NEFTE Compass articles from July 2004

NEFTE Compass archives from July 2004

Fatal Attraction: Russia's Riches Outweigh The Risks For World Majors.
July 5, 2004... No matter how hard the state tramples over Yukos, international majors keep coming back for more. At the peak of the crackdown on Russia's largest oil producer, the chairman and chief executive of ChevronTexaco, David O'Reilly, said at a...

Moving Target: Yukos Keeps Oil Flowing As Kremlin Turns Guns On Shareholders.
July 5, 2004... International oil markets were spooked this week when Russian oil giant Yukos warned that the state crackdown against it would force it to shut off the taps on its 1.7 million barrel per day crude production. But despite the panic, the company...

Bandwagon: Yukos Minority Shareholders File Class Action.(Brief Article)
July 5, 2004... As Yukos appears to hurtle towards its own demise, jittery minority shareholders have started their own legal assault on the company, this time in the US where the company's American Depository Receipts (ADRs) trade. Law firm Lerach...

Chicken Kiev: Ukraine Clears Way For Odessa-Brody Reversal.
July 5, 2004... Ukraine has agreed in principle to reverse the Odessa-Brody crude pipeline, and is looking at a proposal from Russian-UK joint venture TNK-BP to accept Russian oil to fill the line. Kiev recently removed a clause from a resolution signed in...

June Bug: Russia Cranks Up Summer Fuel Oil Loadings.(Brief Article)
July 5, 2004... Russian exporters maximized product shipments in June as they started to push as much of their output abroad as possible before export tariffs soar in August. Product duties, at least for now, are still set at 90% of the duty for crude oil....

Eight Ball: Rosneft To Start Vankor Exports In 2008.(Brief Article)
July 5, 2004... In a move to bypass the capacity limitations of national pipeline operator Transneft, Rosneft has opted to transport its crude output from the Vankorskoye field in Eastern Siberia to the Arctic port of Dikson. The 800 km, 600,000 b/d...

High Five: BP And Rosneft Finalize Sakhalin-5 Deal.
July 5, 2004... BP has signed a deal with Russia's state-owned Rosneft on the $3 billion-plus exploration and development of Sakhalin-5 on the Russian Pacific shelf. The shareholder and operating agreement allows the partners to start exploration drilling...

Trading Strategy: TNK-BP Seeks New Routes To Optimize Netbacks.(Interview)
July 5, 2004... In an interview with Nefte Compass, Jonathan Kollek, TNK-BP's vice president for trading and logistics, describes the current market situation and the Russian-UK company's strategy for expanding export opportunities. Will the new,...

Boom Box: Baltic Exports Boom Blasts NWE Urals Premiums.(Northwest Europe)
July 5, 2004... Russia's massive boost in Baltic Sea crude exports over the past year has flooded markets in Northwest Europe, reversing the 5cents-6cents premium that Urals traditionally held in the north, versus Mediterranean cargoes. An analysis of...

Strait Talking: Battle Heats Up To Build Bosporus Bypass Pipeline.
July 5, 2004... Competition is intensifying between two groups -- one US-backed and the other supported by the Russian government -- over the right to build a pipeline that would pump over 1.5 million barrels per day of Russian and Central Asian crude across a...

Kazakhstan: Rig Seizure Puts Kashagan Partners Under New Pressure.
July 5, 2004... The world's biggest new oil project, the $29 billion development of the offshore Kashagan field, has suffered another blow after a drilling rig specially adapted to work in the shallow waters of the north Caspian Sea was seized by authorities...

Azerbaijan: Glencore Wins Socar Tender.(Brief Article)
July 5, 2004... Swiss trader Glencore has won a tender from Azeri state oil company Socar to buy Azeri Light crude, to be pumped through the Baku-Supsa pipeline. The 1 million bbl cargo will load out of the Georgian Black Sea port of Supsa on Jul. 25-26....

Kazakhstan: Giffen Mounts Last Stand Against Corruption Charges.
July 5, 2004... James Giffen, the head of New-York based consultancy Mercator Corp., who advised the Kazakh government on major upstream oil deals throughout the 1990s, is preparing to fight a last-ditch battle when he stands trial at a US federal court on...

Kick Off: Lukoil Starts Exports From Karachaganak.(Brief Article)
July 5, 2004... Lukoil has taken delivery of its first export cargo of Kazakhstan's Karachaganak light crude at a Black Sea terminal near Novorossiysk, Lukoil Overseas said this week. A 134,900 metric ton (989,000 bbl) cargo of crude, delivered via the...

Kazakhstan: Hungary's Mol Farms Into Yukos Field.(Brief Article)
July 5, 2004... In an effort to increase its production base, Hungary's oil and gas company Mol has acquired a 22.5% stake in the Fyodorovskoye block in northwest Kazakhstan. The stake was supposedly purchased from Yukos, but the Russian major failed to...

Ukraine: UK Minnow Wins Two Production Licenses.(Brief Article)
July 5, 2004... Regal Petroleum, a London-based independent oil and gas producer, says it has been awarded a 100% interest in two new production licenses in Ukraine. The 20-year licenses are for the Mekhedivsko-Golotobshcinske and the Svyrydivske gas...

Setback: Tatneft Auditor Queries Books.(Brief Article)
July 5, 2004... Tatneft has been hit with another corporate governance setback after auditor Ernst and Young questioned "unusual transactions." This could lead to a delay in the release of the company's 2003 US GAAP financial results, missing a Jul. 15...

Looking Good: Lukoil Posts Strong Q1 Results.(Brief Article)
July 5, 2004... Lukoil has reported a net profit of $819 million for the first quarter of 2004, in unaudited, consolidated accounts prepared according to US GAAP standards. While this looks to be flat with the $820 million posted for the same period last...

Rosebud: Rosneft Reports Profits Jump.(Brief Article)
July 5, 2004... Net profits at Russia's state-owned Rosneft increased 19.3% in 2003 to $386 million, according to newly released consolidated accounts prepared to US GAAP accounting standards. Rosneft's earnings before interest, tax, depreciation and...

Equities And Currencies.(Brief Article)
July 5, 2004... Share Prices Closing On July 6, 2004

Crude Oil: Differentials Look Overdone In NWE.(Northwest Europe)
July 5, 2004... Russian crude oil differentials firmed against benchmark dated Brent but probably got slightly overdone in Northwest Europe. Cash values improved significantly on the back of a strong recovery in futures. August Brent came back from close...

Products: Faltering Swaps Threaten Gas Oil Arbitrage.(Brief Article)
July 5, 2004... The price of Russian oil products increased with crude. The arbitrage between Rotterdam and Singapore is open on paper but traders say that swaps are coming under pressure and could leave Northwest Europe with a huge glut. A total of seven...

Barricades: Russia Mulls New Law To Restrict Foreign Influx.
July 14, 2004... International oil companies looking to buy new Russian assets will find their scope severely restricted if new legislation now under preparation makes it onto the statute books. The new rules could pose a new barrier to majors such as...

Crisis? What Crisis?: Nerves Frayed By Fears Of Banking Crisis.
July 14, 2004... With all the furor over Yukos, the last thing that Russia needed was a banking crisis. But the government has been forced to intervene to head off a crash that could further have earned the nation another black mark. The crisis, which...

Silent Nights: Yukos Stews As Authorities Hold Their Fire.
July 14, 2004... After the Russian authorities made it clear that they are unwilling to cut any deals with Yukos, the beleaguered oil major has decided on a new course of action. The company's management board has approved the repayment of the 99 billion ruble...

New Europe: Gazprom Adds Strategic Links Into Europe.
July 14, 2004... If you can't beat 'em, join 'em, seems to be Gazprom's current approach to the now clearly inevitable liberalization of European gas markets. The Russian gas giant, with the backing of the government in Moscow, is busily expanding its strategic...

Sticker: Moscow Hikes Products Export Duties.
July 14, 2004... Moscow is further raising the tax burden on Russian oil producers, this time by raising the export duties on oil product exports. The government has announced that it is raising the duty on products exports to $45.40/metric ton, or 65% of...

Counterpoint: Changes Mooted For Pacific Oil Pipeline.
July 14, 2004... The governor of the Khabarovsk region, Viktor Ishayev, has sent a proposal to the Russian government to change the final destination of the planned oil pipeline to the Pacific Coast. Ishayev says the pipeline should go to the Pacific port...

Card Shuffler: Vitol Sells Upstream Assets To Public Affiliate.(Brief Article)
July 14, 2004... Swiss oil trader Vitol is consolidating its upstream assets in Russia and the former Soviet Union under the umbrella of Canadian-listed Arawak Energy, a company in which it owns 41% through Vitol affiliate Rosco SA. Vitol says the purpose...

Golden Parachute: Former Energy Ministers Turn To Diplomacy.(Brief Article)
July 14, 2004... It looks like Russia's Foreign Ministry is becoming a second home for the country's outgoing energy ministers. Igor Yusufov, who was energy minister during President Vladimir Putin's first term of office in 2000-04, will now take on the...

Going Dutch: Port Of Rotterdam Woos Russian Oil Companies.
July 14, 2004... The Netherlands' port of Rotterdam is trying to attract Russian oil companies to build terminals there, the Russian Energy Agency said in a statement. A delegation from the port of Rotterdam gave a presentation to the head of the Russian...

Pole Position: Yaroslavl First Producer Of Euro-3 Gasoline.(Brief Article)
July 14, 2004... Slavneft's Yaroslavl plant has become the first Russian refinery to produce European-standard gasoline, the oil major proudly announced this week. The refinery produced its first 1,800 tons of premium-95 gasoline meeting the Euro-3...

Going North: Ritek To Boost Exports Via Northern Route.(Ritek)(Brief Article)
July 14, 2004... Lukoil subsidiary Ritek is enjoying solid crude production and export growth. The company has announced plans to increase crude exports by nearly 11% to 19,000 b/d (240,000 tons), along the northern river barge route via the Ob Bay to the...

Risky Business: High Prices Mask Operational Risks.
July 14, 2004... Operational risks in the global oil and gas industry have increased almost as sharply as commodity prices in the past 12 months, credit rating agency Fitch said last week in comments that painted a bleak picture of the day-to-day political and...

Outside Job: Stroitransgas To Build Pipeline In India.(Brief Article)
July 14, 2004... Russian oil and gas pipeline contractor Stroitransgas, in a consortium with India's Essar Construction, has signed a contract to build an oil product pipeline for Indian Oil Corp. (IOC), the Russian company reported this week. The new, 688...

Lifeline: Lithuania To Expand Gas Pipeline To Kaliningrad.(Brief Article)
July 14, 2004... Lithuania's gas utility Lietuvos Dujos (LD), which is controlled by Germany's E.On and Russia's Gazprom, is to expand the capacity of the Lithuanian section of the pipeline that pumps gas to Russia's Kaliningrad enclave. The expansion will...

Money Bags: Russian Majors Enjoy Record Earnings But Valuations Lag.
July 14, 2004... Russian oil companies are set to announce record quarterly profits in the second three months of 2004, but the excitement will be short-lived as higher export duties will eat into their bottom lines in August (NC Jul.1,p1). High oil prices,...

Kazakhstan: Gazprom Throws Down The Gauntlet At Karachaganak.
July 14, 2004... Russian gas giant Gazprom has thrown down a new challenge to the international consortium developing the Karachaganak gas condensate field by inviting Kazakhstan to set up a joint venture to expand the Orenburg gas processing plant (OGPP) in...

Lithuania: Mazeikiu Nafta Keeps Anxious Eye On Yukos.(Brief Article)
July 14, 2004... Refiner and terminal operator Mazeikiu Nafta (MN) has moved to calm fears about possible disruptions to the crude supply line from besieged Russian major Yukos, which controls and manages the Lithuanian company. Yukos, which is facing...

Ukraine: TNK-BP Expands Scope Of Refinery Upgrade.(Brief Article)
July 14, 2004... TNK-BP is pressing ahead with ambitious plans to beef up its downstream presence in Ukraine. The company will invest $20 million-$25 million annually over the next few years in the 320,000 b/d Lisichansk refinery and will draw up a plan in...

Kazakhstan: Nelson To Make London Market Debut.(Brief Article)
July 14, 2004... Nelson Resources says it has successfully completed a $120 million share placement and expected to make its debut on the London Stock Exchange's Alternative Investment Market (AIM) on Jul. 19. "The success of the placing bears testament to...

Romania: OMV Closes In On Petrom Stake.(Brief Article)
July 14, 2004... The Romanian government has agreed to sell Austria's OMV a controlling stake in its state-owned oil and gas group Petrom, putting an end to the uncertainty surrounding completion of the auction. OMV will pay a total of 1.4 billion euros...

If At First...: Lukoil Tries Yet Again To Sell Off Drilling Unit.(Brief Article)
July 14, 2004... Lukoil is trying yet again to sell off its drilling subsidiary, Lukoil-Bureniye, after having failed in several previous attempts. The oil company is accepting bids for an open tender, closing on Sep. 1. The results should be announced no...

Expensive: Gazprom Profits Rise With Costs.(Brief Article)
July 14, 2004... Russian gas monopoly Gazprom has reported a record fivefold rise in net profits for 2003, on the back of strong international gas prices and higher exports volumes. The results, however, fell below analysts' expectations, as they were...

Equities And Currencies.(Brief Article)
July 14, 2004... Share Prices Closing On July 13, 2004

Crude Oil: Urals Firm, But May Top Out.
July 14, 2004... Russian crude oil differentials firmed a little further against benchmark dated Brent over the past week while cash values improved as dated Brent and the front end of the futures both strengthened. Brent futures for now seem caught in a...

Products: Gas Oil Differentials Hold Their Ground.(Brief Article)
July 14, 2004... Gas oil differentials have held up relatively well against declining International Petroleum Exchange gas oil futures. Cash values have decreased, however. Straight run fuel continues to demand a strong premium over cracked material although...

Iron Curtain: Russia Closes Door On Western Majors In Yukos Aftermath.(YUKOS Oil Co.,)(Yuganskneftegas)
July 21, 2004... The carve-up of Yukos has finally begun, casting a fresh complexion over the Russian oil industry. And it's not too rosy, either. The message is clear that foreign companies will not be welcome as bidders for Yukos' assets, starting with...

Past Times: Glory Days Over For Western Companies In Kazakhstan.
July 21, 2004... Just months after the Kazakh government trumped BG's $1.23 billion deal to sell its stake in the giant Kashagan field to its partners in the project, the UK group is facing accusations from the country's financial watchdog that it helped to...

Fighting Chance: Yukos Defends Itself In Face Of New Threat.(YUKOS Oil Co.)
July 21, 2004... Although the sale of Yuganskneftegas looks like it could be launched in as little as a month, Yukos continues to struggle for its survival, and its shareholders could still have time to strike some sort of deal with the government. Reports...

Last Chance: TNK-BP Warned On East Siberian Licenses.
July 21, 2004... TNK-BP has won a stay of execution from Russia's Natural Resources Ministry, which decided to keep its hands off the venture's licenses to the Kovykta gas field and Verkhnechonskoye oil field -- for now. The ministry, however, is demanding...

No Thanks: Rosneft May Not Be Interested In Yuganskneftegas.
July 21, 2004... State-owned Rosneft is often mentioned as the most likely candidate to get Yukos' assets, including its prized Yuganskneftegas producer, which may go up for tender as soon as a month from now. But the state company announced it is not...

Stop Go: BP, Rosneft Start Sakhalin-5 Drilling, Marathon Talks Off.(British Petroleum Company PLC, Marathon Oil Co.)
July 21, 2004... BP, in partnership with Russian state-owned Rosneft, has started exploration drilling on the Sakhalin-5 acreage on the Russian Pacific Shelf, announced Rosneft's first vice president Sergei Alexeyev. Rosneft, meanwhile, has postponed talks...

Due North: Products Pipeline To Primorsk Takes Shape.
July 21, 2004... National oil products pipeline operator Transnefteproduct is moving forward with plans for a line to Primorsk, with construction to start already in the fourth quarter. The planned "North" pipeline will allow Russia to significantly boost...

Augustus: Primorsk Further Boosts Capacity.
July 21, 2004... State pipeline monopoly Transneft is continuing its program to boost its crude transshipment capacity to Primorsk. The flagship Baltic Sea port has penciled in an 82,000-b/d boost in a preliminary loading schedule for August, compared with...

Tough Racket: Lukoil Supplies More Fuel To US Army In Iraq.(Brief Article)
July 21, 2004... Lukoil has extending its contract to supply fuel to the US military in Iraq. Lukoil's marketing arm Litasco says it extended its contract with US Refinery Associates of Texas for up to a year to supply gasoline and diesel to the north of...

Lenny Krav'tz: Lukoil Kicks Off Production On Baltic Shelf.(Brief Article)
July 21, 2004... Lukoil has kicked off commercial crude production on the Baltic Sea shelf, at its Kravtsovskoye (D-6) Block. The Russian oil giant announced it had completed drilling its first production well from its Arctic-class platform specially...

Satellites: FSU States Turn Back To Russia As Putin Fills Vacuum.(Former State Union states)
July 21, 2004... Russia's policy of improving relations with former Soviet states is starting to pay dividends, with breakthroughs in Uzbekistan and Ukraine. Spurred partly by concern that US influence in the region is growing, a special coordinating...

Money Bags: Russian Majors Reap Record Profits But Valuations Lag.
July 21, 2004... Russian oil companies are set to announce record quarterly profits in the second three months of 2004, but the excitement will be short-lived as higher export duties will eat into their bottom lines in August (NC Jul.1,p1). High oil prices,...

Flatheads: Gazprom Keeps Reserves Flat.(Gazprom Russian Joint Stock Co.)(Brief Article)
July 21, 2004... Gazprom has managed to keep its gas reserves flat on the year, according to an audit conducted by DeGolyer and MacNaughton. The audit of its natural gas, oil, condensate, gas liquids and sulfur reserves at 19 fields revealed total proven...

Blockage: Russia's Production Miracle Runs Out Of Steam.
July 27, 2004... Russia's oil production miracle could be running out of steam as local majors reduce their growth forecasts for the year, despite hitting record output of 9.26 million barrels per day in June, accounting for more than 11% of global supply (see...

Stoppage: Georgia Makes Life Difficult For BP Pipeline.(British Petroleum Company PLC)
July 27, 2004... BP will know on Aug. 2 if the halt called by Georgia to work on a section of the 1 million barrel per day Baku-Tbilisi-Ceyhan crude oil pipeline is more serious than originally thought. The UK major expects to resume work on that date after...

Bigwigs: Conoco Chief Meets Putin, Lukoil President.
July 27, 2004... ConocoPhillips appears to be moving towards taking a stake in Lukoil. Russian President Vladimir Putin met last week with ConocoPhillips President and Chief Executive James Mulva, the same day that Moscow said it plans a third-quarter sale...

The End Is Nigh: Yukos Gives Itself Three More Weeks.
July 27, 2004... Yukos has reached the end of the road: It will file for bankruptcy if the government sells its main producing subsidiary Yuganskneftegas and will not be able to finance its operations in three weeks when it runs out of cash. Yukos said it...

No Bid: BP Will Not Bid For Yukos Assets.(Brief Article)
July 27, 2004... BP saw its second-quarter earnings boosted by a strong trading environment and higher production from its TNK-BP joint venture, but will not be looking to add to its Russian portfolio by bidding for any of the former Yukos assets likely to be...

Red Carpet: Lukoil Launches Iraqi Program.
July 27, 2004... Lukoil welcomed its first group of Iraqi oil specialists this week to be trained at facilities in Kogalym, Western Siberia. The initiative is linked to Lukoil's campaign to salvage its West Qurna contract in Iraq, the fate of which still...

Gas Gossip: Moscow, Kiev Discuss Energy Cooperation.
July 27, 2004... Cooperation between Russia and Ukraine in the energy sector, primarily in gas, was one of the top items discussed by Russian President Vladimir Putin and his Ukrainian counterpart Leonid Kuchma early this week in Yalta. The two sides have...

Whodunnit: Yukos Shareholder Accused Of Murder.
July 27, 2004... Russian law enforcement agencies have leveled more criminal charges against one of Yukos' core shareholders -- this time for murder. The Moscow District Court issued an arrest warrant on Jul. 26 for Yukos shareholder Leonid Nevzlin, for the...

American Dream: Sakhalin-2 Targets US Exports.
July 27, 2004... Sakhalin Energy, operator of the Royal Dutch/Shell-led Sakhalin-2 project on the Russian Pacific shelf, could sign a new gas sales contract within a month. The deal would involve liquefied natural gas deliveries to Mexico and the US, according...

Polish Deal: Lukoil Signs Direct Transit Deal In Poland.(Brief Article)
July 27, 2004... Lukoil subsidiary Lukoil Polska has signed a direct oil transit deal to send its crude to world markets from the Polish port of Gdansk. Under the agreement, Lukoil plans to pump 300,000 metric tons (24,000 b/d) of its crude in the fourth...

In Reserve: Tatneft Reveals Reserves.
July 27, 2004... Russian oil major Tatneft, which produces heavy and high-sulfur crude from mature fields in Tatarstan, has managed to replace its proven reserves in 2003. According to an audit by US consultant Miller and Lents, Tatneft's overall proved...

Perpetual Motion: TNK-BP Moving Forward With Baltic Terminal Plans.(Brief Article)
July 27, 2004... TNK-BP looks to be moving forward with plans to build a crude and oil products terminal on the Baltic Sea. The Russian-UK company's board of directors has approved allocating budget funds for a pre-feasibility study of the project, which...

Stalwart: Primorsk Takes Top Spot In August.(Brief Article)
July 27, 2004... Russia is set to cut its seaborne crude exports by 207,000 metric tons (49,000 b/d) in the port loading programs released so far for August, from the previous month. The Baltic Sea ports will ramp up loadings by 263,000 tons (62,000 b/d)...

Russian Crude Oil And Condensate Production/Exports, June 2004.(Brief Article)
July 27, 2004... Russian Crude Oil And Condensate Production/Exports, June 2004 * Exports to non-CIS markets via Transneft pipeline system. ** Excluding exports for state needs, rail shipment, transit. Total for exports for Lukoil excludes...

Russian Crude Loading Programs For August 2004.
July 27, 2004... Novorossiysk Crude Loading Program For August 2004

Kazakhstan: Kashagan Group Discovers Fifth Offshore Field.
July 27, 2004... The Eni-led consortium developing the supergiant Kashagan field has announced that it has discovered a fifth field in its block in Kazakhstan's sector of the Caspian Sea. But it is not all smiles behind the scenes, as the Kazakh government...

Lithuania: Klaipeda Delays Crude Transshipments.(Brief Article)
July 27, 2004... Baltic Sea terminal operator Klaipedos Nafta (KN) has failed to meet its goal of launching crude oil shipments this month, due to a lack of guaranteed long-term export contracts. According to a KN official, the terminal has been cleared to...

Ukraine: TNK-BP To Fill Odessa-Brody Line In September.(Brief Article)
July 27, 2004... In a boost for Russian oil exports, TNK-BP will start filling crude into the Odessa-Brody pipeline in September, with the line to start operations in early October. Following Ukraine's recent decision to permit the reversal of the line,...

Romania: OMV Takes Market Lead With Petrom Deal.(Brief Article)
July 27, 2004... In the largest oil privatization in Eastern Europe, Austria's OMV has agreed on terms with Romania to buy a controlling stake in oil and gas group Petrom. OMV said late last week that it would pay as much as 1.52 billion ($1.86 billion) to...

In The Dock: Sibneft Accused Of Diluting Sibir Stake.(Brief Article)
July 27, 2004... UK-registered Sibir Energy has accused Russian oil giant Sibneft of stealing its stake in the Siberian Sibneft-Yugra oil venture. Sibir maintains that its 50% stake in the Sibneft-Yugra production venture was diluted to less than 1% without...

Cheap Trick: Gazprom Places Its Cheapest Ever Bonds.(Brief Article)
July 27, 2004... Gazprom has raised $1.25 billion on capital markets, to support its investment program and help ease its heavy debt repayment schedule. The Russian gas monopoly placed the 15-year eurobonds in Europe and the US on Jul. 23. The bonds set a...

Equities And Currencies.
July 27, 2004... Share Prices Closing On July 27, 2004

Crude Oil: Futures Race To Record Highs.
July 27, 2004... Crude oil futures have raced ahead to set new record highs. The high prices are driven by increasing concerns about the long-term fundamental supply-demand balance, the potential for an acute supply squeeze developing in case of even relatively...

Products: Gas Oil Prices Move Into The Fast Lane.(Brief Article)
July 27, 2004... Russian gas oil prices have taken a fast ride on the back of rising futures. The physical market, however, looks pretty weak. Gas oil differentials rose in the north and fell in the south. The Baltic Sea ports loaded 376,000 metric tons...