August 22, 2012
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№ 1 (January 2007)

Lukoil Signs Memorandum with Qatar Petroleum

Russia’s largest oil producer LUKOIL signed a Memorandum of Understanding with Qatar Petroleum, aiming to expand its presence in the middle eastern market in a move seen as a step forward in Russia’s economical partnership with the leading energy producers in the region. The memorandum, which was signed by the President of LUKOIL Vagit Alekperov and the Chairman and Managing Director of Qatar Petroleum His Excellency Abdullah Bin Hamad Al-Attiyah identifies exploration of mutually acceptable participation in oil and gas projects within the territory of Qatar, as the main purpose of the cooperation between the two companies.

By Sergei Balashov

"Our Company is interested in participating in new projects, as well as in the existing oil and gas projects in Qatar, given the strategic significance of the Gulf region as the largest petroleum province of the world," commented Vagit Alekperov. 

His Excellency Abdullah Bin Hamad Al-Attiyah was quoted in LUKOIL’s press release stating that "Qatar Petroleum welcomes international oil companies to participate with it in Qatar’s development," and adding "all of our developments, whether for gas, gas-to-liquids, LNG or petrochemicals, are built on long-term mutually beneficial relationship with strong international partners, and we look forward to exploring such opportunities with LUKOIL."

LUKOIL is the world’s 2nd largest company in proven hydrocarbon reserves, and holds a 1.3% share in the world’s proven oil reserves with over 16 bln boe, which is 20% more than that of Chevron with approximately 13 billion. Russia’s leading oil producer retails petroleum in 18 countries worldwide, possessing oil refineries in 4 countries, and is currently trying to gain a major stake in the middle eastern energy market with its latest activities. LUKOIL’s Memorandum of Understanding with Qatar was preceded by singing similar agreements with the Kazakh company KazMunaiGaz in 2003, the Algerian state oil company Sonatrach in 2006, and Iraq’s ministry of oil, in accordance with which the Russian oil giant shipped $5 mln worth of equipment to Iraq for the ministry’s needs in 2005. LUKOIL has also established a joint venture "Luksar" the with Saudi Arabian company Saudi Aramco in 2004. 

The singing was a part of the official agenda of Russian President Vladimir Putin’s visit to Doha. He made it clear that Russia’s involvement in Qatar wasn’t to stop there. 

"LUKOIL just signed a memorandum…Gazprom and Rusal are also ready for active cooperation," he said. President Putin also didn’t rule out an opportunity of establishing an international gas cartel similar to OPEC. "This is an interesting idea," he said, adding that it requires "more study" to find out whether such an organization is needed. 

Iran raised this issue in January sparking fears of a gas monopoly in the EU. Political support and recent exploration efforts of Russia’s leading energy companies in the mideast could put this proposal closer to reality.

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