Conflict around Qatar should be settled by diplomatic means - source at Foreign MinistryRussian Politics & Diplomacy June 24, 16:44
More than 237,000 fans attend Confederations Cup matches already - Deputy PM MutkoSport June 24, 15:03
Sistema's president hopes for dialogue with Rosneft on settlement agreementBusiness & Economy June 24, 14:56
CNN deletes article about meeting between Scaramucci and Russian Direct Investment FundWorld June 24, 13:12
Ukrainian Army units shell Donetsk Republic in first hours of newceasefireWorld June 24, 5:19
Politician says Russia vs Mexico football game will be interesting to watchSport June 23, 21:11
Kyrgyz president sees revival of relations with Russia as major result of his tenureWorld June 23, 20:49
Ex-premier says initiative to impeach Poroshenko stems from Ukraine’s economy collapseWorld June 23, 20:20
This week in photos: Confederations Cup opening and summer solstice celebrationsSociety & Culture June 23, 19:11
The Norwegian oil company Statoil is leaving the development project of the Shtokman gas condensate field. No other companies to replace the foresaid company in the Shtokman gas project were found yet. In view of a low gas demand and permanent problems the future of the Shtokman gas condensate project looks vaguer.
Statoil brought back to Gazprom a stake in Shtokman Development AG (the operator of the first phase for the development of the Shtokman gas condensate deposit in the Barents Sea), Statoil spokesman Fredrik Norman told the Vedomosti daily. Over this fact in the second quarter Statoil wrote off the cost of this stake – 2.1 billion Norwegian krone (about 354 million dollars). The company is still negotiating with Gazprom and hopes to participate in the project on beneficial terms, Norman noted. Statoil Director General Helge Lund and Senior Vice-President for Europe and Asia Torgeir Kydland have already quitted the Shtokman Development board of directors.
Shtokman Development was established in 2008 and was to launch the production in 2013, the newspaper recalled. Gazprom has 51% of stock, France’s Total – 25%, Statoil – 24%. For the past four years 1.5 billion dollars were invested in the project and a half of investments were made by Gazprom.
Statoil’s quitting is not critical for the project and will not affect the deadlines for the Shtokman development, East European Gas Analysis Director Mikhail Korchemkin, who is cited by the newspaper, believes. Shell can easily take its place. The company is not inferior to the Norwegians in the experience of operation at similar deposits, moreover, it is already cooperating with Gazprom in the Sakhalin-2 project. But still the main question is the solvency of the project, Korchemkin warned. For the last few years the market has changed, as the shale revolution occurred in the United States, enormous reserves were discovered in Turkmenistan, the liquefied gas technologies have advanced greatly, therefore, the market is saturated with the cheap fuel for years to come.
The third participant in the project, France’s Total, has not returned its blocking stake yet, Kommersant sources on the market said. According to them, the company is waiting for a meeting of the Shtokman Development shareholders, which is due on August 30, to discuss this issue. On Tuesday, a source in Total told the newspaper that “they cannot add anything to the recent statements of their top management.” Total Financial Director Patrick de la Chevardiere pledged in late July, “Total is still very interested to play the active role in this project, the choice of the partners depends from Gazprom, but we want to be part of the project.”
The main reason for the delay of the project became some uncertainty with future gas supplies and the gas price. Since the launch of the Shtokman gas development the gas demand has been going down in Europe, but the gas remains too cheap in Russia. Meanwhile, the issue of tax benefits to the project has dragged out, but the question was settled only partially so far. It was initially planned that the investment solution on the Shtokman gas project will be taken in late 2009 or early 2010, and gas supplies will be launched along the pipeline in 2013 and the liquefied gas supplies in 2014. But in 2010 the Shtokman Development board of directors approved the delay of the deadlines to 2016-2017. Under the new plan the final investment solution on the pipeline gas production was planned to take in March 2011 and on liquefied gas production before the end of 2011. In February 2011 deputy head of the Federal Agency for Subsoil Usage Pyotr Sadovnik noted that the commissioning of the Shtokman gas pipeline may be postponed to 2018 upon the requests from the participants in the project.
Gazprom hopes to complete the consultations for the configuration and conditions for the development of the Shtokman gas project by the beginning of autumn. But no deadline was met under the project. Shtokman is not quite topical for the Russian gas monopoly. Alexander Nazarov from Gazprombank noted that “previous schemes and calculations are becoming senseless over the changes in the market climate.” In particular, if before the profit-making level of the project has been the oil price of 80 dollars per barrel, now over the changes in the price formula most contracts of the Gazprom clients, inflation and the cost of materials it exceeds 100 dollars per barrel. With this market climate Gazprom does not need the project, the analyst said, noting that the Gazprom gas production keeps falling over a slack gas demand.