Page 13 - FSUOGM Week 27

FSUOGM INVESTMENT FSUOGM

Rosneft eyes Russian

drilling business

RUSSIA RUSSIA’S Rosneft is looking to acquire a drill- barrels per day (bpd) of crude, accounting for a
ing business from IDS Group, a Russian firm third of Rosneft’s total output.
Rosneft has been belonging to business Artur Dulgery and Gadzhi It is unclear how much the oil company is
wanting to expand Gadzhiyev, Reuters reported on July 7. paying for IDS Navigation. News of the acquisi-
its inhouse drilling for Citing a letter to IDS employees, Reuters said tion plan comes as Russia prepares state support
some time. Rosneft intended to take over or merge with for oil firms to work on almost 3,000 new wells
telemetry specialist IDS Navigator through its that will remain unfinished until the OPEC+
Intellectual Systems subsidiary. IDS Navigator agreement expires. This will allow producers to
helps operators guide drilling equipment while quickly ramp up supply and claw back market
a well is being sunk. The Russian oil giant could share from competitors. OPEC+ restrictions are
acquire other IDS assets as well, a source told the due to remain in force until early 2022, but will be
news agency. gradually eased between now and then.
Rosneft has long sought to reduce its depend- Moscow is drawing from the practices of US
ency on third-party oilfield services providers. shale companies, which sometimes drill but do
The company in 2006 set up its own services unit, not complete wells when oil prices are low, and
RN-Burenie, which now boasts 267 rigs and 202 then finish them when prices are high enough.
drilling crews. But it still relies on other, private The 3,000 wells are expected to flow roughly
drillers, and Rosneft CEO Igor Sechin has com- 200,000 bpd.
plained that these subcontractors cost too much. The support scheme proposed by Russia’s
IDS is among the main contractors working energy ministry will see state-owned banks such
for Yuganskneftegaz, a former Yukos asset that as Sberbank and VEB provide companies with
is now Rosneft’s largest upstream subsidiary, up to RUB400bn ($5.6bn) in soft loans to drill
according to Reuters. It produces around 1.4mn the wells. ™

BP eyes upstream opportunities

in Kazakhstan

KAZAKHSTAN BP is interested in joint exploration in Kazakh- Rosneft.
stan with national oil company (NOC) KazMu- Last year, though, BP signed a memorandum
BP left Kazakhstan over nayGas (KMG), a KMG official told local press of understanding (MoU) with KMG on subsoil
a decade ago. on July 7. data study. And at the start of this year, the pair
Speaking with Forbes Kazakhstan, KMG signed an agreement of intent on joint explora-
board member Dastan Abdulgafarov said the tion activities.
pair had identified potential subsoil areas for “Areas of mutual interest were identified, an
study, and aimed to agree a contract for explora- assessment was conducted and negotiations are
tion and production. planned to take place with the aim of reaching
BP was once a shareholder in the Chev- an exploration and production contract,” Abdul-
ron-operated Tengiz oilfield, which today is gafarov said.
Kazakhstan’s largest single source of oil produc- Recent years have seen relatively few
tion. But the UK major quit the project in 2009, upstream projects advancing in Kazakhstan,
selling its stake to Russia’s Lukoil, and withdrew whose basins are now mostly mature follow-
from the Central Asian state completely. ing extensive development in recent years. The
Instead BP has focused its attention in the government introduced tax and subsoil reforms
region on Azerbaijan, where it is the number during 2018, however, in an effort to attract more
one foreign investor. It is also a major oil player investors. The following year Russia’s Lukoil
in neighbouring Russia, where it holds a minor- signed up to new projects in the Kazakh section
ity stake in the country’s largest oil producer of the Caspian Sea. ™

Week 27 08•July•2020 www. NEWSBASE .com P13