| Vagit Alekperov does not promise to fill the Northern Pipeline The LUKOIL company does not yet intend to provide guarantees for pumping oil through the Northern Oil Pipeline, although Transneft has been asking for this for several months. As the head of LUKOIL, Vagit Alekperov, said yesterday, he will resolve this issue when the owner of the largest field in the Timan-Pechora oil and gas province, named after him, becomes known. Roman Trebs and Anatoly Titov, as well as four blocks of the Central Khoreyver uplift. For now, all of them are in the unallocated subsoil fund.
The Northern Oil Pipeline project (the route from Kharyaga to Indiga, on the coast of the Barents Sea) is designed to pump 24 million tons of oil per year. According to Transneft forecasts, about $2.2 billion will have to be spent on its implementation. It is assumed that this pipe will pump raw materials from the Timan-Pechora oil and gas province, the main subsoil users of which are Rosneft and LUKOIL. The head of Transneft, Semyon Vainshtok, has already reported that only “light”, low-sulfur oil produced in Timan-Pechora and Komi will flow along the northern route. Since it will not be mixed in the pipe with other varieties of Russian raw materials, its quality will not decrease, and the price will exceed the cost of the main domestic Urals grade. The head of Transneft has been saying for several months now that he sent letters to LUKOIL and Rosneft asking for guarantees for pumping raw materials, but received no response. Transneft does not intend to start the project without guarantees.
True, yesterday Mr. Alekperov said that he had not received any official requests from Transneft on this topic. At the same time, he noted that the Timan-Pechora province remains the only region where production volume is limited by the capabilities of the pipeline system, and the Northern Pipe can solve them. It was previously reported that 30 million tons of oil per year could be produced in Timan-Pechora.
Mr. Alekperov recalled that the undistributed fund now contains a large deposit named after. Trebs and Titov, whose proven reserves amount to almost 40 million tons; as well as four blocks of the Central Khoreyver uplift (reserves of three blocks are 25 million tons, one block is 17 million). All deposits are classified as strategic. A competition for them is scheduled to be held this year, but it has not yet been announced. LUKOIL has already expressed its interest in these areas, but it is not known whether it will be able to obtain them. “Until this issue is resolved, we will go in circles,” said the head of LUKOIL, meaning that it is premature to talk about the guarantees Transneft is asking for.
It is worth noting that LUKOIL intends to build its own terminal in Timan-Pechora - in Varandey, on the coast of the Barents Sea, and export 12 million tons of oil through it starting in 2007 (instead of 3 million tons this year). LUKOIL does not rule out that in the future the terminal’s capacity will be increased to 16 million tons. So, first of all, LUKOIL will be busy loading its own capacities. The company is implementing the Varandey expansion project together with its American shareholder, ConocoPhillips. Oil produced by a joint venture of the two companies will be transported along this route. The joint venture was formed on the basis of LUKOIL's subsidiary, Naryanmarneftegaz, and, as Mr. Alekperov announced yesterday, it will begin to function on July 1. It was previously reported that by 2008 the joint venture plans to produce about 10 million tons of oil per year.
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Yesterday LUKOIL held its annual meeting of shareholders. The composition of the holding's board of directors has not changed. Shareholders decided to pay dividends in the amount of 28 rubles. per ordinary share, allocating a total of 23.815 billion rubles for these purposes, which is 16.6% more than last year. Based on the results of 2005, the holding intends to pay shareholders at least 25% of net profit, and by 2014 to increase this figure to 40%, Mr. Alekperov said yesterday. The company's net profit this year is projected to be $2.49 billion. The company's effective income tax rate last year was 29%. In addition, yesterday the company published a report according to US GAAP standards for the first quarter of 2005. LUKOIL's net profit compared to the same period last year increased by 44%, to $1.18 billion; revenue - by 61%, to $10.616 billion. Denis REBROV |
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