NEFTE Compass articles from August 2006

NEFTE Compass archives from August 2006

Hot Air: Venezuelan Pledges Of Cooperation Fail To Bear Fruit.
August 1, 2006... When Venezuelan President Hugo Chavez came to Russia at the end of 2004, expectations were high that energy cooperation between two of the world's leading oil producing countries would boom. However, two years later, Russian companies have...

Pipe Dreams: Moscow Seeks To End Urals Discount To Brent.
August 1, 2006... Moscow continues to move forward with its plans to put an end to the discount that Russia's crude export stream, Urals blend, suffers against North Sea benchmark Brent. The government boasts that the discount -- currently around $5 per barrel...

High Hopes: Russneft Mulls JV With Belarus To Increase Exports.
August 1, 2006... Russian independent Russneft has renewed its efforts to set up a joint venture with Belarus as a means of increasing exports from its terminal in the Bryansk region, which the company aims to run at full capacity. Russneft is proposing to...

Green Acres: Transneft Chooses New Pacific Endpoint For Pipe.
August 1, 2006... Bowing to environmentalist pressure, Russian state pipeline monopoly Transneft has moved the Pacific Coast end point for its planned East Siberia Pacific Ocean (ESPO) oil pipeline. Transneft plans to run the pipeline to Kozmino Bay, near...

Bad Luck: Lukoil Comes Up Dry In Egypt.
August 1, 2006... Lukoil appears to have abandoned the Northeast Geisum and West Geisum fields in the Egyptian offshore after failing to find viable amounts of crude at the blocks, which are located in the Gulf of Suez. The company's international arm Lukoil...

Grand Unveiling: Lukoil Reveals Caspian Development Plan.
August 1, 2006... After announcing earlier this year a big Caspian oil find at the V. Filanovskogo offshore field, Lukoil has unveiled its industrial development plan for its six fields in the Russian section of the Caspian Sea. Lukoil plans to bring on...

Sunshine: Russian-Indian Venture Suntera Plots IPO.
August 1, 2006... Suntera, an equal joint venture of Russia's Itera and Indian investment company Sun Group, plans an initial public offering (IPO) in roughly three years time. The Itera Group has, however, ruled out an IPO of its own shares, the company's...

Modern Touch: Gazprom Neft Updates Omsk Refinery Plan.
August 1, 2006... The Russian government's drive to improve domestic petroleum products to European standard levels has led Gazprom Neft, formerly Sibneft, to update its plan to modernize the Omsk Refinery. Plans include the installation of a hydrotreating...

Cozy Korea: South Korea Mulls Closer Relations With Gazprom.
August 1, 2006... South Korea's state-controlled Korea Gas Corp. (Kogas) is considering ways to cement its relationship with Russian gas giant Gazprom, including a possible swap of equity stakes, according to a Kogas source. The idea of exchanging equity is...

First Step: Tatneft Gets Toehold In Nenets.(licensing of Tatneft)(Brief article)
August 1, 2006... Tatneft has won a license to explore and develop a block in the Nenets region, as the Tatar state-controlled company makes a move to replace reserves away from its aging fields in Tatarstan, according to Tatar news sources. Tatneft paid 80...

Law Man: East Siberian Greenfields To Get Tax Breaks.
August 1, 2006... President Vladimir Putin has signed into law a bill giving tax breaks to oil companies developing oil fields in East Siberia and to companies with mature fields in an attempt to fill the East Siberia Pacific Ocean pipeline and increase Russia's...

Bosporus Bypass: TNK-BP Weighs Up Samsun-Ceyhan Pipeline.
August 1, 2006... In a new twist to the long-running tale of Bosporus bypass projects, TNK-BP has confirmed it is looking at the Samsun-Ceyhan oil pipeline from the Black Sea to the Mediterranean, which has been proposed by Italy's Eni and Turkey's Calik Enerji....

Changing Places: Rosneft Heads Higher As Lukoil's Earnings Slide.
August 1, 2006... With output on the rise and global oil prices flying high, state-controlled oil firm Rosneft saw its net profit jump to 36.7 billion rubles ($1.36 billion) in April-June, an increase of 57.4% from the first quarter of 2006. The profit, as...

Newfound Joy: Transneft Plans Baltic Expansion, Shares Freed.
August 16, 2006... Russian pipeline operator Transneft was linked to two pieces of good news this week. The first was when it confirmed it would proceed with a plan for further expansion of Russia's flagship oil port of Primorsk, on the Baltic Sea. The second was...

Brewing Angst: Russia Runs Into Fresh Gas Problems With EU.
August 16, 2006... Gazprom is pushing full speed ahead in its drive to line up new and expanded export routes and gain tighter control over the system that feeds its gas into the European market. Those moves could potentially be of even greater concern to...

Asian Invasion: Petronas Builds Its Russian Strategy Around Rosneft Stake.
August 16, 2006... When Petronas splashed out $1.1 billion on buying a stake of around 1.4% in Russia's national oil champion Rosneft last month, many in the industry were left scratching their heads. The Malaysian state energy giant has no current assets in...

Booster Club: Banks Boost Rosneft IPO By $232 Million.
August 16, 2006... The organizers of Rosneft's massive initial public offering (IPO) in July have exercised part of an over-allotment option to expand the company's offering by $232 million, the Russian state-controlled company said. ABN Amro, Dresdner...

Endangered Species: Utility Consumption Of Fuel Oil Unsettles Traders.
August 16, 2006... A decision by Russian utilities giant UES to use less natural gas in power generation in favor of more fuel oil is causing consternation among Russian oil traders. Not only could the switch affect the domestic fuel oil market, it could have a...

Summer Lull: July Trading Patterns Show No Surprises.
August 16, 2006... July saw few surprises in trading patterns of Russia's seaborne crude exports, as major producers sent oil to world markets via their traditional partners (see p11). Rosneft's volumes from Novorossiysk and Primorsk were lifted by Gunvor...

Buck Passing: Energy Agency Passes Off Scheduling Duties.
August 16, 2006... Russia's Federal Energy Agency is a step closer to being relieved of its duties in preparing Russia's quarterly export schedule, leaving state oil pipeline monopoly Transneft fully responsible for the planning. The country's Federal...

Southern Flare: Lukoil, Gazprom To Bid For Venezuela Offshore Blocks.
August 16, 2006... Mandated with the role of Russia's standard bearers overseas, Lukoil and Gazprom plan to participate in a tender for four offshore blocks in Venezuela. Venezuela last week opened the bidding for the acreages, which have been identified as...

Usual Suspects: Prosecutor Investigates Bashkneftekhim.
August 16, 2006... The Russian general prosecutor's office has open up a criminal investigation for fraud against the former management of Bashneftekhim, a now-defunct company that once controlled the four Ufa refineries in the Bashkir Republic. The...

Fruitless Victory: Court Cuts Yukos Tax Bill, Helping Rosneft.
August 16, 2006... Rosneft appears a step closer to becoming the largest creditor for bankrupt oil firm Yukos following the decision of a Moscow appeals court to slash the Russian tax authorities' claims against the fallen company by $1.5 billion. The court...

Refined Tastes: Lukoil Starts Feasibility Study For Turkish Plant.
August 16, 2006... In a further bid to expand overseas, Lukoil is launching a feasibility study on the construction of a refinery on the Turkish coast of the Black Sea, according to the company's spokesman. The refinery, which is planned to process up to 10...

Opening Shop: Gazprom Advances With LNG Plans.
August 16, 2006... In an attempt to advance its LNG plans abroad, Gazprom's UK-based subsidiary Gazprom Marketing & Trading has set up new units in the US and France. The newly created Gazprom Marketing & Trading US in Houston will manage the gas giant's...

Loan Shark: Transneft Gets Financing For East Siberian Pipe.
August 16, 2006... Oil pipeline operator Transneft has forged ahead with plans for its East Siberian Pacific Ocean pipeline (ESPO), having last week signed a six-year revolving credit line for 65 billion rubles ($2.43 billion) with state-owned Sberbank for the...

Looking Deep: Tatneft Begins Seismic Research On Syrian Block.
August 16, 2006... Tatneft's geological research subsidiary Tatneftegeofizika plans to begin analyzing seismic data this year on Syria's Block 27 as part of the company's plans to build its reserves away from its mature fields in Russia's Volga region. ...

Ukraine: Yanukovich Heads To Russia For Gas Talks.
August 16, 2006... Ukraine's pro-Russian Prime Minister Viktor Yanukovich took his first official trip to Russia this week to the Russian Black Sea resort town of Sochi to discuss a range of gas initiatives with Russian officials in the start of new haggling over...

Latvia: Ventspils Sale Sets Timetable Attracts Interest.(sale of Venstpils Nafta shipping complex)(Brief article)
August 16, 2006... The Latvian government is pressing forward with the sale of its 38.62% stake in the Venstpils Nafta (VN) shipping complex, which is attracting the eyes of a growing number of foreign suitors. The sale, which will take place on the Riga...

Azerbaijan: Money Supply Grows On Increased Production.(petroleum industry economic aspects)(Brief article)
August 16, 2006... Increasing production at the BP-led Azeri-Chirag-Guneshli (ACG) oil and Shah Deniz gas projects -- combined with this year's opening of the Baku-Tbilisi-Ceyhan pipeline -- has caused a dramatic rise in Azerbaijan's money supply. The supply grew...

Bosnia: Zarubezhneft Eyes Two Refineries.
August 16, 2006... Milorad Dodic, prime minister of the Serb entity within Bosnia-Herzegovina, has traveled to Moscow to hold talks over the potential sale of majority stakes in two refineries to minor Russian state-owned oil firm Zarubezhneft. The talks...

Caspian Shipping: Sovcomflot Makes Plans For Caspian Fleet.
August 16, 2006... Top Russian shipping company Sovcomflot has set its sights on the growing shipping needs on the land-locked Caspian Sea. The company reportedly has opened talks with British supermajor BP, France's Total and top Russian producer Lukoil on...

Kazakhstan: Polish Company Plans Upstream Investment.
August 16, 2006... Polish oil company Petrolinvest reportedly plans to invest over $800 million to purchase and develop oil reserves in Kazakhstan. Prokom Investments subsidiary Petrolinvest, an investment vehicle of Poland's richest man, Ryszard Krauze,...

Tax Man: Courts Upholds Majority Of TNK-BP Tax Bill.
August 16, 2006... A Russian appeals court has ruled that TNK-BP should pay a disputed back tax bill of 3.5 billion rubles ($131.6 million) for 2001, giving the joint venture only a smidgen of relief. A representative for TNK-BP said the company plans to...

Pile Driver: Surgut Cash Pile Hit By Stronger Ruble.(Surgutneftegas company sales and earnings)(Brief article)
August 16, 2006... Surgutneftegas, notable for its policy of keeping a huge stash of cash, got battered by a strengthening ruble in the first half of 2006, according to its latest financial results under Russian Accounting Standards (RAS). The...

Equities and Currencies.
August 16, 2006... Share Prices Closing August 15, 2006

Crude Oil: Under Pressure.
August 16, 2006... Brent futures traded a $5.71 range, heading steadily south from a $78.43 high on Aug. 9 to a $72.72 low on Aug. 16 in response to reports that the Israel-Lebanon cease-fire that came into effect on Aug. 14 appeared to be holding. A statement...

Products: Gas Oil Steadies After Initial Beating.
August 16, 2006... European middle distillates prices steadied somewhat and fared better than gasoline after taking a beating over the past week on receding crude futures. The news of a cease-fire between Israel and Lebanon trimmed crude futures and caused a sell...

Murky Waters: Opaque Relationships Muddy Waters For Kazakh IPO.
August 23, 2006... Encouraged by this summer's successful flotation of Russian oil giant Rosneft, the upstream arm of Kazakhstan's state-owned Kazmunaigas (KMG) is preparing to debut on the London Stock Exchange. KMG E&P, which is 88% owned by its parent and was...

Liquid Sunshine: Gazprom Seeks Global Reach With First LNG Sale To Japan.
August 23, 2006... Russia's Gazprom has this month moved its LNG practice trading into the Pacific Basin, first signing a trading agreement with Japan's largest LNG buyer, Tokyo Electric Power Co. (Tepco), before following up with the purchase of a cargo from a...

Moving Out: Russia Ups Take On Rising Product Exports.(global prices for oil)(Brief article)
August 23, 2006... As global prices for oil products continue their upward spiral, Russia's take is reaching new heights. Beginning this week, Russia is charging $158.10/metric ton for exports of light and middle-distillate products, as well as $85.20/ton for...

Lingering Wounds: Sakhalin-2 Problems Remain Despite Minor Violations.
August 23, 2006... An audit of the Royal Dutch Shell-led Sakhalin-2 project on the Russian Pacific shelf has revealed only two minor violations to the terms of its production sharing agreement (PSA). Despite the trivial nature of the infractions, however, the...

Rising Tide: Russian Production Reaches New Record In July.
August 23, 2006... Russian crude production reached a new high of 9.68 million b/d (40.93 million metric tons) in July, according to the latest data from the Industry and Energy Ministry. This is 18,000 b/d more than in June and 2.4% higher than in the same...

Breaking Down: Ministry Admits Possible Natural Gas Defecit.
August 23, 2006... Russia appears headed to a deficit in its gas production in 2007-09 due to rapidly increasing domestic consumption, according to Russia's economic development and trade minister, German Gref. The domestic market will require between 26 Bcm and...

Growing Needs: Budget's Dependence On Oil Hits New Peak.
August 23, 2006... With the election cycle approaching, the Russian government has approved a significant hike in spending for 2007 in a move that observers feel is an attempt to curry favor among voters. The higher level of spending has set off alarm bells with...

Field Sport: Rosneft, Gazprom Boost East Siberian Positions.
August 23, 2006... Rosneft and Gazprom have won two separate tenders in the Krasnoyarsk region of East Siberia, where both companies are building a portfolio for future development. Rosneft gave 1.56 billion rubles ($58.3 million) for the Kulinda oil and gas...

Second Helpings: Tatarstan Mulls Another Refinery.
August 23, 2006... The Russian republic of Tatarstan is considering building another refinery to handle high-sulfur crude oil in addition to the one Tatar state-controlled Tatneft already has under construction in Nizhnekamsk, potentially boosting Moscow's plans...

Taking Charge: Yukos Bankruptcy Lands In Gazprom Hands.
August 23, 2006... State-controlled gas behemoth Gazprom appears to have gained a slight edge in the struggle for the remaining assets of Yukos following a decision by the bankrupt oil firm's court-appointed receiver to give Gazprom banking subsidiary Gazprombank...

Lithuania: Vilnius Mulls Shutdown Of Rails To Russia.(Brief article)
August 23, 2006... The political tension over Russian pipeline monopoly Transneft's cutoff of crude supplies to Lithuania appears to have kicked up another notch. Lithuania reportedly has warned that it could shut down some railway access to the Russian Baltic...

Turkmenistan: Pipeline Talks With China Advance.
August 23, 2006... Turkmenistan, the biggest producer and exporter of natural gas in Central Asia, is pushing ahead with plans to strengthen its energy ties with China by constructing a gas pipeline to the energy-starved Asian giant. Following an...

Romania: Lukoil Considers Pipeline Offer.
August 23, 2006... Lukoil is considering taking up Romania on its offer of concession rights to the country's oil pipelines to private companies. The Russian major insists that before taking a final decision, however, it still needs to thoroughly study two...

Bosporous Bypass: Total Looks To Join Eni In Rival Pipeline Plan.
August 23, 2006... France's Total may be seeking a way to join with Italy's Eni in the construction of a pipeline through Turkey to bypass the congested Bosporous Straits. Both companies have proposed building a line from the Black Sea port of Samsun to...

Ukraine: Russian Companies Boost Refining Investment.
August 23, 2006... The rise to power of Ukraine's pro-Russian Prime Minister Viktor Yanukovich may have again boosted the country's outlook, as Russian and Ukrainian oil firms appear to have agreed to increase their investment in Ukraine's downstream. In return,...

Bosnia: Zarubezhneft Rejects Purchase Of Refineries.
August 23, 2006... Russia's state-owned oil firm Zarubezhneft reportedly has refused to buy two refineries in the Serb entity within Bosnia-Herzegovina due to outstanding debts of C190 million ($244 million). The outstanding debt is the main obstacle...

Kazakhstan: Kurmangazy Well Decision Due Next Year.
August 23, 2006... Rosneft plans to make a decision on drilling a second well in the Kurmangazy Block in the Caspian Sea in the middle of next year. The decision will be based on the results of further geological studies and interpretation of the data from the...

Money Hungry: Transneft Seeks Higher Tariffs For Pacific Line.
August 23, 2006... National pipeline operator Transneft is seeking a 2% increase in pumping tariffs to help finance construction of the East Siberian Pacific Ocean pipeline. The company reportedly has taken the issue to the Federal Tariff Service, which is...

Gaining Weight: Gazprom Takes Top Spot On Investment Index.
August 23, 2006... Natural gas behemoth Gazprom is set to take the top spot on the Morgan Stanley's much-followed emerging markets stock index, which serves as the compass for funds representing trillions of dollars of investments. In a long-anticipated...

Crude Oil: North Sea Weaker, But Urals Firmer.
August 23, 2006... Brent futures traded a relatively modest $2.48 range from an Aug. 17 low of $71.31 to an Aug. 22 high of $73.79. The low reflected the crumbling of several bullish price supports rather than any particularly bearish development, while the...

Products: Poor Demand Sends Gas Oil Sliding.
August 23, 2006... The market for Russian gas oil drifted sideways over the course of the week, sliding with crude futures. However, prices got a bit of help on Aug. 22, when Dutch officials said that part of the 400,000 b/d BP-Chevron Nerefco refinery in...

Late Starter: Japan Struggles To Catch Up With China In FSU Energy Market.
August 30, 2006... Japan is making a concerted push in the former Soviet Union to harness new energy supplies, but there is no disguising the fact that it is trailing far behind its main regional rival for energy resources, China. As part of his country's...

Early Bird: Russia Makes Room For Extra Crude Exports.
August 30, 2006... As it turns out, Transneft doesn't have much work to do on its planned upgrade of the Baltic Pipeline System (BPS) to its flagship port of Primorsk. The Russian pipeline monopoly has boldly scheduled the system to carry a heroic 1.432 million...

Timber!: Sakhalin-2 Halts Pipeline Construction.
August 30, 2006... Work on oil and gas pipelines by Sakhalin Energy, the operator of the Royal Dutch Shell-led Sakhalin-2 project on the Russian Pacific shelf, has been brought to a halt because of allegations that a subcontractor illegally cut down trees. ...

Inside Track: Rosneft Executives Mop Up Modest Chunk Of Shares.
August 30, 2006... Several top executives and board members of Russian state-controlled oil firm Rosneft purchased over $12 million of the company's shares in its July initial public offering (IPO), Russian daily Vedomosti reported this week, citing information...

Euro Focus: Lukoil, Conoco Draft Joint Downstream Plan.
August 30, 2006... The plan for joint downstream activities that Lukoil and ConocoPhillips are to present by the end of the year will mainly comprise a processing deal for the Russian major at the refining facilities of its US partner, industry sources confirm....

Market Debut: Sakhalin-1 Crude Exports To Start In October.
August 30, 2006... The Sakhalin-1 export terminal to send crude to the Asia-Pacific market is slated to be opened on Oct.4, according to the latest reports. Exxon Neftegas, the project's operator, has been running trial exports since March, with the crude...

Perfect Harmony: Rusal And TAIF Team Up For Coke Connection.
August 30, 2006... Rusal, Russia's largest aluminum producer, and TAIF, the Tatar-American investment fund, have launched a tender for the construction of a heavy oil residue processing plant in Nizhnekamsk, in the Russian autonomous republic of Tatarstan. ...

Balkan Stand: Lukoil Spreads Its Wings With Slovenian Venture.
August 30, 2006... As part of its drive to expand in Eastern Europe, Lukoil has signed a framework agreement with Slovenian fuel trader Petrol on setting up a joint venture to sell oil products in the Balkans. Lukoil said it will hold a 49% stake in the...

Thinking Ahead: Alliance Plans Bonds For Khabarovsk Upgrade.
August 30, 2006... Russian independent Alliance Oil Co. is planning to place bonds totaling 3 billion rubles ($112 million) in the middle of September on the local market. The funds raised from the placement of the five-year securities are to be used to...

Lookout: Gazprom Eyes More European Assets.
August 30, 2006... Gazprom's drive to become a global energy company is gaining ground, with offers of potential new acquisitions in Portugal and Bulgaria. Media reports from Lisbon say the Russian gas giant has been offered a stake in Amorim Energia, which...

Love Boat: Shipowners Set To Join Forces.(Deputy Transport Minister Alexander Misharin)(Brief article)
August 30, 2006... The board of directors of Russian state-controlled Novorossiysk Shipping (Novoship) has failed to reach a decision on whether to merge the company into Sovcomflot to create a dominant state shipper, though the board is continuing to examine the...

Indian Summer: Stroitransgas Builds Up Business In India.(Stroitransgas contracts with Reliance Gas Transportation Infrastructure Ltd)(Brief article)
August 30, 2006... Russian pipeline contractor Stroitransgas has won a new contract in India. The company said last week it had signed a contract with Reliance Gas Transportation Infrastructure Ltd. to build two stretches of the country's "East-West" trunk...

E.On Era: Germans Hail New Gas Deal As Good For Europe.
August 30, 2006... Russian gas giant Gazprom and Germany's E.On signed major gas supply contracts in Moscow this week, which the German utility said marked a key milestone towards safeguarding long-term European gas supplies. Three-quarters of the huge...

Double Entendre: GdF Blows Hot And Cold Over Gazprom.
August 30, 2006... Gaz de France (GdF) is playing a double game with Gazprom. On the one hand, GdF chief Jean-Francois Cirelli this week was quoted as saying that GdF plans to sign a new agreement with Gazprom soon that will guarantee Russian supplies to...

Latvia: Plan Finalized For Sale Of Oil Terminal.(Ventspils Nafta acquisitions)(Brief article)
August 30, 2006... Latvia's privatization agency has received the final plan for the sale of crude terminal operator Ventspils Nafta (VN), which could be auctioned off by early October. Parex Banka, which is organizing and underwriting the sale of the...

Poland: Lotos Diversifies Supplies With Kuwait Deal.
August 30, 2006... With Russia's cutoff of oil supplies to Lithuania further heightening concerns about Moscow's dependability as an energy supplier, Polish state refining group Lotos has made a move to branch out and diversify its crude intake. Lotos has...

Ukraine: Ukrnafta Eyes Nigerian Opportunities.(building an oil refinery)(Brief article)
August 30, 2006... Ukraine's Ukrnafta is interested in building an oil refinery in Nigeria that apparently would be supplied with oil from one of the African nation's fields, the state-owned company's chairman, Igor Palitsia, was reported as saying this week. ...

Uzbekistan: Consortium Signs PSA For Aral Sea Fields.
August 30, 2006... An international consortium signed a production sharing agreement (PSA) in Tashkent this week covering the exploration and development of oil and gas reserves in the Uzbek sector of the Aral Sea. The consortium was set up a year ago by...

Georgia: Itera Cuts Off Gas Supplies.
August 30, 2006... Russian gas producer and trader Itera has cut off gas supplies to Georgia, citing unpaid debts of $3.4 million. According to local media reports, gas supplies have been suspended to eight regional gas distributors in the country. As a...

Hardball: Lukoil To Dilute Minority Shareholders At Refinery.
August 30, 2006... Lukoil is poised to dilute the stakes held by unruly minority shareholders in the Nizhegorod refinery. Lukoil, which controls 88% of Nizhnegorod, will increase the refinery's charter capital through the issue of additional shares, in line...

Underwhelmed: Novatek Results Fail To Impress.
August 30, 2006... Russia's largest independent natural gas producer Novatek recorded a net profit of 3.499 billion rubles ($130.9 million) in the second quarter of 2006, slightly underperforming analysts' expectations for both the quarter and the first half of...

Equities and Currencies.
August 30, 2006... Share Prices Closing August 29, 2006

Crude Oil: Prices Dip Below $70 As Storm Worries Fade.
August 30, 2006... Brent futures traded a $4.99 range from an Aug. 30 low of $69.10 to an Aug. 25 high of $74.09. Crude futures ended below $70/bbl on Aug. 29 as traders continued to take profits amid waning anxiety about Tropical Storm Ernesto, which was...

Products: Renewed Demand Does Little To Stem Drop.
August 30, 2006... The market for Russian gas oil showed significant volatility, as gas oil futures dropped sharply with crude prices early in the week before firming slightly on Aug. 30 with expectations that US stockpiles would show a moderate drop in supplies....