Royal Dutch Shell Group .com

The Surgut Courts Gazprom, Rosneft, Mobil and Shell


By Eduard Gismatullin


Tuesday, Apr. 6, 2004. Page 7


Surgutneftegaz, Russia's fourth-largest oil producer, will invite state-owned Gazprom and Rosneft to help it develop a $3 billion oil field in east Siberia after supplanting Yukos as the site's developer.


Surgut on Monday said it agreed to buy oil exploration assets from Yukos Sakhaneftegaz, including its Lenaneftegaz subsidiary, which is exploring the Talakan field and its estimated 2.3 billion barrels of oil reserves. The $3 billion needed would pay for acquiring the field, exploring for and extracting oil and to link the Talakan to a planned pipeline to Nakhodka.


Surgut, Rosneft and Gazprom last year said they would cooperate to exploit eastern energy resources, two months after former Yukos CEO Mikhail Khodorkovsky was arrested in October. Russia, which extracts most of its oil in west Siberia for sale to Europe, is seeking to tap fields in the country's east and export fuel to meet growing demand in Asia and the United States


In eastern Siberia, "we will make new discoveries as there are other oil fields in the region," Surgut CEO Vladimir Bogdanov said in an interview in Moscow.


Bogdanov also said that Sugut had invited Marathon Oil, the fourth-largest U.S. oil company, and Royal Dutch/Shell, Europe's second-largest oil company, to form joint ventures to develop oil fields in western Siberia.


Shell and Marathon both confirmed they had held talks with Surgut, but neither would say if they had responded to the offer.


Surgut has been encouraged by government statements that indicate the country may decide to build an oil pipeline to Nakhodka on the Pacific coast to sell fuel to Japan, rather than a link to Daqing in China, Bogdanov said.


Surgut has committed to invest $185 million in Talakan to date, Bogdanov said. That includes a $61 million payment to the government that the company promised in its bid for the Talakan field.


Surgut lost that bid to Sakhaneftegaz, which was later acquired by Yukos. Surgut was later awarded the Talakan license after the Yukos unit's exploration license lapsed.


Bogdanov declined to say how much of the remaining $124 million in investment pledged would go to buy Talakan assets from Yukos.


"The agreements will allow Surgutneftegaz to start full development" in the Yakutia region, where the field is based, Surgut and Yukos said in a joint statement.


Vedomosti last week said Surgut may face a lawsuit from the government contesting the company's rights to Talakan, citing Natural Resources Minister Yury Trutnev.


"Legally there is no possibility to withdraw the license from us," Bogdanov said Monday. "If it happens that would be bad for the region."


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