GAZPROM TO SET UP PETROLEUM SUBSIDIARY
April 5
Interfax-AGI
In the upcoming summer, Gazprom intends to set up the Gazpromneft wholly-owned petroleum business to extract to 30-40 mln t of oil and gas condensate annually, Interfax-Gas Information Agency has been informed of by Alexander Ryazanov, Deputy Chairman of Gazprom’s Management Committee.
According to A. Ryazanov, the new petroleum company will emerge within Gazprom’s structural changes aiming to unbundle the financial flow going to the Monopoly’s core businesses.
Pursuant to the March statements by Gazprom’s CEO Alexey Miller, Gazprom is currently shifting over to the 2nd stage of its restructuring targeted at enhancing the corporate operating efficiency as a vertically integrated business and at optimizing its core business management structure at the subsidiaries’ level.
A. Ryazanov noted that, at an initial stage, Gazpromneft would be a wholly-owned subsidiary of Gazprom.
“But, over some 2-3 years, the petroleum company’s assets may be partially sold off. A part of its stake is likely to be auctioned on a security market or offered to a strategic investor but Gazprom will still exercise control over the controlling stake. Otherwise, we’ll fail to channel sufficient investments to the petroleum business. As of today, we annually invest some RUR 4-4.5 billion into our oil sector and this is a very scanty amount. Gas still remains to be our priority,” – maintained A. Ryazanov.
Founding Gazpromneft will allow Gazprom, in A. Ryazanov’s viewpoint, to finally meet its long-standing oil export challenge.
“We’re being deprived of oil export quotas since we’re channeling gas condensate to our own but not to Transneft-controlled trunk lines. This is unfair,” – believes Deputy Chairman of Gazprom’s Management Committee.
At present, almost all of the gas condensate produced by Gazprom is going to SIBUR’s processing facilities, with only an insignificant amount (0.5 mln t) being exported by rail to Europe. “A situation like this helps us to load SIBUR’s plants but gas exports surely look more attractive,” – states A. Ryazanov, adding that, in addition to railroad supplies, Gazpromneft will forward stabilized gas condensate to Transneft’s pipelines.
“We’re so far involved in the talks with Transneft on our potential access to its trunk lines. We’d certainly derive more benefits from directly exporting a more expensive condensate but we can’t count on this alternative for now. On the other hand, due to our injections, the pipeline will carry oil of a better quality,” – said A. Ryazanov.
Gazprom hopes to export up to a half (some 30-40%) of its subsidiary’s oil output via Transneft’s pipelines. An inconsiderable amount will be exported by rail. The rest is planned to be refined at SIBUR and Salavatnefteorgsintez’s facilities.
According to A. Ryazanov, Gazprom doesn’t have intentions yet to acquire any new oil assets. “We’re doing fine with our own production,” – he said reminding that Gazpromneft would also be involved in joint oil projects by Gazprom together with LUKOIL on the Tsentralnaya Structure development in the Caspian Sea and in partnership with Rosneft on the Prirazlomnoye field development.
“But gas condensate will still be in the main focus of the new petroleum business,” – he pointed out.
“New gas field reservoirs to be developed, including the Achimov and Valanginian deposits, cardinally differ from the Cenomanian ones. In addition to gas, the former contain a huge amount of gas condensate structurally very much resembling oil,” – explains A. Ryazanov.
At present, Gazprom is withdrawing 11 mln t of oil and gas condensate, earning some RUR 40 billion per annum.
Nevertheless, oil and gas condensate extraction will grow, under A. Ryazanov’s forecasts, 3 or 4-fold in 4 to 5 years, annually yielding Gazprom a minimum of USD 3-4 billion.
Gazprom produces 10.2 mln t of gas condensate and 0.8 mln t of oil per annum, including 3.7 mln t of gas condensate extracted by Urengoigazprom, some 4 mln t, by Astrakhangazprom and the rest, by Yamburggazdobycha, Severgazprom and Vostokgazprom.