Russia 110328 Basic Political Developments

Activity in the Oil and Gas sector (including regulatory)

Russia to raise oil export duty on April 1

http://www.itar-tass.com/eng/level2.html?NewsID=16093705&PageNum=0

28.03.2011, 08.38

MOSCOW, March 28 (Itar-Tass) - Russia will raise its oil export duty from 365 dollars to 423.7 dollars per tonne as of April 1, 2011.

Prime Minister Vladimir Putin signed the relevant decree.

The export duty from twenty-two fields in Eastern Siberia and two Northern Caspian fields will grow from 150.4 dollars per tonne to 191 dollars per tonne.

The export duty on light petroleum products will increase from 244.6 dollars to 283.9 dollars per tonne and on dark petroleum products – from 170.4 dollars to 197.9 dollars.

According to the Russian Finance Ministry, the average oil price in the period from February 15 through March 14 comprised 108.16 dollars per barrel.

Russian Oils - Decision on unification of oil product export duties to be made this summer

http://www.bne.eu/dispatch_text14575

Citi
March 28, 2011

Deputy Finance Minister Sergei Shatalov said last Friday that a decision on the unification of light and heavy products export duties (within the "60-66" taxation scheme) will be made by June-July. He said that there were still "a few small problems with certain companies ... We have to figure out how we solve them". We think he was likely referring to Tatneft and Bashneft, which could suffer if tax breaks are not provided. Mr. Sahatalov earlier said that the government was contemplating the introduction of the "60-66" scheme from 2012 and that it could provide $300mn annual subsidies for Tatneft and Bashneft. We view the news as expected and neutral for the sector.

Ildar Khaziev

Russian Energy Ministry expects that the deal BP and Rosneft will be realized

http://www.bbc.co.uk/russian/rolling_news/2011/03/110328_rn_shmatko_rosneft_bp.shtml

Last Updated: Monday, March 28, 2011, 07:30 GMT 11:30 MCK

Energy Minister Sergei Shmatko hopes that a deal between Rosneft and British BP will be realized.
Shmatko made ​​this statement to journalists, commenting on the decision of the Stockholm Press Court, the ban BP enter into an alliance with Rosneft in its original form.

In January, BP and Rosneft agree on reciprocal exchange of shares, in which Rosneft will receive 5% of ordinary shares in BP in exchange for a 9.5% stake in Rosneft, as well as joint hydrocarbon exploration and production in the Russian Arctic shelf.

However, the consortium AAR, representing the Russian shareholders of TNK-BP, said the deal is incompatible with its shareholder agreement with BP, and challenged it in court.

As noted earlier, Vice Prime Minister Igor Sechin, a Stockholm court to its decision not to block the deal Rosneft with BP, and extended the current ban on its implementation until April 7.

BP May Need $15 Billion to Settle Russian Dispute, Times Says

http://www.bloomberg.com/news/2011-03-27/bp-may-need-15-billion-to-settle-russian-dispute-times-says.html
By John Glover - Mar 27, 2011 9:08 AM GMT+0200

BP Plc (BP/) may have to spend $15 billion to buy out its partners in TNK-BP after they blocked its attempted share swap with OAO Rosneft, the Sunday Times reported, citing unnamed analysts and bankers.

BP’s partners, represented by the AAR group, denied they have offered to sell out, the newspaper reported.

To contact the reporter on this story: John Glover in London at [e-mail]

To contact the editor responsible for this story: Paul Armstrong at [e-mail]

Foreign Office 'backed BP in Rosneft talks'

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8410043/Foreign-Office-backed-BP-in-Rosneft-talks.html

Efforts by BP to hammer out its $16bn (£10bn) share swap and Arctic exploration deal with Russian energy group Rosneft had the full support of the Foreign Office over an 18-month period, cables show.

9:42PM BST 27 Mar 2011

A series of meetings between Anne Pringle, British ambassador in Moscow, and BP executives covering discussions about a Rosneft tie-up – as well as conversations about the strained relations in the TNK-BP partnership – are listed in censored cables released on Sunday under the Freedom of Information Act.

The ambassador congratulated BP after being briefed in advance of January's formal announcement of the Rosneft deal, telling the Foreign Office that "given the current emphasis of the Russian Government on mutually beneficial strategic partnerships this seemed the right way to go".

She also provided insight into the way BP had tried to keep its political lines intact by disclosing the oil giant first briefed Downing Street about the deal and then Washington, Brussels and Berlin.

BP had also asked whether Nick Clegg, Deputy Prime Minister, or Chris Huhne, Energy Secretary, could attend the signing ceremony. In the event Mr Huhne attended.

Edited versions of the cables and conversations were obtained by Platform, the oil industry watchdog group critical of Arctic exploration.

James Marriott, Platform executive, said the documents showed 18 months of close interaction between BP and the British embassy in Moscow.

BP refused to comment on the disclosures while diplomatic sources said it was not unusual for the Government to support a major British company involved in deals that had economic as well as business implications.

They added that any attempt by the Government or the embassy in Moscow to make diplomatic overtures on behalf of BP as it desperately tries to salvage the Rosneft deal would be counter-productive and inflame the situation.

BP has been on the losing end of the battles with its Russian partners in TNK-BP – four Russian oligarchs operating under the umbrella of Alfa-Access-Renova (AAR). Last week the quartet won an arbitration tribunal ruling that the Rosneft deal breaches a shareholder agreement with them, stipulating that TNK–BP is the UK oil group's "primary vehicle" for all oil and gas exploration in Russia and Ukraine.

The stand-off has provided an opportunity for other oil majors to court Rosneft over Arctic exploration. A spokesman for the Russian company was quoted over the weekend saying that if the BP deal fails it will "find a new partner" and that it has received overtures from "leading energy companies, including Shell".

Lawyers for the four oligarchs will now oppose any attempt by BP chief executive Bob Dudley to persuade the tribunal that it should sanction only the share-swap element of the Rosneft deal.

BP proposed its chief financial officer Byron Grote give evidence to the tribunal on April 4. But AAR is adamant last week's ruling prohibits BP from a share swap with Rosneft that has any sort of strategic component. One source said: "How could a share exchange be anything other than a strategic investment. BP is not an institutional investor in the habit of making passive $8bn (£5bn) investments."