Gazprom Develops in South America

Excerpt from Russian Petroleum Investor

Recently, Gazprom signed a memorandum with Venezuelan state-owned company Petroleos de Venezuela (PDVSA) to develop the shelf deposit Blanquilla Este y Tortuga. The project is the third phase ofanother large-scale project – Delta Caribe Oriental – costing a total of$20 billion (each phase has its own participants). The third phase shouldlaunch in 2016. Gazprom has a 15 percent holding in the project. PDVSA holds 60 percent, while Eni (Italy) and Petronas (Malaysia) each have 10 percent and Energias de Portugal holds 5 percent, according to a Gazprom manager. The cost of this phase amounts to $6.41 billion.

If the reserves are sufficient, a second stage will begin to construct capacities for liquefying gas, develop the deposit and sell gas both domestically and for export. This stage would create its own venture in which the participants would hold the same ownership positions as in the initial stage. The companies would retain the same stakes in all subsequent stages of the project.

Read Related Articles (free)

Why Indonesia Left OPEC

Excerpt from Russian Petroleum Investor by Inna Gaiduk, Editor-in-Chief

Recently, Indonesian President Susilo Bambang Yudhoyono declared that his country had pulled out of OPEC. The president said that Indonesia would concentrate on increasing oil production on its own. Daily production has currently declined to below 1 million barrels (136,425 tons). Increasing the extraction volume could take 1-3 years. In the mid 1990s, Indonesia daily production reached between 1.5 and 1.6 million barrels. By April of this year, that had declined to 860,000 barrels.

Indonesia imports about a third of its oil and production has slumped 49 percent from a peak in 1977, partly as disputes with ExxonMobil (US) delayed field developments and deterred investments. The nation, a member of OPEC since 1962, has considered leaving for the past three years as it failed to meet output targets stipulated within the producer group. “It was long overdue for Indonesia to step out because as a net importer it didn’t make sense to stay on,’’ said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “And since they could not even make the quota, there was not much to gain anyway.”

The withdrawal from OPEC will help the nation save 2 million euros ($2.8 million) in membership fees a year, according to Indonesian Energy Minister Purnomo Yusgiantoro. Indonesia’s plan to leave OPEC became more pressing as crude prices in New York reached $147.27 a barrel on July 11.

OPEC includes 13 countries overseeing two-thirds of all oil global reserves. Indonesia was the only country of the Asian-Pacific region in the organization.

Read Related Articles (free)