Uchenna Izundu
International Editor
LONDON, Oct. 17 -- Norsk Hydro AS—one of the companies interested in developing Shtokman gas field with OAO Gazprom in the Barents Sea—has not received official confirmation from Gazprom that its offer has been rejected, Eivind Reiten, CEO and president of Norsk Hydro, told OGJ.
Speaking Oct. 16 at the inauguration of the Langeled pipeline, which delivers Norwegian gas from the Sleipner hub to the UK, Reiten said there was no timetable in place to negotiate with Gazprom until Hydro receives its communication about its status on the ambitious project.
He added: "We will discuss providing technology if that's an avenue that Gazprom wants to explore, but before I can comment any more specifically on that, we have to engage in dialogue."
On Oct. 9 Gazprom issued a press release stating that it would solely develop Shtokman field for gas exports to Europe despite keen interest from international companies such as ConocoPhillips, Total SA, Chevron Corp., Statoil ASA, and Norsk Hydro Oil & Energy (OGJ Online, Oct. 10, 2006).
The announcement shocked the international petroleum industry, considering the technical and logistical challenges facing the project and the estimated $10-20 billion required to bring it to fruition. Hydro was viewed as holding a strong advantage over its competitors because it was experienced in developing such challenging projects; it had drilled the fourth Shtokman appraisal well with Gazprom and is providing the rig for the seventh well. The other major surprise was the loss of LNG supplies to North America, as this had been the primary original market for Shtokman gas (OGJ, Oct. 16, 2006, p. 20).
Gazprom Chief Executive Alexei Miller said earlier that the contenders had been rejected because they "were unable to provide the capital required. Foreign companies could not offer us assets that corresponded in size and quality with the reserves of the Shtokman field." Miller added that foreign companies would be considered "only as contractors" for the project.
Contact Uchenna Izundu at [email protected].
