Paris oil & gas summit provides crucial contacts and updates on CIS projects and plans

Release Date: 2010-05-20

Large delegations from Russia and Kazakhstan and important updates on crucial projects made for a very successful CIS Oil & Gas Summit which returned to Paris for its tenth anniversary earlier this month.

Says Evnika Polovinkina, CIS Oil & Gas Summit director: “We have received such enthusiastic feedback about the high-level delegates, the quality of the presentations and the networking opportunities during this event. The cocktail reception in the Louvre was truly special! It is gratifying to know that we manage to get the right people together year after year, because that is what the CIS Oil & Gas Summit is all about: to facilitate easy access to the CIS region.”

Some 280 delegates from 26 countries, including Ukraine, Azerbaijan and Turkmenistan with large delegations from Russia and Kazakhstan, made the summit a popular destination for prospective and current investors who were given a singular opportunity to meet the top regional executives and regulators in one place and have their questions answered.

Highlights from the programme:

• TOTAL: Demand for gas expected to turn

Yves Louis Darricarrere, Total’s President E & P said that the global economic crisis has curbed the demand for natural gas, but that it will resume its upward trend from this year on, with a 2% increase per year until 2020. According to Mr Darricarrere, Total’s exploration and production strategy is focused on replacing oil and gas reserves and that new projects should account for 40% of the group's hydrocarbon production by 2014. He added that Total currently has 15 new exploration and production projects lined up between 2009 and 2014.

• Kazakhstan: Oil output will rise by 4.7 percent this year

Lyazzat Kiinov, Kazakhstan’s Vice Minister of Energy and Mineral Resources, said during his presentation at the Summit that “Kazakhstan's oil output will rise by 4.7 percent this year, coinciding with a rise in its economic growth.” He added that 2010 would also see further social and economic growth. Minister Kiinov further stated gas production would nearly double by 2015 to reach 65 billion cubic metres (bcm), up from 37 bcm last year.

Speaking more broadly about Kazakh energy policy, Kiinov said Kazakhstan will continue to use diverse routes to deliver its crude oil to world markets, while its priority for gas exports remains the Central Asia-Center (CAC) pipeline pumping gas to Russia from Turkmenistan, Kazakhstan and Uzbekistan.

• Gazprom Neft: Russian oil major on the march

Boris Zilbermints, Gazprom Neft Deputy General Director, Exploration & Production and Deputy Chairman of the Management Board, said the company is ready to give foreign companies access to assets in Russia in return for experience in developing off-shore fields. Said Zilvermints: “It is no secret that Russian companies have practically no experience in working fields on the shelf, to say nothing of deep-water off-shore fields. I am saying this in all honesty: we do not have this experience, and we truly are interested in acquiring it. In return for such experience, we are ready to give access to fairly serious assets on Russian territory."

Zilbermints clarified that he was talking about company assets in Yamal and East Siberia and about attracting investments. "Plus, it is possible there can be cooperation on other assets in Russia, not excluding the joint acquisition of third companies", he added.

• Shtokman update: Important to bet on the future next year

Herve Madeo, acting CEO of Shtokman Development said a rebound in gas prices will make Russia's giant Shtokman field in the Arctic profitable when it starts exporting liquefied natural gas (LNG) in 2017. Said Herve Madeo: "There are partners in the Shtokman project who think that in 2017 the price of LNG will be right and will make the LNG project profitable, therefore we have to go ahead with it ... It is important that in 2011 people bet on the future."

Madeo said the final investment decision on the whole project had been planned for September 2010. The final investment decision on the pipeline part had slipped to early 2011, with Russian caution over the environmental impacts of LNG facilities pushing back that decision.

• SOCAR: Key gas deal with Turkey in June

Rovnag Abdullayev, SOCAR President announced that the company will sign a key gas deal with Turkey next month but will not hold talks with other parties interested in supplies from the second stage of the BP operated Shah Deniz field until the end of this year, with no contracts anticipated before 2012. He also said SOCAR has started considering applications for Shah Deniz-2 gas and will open talks at the end of this year although there is "no deadline" for when they would be concluded.

• Kashagan field update: 70% completed already

Pierre Offant, Managing Director, of the North Caspian Operating Company said that Kazakhstan’s major project, Kashagan, is working hard to bring first oil production on stream at the end of 2012, with 70% of the work having been completed by the end of 2009.

The CIS Oil & Gas Summit will return to Paris from 25-27 May 2011.

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