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REUTERS: FACTBOX-Energy projects under Russian pressure

Tue May 22, 2007 1:57 PM BST

May 22 (Reuters) – BP’s Russian venture TNK-BP may lose rights to develop the giant East Siberian Kovykta gas field in days, Russia’s environmental agency has said.

The agency’s deputy head Oleg Mitvol said inspectors would begin an examination of the project on Wednesday, adding: “The results of the inspection seem obvious to me.”

The pressure on Kovykta is seen by many analysts as part of a broader state plan to force Russian billionaire shareholders to sell half their TNK-BP state to a state company, something the shareholders have repeatedly denied.

Following is a list of projects in Russia that have come under official pressure in recent months.

SHELL AND SAKHALIN-2

One of the world’s biggest energy projects.

Royal Dutch Shell has ceded control of the $22 billion scheme, the world’s largest liquefied natural gas (LNG) project, to state gas monopoly Gazprom after months of pressure.

The deal, struck in December and completed in April, marked a victory for the Kremlin, which is determined to wrest control over the “commanding heights” of the Russian economy.

Russia’s Natural Resources Ministry and environmental regulator had accused Shell of ecological violations and threatened to delay the project.

Under the terms of the deal Shell reduced its stake from 55 percent to 27.5 percent.

Analysts said the Kremlin had targeted Sakhalin-2 because it was angry at cost overruns which meant a long delay before it would start seeing returns under its Production Sharing Agreement. Under the new deal, Shell and its partners agreed to pay a fixed annual dividend to Russia, an industry source said.

EXXON’S SAKHALIN-1

This Exxon Mobil-led oil and gas project has faced fewer obstacles than neighbouring Sakhalin 2, but it has encountered some difficulties.

Exxon has a Russian partner, state oil firm Rosneft with 20 percent. But this has so far done little to persuade gas monopoly Gazprom to allow the group to build a gas pipeline to China. Gazprom has a rival project.

On February 15 Russia told Exxon Mobil it was ruling out any automatic enlargement of the U.S. oil major’s Sakhalin-1 licence territory, just as the project has hit peak output and is seeking new reserves. Moscow said it would put the adjacent deposits into an auction, despite their discovery by Exxon.

On March 1 Russia’s environmental watchdog announced new checks on Sakhalin-1, focusing on how Exxon and its partners fulfil their environmental obligations. Previous inspections, conducted last year by Russia’s technical standards agency, RosTekhNadzor, delayed full scale exports by several months.

TOTAL’S KHARYAGA

Kharyaga, a much smaller development than the Sakhalin projects, has been at odds with the resources ministry for years. The ministry says the French firm is not developing the field quickly enough, which Total denies.

TNK-BP’S KOVYKTA

Oil major BP had hoped to turn Kovykta, a large gas field in Russia’s Far East, into a main source of gas for energy hungry China. But Russian prosecutors have warned TNK-BP unit Rusia Petroleum, which holds the licence to the huge field, over violations of environmental law.

BP’s Russian venture, TNK-BP, went as far as signing supply deals with China and South Korea only to discover several years ago that Gazprom had been made Russia’s gas export monopoly and no gas can leave the country via other firms.

The $20-billion project is now stuck on a regional basis with TNK-BP planning to supply a small local customer base with no clear answer as to whether exports would be ever allowed.

Industry analysts say the project could be unlocked if Gazprom becomes a partner of BP in TNK-BP by buying out half of it from Russian billionaire owners. Such a deal is valued at $25 billion. On September 28, 2006, the head of Gazprom’s oil unit, Gazprom Neft, said it would be interested in buying shares in TNK-BP if its Russian owners decide to sell.

TNK-BP’S ROSPAN

Russian prosecutors said on November 9, 2006, they had opened a criminal investigation into licence violations at TNK-BP’s Rospan unit. They allege multiple ecological and licensing violations at the Novo-Urengoi and East-Urengoi gas fields.

They are located near West Siberian production sites operated by Gazprom and belonged to the gas monopoly before being spun off in the early 1990s.

IMPERIAL ENERGY

On April 19 Russia’s environmental watchdog stepped up pressure on oil firm Imperial Energy , saying it had filed a request to end its production licences and will block its pipeline from shipping oil.

Oleg Mitvol, deputy head of Rosprirodnadzor, said in a statement his agency wanted Russia’s resources ministry to withdraw licences from Imperial Energy’s units Nord Imperial, Alianceneftegaz and Sibinterneft. He said the units were not meeting exploration and development obligations. He also said he would ask state authorities not to allow Imperial Energy to use its newly built pipeline to ship crude from West Siberia.

Imperial Energy said it was not aware of any grounds for statements against it.

URALS ENERGY

On May 15 Russia’s state environmental agency said it planned to launch inspections of several sites operated by oil firm Urals Energy , initially knocking more than 10 percent off its share price.

The environmental watchdog, RosPrirodNadzor, said in a statement it had decided to investigate the firm’s operations after environment organisations accused it of dumping oil products in the Barents Sea, causing an oil slick.

The agency also said ecologists had accused Urals Energy of deforestation in the Irkutsk region and it also had information about wrongdoing around the island of Kolguyev in the Arctic Nenets region.

Urals Energy said in a statement it had had no official warning about any violations or investigations and was confident the checks would prove the accusations were false. 

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© Reuters 2007. All rights reserved.

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