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Wednesday, November 19, 2008

Gazprom's deal with Eni for stake in Libyan oilfield delayed

MOSCOW, November 18 (RIA Novosti) - Gazprom's deal to gain a 16.5% stake in Libya's Elephant oilfield under an asset swap with Italy's Eni S.p.A. has been postponed until later this year, the deputy head of the Russian energy giant said on Tuesday. Under the deal, which was to be finalized in late October, Gazprom is to take half of Eni's 33% stake in the deposit with reserves estimated at 68 million metric tons (499.8 million bbl) in exchange for Eni taking part in projects to develop northwest Siberian assets owned by the Arctic Gas company. "We will finalize it before the end of the year," Alexander Medvedev said, explaining that the delay was due to the global financial crisis and declining oil prices, which could lead to reviewing the terms of the deal. Medvedev earlier said a cash settlement could also be used in the deal with Eni. Gazprom has two prospecting licenses in Libya and minority stakes in two projects run by Germany's Wintershall. Gazprom's foray into Africa has provoked concerns in European countries, which have become increasingly dependent on the Russian company. Gazprom supplies over a quarter of the EU's natural gas. Libya's position as an oil and gas exporter has been strengthened with the lifting of international sanctions. The country is ranked first in Africa and fifth in OPEC in terms of proven reserves of light oil, which stand at 5.1 billion metric tons (37.48 billion bbl). Eni, which formed EniNeftegaz consortium with Enel in Russia, bought Arctic Gas and other assets at a tender for Yukos assets in 2007. The Arctic Gas assets' reserves exceed 900 billion cubic meters of gas, 300 million tons of condensate, and 860 million tons of oil. Gazprom has an option to buy 51% of the Russian assets held by EniNeftegaz within two years. Eni's other projects in Russia include a 50% stake in the Blue Stream gas pipeline under the Black Sea, the other stake belonging to Gazprom, and the company is also involved in the South Stream pipeline to supply Russian gas to Europe.

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