November 20, 2008
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Home / Issue Archive / 2007 / June #6 / Norsk Hydro Still Seeks Participation in Shtokman

№ 6 (June 2007)

Norsk Hydro Still Seeks Participation in Shtokman

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The Financial Times has reported Norwegian offshore oil company Norsk Hydro expressed interest in participating in Gazprom’s Shtokman project Tuesday saying “there’s still a chance for Norsk Hydro to get involved in Shtokman in spite of Gazprom’s choice of French oil major Total as its main development partner.” This statement comes amidst Russian oil giant’s announcement of changes to the investment plan for 2007, including cutting Shtokman’s budget. 

Instead of the originally planned RUR 17.1 billion ($671 million), the investment into the Shtokman LNG project is set to amount to RUR 8.6 billion ($265 million), according to the figures provided by Barents Observer. The general investment program of the largest global gas company has been reduced by 11%. The changes came just shortly after French oil company Total joined the project and reportedly have to deal with Gazprom’s aim at bringing more investment from foreign companies yet to participate in Shtokman field development. Norsk Hydro was among the 5 companies contacted by Gazprom in January regarding their potential participation in the project. Other companies were Chevron, Total, Statoil and ConocoPhillips, which is also among the frontrunners for the remaining stake in Shtokman. ConocoPhillips CEO James Mulva said earlier this week the company “continued negotiations with as do also other companies,” as quoted by Barents Observer. “We might take part in the project,” he added.

With Gazprom owning the commanding stake in the project with 51% of the shares and Total in control of other 25% there’s still room for other participants which could obtain up to 24% in the project.

“We are in continued dialogue with Gazprom,” said Eivind Reiten, CEO of Hydro regarding participation in Shtokman as quoted by the Financial Times. “We are closely interested in taking a share if the conditions are right,” commented Reiten.

Back in July AFX News reported Norsk Hydro stated the company had the “key expertise and experience to ensure Russia’s mammoth Shtokman gas field is developed in a profitable and responsible way.”

The Shtokman field in Russian Barents Sea is one of the world’s largest natural gas fields with the reserves estimated at the level of over 3 trillion cubic meters of gas, or twice the reserves of Canada. Gazprom expects the gas production to be running by 2013-15.

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