Exxon, Gazpromneft

Russian oil companies are more resistant to falling oil prices than foreign competitors.

Russian oil companies are more resistant to falling oil prices thanks to support from the state.
According to Bloomberg the largest Russian oil companies tolerate falling oil prices easier than their western competitors. In view of the favorable attitude of the state and the low cost of production in such companies as "Rosneft", Lukoil or "Gazpromneft", the situation with profitability, net free cash flow and equity prices is much better than such Western companies as Shell and ExxonMobil.

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"Vedomosti": "Rosneft" asks Rosnedra to postpone the development of the shelf.

The Russian oil company "Rosneft" sent Rosnedra a list of offshore license areas to change the terms of use, "the Vedomosti" wrote about it on Thursday, February 19 with reference to the existing wording in the document, which has information on 12 projects of the company.
The publication states, citing a source close to Rosnedra, that the country's largest oil company asks to postpone work on offshore projects in the Arctic because of the recession of foreign partners.

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"Gazpromneft" is alone with shale.

Shell suspends partnership with the company.
The Russian oil companies continue to lose partners because of the sanctions. Following "Rosneft", which lost ExxonMobil, "Gazpromneft" will have to suspend cooperation with Shell on one of the shale oil projects. The sanctions can affect both SP - Salym Petroleum Development. Closing the Western capital markets has been the general trend, so even "Gazpromneft" is ready to ask NWF for money.
Shell suspended its participation in a joint venture with "Gazpromneft" for the development of the shale oil in the "Khanty-Mansiysk Oil Union" (HMNS), Aleksandr Dyukov, the general director of the Russian company, stated on Friday. He added that the freezing of the other JV is possible, - the Salym Petroleum Development (SPD; controlled by the parties on an equal footing). "Shell is discussing the issue with the regulators", - the top manager stated. Shell confirmed "the Kommersant" that "it is engaged in dialogue with the European government agencies and partners". "We are observing some impact of the EU and the United States sanctions both on the current and the planned activities of the company in Russia", - the company admits.

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The Russian oil producers face the sanctions.

In the future neither western money, nor technologies will be observed.
The Russian oil companies have recognized that the sanctions, imposed by the United States and the EU, will significantly affect the development of the production in the Russian Federation. For "Rosneft" the prospect of extraction in the Arctic is up in the air, "Gazpromneft" will have to find new suppliers of equipment for their offshore operations, and Lukoil expects difficulties with the extraction of hard-to-recover oil. Vagit Alekperov acknowledged that Russian oil companies should get used to the absence of the external loans and Western technologies.
LUKOIL became the first of the major oil companies of Russia, which a week ago announced the consequences of the tighter Western sanctions. On Friday,the CEO, Vagit Alekperov stated that, although only the technological and non-financial sanctions entered against Lukoil, the foreign capital markets are closed. "We do not expect that we will get some money, especially in the medium term, we must rely on our own funds", - he stated. In early September LUKOIL has reported its intention to reduce its investment program for 2015 by $ 2 billion to impose it without loans (see. "the Kommersant" dated September 1).

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The former head of BP predicts the disruptions in oil supplies due to the sanctions against Russia.

Tony Hayward, the former head of BP , stated that the sanctions of the EU and the United States against Russian oil market may hit the West itself and lead to supply disruptions and price increases in an interview with the Financial Times, the publication publishes the excerpts from the conversation.
Hayward stated that cutting off the power industry of Russia from the capital markets by the EU and the United States was detrimental to the long-term supplies. "He stated that the shale boom in the United States, on the one hand, reduced the threat to the world's oil supply, but it could lead to the interruptions in the oil supply", - the publication shares the words of the former top manager.
"The world is lulled by the false sense of security in the light of what is happening in the United States", - he stated, referring to the results of the shale boom, during which the oil production in the United States increased by 60% since 2008. "When the United States reached a peak in the production, where the new sources of energy will be?" - He asked.

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The future without oil shown to Russia: technological sanctions to hit long-term development

The “Oil” sanctions of the United States and the EU, have already impacted on all the major oil and gas companies of Russia, and have closed opportunities for further cooperation with them in the field of offshore production and oil shale. This will influence almost all promising projects of the companies in this area, on which they counted in the future (except, perhaps, Lukoil’s Caspian projects, which are not formally subject to the sanctions). It will be difficult and expensive for Russia to cope on its own or to replace Western technologies and contractors, experts think, but the Government has already promised to give the industry an access to the money of the National Welfare Fund.
New sanctions against Russia, published by the United States after the EU on Friday, have concerned not only the state-owned oil companies - Rosneft and Gazpromneft, but also private ones – Lukoil and Surgutneftegaz. For the first time, Gazprom was included in the list, but only on its oil projects. As the Ministry of Finance of the United States explained, the ban on the supply of technologies and services related to deep, offshore Arctic and shale projects in Russia or Russian waters, if they have the "potential of oil production" (regardless of whether the gas production is envisaged).

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“Gazprom burenie” to lose a contract with Halliburton due to sanctions

On May 18th “Gazprom burenie” received a letter from the Moscow office of Halliburton. The American company notified of the shutdown of cooperation with the Russian company. It was the first case when due to the sanctions where Russian oil and service companies have been limited in access to foreign technologies. If the EU introduces technical sanctions in respect of Russia this week, within 3 years the oil production will fall at least by 26 mln tons a year (5% of the annual production). Without foreign partners it is difficult to grow the pay back of complicated deposits and the work at the shelf is also impossible, RBC writes.
American connections

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USA and EC Sanctions – Russian oil and gas companies may be limited in technologies

The USA and Europe may impose new sanctions against Russia that will concern the oil and gas industry, which is a key sector for the country. It could be prohibited for foreigners to use new technologies in work with Russian companies in this sector. Sanctions can have an impact on the development of the shelf and difficult reserves. Such projects are at early stages, thus the effect from the restrictions will be suspended and risks of the Russians will be shared by their foreign partners in full measure. But Russian oil and gas companies need new technologies in the long-term perspective, however the companies don’t hurry to develop them.

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Russia let French Total access to difficult to recover oil sites

French Total received three Russian hard to recover reserves sites in the Khanty-Mansi Autonomous Area for exploration, the region stated on its web site, citing the governor of Yugra N.Komarova.
Total declined to give any comments.
Total, participating at the ambitious gas project in Yamal, has become one of the western companies, which announced about its intentions to keep investments in Russia, despite the appeal of the USA to restrict economic cooperation after the annexation of the Crimea.

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Total is seeking partnership with LUKOIL on stranded oil extraction in Russia

The French oil company Total holds negotiations with JSC "LUKOIL", aims at forming a partnership for the implementation of joint projects in Russia, according to British business newspaper the Financial Times, citing sources familiar with the situation.
According to the newspaper source, the parties are discussing the creation of a joint venture for production of stranded oil, including offshore. Thereat there are no guarantees of the effectiveness of negotiations, both companies declined to comment.

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