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North America's Source for Oil and Gas News
August 2004

Vol. 9, No. 35 Week of August 29, 2004

Yukos sells stake in gas producer to TNK-BP

Allen Baker

Petroleum News

NK-BP has obtained the majority stake in a Siberian gas venture from beleaguered OAO Yukos in a convoluted deal, according to Russian sources. Yukos received $357 million for its share of Rospan International. TNK-BP had been the minority partner in the Rospan venture, according to an article in the Kommersant daily.

Assets of Yukos have been frozen by the Russian government, but the Rospan stake was held by an overseas subsidiary. TNK-BP announced early in August that it was buying the Rospan assets, where it is the operator.

Yukos, the country’s biggest oil producer, faces an escalating tax bill in Russia, which says the company owes more than $3 billion in back taxes for 2000 alone.

Two banks reportedly pull plug on TNK-BP loan

A bank loan to TNK-BP that would have given the joint venture about $600 million has been scaled back after two big European investors pulled out, according to the Financial Times in Great Britain.

The loan was to be secured by future export receivables and have a maturity in five years. BP has a 50 percent stake in the venture, which ranks third in oil production among Russian firms.

But Societe Generale and ING have apparently pulled out over fears that property rights in Russia might not be secure, according to the Financial Times. Eight banks were originally involved in the loan, which may now be cut to $400 million or so.

Husky Energy signs deal for exploration in South China Sea

Husky Energy has signed a deal to explore for oil in a block of the South China Sea covering about 3,900 square kilometers, or roughly 964,000 acres.

The agreement with the China National Offshore Oil Corp., announced Aug. 16, calls for Husky to drill a well in the deepwater block next year, subject to rig availability, and to drill two additional wells before 2011.

Husky will pay all the costs, with CNOOC having the right to back into the development with a 51 percent interest.

Average water depth on the block about 180 miles southeast of Hong Kong is about 4,300 feet. CNOOC has shot significant amounts of 2-D seismic on the block already, and it is considered to have good potential.

Husky already has a 40 percent working interest, in partnership with CNOOC, in the successful Wenchang field off China, which is expected to yield 18,000 to 20,000 barrels daily net to Husky over the course of the current year.

Husky now has a total of about 6.2 million acres of exploration acreage in the South China Sea and the East China Sea.

Russian government to sell OAO Lukoil shares by year’s end

The 7.59 percent of OAO Lukoil held by the Russian government will be sold by the end of the year, according to a Russian minister quoted by the news agency Itar-Tass on Aug. 19.

Andrei Sharanov said the package of 64.6 million Lukoil shares would be sold in a lot at auction. The government has set a minimum price of $1.26 billion for the shares.

ConocoPhillips has been considered the leading contender to buy the stake, and executives of that company met recently with Russian officials.

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