Royal Dutch Shell Group .com Rotating Header Image

Daily Telegraph: Gazprom spurns West: Gazprom may be forced into rethink

(Filed: 10/10/2006)

Gazprom, Russia’s state-run gas company, will develop the $20bn (£11bn) Shtokman field itself, spurning offers from five Western producers to exploit the country’s biggest untapped natural-gas deposit.

Gazprom doesn’t need “international participation,” chief executive Alexei Miller said. Chevron, ConocoPhillips, Norsk Hydro, Statoil and Total had bid to help develop Shtokman’s 3,700bn cubic meters of gas, enough to supply the US for more than five years.

President Vladimir Putin is seeking a bigger share of output for state companies in Russia, the world’s largest oil and gas producer. The government last month threatened to delay Royal Dutch Shell $22bn Sakhalin-2 oil and gas project on environmental grounds, intensifying pressure on Shell to negotiate on selling Gazprom a stake in the venture.

Stephen Leeb of Leeb Capital Management in New York, who manages $30m invested in energy stocks, told Bloomberg: “Anyone that thinks Russia is going to cede any meaningful control of its energy assets to outside interests is dreaming.

“They’re much more interested in protecting these assets long-term than they are in exploring and developing them and using them for the world’s interest.”

Relations with the US have worsened as the administration of President George Bush delays its approval of Russia’s bid for World Trade Organization membership. Vice President Dick Cheney in May accused Russia of pressuring its neighbours through energy “blackmail”.

The companies on the Shtokman shortlist had faced numerous delays on a decision before the decision, which came without warning.

The announcement was “not expected,” Statoil said. The company, Norway’s biggest oil company, will discuss the decision with Gazprom and continues to pursue a long-term presence in Russia.

Chevron spokeswoman Margaret Cooper said: “Chevron has not been formally notified of any decision. Whatever the decision on Shtokman, Chevron looks forward to continuing to work on energy projects with Gazprom.”

Bill Tanner, a ConocoPhillips spokesman, said the company had received no official notification from Gazprom. Patricia Marie, a spokeswoman for Total in Paris, declined to comment, as did Petter Nore, head of Norsk Hydro’s Russian operations.

Shtokman was to become Gazprom’s first LNG project, allowing it to supply overseas customers beyond the reach of pipelines. Gazprom’s inexperience in producing LNG, gas chilled to a liquid that can be loaded on tankers, forced it to seek foreign partnerships.

“The priority is pipeline gas and deliveries to the European market, as opposed to liquefied gas,” Mr Miller said. He said the fuel will supply the Nord Stream pipeline, which will travel along the Baltic seabed to Germany.

The company couldn’t find a partner that would offer acceptable terms, Mr Miller added. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

Comments are closed.

%d bloggers like this: