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Gazprom's solo gas plans unrealistic: report
AFP
MOSCOW
Petroleumworld.com 10 10 06
Russian gas monopoly Gazprom's surprise announcement that it would develop the world's largest gas field without foreign partners may prove impossible to carry out, Russian newspapers quoted energy company sources as saying Tuesday.
Gazprom CEO Alexei Miller shocked foreign energy companies Monday by saying his company would develop the Shtokman gas field in the Barents Sea without the help of foreign partners, which had previously been thought indispensible.
But a Gazprom manager told daily Vedomosti that Gazprom may not be able to go it alone.
"The development of Shtokman will cost no less than 40 to 50 billion dollars (32 to 40 billion euros), and to take that on without a partner is too risky," the manager said.
"It would be necessary to draw huge amounts of credit, and moreover, Gazprom does not have the necessary technology," he said.
Gazprom officials -- and even Russian President Vladimir Putin -- had previously signalled that at least one Norwegian energy company would be named as a Shtokman partner due to their experience working in the rough, technically demanding Barents Sea.
The five foreign companies shortlisted to help develop the field were Norway's Norsk Hydro and Statoil, US majors Chevron and ConocoPhillips, and France's Total.
Even if Gazprom can manage the project on its own, "it is unlikely that Shtokman can come on line in 2011-2012 as planned," the Gazprom manager said.
He also said that Gazprom had been motivated by the massive potential profits from the field, which contains 3.7 trillion cubic meters of gas.
"The Shtokman reserves are currently worth 16 billion dollars, but in five to seven years their value will increase to 50 billion dollars," he said.
But a source close to the shortlisted Norwegian companies, Statoil and Norsk Hydro, added his own doubts as to whether Gazprom could manage the challenges of the field, daily Kommersant reported.
The source pointed out that Gazprom has yet to develop a single offshore deposit, and said technical difficulties would prevent the company from meeting its production target date of 2011.
"You can't buy the technology, you have to develop it," he said.
Kommersant also quoted representatives of the Norwegian companies as saying that without full partnership, they would not be interested in contributing their expertise to the project.
AFP 10 0548 GMT 10 06
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