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Gazprom may ask Germans extra pay for Arctic project

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MOSCOW (Reuters) - A joint venture between Gazprom and German Wintershall and E.ON Ruhrgas - Severneftegazprom may overestimate reserves in a year, and then its German partners may have to pay the group for participation in the Arctic project, said the head of the operating company project - Severneftegazprom Stanislav Tsygankov.

"It is possible that after the revaluation of stocks, the German partners will have to pay extra, as the resource base of the joint venture will grow," he said in an interview with Reuters.

German companies became part of the Severneftegazprom, which holds the license to develop the Yuzhno-Russkoye gas and condensate field in the Tyumen Region, in 2007 and 2009, receiving shares in the project in exchange for assets.

The field is the resource base of the new export gas pipeline - Nord Stream. Gazprom’s share in the project's economy is 40 percent, German Wintershall and E.ON Ruhrgas - 35 and 25 percent, respectively.

When creating a trilateral JV, the proven reserves of the field were estimated at 610 billion cubic meters of gas. Later it turned out that they are higher. The shareholders agreement provides for a reassessment of reserves in the third quarter of 2013, said the general director of Severneftegazprom.

"In October 2013, shareholders will clarify the amount of reserves that were taken in the calculations in the asset swap deal. In aggregate, we have reserves (C1C2) of the order of 1 trillion cubic meters of gas and 20 million tons of oil and gas condensate. Of course, we will not increase yet half a trillion, but growth is possible, "said Tsygankov.

He did not name the possible size of the "surcharge", but analysts believe that the German partners in the development of the Yuzhno-Russkoye field will have to pay Gazprom some billion dollars.

"The surcharge may be about $ 2 billion," said Nomos-Bank analyst Denis Borisov, who estimates the possible additional expenses of Gazprom’s German partners, expecting a gas increase of about 400 billion cubic meters. Severneftegazprom does not comment on these figures.


In the fall of 2011, Gazprom launched the first line of Nord Stream, starting to embody the dream of new export corridors bypassing transit countries. The capacity of the first stage is 27.5 billion cubic meters per year, that is, more than is produced in South Russian. The second line with the same capacity is planned to be launched at the end of 2012. Gazprom recently announced an ambition to bring the trunk capacity to 110 billion cubic meters.

The Yuzhno-Russkoye field is the main resource base for the gas pipeline, and analysts are surprised where the monopoly will take gas for the second line of the pipeline. Tsygankov is sure that there will be no problems with this: "We still have Bovanenkovo ​​injected - there are additional volumes. There is gas from small fields, there is gas from independent suppliers that falls into a single gas balance."

At the same time, he disagrees with the common opinion among analysts that in order to fill all existing and planned pipes and increase exports, Gazprom, whose production falls, needs to take more gas from independent producers and oil companies.

"The current demand, which exists - both export and domestic - is fully provided with the capacities of one Gazprom," said Tsygankov, adding that as soon as the price of fuel inside Russia becomes equal profitable exports, independent suppliers will not seek to sell gas for "very specific and complex "foreign market.

According to Russian laws, Gazprom is a monopoly exporter of gas, which makes all other producers, who dream of access to foreign markets, dissatisfied.

"This topic - let us export ... will disappear as soon as there is equal profitability within Russia," Tsygankov believes.

The Russian authorities have long been unable to agree on the timing of the liberalization of domestic prices, which are normally transferred for political reasons. Tsygankov believes that the question should not be delayed:

"In my opinion, it would be better for the gas industry to introduce an equal profit price in 2014-2015."

The forecasts of the authorities are much more conservative: officials are inclined to see the domestic gas market as profitable not earlier than 2017.


Analysts often blame Gazprom for being stagnant, which does not allow it to respond promptly to the dictates of the market. The Russian concern sells gas under long-term contracts that tie its price to the price of oil, but consumers one by one refuse such a formula. While the European Union is conducting anti-monopoly investigation against Gazprom, some European partners of the concern, which buy some of the gas on the exchange are cheaper than under long-term contracts with Russia, have already moved from criticism and exhortations to the courts.

With some dissatisfied, Gazprom managed to conclude the world in the winter and summer of this year. The last victory of the concern was last week, when he agreed to reduce the price with E.ON, who refused to continue the arbitration proceedings with the Russian monopolist. Gazprom promises to adapt its other contracts with European consumers to market conditions.

Gas exports to Europe from the Russian Federation are noticeably falling, and the concern itself, which supplies a quarter of the gas needed by European consumers, is going to cut its gas production plan in 2012.

For the year Gazprom planned to export 154 billion cubic meters of gas to Europe, but now it does not exclude that the total figure will be at the level of 150 billion.

"In the horizon of 2015-2020, Russia could, in my opinion, export gas approximately in the region of 180 billion (cubic meters per year). This figure is supported by demand ... The first reason is the depletion and decrease of our own European gas resources - Norwegian, Dutch. The second is the abandonment of nuclear energy. This will affect both the European market and the global one. And the third is the overall consumption growth and economic recovery, ”Tsygankov, who had been in charge of foreign trade depot for about 10 years, did not lose optimism. Gazprom tament.


Now Yuzhno-Russkogo gas is subject to a mineral extraction tax (MET) in full, but the JV, which is not an exporter, asks the authorities to apply a reduced rate for independent gas producers.

"We pay 509 (rubles per 1,000 cubic meters of gas from January 1), we believe that there is a need for our company to clarify (the amount of payment). We sent a letter to the Ministry of Finance regarding the applicability of this rate to us. In fact, we could apply preferential rate for those who do not have income from the export of natural gas, "- said Tsygankov.

The Ministry of Finance of the Russian Federation wants to significantly increase the NPDI both for Gazprom and for independent gas producers, but its position, having encountered strong resistance from the industry lobby, has not yet found support from the government. The authorities continue to discuss the key tax rates for seizing gas revenues in the domestic market.

Having extracted 25.65 billion cubic meters of gas in 2011, Severneftegazprom expects this year to slightly increase the production of fuel - up to 25.95 billion cubic meters.

Source:Thomson Reuters

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