Page 7 - FSUOGM Week 48 2019

FSUOGM PIPELINES & TRANSPORT FSUOGM
Vitol eyes Turkmen oil product trade
TURKMENISTAN
Earlier this year Vitol snatched Caspian oil trade away from rival SOCAR.
TOP global oil trader Vitol has landed a deal to export fuel oil and diesel from Turkmenistan from the Russian Black Sea port of Novorossiysk, sources told Reuters on December 2.
The breakthrough comes after Vitol was able earlier this year to outbid rival trader SOCAR, Azerbaijan’s national oil company, for the bulk of Turkmenistan’s eastbound oil exports. SOCAR operates the largest tanker fleet in the Caspian Sea, and refused to let Vitol use its vessels in order to protect its interests.
Vitol initially struggled to obtain enough tankers to handle the oil it had agreed to take from Turkmenistan, reportedly causing a dis- ruption to the country’s exports. The company was successful, however, and is now seeking to compete with SOCAR for the trade of Turkmen oil products as well, Reuters sources said.
Most of Turkmenistan’s oil products are sold to Azerbaijan or exported to Black Sea markets via ports in Georgia. Some traders also use the Volga-Don shipping canal in Russia but this route is typically shut between November and April because of ice.
Vitol won a tender to buy oil products from the Turkmenbashi refinery in Turkmenistan this year, sources told Reuters, although it has taken
the company some time to sort out logistics.
“In December the first, test shipment [via Novorossiysk] is planned. If everything goes well, next year they expect to supply around 500,000 tonnes [of oil products],” one source
told Reuters.
From Turkmenbashi, the supplies would
need to be shipped across the Caspian to Russia’s Makhachkala port and then loaded onto rail for transport to Novorossiysk.
Turkmenbashi is the larger of two refineries in Turkmenistan, the other one being the Seydi plant. The pair have a combined oil throughput capacity of 271,000 barrels per day, or around 13.5mn tonnes per year (tpy), according to BP statistical data, but processed just 171,000 bpd in 2018.
Oil products from Turkmenbashi are usu- ally sold in annual tenders. The main buyers are Maddox, a trading firm affiliated with SOCAR, Dubai-based Turkmen Petroleum, Coral Energy and several other traders, according to Reuters.
“Competition for Turkmen oil products is pretty tough, it is certainly not an easy thing to secure half a million tonnes of oil products for the next year,” a source said.™
INVESTMENT
Russia delays approval of Shell-Gazprom Neft JV
RUSSIA
Several largescale foreign investments in Russia’s oil industry have been blocked in recent years.
RUSSIAN’S Federal Antimonopoly Service (FAS) has delayed its approval of an upstream joint venture between Gazprom Neft and Royal Dutch Shell because of technical reasons, it said on November 28.
The regulator revealed last month it had postponed its decision on Shell’s purchase of a 50% stake in Gazprom Neft subsidiary Mere- toyakhaneftegaz by three months – a deal valued at RUB9.3bn ($146mn).
Meretoyakhaneftegaz holds rights to the Meretoyakhinskoye oilfield in Western Siberia. Gazprom Neft is also set to grant it control of the Tazovskoye and North-Samburgskoye fields, and the West-Yubileisky block, before the deal with Shell is closed.
FAS has not disclosed any further details on why its approval has been delayed. But agency head Igor Artemyev told reporters in November that there were “good chances” that the transac- tion would be greenlighted.
Russian regulators have taken a cautious approach to clearing Western investments in the
oil industry in recent years, because of the risk of new sanctions that could impair strategically valuable companies and assets. Several large- scale transactions have been blocked, including two bids by Schlumberger for a stake in Russia’s top oilfield services provider Eurasia Drilling (EDC), and Haliburton’s proposed purchase of equipment supplier Novomet. The two compa- nies are set to be bought by Chinese, Russian and Middle Eastern investors instead.
Gazprom Neft and Shell, which are already partnered at the Salym fields in Western Siberia, have been discussing forming a new joint ven- ture in the region for several years. Tazovskoye, the largest of the assets to be included in the new partnership, contains 438mn tonnes (3.2bn bar- resls) of oil and 186bn cubic metres of gas.
Gazprom Neft began trial development drill- ing at Tazovskoye last year and hopes to launch full-scale production in 2021. It plans to drill 132 oil and 10 gas wells, with oil output set to peak at 2.1mn tonnes (42,000 barrels per day) in the 2020s. ™
Week 48 04•December•2019 w w w . N E W S B A S E . c o m P7