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Far East Report Total spending a billion for stake in Russia’s OAK Novatek
French oil major Total SA will spend about $1 billion for a quarter of Russia’s OAK Novatek. The deal, announced Sept. 22, is the latest in a series by international companies seeking to gain a share of Russia’s reserves.
Total didn’t announce the exact price it is paying for the stake, but earlier reports said Total was set to pay about $1 billion for a Russian investment.
Novatek, which was set up in 1994, produces about 1.8 billion cubic feet of gas daily from three major western Siberian fields — Tarkosale East, Khanchev, and Yurkharov.
The fields have proved and probable reserves of about 4 billion barrels of oil equivalent. The latter two went into production in 2003, boosting Novatek’s production last year by nearly 50 percent.
Total’s investment will give it 25 percent plus one share in the Russian company, an amount that allows a shareholder to block major management moves. The deal has been submitted to the Russian antitrust agency for approval. Shell hits oil in deep water off Malaysia A partnership led by a Shell Oil Co. unit has made an “important oil discovery” in deepwater off Sabah, Malaysia, the company said Sept. 22.
“The Malikai-1 exploration well encountered a long oil column in very good quality reservoirs,” said Jon Chadwick, chairman of Shell Malaysia. “Initial indications are that Malikai crude oil is of a high quality. Another pleasing discovery.” Estimates of the size of the discovery weren’t released.
Sabah Shell Petroleum Co. Ltd. is operator of the discovery block, with 35 percent ownership. ConocoPhillips also has 35 percent with the remaining 30 percent held by Malaysia’s state-owned Petronas.
The well was drilled in 1,850 feet of water about 70 miles from the Gumusut field, also offshore Sabah, where an earlier discovery was made on behalf of the same partnership. Drilling began on the new well Aug. 4. Korea looking for LNG suppliers Korea Gas Corp. has started accepting bids for LNG supplies to begin in 2007, with Shell’s Sakhalin-2 project the closest potential supplier. But projects in the Middle East and southern Asia could also supply the 5 million tons of LNG Kogas wants annually, starting in 2008.
The company invited a dozen firms to bid on the LNG contract, and it could choose as many as three suppliers. Kogas didn’t say when it expected the deal to be announced.
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