#16 - JRL 7068
FACTBOX-Western oil projects in Russia

MOSCOW, Feb 19 (Reuters) - BP announced last week it would merge its medium-sized Russian assets with those of Russian private shareholders in TNK, the country's third largest oil producer, and pay $6.75 billion for 50 percent of the enlarged company.

Following the deal, the largest single foreign direct investment in Russia, analysts have said more international oil firms could soon decide to expand in Russia.

Following is a list of existing and planned oil and gas projects in Russia by some of the world's biggest energy firms:

EXXONMOBIL

U.S. ExxonMobil, the world's largest oil firm, is focused mainly on its huge oil and gas project on Russia's remote eastern island of Sakhalin.

The Exxon-led Sakhalin-1 production sharing deal, signed in the early 1990s, progressed slowly until last year, when the firm gave its final go-ahead to a $15-$20 billion plan.

It has already invested more than $1 billion and expects to produce its first oil by 2005 and build a gas pipeline to Japan by 2008.

Exxon has a 30 percent stake in the project, Japan's consortium Sodeco has 30 percent, with Russia's state oil firm Rosneft and India's ONGC holding the remaining 20 percent.

ROYAL/DUTCH SHELL

The world's second largest oil firm operates the most successful of Russia's few production sharing deals, Sakhalin-2, which extracted its first oil in 1999.

The company plans to invest $15-$20 billion over the next decade with output rising to 160,000 barrels per day (bpd) by 2008 from the current 40,000 bpd.

Shell also plans to build on Sakhalin the world's largest liquefied natural gas (LNG) plant to produce nine million tonnes of LNG per year, but the idea is progressing slowly due to the lack of deals with customers in Japan, Korea and China.

Shell owns 55 percent in Sakhalin-2, with Japan's Mitsui and Mitsubishi holding the remaining stakes. Sakhalin-2 reserves amount for 185 million tonnes of oil (1.4 billion barrels) and 800 billion cubic metres of gas.

Shell and Russia's gas monopoly Gazprom also signed a memorandum at the end of 1990s to develop oil and gas condensate deposits at Gazprom's huge Zapolyarnoye gas field, but the deal was never finalised.

BP

BP, the world's third largest oil firm, has extensive projects in Russia besides its 50 percent interest in TNK, which produces 1.2 million barrels per day, has reserves of 5.2 billion barrels and operates five refineries and 2,100 filling stations.

BP and Rosneft plan to jointly develop a number of Sakhalin oilfields (Sakhalin-4 and 5) and are currently looking for a matching production sharing deal.

BP has 49 percent in each project, containing huge but untapped oil and gas reserves.

BP also holds 30 percent in the giant Kovykta gas project in eastern Siberia with TNK controlling 29 percent. The field contains untapped gas reserves of 1.9 trillion cubic metres and is seen as one of the main sources for a planned gas pipeline from Russia to China and possibly South Korea.

The plan is not progressing due to lack of support from the government and opposition from gas monopoly Gazprom, which has its own strategy for penetrating the Chinese market.

TOTALFINAELF

TotalfinaElf, the world's fifth largest oil firm, is developing together with Norway's Norsk Hydro a medium-sized oil field in Russia's north, Kharyaga, which produces 30,000 bpd and holds 710 million barrels of reserves.

Total also acquired last year the giant but remote Vankor field in eastern Siberia, previously abandoned by Shell. It promises to invest up to $3 billion in exploration and new transportation routes from Vankor in the next few years.

The firm is also eyeing two offshore oil exploration projects in the Black Sea together with Rosneft and Russia's second largest oil firm YUKOS, but analysts question these plans as no oil has ever been found in the Black Sea.

The French giant also wants to develop with Gazprom the giant offshore Arctic Shtokman gas field with reserves of 3.0 trillion cubic metres. It needs investment of $10-$15 billion to link the field to Europe with a huge underwater pipeline.

Gazprom's other partners for Shtokman initially included Norsk Hydro, U.S. ConocoPhillips and Finnish Fortum, but recently Gazprom dropped the plan and said it would develop the field together with Rosneft. Total and ConocoPhillips say they are still interested in the project.

CONOCOPHILLIPS

Apart from its interest in the Shtokman gas project Conoco, the U.S.'s third largest oil firm, is producing 25,000 bpd from a northern small joint venture with Russia's largest oil firm LUKOIL, Polar Lights.

Conoco also wants to develop together with LUKOIL a neighbouring project in Russia's north, known as the Northern Territories, which may contain 4.0 billion barrels of untapped oil reserves. Conoco has said it needs to clinch a production-sharing agreement with the state to go ahead with a multi-billion dollar investment.

ENI

Italian energy group ENI is the largest importer of Gazprom's gas. The two firms equally own a $3 billion gas pipeline from Russia to Turkey under the Black Sea, the Blue Stream, which will become operational this year.

Under the agreement ENI can use 50 percent of the link's capacity and ship eight billion cubic metres of gas a year to Turkey. It does not produce gas in Russia but is planning to begin production there by 2005 from the huge Astrakhan deposit in Russia's south.

RUHRGAS

Germany's Ruhrgas is also one of Gazprom's largest Western clients. The two firms have several joint projects including a plan to build a gas link through Poland and Slovakia, bypassing Ukraine. Rurhgas has a five percent stake in Gazprom.