Gazprom chief Alexei Miller and LUKoil chief Vagit Alekperov met Tuesday to discuss developing gas deposits in the Yamal-Nenetsk autonomous district and on the Caspian Sea shelf, as well as shipping liquefied natural gas to the Far North, a joint statement said.
Alekperov said in the statement that the companies had reached agreement on exploration, extraction, transportation and gas sales. The companies declined to name specific deposits.
A working group is to draft a strategic partnership agreement over the next month that will be effective from 2002 to 2005 and set out concrete projects and investment volumes.
LUKoil had initiated Tuesday's meeting, said a source in Gazprom who asked not to be identified.
"Alekperov's company decided to get seriously involved in the gas business -- but without our help they wouldn't get anywhere," the source said. "For our part, we aren't opposed to working with the oil company."
Specific projects will be discussed later, the source said.
LUKoil officials said the company had proposed cooperation with Gazprom before Rem Vyakhirev was ousted as CEO of the gas monopoly in 2001.
"We had a partnership agreement that was signed when Rem Vyakhirev was in charge," said one official who asked not to be identified. "Now Gazprom has new management, and there are big changes in store for the gas sector. Therefore we needed a new agreement."
During the first stage of the cooperation program, gas and gas condensate is to be transported from six LUKoil deposits in the Bolshekhetskoi area of the Yamalo-Nenetsk autonomous district. These deposits have reserves of 1 trillion cubic meters of gas.
LUKoil intends to extract 50 billion to 60 billion cubic meters of gas per year from deposits in Yamal and the Caspian, which would make it the second largest gas producer after Gazprom. The oil company has said it plans to export gas.
LUKoil hopes to enter the Greek gas market, and is participating in the privatization of Hellenic Petroleum. LUKoil's gas program is estimated at $2 billion to $4 billion.
"LUKoil's desire to work with Gazprom is understandable -- after all, the company is the monopoly pipeline owner, without which gas extraction has no economic sense," said Pavel Kushnir, an analyst with United Financial Group.
Gazprom is less interested in working with oil companies, though the joint development of deposits could help boost extraction, he said.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.