arbitration ruled in favor of Renzhin on Friday in a case against Gazprom and SP-DRAGA, Gazprom's registrar, concerning the theft of 95,200 shares in Gazprom. Renzhin received the shares in 1994 in exchange for 68 vouchers. They were transferred from his account to ZAO IK Gorizont in 2000 using falsified documents. Renzhin discovered the loss only in March of last year and a criminal case was initiated, but the guilty parties were not found and the case was discontinued. Renzhin filed suit in May of this year, demanding 401,700 rubles for lost dividends and 1 million rubles for moral losses. The court ruled not to compensate Renzhin for moral losses, but to compensate his losses, including lost profit. The Supreme Arbitration Court allowed share issuers to be sued for losses in a decision of August 2, 2005. Rosgazifikatsia has filed a suit similar to Renzhin's against Gazprom for the loss of 50 million shares, worth 14.5 billion rubles. Gazprom lawyers called Renzhin's case “suspicious” and accused Renzhin of selling the shares in question himself. They also accused the judges of bias and unsuccessfully demanded two of the judges, one of whom they chose themselves, be dismissed. Judge Vyacheslav Lobko noted that Gorizont figured in a suit filed by a Ufa resident on June 19 over the loss of 14,000 shares of Gazprom. The Gazprom press service did not answer its telephone on Friday.

Restrictions on gas pipeline access may be lifted in 2008

MOSCOW, October 26 (RIA Novosti) - Regulations on non-discriminatory gas pipeline access could be adopted in January 2008, if the Federal Antimonopoly Service reaches terms with energy giant Gazprom, FAS head said Friday. Igor Artemyev said the FAS proposed that after Gazprom has met its domestic and foreign gas supply obligations, independent producers should be granted equal access to the pipeline on a competitive basis. "The decision could be made in 2008, ... if Gazprom meets us halfway," Artemyev told the press adding that the gas monopoly has not yet agreed to the proposal. Artemyev said Prime Minister Viktor Zubkov told the FAS on Wednesday to coordinate the proposal with the relevant departments, and that a special conference headed by Deputy Prime Minister Alexander Zhukov could be held later this month. The Federal Antimonopoly Service could also respond to applications filed by two companies BasEl, owned by Kremlin-friendly tycoon Oleg Deripaska, and Swiss Glencore to buy the RussNeft oil company later this year, Artemyev said. RussNeft owns 30 oil producing companies, three oil refineries, two transport companies and a network of 300 gas filling stations. BasEl announced plans to buy RussNeft in mid-summer, and the FAS decided in early October to postpone its decision on the application for 60 days. Glencore submitted its application to the FAS for the acquisition of three RussNeft oil producing subsidiaries on September 11.

Gazprom snubs ConocoPhillips in Barents Sea deal

Oct. 25, 2007 - Associated Press - MOSCOW — Russia's gas monopoly Gazprom today chose Norway's StatoilHydro to participate in a $30 billion gas project in the Barents Sea that is crucial for Russia if it is to meet rising demand for natural gas at home and abroad. StatoilHydro will take a 24 percent stake in an operating company that will plan, finance and build the first stage of the technically daunting Shtokman gas field, which could eventually produce up to 100 billion cubic meters of gas per year. Houston-based ConocoPhillips was a contender for the stake. France's Total has a 25 percent stake in the operating company, while state-controlled OAO Gazprom will keep 51 percent. Gazprom will also retain ownership of Shtokman's reserves, estimated at 3.7 trillion cubic meters of gas, the equivalent of six years of Russia's current annual production and enough to meet U.S. demand for six years. "We have gigantic reserves in the Barents Sea, and our Norwegian partners have good experience in carrying out gas production and transportation in the harsh climate conditions in the north," Gazprom CEO Alexei Miller said in a statement. Early today, President Vladimir Putin personally called Norwegian Prime Minister Jens Stoltenberg to inform him that StatoilHydro was chosen for the project — indicating the high degree of Kremlin involvement in the venture. StatoilHydro — formed earlier this month when Norsk Hydro sold its oil and gas division to its larger Norwegian rival Statoil — beat out Houston-based ConocoPhillips for the stake. Some Shtokman gas is to be delivered to the North American market in liquefied form. Michael Emerson, senior researcher at the Center for European Policy Studies in Brussels, said he did not rule out that unresolved geopolitical issues between Russia and the United States — such as Washington's plans to build a missile shield in Eastern Europe — influenced the decision. But the deal was signed today to coincide with Putin's visit to Portugal this week, where he will attempt to forge a new trade deal with the European Union, analysts said. "By bringing StatoilHydro on board today, Putin is showing he is ready to give the green light to the project, which Europe needs just as much as Russia since it will run into supply problems around 2012," said Chris Weafer, chief strategist at UralSib, a Russian investment bank. StatoilHydro is 62.5 percent owned by the Norwegian state, which is not a member of the European Union. EU officials have expressed increasing alarm in recent months about Russia's stagnant gas production capacity at a time when energy consumption is on the rise. Russia, for its part, is annoyed that the EU's new draft energy charter targets Gazpom's investments into EU energy production and infrastructure, which Brussels wants to separate. "Putin will be looking for a softening of the EU's stance in regard to this charter," said Weafer, adding that Moscow would also like to see progress on a new strategic trade agreement with the EU that would free up trade and investment. Russia currently provides 30 percent of the EU's oil imports and 42 percent of its natural gas imports. Gazprom said in a statement that the first shipments of Shtokman gas would be made in 2013, when production would reach 23.7 billion cubic meters. The field is projected to have an active life of more than 50 years, with gas output peaking at some 97 billion cubic meters for 25 years, according to ZAO Sevmorneftegaz, the Gazprom-controlled company that owns the license to the field. According to plans, gas extracted from beneath the seabed will be piped 600 kilometers to the shore, and then south to connect to the Nord Stream pipeline, which, when completed, will deliver gas directly from Russia to Germany beneath the Baltic Sea. Emerson said that Russia's opting to cooperate with the Norwegians is "reasonable." "They're right next door, they have the technology for this type of thing, and they share an undemarcated zone with Russia in the area," he said. Norwegian Oil Minister Aaslaug Haga stressed that StatoilHydro has "unique competence" in working on the northern continental shelf and extensive experience in Russia. Statoil developed Snoehvit, the first offshore field in the Barents Sea. The company had to develop much of the technology needed to produce the gas in harsh Arctic conditions, and in an environment similar to Shtokman. The project has no facilities above the ocean surface and is remotely controlled from land, by a 155-kilometer cable. In taking over Norsk Hydro's oil and gas unit, the new StatoilHydro also acquired the technology and expertise that went into building the giant Ormen Lange natural gas field in the Norwegian Sea, in which all of the installations are underwater and had to be placed on the extremely steep and uneven area of the sea floor and be able to withstand exceptional currents, extreme wind and wave conditions and subzero temperatures on the sea floor.

Gazprom raises Wingaz stake to 50% in asset swap with BASF

MOSCOW, October 25 (RIA Novosti) - Gazprom [RTS: GAZP] has increased its share in Wingaz GmbH from 36% to 50% minus one share under an asset swap deal with BASF, the Russian energy giant said in a news release Thursday. Wingaz is the companies' joint venture. Under the asset swap deal Gazprom and Germany's BASF signed in April, the world's largest chemicals producer will be granted access to a strategic natural gas deposit in Russia, while the Russian gas producer will receive gas transportation and distribution assets in Germany. Gazprom also said BASF received 25% minus one share and 10% of non-voting shares in Gazprom's subsidiary Severneftegazprom operating the Yuzhno-Russkoye oil and gas field in West Siberia. The field will be the main source of Russian gas exports to Western Europe via the Nord Stream pipeline that will lie along the Baltic seabed. Under the asset swap deal, Gazprom will also gain a stake in Wintershall, a BASF subsidiary that owns hydrocarbon exploration and production assets in Libya.

Tuesday, October 23, 2007

Moscow unveils EU gas alert plan

23 October 2007 - By Upstream OnLine - Russia will put forward plans for a rapid alert mechanism to give Europe advance warning should Moscow cut off gas supplies during a supply crisis affecting the 27-member bloc, Vladimir Chizhov, Russia's ambassador to the European Union said. Speaking ahead of a Russia-EU summit in Portugal, the ambassador, Vladimir Chizhov, told the International Herald Tribune that the alert system was meant to help restore Europe's confidence in Russia as a reliable energy supplier. "Russia has agreed to warn the EU if Gazprom decides to turn off the tap," Chizhov said. Russians officials, who will unveil the plan on Friday, said the warning system would include a special telephone hotline between Brussels and the Kremlin. Moscow and Brussels would have to designate officials to be on call 24 hours a day in case of an energy supply crisis. The EU wants to avoid a repeat of late 2005, when Russian state-owned gas monopoly Gazprom cut gas supplies to the Ukraine in a pricing battle that led to shortages across the Continent. A dispute between Russia and Belarus last December and January also affected oil supplies to some European countries. Chizhov said energy would figure prominently at Friday's meeting, adding that Russia would also voice its concerns with a new European Commission proposal to prevent Gazprom from taking over power networks in Europe. Under plans submitted by the commission, non-EU companies would be barred from owning a majority stake in gas pipelines or electricity power grids unless their home country signs a reciprocal agreement with the EU. The proposal was contained in a package of measures designed to liberalise the European energy market, underlining European concern that Gazprom would buy up energy assets across the Continent. Chizhov said Moscow was still studying the proposal - dubbed the "Gazprom clause" by many in Brussels - which he said showed it was the EU, not Moscow, that was using its energy resources for political ends. He said the proposal was a source of concern to the Kremlin and Gazprom, since "no matter how you look at it, the proposal does not comply with market principles".

'Gazprom is no Microsoft'

15 October 2007 - Upstream OnLine - The European Union has no need to act against Russian gas export monopoly Gazprom as the company does not have the same dominance as the bloc's antitrust target Microsoft, Energy Commissioner Andris Piebalgs said today. Gazprom's growing influence on the market has aroused concerns as it supplies one quarter of the EU's gas. But Piebalgs said today that its market share was relatively small compared with that of software maker Microsoft. "Do we treat Gazprom as we treat Microsoft? Yes we do. The difference is that Microsoft has 100% of the market," Reuters quoted Piebalgs telling a conference in the Latvian capital Riga. "That is why we do not take measures against Gazprom, there is no need. They do not play a big enough role in the market." The European Commission this year won a decisive court battle against Microsoft for abusing a dominant market position to crush rivals. Other speakers at the conference expressed fears of Russia's increased use of its energy resources. One worry has been the Nord Stream gas pipeline, which will run under the Baltic Sea, being built by a Gazprom-led consortium, which includes Germany BASF and E.ON . This has worried Poland in particular, which fears the pipeline currently carrying Russian gas to the West will be bypassed. Piebalgs had no such reservations. "I have no difficulties with this project as it stands," he said, adding that he regretted the political difficulties surrounding it. "We should look at it on its own merits." Piebalgs said the answer to worries about suppliers like Gazprom was the power of the European Union as a consumer with 500 million inhabitants, the rules of the internal market and further diversification of energy sources. Meanwhile Pieblags said a state holding in Austrian energy group OMV is no reason in itself to object to its bid for Hungary's MOL. "I would disagree that OMV's bid for MOL is wrong just because OMV has state participation," Piebalgs said. The Austrian government has 31.5% of OMV. Reuters quoted him as saying that under European Union law private companies and those with the state as shareholders were treated equally. OMV has made a hostile bid for MOL, though Hungary's parliament recently passed a law on takeovers which many investors say is designed to protect the oil producer. MOL and the Hungarian government also argue that merging the two companies would form a regional monopoly and that as the Austrian oil company is part-owned by the state it would effectively be a re-nationalisation of a private company.

Gazprom's unit starts oil pipeline construction in Saudi Arabia

saudi arabiaMOSCOW, October 23 (RIA Novosti) - Stroytransgaz, the construction arm of Russian energy giant Gazprom [RTS: GAZP], said on Tuesday it had started building an oil pipeline in Saudi Arabia. The Sheyba-Abkayk oil pipeline, whose length exceeds 200 km (124 miles), is expected to be completed in 18 months. The construction will be carried out in the world's largest desert, Rub al-Khali, known for its record high temperatures, quick sands and dust storms. The oil pipeline project worth more than $100 million is part of the undertaking to boost the carrying capacity of the existing Sheyba-Abkayk (SHBAB-1) pipe and will run parallel with it, Stroytransgaz said in a statement.

Gazprom Has No Problems in Europe

Oct. 23, 2007 - Kommersant - Head of the Moscow office of the European Commission Marc Franco made it clear yesterday that Gazprom need not expect most favored status in Europe. He said Russian companies have no problems with access on the European market. “There are no restrictions in the proposals of the European Commission on the participation of foreign investors in the production and network transmission of gas and electricity,” Franco told Kommersant. As proof, he provided a list of European companies Gazprom owns shares in. Today European Energy Commissioner Andris Piebalgs will explain that to Russian Minister of Industry and Energy Viktor Khristenko, with whom he is meeting as part of International Energy Week in Moscow. Piebalgs and European Commission Competition Commissioner Neelie Kroes came up with a package of directives on September 19 to reform the energy market in the European Union that banned companies operating in the EU from combining production and sales of energy resources with their transport. Thus, the list of companies Gazprom owns interests in may shrink. Khristenko published a letter in the Financial Times in which he urges the EU not “to fear money or to rank it depending on the country of its origin. He predicts that, if there will be an “energy curtain” around Europe, Russia will “diversify our industrial and energy cooperation by turning to Asian and Pacific countries.”

Monday, October 22, 2007

Calls for reform of Russia's LPG market

Calls for reform of Russia's LPG marketOctober 18, 2007 - Russia Today - Gazprom is doubling its number of liquid gas filling stations in Russia, boosting its monopoly on the domestic LPG market. Liquefied petroleum gas has long been a cheap alternative to petrol as a fuel for vehicles in some European countries, but in gas-rich Russia it accounts for less than 20 % of the market. Mikhail Belzer, an analyst from the international management consultants A.T. Kearney, believes the main limitation is the ‘infrastructure itself’. “We have a number of petrol stations that have the necessary equipment. But there are companies that are still thinking of ways to invest or not to invest into development of these infrastructures,” he says. There are 220 gas filling stations in Russia, of which Gazprom - the main supplier of LPG - controls 80%. Market players say the growing presence of gas suppliers in the retail sector is holding back the industry. “Large state-owned energy companies like Gazprom continue to buy up gas refineries and filling station chains. At the same time, they also dictate the price for independent retailers. For example, by increasing transportation tariffs,” Nikolay Zhukov, President of Gazresurs, believes. The price per litre of gas at some filling stations has changed five times over the past month. Experts say such volatility is the main obstacle for the development of the sector. And market players are urging the government to regulate the pricing policy of gas producers. They say the lack of competition is driving up the price of gas. “The cost price of a kilo of gas is no more than two cents but producers sell it for 15. And prices are high because of speculation. To solve the problem we need the government to regulate gas prices on the market," Roman Sedov from a Union of Gas Consumers says. However, the chance of the government regulating for such a small industry looks slim for now.

Monday, October 15, 2007

Gazprom after new projects in Venezuela

venezuelaMOSCOW, October 12 (RIA Novosti) - Gazprom [RTS: GAZP] discussed its possible involvement in new projects in Venezuela at negotiations in the South American country, Russia's state-controlled natural gas giant announced on Friday. A Gazprom delegation met with senior energy officials in Venezuela during a recent visit to Latin America's largest oil and gas producer. "The parties discussed prospects of Gazprom's participation in a project to certify reserves at deposits in the Orinoco Belt, and new offshore gas and infrastructure projects," the company said in a news release. In 2005, Gazprom won exploration licenses for two oil fields in Venezuela's territorial waters. The company completed exploration efforts earlier this year and made a decision to drill test wells. The company is also involved in plans for a 9,000-meter pipeline to link Venezuela's vast natural gas reserves to Bolivia, Paraguay and Uruguay via Brazil to Argentina. Gazprom, which is 51% owned by the Russian government, controls around a quarter of global gas reserves, but is keen to diversify abroad. Venezuela's outspoken socialist president, Hugo Chavez, who has led opposition to U.S. influence in Latin America, put all oil fields under the control of state-owned Petroleos de Venezuela. Foreign corporations working in the country were offered to set up joint ventures with PdVSA by transferring controlling stakes to the company.

Thursday, October 11, 2007

Moncrief withdraws BASF gas field claim - court

FRANKFURT, Oct 9 (Reuters) - U.S. oil company Moncrief Oil International has withdrawn its claim against Germany's BASF (BASF.DE: Quote, Profile, Research) over ownership of Russian gas field Yuzhno-Russkoye, a German court said on Tuesday. A spokesman at the higher court in Zweibruecken said Moncrief had retracted its appeal, which it filed in August, after a German court described its legal suit against BASF as unfounded. The spokesman was confirming a report in German newspaper Die Rheinpfalz. Moncrief's law firm in Germany was not immediately available for comment. The Yuzhno-Russkoye gas field is controlled by Gazprom (GAZP.MM: Quote, Profile, Research). German utility E.ON (EONG.DE: Quote, Profile, Research) is also working to reach an agreement with Gazprom for a stake in the gas field.

Wednesday, October 10, 2007

Moncrief backs down at Yuzhno-Russkoye

09 October 2007 - Upstream OnLine - US player Moncrief Oil International has withdrawn its claim against Germany's BASF over ownership of a stake in Russia's Yuzhno-Russkoye gas field, a German court said today. A spokesman at the higher court in Zweibruecken said Moncrief had retracted its appeal, which it filed in August, after a German court described its legal suit against BASF as unfounded. The spokesman was confirming a report in German newspaper Die Rheinpfalz. Moncrief's law firm in Germany was not immediately available for comment, Reuters said. Yuzhno-Russkoye is controlled by Gazprom. German utility E.ON is also working to reach an agreement with Gazprom for a stake in the gas field.

Moncrief Oil files suit over Russian gas field

RICHARD MONCRIEFOctober 10, 2007 - Bloomberg News by Karin Matussek –  Moncrief Oil International, a privately held Fort Worth gas and oil company, sued OAO Gazprom, claiming that it has rights to develop a Russian gas field. Moncrief Oil filed the lawsuit at the Regional Court of Berlin, the company said in an e-mailed statement Tuesday. BASF AG and E.ON AG also have stakes in the disputed field, called Yuzhno Russkoye, Moncrief Oil said. The U.S. company claims that it has prior rights to the field. The suit is one of at least three Moncrief Oil has filed over the field, in which BASF's Wintershall unit holds a 35 percent stake and E.ON may acquire a 25 percent interest. Two suits have been dismissed. Yuzhno Russkoye has more than 600 billion cubic meters of gas, which would secure 15 years of deliveries to Germany, Gazprom and BASF said in April 2006. A Gazprom spokesman, who declined to be identified, said by telephone that Moncrief was only negotiating with Gazprom and never had any legal rights to the field. BASF spokeswoman Ingrid Nienaber said the company wouldn't comment on the suit. E.ON didn't immediately return a call seeking comment. Moncrief's Oil's German unit is suing Gazprom for a 40 percent share in the venture plus damages. The claim is worth about $12 billion to $14 billion, Klaus Nieding, Moncrief's German attorney, said Tuesday in an interview. Moncrief Oil claims that Gazprom broke a contract between the two companies when it signed a memorandum of understanding with BASF in Hannover, Germany. This venue gives German courts jurisdiction over the case, Moncrief Oil claims. "We have no illusions that Russian courts would be unbiased in this case," Chairman Richard Moncrief said in the statement. "Russia's and Gazprom's economic interests are way too much touched by this litigation."

Thursday, October 04, 2007

LUKoil, Gazprom to Develop New Deposits Jointly

10.04.2007 [Neftegaz.RU]- Russia's largest independent crude producer LUKoil and Gazprom Neft said they may establish a joint venture within the next two months, the LUKoil CEO said Wednesday. LUKoil and Gazprom Neft signed an agreement in May to develop new deposits in East Siberia and the Timano-Pechora oil bearing province in north European Russia. LUKoil is to have a 49% and Gazprom Neft a 51% stake in the JV, which will be managed on a parity basis.

Monday, October 01, 2007

Gazprom hands execs extra time

01 October 2007 - Upstream OnLine - The state-controlled board of Russian gas giant Gazprom has extended the contracts of five key managers, including export chief Alexander Medvedev, the company said in a statement released today. Contracts have been also extended for the head of the gas production department, Vasily Podyuk, the head of the legal department, Konstantin Chyuichenko, the head of domestic sales arm Mezhregiongas, Kirill Seleznyov, and the head of the regional relations department, Viktor Ilyushin. All contracts have been extended for another five years. The move followed reports in the local press the government might go ahead with a major management reshuffle at Gazprom, Reuters said.

Sibir shelves Gazprom stake sale

01 October 2007 - Upstream OnLine - Russian player Sibir Energy backed away from a plan to sell a majority stake to Gazprom, according to reports. Earlier this year, company boss Shalva Chigrinsky said Sibir was in talks to sell a controlling stake to Gazprom. Sibir had offered Gazprom a 50% plus one share in a bid to resolve a dispute over assets, Chigirinsky said. However, plans to sell a stake to Gazprom are "on ice," Bloomberg quoted Stuard Detmer, a member of the board and head of the company's oil refining and distribution, as saying. "It'll take two sides to agree to that," Detmer said. "Right now we're not discussing it."

Reiten optimistic on Shtokman

25 September 2007 - Upstream OnLine - Norsk Hydro chief executive Eivind Reiten, who will become chairman of the merged StatoilHydro oil and gas company, said today he was optimistic the new group will play a role in Russia's huge Shtokman gas gield. "We are having dialogue with them ( Gazprom). I am optimistic but we are not there yet," Reiten said in a briefing for foreign journalists. Reiten visited Gazprom's headquarters in Moscow last week to discuss a role for the merged entity in Shtokman, the Barents Sea gas field in which France's Total has already been chosen as a western partner. "If you take those three areas - the Middle East, Australia and Iceland - you will pretty much have the optons for expansion," he said, referring to the aluminium business. ** StatoilHydro will develop leading technologies for Arctic drilling to protect the environment or stay out of the region, Reiten said. "It shouldn't be and will not be tolerated by any society that you harm this sensitive environment," Eivind Reiten told reporters. "On the other hand the drive for finding more energy means more exploration in these areas."

Gazprom acts to reassure Europe on natural gas

October 1, 2007 - International Herald Tribune by Judy Dempsey - BERLIN: Russia will use some of the vast reserves in the Shtokman fields to supply gas to Europe, officials of the German-Russian consortium that will transport the fuel said Monday. Confirming for the first time that the Shtokman fields would be tapped, the officials said that Gazprom was seeking to reassure European customers that Russia would develop one of the largest offshore natural gas reserves in the world. Europe increasingly depends on Russian gas, buying more than a quarter of its total from Gazprom, the state-owned energy monopoly. Energy analysts said Europe, which imported around 330 billion cubic meters of gas in 2005, would require an additional 200 billion cubic meters per year by 2015. Some of the gas would be transported to Europe through a new pipeline. Officials from Nord Stream, the German-Russian consortium that will build the 1,200-kilometer, or 750-mile, pipeline under the Baltic Sea, said it would meet about a quarter of the extra demand. "The decisive factor is Shtokman," said Jens Müller, the spokesman for Nord Stream. "The future is Shtokman. It will feed gas into Nord Stream." Instead of an earlier plan to convert much of the gas from Shtokman into liquefied natural gas for shipment to Europe and other markets, much of it will now allocated to Nord Stream, which includes Gazprom and two German partners, E.ON Ruhrgas and Wintershall. When completed, perhaps by 2012, Nord Stream will consist of two parallel pipelines with a total annual capacity of 60 billion cubic meters. They will stretch from Vyborg, Russia, to Greifswald, Germany and will allow Gazprom to reduce its dependence on Ukraine, Belarus and Poland as transit countries. Since the project was officially inaugurated two years ago in Berlin by Vladimir Putin, the Russian president, and Gerhard Schröder, who was chancellor at the time, Nord Stream has faced delays, mainly over obtaining construction permits. Schröder, a friend of Putin, became chairman of Nord Stream in late 2005 after he left office. This project has already involved lengthy consultations with countries along the Baltic Sea which include Finland, Sweden, Denmark, Germany. Russia, Poland, Estonia, Latvia and Lithuania. Some of these countries, particularly Estonia and Sweden, bitterly oppose Nord Stream, claiming it will damage to the environment. Others say they fear that Europe would become too dependent on Russia. Last week, Estonia refused to permit Nord Stream to conduct sea bed surveys in Estonian waters. Urmas Paet, the Estonian foreign minister, said in a statement that the survey would have provided information to Nord Stream about Estonia's natural resources. In Sweden, officials said Nord Stream wanted to build a platform in Sweden's economic zone. "They need a permit for that. Yet the company has not yet applied," said Sten Jerdenius, an official at the Swedish environment ministry who is closely involved in consultations with Nord Stream over the environmental impact of the project. "We are still waiting for the official application," he said. Müller said applications for construction permits from national governments would be submitted in November and December. "These could be completed by the end of 2008," he said. "Realistically, we can start building in 2009. The first pipeline could be finished by 2010." Despite the delays, Müller said the company had already chosen a German and Russian company to supply the steel pipes. It has also reserved two barges to lay the pipe on the bed of the Baltic. The daily cost of hiring such a barge, of which there are only four in the world, is €1 million, or $700,000, according to energy analysts. But with delays in starting the pipeline construction and delays in opening up the Shtokman fields, some energy analysts said they were skeptical whether either project would succeed. Vladimir Milov, director of Institute for Energy Policy in Moscow, said Gazprom was scaling down its investments for developing Shtokman. "Investments for 2007 have been reduced from $670 million to $335 million," Milov said during an energy conference in Budapest last month. He said such investments were insufficient for developing Shtokman. The Shtokman fields, in the Barents Sea, were at the center of a struggle last year between Putin and a group of foreign energy companies, including ConocoPhillips of the United States and Norsk Hydro of Norway, which had been competing to develop Shtokman. Putin abruptly declared that Gazprom would develop the fields alone. Just as abruptly, he changed his mind in July and asked Gazprom to invite Total of France to take a 25 percent stake in the company that will manage the infrastructure of the fields. Analysts said the turnabout was because Gazprom needed the technological expertise of Total.

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