RUSSIA - Part 2 - The Oil & Gas Producers
The integrated groups own most of Russia's 28 oil refineries. Firms in relatively more autonomous member-republics include Tatneft of Tatarstan and Bashneft of Bashkortostan. There are also independent Russian oil refining and distribution companies (see profiles on following pages and Downstream Trends). There are two categories of oil producing joint ventures: JVs operated by foreign companies, like Polar Lights involving Conoco, and JVs operated by Russian companies. The second category includes Ortneft, Vatoil, LUKoil-AIK and Yoganoil.
THE MAIN RUSSIAN OIL COMPANIES* Market Captln Production Mkt Cap/ Reserves Company (US$m) ('000 b/d) Production (m barrels) LUKoil 13,187 1,235 29.3 11,640 Yukos 4,832 708 18.7 9,728 Surgutneftegaz 4,191 675 17.0 5,460 Sidanco 3,719 445 22.9 9,633 Tatneft 2,601 488 14.6 6,090 Sibneft 2,439 361 18.5 4,145 Slavneft 2,373 257 25.3 1,300 Eastern Oil Co. 1,907 229 22.8 2,100 Tyumen 1,687 420 11.0 5,770 Onaco 1,061 159 18.3 1,430 KomiTek 395 102 10.6 1,625
* By Feb.9, 1998. Source: Natwest Markets Europe as published by FT Energy Economist in April 1998.
RUSSIA'S MAIN INTEGRATED OIL COMPANIES LUKoil Producing Units Refineries Langepasneftegaz Volgograd Uraineftegaz Perm Kogalymneftegaz Novoufimsk Permneft Ufa Niznevolzhskneft Astrakhanneft Kaliningradmorneftegaz Arkhangelskgeoldobycha LUKoil crude oil/condensate production Mid-Aug. 1998: 1.3 million b/d LUKoil's usable refining capacity: 400,000 b/d Yukos Yuganskneftegaz Novokuibyshev Samaraneftegaz Kuibyshev Syrzan Crude oil/condensate production Mid-Aug. 1998: 730,000 b/d Usable refining capacity: 590,000 b/d. Surgutneftegaz Producing Units Refineries Surgutneftegaz Kirishi Crude oil/condensate production Mid-Aug. 1998: 685,000 b/d Usable refining capacity: 390,000 b/d Sidanko Varyeganneftegaz Saratov Kondpetroleum Angarsk Chernogorneft Khabarovsk Udmurtneft Saratovneftegaz Crude oil/condensate production Mid-Aug. 1998: 460,000 b/d Usable refining capacity: 750,000 b/d Tyumen Oil Co. Nizhnevartovskneftegaz Ryazan Tyumenneftegaz Obneftegazgeologiya Crude oil/condensate production Mid-Aug. 1998: 450,000 b/d Usable refining capacity: 360,000 b/d Sibneft Noyabrskneftegaz Omsk Crude oil/condensate production Mid-Aug. 1998: 400,000 b/d Usable refining capacity: 566,000 b/d NK Rosneft Dagneft Komsomolsk Kalmneft Krasnodar Krasnodarneftegaz Tuapse Purneftegaz Sakhalinmorneftegaz Stavropolneftegaz Termneft Crude oil/condensate production Mid-Aug. 1998: 270,000 b/d Usable refining capacity: 270,000 b/d Slavneft Megionneftegaz Mozy (Belarus) Yarolavl Crude oil/condensate production Mid-Aug. 1998: 260,000 b/d Usable refining capacity: 680,000 b/d East Oil Co. (VNK) Tomskneft Achinsk Tomskneftegazgeologiya Crude oil/condensate production Mid-Aug. 1998: 235,000 b/d Usable refining capacity: 300,000 b/d Orenburg Oil (Onako) Orenburgneft Orsk Crude oil/condensate production Mid-Aug. 1998: 160,000 b/d Usable refining capacity: 200,000 b/d KomiTek KomiNeft Ukhta Crude oil/condensate production Mid-Aug. 1998: 110,000 b/d Usable refining capacity 150,000 b/d:
AUCTIONS OF FEDERAL OIL SHARES: NOVEMBER-DECEMBER 1995
% Of Shares Floor Price Company Offered Price Paid Winner Surgutneftegaz 40 $66.6m $88m SNG Pension Fund Lukoil 5 $35m $35.01m Lukoil Via Imperial Bank Yukos 45 $150m $159m Bank Menatep Sidanko 51 $125m $130m International Finance Corp Sibneft 51 $100m $100.3m Stoiochny Bank Sberezhny Nafta Moskva 15 $20m $20.01m Nafta Moskva
As this table shows, the amounts of money paid for large shares in these companies in the first privatisation wave were ridiculously low (see background in the 1996 survey of Russia, Vol. 47).
The oil industry in Russia is facing enormous problems. These range from a deep financial crisis in the country to lack of modern equipment and technology. As a result, the average production per well - excluding more than 40,000 wells made idle in recent years - is less than 70 b/d. To compare, the average production per well in Saudi Arabia is 5,780 b/d. For completely different reasons, the average in the US is 12 b/d and in Canada it is 33.5 b/d.
The oil producing companies, from LUKoil down to the smallest one, have all been hit hard by the fall in world crude oil prices this year. They have also been hit by higher taxes and excise fees imposed on them by the Moscow government. Costs of crude oil being produced, together with government taxes and pipeline fees, have risen to almost $10/barrel. This is the level to which the market price of Urals, Russia's main export blend of crudes, has reached in recent months.
The Russian oil companies have sought "strategic alliances" and partnership deals with Western majors. Following LUKoil's JVs with Arco and Agip, a strategic link was agreed in November 1997 between Gazprom and Shell and between BP and Sidanco. An Elf-Sibneft link is under negotiation in parallel to a Yukos-Elf link being negotiated separately as an alternative. A Yukos- Sibneft merger, in which Elf and Mobil were to be involved as partners to
create the biggest oil group in Russia called Yuksi, was agreed in late 1997, but this collapsed in May 1998. Each of the other companies is negotiating some form of alliance with a Western major (see Downstream Trends).
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|Publication:||APS Review Oil Market Trends|
|Date:||Aug 17, 1998|
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