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OilMARKET 02 / 2004
TOPIC OF THE ISSUE
TAMAZ SOMKHISHVILI:
no more easy barrels
This is the story of a working upstream project developed in the Tomsk region in Siberia. This cationary example highlights the distortions in taxation in the oil industry which eventually can bring the development of projects on remote oil fields in Siberia and the Russian Far North to the brink of ruin and obstruct the inevitable march of Russian oil producing industry to the final frontiers.
INDEPENDENTS
TATEX in Russi: a difficult story of successTATEX in Russi: a difficult story of success
It's not a big secret what makes foreign oil companies coming to Russia to develop oil and gas projects. Foreign investors aim at making profit and that's what they are supposed to do. Still, many find it quite tricky to survive on the Russian soil as business ventures. Russo-American joint venture Tatex is one of those rare exceptions: the company is operating in Russia already more than 13 years. The OilMarket takes a closer look at the story of this successful, although difficult long-term partnership.
EXPLORATION AND PRODUCTION
The growth antinome
The surge in Russia's crude production growth coincided last year with a steep decline in independent producers' share in the country's production total.
EXPLORATION AND PRODUCTION
Is this the end of cheap energy?Is this the end of cheap energy?
Over the last four years crude oil prices have oscillated at around $30/bl, lately climbing closer to the mid 30-s. Indications are that the levels of the first Gulf war peak of $40/bl are not far away. If conventional wisdom is right, such a long period of soaring crude prices should be close to its end and energy prices will soon ebb. This implies that supply will finally grow and surprisingly strong demand will soon wane. However, this logic, which has worked perfectly for the global oil industry over more than 20 years, might be all wrong. But does anyone really care where the truth is?
EXPORTS
Pipeline crude exports continue growth
The crude export pipeline shipments from Russia and CIS countries totalled in February 15.29mn t, or 3.85mn b/d. This was another record high monthly shipment via the systems of the world's largest pipeline operator Transneft. The previous record was in December 2003, when the volume of shipments was at 3.71mn b/d. Shipments of the Russian crude via Transneft systems then reached 13.69mn t or 3.45mn b/d, including rail shipments from the Transneft terminals.
RISK MANAGEMENT
Pilots in the sea of export risksPilots in the sea of export risks
That old illness common to Russian oil exporters intensified as Russia's oil production surged, over 11% in 2003. This malady stems from the stubborn neglect of export hedging instruments despite the fact that they have become increasingly essential the longer world crude oil prices stay at sky-high levels.
COMPANIES
SURGUTNEFTEGAZ  done well or well-done?SURGUTNEFTEGAZ done well or well-done?
Surgutneftegaz surprised the business community several times in February 2004 with various announcements regarding its plans for the company. Though investors were cautiously optimistic on receiving the news on the company's plans to double gas refining while substantially reducing expenditure, Surgutneftegaz's intention to almost quadruple dividend payments on 2003 results got investors and stock market participants talking. Despite the substantial increase in the nominal value of dividends, they remain the lowest in the oil and gas industry.
REGION
Heavenly attractionHeavenly attraction
Radical changes are afoot on Ukraine's jet fuel market
The aviation segment of the Ukrainian motor fuel trade always was the most enigmatic and elusive conrer of the market.. The main reason the military-industrial complex which for years was main consumer of jet fuel and its secrecy, . Today the situation is largely different. The secrets of the Ukrainian military complex fade away, giving space to civil aviation and those wishing to cater for this respectable transport. Over the past three years Ukraine's jet fuel market stepped on the road of de-monopolisation. Instead of a single producer and distributor, the market is shared by three companies, biting large bits off the share of the former monopolist. However, while monopolisation in jet fuel distribution sphere was simple to overcome, the necessity of quality changes in bunkering infrastructure and in correlation of oil companies with airport operators is not so easy to tackle.
REGION
Urals Fuel Union: uniting for quality and growthUrals Fuel Union: uniting for quality and growth
Ural Fuel Union (UTS), an association of independent fuel retailers, was registered in November 2003 in Yekaterinburg. As of February 2004, the association engulfs 18 companies: AtomProm-Oil, BVB, Berezovsk-Benzoservice, Barkhan, Ural Rennaissanse, EDIAR, Yekaterinburg Autocentre, Leon, Prima Enterprise, Istok, Era, Texas Hermes, Ural-Oil, Ural-Magma, UralBusinessNeft, Yava-AZS-Service, Yekaterinburg- benzin, and Ural-Farmer. The members of the union control totally 101 petrol stations, retailing an average of 15,000 tonnes of oil products per month, which accounts for over 20% of the market in the Sverdlovsk region. Mr. Sergey Shiyan was elected as the CEO of the association. OilMarket met with Mr. Shiyan the resulting interview is offered to your attention.
NATURAL GAS
Once again on Turkmen natural gas,Once again on Turkmen natural gas,
Or the role of the Turkmen father of the nation in Russia's natural gas balance
The post-soviet landscape has no shortage of national leaders willing to astonish the grassroots. Some gain attention by sheer extravagant behaviour, others tend to come out with the provocative utterances. However, only one personality can rightfully say that his very name (actually, half-name/half-title) astounds any audience the father of the nation or Turkmenbashi for short. Saparmurat Niyazov could have remained a decoration of post-soviet political landscape, building golden monuments, renaming cities and months of year after himself or sacking ministers while on air addressing the nation from TV screen. But fate had different twist in hand. Having signed an agreement with Russia's natural gas monopoly Gazprom on supplies of more than 1.7 trillion m3 of the natural gas over the 25 years period, Turkmenbashi became more than a guarantee factor for Gazprom to fulfil its obligations. Since all internal and external strategy of Turkmenistan closes on a single person, he personally becomes an important factor of Russia's energy security.
TRANSPORTATION
FEK tightens screws on CPCFEK tightens screws on CPC
The rigid position of Federal Energy Commission (FEK) of RF regarding tariff control on the CPC pipeline implies that the Commission has the full-on support of the Russian government and intends to see the matter through.
04 / 2018