Oman sells its 7% stake in CPC to Russia
Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Nov. 9 -- Oman has sold Russia its stake in the Chevron Corp.-led Caspian Pipeline Consortium (CPC), which owns and operates the 1,580-km Tengiz-Novorossiisk oil pipeline.
"Rosimushchestvo (Russia's federal property agency) has finalized the deal to buy Oman's 7% stake in CPC," confirmed Igor Dyomin, a spokesman for Russia's state pipeline monopoly OAO Transneft.
In early October, an Omani official said the Arab country would consider selling its stake, but that no firm offer had been made.
"If the offer is right, then why not? We have had a few interested parties but nobody put in a firm proposal," said an Omani finance ministry official.
The Omani government gave no reason for selling its stake, but industry sources said Muscat had grown frustrated over protracted disagreements among the consortium members about funding expansion of the pipeline.
Russia had long opposed the plan to double the capacity, saying the pipeline yielded low returns and that its expansion would add pressure to the already congested Turkish Straits shipping route.
But Russian objections ended when most of the partners agreed to raise the shipping tariff to $38/tonne from last year's $30.24/tonne and when investors agreed to reduce interest rates by 50% on a $5 billion loan to CPC.
BP PLC, however, still opposes the expansion plan and said it might also sell its 6.6% stake—held through Lukarco and Kazakhstan Pipeline Ventures—if the CPC partners do not reach a compromise.
Russia owns a 31% stake in CPC through Russian crude pipeline monopoly OAO Transneft, while the Kazakh government has a stake of 19%.
Other CPC shareholders are Chevron 15%, Lukarco 12.5%, a Rosneft-Shell joint venture 7.5%, ExxonMobil 7.5%, Eni 2%, BG 2%, Kazakhstan Pipeline Ventures 1.75%, and Oryx Caspian Pipeline 1.75%.
Contact Eric Watkins at [email protected].