Gazprom Neft is considering setting up a joint venture with LUKoil at a meeting in mid-November, said Alexander Dyukov, president of Gazprom Neft.
No decision has been passed on the joint venture thus far because "there hasn't been a need for this," he said. "We needed time to define the zone of mutual interests in the framework of a memorandum the two companies reached."
The companies signed the memorandum in May 2007. Gazprom Neft is to hold 51 percent and LUKoil 49 percent in the joint venture, with management on a parity basis.
New projects will be carried out as part of the joint venture, although it could also jointly develop the companies' existing fields, he said.
"Exploration and extraction will be a priority (in the work of the joint venture). Joint work on the shelf is not being considered, we will work on the continent," he said.
Dyukov also said that Gazprom Neft proposed that several foreign oil companies take part in the joint realization of projects involving the geological exploration at the company's licensed oil fields in eastern Russia, in particular the Lopukhovsky block on Sakhalin and in the Chukotka Autonomous District.
"We have yet to reach any agreements on such cooperation with anyone. If we agree, the realization of the projects will be carried out as part of the joint venture," he said, adding that the company issued proposals to Chevron, Shell and Statoil.
Gazprom Neft to invest $50B by 2020
Gazprom oil subsidiary plans to invest $4 billion annually until 2020 to double oil output, the company's chief executive told reporters.
Gazprom Neft, Russia’s fifth-largest oil producer, is struggling with dwindling oil production since its former owner, billionaire Roman Abramovich, sold the firm, then called Sibneft, to the gas giant in 2005, the Irish Independent reported.
The company, which in 2006 produced around 43 million tons of oil including its share in oil venture Slavneft, approved a development strategy last year that envisages production growth to at least 80 million tons by 2020.
Gazprom Neft President Alexander Dyukov said he expected Gazprom to transfer the right to develop all of its 11 oil deposits to Gazprom Neft within the next two to three years, which might help boost production. Gazprom Neft has not acquired a single major asset since approving its ambitious growth strategy.
Analysts said they suspect the Kremlin has decided that Gazprom should focus on gas while the state increases its grip over the oil industry.
Dyukov said Gazprom Neft was still considering acquisitions. The company earlier this year took a $2.2 billion foreign loan.
Indonesia's domestic airlines to raise fuel surcharges
Indonesian domestic airlines plan to raise fuel surcharges due to rising global crude prices.
Lion Air, which is known as a budget carrier, was expected to raise its fuel surcharge, Hasyim Arsal Alhabsy, its public relations manager, said Monday.
"This is inevitable in view of increasing crude oil prices, which are expected to hit another record high of $100 per barrel. But if later the crude prices go down, the fuel surcharge will be lowered accordingly," he was cited as saying by Asia Pulse.
He said the impact of fuel prices on production costs varied, depending on the types of airplanes.
"For B737-400s and B737-300s it is still ranging from 35 percent to 40 percent; for B737-900s it is above 30 percent and for B737-200s it exceeds 40 percent," he said.
Despite the increase in fuel surcharge, Lion Air's basic flight tariffs classified into nine sub-classes remained unchanged, he said.
"The impact is expected to be noticeable early in November. Will demand increase or vice versa?" he said.
Closing oil prices, Oct. 31, 3 p.m. London
Brent crude oil: $87.90
West Texas Intermediate crude oil: $90.49