Oil & Gas Companies: News for Oil & Gas and Hydrocarbon Industries  Membership Services »
Gulf Oil and Gas grow your business
Home News Events Projects Tenders Unconventionals community | My Account  Jobs 
Products and vendors Services and providers Oil & Gas Software and publications

Conoco Bets on U.A.E. Alliance in Caspian Oil Race

Source: Bloomberg 4/13/2010, Location: Asia

Share |

ConocoPhillips plans to team with Abu Dhabi-backed Mubadala Development Co. to bid for oil and gas fields in the Caspian Sea off Turkmenistan after an attempt with Russia’s OAO Lukoil foundered, a person familiar with the strategy said.

ConocoPhillips, the third-biggest U.S. oil producer, has worked with Mubadala in the Turkmen part of the sea for the past six months after Lukoil’s attempt to gain Block 21 failed in September, said the person, who declined to be identified during the bidding process.

The Houston-based company and Mubadala won access to Block N in Kazakhstan’s sector of the Caspian in 2008 and plan to drill an exploration well in the third quarter. ConocoPhillips may find a partnership with an Arab oil producer to be a preferable route to Caspian resources than with Lukoil, Russia’s largest non-state oil company, Julia Nanay, an oil analyst at PFC Energy, said by e-mail.

Turkmenistan has held off larger Russian companies because of historical dependency on its northern neighbor, Nanay said. “They may have wanted Conoco to try for a block without Lukoil,” she said in the e-mail.

The selection of OOO NGK Itera, a Russian gas trader owned by Turkmen-born Igor Makarov, to explore Block 21 reflects the former Soviet republic’s interest in appeasing the regional power, while keeping out Russia’s largest energy producers, Nanay said.

Setbacks
Turkmenistan, which holds the world’s fourth-largest gas reserves, is seeking bids from foreign producers to find and develop oil and gas in its little-explored section of the Caspian Sea. The nation has said it will keep ownership of almost all onshore resources.

“We are interested in opportunities in the Caspian, the Middle East and the Far East,” Philip Loader, a senior vice president for exploration at Mubadala, said by telephone. He declined to comment on the company’s relationship with ConocoPhillips or any specific projects. ConocoPhillips didn’t respond to phoned request for comment. Lukoil declined to comment.

The Block 21 setback wasn’t Lukoil’s first in the region. In 2005, Lukoil failed to buy into Dragon Oil, a producer controlled by Emirates National Oil Co. that plans to invest $870 million in Turkmen oil and gas projects through 2012.

Russia has created an opportunity for Arab energy producers in Turkmenistan by failing to meet commitments to buy gas and expand partnerships, said Chris Weafer, chief strategist at Moscow-based UralSib Financial Corp. Arab Investment

Relations between the two countries soured when OAO Gazprom, Russia’s gas-export monopoly, stopped buying Turkmen gas last year following a plunge in world demand. Turkmenistan also blamed Russia for an explosion that damaged the gas pipeline linking the two countries.

Until last year, when China opened an export pipeline and Iran expanded its link, Russia had a near lock on gas supplies from Turkmenistan.

“The momentum of Arab investment in the Caspian has been under way for quite some time and it is expected to become significantly bigger over the next 10 years,” Weafer said, citing regional growth, proximity and cultural ties. ConocoPhillips spent $7.5 billion to buy 20 percent of Moscow-based Lukoil from 2004 to 2006 to develop an alliance. ConocoPhillips said it plans to sell half that stake for about $5 billion after the rise of resource nationalism in Russia and an increased tax burden frustrated their expansion plans.

Conoco, Iraq
Russia’s government has extended control over natural resources, bankrupting Yukos Oil Co., once the nation’s largest oil exporter, and selling its largest oil assets to state-run OAO Rosneft at auction. Amendments to resource laws favor state companies Rosneft and OAO Gazprom, which have gained licenses to so-called strategic deposits without competitive tenders.

ConocoPhillips and Lukoil’s one venture, the Yuzhno- Khylchuyu field in northern Russia, pumped 140,000 barrels a day last year after starting production in 2008, Lukoil said.

ConocoPhillips dropped plans to work with Lukoil in Iraq after an unsuccessful joint bid for the West Qurna-1 field. In October, the company announced plans to raise $10 billion selling assets, including the Lukoil stock, to reduce debt and buy back shares. Lukoil won the rights to the West Qurna-2 field in December with Norway’s Statoil ASA.

Oil & Gas Companies News in Turkmenistan >>

Technip Wins EPC Contract for Bangka Development in Indonesia
Indonesia >>  10/29/2014 - Technip was awarded a substantial subsea contract by Chevron Indonesia for the Bangka Development, located in Rapak PSC area, approximately 70km offsh...
Bechtel Awarded EPC Contract for Crude-Oil Storage Tanks in Kazakhstan
Kazakhstan >>  10/27/2014 - Bechtel has been awarded a contract to provide engineering, procurement, and construction services to build four crude-oil storage tanks at the Tengiz...

China Oil Demand in October 2014
China >>  10/26/2014 - Chinese oil consumption picked up momentum in August, growing by more than 0.36 mb/d, to stand at 10.39 mb/d, led by considerable growth in gasoline a...
Fluor & Technip Awarded RAPID Refinery Facilities Project in Malaysia
Malaysia >>  10/23/2014 - Fluor Corporation in a joint venture with Technip, was awarded an engineering, procurement and construction management contract by PRPC Utilities and ...

BP Awards FEED Contracts for Indonesian LNG Project
Indonesia >>  10/22/2014 - On behalf of the Tangguh Partners, BP is pleased to announce the following two consortia have been awarded the onshore Front End Engineering and Desig...
Lamprell Completed Second Caspian Sea Jackup Drilling Rig
Russia >>  10/21/2014 - Lamprell, a leading provider of fabrication, engineering and contracting services to the onshore and offshore oil & gas and renewable energy industri...



Related Categories: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  Food Supplies  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Skilled Labors  Transportation, 4X4 Trucks  Unskilled Labors  Utility Systems  Waste Disposal  Water Supply Services  Welding Products/Services 

Related Articles: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Transportation, 4X4 Trucks  Utility Systems  Water Supply Services  Welding Products/Services 


Turkmenistan Oil & Gas 1 >> 

More News

Oil & Gas Companies in Turkmenistan >>

Related Links

Countries Quick Links

AZ BD BN CN GE HK ID IN IR JP KG KH KR KZ MM MN MY PG PH PK RU SG TH TJ TM TW UA UZ VN
Gulf Oil and Gas E-Marketplace - About - Advertising - Competitive Intelligence - Talent Solutions - Membership Services Follow us on Facebook
Copyright © Universal Solutions All rights reserved. Privacy Policy. - Contact Us  Gulfoilandgas rss feed