Conditions improve for Russian Joint Ventures

Jan 27, 1997 01:00 AM

Western partners in some Russian oil joint ventures are beginning to reap rewards from their investments, but long term success is still far from secure, officials said. KomiArcticOil, a joint venture between British Gas and KomiTEK of Russia announced a 41 % hike in output last year over 1995 to 1.13 million tonnes, or 22,600 bpd, most of which was exported. KomiTEK's main producing unit is Komineft A KomiArcticOil official in Moscow said he was optimistic that production could rise again in 1997, but that this would depend on getting priority access to Russia's oil export system. There are roughly 40 joint ventures in Russia, producing about 330,000 bpd of crude oil. Russia's total output is 5.86 million bpd. They enjoy a bigger slice of exports, however, accounting for around one-tenth of total exports of 2.0 mmbpd. Foreign partners in joint ventures need to export the bulk, if not all of their share of output to remain profitable. Most ventures in theory have priority access to Russia's burgeoning export pipeline system, with a small group allowed to export 100 % of their output until September. But energy officials may not extend priority access beyond that date, threatening to limit the amount of oil joint ventures that can export. "If joint ventures are allocated pipeline access on the same basis as Russian companies, then for some only around 30 % of oil would get access (to the export system),'' said one Western oil industry source in Moscow. "Given the difference between world oil prices and domestic market prices this would represent a significant loss to them.'' Any tightening of access to Russia's export pipelines is seen as a barometer of how willing Moscow will be in coming years to let big foreign investors with output-sharing contracts export the volumes they need. Most of the projects will require new pipelines, but in the initial stages they will probably use existing infrastructure. But conditions for some of the biggest joint ventures in Russia, including KomiArcticOil, improved recently when a government decree said certain ventures would pay a privileged 20,000-rouble tariff on each tonne of oil produced. "The duty reduction will have a positive effect on output as well as on profits (for these companies),'' Stefanovski said. The new rate was long sought by qualified joint ventures with priority access to Russia's pipeline system. The old rate was just over 56,000 roubles. Qualified joint ventures are those with export tariff exemptions. Other joint ventures will pay higher output duties, while Russian oil companies will pay duties in a new range which lowers the average duty to 55,000 roubles from 72,000 roubles.

Source: not available
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« October 2020 »
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31

Register to announce Your Event

View All Events