President of Rosneft oil company Sergey Bogdanchikov
Photo: Ilya Pitalev
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Rosneft Opens Sakhalin to the Chinese
// Sinopec to take part is development of Venin block
International Cooperation
Rosneft signed an agreement with the Chinese Sinopec petrochemical company on Friday on the joint development of the Venin block oil and gas field in the Sakhalin 3 project. Gazprom had also declared its interest in working with Rosneft but had made no concrete proposals. A partnership with Sinopec is likely to mean that Rosneft will keep a share in the Venin block under any circumstances.
On Friday, in the course of Russian-Chinese negotiations, Roneft signed a framework agreement on collaboration with CNPC, the Chinese national oil and gas company, and a protocol on the foundation of a joint venture for geological exploration and study of the Venin block field of the Sakhalin 3 project with the Chinese oil and gas company Sinopec.
The oil resources in the Venin block are preliminarily estimated at 114 million metric tons ad gas at 315 billion cubic meters. Rosneft received a license for geological study of the block in April 2003. It is assumed that the operator of the project will be a specially founded OOO Veninneft. There are three other blocks besides Venin in the Sakhalin 3 shelf project. They are the Eastern Odopinsky, Ayashsky and Southern Kirinsky, licenses for which are held in an indivisible fund.
The agreement between Rosneft and Sinopec means that the Chinese company will receive a share in OOO Veninneft. Its size has nor yet been revealed. Kommersant has information that Sinopec will receive a 40-50 percent share in the project operator. Rosneft president Sergey Bogdanchikov announced on Friday that Sinopec will finance all geological exploration work ad no less than half the funds necessary for the development of the block. It is thus committing itself to more than half of all the financing of the project.
On June 24, Alexey Miller, chairman of the board of the Gazprom monopoly, stated that that company was preparing to make an offer for the purchase of a share in all the Sakhalin projects from Rosneft. Besides the Venin block, Rosneft owns 20 percent of the Sakhalin 1 project (operated by the American ExxonMobil, which owns 30 percent. The Japanese SODECO also owns 30 percent of it and the Indian ONGC owns 20 percent). Rosneft owns 51 percent of Sakhalin 4, the project is developing the Western Shmidtovsky lot, along with British Petroleum. Rosneft and BP are sharing in the same proportions the Sakhalin 5 project at the Eastern Shmidtovsky and Kaigansko-Vasyukansky lots. On Friday, a Gazprom representative told Kommersant that no concrete offers had been made to Rosneft. The fact that the oil company found an investor for the development means that it will most likely retain a share in the project in any case.
At the end of this year or beginning of 2006, the Ministry of Natural resources plans to auction off the three remaining blocks in Sakhalin 3. Gazprom plans to take part in those auctions with LUKOIL. Representatives of the companies have not said to what extent the infrastructure of the Sakhalin 3 blocks will be interconnected, but some cooperation between the participants in the project will obviously be necessary.
Nikolay Semenov
All the Article in Russian as of July 04, 2005
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