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Rosneft, Gazprom agree on splitting offshore

Thomson Reuters

Rosneft, Gazprom agree on splitting offshore

Tue May 27, 2008 6:02am EDT

MOSCOW, May 27 (Reuters) – Russian state-controlled energy giants Rosneft (ROSN.MM: QuoteProfileResearch) and Gazprom (GAZP.MM: QuoteProfile,Research) have agreed on splitting offshore deposits, limiting foreign and private access, an official said on Tuesday.


The government official who asked not to be named said the two firms last year signed an agreement under which oil giant Rosneft will develop oil deposits on Russia’s northern shelf, while gas export monopoly Gazprom will explore gas fields.

The agreement has yet to be approved by the government, said the official.

Gazprom and Rosneft declined to comment.

Russian media reported last year that the government was discussing splitting strategic shelf deposits between Rosneft and Gazprom by holding closed auctions of the fields, which could reduce cash proceeds, but exclude surprise bidders.

State officials have repeatedly favoured state firms for offshore fields, which are due to replace West and East Siberia in the second half of this century to support Russian oil and gas output growth.

According to the Russian subsoil law, only companies which have state shareholding of over 50 percent and previous experience of working on shelf, can develop oil and gas deposits offshore Russia’s Far Eastern and northern seas.

Gazprom is developing the huge Shtokman gas field in the Barents Sea and controls the Sakhalin-2 project offshore the Pacific island of the same name. Other Sakhalin-2 shareholders include Royal Dutch Shell (RDSa.L: QuoteProfileResearch) and Japan’s Mitsui (8031.T: Quote,ProfileResearch) and Mitsubishi (8058.T: QuoteProfileResearch).

The government this month awarded Gazprom the rights to develop nine northern gas deposits, including two shelf fields in the northern Karskoye and Okhotskoe Seas, without a tender.

Rosneft, Russia’s largest oil producer, is developing Sakhalin-1, Sakhalin-3 and Sakhalin-4 offshore projects.

Other Sakhalin-1 shareholders include the project-leader Exxon-Mobil (XOM.N: QuoteProfileResearch), India’s ONGC (ONGC.BO: Quote,ProfileResearch) and the Japanese consortium Sodeco. BP (BP.L:QuoteProfileResearch) is Rosneft’s partner in the other two Sakhalin projects.

Although state energy companies are widely expected to get the remaining shelf deposits, foreign majors hope that the heavily indebted firms will need Western finance to develop the expensive projects. (Reporting by Ekaterina Golubkova, writing by Tanya Mosolova)


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