Lukoil

Lukoil has agreed to sell its stake in several oil projects in Kazakhstan to Sinopec for $1.2bn, in the latest of a string of Chinese investments in the country’s energy sector. The Russian company – the country’s largest private-sector oil producer – said the purpose of the sale was to “optimize Lukoil’s overseas hydrocarbon asset portfolio”.

But the deal is also symbolic of China’s rapid expansion in Central Asia, part of Russia’s traditional “sphere of influence”. Read more

Russia’s second largest oil producer Lukoil has put on ice its plans to list on the Hong Kong Stock Exchange. Lack of an accord between Russian and Hong Kong regulators means Lukoil has, for now, shelved its plans for a $1bn to $2bn secondary listing.

This is despite the company being keen to find Chinese partners for its big overseas operations as it gears up to ship more oil and products to the Asian giant. Read more

The revolving door at Venezuela’s oil sector continued to spin on Wednesday after Lukoil, Russia’s second largest oil producer, said it was withdrawing from a multi-billion dollar oil project in the country’s heavy oil rich Orinoco basin.

The news comes just a month after Malaysia’s Petronas pulled out of another big project. Read more

Norway has been producing oil offshore since the 1970s and hardly needs help from relatively inexperienced Russia.

So presumably it’s for strategic reasons that Norway’s energy ministry decided this week to award Russian oil companies rights to explore on the Norwegian continental shelf for the first time. The two countries do after all share an offshore frontier. Read more

When KazMunaiGas muscled into the Karachaganak oil and gas field in 2011, international oil majors had no choice but to dilute their shares in the hugely profitable project to make way for Kazakhstan’s state oil company. At the time it was understood that KMG’s participation would clear the way for Kazakhstan to sanction the third phase of Karachaganak’s development and allow production to surge at the field. That now appears to be have been optimistic: in a surprise move this week, KMG said the expansion plan had been put on ice. Read more

For international companies, Brazil’s oil and gas industry can be challenging. The national oil company, Petrobras, has been appointed the sole operator by government decree of new fields in the country’s giant new offshore reserves, known as “pre-salt”. This means all operators have to work with Petrobras, exposing them to the risk of having the same government-controlled company as a partner. They also must source certain percentages of equipment locally, potentially making field development costly.

But that hasn’t stopped foreign companies from rushing in. Read more

State-owned Rosneft buys TNK-BP Photo Bloomberg

Russia’s government did its best on Wednesday to affirm its continued commitment to privatisation plans, despite carrying out what is in effect the largest nationalisation in post-Soviet history this week.

Andrei Belousov, economy minister, insisted that the purchase of 100 per cent of oil company TNK-BP by state company Rosneft did not mean the government was rethinking its commitment to rolling back state ownership of the economy. Read more

Monopolies would not be monopolies if they accommodated competition. So it’s not surprising that Gazprom appears to have its back to the wall. In Europe the Russian company is facing an anti-trust investigation for suspected abuse of its dominant market position. In Russia a simmering battle between Gazprom and the increasingly assertive independent gas producers has bubbled over into the open. As often happens in Russian gas disputes, Gazprom appears to be taking rather heavy handed action. Read more

An unusually forthright spat among stockbrokers over TNK-BP – one that that mirrors, in its modest way, the titanic battle being fought over the Russian oil group by its shareholders.

Renaissance Capital fired the opening salvo on Monday with a 63-page report on the Russian oil industry which raised serious doubts about the future of TNK-BP. Read more

Another big foreign oil deal in Russia. State-controlled Rosneft and Italy’s Eni announced on Wednesday a pact for offshore exploration in the Russian Arctic and the Black Sea.

Prime minister Vladimir Putin blessed the deal – Rosneft’s second big partnership this month, following last week’s accord with ExxonMobil. At the same time, Moscow has relaxed the tax regime governing the huge projects critical to its future as an energy producer. After many false starts, could it be that Russia is finally serious about working with foreign investors? Read more

Russia’s ministry of natural resources fired a shot across the bows of Lukoil on Friday, warning that the Russian oil major could lose the right to develop two huge Arctic oil fields in a partnership with Bashneft.

In the past hints like this have led to disputes in which the state damaged the interests of private oil investors – even to the extent of grabbing a share of strategic upstream assets. So although Lukoil and Bashneft’s shares have hardly reacted to the news, it’s worth watching closely to see how events play out. Read more

A good day for investors seeking dividends in Russia. Hot on the heels of the state-controlled companies looking to return around 25 per cent of profits (see previous story) comes Lukoil, Russia’s second biggest oil producer.

Lukoil isn’t state-controlled, but it has promised to become a “cash cow” for shareholders by boosting dividend payments in the coming decade. So investors can look forward to years of happy milking at Lukoil – including the top management who own substantial stakes in the company. Read more