FSU Energy articles from December 2003

FSU Energy archives from December 2003

Transneft looks to the bosporus: a Turkish firm has proposed a solution to the Turkish straits bottleneck. Russia's pipeline giant is interested.
December 19, 2003... A Turkish company has proposed construction of a pipeline bypassing the Bosporus and Dardanelles straits in order to circumvent frequent tanker delays. And Russia's state-owned pipeline operator, Transneft, is considering forming a pipeline...

Funny old year: this year has shown that the FSU remains an unpredictable place. It's a tough time for crystal-ball gazers.(Editorial, Former Soviet Union)
December 19, 2003... It's been a strange year. It all started so well back in February when the TNKBP deal appeared to open up a whole new shining era &possibility for western oil firms in Russia. If these two erstwhile adversaries could get together, then surely...

Last rites for YukosSibneft.(News)
December 19, 2003... Yukos and Sibneft shareholders appear to be moving rapidly towards cancellation of the YukosSibneft merger deal without payment of a $ 1bn penalty stipulated in their agreement. But the Kremlin-backed campaign against Yukos looks set to...

No end in sight.(News)(petroleum industry)
December 19, 2003... Even an amicable deal between Yukos end Sibnelt will not bring about an end to the attacks on the beleaguered oil company, most analysts agree. "The Kremlin's target is to gain control over Yukos and exclude its shareholders from the...

Surgutneftegaz secures Talakan.(News)(Surgutneftegaz Industrial Association)
December 19, 2003... Surgutneftegaz has fulfilled its long-held ambition of taking control of the Talakan crude and condensate field in eastern Siberia. The news is a fresh--although not unexpected--blow for Yukos, which had hoped to take control of the field....

Prirazlomnoye plans take shape.(News)
December 19, 2003... Sevmorneftegaz, the 50:50 joint venture between Gazprom and Rosneft, plans to start production at the Prirazlomnoye oil field in the Barents Sea in 2005. Financing and the timetable of key operations were worked out at a meeting last...

BTC workers strike.(News)(Baku-Tbilisi-Ceyhan)
December 19, 2003... Georgian workers building part of the BP-led 1mn b/d Baku-Tbilisi-Ceyhan (BTC) pipeline have gone on strike demanding higher wages. Workers building a pumping station in Georgia's Gardabany region, and other workers laying the pipeline in the...

Firms hope for Iraq comeback.(News)
December 19, 2003... Russian oil companies could have a chance to return to Iraq, depending on the outcome of talks on restructuring of the country's sovereign debt. US special envoy James Baker is expected to come to Moscow at the end of this week to...

Turkmen PSA delayed.(News)(production-sharing agreement)
December 19, 2003... Turkmenistan and Russia's Zarit consortium--comprising Itera, Rosneft and Zarubezhneft--have failed to sign an expected production-sharing agreement (PSA) covering development of four prospective structures in the Turkmen sector of the...

Japan fails to win pipeline commitment.(News)
December 19, 2003... Japan has failed to get a firm commitment from Russia over the 1mn b/d Angarsk-Nakhodka crude pipeline project during a three-day visit to Tokyo by Russian prime minister Mikhail Kasyanov (FSUE, 12 December, p3). Kasyanov held talks with his...

Fuel oil flood swamps terminals.(Exports and trade)
December 19, 2003... High fuel shipments to Baltic ports coinciding with weak demand in northwest Europe has left export terminals in the region struggling to cope. Latvian Railways has extended a ban on fuel oil deliveries to the port of Ventspils until at...

Primorsk expansion boosts exports.(Exports and trade)
December 19, 2003... FSU crude exports rose in November despite a slump in volumes from Black Sea ports. Total exports of 4.71mn b/d (19.2mn t) were up by 1.5pc on October. Year-to-date volumes are 4.62nm b/d, up by over 16pc on the same period in 2002. A...

The return of uncertainty.(2003 in review)
December 19, 2003... The Kremlin-backed campaign against Yukos dispelled some of the positive impact on Russia's investment climate from the TNK-BP deal. The chances of another major deal may have diminished, but western firms are still looking for opportunities....

TNK-BP suggests new investment model.(2003 in review)(British Petroleum Company PLC)(Tyumenneft)
December 19, 2003... BP's February announcement of the creation of a 50:50 joint venture with its former arch-enemies, the owners of Tyumen Oil (TNK), was not unexpected. But it did usher in a new wave of international interest in Russia, prompting intense...

Shell prospers in Sakhalin.(2003 in review)
December 19, 2003... The Shell-led Sakhalin Energy group developing the Sakhalin II project this year signed a number of deals paving the way for 2.8mn t/yr of liquefied natural gas (LNG) sales to Japan. In May, Sakhalin Energy announced plans to go ahead...

Export growth increases Russia's global role.(2003 in review)
December 19, 2003... FSU crude oil output and exports continued to rise in 2003. With domestic consumption static, growth in exports has outpaced that for production. Russian crude production, including gas condensate, looks set to hit 8.5mn b/d in 2003, up...

BPS expansion gives Transneft breathing space.(2003 in review)(Baltic Pipeline System)
December 19, 2003... Transneft focused firmly on expanding the Baltic Pipeline System (BPS) feeding the port of Primorsk, bringing forward the expansion of the route from 360.000 b/d to 600.000 b/d to November from January. This gave the pipeline operator...

State-owned firms come to the fore.(2003 in review)(Gazprom Russian Joint Stock Co.)(Rosneft)
December 19, 2003... It has been a good year for Russia's state-controlled energy giants, Gazprom and Rosneft, whose fortunes seem to he on the rise. In October, President Vladimir Putin made it clear that there that there will be no break-up of the...

Rivals hope to profit from Yukos' plight.(2003 in review)(Lukoil Co.)
December 19, 2003... Lukoil announced in April a 10-year corporate strategy to regain ground lost to Yukos. Total investment over the period will be around $19bn. It expects medium-term growth from fields in Timan-Pechora and the Caspian region. The company...

All change in the Caucasus.(2003 in review)
December 19, 2003... The year brought major political change in Azerbaijan and Georgia, countries that have become vital to western interests in the Caspian region. In December, former Azeri president Heidar Aliyev died after having stepped down in October...

Central Europe consolidates.(2003 in review)( etroleum industry)
December 19, 2003... In central and eastern Europe, the big news was a potential strategic alliance between Hungarian firm Mol and Poland's PKN Orlen. PKN and Mol have talked about tying the knot in the past, but this time both national governments are...

Market awaits YukosSibneft divorce.(Stock markets)
December 19, 2003... The benchmark Russian Trading System (RTS) recovered some of its recent Yukos-inspired losses early on in the week, but then fell back again. The stock-market ended the week down by 0.2pc at 539 points. Investment bank UFG says the latest...

Yukos defends its tax record.(Companies)
December 19, 2003... Yukos has released information about its tax payments over the past five years in response to tax ministry allegations of unpaid tax bills. The figures show Yukos' tax payments rising from Rbs8bn in 1998 to Rbs164bn ($5.3bn) this year....

OMV signs up to Druzhba.(OMV (Vienna, Austria))(Tranapetrol)
December 19, 2003... Austrian firm OMV and Slovakia's Tranapetrol--which is 49pc owned by Yukos--have signed a deal to extend Russia's Druzhba export pipeline by 60km from its current terminus at Bratislava to OMV's 200,000 b/d Schwechat refinery near Vienna....

Sakhalin production season ends.
December 19, 2003... The Shell-led Sakhalin Energy group ended its production season for this year on 14 December. Total output of Vityaz crude was 10.3mn bl (1.41mn t) compared with 10.8mn bl last year. Production at the offshore complex is restricted to six...

Tuapse berth damaged.
December 19, 2003... The Tuapse oil terminal's berth 4, which handles products, was damaged last week during a tanker berthing operation. Loading operations at the Black Sea port are expected to be delayed as the berth will have to shut down for repairs. It is...

Baltic ports directory.(oil terminals)
December 19, 2003... This new edition of the Argus guide to oil terminals on the Baltic Sea is an essential tool for anyone who needs to keep up with the latest changes to the region's export infrastructure. It covers air major outlets, as well as lesser-known...

Announcement.
December 19, 2003... FSU Energy will not be published next week because of the Christmas holidays. The next issue (Vol. IX, 1) will be published on Friday 9 January, 2004.

Gasoil on the rise.(Products market)
December 19, 2003... * Strong gains on crude futures pushed gasoil prices higher over the week. Gasoil values in the Black Sea also looked set for a boost from another wave of buying in the east Mediterranean. Fuel oil lagged, with closed arbitrage to the...

Urals hits the skids.(Crude market)
December 19, 2003... * Oil prices continued to rise as traders fretted over the parlous state of US crude inventories, with US stocks falling for the fourth week in a row. Dated BFO rose to close to $31/bl, but Urals fell against the benchmark in both the...

Crude export offtakers, November 2003.(FSU crude offtakers)(Illustration)
December 19, 2003... Producers Offtakers Volume ('000t) Novorossiysk TNK TNK-Trade 360.6...

Russian refinery output, October 2003.(Russian refinery output)(Illustration)
December 19, 2003... Russian refinery output, October 2003 Company/refinery Crude throughout Crude throughout %chg Sep Oct Oct '000 b/d Total for Russia 15,942.3 3,754.2...

Netbacks.(Illustration)
December 19, 2003... Russian crude netbacks 17 Dec Primorsk Butinge Novo rossiysk Urals (cif-fit) ($/bl) ...

YukosSibneft fades rapidly: although Yukos and Sibneft are still negotiating, the talk is about penalty payments. The merger is dead.
December 12, 2003... The YukosSibneft merger appears to be on the brink of final collapse, with Yukos' owners still refusing to accept Sibneft's 11th-hour attempt to revise the terms last week. "Under the current circumstances there is only a minuscule...

Managed democracy: Vladimir Putin now has a tame parliament. The best scenario is that pragmatism will prevail over populism.(Editorial)
December 12, 2003... Russia's Duma elections appear to have set the seal on its transformation into something that bears a more than passing resemblance to an autocracy. In a landslide victory, the pro-Kremlin United Russia party--under the slogan: "Together...

Rusia outlines domestic supply plan.(News)
December 12, 2003... The TNK-BP-led Rusia Petroleum joint venture, operator of 1.9 trillion [m.sup.3] Kovykta gas field in east Siberia, has drafted a plan for supplying gas to domestic consumers, amid uncertainty about export prospects. Supplying gas to the...

Moscow keeps Japan on the boil.(News)
December 12, 2003... Russia is looking for ways to maintain friendly relations with Japan, while avoiding giving a clear answer on whether it will build the 1mn b/d Angarsk-Nakhodka pipeline from east Siberia to the Russian Pacific coast. The pipeline, which...

Gutseriyev expands his empire.(News)(Mikhail Gutseriyev)
December 12, 2003... Former Slavneft president Mikhail Gutseriyev is stepping up efforts to expand his oil firm Russneft. The company announced this week that it has received a one-year $228mn loan from Cyprus based Intersil-Oil to buy new oil assets in...

ChevronTexaco boosts Odessa-Brody hopes.(News)
December 12, 2003... ChevronTexaco is eyeing the 180,000 b/d Odessa-Brody pipeline as a transit route for Kazakh crude, according to a source close to the ChevronTexaco-led Caspian Pipeline Consortium (CPC). Ukraine and ChevronTexaco have reached a...

Lukoil's Vysotsk terminal delayed.(News)
December 12, 2003... The launch of Lukoil's new Vysotsk oil terminal in the Gulf of Finland has been delayed until the second quarter of next year, thanks to legal and technical difficulties. The start-up capacity of the planned terminal--located some 150km...

Sakhalin Energy starts tanker tender.(News)
December 12, 2003... The Shell-led Sakhalin Energy group, which operates the Sakhalin II production-sharing agreement project in Russia's far east, has launched a tender to charter liquefied natural gas (LNG) tankers. Sakhalin Energy will need two gas...

River shipment hike.(News)(crude petroleum)
December 12, 2003... Russian exporters shipped 3.63mn t of crude to export markets along the Volga-Don river route to the Black Sea ports of Kavkaz and Kerch during this year's navigation season, according to the directorate of internal waterways, Rosrechflot....

New Karachaganak delay.(News)
December 12, 2003... The BP-Agip led KIO consortium developing the 7mn t/yr Karachaganak field in western Kazakhstan has delayed the shipment of gas condensate through the Caspian Pipeline Consortium (CPC) system until the second quarter of next year. The...

CPC faces natural monopoly call.(News)(Caspian Pipeline Consortium)
December 12, 2003... The Russian energy ministry is supporting a proposal raised by the Federal Energy Commission (FEC) this month to include the Caspian Pipeline Consortium (CPC) in Russia's list of natural monopolies, says a source close to CPC. If this...

Black Sea delays ease.(News)
December 12, 2003... Black sea export disruptions have eased over the last week, but still remain massively constrained. There have been no significant closures of the Turkist straits in December, easing hold-ups. Northbound delays for "daylight restricted"...

Single-hull tanker controversy reignites.(Exports and trade)
December 12, 2003... A year on from the Prestige disaster, the use of cheap single-hull tankers to transport fuel oil from FSU ports is again stirring up controversy. The EU and the Spanish government expressed concern early this month about the 24-year-old...

Russia to maintain Iran crude supplies.(Exports and trade)
December 12, 2003... Russia's Lukoil and TNK-BP will continue crude shipments to Iran in the near/future. The route is "marginal"--less profitable than exports through the Transneft pipeline system but, unlike pipeline exports, it has the advantage of being...

Sakhalin race hots up.(Russia & CIS)
December 12, 2003... The second round of elections for a new governor for the oil and gas rich Sakhalin region will take place on 21 December. Acting governor Ivan Malakhov gained 36pc of votes and Yuzhno-Sakhalinksk mayor Fyodor Sidorenko gained 32pc of votes in...

Schlumberger acquires PetroAlliance.(Russia & CIS)(PetroAlliance)
December 12, 2003... International oil services giant Schlumberger is set to boost its presence in the Russian oil sector by acquiring Russian services firm PetroAlliance. Schlumberger will close a deal on acquiring a 26pc stake in PetroAlliance--the country's...

Surgut gets temporary licence.(Russia & CIS)(Surgutneftegaz Industrial Association)
December 12, 2003... Surgutneftegaz's hopes of gaining access to the 124mn t Talakan crude and condensate field were raised this week when Russia's natural resources ministry granted it a temporary development licence, effective either/for a year of until a...

Nelson buys 50pc of Buzachi.(Caspian/central Asia)(China National Petroleum Corp.)(Nelson Resources Ltd.)
December 12, 2003... Canada-based producer Nelson Resources has agreed to buy a 50pc stake in Kazakhstan's North Buzachi oil field from Chinese state-owned oil firm CNPC. The deal could be finalised by the end of this year. CNPC bought Buzachi earlier this year...

Azeri loadings hit by delays.(Caspian/central Asia)
December 12, 2003... Four 1mn bl cargoes of Azeri Light are scheduled to load at the Georgian Black Sea port of Supsa in January. But the month's last cargo, with ExxonMobil, is in reality likely to be delayed into February, given recent loading delays. Hold-ups...

Azeri crude exports stable.(Caspian/central Asia)
December 12, 2003... Azerbaijan exported 155,000 b/d (636,300t) of crude in November, compared with 149,000 b/d in October. Shipments by state-owned firm Socar through Russia's Black Sea port of Novorossiysk were down sharply due to loading delays. Exports of...

Kazakh crude exports dip.(Caspian/central Asia)
December 12, 2003... Kazakhstan exported 713,000 b/d (2.93mn t) of crude in November, compared with 720,000 b/d the previous month. CPC shipments were down because of loading disruptions near the Black Sea port of Novorossiysk and tanker delays in the Turkish...

Ventspils halts fuel oil deliveries.(Baltics)
December 12, 2003... Latvia has banned rail fuel oil shipments to the Ventbunkers terminal at Ventspils from 5-12 December. This accumulated on railway sidings at the terminal. Over 1,000 rail cars are awaiting unloading near the port but the terminal cannot...

Hungary suspends Mol sale.(Central/eastern Europe)
December 12, 2003... Hungarian privatisation agency APV has suspended the sale of a 17.6pc state-owned stake in oil and gas company Mol, citing unfavourable market conditions. The 19. 1mn shares on offer were oversubscribed, but the government's target of 7,100...

Eni move narrows Petrom bidding.(Central/eastern Europe)(Eni S.p.A.)(Petrom R.A.)
December 12, 2003... Italian energy firm Eni has pulled out of the bidding for a 33.34pc stake in Romanian state-owned oil company Petrom. Eni's withdrawal means that there are now just seven candidates left in the running for a majority stake in Petrom. Fourteen...

Looking ahead.(Calendar)
December 12, 2003... * Risks and Opportunities in caspian and Central Asian Oil and Gas Pipeline Partnerships. 26-27 January. London. CWC. Tel: +44 20 7089 4200 * Caspian Black Sea & Turkiog Oil & Gas. 26-28 February. Istanbul. ITE. Tel: +44 02 7596 5166 ...

RTS defies YukosSibneft news.(Stock markets)(Russian Trading System)
December 12, 2003... The week was once again dominated by speculation about the fate of the YukosSibneft merger (see p1), which now appears highly unlikely to go ahead. "The break-up of the merger should not affect Yukos' fundamental valuations," according...

UES unbundling takes shape.(Power reform)(Unified Energy System)
December 12, 2003... Russia is edging slowly towards unbundling national power monopoly Unified Energy System (UES), in what is being seen as the country's most important market reform since the mass privatisations of the 'nineties. UES' board of directors...

Arb prospects boost HSFO.(Products market)
December 12, 2003... * Prices for most products were higher, with arbitrage opportunities boosting high-sulphur fuel oil. But oversupply in the Mediterranean pulled down prices for gasoil exports from the Black Sea. * As many as eight cargoes of high-sulphur...

Med Urals under pressure.(Crude market)
December 12, 2003... * Icy weather swept across the northeast US, helping push dated BFO to over $30/bl. Urals remained firm against the benchmark in northwest Europe but eased in the Mediterranean as shipping and loading delays diminished. * Urals was...

Russian pipeline exports, November 2003.(Pipeline exports)(Illustration)
December 12, 2003... Russian pipeline exports, November 2003 '000t Exporter Novorossiysk Tuapse Odessa Total exports through Russia 3,204.80 262.51 668.12 Total exports by Russia ...

Russian crude netbacks.(Netbacks)(Illustration)
December 12, 2003... [GRAPHICS OMITTED] Russian crude netbacks 10 Dec Primorsk Butinge Novorossiysk Urals (cif-fit) ($/bl) 28.81 28.81 28.91...

Sibneft wants it all: the future of Yukos is more uncertain than ever following last week's derailment of the YukosSibneft merger.
December 5, 2003... Yukos' core shareholders this week rejected a bid by Sibneft to take management control of YukosSibneft. Sibneft's move, which may well have Kremlin backing, led to last week's suspension of the merger between the two. Sibneft...

A final favour: Roman Abramovich seems to have stalled YukosSibneft. But it appears likely someone else is pulling the strings.(Editorial)
December 5, 2003... To borrow very loosely from Oscar Wilde: for one merger to collapse may be regarded as a misfortune; to lose a second looks like conspiracy. The apparent demise of YukosSibneft (see p1) is of course the second time a proposed union...

Ministry claims Yukos owes $5bn.(News)
December 5, 2003... The long-running campaign by the authorities against Yukos and its owners appeared to continue unabated this week, against the background of the YukosSibneft merger collapse. Russian news agency Interfax this week published a letter...

Gazprom defines Shtokman LNG plans.(News)
December 5, 2003... Gazprom has reached a decision on how to export gas from the 4.3 trillion [m.sup.3] Shtokman field in the Barents Sea in the form of liquefied natural gas (LNG). This forms part of the firm's wider strategy for development of Russia's...

TNK-BP 'close to Ventspils deal'.(News)
December 5, 2003... TNK-BP is close to reaching an agreement that would give it control of Latvia's Ventspils Nafta (VN) oil terminal, according to Latvian sources close to the negotiations. It is negotiating to take a 50pc plus one share stake in Ventspils...

Statoil abandons Polish gas supply plan.(News)
December 5, 2003... Norwegian firm Statoil has called off a major gas supply deal with Poland, following sluggish growth in the country's gas demand over the past two years. The original deal--signed with state-owned Polish Oil and Gas (POGC) in...

Ministry stands Surgut up.(News)(Surgutneftegaz Industrial Association)
December 5, 2003... Surgutneftegaz's efforts to secure a permanent licence for the 124mn t Talakan crude and condensate field received a setback this week when natural resources ministry officials failed to turn up for a court hearing into the issue. The oil...

Transneft will boost Primorsk exports in March.(News)
December 5, 2003... Russian pipeline firm Transneft will complete the second expansion phase of the country's Baltic Pipeline System (BPS) in Match, ahead of the firm's original plans to finish the work by next summer, a company source tells Argus. This...

Murmansk amendments proposed.(News)(Transneft)
December 5, 2003... Transneft has come up with recommendations for construction of the proposed Murmansk pipeline, which could eventually allow Russian crude off to be shipped directly to the US on very large crude carriers (VLCCs). But sources at Transneft...

Black Sea woes shift interest to Druzhba.(Exports & trade)
December 5, 2003... Loading problems at Black Sea ports (see p7) have intensified exporter interest in Druzhba destinations. And traders believe that actual December shipments may well exceed the scheduled 1.25mn b/d. In December last year, when interest in the...

Black Sea exporters pay the price.(Exports & trade)
December 5, 2003... Delays through the Turkish straits have not only played havoc with loadings at Novorossiysk (see below), they have cost exporters of Russian and Caspian crude a fortune in extra shipping fees and severely disrupted the supply of crude to...

Transneft cuts Novorossiysk supplies.(Exports & trade)
December 5, 2003... Tanker delays in the Turkish straits and stormy weather mean R will almost certainly be impossible to fulfil the December crude loading schedule at Novorossiysk. As a result, pipeline firm Transneft intends to cancel late-month cargoes...

Domestic product supply rises.(Exports and trade)
December 5, 2003... Fuel oil prices on the Russian domestic market fell in the first half of November, as domestic supply increased. The domestic market received just over 43pc of Russian fuel oil output in the 1-16 November period, up from around 40pc in...

Baltic product exports rebound.(Exports and trade)
December 5, 2003... Product exports from FSU ports totalled 6.87mn t in November, up by 2pc on an average daily basis from October and up by 4pc from November last year. Gains were led by fuel oil, which is up by 20pc on November 2002. This came despite...

CNPC eyes new Caspian projects.(News: Caspian/central Asia)(China National Petroleum Corp.)
December 5, 2003... Chinese state-owned oil firm CNPC is planning to expand its operations in the Caspian region, potentially increasing competition for western firms. CNPC representatives tell Argus that the company is looking for new projects, but decline...

Russia wants Azeris to pay more.(News: Caspian/central Asia)
December 5, 2003... Russia wants to increase the payments Azerbaijan has to make for sending its crude through the 100,000 b/d Baku-Novorossiysk pipeline. Moscow is proposing the introduction of a tariff for storing Azeri crude at the Black Sea port of...

CPC loadings hit record.(News: Caspian/central Asia)(Caspian Pipeline Consortium)
December 5, 2003... The Caspian Pipeline Consortium (CPC) terminal near the Russian Black Sea port of Novorossiysk loaded a record 354,000 b/d (1.33mn t) in November, up from the previous record of 324,000 b/d in October. Loadings will get a further boost this...

Kazmunaigaz merges producers.(News: Caspian/central Asia)
December 5, 2003... Kazakh state-owned oil and gas holding company Kazmunaigaz is planning to merge its production affiliates, Uzenmunaigaz and Embamunaigaz. The key reason for the merger is the need to optimise field management in southern Kazakhstan. The two...

Black Sea disruption hits exports.(Russia & CIS)
December 5, 2003... Black Sea disruption hits exports Crude exports by pipeline from Russia averaged 3.49mn b/d in November, up by 2.6pc on October and by around 17pc on the same month last year. The increase follows a major boost in loadings at Primorsk...

Russian crude output steady.(Russia & CIS)
December 5, 2003... Russia produced 8.75mn b/d (36mn t) of crude and gas condensate in November, according to preliminary figures released by the energy ministry. This is an increase of almost 10pc on the same period last year. The ministry expects some...