NEFTE Compass articles from August 2008

NEFTE Compass archives from August 2008

Energy Ministry Revives Quality Bank Plan.
August 6, 2008... The latest generation of authorities in charge of Russia's oil and gas sector, including Deputy Prime Minister Igor Sechin and the energy ministry's new team, have no shortage of initiatives, although many appear to be well-seasoned ideas....

Eni Executive Quits After Kashagan Overruns.(resignation of Stefano Cao)
August 6, 2008... Italy's Eni last week announced the surprise resignation of its upstream chief operating officer, Stefano Cao, replaced by his deputy, Claudio Descalzi. Cao's tenure was dogged by cost and timing overruns at the giant Kashagan oil project in...

Russian Minnows Catch Spotlight Again.
August 6, 2008... For the second time in nearly as many weeks, speculation that Russia's smaller independent producers are poised to become the focus of a feeding frenzy by international majors has spiked following reports that a second bidder has emerged for...

Russian July Crude Exports Plunge.
August 6, 2008... Russian crude exports to countries outside the former Soviet Union plunged by nearly 7% to 4.08 million b/d in July from 4.38 million b/d a year earlier. An average of 3.71 million b/d was exported via the Transneft pipeline network, down from...

Sakhalin-2 Delays Hit Russian Oil Output.
August 6, 2008... Russian crude and condensate production slid by 1.2% in July from year-earlier levels, largely because of a delayed start to the production season at the Sakhalin-2 project. According to preliminary energy ministry data, the country...

Gazprom Neft Restarts China Pipeline Shipments.
August 6, 2008... Gazprom Neft has managed to secure a quota to ship crude oil to China via Kazakhstan's Atasu-Alashankou pipeline, transporting 20,000 metric tons (4,700 b/d) to the Asian giant in July. Gazprom Neft has not received any allotment for the...

TNK-BP CFO James Owen Quits.
August 6, 2008... The ongoing shareholder conflict at Russian-UK joint venture TNK-BP has resulted in the resignation of Chief Financial Officer (CFO) James Owen. "As the current shareholder issues remain unresolved, Mr. Owen feels it is difficult for him...

Transneft Hikes Crude Transport Tariffs.
August 6, 2008... Russia's Federal Tariff Service (FTS) this week increased by 19.5% the average crude transportation tariff via state oil pipeline monopoly Transneft's system to help the company raise more money to pay interest on its borrowings to build the...

Libya Gets Cozy With Russia.
August 6, 2008... Libya last week finally released an executive from Russia's Lukoil who has been jailed without charge since November. Alexander Tsygankov was freed just hours before the Libyan and Russian prime ministers sat down for a tete-a-tete in Moscow....

Gazprom Boosts Proven Gas Reserves.
August 6, 2008... Russia's Gazprom increased proven gas reserves by 0.6% in 2007 to 18.27 Tcm, according to media reports last week, which cited a memorandum released ahead of the gas giant's planned eurobond placement. Gazprom replaced 118% of its output...

Crude Exports Bypassing The Transneft Pipeline System, July 2008 ('000 metric tons).
August 6, 2008...  

Belarus In Russian Gas Talks.
August 6, 2008... Belarus wants Russia's Gazprom to revise natural gas supply and transit contracts to avoid a near-doubling of the price Belarus will have to pay next year. First Deputy Prime Minister Vladimir Semashko said this week that Minsk is pushing...

BP Declares Force Majeure After BTC Blast.
August 6, 2008... BP said late on Aug. 6 that it has declared force majeure on its shipments of Azeri Light crude out of the Turkish Mediterranean port of Ceyhan after an explosion and a fire on the Turkish stretch of the giant Baku-Tbilisi-Ceyhan (BTC) oil...

Vanco, Ukraine Speed Toward Arbitration.(Vanco Energy)(Brief article)
August 6, 2008... US-based independent Vanco Energy appears to be hurtling toward international arbitration over its rights to develop a huge swath of Ukraine's Black Sea territory following a Ukrainian government decision this week to halt any negotiations over...

Rosneft, Lukoil Eye Belarus Privatization.
August 6, 2008... Belarus is holding talks with Russian oil majors Rosneft and Lukoil on the privatization of the Novopolotsk (Naftan) refinery and Polimir petrochemical complex. "We are in talks on Naftan and Polimir with Rosneft and Lukoil on investment...

Turkmens Make New Central Karakum Gas Find.
August 6, 2008... Turkmenistan has discovered a new natural gas field in the Central Karakum Desert, roughly 110 km northwest of the Turkmen capital of Ashkhabad, the country's press service announced Monday. Exploratory well No. 1 on the field has shown a...

Gazprom First-Half 2008 Profits Surge.(Financial report)
August 6, 2008... Russia's Gazprom said last week that net profits totaled 285.7 billion rubles ($12.18 billion) in the first half of 2008, more than double year-earlier levels on the back of higher gas prices. The state giant's net profits in the second...

Russneft Buyout Inches Forward.
August 6, 2008... Embattled Russian oil firm Russneft may soon be cleared for purchase by Kremlin loyalist and metals magnate Oleg Deripaska, after Russian officials last week abandoned legal attempts to claim a majority of the company's shares in payment of tax...

Transneft Issues Huge Bond.(Brief article)
August 6, 2008... Russian state crude oil pipeline monopoly Transneft has placed a US dollar-denominated eurobond worth $1.65 billion, according to media reports last week that cited banking sources. The money will reportedly be used to finance the upgrade and...

Equities and Currencies.
August 6, 2008... Share Prices Closing On August 5, 2008

Bears Lead Futures Down, Physical Urals Heads Higher.
August 6, 2008... Crude futures traders were torn between dire economic news and evidence of increasing demand erosion on the one hand and rising geopolitical tension in the Middle East combined with more supply disruptions as a result of militant activity in...

Physical Differentials Under Pressure.(Brief article)
August 6, 2008... ICE gas oil futures have softened in line with crude this week, trading in a $118.75/ton range, as the gas oil crack remains steady at around $25/bbl. Flat prices have fallen, and 10 ppm diesel premiums ticked off -- early offers of...

Georgia's Role As Caspian Hub Is Down But Not Out.
August 13, 2008... Years of work to establish an East-West transportation corridor for oil and gas exports from the Caspian have been set back by the Georgian-Russian conflict. But companies, policymakers, bankers and exporters contacted by Nefte Compass are...

Jet Fuel Prices Subside Amid Mounting Pressure.
August 13, 2008... The pressure on Russian oil firms to curb the unbridled rise in the federation's jet fuel prices may already be having an effect, as domestic prices for aviation kerosene have reportedly subsided over the past two weeks. In addition, industry...

Rosneft Loses Kamchatka License.
August 13, 2008... Rosneft has failed to win an extension to its license for the West Kamchatka shelf in the Sea of Okhotsk, which it was exploring with Korea National Oil Corp. (KNOC). The license, issued in 2003, expired on Aug. 1. The extension was turned...

CNPC Iraq Deal Cheers Lukoil.
August 13, 2008... The chances of Lukoil keeping the West Qurna-2 project in Iraq have been boosted by Baghdad's decision to revive the Al-Ahdab deal with China National Petroleum Corp. (CNPC) that was signed under the regime of Saddam Hussein. "The deal...

Russian Refiners' June Volumes Rise.
August 13, 2008... Crude processing at Russia's refineries increased to almost 115.9 million metric tons (4.667 million b/d) in the first half of 2008, up 3.4% from the same period last year (see p8). Total throughput stood at over 19.9 million tons (4.875...

Transnefteproduct Plots Primorsk Line Boost.
August 13, 2008... State products pipeline monopoly Transnefteproduct reportedly expects to boost shipments of high-quality gas oil via a new pipeline to the Baltic port of Primorsk to around 460,000 tons/month in October with the addition of supplies from...

Gazprom Inks Abu Dhabi LNG Deal.
August 13, 2008... Gazprom, the world's biggest natural gas company, is pushing forward with plans to become a leading LNG supplier, last week signing a term purchase contract with Abu Dhabi Gas Liquefaction (Adgas). UK-based Gazprom Marketing and Trading...

Barabinsk Rail Terminal To Start Exports.(Brief article)
August 13, 2008... TNK-BP has confirmed its intention to start exports this month of its high-quality light crude from the Barabinsk rail terminal. A spokeswoman for the joint venture said that a delay of several months to the start of exports from the...

TNK-BP Buys Into Power Generation.
August 13, 2008... As part of its associated gas utilization program, TNK-BP has completed the purchase of a blocking stake in a Siberian power plant. The Russian-UK joint venture bought a 25% plus one share stake in the Nizhnevartovsk power plant for C230...

OMV Gives Up Mol Chase.
August 13, 2008... Austria's OMV has abandoned its bitter year-long takeover battle for Hungarian rival Mol after European competition authorities demanded too much in the way of asset sales. To ward off extensive forced asset sales, OMV proposed combining...

Gazprom Neft Offers Projects To KMG.
August 13, 2008... Gazprom Neft could offer Kazakh state Kazmunaigas (KMG) a stake in its upstream projects in Russia if it allows Gazprom's oil arm to break into Kazakhstan. The Russian producer refused to specify any projects for potential joint...

TNK-BP Ukraine Plant To Shut Down.
August 13, 2008... The TNK-BP operated Lisichansk refinery (Linik) in Ukraine will shut down on Sep. 15 for 45 days of scheduled maintenance to examine and replace aging equipment, according to a TNK-BP Commerce representative in Ukraine. The official said...

Serbia Hires Deloitte To Evaluate NIS.
August 13, 2008... Serbia has reportedly hired international auditors Deloitte & Touche to evaluate the assets of refiner Naftna Industrija Srbije (NIS) before going ahead with a sale to Russia's Gazprom. Deloitte is to finish the work by Sep. 1, an official at...

End Of Violence Buoys Russian Market.
August 13, 2008... With the end of the fierce fighting between Russian and Georgian troops in sight, Russia's battered financial markets have begun a sharp rebound as foreign money that bailed out following the outbreak of hostilities returned to the market. ...

Equities and Currencies.
August 13, 2008... Share Prices Closing On August 12, 2008

Primorsk States Diesel Demand.(Primorsk Shipping Co.)(Brief article)
August 13, 2008... The ICE August gas oil contract expired at $1,015.75 on Aug.12, with 125,000 metric tons delivered, up from 79,500 tons in July. The contract lost almost one-quarter of its value in the last month, plunging from its high point of $1,325.25/ton...

Futures Tumble, Physicals Firm.
August 13, 2008... Crude futures markets have turned bearish to the extent that even a vicious war between Russia and Georgia and sabotage of the Baku-Tbilisi-Ceyhan crude oil pipeline by Kurdish rebels in Turkey couldn't decisively turn prices around (see p1)....

TNK-BP, BP Compete For Turkmen Block As Pressure Mounts.
August 20, 2008... In a development that has the potential to further undermine relations between the Russian and British shareholders in TNK-BP, the Russia-based joint venture is competing against its 50% owner BP for the rights to an offshore block in the...

Azerbaijan Taps Iran As Caspian Exporters Weigh Options.
August 20, 2008... Azerbaijan has turned to Iran as an export route as oil producers in the landlocked Caspian region weigh their options in the wake of Russia's invasion of Georgia and an explosion on the Turkish leg of the Baku-Tbilisi-Ceyhan (BTC) pipeline....

Russian Producers Cut Fuel Prices.
August 20, 2008... Government pressure on Russian oil companies to curb rises in domestic fuel prices has had the desired effect, with Lukoil announcing last week that it cut wholesale prices of diesel, fuel oil and aviation kerosene from its refineries this...

Sakhalin-1 China Exports Back In Sight.
August 20, 2008... The fate of future gas output from the Exxon Mobil-operated Sakhalin-1 project on Russia's Pacific shelf remains at the center of a fierce battle, with Exxon scoring some important points recently as China apparently moves back up into pole...

Gazprom Boosts Shipments To Europe.
August 20, 2008... Russia's Gazprom increased its natural gas exports to 131.11 Bcm/yr in the first half of 2008, up almost 14% from the same period last year, as international gas prices soared to record-high levels (see table). Data from the state gas...

Russia To Rely More On Oil Fund.
August 20, 2008... Russia's Finance Ministry has set forward a broad plan that would restructure the management of the country's oil revenues to support Russia's pension system, a move that appears to be the latest signal of Moscow's growing dependence on the oil...

Lanturno Keeps Control Of Czech Supplies.(Brief article)
August 20, 2008... Lanturno Trading remained in control of all Russian crude supplies to the Czech Republic in July, according to the latest data from Russia's national pipeline operator, Transneft. The trader set up by Dmitry Perevalov also extended its...

Russian Antitrust Powers Set To Grow.(Brief article)
August 20, 2008... The role of Russia's Federal Antimonopoly Service (FAS) is set to grow, with analysts noting that it could become another government instrument to put pressure on businesses, replacing tax and environmental legislation as the Kremlin's weapon...

Rosneft Buys Surgut's Talakan Crude.
August 20, 2008... Surgutneftegas has sold Rosneft the entire 30,000 b/d of output expected next year from its East Siberian Talakan oil field to supply Rosneft's Achinsk refinery, insiders claim. The oil will be pumped via the East Siberian Pacific Ocean...

Rusia Petroleum Closes China Office.
August 20, 2008... Rusia Petroleum, a license holder for the giant Kovykta gas and condensate field in East Siberia, has closed its representative office in China. The company said in a statement that its board of directors decided to close the office in...

Gazprom Seeks Moncrief Case's Dismissal.
August 20, 2008... Gazprom has filed a motion for a US court to reject a lawsuit from US-based Moncrief Oil International, which is seeking a massive settlement for being left out of a giant Siberian natural gas field. Gazprom asked a Texas court to throw out...

Gazprom Negotiates New Loan.
August 20, 2008... Gazprom is reportedly negotiating a new $500 million credit line from a syndicate of Western banks headed by Calyon and Royal Bank of Scotland, which are acting as bookrunners for the lending. A Gazprom chemicals subsidiary attracted the...

Former Finnish PM Joins Nord Stream.
August 20, 2008... Another former senior government figure has joined the board of the Gazprom-led Nord Stream project to build a 1,200 km gas pipeline under the Baltic Sea to Germany. Former Finnish Prime Minister Paavo Lipponen is to become an independent...

Iraqi Electricity Minister Invites Russian Companies.
August 20, 2008... Russia and Iraq are to set up a working group to resume energy cooperation under an agreement reached in Moscow between Russian Energy Minister Sergei Shmatko and his Iraqi counterpart, Karim Wahid al-Hasan. The Iraqi minister invited Russian...

Nabucco Undaunted By War In Georgia.(Survey)(Brief article)
August 20, 2008... The six-company Nabucco consortium says a market survey has indicated "huge demand" for the pipeline it plans to start operating in 2013 across Turkey and via the Balkans to Austria, and Managing Director Reinhard Mitschek insists he is...

Kazakh National Company Gets A New Boss.
August 20, 2008... In the second reshuffle at Kazmunaigas (KMG) in four months, the government has appointed Kairgeldy Kabyldin as president of the national oil and gas company. Press reports said Kabyldin, who was formerly deputy chairman of state holding...

CNPC Makes Commercial Kazakh Finds.(China National Petroleum Corp.)(PetroKazakhstan Inc.)(Brief article)
August 20, 2008... State China National Petroleum Corp. (CNPC) has made commercial finds in two Kazakh blocks it acquired when it bought PetroKazakhstan in 2005 (NC Nov.3'05,p9). In a statement on its website on Aug. 17, the Chinese state giant said the Doshan...

Novatek Sees Profits Rise Sharply.(Financial report)
August 20, 2008... Russia's Novatek saw net profits climb to 14.55 billion rubles ($601.1 million) in the first half of 2008, a 70.2% increase on year-earlier levels. Sales revenues, reported under International Accounting Standards, jumped 39.2% to almost 42.23...

Profits Soar At Mazeikiu Nafta.(Financial report)(Brief article)
August 20, 2008... Lithuania's Mazeikiu Nafta (MN) refinery, which this year returned to full operating capacity, has more than doubled its revenues in the first half of 2008, enjoying record second-quarter crude processing volumes. MN, majority-owned by...

Equities and Currencies.
August 20, 2008... Share Prices Closing On August 19, 2008

Futures Seek A Floor, Urals Slightly Softer.
August 20, 2008... Crude futures markets remained in the grip of the bears, although signs were emerging that October Brent had found a floor just short of $110/bbl. However, a nascent rally was knocked on its head by a huge 9.4 million bbl increase in US stocks...

Better Demand, Poorer Supplies Support Gas Oil.
August 20, 2008... With heating oil demand returning and the prospect of refining maintenance across Europe, the ICE gas oil front-month was supported above the $1,000/ton floor for most of this week. Shipments from the US are starting to tail off as refiners...

Fears Arise That Poland Could Face Energy Pressure.
August 27, 2008... With the conflict between Russia and Georgia bringing tensions between Moscow and the West to a new post-Soviet high, fears have emerged that Poland could face a cut in pipeline crude oil supplies from Russia because of its support for the US'...

Georgia: Oil Flows But Outlook Bleak.
August 27, 2008... After the tumultuous events in Georgia that have stretched Russia's relations with the West almost to the breaking point, the flow of Caspian oil and gas across the Georgian "corridor" to Turkey and ports on the Black Sea is slowly returning to...

Dudley Fires Back At Pressure On TNK-BP.
August 27, 2008... TNK-BP's banned chief executive, Robert Dudley, has filed an official complaint with Russian officials over the firm's treatment, accusing the state of using its powers to weigh in on the struggle between the joint venture's Russian and UK...

BP Losing Operational Control Of TNK-BP.
August 27, 2008... BP is losing operational control of its Russian joint venture, with another senior executive deciding to resign from TNK-BP. Meanwhile, in a development that could be coincidental, major negations on TNK-BP's regional projects, including one in...

Shell Eyes Opportunities In Kalmykia.
August 27, 2008... Seeking further opportunities in Russia, Royal Dutch Shell has signed a framework cooperation agreement with the republic of Kalmykia opening the way for hydrocarbon exploration and production in the Caspian Sea region. Under the document...

Russia Outlines Oil And Gas Scenarios.
August 27, 2008... Investments in the Russian oil industry are expected to total 2.4 trillion-2.5 trillion rubles ($98 billion-$102 billion) in 2009-11, under the country's socioeconomic development plan for the next three years, approved by the government last...

Russia Plans Modest Rise In September Loadings.(Brief article)
August 27, 2008... Following a particularly low export program for August, Moscow is preparing to boost crude oil exports in September, albeit by a modest 25,000 b/d. Transneft has scheduled seaborne crude exports of 2.689 million b/d in September, up from 2.664...

ONGC Closes On Siberian Entry With Imperial Bid.
August 27, 2008... Indian state firm Oil and Natural Gas Corp. (ONGC) is poised to make a dramatic break into Siberia after finalizing a buyout offer on Aug. 26 for UK-listed Imperial Energy, one of several small producers in Russia that have begun garnering...

Court Rejects Khodorkovsky Parole Request.
August 27, 2008... A Siberian court has denied fallen Russian oil tycoon Mikhail Khodorkovsky parole, which suggests that the former Yukos boss will receive no softer treatment from President Dmitry Medvedev than from Vladimir Putin, now Russia's prime minister....

Koreans Seek Putin's Support.
August 27, 2008... Korea National Oil Corp. (KNOC) is seeking support from Russian Prime Minister Vladimir Putin in its efforts to keep the license for the West Kamchatka shelf in the Sea of Okhotsk. The Korean firm, as well as the embassy of South Korea in...

Confusion Over Kazakh Tax Proposals Erodes Confidence.
August 27, 2008... Mounting uncertainty over proposed tax changes in Kazakhstan is eating away at investor confidence, prompting a group representing the leading oil and gas companies in the republic to write a stiff letter of protest to the prime minister and...

Rise In Ukrainian Transport Costs Threatens Refiners.
August 27, 2008... The Ukrainian government has embarked on a series of tariff hikes for transportation inside and out of its territory that industry players warn could significantly impact energy flows from the country. Ukraine's transportation ministry has...

Petrovietnam Eyes Uzbek Blocks.
August 27, 2008... State Petrovietnam plans to acquire oil and gas blocks in Uzbekistan after signing a cooperation agreement last week, according to a statement from the industry and trade ministry. Petrovietnam signed the agreement with Uzbek state...

Kremlin Showdown With West Scares Off Investors.
August 27, 2008... After a modicum of stability last week, Russia's financial markets have again collapsed in the wake of mounting tensions with the West, which spiked following the Kremlin's decision to recognize the independence of Georgia's breakaway republics...

Tatneft Unveils First Quarterly Results, Disappoints.(Financial report)
August 27, 2008... Regional oil producer Tatneft recorded net profits of 6.34 billion rubles ($260 million) in the first quarter of the year on revenues of 109 billion rubles ($4.47 billion), with a lack of refining capacity weakening the company's bottom line....

Russia-Georgia Tensions Encourage Bulls.(Brief article)
August 27, 2008... The bulls are starting to reassert themselves in the crude futures arena, although upward movement has been slow, with the floor still around $110/bbl. The conflict between Russia and Georgia is also showing few signs of resolution, and the...

Gas Oil Stable Before The Climb.
August 27, 2008... Premiums for 0.1% gas oil cargoes were stable during the week, dealing even to ICE September gas oil on Aug. 21 and up to $1/ton above on Aug. 26. The burst of interest from German and Swiss heating oil consumers is burning out as flat prices...