Already a Bloomberg.com user?
Sign in with the same account.
Total SA (FP), Europe's third-largest oil company, agreed to let ConocoPhillips and OAO Lukoil expand pipeline capacity and export more oil from Russia's Arctic.
Total had balked at paying higher fees demanded by OAO Transneft, Russia's state-owned pipeline monopoly, under plans to boost shipments through existing pipes from Timan-Pechora, an Arctic province with an estimated 30 billion barrels of oil reserves. ConocoPhillips's Polar Lights venture and Severtek, which is run by Lukoil, Russia's largest oil producer, had asked Transneft to let them increase shipments from Timan-Pechora.
``Production in Timan-Pechora is expanding faster than the enlargement of pipeline capacity,'' Sergei Oganesyan, the head of Russia's Federal Energy Agency, told reporters in Moscow. ``We found a compromise which fits us and Total.''
Russia, the world's largest oil producer this year, has raised output almost 50 percent since 1998 as soaring oil prices allowed companies to invest billions of dollars in extraction projects. Capacity shortfalls in export pipelines, which are built and managed by the state, are costing Russia about $5 billion a year in transport costs, according to Lukoil.
Transneft has been proposing a $790 million pipeline to increase shipments from the Arctic. Polar Lights and OAO Rosneft, Russia's largest state-owned oil producer, had said that the lack of local pipeline capacity is hurting production growth.
Oganesyan declined to give details about the agreement on increasing exports through existing pipelines.
Transneft plans to invest 4 billion rubles ($137 million) to expand Usa-Ukhta pipeline capacity by 7.3 percent to 410,000 barrels a day, he said. The project will take one year.
ConocoPhillips (COP), the third-largest U.S. oil company, holds 50 percent of Polar Lights and operates the venture, with the remainder held by Rosneft. Lukoil owns half of Severtek, with the rest held by Finland's Fortum Oyj. (FUM1V)
Local oil producers are also examining an option to ship crude through the Varandei oil port in the Pechora Sea. Lukoil, which is expanding the port, is proposing to ship as much as 240,000 barrels a day, Oganesyan said.
To contact the reporter on this story: Eduard Gismatullin in Moscow at firstname.lastname@example.org
To contact the editor responsible for this story: Tim Coulter at email@example.com