Rosneft acquires 35.5% interest in Russian field for $444M

Rosneft has signed a tentative agreement with Sberbank Capital to acquire 35.3% stake in Taas-Yuryakh Neftegazodobycha for $444 million. Taas-Yuryakh holds production licences for the Srednebotuobinsk oil and gas condensate field, which is situated 160 km north of the ESPO pipeline.  Continue reading here..

Rosneft and Lukoil team up to jointly explore Arctic shelf

Rosneft will open its licencing zones to Lukoil off of Russia's oil-and-gas-rich Arctic Yamal peninsula.

Given the successful development of their mutual cooperation, and with the goal of raising the profitibility of existing projects, Rosneft and Lukoil have agreed to join forces in the following areas:

• Oil exploration & development, development and transportation of hydrocarbons in the license areas of the Nenets Autonomous District;
• Exploration in the areas licensed to Rosneft on Russia’s Arctic shelf and development of fields that are already open, within the framework of current Russian legislation;
• Development of the market for domestic petroleum products, petrochemicals, gas processing and base oils;
• Joint marketing of associated and natural gas from fields in the Bolshekhetskaya and Vankor zones;
• Joint deliveries of petroleum products, liquefied gas and petrochemical products to the distribution and production facilities of both companies;
• Development of solutions for improving production efficiency for petrochemical products, oil and gas, in Russia and abroad;
• Use of existing logistics infrastructure, including transshipping facilities for crude oil, refined pretroleum products and petrochemical products that are for export; and development and execution of transportation infrastructure projects for petroleum products, including the construction of a product pipeline interconnecting with the "Moscow product ring," and the "South” project.

This marks Lukoil's first offshore deal in Russia since launching the Korchagin oil field in the Caspian Sea last year, Lukoil is also venturing out of Russia, actively seeking US shale gas opportunities (Lukoil planning shale JVs in 2011). Rosneft has been aggressively partnering with foreign majors including BP, Chevron and ExxonMobil for developing its offshore fields.

Key projects of Rosneft and Lukoil:

1. Joint transportation of gas from the Vankor field and the Bolshekhetskaya Depression.
On 12 April 2011, Lukoil and Rosneft signed an agreement, under which Rosneft will independently transport gas from the Vankor field and adjoining license areas to Lukoil’s infrastructure. In turn, LUKOIL will transport gas through its facilities to Gazprom’s gas transportation system. At present, Lukoil and Rosneft are building their own gas pipeline sections and infrastructures.

2. Priazovneft
Rosneft and Lukoil each own a 42.5-percent stake in Priazoneft.  The Administration of the Krasnodar Territory owns the remaining 15 percent. Priazovneft is developing the Temryuksko-Akhtarsk license area on the shelf of the Azov Sea. In 2008, the “New” oil field was opened. The field’s recoverable reserves are: Oil: C1 - 0.87 million tonnes; C2 – 2.25 million tonnes; Gas: C1 – 319 million m3; C2 - 820 million m3. Seismic work is currently underway.

3. Caspian Oil Company
Rosneft and Lukoil each own 49.9 percent of the Caspian Oil Company; Gazprom owns the remaining 0.2 percent. In 2008, the West-Rakushechnaya field in the north-Caspian area was opened. In 2010, an assessment well was drilled at the Ukatnaya structure. Open non-industrial deposit.http://docsearch.derrickpetroleum.com/research/q/Rosneft.htmlhttp://docsearch.derrickpetroleum.com/research/q/Rosneft.htmlhttp://docsearch.derrickpetroleum.com/research/q/Lukoil.html

Uncertainty on Rosneft and BP share swap continues...........Will this impact BP's joint projects with Rosneft???

Uncertainty about a strategic alliance between Rosneft and BP, blocked by the BP's partners in the TNK-BP joint venture, will not affect BP's investment projects in Russia.

Exisitng joint developments

BP's joint projects with Rosneft on Sakhalin are still an investment priority for BP in Russia.

BP and Rosneft are jointly developing deposits off Russia's Pacific Island of Sakhalin. The companies are implementing the Sakhalin-V project, which initially envisaged the exploration and development of the Vostochno-Shmidtovsky deposit with estimated recoverable reserves of 411 mln tons (3 bln barrels) and 255 bln cubic meters of gas, and the Kaigansky-Vasyukansky deposit whose recoverable oil reserves are estimated at 1.2 billion tons (8.6 bln barrels).

In 2009 the partners abandoned exploratory drilling at the Vostochno-Shmidtovsky field and returned the license to the government.

Uncertainty due to suspension of the deal by British Court

BP and Rosneft agreed in mid-January to form a strategic alliance to explore the Arctic seabed in a share swap deal but BP's partners in TNK-BP objected to the move, saying all of BP's new business opportunities in Russia and Ukraine must be pursued through the Russian-British joint oil venture. The JV's Russian billionaire shareholders won a preliminary order in a British court to suspend the deal.

Uncertainty to continue

Willfully ignoring the provisions of the shareholder agreement was a serious misjudgment by BP that has severely damaged the relationship between the TNK-BP shareholders; it has also harmed BP’s reputation in Russia.

AAR Group(BP’s partners) has now put itself in a very strong position to have either a more active role for TNK-BP in the deal or to get compensation.
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Rosneft and ExxonMobil to cooperate in the Russian Black Sea coast.. Will this be the springboard for full-scale Black Sea basin development???

Rosneft and ExxonMobil have entered into an agreement regarding joint development of oil and gas resources in the Black Sea, which includes an initial focus on oil exploration and production in the Tuapse Trough in the Russian Black Sea basin.

Region to be developed

The agreement signed contemplates a joint operating company to conduct exploration and production in the Tuapse Trough, an 11,200-square-kilometers deepwater offshore area along the Black Sea coast of the Krasnodar region. The exploration stage is estimated to cost $1 billion, with ExxonMobil to make initial investments. . Drilling in the block is scheduled for year 2011-2013.  Rosneft will own a 66.7% stake in the joint operating company, with ExxonMobil receiving the remaining 33.3% stake. The financial details of the transaction are not disclosed.

Larger plan for the joint venture

The agreement enables Rosneft and ExxonMobil to consider additional opportunities to expand Black Sea energy sector cooperation in areas such as additional exploration and production, crude oil sales to Rosneft’s Tuapsinsky refinery and other Black Sea markets, development of regional transportation infrastructure, and deepwater offshore technology research and development.

BP Rosneft share Swap in problem – Rosneft may look for new Asian partners to develop the Arctic project

Share swap between BP and state-controlled Rosneft under which they agreed to jointly explore for offshore oil and gas in the areas of the Arctic is in problem after TNK BP won an injunction in a London court that froze the deal and is now seeking to be part of it. 

Rosneft and the Russian government have made clear such move was not welcome. On 2 March the TNK-BP management had proposed buying a $7.6 billion stake in BP and joining the offshore partnership with Rosneft. The deal with Rosneft gives BP more clout in Russia and effectively sidelines TNK BP.

Two months after Rosneft-BP strategic alliance announcement, Rosneft  is considering new partners

After 2 months of BP Rosneft deal, Rosneft is considering partnering with Chinese and Indian energy companies to work on Arctic projects.

Arctic Project Overview

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