Russian Gazprom gains full control over northern shelf projects

Russian Gazprom gains full control over northern shelf projects

Moscow (Platts)--29Dec2004


Russia's gas monopoly Gazprom is consolidating shares in Prirazlomnoye oil
field in the Pechora Sea and the Shtokman gas field in the Barents Sea off
northwest Russia as it aims to diversify its business by entering liquefied
natural gas markets and to avoid legal risks after the sale of Gazpromneft,
Gazprom said Wednesday. The gas giant's financial arm Gazprombank bought from
Rosneft a 49.95%-stake in joint asset set up by Gazprom and Rosneft in 2001 to
develop the Arctic shelf in the Barents and Pechora Seas. The bank also bought
a 50% stake in Sevmorneftegaz from Rosneft subsidiary Rosneft-Purneftegaz. The
deal to buy 26% stake in Rosshelf, another joint entity to develop the shelf
fields, is yet to be completed, he said. Gazprom is to gain full control over
the two huge fields once the acquisitions have been completed.

"Gazprom's consolidating full control over the 3-tril cu m Shtokman gas
project provides for additional incentives to attract large international
partners which can help Gazprom not only with updated expertise but with
entering LNG markets, in particular in the USA," Gazprom said in a statement.
Gazprom declined to comment on the price of the deals. Rosneft however was
reported earlier Wednesday as selling its shares in the shelf projects for
$1.7-bil to raise finances to pay back the bid by Baikal Finance Group for
participation in the auction of Yukos' oil producing asset Yuganskneftegaz.
Rosneft bought the Yukos production unit through buying the auction winner,
which nobody had heard of until it was announced the winner.

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