• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 37 mins Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 7 hours Tesla Launches Faster Third Generation Supercharger
  • 41 mins EU has already lost the Trump vs. EU Trade War
  • 8 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 38 mins ''Err ... but Trump ...?'' #Humph
  • 10 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 1 hour China's Renewables Boom Hits the Wall
  • 22 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 17 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 23 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 21 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 22 hours Trump Interview On Farage's Radio Show #classy
Andy Tully

Andy Tully

Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com

More Info

Premium Content

BP To Bypass Sanctions, Buy In On Siberian Oilfield

British-based BP is negotiating with Russia’s Rosneft to buy a stake in an oil field in eastern Siberia, according to multiple sources with direct knowledge of the talks who spoke with several news organizations.

The talks concern the Taas-Yuriakh field, which is situated near a pipeline leading to Russia’s Pacific coast. It would supply refineries in Russia’s Far East and elsewhere in the Asia-Pacific region, including China.

By 2017, the Taas-Yuriakh field will yield more 100,000 barrels a day, or more than 5 million metric tons a year. The field also contains an estimated 155 billion cubic meters of natural gas. BP’s share in the field may be as high as $700 million or even $800 million, according to the Russian business journal Kommersant, which broke the story on Dec. 24.

Related: China’s Pivot Toward Europe May Cut USA Out Of Deal

The Russian government owns a majority stake in Rosneft, but BP owns nearly 20 percent and has stood by its commitment to the Russian oil giant despite economic sanctions imposed on Moscow’s oil industry by the European Union and the United States for its suspected role in the economic instability and violent unrest in neighboring Ukraine.

Those sanctions forbid Russian oil companies to obtain Western technology for shale and offshore oil extraction and limit its access to Western financial markets for financing their initiatives. But they don’t forbid Western companies from buying Russian assets, such as shares in oil fields. Therefore the sanctions wouldn’t apply to any BP-Rosneft deal.

Oil and gas account for about half of Moscow’s annual budget, and President Vladimir Putin lately has been seeking to expand sales of Russian oil and gas eastward as it loses customers in the West, notably in the European Union. Europeans feel they cannot rely on Moscow to provide energy reliably. EU customers now get about one-third of their gas from Russia, half of it through pipelines in Ukraine.

As part of its eastward push, Russia has been negotiating with the China National Petroleum Corp. (CNPC) about developing the Taas-Yuriakh field. At one point, about a year ago, the field was to have become the base for a joint venture between Russia and China to explore for oil and produce it.

Related: Is The Arctic Dream Dead?

But if BP succeeds in buying a stake in Taas-Yuriakh, it would ease Rosneft’s current financial burden. Because of the sanctions and the plummeting price of oil, Rosneft reports that its net debt rose to $45 billion by the end of the third quarter of 2015.

BP’s involvement also would help exploit the field and improve its efficiency, minimizing delays in exploration and production. That’s according to Alex Fak and Valery Nesterov, two analysts at Russia’s Sberbank, a savings institution in which the Russian government owns a majority share.

“This removes at least one source of concern for a company that has spread itself too thinly over the past couple of years,” Fak and Nesterov wrote in a research paper.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Todd Monka on December 30 2014 said:
    Fairness to all:

    Why can BP bypass sanctions and everyone else has to abide by

    them?

    Either there are sanctions or there aren't!

    Just because BP has a boatload of money doesn't make them above

    the law.

    Either honor the sanctions or drop the sanctions altogether.

    I am sure there are other oil companies that would like to do a

    deal with the Russians, but they abide by the sanctions.

    BP, the sanctions are there for a reason. If you give them

    business, they won't take action on what the sanctions are

    supposed to accomplish. The sanctions are supposed

    to get them to stop their "wrong" behavior. You are encouraging

    their wrong conduct by doing this deal.

    Why doesn't Russia listen to what these sanctions are bringing to

    their attention and make the needed changes so the sanctions can

    be lifted and this whole thing does not escalate into WW-3?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play