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OilMARKET 12 / 2005
TOPIC OF THE ISSUE
FAIRY TALE OF SALYMFAIRY TALE OF SALYM
On this cold November's night, the crude processing facility, just like the whole drilling rig, was up for the coming New Year. Salym was singing, dancing and talking niceties (no drinking however Salym is dry town). As a result of unpredictable Siberian weather, the venue was lacking the shareholders of Salym Petroleum Development (SPD) and its general director Dale Rollins thawing gave way to night frosts, which covered choppers' rotor blades with a film of ice.
PERSON OF THE ISSUE
Gordon Bright Siberian adventureGordon Bright Siberian adventure
Old lady and farmer Gordon Bright arrived from Scotland to Khanty-Mansiysk on 24 November 2005 to have a proper look at just where the managers of JV Salym Petroleum Development (SPD) invest her money. Three generations of Bright family have been Shell shareholders, but Gordon decided to expand the portfolio, investing in Sibir Energy, where she is one of minority shareholders who control some 3% of equity
PHOTO OF THE ISSUE
BuncefieldBuncefield
Flames and smoke rise from the Buncefield oil depot near Hemel Hampstead, England Monday December 12, 2005. Firefighters attacked an inferno raging at the oil depot north of London, extinguishing half of the tank fires (10 of the 20) by Monday midday with sprays of chemical foam
EXPLORATION AND PRODUCTION
FAMILIAR FACESFAMILIAR FACES
NATIONS ENERGY IS CONTESTED BY CHINA'S NPC AND INDIA'S ONGC
Karajanbasmunai, the main asset of the Nations Energy, lured Chinese and Indias companies for $2bn bid.
TRANSPORTATION
Lukoil Results 2005 navigationLukoil Results 2005 navigation
Sustainable growth of oil products shipments and absence of terminal spills are the main results of Lukoil's 10-months marine and river navigation.
COMPANIES
SECRETS OF GROWTHSECRETS OF GROWTH
Yuganskneftegaz acquisition boosted Rosneft's operational efficiency
In late November the state-run oil company Rosneft published the US GAAP financial accounts for the first half 2005. The boost recorded throughout the accounts is no surprise as in the end of 2004 the company acquired the largest production subsidiary of the disgraced Yukos Yuganskneftegaz the producer much bigger than Rosneft by both production and value.
COMPANIES
Second thoughts are bestSecond thoughts are best
NEGOTIATIONS ON SALE OF YUKOS-OWNED 53.7% STAKE IN MAZEIKIU NAFTA NOW postponed AT LEAST TILL SPRING
Ideally, Lithuania would have liked to both sell the stake at maximum profit and secure crude supply guarantees for sustainable operation of the refinery long-term. Yet the circle of potential investors is shrinking while no offer so far meets both criteria. All the signs are that the Lithuania's government will face a difficult choice experts say the final decision is unlikely before 2Q 2006.
COMPANIES
RUSSNEFT ENTERS SECURITIES MARKETRUSSNEFT ENTERS SECURITIES MARKET
WHILE RAISING MONEY TO REFINANCE SOME OLD DEBTS, THE COMPANY DOESN'T SHY AWAY FROM MAKING NEW BARGAINS
On 16 December Russneft placed its first issue of rouble securities for $243.06mn. The annual rate of first Russneft bond coupon reached 9.25% as the result of the auction on the Moscow Interbank Currency Exchange, which practically matched the forecast of auction organisers, Alfa-bank (9%). Mikhail Gutseriev's company for the first time decided to raise funds by issuing securities; Russneft had previously borrowed from international and Russian banks, but its main creditor is a trading company Glencore, Switzerland. Currently, Russneft will focus mainly on consolidating its assets and transforming the company into a vertically-integrated holding, thus, such borrowing options as IPO or Eurobonds are beyond discussion.
NATURAL GAS
NEGP PROJECT HITs THE ROADNEGP PROJECT HITs THE ROAD
RUSSIA STARTED CONSTRUCTION OF ONSHORE PART OF NORTH EUROPEAN GAS PIPELINE
Ceremonial welding of the first junction took place in Babaevo (Vologda region, Northern Russia) on 9 December. Representatives of Russian and German governments together with CEOs of companies-shareholders of the project that already received such an explosive and controversial feedback from European community attended the ceremony hoping to strengthen credibility of their offspring. The project's construction works are just being started, but it can be already labelled as unique not so much for its technical and economic features, as for the response to the idea of undersea Baltic gas pipeline. Any discussion on environmental safety of NEGP project or economic benefits to the countries-participants inevitably comes down to political issues. Still, the project had linked political and economic interests from the start; the tendency is likely to go on.
INTERNATIONAL NEWS
CONOCOPHILLIPS DECEMBER LANDMARK DEALCONOCOPHILLIPS DECEMBER LANDMARK DEAL
The passing year was rich in mergers and acquisitions the majors and industry heavyweights relentlessly juggled assets, acquiring small-time competitors and large market players alike. The difference in approach was evident even to amateurs: some companies were sweeping up the offers (thus, few auctions happened without China's companies on the list of potential investors), while others proved to be more selective picking up assets very carefully and playing safe, with no peddling about. ConocoPhillips is in second group small number of quite attractive assets acquired in 2005 enabled the company to improve production performance and reserves, while boosting capitalisation to $135bn (same as Chevron, the biggest US oil&gas company).
INTERNATIONAL NEWS
Buncefield depot rocked by huge explosionBuncefield depot rocked by huge explosion
Three blasts that echoed around one of the largest UK oil depots Buncefield (Hertfordshire, 20 miles north of London), within half-hour from each other in early hours of 11 December were heard within 70 miles from the site. The flames engulfed 20 fuel tanks, total capacity 270,000 m3 eyewitnesses say the flames reached 80 metres height. The resulting fire was the largest in Europe after the WWII.
REFINING
MAZUT MARCHESMAZUT MARCHES
A Russo-French word mazut (fuel oil) is undoubtedly the symbolic term that signifies quite insulting for Russia phenomena of underdeveloped domestic refining. Technologically advanced processing and a growing depth of refining are the key criteria determining whether a country's refining segment matches the standards of post-industrial economies or tails along on third-world levels. The lingering problem of significant mazut yield and low refining depth is the key factor of the looming shortage of high-octane gasoline in Russia. Today's Russian refining industry stands as a knight on white horse on the crossroads in the midst of mazut swamps, deciding on its course of action. The old way of operating becomes impossible the industry's future depends on today's decision-making.
REFINING
Entering twice into the same riverEntering twice into the same river
Lukoil aspired to become Moscow refinery shareholder once again
The altest news increasingly indicate that in December Lukoil is willing to get back its former stake in Moscow refinery, which the company supplies with its crude. Vahit Alekperov's team is also aiming at leading position on oil products retailing market in the Moscow region, overtaking the current leader Russneft. In the process, the company is expected not only apply its tenacity, but also use an administrative support and Gazprom assistance through Sibneft.
TECHNOLOGY
Worlds First Full Superconducting Motor Completed
The cutting-edge Japanese academic-industrial group* coordinated by Ishikawajima-Harima Heavy Industries (IHI) has completed the world's first liquid nitrogen-cooled inductor-type flux control superconducting motor (IFCS motor).
04 / 2018