UPI Energy Watch

WASHINGTON, Nov. 27 (UPI) -- Gazprom: Foreign firms may have Shtokman role

Western companies will be allowed to join the Shtokman gas project, a top Gazprom official has said.

"We would like our future partners to make an upward revision of potential earnings they can get from this very important field," said Alexander Medvedev, deputy chairman of Gazprom's board, in an interview with the French newspaper Echos on Monday.

He described as "purely economic" Gazprom's recent decision to develop the field on its own.

He said Western firms may participate as project operators and on shared liabilities terms.

In October, Gazprom said it would develop Shtokman itself. At the time, Alexei Miller, chief executive of Gazprom, said the five companies likely to be offered a total of 49 percent of the $27 billion project couldn't make a good enough offer.

He said the gas will also no longer be available for U.S. markets and would instead flow to Europe.

U.S.-based Chevron and ConocoPhillips, Statoil and Norsk Hydro of Norway and Total of France were the companies bidding for the job.

According to the Itar-Tass news agency, Shtokman has 3,700 billion cubic meters of natural gas and more than 30 million tons of gas condensate.

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Official: Russian gas to Belarus at $200 per 1,000 cu. m 'fair'

A price of $200 per 1,000 cubic meters for Russian gas to Belarus next year will be fair, Viktor Baranov, head of the Independent Gas Producers' Union, said Monday.

"No customs union can be an argument for selling gas at a loss," he told Ekho Moskvy radio. "All countries must purchase gas at economically fair prices."

The comments were reported by Itar-Tass.

Baranov, president of the Inter-Regional Exchange of the Oil and Gas complex, acknowledged that Belarus might not be able to withstand those prices, but said Minsk could sell half its gas transportation system Beltransgaz to Gazprom.

"This price of gas exported to Belarus may to a certain extent compensate for loss-making gas sales in Russia's domestic market," he said.

Last week, Belarus President Alexander Lukshenko complained unequal gas prices with Russia could endanger a union of the two states.

"As for Belarus and Russia, please agree in principle that it is not important what the price will be, either $50 or $120 dollars (per 1,000 cu.m.) It is not important," he said Thursday. "The important thing is that this price be the same in Belarus and Russia. This is the essence of equal conditions for business entities."

He said he and former Russian President Boris Yeltsin signed accords creating equal conditions for businesses from the two countries.

"If conditions are different, the conclusion is categorical," he said "This is not the single state that we were planning to construct."

Russia has raised the price of gas sold to former Soviet states, saying they need to reflect market rates. Most of Western Europe pays $230 per cu.m.

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Saudis back OPEC cuts

Saudi support for a production cut by OPEC are likely to push prices up until the cartel acts Dec. 14 at its meeting in Nigeria.

"We will first assess the impact of the measures that were decided on at the Doha meeting last month and if they serve the purpose of bringing stability in the global market, then we will not act," Ali al-Nuaymi, minister of petroleum and mineral resources, said Sunday. "But, if these measures fail, then further cuts cannot be ruled out."

The comments came in the Saudi capital, Riyadh, at an energy event, "International Joint Oil Data Initiative (JODI) Conference."

The Organization of Petroleum Exporting Countries is to meet in Abuja, Nigeria, Dec. 14 and decide on its course of action. Last month, in a bid to stem a 25 percent slide in oil prices from over the summer, the cartel cut production by 1.2 million barrels a day, but that move had little effect on prices, which are at $60 levels.

Nuaymi also said prices will not be the only factor OPEC will take into account while making its decisions. He said high oil stocks in industrialized nation were leading to an imbalance in supply and demand and could force OPEC to cut production.

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Closing oil prices, Nov. 27, 3 p.m. London

Brent crude oil: $ 58.91

West Texas Intermediate crude oil: $ 58.10

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(Comments to energy@upi.com)

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(Energy Watch's regular writer, Andrea R. Mihailescu, is on vacation)