Post by marchesarosa on Jan 17, 2013 11:01:27 GMT 1
BP in secret talks with Gazprom to pipe Russian gas supply to Britain by 2016
By LISA BUCKINGHAM, FINANCIAL MAIL ON SUNDAY and TOM MCGHIE, FINANCIAL MAIL ON SUNDAY
PUBLISHED: 22:49, 24 November 2012
BP has opened secret talks with Russia’s state-owned energy giant Gazprom to help build a pipeline to bring vast quantities of gas into Britain by 2016. David Peattie, BP’s director for Russia, said talks were at ‘an early stage’ but Financial Mail understands that David Cameron has given the thumbs-up to a deal.
The Prime Minister discussed the plan with President Vladimir Putin when they met at the Olympics. Peattie said a deal could be signed as early as the middle of next year. The contract will follow BP’s recent deal to take a 20 per cent stake in Russia’s Rosneft.
A re-evaluation of its exploitable reserves is under way and is expected to lead to shares of both companies being re-rated by the stock market. Senior BP executives estimate the investment in Rosneft could eventually yield $50billion (£31billion) and make it as profitable as its TNK/BP joint venture. BP wants to help to extend the Nord Stream gas pipeline – which runs from Vyborg near St Petersburg to Greifswald in northern Germany – to Norfolk. It is understood that buying a stake in Nord Stream will cost BP about $300million.
Putin is on the record as saying he would like Gazprom to supply 20 per cent of Britain’s gas, making it the country’s second-biggest supplier after British Gas. Although Russia cut off gas supplies for four days in 2006 in a dispute with Ukraine, Moscow has provided Germany with about 40 per cent of its gas virtually uninterrupted for the past 40 years.
Sources close to the negotiations predict that the 600-mile pipeline extension could be completed in about two years.
Feasibility studies are already under way and the sources suggest that the project appeals to Downing Street because it offers diversity of supply, reducing Britain’s expected dependence on imported liquefied natural gas from the Middle East and potentially from the US.
Nord Stream, which allows Russian gas to bypass Ukraine, is 51 per cent-owned by Gazprom with the remaining share divided between German energy giants Eon and Wintershall, GDF Suez of France and Gasunie of the Netherlands. The business is chaired by former German Chancellor Gerhard Schroeder.
Gas pipes: Sources close to the negotiations predict that the extension could be completed in about two years
The pipeline deal will boost BP’s growing involvement in the Russian energy market, which was sealed earlier this year when it agreed to swap its 50 per cent stake in TNK/BP for $12.3billion in cash and a 20 per cent share of Rosneft. BP is expected to reveal early next year that it will get a share of an expected 10 billion barrels of oil that will come from helping Rosneft – which is about to become the world’s biggest oil and gas producer – to exploit between 40 and 50 per cent of the capacity of its wells rather than the 30 per cent it achieves at present.
Executives suggest that the savings of $300million to $400million a year – which Rosneft reckons it can achieve by integrating the parts of TNK/BP that it is taking over – will in reality be substantially higher.
It has also emerged that BP is in a leading position to exploit Bazhenov in western Siberia, the world’s largest shale oil find, estimated to be 80 times bigger than the US’s Bakken field and roughly equivalent to the entire production of the North Sea.
There is already a pipeline infrastructure in place, built for traditional oil exploration. Exploiting shale oil and extracting more from existing fields will provide BP with so much work that it is unlikely to start test drilling in the Arctic until at least 2027.
Read more: www.thisismoney.co.uk/money/news/article-2237831/BP-secret-talks-Gazprom-pipe-Russian-gas-supply-Britain.html#ixzz2IE1zhL44
Follow us: @mailonline on Twitter | DailyMail on Facebook
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Hardly surprising that BP is talking down the impact of shale gas fracking in the UK, is it? It would stymie its sweet deal with Putin! Maybe the Greens should be turning their attention to the BP-Russia nexus instead of squealing about domestic fracking. The gas is going to be consumed here whatever they say, so it might as well be from domestic sources with all the domestic benefits to the economy and employment.
By LISA BUCKINGHAM, FINANCIAL MAIL ON SUNDAY and TOM MCGHIE, FINANCIAL MAIL ON SUNDAY
PUBLISHED: 22:49, 24 November 2012
BP has opened secret talks with Russia’s state-owned energy giant Gazprom to help build a pipeline to bring vast quantities of gas into Britain by 2016. David Peattie, BP’s director for Russia, said talks were at ‘an early stage’ but Financial Mail understands that David Cameron has given the thumbs-up to a deal.
The Prime Minister discussed the plan with President Vladimir Putin when they met at the Olympics. Peattie said a deal could be signed as early as the middle of next year. The contract will follow BP’s recent deal to take a 20 per cent stake in Russia’s Rosneft.
A re-evaluation of its exploitable reserves is under way and is expected to lead to shares of both companies being re-rated by the stock market. Senior BP executives estimate the investment in Rosneft could eventually yield $50billion (£31billion) and make it as profitable as its TNK/BP joint venture. BP wants to help to extend the Nord Stream gas pipeline – which runs from Vyborg near St Petersburg to Greifswald in northern Germany – to Norfolk. It is understood that buying a stake in Nord Stream will cost BP about $300million.
Putin is on the record as saying he would like Gazprom to supply 20 per cent of Britain’s gas, making it the country’s second-biggest supplier after British Gas. Although Russia cut off gas supplies for four days in 2006 in a dispute with Ukraine, Moscow has provided Germany with about 40 per cent of its gas virtually uninterrupted for the past 40 years.
Sources close to the negotiations predict that the 600-mile pipeline extension could be completed in about two years.
Feasibility studies are already under way and the sources suggest that the project appeals to Downing Street because it offers diversity of supply, reducing Britain’s expected dependence on imported liquefied natural gas from the Middle East and potentially from the US.
Nord Stream, which allows Russian gas to bypass Ukraine, is 51 per cent-owned by Gazprom with the remaining share divided between German energy giants Eon and Wintershall, GDF Suez of France and Gasunie of the Netherlands. The business is chaired by former German Chancellor Gerhard Schroeder.
Gas pipes: Sources close to the negotiations predict that the extension could be completed in about two years
The pipeline deal will boost BP’s growing involvement in the Russian energy market, which was sealed earlier this year when it agreed to swap its 50 per cent stake in TNK/BP for $12.3billion in cash and a 20 per cent share of Rosneft. BP is expected to reveal early next year that it will get a share of an expected 10 billion barrels of oil that will come from helping Rosneft – which is about to become the world’s biggest oil and gas producer – to exploit between 40 and 50 per cent of the capacity of its wells rather than the 30 per cent it achieves at present.
Executives suggest that the savings of $300million to $400million a year – which Rosneft reckons it can achieve by integrating the parts of TNK/BP that it is taking over – will in reality be substantially higher.
It has also emerged that BP is in a leading position to exploit Bazhenov in western Siberia, the world’s largest shale oil find, estimated to be 80 times bigger than the US’s Bakken field and roughly equivalent to the entire production of the North Sea.
There is already a pipeline infrastructure in place, built for traditional oil exploration. Exploiting shale oil and extracting more from existing fields will provide BP with so much work that it is unlikely to start test drilling in the Arctic until at least 2027.
Read more: www.thisismoney.co.uk/money/news/article-2237831/BP-secret-talks-Gazprom-pipe-Russian-gas-supply-Britain.html#ixzz2IE1zhL44
Follow us: @mailonline on Twitter | DailyMail on Facebook
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Hardly surprising that BP is talking down the impact of shale gas fracking in the UK, is it? It would stymie its sweet deal with Putin! Maybe the Greens should be turning their attention to the BP-Russia nexus instead of squealing about domestic fracking. The gas is going to be consumed here whatever they say, so it might as well be from domestic sources with all the domestic benefits to the economy and employment.
