ECONOMY

Russia wants no foreign oil firms as pipeline partners

MOSCOW – Three Russian oil companies ultimately controlled by the Kremlin will share a 51 percent interest in a pipeline from the Black Sea to the Mediterranean, the head of one of the firms said yesterday. Semyon Vainshtok, CEO of oil pipeline monopoly Transneft, said his firm, state oil firm Rosneft, and Gazprom Neft, part of gas monopoly Gazprom, would equally share 51 percent of the line from Burgas on the Bulgarian coast to Alexandroupolis in Greece. He told a conference that Greece and Bulgaria would share the remaining 49 percent in the 700-million-euro ($890 million) project, designed over a decade ago to bring Russian crude to the Mediterranean and bypass the crowded Turkish straits. The announcement means the Kremlin has abandoned the idea of inviting foreign majors such as US firm Chevron or TNK-BP, the Russian vehicle of oil major BP, to take a share in the project. Vainshtok had previously told Chevron it would need to help Russia build a pipeline to bypass the Bosporus if it wanted permission to expand its pipeline from Kazakhstan to the Black Sea. TNK-BP was at one point appointed the Russian coordinator of the project but Vainshtok said this was no longer the case. «Private companies can participate in talks about the remaining 49 percent, which belong to Greece and Bulgaria,» Vainshtok said. The Kremlin has drastically increased control over the strategic energy sector under President Vladimir Putin. Analysts say he considers the oil and gas sector a top foreign policy tool at a time of high international prices for energy. Transneft has said the project could come on stream in 2009 to pump up to 200,000 bpd from Bulgaria’s Black Sea port of Burgas to the Greek port of Alexandroupolis on the Aegean Sea, with volumes set to triple in three or four years. Vainshtok also said he expected Russia would approve the investment basis, currently being finalized, for a pipeline linking its Asian pipeline with China. He said the link would be financed by the Chinese government. Once the investment plan was ready, the feasibility study for the link would be done. The pipeline is due to pump up to 600,000 bpd when it comes on stream at the end of this decade and to become the first major link between the world’s No 2 oil exporter and consumers in Asia. Until it is built, Russia is considering channeling oil exports to China via the new Atasu-Alashankou pipeline from Kazakhstan, a former Soviet republic.