24.3 C
Supported byspot_img

Skyland China to join Rosneft for Siberia oil project

Member of Europium Groupspot_img
Supported byspot_img

China is in talks to enter a Siberian oil project run by Rosneft OJSC for as much as $730 million, according to another prospective partner in the venture.

A Chinese state-run enterprise may join Skyland Petroleum Group to buy 29% of the Taas-Yuryakh project, Skyland President David Robson said in an interview, declining to name the company. The Chinese firm would pay as much as two-thirds of a total $1.1 billion to bring in both partners, he said.

Skyland, a closely held company backed by Chinese investors, agreed with Rosneft last June to cooperate at Taas-Yuryakh, which operates one of the biggest undeveloped oil fields in eastern Siberia. Debt-strapped Rosneft, seeking funds for investment amid the crude-price collapse, has sought a foreign partner for the project since at least 2013, when it tried and failed to sell a 49% share to China National Petroleum Corp.

Supported by

“We now have found a good Chinese partner, which is a large Chinese state-owned enterprise” that hasn’t worked in Russia before, Robson said by phone. Skyland, which may take either a third or a half of the 29% stake, expects to agree on details with the Asian company by early next month, and doesn’t yet know when the deal with Rosneft would be signed.

A Rosneft spokesman declined to comment immediately by phone.

China Ties

Agreement on a stake sale would represent Rosneft’s first oil-production partnership with a Chinese state enterprise in almost a decade. Russia’s largest oil producer sold a portion of its Udmurtneft venture to China Petroleum & Chemical Corp. in November 2006.

Rosneft has already attracted BP Plc to Taas-Yuryakh, which operates the Srednebotuobinskoye oil and gas condensate field in Yakutia. The U.K. company said in June it would pay $750 million for a 20% stake and team up with Rosneft to explore other areas in Siberia. It’s among international oil producers seeking increased access to Russia’s vast energy reserves to benefit from their proximity to Chinese and Japanese markets.

In December, state-controlled Indian Oil Corp. and Oil India Ltd. signed an agreement with Rosneft to study a possible partnership at the Taas-Yuryakh project. Reuters reported that the Indian companies were considering buying as much as 29%.

The per-share value of the planned China-Skyland deal is on par with the price paid by BP, according to Robson, who founded Skyland just a year ago. It’s also in line with the valuation he discussed with Rosneft when they agreed to cooperate in June, though oil prices have dropped almost 50% since then.

“There may be a short-term glut of oil, which is depressing the price, but don’t forget that major production from the field will not come for another couple of years,” Robson said.

Output from the Taas-Yuryakh project, currently at about 1 million metric tons of oil a year, may top 5 million tons a year, or 100,000 barrels a day, after 2017, according to Rosneft. The Srednebotuobinskoye field has recoverable oil reserves of an estimated 167 million tons and natural-gas reserves of 181 billion cubic meters.


Supported byElevatePR Digital

Related News

Canada Nickel reveals initial resource estimate for Deloro project, underscoring Timmins District prospects

Canada Nickel has announced the initial mineral resource estimate for its Deloro nickel sulphide project, located in Ontario's Timmins-Cochrane mining camp. This estimate marks...

Resouro Strategic Metals unveils extensive resource estimate for Tiros titanium and rare earths project

Resouro Strategic Metals, a recent entrant into Brazil’s rare earths sector, has unveiled a significant resource estimate for its Tiros project located in Minas...

NMMC targets $1 billion investment in 2024 to expand gold production capacity

Navoi Mining and Metallurgical Combine (NMMC), the world’s fourth-largest gold producer and Central Asia’s largest gold miner, has announced an ambitious investment program for...

U.S. and Kazakhstan strengthen energy partnership at 2024 Strategic Dialogue in Astana

On July 18, 2024, the U.S. Department of State and the Department of Energy, in partnership with Kazakhstan’s Ministry of Foreign Affairs and Ministry...
Supported by
Supported by
Supported by
error: Content is protected !!