Rosneft sells its share in shelf projects to Gazprom

Dec 29, 2004 01:00 AM

Rosneft and Gazprom concluded a high-profile commercial deal the other day. The oil company sold Russia's gas monopoly its stake (about 70 % of shares) in Sevmorneftegaz for $ 1.7 bn. The same amount had been deposited by BaikalFinansGroup to participate in the auction for 77 % of the shares of Yuganskneftegaz (BaikalFinansGroup was subsequently acquired by Rosneft).
Rosneft returned the proceeds from the deal with Gazprom to Surgutneftegaz, which had given money to BaikalFinansGroup through Sberbank so it could bid in the auction for Yukos's core production unit.

Sevmorneftegaz was established on a parity basis in 2002 by Rosneft-Purneftegaz and the company Rosshelf, which was founded by Gazprom.
In its turn, Rosneft owns about 40 % of the shares in Rosshelf. Sevmorneftegaz holds licenses for the development of the Prirazlomny oil field and the Shtokman gas condensate deposit (both of them are in the Barents Sea). The recoverable resources of the Shtokman deposit include 3.2 tcm of gas and 27 mm tons of oil. The recoverable resources of the Prirazlomny deposit are 83 mm tons of oil.

For Gazprom, this deal is a kind of a short-term loan given to Rosneft, which it will take over in 2005. During the establishment of Sevmorneftegaz, Rosneft did not pay any money, although its investment in the prospecting of the Shtokman and Prirazlomny deposits totalled about $ 500 mm.
Such substantial expenditures incurred by Gazprom do not fit into its investment program for 2004 (192 bn roubles; $ 1 = 27.77 roubles).

Apparently, Gazprom had to take out additional loans to enable Rosneft to pay for the Yuganskneftegaz deposit. Now it will also have to look for the remaining sum necessary to make settlements for the auction.
It might receive loans from Russian banks, which in their turn will raise funds from their Western partners.

Source: PetroEnergy Information Network
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