Nc091125.qxd

NEFTE COMPASS
A Weekly Publication on Oil and Gas in Russia, the Caspian, Central Asia and Eastern Europe
Copyright 2009 EIG. Unauthorized access or electronic forwarding, even for internal use, is prohibited. Vol. XVIII, No. 46, November 25, 2009
Russia Must Face Up To Alternative
Inside This Issue:
Energy — Khodorkovsky
■ Finnish trader wins maiden Espo tender, page 3■ Transneft buries Druzhba-Adria plans, page 4 Russia has yet to find its place in the future world of ■ Interview with Mikhail Khodorkovsky, page 5 energy as more alternative fuel sources come into ■ Rosneft results seen on the slide, page 7 play, Mikhail Khodorkovsky, the former head of ■ Zarubezhneft takes control of Turkmen block, page 8 Yukos, says in an interview from his jail cell in ■ Russia lists October oil production, page 9 Moscow, where he awaits trial on new charges.
In many ways, Russia is similar to Canada, with its wide open spaces and abundant raw materials. “A Turkmenistan Keeps
place in the world similar to Canada’s doesn’t suitus,” Khodorkovsky says. “More likely, some specu- Suitors Waiting
late, Russia will take on a role similar to Germany.”He admires Germany’s “integrated approach … the Turkmenistan has found itself the focus of a beauty development of technologies for energy conservation contest in which all the international majors are lin- ing up with proposals to develop its massive onshore But he warns that “Russia could wind up like gas reserves. But the Central Asian republic, which by Namibia” if it continues to rely on raw materials and the end of the year is due to pump its first volumes of South Korean-style chaebol conglomerates.
gas east to China, is in no hurry to respond to the Khodorkovsky, if he were to be released, sees a majors’ overtures and has made it clear that its prior- future for himself working in alternative energy.
ity is to find companies to develop the much riskier “Ultimately, new forms of energy will become a technological and economic reality,” he says in an in- “All the companies have made their pitches,” a terview with Nefte Compass (see p5). “This will result Western oil executive said on the sidelines of an oil in fundamental changes across the globe, perhaps and gas exhibition in Ashkhabad last week. “Now Khodorkovsky could be released in 2011 but The likes of Chevron, Total and Royal Dutch Shell faces another 22 years in jail on charges of stealing have submitted proposals to the Turkmen authorities to Yukos’ oil production currently being heard in a tap fields such as the supergiant South Yolotan/Osman Moscow court. The accusations are widely decried as reservoir, which, according to UK auditors Gaffney, “absurd” and there are hopes that the new Kremlin Cline and Associates, has potential gas reserves of up to leadership of President Dmitry Medvedev could 14 trillion cubic meters. But the State Agency for the bring an end to a confinement that was instigated by Management and Utilization of Hydrocarbons — the the old-guard grouping around Prime Minister body set up by Turkmen President Gurbanguly Berdimuhammedov to negotiate with the companies — Russia’s human rights record is coming under more intense scrutiny following the death in custody What the majors are looking for is a long-term last week of Sergei Magnitsky, a lawyer for Hermitage technical service contract that would guarantee a rea- Capital Management, once one of the biggest in- sonable rate of return and, crucially, enable them to put the reserves on their books. But a source at one Khodorkovsky says Russia needs to recognize of the majors says the best the Turkmens are pre- that the landscape is changing and that alternative pared to offer so far is a one-year service contract for oil companies wishing to invest in Turkmenistan.
“There is no question that a sociopolitical deci- It is becoming increasingly clear to the majors that a sion to break free from energy dependence has been production sharing contract along the lines of the 30-year (see Russia, page 2)
(see Turkmenistan, page 2)
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(continued from page 1)
See the full interview on page 5.
dependence on one supplier, or agroup of politically associatedsuppliers, has been set and will be Turkmenistan
(continued from page 1)
is a one-off that will not be repeated.
replied to questions asked by Nefte Paul Sampson, Ashkhabad
Nefte Compass is published one day Editorial Staff: Moscow Bureau Chief: Nelli Sharushkina. Senior Correspondents: Axel Busch, Paul Sampson. Staff Reporters: Tom Daly, Andrei Glazov, Nadezhda
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Russia
Oil Production
Surgut Waits For Dust
Hits New Record
To Settle On Mol
est energy ministry data (see page 9).
bly didn’t want in the first place.
tion sharing agreement (PSA) projects.
to 254,600 b/d, according to the lat-est statistics, although it was still Finnish Trader Wins Maiden Espo Tender
11% lower than a year ago as thecompany waits for its ownership is- of 50¢ per barrel to the Dubai oil price.
Russia Redefines
Exploration Strategy
from the port until tariffs are set for de- offtaker of the bulk of Rosneft’s oil ex- 18 fields from the 13 first proposed.
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Russia
targets are lower than before (NC Nov.
unsecured rating in foreign currency.
Lukoil Shifts Strategy
Focus To Cash Flow
assets, monetization of gas reserves, in- TNK-BP Confirms Barsky
tainties, Lukoil has decided to shift its As CEO From 2011
tion to the growth of free cash flow.
executive, ending a 14-monthsearch for a successor for the ousted Transneft Buries Druzhba-Adria Plans
that connects it with the Black Sea.
ter port of Omisalj on the Adriatic Sea.
Nefte Compass that no progress is be- businesses at BP and BP’s head office in the first time with Russia’s 3,000 kilo- www.energyintel.com
Russia
Russia Needs To Determine World Role
— Khodorkovsky
production cycle — from the min-ing of the uranium through the In this interview for Nefte Compass, Mikhail Khodorkovsky, who built Yukos into Russia’s biggest oil company before he was jailed and the company was broken up, sets out his views on issues related to alternative energy and the future of the Russian oil and gas industries (see p1). thermal power stations. However,the level of the potential conse- year period, appear more attractive.
fields” in deserts and semi-deserts.
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Russia
tional capacities will be exhausted.
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Finance
Urals Energy
Repays Sberbank Loan
release shares pledged by the com-pany’s owner, Leonid Dyachenko, in Share Prices Closing On Nov. 23, 2009 ($/Share) RTS prices are given for companies listed on the exchange.
Market capitalization updated weekly. Rosneft Profits
Seen Slipping 60%
* Slovakia became a euro country Jan.1’09 www.energyintel.com
Caspian/Europe
Zarubezhneft Takes Control
of Itera Turkmen Block
originally stipulated volume of 52 Bcm.
Ukraine Gets Out
Of Another Fine Mess
Putin’s stated intention not to fine Kiev more feasible volumes (NC Sep.3,p3).
seven years and include 3-D seismic,with the first appraisal well to be Timely Turnaround Eases Kazakh Fuel Pinch
active in Central Asia (NC Apr.2,p8).
Mittal Lacks Mettle
For Kazakh Block
offshore Kazakhstan just 10 monthsafter farming in.
the Satpayev exploration and produc-tion contract, as KMG’s sole partner.
Table is based on the following factors for conversion to barrels: Crude - 7.33; Mazut - 6.64; Gas Oil - 7.46; Gasoline - 8.51; Jet Fuel - 8.00. Data for the previous month were revised.
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Russia
Russian Crude Oil And Gas Condensate Production/Exports, October 2009 Russia
Russian Crude Oil And Gas Condensate Production/Exports, October 2009 (cont.) Russia
Russian Crude Oil And Gas Condensate Production/Exports, October 2009 (cont.) * Exports to non-CIS markets via Transneft pipeline system. † Total for exports for PSA Operators exclude Sakhalin Energy and Exxon Neftegas which export crude bypassing Transneft pipeline system. ** Excluding exports for state needs, rail shipment, transit. Figures may not add due to rounding. Source: Energy Ministry Markets
Crude Oil — Futures Fail To Sustain Upward Momentum
The ICE Brent futures may, for the time
to prevent it from sliding below $75.
profit in a simple Mediterranean refinery, gained $1.15 to yield a $2.20 profit.
sessed at dated Brent minus 70¢ c.i.f.
Products — Gas Oil Pressured By Rising Offshore Storage
European product markets remain a
pressure, and fuel oil faring better, al- of the year, due to high stock levels.
suggest that total oil products in float- million barrels at the end of October.
market for the remainder of the year.
Marketplace
Spot Crude Oil Prices$/barrel f.o.b. terminal, or c.i.f. destination Urals c.i.f. Med vs. Dated Brent
Urals c.i.f. Med vs. Dated Brent
* Basis Rotterdam. ** Basis Augusta.
$/metric ton
Russian Gas Oil NWE
Russian Gas Oil NWE
$/metric ton
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Source: http://khodorkovsky.ru/media/nc091125.pdf