Putin reappoints Miller as Gazprom CEO

Gazprom

http://www.neurope.eu/articles/Putin-reappoints-Miller--as-Gazprom-CEO/105252.php

Russian Prime Minister Vladimir Putin has reappointed Alexei Miller as CEO of Russian gas monopoly Gazprom. Miller has been in charge of Gazprom since 2001. His contract was set to expire on May 31, 2011. He has now been reappointed for five more years. Putin said he had instructed government representatives on the board of the state-held giant to vote for Miller’s reappointment for another five-year term.

Asked — during a visit to Bryansk, central Russia — whether he had signed a letter recommending Miller’s reappointment, Putin replied “that is the case.” Miller has overseen a near-10-fold increase in the state-owned company’s share price since he took over as CEO in 2001. But some experts said might be dismissed as the company has been criticized for ineffectiveness and cost overruns. Two weeks ago, Gazprom scored a big victory over the country’s biggest oil producer Rosneft, winning the right to develop the Kovykta field in East Siberia – a deal, which analysts said, was also a personal victory for Miller.

A former Deputy Energy Minister, Miller has close ties with Putin. From 1991-1996 he worked under him in the St Petersburg mayor’s external relations committee.

http://www.steelguru.com/russian_news/Naftogaz_transfers_over_USD_2_billion_to_Gazprom/195465.html

Ukrainian Journal reported that Naftogaz Ukrayiny has transferred over USD 1.6 billion to Russia's Gazprom as payment for natural gas supplied to Ukraine.

The statement said that Naftogaz Ukrayiny is meeting its commitments to Gazprom on the payment for imported natural gas each month on time and in full.

Mr Yevhen Bakulin CEO of Naftogaz said that Naftogaz had imported 6.3 billion cubic meters of Russian natural gas in February 2011.

(Sourced from www.ukrainianjournal.com)

LUKoil, Gazprom sign swap deal for 8.35 bcm of gas in 2012

http://www.neurope.eu/articles/LUKoil-Gazprom-sign-swap-deal-for-835-bcm-of-gas-in-2012/105251.php

14 March 2011 - Issue : 926

Russian oil major LUKoil said Russian gas monopoly Gazprom has agreed to buy natural gas from fields in West Siberia and the Caspian Sea, in a sign the gas giant is loosening its grip on the country’s pipeline system. LUKoil signed a contract to continue supplying Gazprom with gas from its fields in the Yamal-Nenets autonomous region over 2012-16, the companies said in separate statements.

LUKoil will supply 8.25 billion cubic meters in 2012 but volumes in subsequent years could vary depending on whether LUKoil commissions wells in the Bolshekhetsky depression in Yamal-Nenets autonomous region and the available capacity in Gazprom’s pipeline system, the companies said. LUKoil’s Nakhodkinskoye field in the Bolshekhetsky depression has been supplying gas to Gazprom since 2005, according to Gazprom. Under the latest deal, which was signed by LUKoil’s CEO Vagit Alekperov and Gazprom CEO Alexei Miller, LUKoil will also be able to pump gas from its North Caspian field into Gazprom’s network, receiving an equal amount of gas in return elsewhere, the statements said. 

Gazprom has been accused of not giving independent producers fair access to its pipelines, undermining the domestic market and causing oil producers to flare large volumes of associated gas. Last month, Russian Prime Minister Vladimir Putin criticized Gazprom over pipeline access.

11.03.2011

Gazprom Neft completes seismic survey work on the Equatorial Guinea shelf

Gazprom Neft has completed 3-D seismic survey work on the Equatorial Guinea shelf (block T) in the Niger Delta river basin. The seismic studies covered around 300 square kilometres of the block's area, which meets the company's commitments regarding the Production Sharing Agreement (PSA) under whose conditions the project is being carried out.

   The tests were carried out by the ship Nordic, in collaboration with the Geoex and Petroleum Geo-Services (PGS) geophysics companies, and with the participation of representatives from Gazprom Neft and Equatorial Guinea's Ministry of Mines, Industry and Energy.

   Gazprom Neft, along with the Russian geophysics company Largeo, will be responsible for the processing of geological information obtained from the results of the work, and also the interpretation of historical seismic data for two blocks (T and U). An independent appraisal of the geological model created following interpretation of the data will be carried out by the international company RPS Energy, which has considerable experience in geological modelling in the Gulf of Guinea.

   An analysis of the geological information is planned to be completed by the end of 2011/start of 2012, after which the parties to the PSA will make a decision regarding the advisability of drilling exploratory wells in the blocks.
“Gazprom Neft is successively building up a portfolio of international assets, which by 2020 should account for around 10% of consolidated hydrocarbon production. In addition, the implementation of these projects in Equatorial Guinea will help extend the company's experience of working on offshore deposits, including working as an operator", said Boris Zilbermints, Gazprom Neft's Deputy CEO for Exploration and Production.

REFERENCE:
Gazprom Neft is carrying out the project for the development of two offshore blocks - T (located in the Niger Delta river basin) and U (in the Rio Muni basin) in Equatorial Guinea - under the conditions of a PSA. The agreement was signed in June 2010 with Equatorial Guinea's Ministry of Mines, Industry and Energy and the National Oil Company of Equatorial Guinea GEPetrol, and was ratified by Theodore Obiang Ngemo Mbasogo, President of the Republic, in August 2010. The agreement provides for the costs incurred by the investors to be refunded after the start of commercial production of oil, with income-generating production being subsequently divided between the investor and the state.

   Gazprom Neft is the project operator. Individual PSAs and collaboration agreements with GEPetrol have been concluded for each of the two blocks. Gazprom Neft has the right to exit from the project upon completion of any of the intermediate stages of exploration.

   At the exploration stage, 80% of the project will belong to Gazprom Neft and 20% to GEPetrol, with the possibility of increasing the latter's share to 45%. In the event of commercial discovery of hydrocarbons, GEPetrol can increase its share, once it has begun to finance the project costs proportionally and having reimbursed the historical exploration costs incurred earlier by Gazprom Neft.
According to preliminary assessments, the oil reserves in the two blocks may amount to 110 million tonnes of oil equivalent. The estimated operational period for the deposit is 30 years for oil and 35 years for gas.

PRESS SERVICE
JSC GAZPROM NEFT
phone: +7 (495) 777-3143
fax: +7 (495) 777-3142
e-mail: pr@gazprom-neft.ru
web: www.gazprom-neft.ru

Nord Stream: Build it, Gas Will Come

http://www.neurope.eu/articles/Nord-Stream-Build-it-Gas-Will-Come-/105257.php

Nord Stream is not concerned by reports of lagging European gas demand, saying the pipeline being built across the Baltic Seabed from Vyborg in Russia to Greifswald in Germany by the Russian-European consortium has already signed long-term contracts.

“The largest share is already under contract of the deliveries through Nord Stream and, of course, we have seen that predictions for gas consumption are foreseeing less of an increase in demand than before the financial crisis but still there is an increase in consumption in mid-and-long run. At the same time the domestic resources in the EU are depleting so even if consumption doesn’t grow as fast as originally foreseen, it still leaves us with a supply gap than needs to be covered and Nord Stream is definitely within that and therefore definitely needed,” Sebastian Sass, head of Nord Stream’s representation to the EU, told New Europe by phone on 11 March.

The financial crisis and less expensive supplies on the spot market damped demand for Russian gas monopoly Gazprom’s pipeline shipments, most of which are tied under long-term contracts to oil and product prices. Gazprom exported 139 billion cubic meters to Europe last year, failing to meet its target to ship as much gas to its key market by revenue as in 2009, when it sold about 141 billion cubic meters, according to reports. Sales to Germany, the biggest buyer of Russian gas on the continent, plunged more than 25% in the fourth quarter. Supplies to France fell almost 50%.

Gazprom says the unrest in northern Africa will likely boost European demand for its own supplies via the planned South Stream pipeline from the Black Sea. But Nord Stream told New Europe on 11 March that the crisis in Northern Africa does not affect the Baltic route. “We are going to fill old pipelines to the maximum regardless and therefore independent of those developments in Northern Africa. We continue with our business model unaffected,” Sass said. “At the moment we can’t see that it has a material impact on the gas demand from Russia, but I think that’s something that would need to be evaluated after some more time has passed.”

Chris Weafer, chief strategist at Moscow’s Uralsib bank, told New Europe by phone on 10 March that while Nord Stream seems like a done deal, the South Stream gas pipeline also led by Gazprom and the competing EU-backed Nabucco in Europe’s Southern Gas Corridor remain uncertain. “With Gazprom progressing very well with Nord Stream and talking about building the second line of the Nord Stream pipeline, which will bring that capacity up to 55 bcm, definitely the sense was that South Stream project momentum declined similar to the one of Nabucco,” he said.

Earlier, Nord Stream and its shareholders scored another big victory by securing the Phase II financing of €2.5 billion for the construction of Nord Stream. This financing comes partly from Nord Stream’s shareholders who are providing investment totaling 30% of the total project cost pro rata to their holding in the company with 70% external project financing coming from the bank market.

According to Matthias Warnig, Managing Director of Nord Stream AG Line 1 of Nord Stream nearly complete and with construction of Line 2 due to start in May, it is clear that lenders see Nord Stream as a solid project with a sound economic background. “Nord Stream is on track to deliver gas to Europe from later this year”, he added.

Twenty-four banks are participating in a deal that was oversubscribed by 60% and that mirrors the solid and successful financial structure of Phase I financing that took place in early 2010. The high interest in Nord Stream’s Phase II financing attests to the continued strategic importance of the pipeline project. Line 1 is due for construction completion in April 2011, the start of pipe laying for Line 2 will commence thereafter with completion due in April 2012.

The very positive response from lenders has meant that Nord Stream was heavily oversubscribed for the €2.5 billion funding. Nord Stream has RBS, Commerzbank and Societe Generale acting as financial advisers. Unicredit have a limited advisory role in connection to the untied loan program of the German government.

Alexei Miller, Management Committee Chairman of Gazprom, said: “Nord Stream is an example of success on a pan-European scale. Over the years of planning it has won the reputation of being ecologically safe and transparent, and it is the most advanced of all the new projects aimed at transporting gas to Europe.”

According to Rainer Seele, Chairman of BASF/Wintershall gas production in Europe is declining steadily, which means that more gas has to be imported in the future and that Nord Stream will supply Europe for decades with secure and climate-friendly energy. The 55 billion cubic meters of natural gas that will flow through the Nord Stream Pipeline to Europe equal the capacity of 55 coal-fired power plants or 20 new nuclear power plants.