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Russian Oil and Gas Companies
August 30, 2007 18:07

Much is told today about oil invasion of Russia to the world markets, therefore it can be useful to learn more about the leading oil and gaz companies, “locomotives” of the Russian economy and business.

Gazprom

Though Gazprom is not an oil-producing company, it totally controls another “overwhelmingly” important natural resource – gas. Gazprom is the world’s largest gas company focused on geological exploration, production, transmission, storage, processing and marketing of gas and other hydrocarbons. 50, 002% of Gazprom’s stake belongs to the Russian government.

The world-biggest gas concern was formed in 1989. Prior to that date it was known as the Soviet Ministry of the Gas Industry. On November 5, 1992, President of the Russian Federation signed a decree on formation of the Joint Stock Company Gazprom.


Headquarters of Gazprom

Today the company possesses the richest gas reserves and it controls 20 percent of world gas-production. Gazprom exports gas to 32 countries and takes steps to expand its positions at the world market despite the fact that many countries don’t welcome the Russian monopolist.

A business priority of Gazprom is the exploitation of gas resources in the Yamal Peninsula, Arctic continental shelf, Eastern Siberia and the Far East. Currently Gazprom participates in several major projects, among them: Sakhalin II, Blue Stream, Nord Stream, Shtockman Project, Altai Project, Prirazlomnoye Oil Field.

On 11 February 2013, its founder and former chief executive Rem Vyakhirev died. 

In 2013, Gazprom is expected to lose the world’s top place as the most profitable public company, with expected full-year earnings totalling $37.3 billion in 2012.

Gazprom’s plans to explore the Arctic have been dealt a series of blows recently, including mothballing the promising Shtockman project and a delay in the oil production at Prirazlomnaya til the end of 2013.

Gazprom's rival NOVATEK, and even Rosneft, may be given the go-ahead to start exporting gas breaking Gazprom’s monopoly.

Government officials have come forward with open criticism of the way the company has been managed.

Among other threats to gas giant's leading positions experts have named the shale gas revolution in the US and Europe, and contractual discounts that European consumers have been demanding from Gazprom.

 

Novatek

OAO Novatek is Russia's largest independent natural gas producer, and second-largest in overall production after Gazprom. The company was established in 1994, since that time the company is doing exploration, production and processing of gas and liquid hydrocarbons.

The company’s deposits and licensed fields are located in Yamalo-Nenets District of Western Siberia (YANAO) - a region which provides about 83% of total Russian gas production and approximately 16% of the world’s natural gas production.
In June 2005, NOVATEK commenced operations at its wholly-owned Purovsky Gas Condensate Stabilization Plant. The Purovsky Plant gave NOVATEK full control over its processing needs and allowing it to export 100% of its stable gas condensate through the Vitino Port facilities on the White Sea.
In the first nine months of 2011, gross production for NOVATEK totaled 39.01 billion cubic meters of natural gas and 3.06 million tons of liquids. Natural gas production increased by 12.12 billion cubic meters, or by 45.1%, whereas liquids production increased by 425 thousand tons, or by 16.1% as compared with the corresponding gross production in the first nine months of 2010.
In the third quarter and first nine months of 2011, NOVATEK processed 928 and 2,884 thousand tons, respectively, of unstable gas condensate at the Purovsky Gas Condensate Processing Plant
OAO Novatek is a joint stock company. Its equities are traded at Russian stock exchanges, at MICEX: NVTK, at RTS: NVTK; global depositary receipts are traded at London stock exchange as NVTK, and at NASDAQ PORTAL as NVATY.  
The major shareholders of Novatek are Leonid Mikhelson with about 27.17%, Gennady Timchenko with about 20.77%, Gazprom with 19.4%, the French company Total with 14.09%.
 
One of the key projects is the Yamal LNG, a rival of Gazprom's Shtockman project.

Lukoil

Lukoil is the biggest private oil company in Russia. It basically focuses on exploration and production of oil & gas, production of petroleum products and petrochemicals, and marketing of these outputs. Lukoil’s main resource base is situated in Western Siberia, while its refineries, gas processing and petrochemical plants are located in Eastern Europe as well as in Russia. The biggest Russian refineries are in Ukhta, Nizhny Novgorod, Volgograd and Perm. State-owned oil concern Lukoil (formerly named LangepasUraiKogalymneft) was established in 1991.

Today the Company has around 1.3% of global oil reserves and 2.3% of global oil production. LUKOIL dominates the Russian energy sector, with almost 19% of total Russian oil production and 18% of total Russian oil refining.

Lukoil branches can be found in 19 countries including Russia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine, Bulgaria, Hungary, Finland, Estonia, Latvia, Lithuania, Poland, Serbia, Romania, Macedonia, Cyprus and Turkey and the United States. The marketing network of the company consists of 200 tank farm facilities and 5,793 filling stations (including franchises).

Lukoil is quickly “moving forward” and hopes to become the leading oil company in Europe.

Gazpromneft (former Sibneft)

As the official site of the company states, Gazpromneft is Russia's fastest-growing oil company. Earlier known as Sibneft the company got a new name of Gazpromneft in 2006. This fact didn’t affect the development strategy of the company, but testified the change of the owner.

Noyabrskneftegas was established in 1981 and served as a basis for Sibneft, which was founded in 1995 by consolidation of Noyabrskneftegas and the Omsk Refinery assets.

Today the company’s proven oil reserves exceed 4.5 billion barrels of oil, which ranks the company among the top twenty private oil companies globally. The major part of reserves is located in Noyabrsk area and is not expected to run short in the next 18 years. Today Gazpromneft possesses over 1800 filling stations in Russia including franchisees.

 

The company's strategic development plan is worth more than $23 billion to be invested into new exploration projects and the upgrade of existing refineries.
 
Among Gazpromneft's targets for 2020 are the $10 billion cash flow, up from current $1.5 billion, an output worth 100 million tons, up from 57.3 million tons, refining capacity increase from 40.5 million tons to 70 million tons.

 

Rosneft

Rosneft is one of the world-biggest vertically-integrated oil companies. Owning 2 refineries, four main oil terminals and a network of over 700 service stations, the company is among the top ten in crude oil production. Rosneft’s headquarters is located in Moscow.

Established in 1993, Rosneft became a successor of Rosneftegaz, which in its turn was founded on the basis of the former Ministry of oil and gas industry. After the years of regress in 1995-1998, the new management of the company headed by Sergei Bogdanchikov announced the new strategy. In 2000 Rosneft regained its right to be a profitable enterprise. Since then the company has acquired controlling stakes in 4 Russian oil companies. In 2006 Rosneft conducted USD 10.6 billion IPO.

The proved oil reserves of the company amount to 14.88 billion barrels (2.05 billion tonnes.

In 2012, Rosneft announced it will buy out TNK-BP in a historic $55 billion deal with BP and AAR.

Surgutneftegaz

Surgutnefetegaz is another large oil company. Its main activities include prospecting, gas and oil filed constriction and development, production and marketing of oil, gas and petrochemical products.

The territory stretching along the middle section of the river Ob and surrounding Surgut, is one of the first territories where in the middle sixties oil and gas production started in Western Siberia. In 1993, the property complex of the production association “Surgutneftegas” became the basis for establishing a joint stock company, which retained the name “Surgutneftegas”.

Today over 50 divisions of the company operate on the market. The recoverable oil and gas reserves amount to 2.5 billion tons of oil equivalent.

Surgutneftegaz possesses 300 filling stations, 32 tank farms and 24 oil-storage tanks. The headquarters of the company is located in the city of Surgut, the Tyumen Region.

TNK BP

The company was established in 2003 by merger of BP’s Russian assets and assets of Alfa Access Renova group (AAR). Today TNK BP is known as a leading Russian oil company with principal refineries in Ryazan, Saratov, Nizhnevartovsk and Lisichansk in Ukraine. TNK-BP’s total proved reserves are 1.0 billion tons of oil equivalent. Headquartered in Moscow the company owns a network of about 1600 filling stations in Russia and Ukraine operating under TNK and BP brands.

In 2012, Rosneft announced it will buy out TNK-BP in a historic $55 billion deal with BP and AAR.

 

  

 

Tatneft

Tatneftis a Russian vertically-integrated oil and gas company with headquarters in the city of Almetyevsk , in the Republic of Tatarstan. The Company ranks No 6 in Russia by the volume of oil production after Rosneft, Lukoil, Surgutneftegaz, TNK-BP and Gazpromneft.The company was established in 1950. It was turned into Joint Stock Company in 1994.

The Group includes: oil and gas production entities;oil and gas refining entities OAO TANECO, Neftegaspererabotka Administration; petrochemical production facilities;  enterprises for selling crude oil and gas, as well as oil, gas, and petrochemical products;  intracorporate stream of service structures.
Annually, the Company increases the volume of oil production. TATNEFT owns most licenses for oil exploration and production in the territory of Tatarstan, and expands its resource base through deposits development in such Russian territories as Republic of Kalmikya, Orenburg, Samara, Ulyanovsk regions and Nenetsk Autonomous District. Oil produced on the territory of Tatarstan is considered heavy and contains much sulphur. The oil of such quality is law-priced but takes much cost for its production.
For eleven months of 2011 OAO Tatneft has developed 23 726 389 tons of oil, what is 45 243 tons more than in 2010. In the end of December 2010, the company’s capitalization made up about 307,6 bl Rubles ($10.131 bl).
Tatneft is listed on the Moscow (RTS:TATN) bourse, and its ADRs are traded on the Frankfurt (ISIN:US6708312052) and London (LSE: ATAD) stock exchanges.
 

The Oil Transporting Joint Stock Company "Transneft" was established according to the Decree #1403 of the President of The Russian Federation dated 17 November 1992 and by the Decision #810 of the Government of Russian Federation dated 14 August 1993. The constitutor is the Government of the Russian Federation.

Transneft
 

The main company’s activity is rendering the service of oil and oil products transportation via the system of trunk pipelines inside and outside Russian Federation.

Transneft” operates around 70 thousand km of linear pipelines, over 500 pumping stations, over 20 million cubic meters of reservoirs. The company transports 93% of all Russian oil.

JSC Transneft is a subject of natural monopolies, 100% of voting stocks are in federal property.

Its 2Q 2012 net profit fell 23.5 percent, year-on-year, to 34.5 billion roubles ($1.08 billion).

Sources:

    www.gazprom.ru 

    www.lukoil.ru
    www.gazpromneft.ru
    www.rosneft.ru
    www.surgutneftegaz.ru
    www.tnk-bp.ru 

    www.tatneft.ru

    www.novatek.ru/

     www.transneft.ru

 Olga Pletneva, Irina Fomina, Mikhail Vesely


Tags: Russian business Russian oil and gas producers Russian oil and gas industry   

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