Page 69 - RusRPTJune18

Gazprom Neft and Lukoil have built 20 out of 42, 8 out of 10 and 10 out of 15 refinery units, respectively.
China warned Russian state-owned oil major Rosneft and Vietnam against joint extraction in the contested South China Sea (SCS), as Chinese Foreign Ministry spokesman Lu kang issued an unusually sharply worded statement addressing the companies. "We urge the relevant parties to respect China's sovereign rights, interests and jurisdiction and stop doing things that affect bilateral relations, regional peace and stability," Kang is quoted as saying by Tass and Indian The Economic Times on May 17. No country, organisation, or individual have the right to carry out exploration and extraction activities in the China-controlled basin, he stressed, referring to Lan Do field in the SCS jointly developed by Rosneft, PetroVietnam, and Indian ONGC (35%, 20%, and 45%, respectively). Rosneft representatives told RBC business daily that oil fields in question are controlled by Vietnam "in accordance with international law." The presidential spokesman Dmitri Peskov told Interfax that Rosneft did not consult Kremlin on drilling in the SCS. "The project in the SCS has been developed for 16 years, and until now it has not raised any concerns," unnamed Rosneft representatives told RBC, adding that all "international legal norms" are followed. Rosneft inherited the SCS fields from TNK-BP oil major it acquired in 2013, which in turn owned the extraction licences thanks to ownership of British Petroleum that discovered the Lan Do and Lan Tai fields in contested waters back in 1990's. Analysts surveyed by RBC believe that Vietnam project is not critical in Rosneft's extraction portfolio, but note the extraordinarily harsh tone of the Chinese statement given tight Russo-Chinese cooperation in the energy field .
Russia’s state-run gas giant Gazprom and Turkey signed a protocol on May 26 on a land-based part of the transit leg of the TurkStream gas pipeline , due to supply Russian gas to European customers, Gazprom said. In addition to the protocol, Gazprom and Botas inked an agreement on conditions and parameters for the section construction, which would enable the sides to take practical steps in the project. The TurkAkim Gaz Tasima A. S. joint venture will be set up to build the land-based part of the pipeline. In September last year, Gazprom's Management Committee approved creating a joint project with Turkish Botas for the construction of the overland section of the TurkStream gas pipeline. Gazprom acquiring of 50 shares in the joint project company TurkAkim Gaz Tasima A.S. with a total value of 50,000 Turkish lira was also approved, which is 50% of the authorized capital of the joint company.
The price of liquefied natural gas (LNG) from the United States for Europe is at least 30-40% higher than that of Russian pipeline gas , Russia’s Energy Minister Alexander Novak said in an interview aired by RBC business news channel at the St. Petersburg International Economic Forum.
Turkey and Russia have reached an agreement on gas discount for supplies in 2015 and 2016 worth $1bn, Anadolu Agency reported with reference to Turkish President Tayyip Erdogan on May 26. "Turkey turned to Russia in 2015 asking for a discount for natural gas. The Russian side rejected the request, which prompted Ankara to turn to international arbitration. Long discussions resulted in an agreement to provide a discount amounting to 10.25% for gas supplies in 2015 and 2016. The difference in payments for those two years of $1 bln will be returned to the republic," President was quoted as saying.
Gazprom has hinted that it may exceed its 475bn cubic meter (bcm) production expectations for 2018 . The company hopes to press ahead with drilling works on the Sakhalin Island shelf with the aid of foreign equipment in 2019, but would likely have to find an intermediary buyer willing to take on sanctions risk themselves if it wants to import anything from the US or EU. Project documentation is reportedly being finalized for four gas fields in Iran.
69 RUSSIA Country Report June 2018 www.intellinews.com