Prospects Improved

Just over a month ago I speculated in this post that the supermajor’s prospects in Russia may improve as a result of the global economic crisis, as financing mega projects becomes much more difficult in the months and years ahead.

Sure enough:

Gazprom executive chairman Alexei Miller has given a ray of hope to foreign companies by saying this week that they may be able to work on building LNG plants on the remote Yamal peninsula in West Siberia.

The Russian gas monopoly is struggling with rapidly falling output at its core assets in the nearby Yamal-Nenets region.

Today, Gazprom expects to transport gas from Yamal peninsula fields by pipelines. However, if the decision to opt for an LNG plant is approved, then the company will speed up the development of the Tambei group of fields, Miller said.

Gazprom expects the Tambei fields to be tapped sometime in 2020 if the pipeline solution is adopted. However, Gazprom officials indicated earlier that they had been in preliminary contact with Anglo-Dutch supermajor Shell and Spain´s Repsol regarding the possibility of building an LNG plant at the South Tambeiskoye gas field.

As well as Shell and Repsol, Gazprom is considering other major players as possible partners for LNG solutions.

“The list of possible participants is currently being made, but we are not ruling out majors such as ExxonMobil and ConocoPhillips from joining the project,”Gazprom deputy chairman Alexander Medvedev said.

Actually, I have no idea whether this is a result of the financial crisis, but I expect that the current turmoil has sharpened minds a little as to how Russia’s grand plans are going to be funded.  By inviting in the western oil companies as partners, the project owners gain access to their technical expertise and large piles of cash.

Miller said that Gazprom will keep full ownership of fields on Yamal and will only allow foreign companies as minority shareholders in future operating companies similar to the first phase of the Shtokman gas development project in the Barents Sea.

This is pretty much how it works in the Middle East: the national oil companies own the development, the foreign companies supply the expertise and the cash.  Might we see the employees of the western oil giants stomping around frozen oilfields for the next decade or so?

Maybe there’s a lengthy career in Russia for me yet?

Albeit on the Yamal Peninsular.  That’ll have my wife jumping for joy.

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1 thought on “Prospects Improved

  1. “Yamal” means “End of the World”… crikey I thought we already lived there, is there another End of the World? See you for some spud peeling.

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