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Bloomberg: Gazprom Offers Chevron, Total Second Chance in Arctic (Update4)

By Stephen Voss and Lucian Kim

Jan. 26 (Bloomberg) — OAO Gazprom, racing to develop natural-gas reserves, will discuss Russia’s biggest untapped deposit with the five foreign producers the company rejected in an earlier round of negotiations.

Gazprom sent letters to companies including Chevron Corp. and Total SA, Deputy Chief Executive Officer Alexander Medvedev said today in Davos, Switzerland. State-run Gazprom estimates Shtokman holds 3.7 trillion cubic meters of gas, enough to meet U.S. demand for five years.

“When we announced we would develop the project ourselves, we meant that 100 percent of our reserves would stay with Gazprom,” Medvedev said in an interview. “It doesn’t exclude foreign companies being involved in different capacities.”

President Vladimir Putin has insisted on a bigger share of output for state companies in Russia, the world’s largest energy producer, forcing foreign companies to take on junior roles in developing resources. Royal Dutch Shell Plc last year ceded control of its Sakhalin-2 oil and gas project to Gazprom after the government threatened to halt it on environmental grounds.

Medvedev said discussions with potential contractors for Shtokman will start “already in February.” ConocoPhillips, Norsk Hydro ASA, Statoil ASA were also on Gazprom’s shortlist.

The five companies may accept the chance to work on Shtokman, said Valery Nesterov, an oil and gas analyst at Troika Dialog in Moscow. Shell, now a Gazprom partner on Sakhalin, may also join, he said.

No Choice?

“Oil majors aren’t so interested in making money this way, they’re interested in stakes,” Nesterov said by phone. “If they have no choice, they’ll probably agree to be contractors.”

Gazprom originally intended to allot stakes in the project to two or three of the five companies. Gazprom scrapped the tender in October, saying it wouldn’t share ownership.

Total said talks with Gazprom over Shtokman have resumed.

“Total is still interested in working to develop Shtokman and we are speaking with Gazprom on how to do this,” said Paul Floren, a spokesman for the company in Paris.

Statoil and Norsk Hydro couldn’t confirm receiving letters from Gazprom.

“I’m not aware of a letter,” said Peter Mellbye, Statoil’s head of international operations. “We have said we’re interested in becoming a partner in Shtokman as an owner. That is still the case,” Mellbye said today by mobile telephone.

To contact the reporters on this story: Stephen Voss in Davos, Switzerland, at [email protected] ; Lucian Kim in Moscow at [email protected] and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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