Potanin rejects bln offer for Norilsk stake

TNK-BP Submits Bid for Poland’s Grupa Lotos, Kommersant Reports

TNK-BP, BP Plc (BP/)’s Russian joint venture, submitted a non-binding bid to buy a stake in Poland’s second-largest oil refiner Grupa Lotos SA (LTS), Kommersant reported.

The Moscow-based oil producer is the only Russian bidder for the asset, the newspaper said, citing an unidentified person with knowledge of the auction. OAO Gazprom Neft and OAO Rosneft, which earlier were considering taking part in the tender, did not submit their bids, Kommersant reported, citing the companies.

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Bashneft to spend $1.2 billion on downstream by 2015

UFA, Russia (Reuters) - Russian mid-size oil producer Bashneft, owned by conglomerate Sistema, plans to invest 35.14 billion roubles ($1.18 billion) in oil refining by 2015, a company executive said on Friday.

Vadim Nikolaichuk, head of Bashneft's subsidiary UfaNefteKhim, told reporters the company invested a total of more than 12 billion roubles in oil processing in 2009-2010.

(Reporting by Olesya Astakhova; Writing by Maria Kiselyova; Editing by Jon Loades-Carter)

http://www.rbcnews.com/free/20110527104605.shtml

      RBC, 27.05.2011, Ufa 10:46:05.Bashneft plans to invest RUB 35.14bn (approx. USD 1.24bn) in the upgrade of its Bashkortostan-based oil refineries Novoil, Ufa Oil Refinery and Ufaneftekhim by 2015, Ufaneftekhim CEO Vadim Nikolaychuk said at a chemical forum on Friday.

      Of this total, Bashneft intends to allocate RUB 19bn (approx. USD 673m) for projects to increase the level of crude oil conversion into light oil products. It plans to launch a delayed coking unit and a vacuum gasoil hydrocracker at Ufaneftekhim.

      As a result of these measures, the level of crude oil conversion is expected to reach 94.7% in 2016, up from 80.21% in 2008. Investments in a project to enhance the quality of fuel are planned at RUB 9.7bn (approx. USD 344m) until 2013.

Anupama Airy, Hindustan Times

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New Delhi, May 26, 2011

First Published: 21:04 IST(26/5/2011)

Last Updated: 02:03 IST(27/5/2011)

Oil giants may put Rs 15,500 cr in Russia gas project

Novatek will retain 51% equity in the project while the balance 49% will be given to potential investors. France’s Total is also understood to be persuing a 20% stake in the project.

A non-binding indicative bid for a 15% stake in the project is underway and, if successful, the Indian consortium will invest R15,500 crore for a 15% in the project, a company official close to the development told HT.

“The 15% equity of this multi-billion dollar project (to be financed on a debt-equity ratio of 50:50) will be split between ONGC Videsh, GAIl and Petronet LNG as 7.5%, 5% and 2.5% respectively,” the official said.

Global consultants including Gaffney Cline Associates (GCA), Poten & Partners (UK) Ltd (P&P) and Allen & Overy were appointed by the Indian consortium for conducting a due-dilligence of the project, besides preparing an indicative offer.

A joint team comprising of representatives from OVL, GAIL and GCA also visited the data room in Tyumen, pertaining to upstream assets.

“While Novatek has indicated the project cost to be $16 billion, our consultants have worked out the capex for upstream development and the LNG liquefaction plant as $30 billion,” the official said.

The capacity of the plant will be 16.5 million tonnes per annum and the delivery of first LNG from Yamal is expected by 2016.

“The Yamal LNG project will receive supplies from the South Tambeyskoye field located in the north east of the Yamal Peninsula and holds estimated reserves of 1256 billion cubic meters of natural gas and 52 million tonnes of oil,” he said.

Does Russia need China’s energy market?

By Andrei Ostrovsky

In October 2009, when Prime Minister Vladimir Putin visited China, a number of agreements were signed in order to boost bilateral cooperation, including a cooperation program between the regions of Eastern Siberia and the Russian Far East and China’s northeastern provinces.

More recently, Rosneft and the China National Petroleum Corporation (CNPC) also signed an agreement on the annual supply of 15 million metric tons (110.25 million bbl) of Russian oil in exchange for a $25 billion loan to Rosneft and Transneft for the construction of a branch pipeline from Skovorodino to Daqing in northeastern China. A related agreement stipulates the supply of some 70 billion cubic meters (2.47 trillion cu f) of Russian natural gas to China annually.

Many people in Russia wonder whether such cooperation is in fact in their own interests, fearing that Russia might soon find itself in the position of a mere commodities supplier. But the question should be rephrased as follows: Has Russia missed the chance to strike a lucrative partnership with China over energy resources? Do its oil and gas companies still have time to strengthen their foothold in eastern markets?

China is the world’s second largest energy consumer after the United States, accounting for over 10% of global primary energy consumption.

While implementing its 11th five-year plan (2006-2010) and drafting a socio-economic development plan through 2020, China came to the conclusion that in order to achieve its goal of “prosperity in moderation” (xiaokang), it needs to increase its energy production accordingly. However, that could be more easily said than done: ever since the 1990s, China has been aware of its dwindling oil supplies, and now insufficient reserves of natural gas and coal may be added to the list.

Meanwhile, China’s demand for energy will keep growing. Its sizable coal reserves notwithstanding, its imports have exceeded exports since 2007. Given the trends of its economic development, China will be hard put to meet its energy requirements in the 21st century.

As for Russia, oil and gas account for over 70% of its exports in terms of value, but nearly all of it is directed westward along existing pipelines from Western Siberia. This irrational distribution of production power in Russia in part underwrites the hypertrophied growth of its European territory at the expense of the starkly underdeveloped east.

The development of large-scale projects designed to deliver Russian oil and gas to Northeast Asia could boost the economic development of Siberia and the Russian Far East while attracting the investment from countries interested in importing Russian energy resources. Russian-Chinese oil and gas projects could be the first step in this direction.

One of the biggest stumbling blocks to Russian-Chinese energy cooperation, however, will be a pricing agreement. It’s no coincidence that this issue has been at the center of ongoing and thus far unsuccessful negotiations between Gazprom and CNPC. Russian companies can demand the same prices for energy distribution as they do for their Western clients, however, as long as China produces more energy than it consumes, it will be reluctant to pay those prices.

Overall, China has enough energy to maintain the rapid growth of its economy. But it will need more energy to accelerate the growth of its GDP, which means that it will have to import oil, as well as natural gas and coal.

Under these circumstances, if Russia does not pay more attention to the eastward development of its energy exports, it will soon find itself elbowed out of the Chinese energy market by its international competitors.

Dr. Andrei Ostrovsky (Economics) is Deputy Director of the Institute of the Far East, Russian Academy of Sciences

Gazprom

Gazprom to launch 10 mln t LNG plant in 2016-source

UFA, Russia May 26 (Reuters) - Gazprom (GAZP.MM) and Japanese companies plan to build a liquefied natural gas plant near Russia's Pacific port of Vladivostok in 2016 with capacity of 10 million tonnes a year, a Gazprom source said on Thursday.

He also told reporters that the investment required for the plant's construction is estimated at $7 billion. Japan is slated to get 7 million tonnes of the frozen gas a year, the rest will be shipped to South Korea.

Last month, a consortium led by the Japanese trading house Itochu Corp (8001.T), said it may build an LNG plant in Russia's Far East together with Gazprom to satisfy rising demand for the fuel.

(Reporting by Olesya Astakhova; writing by Vladimir Soldatkin; editing by Jessica Bachman)

11:30 27/05/2011ALL NEWS

YUZHNO-SAKHALINSK, May 27 (Itar-Tass) —— The authorities in the Sakhalin Region and the Russian gas giant Gazprom will develop and use the resources of the Sakhalin shelf projects under a memorandum, which Governor of the Sakhalin Region Alexander Khoroshavin and Gazprom Deputy CEO Alexander Ananenkov signed.

“The memorandum holds that the signatory parties intend to cooperate in the use of the resources under the Sakhalin shelf projects for gas supplies in the Sakhalin Region and gas supplies in other constituents in the Far Eastern Federal District and the development of the export supplies in the countries in the Asia-Pacific Region,” spokesman for the regional governor Alexei Bayandin told Itar-Tass on Friday. For this purpose the regional government and Gazprom will synchronize the development of the gas production capacities on Sakhalin (including the Sakhalin-Khabarovsk-Vladivostok gas pipeline) and the liquefied gas output rate near the settlement of Prigorodnoye.

Gazprom will also consider the construction of an oil refinery in the Sakhalin Region. Oil and gas condensate from the Sakhalin shelf fields can become the raw materials for the oil refinery. Meanwhile, the government of the Sakhalin Region will assist the company in these issues, the memorandum runs.