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Five applicants invited to further discuss Shtokman Chevron, ConocoPhillips still in the running for Gazprom’s giant Arctic natural gas project on the Russian side of the Barents Sea Ray Tyson For Petroleum News
Gazprom evidently has invited all five applicants, including U.S. majors Chevron and ConocoPhillips, to further discuss joint venture proposals to help the Russian gas monopoly develop its giant Shtokman natural gas field, located on Russia’s side of the gas-rich Arctic Barents Sea.
However, industry analysts believe state-owned Gazprom may not pick ConocoPhillips and Chevron for the project because of increasingly chilly relations between Russia and the United States. Still, the two U.S. oil majors appear to be in the running.
“We are now continuing to analyze proposals from all five companies from the short-list,” Gazprom spokesman Sergei Kupriyanov said in a Reuters’ news story published Sept. 6.
Chevron and ConocoPhillips have long been considered to be on Gazprom’s short-list for the Shtokman project.
Statoil, Norsk Hydro, Total on list However, after several high-profile delays this year, Gazprom is reported to have said its final choice on a partner or partners for the Shtokman project would not be made until 2007. Other international majors vying for a spot on the Shtokman team, and also said to be invited to continue talks with Gazprom, are Norway’s Statoil and Norsk Hydro and France’s Total.
Statoil and Norsk Hydro confirmed they had received the invitation after Total said its president had received a letter asking the company to prepare to resume talks on developing Shtokman, according to Reuters. The news agency also said that Chevron confirmed it had received an invitation, while ConocoPhillips could not be reached for a comment.
“We think it is just to let the companies know we are still working on this and will contact you,” Statoil’s spokesman Ola Morten Aanestad said of the Gazprom invitation.
Chevron remains interested in the Shtokman project and has submitted what it considers a competitive tender, Chevron spokesman Don Campbell said.
Estimated reserves 130 tcf The Shtokman gas field is about 342 miles from Russia and Norway, and has estimated reserves of around 130 trillion cubic feet of gas and 31 million tons of condensate. The project includes field development and construction of a gas liquefaction terminal in northern Russia.
However, largely because of its location in the remote iceberg-clogged Barents Sea, Shtokman development is projected to cost in excess of $20 billion. Nevertheless, a stake in developing the giant field has proved to be a keenly sought-after prize, particularly for an industry faced with depleting worldwide reserves.
The Shtokman project has been on the table for more than a decade, and forecasts for field startup have ranged from 2011 to 2015 to as late as 2020.
Just prior to Gazprom’s last delay this summer analysts had speculated Russia might postpone the massive Shtokman project due to the high cost of Arctic development or due to political infighting over Shtokman taxes.
Another theory had Russia deliberately holding back Shtokman development to drive up natural gas prices on the world market.
Yet another theory had Russia using Shtokman as a bargaining chip to gain U.S. support for its bid to become a member of the World Trade Organization, and caught in the middle were Shtokman hopefuls ConocoPhillips and Chevron.
Russia also didn’t take kindly to harsh remarks made in early May by U.S. Vice President Dick Cheney that Russia was playing energy politics with its neighbors.
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