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Putin to meet global majors on Yamal gas projects

Reuters

Sun Sep 20, 2009 10:49am EDT

By Gleb Bryanski and Dmitry Zhdannikov

MOSCOW (Reuters) – Russian Prime Minister Vladimir Putin will next week hold a meeting on how to tap giant gas reserves on the Arctic Yamal peninsula and global majors hope to hear about tax breaks and the easing of regulations.

“We invited all those who are interested in working on Yamal,” Putin’s spokesman Dmitry Peskov told Reuters ahead of the meeting on Sept 24 in the Arctic town of Salekhard.

Industry sources said invitations had gone to the chief executives of Total, Royal Dutch Shell, Exxon Mobil, ConocoPhillips, StatoilHydro, ONGC, Petronas as well as Russia’s gas export monopoly Gazprom and local gas and oil firms.

Gazprom, the world’s largest gas producer and supplier of a quarter of Europe’s gas, is beginning to face reserve depletion on its Siberian fields and needs to develop fields on Yamal and in the Barents Sea to meet demand.

The global financial crisis has softened demand in Europe but Gazprom still expects growth in consumption to resume shortly and wants to increase its European market share to one third from the current 25 percent.

It has however postponed the launch of its first field on Yamal – Bovanenkovo — by one year to 2012 and has said the launch of Shtokman in the Barents Sea will also depend on the demand for Russian gas in Europe

Russia passed laws curbing foreign participation in tapping its mineral resources last year, encouraged by a surge in crude prices.

But as prices fell from their peaks many officials have called for the easing of regulations and experts say Russia needs Western technology and money as Gazprom remains Russia’s most indebted company.

Putin met executives from some of the world’s biggest energy firms this year, such as Total and Royal Dutch Shell, and said more cooperation was possible on Yamal — a statement which many investors saw as a precursor of the easing of rules and tax regulations.

“We hope very much that this meeting will be about tax incentives, not just about how important it is to work on Yamal,” said a source at a Western major.

(Editing by Greg Mahlich)

REUTERS ARTICLE

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