the RUSSIA oil & gas competitive intelligence report - Report Buyer

More documents

Recommendations

Info

Russia Oil and Gas Competitive Intelligence Report 2010 move will help it remain competitive in the fuels export market as local rivals such as TNK-BP invest heavily in their own plants. In December 2009 Sistema signed a strategic cooperation agreement with India’s ONGC for joint energy projects in the FSU. Itera – Summary Itera is another significant domestic Russian gas player. An opaque company, it has traditionally been a gas trader but in the 2000s got involved in production. Itera works close with Gazprom and has access to its pipeline system. While Itera is keen to establish itself as a leading ‘independent’ Russian gas producer, it has backed a continuation of Gazprom’s near-monopoly. Royal Dutch Shell – Summary Anglo-Dutch Shell is no longer the leading member of the US$10bn Sakhalin-II integrated project in the Far East, having relinquished control to Gazprom in December 2006 after a drawn-out battle. Previously, Shell held a 55% stake but now retains 27.5% minus one share. Shell is also involved in the Salym group of oil fields in Western Siberia through a 50:50 Salym Petroleum JV with Sibir Energy, a Gazprom Neft subsidiary. The partners are developing the West Salym, Upper Salym and Vadelyp fields, which hold an estimated 600mn bbl of crude reserves. The Salym fields started commercial production in December 2005, peaking at around 160,000b/d in 2009, mostly from West Salym. In spite of the chequered history of its Russian operations, Shell has proposed developing Yamal reserves with Gazprom. In February 2009, Shell’s former CEO Jeroen van der Veer also said the company was looking to discuss joint projects with Gazprom in the Far East. This was followed in June 2009 by Putin’s informal invitation to Shell to join the Rosneft/Gazprom-led Sakhalin-III and -IV project, which were abandoned by BP. In March 2009 Salym Petroleum extended a drilling contract with US-based oil field services company Halliburton in a deal worth US$100mn. Halliburton has been working at Salym since 2005 and will now remain there until at least 2013. ExxonMobil – Summary US major's subsidiary Exxon Neftegas (ENL) operates the US$12bn Sakhalin-I project with a 30% stake, working alongside two units of Rosneft (20%), India's OVL (20%) and a consortium of Japanese companies JNOC, Japex, Itochu and Marubeni (30%). The partners are developing the Chayvo, Odoptu and Arkutun-Dagi offshore fields, which are estimated to contain up to 2.3bn bbl of crude and 485bcm of potential recoverable gas resources. Oil production from Chayvo, the only producing field so far, began in 2006. Production peaked the very next year at around 225,000b/d (somewhat below initial expectations) and has been declining since, averaging 193,000b/d in 2008 and 165,000b/d in 2009. Chayvo also © Business Monitor International Ltd Page 57
Russia Oil and Gas Competitive Intelligence Report 2010 produces gas, with output expect to eventually reach 10bcm per year. Currently, consumption of Sakhalin-I's gas remains confined to the Khabarovsk region. Rising output volumes, however, present significant export potential. Progress at Sakhalin has been slower than expected owing to disagreements between Gazprom and Exxon over gas marketing rights. Exxon supports the construction of a pipeline to China, an option it has under the project's PSA. Gazprom, on the other hand, has previously favoured shipping the gas as LNG from the Sakhalin-II export terminal, although more recently it has insisted the gas is needed to supply the domestic market to support industrial expansion in eastern Russia. In late-April 2009, Exxon resumed work at Sakhalin-I after the energy ministry finally approved its US$2bn cost plan for that year. Delay in the budget approval forced Exxon to briefly halted work on the project in February 2009. The Odoptu field is due onstream in H210, Exxon announced in January 2010. Oil production from Odoptu will offset declining output from Chayvo. The Odoptu Phase 1 development will utilise the existing midstream infrastructure connected to the Chayvo field. Crude from Odoptu will be sent by pipeline to the Russian mainland for export via the De-Kastri terminal in the Khabarovsk region. No production estimates for the Odoptu fields have been released. In May 2010 Exxon said that the Odoptu field will increase output at Sakhalin-I by 30,000b/d when it comes onstream in H210. Transneft – Summary State-owned Transneft is Russia’s oil pipeline monopoly. It transports about 93% of Russia’s oil production, operating some 50,000km of long-distance pipelines, including the Druzhba (Friendship) line, which runs from Russia through Belarus and Poland into Germany. Transneft is also the largest shareholder (31%) in the 750,000b/d CPC system, which stretches 1,505km from Tengiz in Kazakhstan to the Russian Black Sea port of Novorossiysk. In December 2008, the government approved Transneft’s request to increase oil transportation tariffs by 15.7% from 2009. While this increase is lower than the 21% rise requested by Transneft, the news will present another blow to Russian oil producers that are already exporting crude at a loss after paying export duties, transportation tariffs and taxes amid subdued oil prices. In 2008, Transneft raised its oil shipping fees in January and August by 19.4% and 10.7% respectively. The company has argued the increases are necessary to maintain its infrastructure and finance new projects, particularly the ESPO. Sakhalin Energy – Summary Sakhalin Energy operates the Sakhalin-II project, which formally began operations on February 18 2009 and which incorporates an oil field with associated gas, a natural gas field with associated condensate, a pipeline, and an LNG processing plant and export terminal. Once fully onstream, the project will produce © Business Monitor International Ltd Page 58
Page 1 and 2:
2010 www.businessmonitor.com the RU
Page 3 and 4:
Russia Oil and Gas Competitive Inte
Page 5 and 6:
Russia Oil and Gas Competitive Inte
Page 7 and 8: Russia Oil and Gas Competitive Inte
Page 57: Russia Oil and Gas Competitive Inte
Page 85 and 86: Russia Oil & Gas Competitive Intell
show all

the RUSSIA oil & gas competitive intelligence report - Report Buyer

Create successful ePaper yourself

Delete template?

Save as template?