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11/21/02Pravda--RUSSIAN OLIGARCHS PANIC OVER OIL,
Russian oil companies striving for access to oil pipelines

Pravda
November 21, 2002

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RUSSIAN OLIGARCHS PANIC OVER OIL
Oligarchs want to get hold of a wealthy oil deposit. The state puts obstacles on their way

There is a real panic in the country of oil oligarchs. The panic is connected with the auction for the right to develop the Talakansky oil and gas deposit in the Yakutia republic. The situation is getting more serious, because the Russian Ministry for Nature has already cancelled the results of the tender that took place in the year 2001. Russian oligarchs complained of that to Russian Vice Prime Minister Viktor Khristenko.

The oligarchs expressed their complaints about the situation with the oil deposit auction in a letter. Mikhail Khodorovsky, the chairman of the administrative board of the oil company Yukos, Sibneft's President Yevgeny Shvidler, and deputy chairman of the Tyumen Oil Company, German Khan, sent their letter to Vice Prime Minister of the Russian government, Viktor Khristenko.

In the letter, the oligarchs wrote that the decision of the Ministry for Nature touched upon their own financial interests. They also wrote that the ministry was going to cancel the auction for the right to develop the Talakansky oil deposit and then hold another competition. The oligarchs asked the vice prime minister to consider the current situation about the issue and to take urgent measures about it. This was informed by the Oil Information News Agency.

Russian Minister for Energy, Igor Yusufov supported oligarchs' concern as well. Yusufov wrote a letter to Prime Minister Mikhail Kasyanov, in which it was said that the Ministry for Nature tried to restrict the participation in the auction. This is prohibited by Article 17 of the Russian Federation Law "About the Use of Oil and Gas."

However, the Ministry for Nature can read official documents as well. A spokesman for the ministry told journalists that the auction might fail on account of the fact that the nature ministry should have an offer for the winner from the owner of the current proprietor complex. A spokesman said that there was no such offer. This imperturbable confidence of the natural ministry definitely has some significant reason for that.

The Russian Ministry for Economic Development and Trade addressed to the Nature Ministry a couple of days ago. The economic ministry asked to consider the issues, which might be a reason to delay the date of the auction or cancel it at all. However, there has not been a final decision made on the subject.

The Nature Ministry affirms that there will soon be a special governmental committee set up (within seven or ten days) in order to find a coordinated position on the issue. We would like to remind that the auction is to take place on December 26th.

However, the situation took a different turn, when presidential aide in the Far East of Russia, Konstantin Pulikovsky, evinced his interest in the auction. Pulikovsky explained to the heads of local special services that not only Russian oligarchs wanted to get hold of the riches of the Talakansky oil deposit. As he said, the deposit was of great interest to various criminal structures. Those structures are not going to develop, but gradually sell it.

Konstantin Pulikovsky also said that he was not going to let them take part in the auction. He claimed that he would do his best for it. This statement seems rather strange against the background of the list of companies that applied for their participation in the auction. They are all respectable, giant oil and gas companies: TotalFinaElf, Sibneft, Surgutneftegaz, East-Siberian Service Company, Gazprom, and so on. Moreover, there is Far East Investment Company on the list too. This company was established under Pulikovsky's personal guidance.

Russian oil oligarchs perceived that statement as a display of lobby on the part of state structures. They claimed that they would file a lawsuit against the government, but as a matter of fact, they started searching for a way to show pressure on the government. Then the Nature Ministry took the actions, which scared the oligarchs indeed.

In 2001 the auction to develop the Talakansky deposit in the republic of Yakutia was won by the company Sakhaneftegaz. The company offered $510 million for the development of the field. However, the company failed to get the money on time and the results of the tender were cancelled on March 1, 2002.

Russian media outlets supposed that the "financial crisis" happened due to the intrigues of some larger gamblers. As it turned out today, the plans of Russia's large gamblers were messed up with some unknown larger gambler.

Reference: the starting price of the auction to obtain the right for the development of the Talakansky deposit is set on the level of 56 million dollars. The Talakansky deposit reportedly has the reserves of 124 million tons of crude and 47 billion cubic meters of gas.

The winner of the tender is to invest $150 million dollars during the first year of the development and not less than 200 million dollars during the second year. The winner will also have to build a refinery near the deposit too. The crude extraction at the deposit is supposed to make up not less than 4.5 million tons a year. The implementation of the project will cost $4.277 billion dollars for the period of eight years.

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Pravda
September 24, 2002

english.pravda.ru/main/2002/09/24/37143.html

GLOBAL OIL CRISIS GATHERING STEAM
Russian oil companies striving for access to oil pipelines

A devastating oil crisis is inevitably threatening the world community; the world's exchange indices have dropped to the lowest rate within the past five years. The oil price has exceeded 31 USD per barrel in New York. OPEC members are in full readiness to protect the oil quotas. Obviously, a war is inevitable. Russia, meanwhile, keeps on increasing its oil production. Therefore, there is no sin in Russia profiting from other countries' troubles and improving its own position.

Experts say that the rise in oil prices is explained by the US's continuous preparation for a war against Iraq. British Prime Minister Anthony Blair is supposed to present today irrefutable evidence that Saddam Hussein is developing weapons of mass destruction. Before the war against Yugoslavia, America and Britain followed the same scenario.

Experts say that the tropic hurricane Isadora is another factor that fatally affects oil prices. The hurricane changed its direction right towards the Gulf of Mexico, where the routes of oil tankers are located.

At the same time, oil production may exceed 100 million tons in Russia in the fourth quarter of the year, Russia's Vice-Premier, Viktor Khristenko told journalists after a session of the governmental commission for oil and gas pipelines usage. He also reassured that the pipelines are in good condition and oil production goes ahead of the schedule.

In Khristenko's words, in the fourth quarter, Russia plans to export 31.1 million tons of oil to overseas countries and 8.7 million tons to CIS countries.

Unfortunately, Russia can't export more because of the carrying capacity of the main oil pipelines owned by the Transneft state monopoly. Therefore, Russia's oil exports are to be lower than expected because of this reason and because of the storms near the Russian oil-loading terminals. However, as RBC informs, Russia's oil exports to overseas countries in the third quarter are to be 32.5 million tons.

Under conditions of an increasing oil rush, Russian companies have already clashed with each other because of access to the oil pipelines. Viktor Khristenko says that the basis of the conflict has already been liquidated. He explained that, earlier, a system of double applications was used when some companies handed applications in to the Russian Ministry for Energy and others to Transneft.

However, now the system has changed: applications should be handed in to Transneft only. An export schedule for Russian oil companies is based upon equal access to the export capacities when each company will be able to export 41.2% of the amount claimed in the application handed in to Transneft.

Meanwhile, as Russia's RIA Novosti informs, today, the US Congress is going to consider a draft resolution that is expected to improve commercial relations between the USA and Russia and give rise to supplies of Russian energy resources to the American market. The main goal of the document is to guarantee the US's energy safety and to find more sources of energy for the American market. At that, Russia's great potential in the sphere of energy sources is to be used to make deliveries to the US market stable. The resolution was developed by Curt Weldon from Committee on Armed Services in the US House of Representatives and Senator Conrad Burns from the Senate Energy and Resources Committee.

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