Translated material
Let me sell
Viktor Vekselberg reminded the president of his role in the fate of Kovykta
At an offsite meeting on the fuel and energy complex, which was held in Omsk by Russian President Dmitry Medvedev , they dealt not only with illegal oil refiners, but also with global trends in gas markets. The main report on the topic was made by Viktor Vekselberg, who appeared on the list not as the executive vice president of TNK-BP for gas business, but as the chairman of the supervisory board of Renova. This is probably meant to emphasize the speaker's disinterest and the expert nature of his presentation.Mr. Vekselberg told the president about the sharp increase in unconventional gas production in the United States and the avalanche-like increase in the supply of liquefied natural gas, politically correctly praised Gazprom’s export monopoly and proposed expanding it further by transferring to the state concern the functions of coordinator of all activities of Russian companies in foreign gas markets (so that avoid competition among themselves). He also noted the need to encourage competition in the domestic gas market and finally resolve the issue of priority access to the gas transportation system for products of associated petroleum gas processing. Last summer, Gazprom blocked this idea at the level of the Prime Minister.
But towards the end of his speech, Mr. Vekselberg still could not resist and spoke about the painful issue. Expressing regret that Russia is losing the Chinese market and complicating the transfer of East Siberian gas there, he complained: “Today, these projects are being postponed. I would like to take advantage, perhaps, of a moment - a hackneyed topic - our Kovykta project. There is no way this problem can be finally resolved. Now an unscheduled inspection of the Ministry of Natural Resources on this issue has been resumed, which clearly, it seems to me, does not contribute to maintaining the investment climate in our country, and will not contribute to solving the problem as a whole.”
A week ago, at a meeting at Gazprom, Alexey Miller, chairman of the board of the monopolist, said that “Kovykta is not included in the plan for the development of Far Eastern gas resources in the near future.” After this, the Ministry of Natural Resources began another formal check of the implementation of the license to develop the field, and, if there is no intervention from above, it will have all the legal grounds to revoke it from the company RUSIA Petroleum (62% owned by TNK-BP, blocking stake by OGK- 3, the rest is with the administration of the Irkutsk region).
As you know, three years ago the Ministry of Natural Resources almost revoked the license for Kovykta. All formal preparations were made, RUSIA Petroleum did not fulfill the license conditions for the production of 9 billion cubic meters of gas in 2006. She couldn’t do this, the company claims, because consumers in the region didn’t need that much gas. But TNK-BP did not have enough lobbying opportunities to make changes to the agreements.
The recall process was stopped at the highest level. In the Kremlin office of Dmitry Medvedev, who was then one of the candidates to succeed Vladimir Putin, first deputy prime minister and chairman of the board of directors of Gazprom, the leaders of TNK-BP and the gas concern signed a legally binding agreement on the sale and purchase of a 62% stake in RUSIA Petroleum " The deal was never completed. The parties did not agree on the price, since the buyer was counting on $1 billion, and the seller did not want to give a penny towards the actual expenses incurred ($680 million). And in 2009, Gazprom began to have cash flow problems due to the crisis drop in exports, and negotiations finally froze.
Then the shareholders of TNK-BP turned to the government (more precisely, Deputy Prime Minister for the Fuel and Energy Complex Igor Sechin) with a request to resolve the issue with Kovykta, after which the option arose of selling the project operator to the state company Rosneftegaz. Its representatives have been studying the documentation of RUSIA Petroleum for several months, but it was impossible to move further in the absence of permission from above.
The Minister of Natural Resources, Yuri Trutnev, ended up in the most ambiguous position: he postponed the issue of revoking the license until the completion of negotiations between Gazprom and TNK-BP, and only 90 days were allotted for this in the agreement. Since then, the minister has been regularly, but in vain, asked questions about what will happen to the license. Gazprom was clearly satisfied with the situation with the withdrawal, after which it would certainly have received a license for this strategic field (2 trillion cubic meters of reserves) with the payment of a symbolic contribution to the treasury. But the Ministry of Natural Resources could not initiate punitive measures when they started talking about the emergence of a new influential contender for Kovykta.
At the same time, Mr. Sechin, apparently, was not ready to take responsibility and reverse the decision made in 2007 with the participation of the current president of the country. Moreover, the new scheme implies the participation of Gazprom to one degree or another, since it is impossible to capitalize investments in Kovykta without the participation of the monopolist. The concern will either have to buy a license from Rosneftegaz (but at a higher price) or guarantee gas purchases from the new operator. Gazprom is conducting similar negotiations with NOVATEK on gas from the Yuzhno-Tambeyskoye field in Yamal, but the process began only after it became known that an influential businessman from the prime minister’s entourage, Gennady Timchenko, was personally interested in the development of the project.
TNK-BP, of course, really doesn’t want to lose Kovykta without compensation, so Mr. Vekselberg’s appeal directly to Dmitry Medvedev, and even in the presence of Messrs. Sechin and Miller, you can understand. After the speech by the co-owner of TNK-BP, the meeting continued in a closed format, but, according to Vremya Novostei sources, the Kovykta topic was not developed. The state of the gas market was discussed in a detailed report by the head of Gazprom, who, however, once again stated that the problems will be solved as soon as domestic gas prices reach European prices.