Russ Oil-Gas

November 9, 2007 – Kommersant – Britain’s Timan Oil & Gas (TOG) has sealed a memorandum with Zapsibgazprom, where Gazprom owns 79.69 percent. According to analysts, TOG attracted Zapsibgazprom to the projects as a guarantee against potential difficulties that the foreign companies apprehend for Russia’s activities. Britain’s Timan Oil & Gas Plc. (TOG) announced yesterday it sealed a cooperation memorandum with Gazprom’s Zapsibgazprom October 22. The memorandum is of no binding nature yet and provides for Zapsibgazprom’s participation in development and exploration of TOG’s reserves of crude oil and gas (estimated at 438.7 million tons under the C3 category). The result could be investments of up to $500 million, TOG said. The memorandum commits Zapsibgazprom to no investment obligations, explained TOG General Director Alexander Kapalin. The partners “are to elaborate the program for raising $500 million to cover CAPEX for putting all facilities into operation.” The memorandum spells out an option for Zapsibgazprom’s participation in development of Nizhnechutinskoe field (Timano-Pechora) that provides for drilling and infrastructure construction for 2,600 wells (the matter at stake is the shallow wells worth no more than $40,000 each); drilling four prospect wells at Khudoelskoe field and two wells at TOG’s two fields in the Caspian Sea. Zapsibgazprom may also enter into the capital of TOG or of its subsidiary, the memorandum says. People in TOG specified that Zapsibgazprom is mostly the technical partner for them, as it has required facilities and qualification to explore the reserves. Indeed, no matter what the form is, Gazprom’s presence in the project has helped quite a few foreign companies strengthen the standing in Russia.