September 5, 2008
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Gazprom Neft to Invest in Iran

Gazprom Neft, the oil arm of gas monopoly Gazprom, plans to acquire new assets and so cannot yet predict its 2008 dividends, the firm's head said on Friday.

Gazprom Neft President Alexander Dyukov said the company would invest over $100 million in a buy-back project in Iran and had also offered to develop more fields in Siberia with U.S. oil major Chevron.

"We plan to buy a number of assets this year. That is why it is too early to talk about dividends as a share of profits," Dyukov told reporters at the firm's annual shareholders' meeting.

Gazprom Neft, fighting years of declining production, has said it is planning to buy new production and refining assets.

It has also said it plans to expand its activities outside Russia in addition to its only foreign project at the moment, part of the Northern Zadegan deposit in Iran.

State-controlled Gazprom clinched a deal in February to develop oil and gas projects in Iran, which is under U.S. sanctions aimed at making the Middle Eastern country drop its nuclear programme.

Dyukov said his company would fully fund the project, where total investment could amount to over "a hundred million dollars". It will shortly take a decision on the three fields within the deposit offered by Iran.

"We are to reply to Iran within six weeks on the geological data we received," he said, adding that Gazprom Neft hoped to book some 60 percent of the reserves of the fields it would develop.

Total reserves of the Northern Zadegan deposit, the largest in Iran and one of the world's biggest, are estimated at 42 billion barrels.

Closer to home, Gazprom Neft is planning to expand its cooperation with Chevron beyond the joint venture the two companies created last year.

"We have approached Chevron to develop one more field... We are talking about a hard-to-develop field and hope for Chevron's technologies," Dyukov said.

Gazprom Neft owns 75 percent of the Northern Taiga NefteGaz venture, set up by the two companies to jointly produce hydrocarbons in West Siberia. Chevron holds the rest.

Dyukov said Gazprom Neft, which produced around 43 million tonnes of oil (863,534 barrels per day) last year, flat on 2006, expects to raise output to 48 million tonnes thanks to last year's acquisition of half of production company Tomskneft.

Russia's largest oil firm, Rosneft , owns the other half of the 220,000 barrel-per-day producer.

Gazprom Neft said in a separate statement it planned to raise up to 35 billion roubles ($1.48 billion) via local bonds with 5-10 year maturity.

Source: Reuters


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