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Showing posts with label Sakhalin. Show all posts
Showing posts with label Sakhalin. Show all posts

RUSSIA: Igor Levitin announced MEGA PROJECT a new seaport to Sakhalin

Published | 27-Sep-2007

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Transportation Minister Igor Levitin announced yesterday that a new seaport would be built in the Sakhalin village of Ilyinsky to serve the future development of hydrocarbon deposits off the shores of the island. He cited the need to provide transportation in connection with Sakhalin projects 3 through 9. The new port, he said, would be served by oil and natural gas pipelines that will make hydrocarbon transportation for future projects 10-15 percent cheaper than for Sakhalin 1 and 2. The port will also serve general uses and will cost 82 billion rubles ($3.2 billion), of which the government will provide 37 billion rubles. At present, there is nothing to load at such a port, nor could experts consulted by Kommersant suggest when it might be needed. The operators of Sakhalin 1 and 2 declined to comment on the Transportation Ministry proposal, but noted that they were not recasting their existing transportation plans. Two international consortia allied with Rosneft are carrying out exploration for the Sakhalin 3,4 and 5 projects, for which Rosneft is planning to build an underwater pipeline to the De Castri oil terminal. Gazprom Neft owns the Lopukhovsky bloc between Sakhalin 4 and 5. It does not have transportation plans yet. Petrosakh, a subsidiary of Urals Energy is working on Sakhalin 6. It has its own mini–oil refinery and plans to sell its products on the Sakhalin market. None of the experts consulted were aware of the Sakhalin 7, 8 or 9 projects. This is the second massive project announced by the Transportation Ministry in the last few days. Earlier, it announced a $6-billion investment in the Port of Murmansk, which experts also found dubious. Experts requesting anonymity have linked the ministry's announcements to the upcoming elections.


Transportation Minister Igor Levitin announced yesterday that a new seaport would be built in the Sakhalin village of Ilyinsky to serve the future development of hydrocarbon deposits off the shores of the island. He cited the need to provide transportation in connection with Sakhalin projects 3 through 9. The new port, he said, would be served by oil and natural gas pipelines that will make hydrocarbon transportation for future projects 10-15 percent cheaper than for Sakhalin 1 and 2. The port will also serve general uses and will cost 82 billion rubles ($3.2 billion), of which the government will provide 37 billion rubles.
Transportation Minister Igor Levitin announced yesterday that a new seaport would be built in the Sakhalin village of Ilyinsky to serve the future development of hydrocarbon deposits off the shores of the island. He cited the need to provide transportation in connection with Sakhalin projects 3 through 9. The new port, he said, would be served by oil and natural gas pipelines that will make hydrocarbon transportation for future projects 10-15 percent cheaper than for Sakhalin 1 and 2. The port will also serve general uses and will cost 82 billion rubles ($3.2 billion), of which the government will provide 37 billion rubles. At present, there is nothing to load at such a port, nor could experts consulted by Kommersant suggest when it might be needed. The operators of Sakhalin 1 and 2 declined to comment on the Transportation Ministry proposal, but noted that they were not recasting their existing transportation plans. Two international consortia allied with Rosneft are carrying out exploration for the Sakhalin 3,4 and 5 projects, for which Rosneft is planning to build an underwater pipeline to the De Castri oil terminal. Gazprom Neft owns the Lopukhovsky bloc between Sakhalin 4 and 5. It does not have transportation plans yet. Petrosakh, a subsidiary of Urals Energy is working on Sakhalin 6. It has its own mini–oil refinery and plans to sell its products on the Sakhalin market. None of the experts consulted were aware of the Sakhalin 7, 8 or 9 projects. This is the second massive project announced by the Transportation Ministry in the last few days. Earlier, it announced a $6-billion investment in the Port of Murmansk, which experts also found dubious. Experts requesting anonymity have linked the ministry's announcements to the upcoming elections.

At present, there is nothing to load at such a port, nor could experts consulted by Kommersant suggest when it might be needed. The operators of Sakhalin 1 and 2 declined to comment on the Transportation Ministry proposal, but noted that they were not recasting their existing transportation plans.

Two international consortia allied with Rosneft are carrying out exploration for the Sakhalin 3,4 and 5 projects, for which Rosneft is planning to build an underwater pipeline to the De Castri oil terminal. Gazprom Neft owns the Lopukhovsky bloc between Sakhalin 4 and 5. It does not have transportation plans yet. Petrosakh, a subsidiary of Urals Energy is working on Sakhalin 6. It has its own mini–oil refinery and plans to sell its products on the Sakhalin market. None of the experts consulted were aware of the Sakhalin 7, 8 or 9 projects.

This is the second massive project announced by the Transportation Ministry in the last few days. Earlier, it announced a $6-billion investment in the Port of Murmansk, which experts also found dubious. Experts requesting anonymity have linked the ministry's announcements to the upcoming elections.

Transportation Minister Igor Levitin announced yesterday that a new seaport would be built in the Sakhalin village of Ilyinsky to serve the future development of hydrocarbon deposits off the shores of the island. He cited the need to provide transportation in connection with Sakhalin projects 3 through 9. The new port, he said, would be served by oil and natural gas pipelines that will make hydrocarbon transportation for future projects 10-15 percent cheaper than for Sakhalin 1 and 2. The port will also serve general uses and will cost 82 billion rubles ($3.2 billion), of which the government will provide 37 billion rubles. At present, there is nothing to load at such a port, nor could experts consulted by Kommersant suggest when it might be needed. The operators of Sakhalin 1 and 2 declined to comment on the Transportation Ministry proposal, but noted that they were not recasting their existing transportation plans. Two international consortia allied with Rosneft are carrying out exploration for the Sakhalin 3,4 and 5 projects, for which Rosneft is planning to build an underwater pipeline to the De Castri oil terminal. Gazprom Neft owns the Lopukhovsky bloc between Sakhalin 4 and 5. It does not have transportation plans yet. Petrosakh, a subsidiary of Urals Energy is working on Sakhalin 6. It has its own mini–oil refinery and plans to sell its products on the Sakhalin market. None of the experts consulted were aware of the Sakhalin 7, 8 or 9 projects. This is the second massive project announced by the Transportation Ministry in the last few days. Earlier, it announced a $6-billion investment in the Port of Murmansk, which experts also found dubious. Experts requesting anonymity have linked the ministry's announcements to the upcoming elections.
Via|Kommersant
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ASIA: The Love between Russia and India

Published | 12-Sep-2007

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Raj Kapoor's Mera Naam Joker and its foot-tapping music is, at best, a frozen, forgotten moment of nostalgia for the average Ruski. Today, as the formidable Soviet Union, and its iron curtain, has made way for the modern-day Russia -- a dismembered, corruption-ridden, terrorist-driven country with an underperforming economy -- nostalgia itself is a nostalgic emotion. In the pragmatic dictates of contemporary power-play, old friendships have been discarded, and new camaraderie struck, based primarily on commercial self-interest. But, strangely, one association which has endured the ravages of contemporary Russian history is the Indian-Russian connection. And contributing, in some measure, to the cementing of this bond has been the historical cooperation between the two countries in the oil sector. It was, after all, Soviet seismic experts who were responsible for ONGC's biggest discovery to date -- the Mumbai High field.In fact, the Soviets were single-handedly responsible for all the major crude discoveries of ONGC-- beginning in 1960 with the Ankeleshwar field, followed by Mumbai High, Kalol, Galeki, Lakwa....the list reads on. It was precisely this connection that Mani Shankar Aiyar tried to evoke in Moscow earlier this week when he proposed, to the Russian leadership, the renewal of old ties and the re-initiation of a partnership which could see the investment of billions of dollars of Indian money into Russia's cash-starved oil and gas sector. For, in the decade since the collapse of the Soviet Union, the roles seem to have been dramatically reversed. Russian companies lost their foothold in India and instead, today, it is the cash-rich ONGC Videsh Ltd. (OVL) which is one of the biggest international investors in the exploration sector in Russia. It has, to date, pumped $1.7 billion in cash into the giant $ 12 billion Sakhalin-1 prospect -- in which ExxonMobil is a partner -- and $1 billion more is believed to be in the pipeline. Most international oil companies find Russia far too daunting a place to work in: The vestiges of the gargantuan Soviet-era bureaucracy and its multi-layered approval process, mountains of paperwork, low labour productivity, severe climatic conditions and an insistence that only local companies can execute contracts are the major pitfalls in working in the Russian oil and gas industry. The odds notwithstanding, OVL appears to be quite at home doing business in Russia. So much so that ExxomMobil depends on OVL's goodwill and clout with the powers-that-be in Russia -- to hasten the paper work and cut through the bureaucratic red-tape which would have normally held up work at Sakhalin. Clearly, it's time for that one giant leap to change the dynamics of the relationship. Aiyar has already outlined an ambitious gameplan to his Russian counterpart: a joint bid -- likely to be worth $10 billion -- by Russian and Indian oil companies to buy out Yuganskneftegaz, the main production subsidiary of the controversial Yukos Oil Company, owned by the jailed oligarch Khodorkovsky; investments of up to $2.5 billion in the Rosneft's cash-strapped Primzlomnoye and Vankor oil fields; an offer to buy out the Severnaya Neft oil company which has licenses to develop 15 oil fields in Russia's Komi Republic and the Nenets Autonomous District; and a bid for the Sakhalin-3 license with an estimated 4.5 billion barrels of oil equivalent. If these investments go through, they will eventually total up to tens of billions of dollars and will go a long way in addressing India's oil security problem. Given India's `most-favoured' relationship with Russia, there is no political downside -- unlike in places like war-torn Sudan or even Angola -- to these investments. What is more, a recent survey conducted for OVL by JP Morgan states that the investment climate in Russia has improved dramatically since 2001 and there is a significant reduction in country risk. This is evident from a fall in the sovereign bond yield in Russia, which has come down from 15% in 1999-2000 to 8% currently. The lower discount rate, in turn, means that the IRR on the Sakhalin project has gone up, and not down, despite a sizeable increase in cash-sink requirements. In this context, it would be prudent for OVL to concentrate all its resources on garnering the Russian acreages. It is hoped the Indian government, lead by the redoubtable petroleum minister, will take full advantage of the situation, particularly when the oft-quoted Chinese competition is unlikely to be a factor here. Nostalgia, without doubt, has its moments. Raj Kapoor's Mera Naam Joker and its foot-tapping music is, at best, a frozen, forgotten moment of nostalgia for the average Ruski. Today, as the formidable Soviet Union, and its iron curtain, has made way for the modern-day Russia -- a dismembered, corruption-ridden, terrorist-driven country with an underperforming economy -- nostalgia itself is a nostalgic emotion.

In the pragmatic dictates of contemporary power-play, old friendships have been discarded, and new camaraderie struck, based primarily on commercial self-interest. But, strangely, one association which has endured the ravages of contemporary Russian history is the Indian-Russian connection. And contributing, in some measure, to the cementing of this bond has been the historical cooperation between the two countries in the oil sector.

It was, after all, Soviet seismic experts who were responsible for ONGC's biggest discovery to date -- the Mumbai High field.In fact, the Soviets were single-handedly responsible for all the major crude discoveries of ONGC-- beginning in 1960 with the Ankeleshwar field, followed by Mumbai High, Kalol, Galeki, Lakwa....the list reads on. It was precisely this connection that Mani Shankar Aiyar tried to evoke in Moscow earlier this week when he proposed, to the Russian leadership, the renewal of old ties and the re-initiation of a partnership which could see the investment of billions of dollars of Indian money into Russia's cash-starved oil and gas sector. For, in the decade since the collapse of the Soviet Union, the roles seem to have been dramatically reversed.

Raj Kapoor's Mera Naam Joker and its foot-tapping music is, at best, a frozen, forgotten moment of nostalgia for the average Ruski. Today, as the formidable Soviet Union, and its iron curtain, has made way for the modern-day Russia -- a dismembered, corruption-ridden, terrorist-driven country with an underperforming economy -- nostalgia itself is a nostalgic emotion. In the pragmatic dictates of contemporary power-play, old friendships have been discarded, and new camaraderie struck, based primarily on commercial self-interest. But, strangely, one association which has endured the ravages of contemporary Russian history is the Indian-Russian connection. And contributing, in some measure, to the cementing of this bond has been the historical cooperation between the two countries in the oil sector. It was, after all, Soviet seismic experts who were responsible for ONGC's biggest discovery to date -- the Mumbai High field.In fact, the Soviets were single-handedly responsible for all the major crude discoveries of ONGC-- beginning in 1960 with the Ankeleshwar field, followed by Mumbai High, Kalol, Galeki, Lakwa....the list reads on. It was precisely this connection that Mani Shankar Aiyar tried to evoke in Moscow earlier this week when he proposed, to the Russian leadership, the renewal of old ties and the re-initiation of a partnership which could see the investment of billions of dollars of Indian money into Russia's cash-starved oil and gas sector. For, in the decade since the collapse of the Soviet Union, the roles seem to have been dramatically reversed. Russian companies lost their foothold in India and instead, today, it is the cash-rich ONGC Videsh Ltd. (OVL) which is one of the biggest international investors in the exploration sector in Russia. It has, to date, pumped $1.7 billion in cash into the giant $ 12 billion Sakhalin-1 prospect -- in which ExxonMobil is a partner -- and $1 billion more is believed to be in the pipeline. Most international oil companies find Russia far too daunting a place to work in: The vestiges of the gargantuan Soviet-era bureaucracy and its multi-layered approval process, mountains of paperwork, low labour productivity, severe climatic conditions and an insistence that only local companies can execute contracts are the major pitfalls in working in the Russian oil and gas industry. The odds notwithstanding, OVL appears to be quite at home doing business in Russia. So much so that ExxomMobil depends on OVL's goodwill and clout with the powers-that-be in Russia -- to hasten the paper work and cut through the bureaucratic red-tape which would have normally held up work at Sakhalin. Clearly, it's time for that one giant leap to change the dynamics of the relationship. Aiyar has already outlined an ambitious gameplan to his Russian counterpart: a joint bid -- likely to be worth $10 billion -- by Russian and Indian oil companies to buy out Yuganskneftegaz, the main production subsidiary of the controversial Yukos Oil Company, owned by the jailed oligarch Khodorkovsky; investments of up to $2.5 billion in the Rosneft's cash-strapped Primzlomnoye and Vankor oil fields; an offer to buy out the Severnaya Neft oil company which has licenses to develop 15 oil fields in Russia's Komi Republic and the Nenets Autonomous District; and a bid for the Sakhalin-3 license with an estimated 4.5 billion barrels of oil equivalent. If these investments go through, they will eventually total up to tens of billions of dollars and will go a long way in addressing India's oil security problem. Given India's `most-favoured' relationship with Russia, there is no political downside -- unlike in places like war-torn Sudan or even Angola -- to these investments. What is more, a recent survey conducted for OVL by JP Morgan states that the investment climate in Russia has improved dramatically since 2001 and there is a significant reduction in country risk. This is evident from a fall in the sovereign bond yield in Russia, which has come down from 15% in 1999-2000 to 8% currently. The lower discount rate, in turn, means that the IRR on the Sakhalin project has gone up, and not down, despite a sizeable increase in cash-sink requirements. In this context, it would be prudent for OVL to concentrate all its resources on garnering the Russian acreages. It is hoped the Indian government, lead by the redoubtable petroleum minister, will take full advantage of the situation, particularly when the oft-quoted Chinese competition is unlikely to be a factor here. Nostalgia, without doubt, has its moments. Russian companies lost their foothold in India and instead, today, it is the cash-rich ONGC Videsh Ltd. (OVL) which is one of the biggest international investors in the exploration sector in Russia. It has, to date, pumped $1.7 billion in cash into the giant $ 12 billion Sakhalin-1 prospect -- in which ExxonMobil is a partner -- and $1 billion more is believed to be in the pipeline.

Most international oil companies find Russia far too daunting a place to work in: The vestiges of the gargantuan Soviet-era bureaucracy and its multi-layered approval process, mountains of paperwork, low labour productivity, severe climatic conditions and an insistence that only local companies can execute contracts are the major pitfalls in working in the Russian oil and gas industry. The odds notwithstanding, OVL appears to be quite at home doing business in Russia. So much so that ExxomMobil depends on OVL's goodwill and clout with the powers-that-be in Russia -- to hasten the paper work and cut through the bureaucratic red-tape which would have normally held up work at Sakhalin.

Clearly, it's time for that one giant leap to change the dynamics of the relationship. Aiyar has already outlined an ambitious gameplan to his Russian counterpart: a joint bid -- likely to be worth $10 billion -- by Russian and Indian oil companies to buy out Yuganskneftegaz, the main production subsidiary of the controversial Yukos Oil Company, owned by the jailed oligarch Khodorkovsky; investments of up to $2.5 billion in the Rosneft's cash-strapped Primzlomnoye and Vankor oil fields; an offer to buy out the Severnaya Neft oil company which has licenses to develop 15 oil fields in Russia's Komi Republic and the Nenets Autonomous District; and a bid for the Sakhalin-3 license with an estimated 4.5 billion barrels of oil equivalent. If these investments go through, they will eventually total up to tens of billions of dollars and will go a long way in addressing India's oil security problem.

Given India's `most-favoured' relationship with Russia, there is no political downside -- unlike in places like war-torn Sudan or even Angola -- to these investments. What is more, a recent survey conducted for OVL by JP Morgan states that the investment climate in Russia has improved dramatically since 2001 and there is a significant reduction in country risk. This is evident from a fall in the sovereign bond yield in Russia, which has come down from 15% in 1999-2000 to 8% currently.

The lower discount rate, in turn, means that the IRR on the Sakhalin project has gone up, and not down, despite a sizeable increase in cash-sink requirements. In this context, it would be prudent for OVL to concentrate all its resources on garnering the Russian acreages. It is hoped the Indian government, lead by the redoubtable petroleum minister, will take full advantage of the situation, particularly when the oft-quoted Chinese competition is unlikely to be a factor here. Nostalgia, without doubt, has its moments.



Via: IndianPetro|By Santanu Saikia
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ASIA: Rosneft to drill exploratory wells on Kamchatka shelf in 2008

Published | 05-Sep-2007

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Rosneft will start drilling exploratory wells at a giant western Kamchatka shelf in Far Eastern Russia as early as next year, the head of Russia's largest crude producer said Wednesday. Rosneft will start drilling exploratory wells at a giant western Kamchatka shelf in Far Eastern Russia as early as next year, the head of Russia's largest crude producer said Wednesday.

"All the preliminary work to start drilling the first prospective sites has been completed, and the drilling will start in two wells in 2008," Sergei Bogdanchikov said.

State-controlled Rosneft holds a 60% stake in the project, which is comparable in scale to major oil and gas projects like Sakhalin I and Sakhalin II.

The Korea National Oil Corporation (KNOC) holds a 20% stake. The Kamchatka shelf is about two-thirds the size of South Korea and is estimated to hold about 900 million metric tons of fuel equivalent at 26 sites.


Rosneft will start drilling exploratory wells at a giant western Kamchatka shelf in Far Eastern Russia as early as next year, the head of Russia's largest crude producer said Wednesday. "The project is comparable with, or could even outstrip Sakhalin I and Sakhalin II," Bogdanchikov said. "The shelf has probable reserves of 3.8 billion metric tons of hydrocarbons but we cannot say yet how much of it is oil and how much gas."



A Russian-South Korean commission on economic, science and technical cooperation signed a memorandum of understanding to develop the shelf in September 2004.

The Rosneft president said work on the shelf started in 2005, and $90 million had been invested since then. "In 2008, we will invest about $270-300 million, and further investment will depend on the prospecting results." Total investment could hit $24 billion, he said.

Bogdanchikov declined to comment on where the oil and gas from the shelf would go afterwards.

The other shareholders in the project are a consortium of Korea Gas Corp., GS-CaltexDaewoo International Corp. and Kumho Petrochemical and Hyundai Corp., SK Corp, Corp.


Rosneft will start drilling exploratory wells at a giant western Kamchatka shelf in Far Eastern Russia as early as next year, the head of Russia's largest crude producer said Wednesday.


Via: Russian News & Information Agency
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EUROPE: Shell's Mad About Rosneft

Published | 13-Jul-2007

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The strategic alliance announced Monday between Royal Dutch Shell and Rosneft represents a thinly veiled kowtow by a Western oil giant of yesteryear to the fast-rising Russian champion of today.

The deal, signed by Shell Chief Executive Jeroen van der Veer and Rosneft chief Sergey Bogdanchikov, did not involve any specific projects and mentioned no dollar values. Ultimately it is little more than a vague agreement that Shell is willing to put up its billions to buy into Rosneft's big new projects, everything from drilling oilfields to building refineries and operating gas stations.

So why is this coming now? Well, it's been a particularly bad several months for Western oil giants in Russia, and Shell is trying to get back in the Kremlin's good graces.

Shell is desperate to show any kind of progress in Russia. Early this year, it was forced to sell half of its Sakhalin 2 stake to Gazprom. In 2005, Shell had disclosed $10 billion in cost overruns on the $20 billion project. Shell's van der Veer told Forbes in a 2006 interview that before the overrun was made public, it fell to him to call the Kremlin to relay the news. Russian President Vladimir Putin later castigated Shell publicly over project mismanagement.

Since then, Putin has moved to strengthen state-controlled oil giant Rosneft and its natural gas brother Gazprom and project their power worldwide. Putin in late June even laid Russian claim to vast stretches of oil-rich subsea geology in the Arctic Ocean.

If Shell is going to maintain its ranking behind ExxonMobil as the world's No. 2 oil giant, it will need to remake some friends in Russia.

Rosneft is the place to do it. Rosneft's chairman is Igor Sechin, deputy chief of staff to Putin.

Sechin, over five years, has transformed Rosneft from a loose assemblage of oil assets into Russia's giant. Rosneft has made a nearly clean sweep of major Yukos assets in the auctions that just finalized that company's liquidation.

In May, both Shell and BP (nyse: BP - news - people ) bid in one of the last auctions for a chain of 500 gas stations and storage facilities across Russia. They were outbid by Unitex, a relatively unknown company that grabbed the assets for roughly $500 million.

In June, Unitex turned around and sold the package to none other than Rosneft--for a $100 million mark-up. Someone got very rich at Unitex (which some press reports speculate is linked to Gazprom). Shell and BP didn't have a chance.

Likewise, don't expect Shell to accrue much benefit from this new Rosneft allliance, especially if history is a guide. In 1997, Shell's van der Veer, then managing director, inked a similar strategic alliance with Gazprom. That didn't turn out so well.

But the real chin-scratcher came in 1998, when Shell backed out of a consortium set to pay $1.6 billion for 75% of Rosneft. Van der Veer claimed soft oil prices for the reason behind that one. Ahh, hindsight. Today, proved reserves are 19 billion barrels, and with output of 2 million barrels a day, Rosneft trails only Exxon Mobil, BP, Shell, Chevron , Total and ConocoPhillips in output among publicly traded companies.

But Shell's not alone. In June, Russia forced BP-TNK to sell its 63% stake in Siberia's 2 trillion-cubic-foot Kovykta gas field to Gazprom for some $800 million, on the grounds that it wasn't selling its contractually obligated volumes out of the field. But selling those volumes was impossible because BP-TNK was barred access to Gazprom's export pipelines.

And within days of taking over Kovykta, Gazprom set its sights on Exxon Mobil, which has a contract in place to export gas from its Sakhalin 1 project to China. Moscow has recently been threatening environmental regulations as a way to force Exxon to tear up its deal with China National Petroleum and sell the gas to Gazprom. Why? So Gazprom can monopolize Russian gas exports to China and dictate pricing. If Exxon doesn't go along, it can expect the same fate in Sakhalin that befell Shell.

Putin is said to be interested in taking over chairmanship of Rosneft from Igor Sechin when his term ends next year. For Shell, a pledge of its billions now could give it a better chance at holding a place in Putin's heart for a very long time to come.


Via: FORBES
by Christopher Helman


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