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Rosneft Goes In with Chinese on Sakhalin 3
Rosneft announced yesterday that it was forming an operating company for the Sakhalin 3 project in conjunction with the Chinese Sinopec. Rosneft will have a 74.9-percent share in the new company, Venin Holding Ltd., with the remainder in Chinese hands. Rosneft has thus excluded the Sakhalin Oil Co., controlled by the administration of Sakhalin Region, from the project.
The new holding, which will work on the Veninsky block, was formed in October of last year. Rosneft is represented in the holding by its subsidiary Rosneft International Limited. The holding will become the sole owner of OOO Venineft, which is now controlled by Rosneft and which holds the license for the Veninsky block. On the Rosneft website, it is indicated that Sakhalin Oil Co. should own a 25.1-percent share in the development of the Veninsky block under an agreement signed in August 2004. In the memorandum to its IPO last summer, Rosneft indicated that the block would be developed by a trilateral joint enterprise in which Rosneft would hold 49.8 percent and Sinopec and Sakhalin Oil Co. 25.1 percent each.
The Veninsky block is the only lot on the Sakhalin shelf that has been assigned so far under the Sakhalin 3 project. It is estimated to contain 169.4 million tons of oil and 258.1 billion cu. m. of natural gas. The first test well was sunk last year and investment in the project as of January 1 of this year was about $70 million. Sinopec financed 75 percent of the geological exploration.
A source in the Sakhalin Regional administration told Kommersant that “we did not agree” to exclusion from the project and “consider that we have a right to participate in it.” Rosneft has officially stated that it has “no obligations to Sakhalin Oil co.,” however. Another source noted that Rosneft will have to deal with the regional administration as it works in any case, so an agreement may still be reached between them.
www.kommersant.com
All the Article in Russian as of Mar. 30, 2007
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