Russian producers eye international moves
By Stuart Elliott in London
February 18, 2011 - In 2008, Russia's energy tsar Igor Sechin, ranked by
Forbes as the world's 42nd most powerful person, said he saw no reason
for the world to fear the expansion of Russia's giant oil and gas
producers into new, international markets.
Since then, companies that were previously entrenched on home turf
developing Russia's vast energy resources in western Siberia and new
domestic provinces farther to the north and east, have begun acquiring
upstream acreage and entering projects on a global scale.
The ambitions of Russia's giant producers -- state-controlled Rosneft,
Gazprom and its oil arm Gazprom Neft, and privately owned companies
Lukoil and TNK-BP -- all have their sights firmly set on expansion
outside of Russia.
And the deal signed January 2011 by Rosneft and BP to include
cooperation outside of Russia -- and TNK-BP's complaint the deal could
impact on its own international plans -- is a signal that Russian
companies are still hungry to enter ever more foreign projects.
Sechin, Russia's deputy prime minister and tellingly also Rosneft
chairman, said after the BP-Rosneft cooperation deal was signed January
14 it was part of Rosneft's strategy "to develop into an international
energy holding."
Under the accord, currently on hold after TNK-BP won an injunction
against it the week ended February 4, Rosneft could also join BP in the
UK company's existing projects around the world.
To date, Rosneft has just two upstream projects outside the former
Soviet Union -- a 60% stake together with Russia's Stroytransgaz in the
245-S block in southern Algeria, and a role in the Russian consortium
developing assets in Venezuela -- so joining forces with BP would see a
whole new world open up for Rosneft.
TNK-BP, though, has its own international expansion ambitions, and as it
seeks to block BP's new partnership with Rosneft, this argument is again
central to the dispute, as it was in 2008.
Back then, TNK-BP's Russian partners complained that BP was blocking
their attempts to expand the company into international markets,
suggesting BP wanted to avoid effectively competing with itself for new
projects outside of Russia.
The two sides eventually settled their dispute, and TNK-BP began laying
the groundwork for new international projects.
In 2010, it secured upstream assets in Vietnam and Venezuela, albeit
former BP projects jettisoned to raise funds to pay for the Macondo oil
spill. It also wants to enter the upstream in Algeria.
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