|TOPIC OF THE ISSUE|
|ANOTHER TWIST OF SUBSOIL SAGA|
The development of Russia's oil&gas industry is thwarted by inertness inherent to post-soviet states. The flagrant problems of the sector are almost ignored by executive and legislative powers, as illustrated by the long-suffering issue of amendments to On Subsoil legislation. The lack of established industry tribune is, evidently, one of the reasons for such thorny quest for compromises. In Russia, even good coverage, as experience shows, helps little in development of open dialogue between oil&gas professionals, authorities and businessmen.
|PERSON OF THE ISSUE|
|SHALVA CHIGIRINSKY'S PRECIOUS ASSETS|
So far, 2005 has been an exciting year for business tycoon Shalva Chigirinskiy. In parallel with a trying experience of confrontation with Sibneft at Moscow refinery, the owner of Sibir Energy faced a good few satisfying moments linked to the development of Salym group of fields. The people close to the Moscow-based tycoon say that he is an example of agility and optimism, with no fear of challenges and jovial personality.
|PHOTO OF THE ISSUE|
|JOY OF SELF-DISCIPLINE|
The JV Salym Petroleum Development (SPD) was set up in 1996 by Shell Salym Development and Russia-based Evikhon for operating Salym group of fields in Khanty& Mansy Autonomy, Russia. So far the company had four general directors; Dale Rollins is the luckiest of the lot. Having become the general director in 2003, he has been successfully guiding the company through major breakthroughs.
|EXPLORATION AND PRODUCTION|
|ACCOUNTING AND CONTROL|
AUTHORITIES ARE TO COUNT THE WELLS AND RE-CLASSIFY SUBSOIL RESOURCES
Russia's ministry of natural resources (MPR) rolled up the sleeves to polish the upstream segment and boost the efficiency of subsoil usage. The MPR plans to initiate a new classification for crude reserves and resources and for fossil gases. The new classification will match international standards and will integrate economic parameters absent in the present classification. The MPR also approved the criteria governing strategic fields and embarked on enumeration of all oil&gas wells on the territory of Russia.
|EXPLORATION AND PRODUCTION|
|THE DELAYED FAREWELL|
INTERROS SELLS VERKHNECHONSKNEFTEGAZ BLOCKING STAKE TO ROSNEFT
This is the second production asset sold by the company since it announced withdrawing from crude business — now only Kovykta stake remains on the company's balance sheets (Interros has been trying to sell its Kovykta stake for some two years). The company assures there is no shortage of offers, but those fall short of Interros commercial interests. The oil&gas industry experts estimate that the company would sell its last asset only after Gazprom's final say on its participation in the project.
|THE RIGHT WAY TO GO|
The Russian government has finally paid attention to a pitiful state of oil refining industry
As OilMarket has already informed, in September the Russian government expressed concern over the problems of the oil refining industry, stating the need to work out the industry development strategy and improve the quality of oil products. Surprisingly, this project has survived the maze of the Kremlin cabinets: the gurus of Russia's oil refining industry expect that all documents needed to bring the Russian refineries up to the European standards, will soon be finalised and approved.
|RUSSNEFT IS THE LEADER OF MOSCOW OIL PRODUCTS MARKET|
From 1 November Russneft propelled to the leading row in «who's who» list of Moscow oil products retailing, having acquired Moscow-based network of fuelling stations Korus for just below $100mn, OilMarket learned from Russneft's top PR man Eduard Sarkisov. Korus network includes 31 fuelling stations in Moscow and suburbs, 5 stations in Smolensk region, and sells some 150,000 t of oil products annually.
|A TERMINAL FOR 360 DAYS|
AEGAZ-TERMINAL STARTED CONSTRUCTION OF A NEW GAS TERMINAL IN KERCH
In June, on an investment forum in Ukraine's capital Kyiv, Kazakhstan's company Asian-European Gas-Kazakhstan (AEGas) presented a project on developing LPG (propane-butane) terminal in Kersh fishing port (Crimea, Ukraine). For this project the company set up and registered in Ukraine AEGas-Terminal subsidiary. The project construction span was somewhat daring — summer 2005. The buzz around the project soon settled down — yet, as OilMarket learned, the company sticks to its guns and has already started initial work on gas terminal project.
|THE BLUE STREAM IS OFFICIALLY OPEN|
On 17 November the Turkish city Samsun welcomed high-ranking visitors to the opening ceremony of the 16 bcm Blue Stream gas pipeline, which links Beregovaya compressor station (Krasnodar territory) and Samsun. The guests included the President of Russia Vladimir Putin, the Prime Minister of Turkey Recep Tayyip Erdogan, the Prime Minister of Italy Silvio Berluskoni and Gazprom's head Alexei Miller.
|Energy industry risk management: dimensions of development in Russia|
The rapid advance of financial markets propelled risk management from one of many elements into a separate dimension of management development. Generally, four types of risks exist — the collective estimate of those gives investment appeal of the country's business. In Russia, business-related risks are much higher than average rates in countries of Organization for Economic Cooperation and Development (OECD). Many investment-related problems spring up from this fact — those have been encountered by energy industry-related companies, which have every right to be considered as an attractive investment opportunity.
|SELLING ROSNEFT INTO THE GOOD HANDS|
IS YUKOS TO BECOME A ROSNEFT MINOR SHAREHOLDER UNDER THE LATTER CONSOLIDATION PROGRAMME?
Since the date of opening back in 1995 Rosneft has been a 100% state-owned firm. In 2006 its status might change — the state is getting ready to Rosneft IPO, and some of the stake could be sold to the strategic investor to pay off company's debts. Besides, Rosneft is working on consolidation programme, which could result in some of its shares going to the company's subsidiaries. In a piquant twist, the biggest among them is Yukos — Rosneft unchangeable adversary for at least last two and a half years.
|GAZPROM SCORES A VICTORY IN MOSCOW|
Having acquired a new owner, Sibneft in alliance with Tatneft took over Moscow refinery
After buying 72% stake in Sibneft for $13bn, Russia's gas giant Gazprom received a «bonus» of control over Moscow refinery (MNPZ). In November the appeal court yielded to the arguments of minority shareholders of the refinery, Sibneft and Tatneft. The two companies challenged GSM decision on 2004 dividend payment on privileged shares of MNPZ. The court's ruling turned the plaintiffs into the owners of control stake in the refinery. The minority shareholders are opposed by large shareholder in the refinery — Moscow Oil&gas Company, controlled by Moscow government. The company intends to challenge the appeal court ruling, but is unlikely to regain control over the refinery.