Dudley is in Moscow to take part in a meeting of the Russian Geographical Society, where Dudley is a member of the board of trustees and Pres. Putin is the head, but it is not clear if the two will meet.
BP owns a 19.75% stake in Kremlin-controlled Rosneft (RNFTF), accounting for about one third of its total global oil output.
Statoil (STO +1.4%) is striving to become a global energy company, but a top exploration executive says its hunt for shale opportunities to match the quality of its U.S. assets has been a disappointment so far.
Its joint venture with Rosneft (RNFTF) looks promising, with China, Argentina and Colombia also boasting high quality basins, but the U.S. maintains a major advantage thanks to the quality of its acreage, a legal system under which landowners own the mineral rights, and political and regulatory support for new projects.
The partners, which also include Rosneft (RNFTF), Lukoil (LUKOY) and the Russian and Kazakh governments, plan to double capacity to 1.4M bbl/day; the consortium had said the link, which runs from northwest Kazakhstan to the Black Sea, would reach full capacity this year.
Rosneft (RNFTF) says it is on track to start production at its first liquefied natural gas plant in Russia's far east in 2018-19, and signals that its partnership with Exxon Mobil (XOM -0.3%) for building the plant will not be affected, despite tension over Ukraine.
Rosneft says current LNG prices in Asia, at more than $15/MBtu, would enable it to successfully carry out its LNG project, which will have an initial annual capacity of 5M metric tons.
Rosneft also says it expects its gas output this year to rise to ~55B cubic meters and to more than 63B next year.
Exxon Mobil (XOM) reportedly is negotiating to bring Rosneft (RNFTF) into oil and gas licenses in Iraq’s Kurdistan region, as the largest U.S. and Russian oil companies forge ahead with a global alliance even amid strained relations between the two governments.
An XOM-operated venture with Rosneft at Sakhalin Island plans to begin pumping oil off Russia’s Pacific coast this year, and the two companies are working on ventures to explore the Arctic Ocean, test the potential of shale oil in Russia and pump crude in Texas.
Sanctions against Russia won’t stop Rosneft (RNFTF) from buying Morgan Stanley’s (MS) oil sales unit, CEO Igor Sechin says, adding that he is :hoping for a positive result" as regulators look at the deal but "we don’t expect an effect” from sanctions.
Meanwhile, a Russia-Japan investment forum begins amid an awkward atmosphere following Russia's move into Crimea; Rosneft is aiming to attract Japanese buyers for a ~$10B liquefied natural gas plant it plans to build at Sakhalin-1 field which will produce at least 5M metric tons of LNG.
Igor Sechin, head of Russia's largest oil company Rosneft (RNFTF), speaks defiantly on potential U.S. and European sanctions, saying Russian companies can easily take their business away from those countries.
The U.S. and EU yesterday announced asset freezes and visa bans against a handful of Russian and Ukrainian officials involved in the Crimean crisis; Sechin was not one of them.
Sechin says he is not afraid of potential increased sanctions, calling them "evidence of powerlessness” by the western countries.
Glencore says Rosneft has refinanced part of its debt and repaid $1B in December, and the two companies agree to amend the terms of the remaining loan so that it would convert at least $900M into an equity stake in Rosneft during 2014.
Also says it will study the sale of BHP Billiton’s Australian nickel assets; BHP has booked impairment charges on the Nickel West assets of nearly $1.6B over the past two fiscal years.
Shares +2.5% in London after the company beat analysts’ earnings estimates in its first annual results since the Xstrata takeover.
BP, which still holds 19.75% of Rosneft (RNFTF) after selling it half of the TNK-BP venture last year, lost more than $1B on its investment overnight, highlighting how its relationship with Russia’s state oil company may become awkward as the crisis in Ukraine develops.
BP’s stake in Rosneft is the biggest single foreign investment in Russia’s oil industry and provides 30% of its production.
Royal Dutch Shell (RDS.A, RDS.B) also is likely to keep an eye on the Ukraine situation, since it owns 35% in the Skifska offshore oil block in the Black Sea to the west of Crimea.
However, Q4 net earnings fell 52% Q/Q to 134B rubles after the Q3 bottom line had been boosted by a revaluation of the TNK-BP assets it had acquired; Q4 revenue fell 0.4% Q/Q to 1.35T rubles.
Rosneft produced 4.196M bbl/day of oil and liquids last year, or 40% of all oil output in Russia, as it stabilized production at its largest Soviet-era fields in western Siberia and two new fields were brought on line there.
Gazprom (OGZPY) reportedly may offer a lower price for its gas in talks with China in exchange for billions of dollars in upfront payments, as top brass from the Russian gas giant landed in Beijing for a round of talks today.
Rosneft (RNFTF) already has established a precedent for huge advances on its exports to China, receiving at least $12B in a lump sum late last year as part of a deal to ramp up supplies.
Gazprom is hoping to clinch a deal to pump 38B cm/year by pipeline to China from 2018, which would be a milestone in Pres. Putin's drive to diversify Russia's energy exports away from Europe, where Gazprom faces a probe into alleged monopoly practices, towards energy-hungry Asia.
State-run Abu Dhabi National Oil will not renew its 75-year oil-production agreement with BP, Exxon Mobil XOM, Royal Dutch Shell (RDS.A, RDS.B), Total (TOT) and others to run the fields, which produce more than half the United Arab Emirates' crude output of 2.8M bbl/day.
Abu Dhabi also had green-lighted Occidental Petroleum (OXY), China National Petroleum (PTR), Statoil (STO), Rosneft (RNFTF) Japan's Inpex and Korea National Oil to bid.
The deepening alliance between Exxon Mobil (XOM) and Rosneft (RNFTF) shows the troubled relationship between the U.S. and Russian governments is no bar to America’s most valuable energy company investing billions in Russia.
The joint venture expects to start its first Arctic well this year, targeting a deposit that may hold more oil than Norway’s North Sea; it also plans to frack shale fields in Siberia, sink a deepwater well in the Black Sea and build a natural gas export terminal in Russia’s Far East.
Diplomatic spats are unlikely to derail business relationships with Russia, especially when the country holds the world's largest oil reserves and XOM needs to find new reserves after three straight years of declining output.