Armenia to refine Iranian oil

Armenia's oil refinery construction project with Russia and Iran will cost approximately $2 billion, The Iranian deputy minister of energy is expected to visit Armenia this month and the two sides plan to discuss the schedule of further works during the visit. Previous reports said the refinery would carry out advanced refining of oil from Iran and produce refined oils, predominantly petrol and diesel fuel. It would sell about 1 million tons of oil products in Armenia, and the rest will be sold abroad.

The Armenian government and Russia's Gazprom energy giant have failed to reach a final agreement on the price of Russian natural gas for Armenia, which is due to rise significantly next year.
The issue dominated talks in Yerevan on May 19 between President Serzh Sarkisian and Prime Minister Tigran Sarkisian (no relation to Serzh), and visiting Gazprom CEO Aleksei Miller. Both Tigran Sarkisian and Energy Minister Armen Movsisian refused to comment on the talks when approached by RFE/RL on May 20.

In January 2006, Gazprom nearly doubled the price of the gas it supplied Armenia, from $54 to $110 per thousand cubic meters. However, the cost for Armenian corporate and individual consumers remained virtually unchanged until this month due to a controversial April 2006 agreement that left more Armenian energy assets under Russian ownership. In particular, Gazprom consolidated its controlling stake in Armenia's gas-distribution network and paid $249 million for an incomplete but modern thermal power plant located in the central town of Hrazdan.

By contrast, Gazprom raised the gas price for Georgia and Azerbaijan from $60 to $110 in early 2006, and again in November of that year to $230 per thousand cubic meters as of January 2007.

The Armenian government has since used the money from the sale of the Hrazdan facility to subsidize gas prices, but admitted last month that those funds are almost exhausted and that subsidies would end as of May 1. This resulted in a 50 percent increase in the retail price of gas supplied to Armenian households and business entities. With another Gazprom price hike planned for January 2009, they will likely go up further.

Azerbaijan has released equipment destined for Iran's Bushehr nuclear power plant after delaying the shipment's delivery for a month while apparently investigating its purpose, international media reported on May 1. The shipment of heat-isolating parts was sent by Russia, which has built the Bushehr plant on the Persian Gulf coast, but it was held up at the border on March 29. Azerbaijan has said it was concerned the cargo might contravene UN sanctions, and was seeking more information, AP reported on May 1. Iran is facing UN sanctions intended to curb its nuclear program. The Russian contractor building the Bushehr plant, OAO Atomstroieksport, has accused Azerbaijan of deliberately obstructing the shipment, AP reported.

Swiss EGL-AXPO wants Azerbaijan gas for Trans Adriatic Pipeline

Natig Aliyev, Azerbaijan’s Minister of Industry and Energy, has met with Robert Lombardini, Head of EGL-AXPO Group of Switzerland. The Ministry’s Press service said EGL-AXPO Group together with StatoilHydro are working the Trans Adriatic Pipeline (TAP), a proposed natural gas pipeline project to transport natural gas from Greece via Albania to Italy.Unlike Poseidon Project, this project is shorter, more feasible and inexpensive. Albany and Italy are soon due to sign an agreement on the project.

Given the significance of the issue, an agreement will be signed to create an Azerbaijan-Italy energy corridor.
The meeting also discussed issues of cooperation between Azerbaijan and Switzerland on the use of alternative and renewable energy sources.

In late May, a meeting on gas pumping via Azerbaijan-Turkey-Greece-Italy route has been scheduled to take place shortly in Athens between the four countries involved - Greece, Italy, Turkey and the supplier Azerbaijan. The meeting will conclude with an agreement.

Kulevi Terminal went on stream in Georgia

Kulevi Oil Terminal (or Black Sea Terminal) in Georgia was inaugurated on May 16, the State Oil Company of Azerbaijan (SOCAR) told APA-Economics.

The opening ceremony was joined by Azerbaijani Prime Minister Artur Rasizade, Industry and Energy Minister Natig Aliyev, Transport Minister Ziya Mammadov, SOCAR President Rovnag Abdullayev.
Azeri and Georgian government officials visited the terminal and acquainted themselves with itstechnical capacity.
Kulevi Terminal is designed to unload 168 oil tank wagons and the capacity of reservoirs is 320 000 tons. The terminal is capable of taking tankers with the capacity of more than 100 000 tons. The terminal will handle 10 million tons of crude oil and petroleum products per annum at the first phase while its capacity is slated to increase to 15 million to 20 million tons late.

Construction of the terminal was launched in 2000 with the participation of the Georgian Railways and Austrian company Argomar Oil. However, construction work was suspended in 2002 due to lack of funding. Two years later an international consortium was created with the participation Argomar Oil and several other Georgian and foreign investors. SOCAR acquired the terminal in Kulevi in early 2007 from the consortium.

Azerbaijan lays pipeline across Caspian seabed for Russia

Azerbaijan's state-owned oil company GNKAR said on Tuesday it had completed building an oil pipeline along the bottom of the Caspian Sea for a major Russian crude producer. The company laid a 58-kilometer (36-mile) long pipeline to the Yury Korchagin oil and gas field, located in the Russian sector of the Caspian Sea. The deposit, which is being developed by Russia's LUKoil oil company, is expected to produce 10 billion cubic meters of gas and 4 million metric tons (80,000 bbl/d) of oil annually.

Work is currently under way to test the operation of the pipeline, GNKAR said.

Korea National Oil Corporation to open a representative office in Azerbaijan

Korea National Oil Corporation (KNOC) intends to open a representative office in Azerbaijan.

KNOC manager Joon Ji Se told APA that the Corporation is negotiating with State Oil Company of Azerbaijan (SOCAR) to join several oil field development projects in Azerbaijan.

Last year KNOC acquired a stake in Inam Oilfield in the Azerbaijan sector of the Caspian Sea.
The offshore Inam contract area covers 225 square kilometers approximately 140 km south of Baku. Water depths in the area vary between 45 metres in the north to 200 metres in the south.
Inam PSA includes BP 25% and operator, SOCAR 50%, KNOC 20% and Shell 5%.

Started in November 2007 the planned drilling activities for INX-2 exploration well under the Inam PSA reached its final total depth of 5404 meters in April.

The extensive planning for the INX-2 well resulted in the well being drilled in under the planned time of 200 days. The well planning used the experience from SOCAR’s well from the early 1990s and the 2000-01 INX-1 well on the southern flank of the structure, as well as the extensive 3-dimensional seismic survey carried out in 1999. INX-2 was drilled using a 15 000 psi-rated blowout preventor equipment (BOPE).

Burzu Aliyev: “It’s early to speak about filling Odessa-Brodi oil pipeline with the Caspian oil”

Deputy Energy Minister of Azerbaijan Burzu Aliyev said it was early to speak about filling Odessa-Brodi oil pipeline with the Caspian oil. APA reports Burzu Aliyev said in his interview to BBC that it required the decision of the State Oil Company of Azerbaijan Republic and solution of technical problems.

Azerbaijan disagreed with Russia’s drive to form CIS energy market

Azerbaijan was represented in the CIS Power Energy Council’s meeting in Moscow on May 23 by a delegation of AzerEnergy, the national electricity producer.

Marlen Asgarov, Vice-President of AzerEnergy, told APA-Economics that the meeting focused on several issues of mutual concern, including preparation for winter, capacity-building for cross-border electivity transmission and regional energy projects.

“Russia’s proposal to set up a single energy market in the CIS area didn’t satisfy some states. Azerbaijan, Ukraine and Moldova didn’t accept the proposal.  

Ceremony of opening of a new asphalt factory built by Neftgaztikinti Trust (State Oil Company of Azerbaijan; SOCAR) has been held today with participation of SOCAR president Rovnag Abdullayev.

Enterprise’s capacity makes 50 tons per hour.

Neftgaztikinti Trust has under its authority five asphalt factories at the Neft Dashlari, Chilov, Pirallakhi, Peschany Island, and Sangachal islands.

Israeli Infrastructure Minister to visit Azerbaijan

Israeli National Infrastructure Minister Benjamin Ben-Eliezer will visit Azerbaijan next week, APA reports quoting Israeli sources.

The visit aims to discuss issues on gas import from Azerbaijan. The guest will meet Azerbaijani President Ilham Aliyev and Industry and Energetics Minister Natig Aliyev.

BELARUS

Prague a meeting of CEOs of Baltic transmission system operators and Union for the Co-ordination of Transmission of Electricity (UCTE) is being held with an aim to discuss further actions of synchronous connection of Baltic power systems and UCTE.

According to Mr.Vladas Paškevičius, Power System Director of Lietuvos Energija AB, the meeting has been initiated by transmission system operators of Lithuania, Latvia and Estonia.  

On June 11, 2007, Lithuanian, Latvian and Estonian Prime ministers signed a communiqué, obliging Baltic transmission system operators to perform a feasibility study of interconnection of Baltic power systems with UCTE for synchronous operation. 

The interconnection of the power system with UCTE for synchronous operation is a part of the National energy strategy.

Articles of association signed in Warsaw of joint venture to implement interconnection Project of Lithuanian and Polish Power Systems

Warsaw (Poland), May 19. Today CEOs of electricity transmission system operators Lietuvos Energija and PSE Operator (Poland) signed articles of association of joint venture LitPol Link, which will implement the interconnection project of Lithuanian and Polish power systems.

The project implementation venture LitPol Link shall prepare a technical project, revise and approve routes of the new power lines, conduct an environmental impact assessment, address issues of land acquisition, permits, licensing, perform other preparatory works.

Lietuvos Energija and PSE Operator will each own 50 per cent of the joint venture shares. It is expected that the new enterprise will be registered in June.

During the ongoing meeting the company’s Board of Supervisors and CEO will be elected.

After succeeding in an auction British company INTERCHEM ENERGY LTD acquires right to purchase crude oil

The best bidder of the auction Interchem Energy Ltd has acquired the right to purchase up to 36000 tons of BRENT (DTD) and up to 1750 tons of URAL'S (MED) oil from Georgian Oil and Gas Corporation during this year.

The crude oil is to be delivered by several stages during the effective period of General Contract between GOGC and the best bidder of the auction.

On 1 April, 2008 GOGC has announced an auction on up to 36,000.0 tons of  BRENT (DTD)  and up to 1750 tons of URAL'S (MED) oil. GOGC sells oil produced by its subsidiary company Ioris Valley Oil and Gas along with state shares of crude received from oil producers under the PSAs.

 02.05.2008 –GEORGIAN OIL AND GAS CORPORATION

The State Oil Company of Azerbaijan (SOCAR) and Georgian National Oil and Gas Corporation signed a natural gas agreement for 2008, a source in the government of Azerbaijan told APA-Economics.

Under the new agreement, Azerbaijan increased the price of gas for Georgia.
Azerbaijan has restarted pumping 1.5 million cubic meters of gas a day natural gas to Georgia since April 23, not releasing the price.

Unofficial sources said Azerbaijan is likely to charge Georgia $180 per 1,000 cubic meters, compared to $120 Tbilisi paid until the gas deal expired in early January.

Georgian officials expressed hope that Azerbaijan would not overcharge Georgia for natural gas even in the new agreement and the prices would be lower than that of Russia.
Georgia said early it would continue importing natural gas from Azerbaijan if it is priced lower that of Russia ($235 per 1,000 cu m).

At present Georgia also takes 250 million cubic meters of gas as a transit tax for transportation of Azeri natural gas via Baku-Tbilisi-Erzurum Pipeline.

Azerbaijan’s state oil company, SOCAR, has inaugurated its new terminal in Kulevi on Georgia’s Black Sea cost at an official ceremony attended by President Saakashvili and Azerbaijani Prime Minister Artur Rasizade on May 16.

SOCAR bought unfinished oil terminal in Kulevi in late 2006 from late tycoon Badri Patarkatsishvili for undisclosed sum. SOCAR said that it had invested over USD 300 million in construction of the terminal.

SOCAR plans to ship 5 million tones of oil and oil products per year through the terminal at the first stage and to increase the capacity to 10 million tones in next two years. SOCAR, according to Reuters, also plans to build gas storage facility in Georgia.

Speaking at the ceremony in Kulevi, President Saakashvili said that Kulevi was “Georgia’s new sea gateway,” which along with planned free economic zone in Poti would create conditions for, as he put it, “total employment” of the local residents.

Georgia has sold a 51% stake of Poti port to the Investment Authority of the UAE’s Ras Al Khaimah (RAK) emirate, which, according to the Georgian officials, has committed to develop a free economic zone on 300 hectares of land in Poti and in addition to built a new port terminal on a 100 hectare site. Details of the deal remain unknown as agreement between the Georgian authorities and RAK Investment Authority is not yet available

The project aiming to transport Caspian crude to Europe is being discussed at Energy Summit in Kiev

The issues of development of the project aiming to carry Caspian crude to Europe are discussed at the Energy Security Summit in Kiev on 22-23 May.

President of Georgia Mikheil Saakashvili, President of Azerbaijan Ilham Aliev, President of Lithuania Valdas Adamkus, President of Latvia Valdis Zatlers, President of Estonia Toomas Henrik Ilves, President of Poland Lech Kachinski, President of Romania Traian Basescu and the president of Moldova Vladimir Voronin are  participating  in this summit.

Georgian delegation is presented by Minister of Energy Alexander Khetaguri and Zurab Janjgava - General Director of Georgian Oil and Gas Corporation.

Within the Summit the Ukrainian House will host the International Energy Forum on 22 May and high level meeting scheduled for 23 May. Odessa-Brody pipeline is expected to be the main topic of the upcoming summit.

EPG successfully completed 1st stage of individual metering in Adjara Branch

ENERGO-PRO Georgia successfully completed 1^st stage of individual metering in Adjara Branch of the company. Modern type European standard meters were installed to 5 500 customers in City Kobuleti. Company invested GEL 1,5 mln (one million five hundred thousand) for the implementation of the project.

Re-metering procedure was preceded by the grid rehabilitation. Planned repairs finished in the end of March, which was followed by the commencement of re-metering.

Mentioned activities in Kobuleti were due to end in the end of June; however they were conducted in a fast pace and were completed one month in advance.    

Customers in Kobuleti shall be billed in accordance to their individual meters. Owing to individual re-metering, EPG customers will be able to control their electricity consumption.

EPG works on rehabilitation of high voltage electricity transmission communications in Kvemo Kartli Region

For the purpose of better electricity supply of residents and increase of energy system operation in the region JSC ENERGO-PRO Georgia carries out rehabilitation of substations located in Kvemo Kartli.

According to the information supplied by the regional PR division of the company, along with ongoing repair activities, EPG plans to construct new accumulator rooms in substations.

Corresponding repairs are carried out in 110 kV substations Small Rustavi and Right Coast. After the rehabilitation new accumulators will be placed in the facility. At Shulaveri substation the kind of facility has already been equipped. 

Apart from that EPG continuous rehabilitation of high voltage 110-35 kV electricity transmission poles; repair and replacement of old damaged poles. Rehabilitations are completed at Giganti 1, Marani, Rustavi -110, Sartichala 1 poles. In total 23 poles were rehabilitated in the region.

Mentioned activities represent the next step forward towards the stability electricity supply in the region and further development of Georgian energy system.

Efforts to construct a trans-Caspian pipeline that would dent Russia’s energy-export dominance in the region continue to make incremental progress.

Much attention in recent months has focused on construction of a natural-gas pipeline across the Caspian. But it may prove that the first route under the sea would carry oil, and link in to the Baku-Tbilisi-Ceyhan (BTC). Attention is shifting to an oil transport route after Kazakhstan’s senate in late April ratified an energy export treaty with Azerbaijan. President Nursultan Nazarbayev’s signature is widely considered a formality.

The treaty sets out the conditions for shipping Kazakhstani oil to Western markets via a route that bypasses Russia, which currently enjoys a stranglehold on pipelines out of Central Asia. Treaty ratification also marks the start of an ambitious $3 billion project, the Kazakhstan Caspian Transportation System (KCTS), to build the infrastructure needed to ship the oil across the Caspian Sea. The first phase of the project involves construction of a pipeline that links the production center of Yeskene to the Caspian port facility at Kuryk. Beyond that, the Kazakhstani government is prepared to spend up to $10 billion in creating an energy export hub at the western coastal city of Aktau, according to a report distributed by the RIA Novosti news agency. Construction of the hub could take up to five years.

Sources in Kazakhstan suggested that the government would be willing to commit to exporting 23 million tons of oil per year initially via the BTC, rising to a possible 38 million tons after the KCST is completed. Current expectations are that the launch will take place when the troubled Kashagan project comes online, which is now – after a series of delays – expected in 2011.

For now, Kazakhstan is content with taking a go-slow approach. The potential construction of a trans-Caspian oil pipeline will likely depend on the performance of the KCTS, suggested Disenova. "I think that the feasibility of a trans-Caspian pipeline would depend on how well the trans-Caspian system of transporting hydrocarbons would work," she said. "If the latter works well and is able to absorb additional volumes of oil from Kazakhstan, then there would be no need for a pipeline. However, if it does not work then probably it would be economically feasible to construct a pipeline."

Presentation of main line pipeline Kazakhstan - China took place in Taraz

Taraz. May 4. "Kazakhstan Today" Presentation of main line pipeline Kazakhstan - China took place in Taraz, agency reports.

Particpants of the presentation were akim of Zhambylskaya oblast Boribay Zheksembin, akim of Taraz Ilyas Tortayev, representatives of "KazTransGas" JSC and TransAsiaGazPipeLine, as well as statesmen from the oblast akimat departments.

The new project will be realized within the framework of the program for development of gas field of the Republic of Kazakhstan up to 2010. Gas pipeline Kazakhstan-China with its length of several thousands of kilometers will go through the area of the six oblasts of the country: Mangystauskaya, Aktubinskaya, Kyzylordinskaya, South Kazakhstanskaya, Zhambylskaya and Almatinskaya. In the Zhambylskaya oblast the gas pipeline will go through area of Shuskiy, Merkenskiy, Ryskulovskiy, Baizakskiy, Zhambylskiy, Zhualynskiy and Kordayskiy districts. Thus, the Kazakhstani gas will be able to be provided the following oblasts: Southern Kazakhstanskaya, Zhambylskaya and Almatinskaya. About 40 billion of cubic meters a year will be transported over new gas pipeline, thirty of which are mean for China, and the rest ten - for southern regions of Kazakhstan.

Japan, Kazakhstan to push nuclear co-operation

Energy-hungry Japan and resource-rich Kazakhstan vowed on Monday to develop cooperation in uranium production and nuclear energy, cementing previous agreements in the strategic sector.

Kazakhstan is home to a fifth of global uranium reserves and wants to surpass Australia and China to become the world's top producer by 2010 by cooperating with foreign majors in developing new fields and raising value-added production.

Last year, Kazakh state nuclear firm Kazatomprom signed a deal with Japanese utility Kansai Electric Power Co trading house Sumitomo Corp and Tokyo-based Nuclear Fuel Industries Ltd. to supply Kansai's power plants.

Under last year's deal, Kazatomprom will start sending supplies of nuclear fuel to Japan in 2009 with volume initially at 20 tonnes and increasing later. The company plans to take over 30 to 40 percent of Japan's market in future.

Japanese firms, in turn, will help upgrade Kazatomprom's Ulba plant producing uranium pellets and other value-added products, and invest in developing new deposits.

Yamamoto said production at Western Mynkuduk, the first uranium deposit developed with Japanese company investment, would start in June. The second joint project, Khorasan deposit, will start later.

Kazakhstan and Japan have signed a deal to work together on atomic energy.
Kazakh Energy and Mineral Resources Minister Sauat Mynbayev and Japanese Deputy Economy, Trade and Industry Minister Kanae Yamamoto signed the memorandum of understanding on strategic partnership in peaceful uses of atomic energy, the Daily News Bulletin reported.

Kazakhstan's Energy and Mineral Resources Ministry said this lays the foundation for 24 atomic energy projects, including some involving reactor technologies and the production of nuclear fuel.
The three other bilateral documents that were signed during Mynbayev's visit to Japan include a protocol on the development of Kharasan-1 and Kharasan-2 uranium blocs, a confirmation of the agreement between Kazatomprom, Sumitomo Corp., Kansai Electric Power Corp. and Appak on the development of the Zapadny sector of the Mynkuduk field and an agreement between Itochu and Kazatomprom on supplies of uranium concentrate.

International environmental campaign wins back-to-back victories moving towards justice at the Karachaganak oil field in Kazakhstan

After five years of campaigning for resettlement and compensation from the nearby toxic Karachaganak oil and gas field, the villagers of Berezovka, Kazakhstan and their international environmental partners-Crude Accountability (US) and the Ecological Society "Green Salvation" (KZ)-have recently achieved two fundamental victories-at both the international and national levels.
On April 25, 2008, an official audit by the World Bank's International Finance Corporation (IFC), which provided $150 million in loans to the Karachaganak project, revealed that the IFC is out of compliance with its own safety standards for toxic emissions at the giant field in western Kazakhstan. This disclosure follows on the heels of a precedent setting decision in late March by Kazakhstan's Supreme Court, mandating that previously confidential environmental data from the Karachaganak Field be made public.
Berezovka provides a clear example of the typical environmental and social exploitation occurring in the Caspian region at the hands of western oil consortia and corrupt local officials. What is not typical about Berezovka is that the citizens are fighting back on both the national and international arenas, proving that the IFC has been violating their right to a clean and healthy environment. "The IFC has violated Kazakhstani legislation, international standards and its own regulations. It should pay restitution to the residents of Berezovka and others whose health has been damaged by emissions from the Karachaganak Field," said Kate Watters, Executive Director of the environmental justice
organization Crude Accountability.

Russia, Kazakhstan agree to double pipeline capacity by 2012

Russia and Kazakhstan have agreed to double the capacity of the Caspian Pipeline Consortium (CPC) by 2012, the Russian Industry and Energy Ministry said on Wednesday.

The decision was agreed during a visit to the ex-Soviet republic by Industry and Energy Minister Viktor Khristenko on May 6 and 7.

The parties also agreed to supply an extra 17 million metric tons of Kazakh oil through the Burgas-Alexandroupolis pipeline. The trans-Balkan oil pipeline, being built by Russia, Bulgaria, and Greece, will pump 35 million metric tons of oil a year (257.25 million bbl), a volume that could eventually be increased to 50 million metric tons (367.5 million bbl).

The Caspian Pipeline Consortium (CPC), designed to carry Kazakh and Russian crude to a terminal on the Black Sea, was commissioned in October 2001. Its capacity currently stands at around 30 million metric tons of oil a year.

Ten pumping stations, six oil tanks for 100,000 cubic meters each and another tanker facility will have to be built for the pipeline to reach its full capacity.

The two countries will hold expert consultations on the issue later in May. The feasibility study for the pipeline project expires in September 2008.

Russia's pipeline operator Transneft is a beneficial owner of a 24% stake in the CPC, and Kazakhstan holds 19%.

Iran offers ocean to oil giant Kazakhstan

A central tenet of U.S. Middle East foreign policy has been to maintain Washington's sanctions imposed on Iran under the 1996 Iran-Libya Sanctions Act, or ILSA, and persuade or strong-arm other nations into minimizing their trade relations with the Islamic republic.

Regional trade realities have been slowly chipping away at the sanctions regime for years, and the final nail in the coffin may well come from U.S. ally Kazakhstan, the sole rising petro-state able to ramp up production to meet rising global demand, where oil is topping $126 a barrel.

Kazakhstan's problem is that, if current estimates are correct, within the next two years its oil production will outstrip the current carrying capacity of its major export pipeline, the 938 mile-long Tengiz-Novorossiisk pipeline. The pipeline links western Kazakhstan's Kashagan and Karachaganak oilfields with Russia's Novorossiisk port on the Sea of Azov; tankers then ferry the crude across the Black Sea and through the Turkish Straits to thirsty Western markets.

Enter Iran. While the CPC is slated for upgrades to produce a projected capacity of about 1.4 million barrels per day by 2015, Tehran sees the disparity between Kazakh production and transit capabilities as a golden opportunity to increase its oil swaps, under which Kazakh oil is shipped across the Caspian to the northern Iranian port of Neka, with Almaty receiving an equivalent amount of Iranian crude at Iran's southern port facilities on the Gulf.

Up to now, Kazakhstan, fearing to anger the United States, has made limited use of Neka, which last year received about 70, 000-80,000 bpd. But Iranian-Kazakh trade is steadily rising, in 2006 exceeding $2 billion, up from $700 million in 2004. Iran's Caspian port of Amirabad also receives Kazakh oil imports.

Now Iran is upping the ante, offering increased Kazakhstan transport facilities not only for its oil exports but other goods, including wheat. Last month at an oil and trade conference in Baku, National Iranian Oil Refining and Distribution Company oil refining department director, Aminollah Eskandari, touted for Caspian business, telling participants: "Countries in the region should not ignore Iran as an attractive option for access to international markets and as a reliable partner."

While most American motorists barely even know where Kazakhstan is, if the U.S. administration finally decides on a military option against Iran, then $126 a barrel oil may become a fond memory, as it is certain that production from the world's largest oilfield discovered in the last three decades will be diverted elsewhere.

KEPCO, Samsung in $4.5 bln Kazakhstan power project

South Korean utility Korea Electric Power Corp and building group Samsung Corp \have secured a preliminary $4.5 billion deal to build a power plant in Kazakhstan, a source close to the matter said.

The two firms are in talks with Kazakhstan's state holding company Samruk, the source said on Wednesday. (Reporting by Cheon Jong-woo; editing by Jonathan Hopfner)

Japan Inpex to up investment in Kashagan oilfield

Inpex Holdings Inc, Japanese biggest oil and gas explorer, plans to increase investments in Kazakhstan's Kashagan oil field in the Caspian Sea by 25 percent or more in the business year that started in April, a company executive said on Wednesday.

That compared with about 40 billion yen invested in the year that ended in March.

The January deal, while calming investor confidence shaken after six months of squabbling between Kazakhstan and the oil majors, will be enforced only after the sides agree on the precise production and structural details of the project.

Under that deal, Kazakh's state-owned KazMunaiGas would double its stake in Kashagan and strip Eni of its leading role in the project, whose production start has been further delayed to the end of 2011.

The deal followed a stand-off that started in August when the Kazakh government accused its shareholders of allowing costs to spiral to $136 billion from $57 billion, and delaying the start of production from the original 2005 target.

Kazakhstan threatened this month to slap sanctions on the consortium should its operators decide to delay the start of production again.

Lithuania is interested in developing energy cooperation with Kazakhstan, said Lithuanian Prime Minister Gediminas Kirkilas. He said the supply need comes from Lithuania's plans to close the Ignalina nuclear power plant.The possibility of constructing a liquefied gas terminal in Klaipeda, a seaport in Lithuania, was also discussed.

 "Kazakhstan Today" Kazakhstan introduces a ban on oil products export. Prime minister of Kazakhstan Karim Massimov declared it during the session of the state commission on modernization of economy, agency reports.

Kazakhstan has cut its oil and gas condensate forecast for 2008 by 3.4% to 67.6 million tons (496.9 million barrels), the Central Asian country's economics minister said on Wednesday.

Last year, the ex-Soviet republic produced 62.7 million tons (460.84 million bbl) of crude. On May 17, Kazakhstan introduced a customs duty on oil exports of $109.9 per ton, with the global oil price standing at $714 per ton. The government said the move would ensure stable supplies to Kazakh oil refineries and yield over $1 billion in oil revenue to the national budget. Kazakhstan also imposed a ban on the export of oil products until September 1, 2008.

Government reduced a planned volume of oil extraction for 2008 from 70 to 67,6 mln ton
Astana. May 21. "Kazakhstan Today" The government of Kazakhstan reduced a planned volume of oil extraction and gas condensate for 2008 from 70 to 67,6 mln ton, said minister of economy and budget planning of Kazakhstan today at the oppress conference, agency reports.

He mentioned that "oil extractors will have a great willingness, taking into consideration that there is a growth of oil prices, to extract quickly and send more for export. But even with introduction of export custom duty on international markets it will be rather beneficial operation," B. Sultanov mentioned.

He stressed that there are some limitations in the transportation part.

New head of KazMunayGas appointed

Serik Burkitbaev has been appointed president of Kazakh national oil and gas company KazMunayGas.

Prime Minister Karim Masimov introduced the new head of KazMunayGas on Thursday, said a correspondent from Interfax-Kazakhstan. He also thanked Uzakbai Karabalin, the former president of the company, “for his long-standing work as head of the company.”

50-year old Burkitbaev earlier worked as transportation and communication minister, head of Kazinformtelecom, Kazakhtelecom, the Kazakh Institute of Oil and Gas, advisor and assistant to the Kazakh president. On February 14 he was appointed head of Samgau National Research Holding.

Burkitbaev is a graduate and a post-graduate of the Moscow Engineering and Physical Institute. He has a degree in physical engineering, Doctor of Science.

The former president of KazMunayGas, 61-year old Karabalin, has been in the office since March 2003.

KazMunayGas is a vertically integrated oil and gas company wholly owned by the state.

In an address to the third party congress of the ruling Ak Jol Eldik (Best Path Popular) party in Bishkek, Kyrgyz President Kurmanbek Bakiev on April 29 named five main priorities for the government and the parliament, AKIpress reported. Bakiev cited the need to improve electricity distribution as his top priority, adding that the country needs "laws on energy conservation and renewable energy sources." He stated that the financial sector is his second priority, and called for the introduction of mandatory insurance and improvements to the pension system. Agriculture was the third priority, with an emphasis on agricultural reforms and food security, particularly in the face of dramatic price increases for foodstuffs. The final priorities were improvements to the business environment and updating the country's tax code, followed by the social sector with the specific goal of expanding the privatization of health care. His articulation of his main priorities followed recent orders to officials to ensure stricter controls over state spending.

Kyrgyz Deputy Minister of Industry, Energy and Fuel Resources Akylbek Tumenbaev opened a meeting in Bishkek on May 2 of officials from Kazakhstan, Tajikistan, and Uzbekistan to discuss plans to improve regional cooperation in the management and use of water and energy resources, AKIpress reported. The officials, primarily deputy ministers from each country's energy ministry, focused on the water and energy resources of Kyrgyzstan's Naryn-Syr Daria river basin. At the end of the meeting, which is set to reconvene on May 14-15, participants adopted specific measures governing the use of the water and energy resources at the Kyrgyz Toktogul reservoir, which provides 40 percent of Kyrgyzstan's hydroelectric energy. The Kyrgyz government recently decided to introduce a new electricity-rationing regime, lasting for at least six months, that entails cutting electricity supplies for seven hours every night (see "RFE/RL Newsline," April 15, 2008). The rationing program is intended to offset a dramatic decrease in the water level at the Toktogul reservoir.

Moldovan delegation attending NATO parliamentary assembly session

The Spring Session of the NATO Parliamentary Assembly has opened in Berlin on Friday. The forum is being attended by a Moldovan delegation led by the Deputy Chairman of the Moldovan Parliament, Christian Democratic Popular Party leader Iurie Rosca.

The agenda of this 5-day-long Session includes discussing of priorities, political events and partnership of the North Atlantic Alliance, questions of Kosovo and the Balkan region’s future, security problems in Central Asia, energy security, religion in the Black Sea region.  

The Spring Session has gathered 340 parliamentarians from 26 NATO member states and from 20 countries that are not NATO members such as Russia, Ukraine, Georgia, Afghanistan, Pakistan. 

There is a very good political collaboration between Moldova and Azerbaijan, which should be extended to economy through common projects.

The statement was made today at a meeting between Moldovan and Azeri Prime Ministers Zinaida Greceanii and Artur Rasizade who participated in a meeting of heads of government of the CIS states.
The officials exchanged opinions on the current status and the prospects of development of the Moldovan-Azeri relations in different areas, mentioning that a fresh impetus was given to them during an official visit to Azerbaijan by Moldovan President Vladimir Voronin.

Zinaida Greceanii and Artur Rasizade agreed  to extend economic collaboration between the two states, opting for the full capitalization of the existing potential. The premier pointed out the  opportunities to implement some common projects due to be discussed by the joint intergovernmental Commission in the near future.

Among the priority directions there were mentioned the energy and fuel sectors, as well agro-industry, investments, social and humanitarian, IT and transport.

Zinaida Greceanii thanked her counterpart for the humanitarian aid given by Azerbaijan to Moldova over the 2007 drought.

The collaboration between Moldovan and Azerbaijan started in 1992. Currently, there are 51 Azeri companies registered in Moldova.

Russian hydropower co. HydroOGK posts 470% profit growth in 2007

HydroOGK, Russia's largest hydroelectric power company, said on Tuesday its net profit calculated to Russian Accounting Standards grew 470%, year-on-year, in 2007 to 8.62 billion rubles ($365 million).

HydroOGK, which unites about 50 hydropower plants across Russia with installed capacity of 25,000 MW, said its revenues in the reporting period climbed 660% to 41.80 billion rubles ($1.8 billion), production costs grew 459% to 33.29 billion rubles ($1.4 billion), and pre-tax profit rose by 629% to 10.88 billion rubles ($461 million).

GasTerra set to strengthen relations with Russia at St. Petersburg forum

GasTerra (formerly Gasunie Trade & Supply), which buys wholesale natural gas, primarily from Dutch fields, then wholesales it throughout Western Europe, hopes to strengthen its ties with Russia at the XII St. Petersburg International Economic Forum in June 2008 and to develop cooperation for the development of the Yamal offshore fields, said Gertjan J. Lankhorst, the company's CEO.

Lankhorst said he intends to strengthen and develop ties with Russian colleagues at the forum, adding that partners should understand each other's needs and desires.

Last year, Russia's Industry and Energy Ministry received offers of the joint development of offshore deposits on the Yamal Peninsula, a strategic region for Russia's energy giant Gazprom, from several Dutch companies, including Royal Dutch/Shell, Gasunie, Essent and GasTerra.

There are 26 explored fields on the peninsula, with prospected gas reserves assessed at 367.12 trillion cubic feet. Lankhorst said the construction of the Nord Stream gas pipeline, the development of the Yamal deposits, and energy security were among the key issues. .

UPDATE 1-Russia clears plan to boost Kazakh oil transit

Russia said on Wednesday it had lifted its opposition to a plan to double the capacity of a Kazakh transit oil pipeline in a move to allow Chevron (CVX.N: Quote, Profile, Research) and other energy majors to boost exports via its territory.

The Russian energy ministry said in a statement its minister Viktor Khristenko and his Kazakh counterpart Sauat Mynbayev had reached an agreement at a meeting in Astana.

The link's capacity, which runs from Kazakhstan's biggest fields to Russia's Black Sea coast, would double to 67 million tonnes from the current 32 million a year.

Kazakhstan in turn agreed to help fill the Burgas-Alexandroupolis pipeline, a trans-Balkan pipeline to take Russian and Central Asian oil from Bulgaria to Greece, sending up to 17 million tonnes of CPC crude to Alexanroupolis.

Medvedev To Remain Formal Head Of Gazprom Board Through June.

President Medvedev will remain chairman of the board of directors of the state-controlled natural-gas monopoly Gazprom until June 27, "Vremya novostei" reported on May 8. Medvedev has headed the board since 2002. A shareholders meeting in June is expected to confirm the nomination of former Prime Minister Viktor Zubkov to replace Medvedev. Medvedev, however, stopped attending board meetings after his election in March and will not attend any for the rest of his tenure. Gazprom CEO and deputy board chairman Aleksei Miller is reportedly performing Medvedev's duties.

Electricity monopoly UES posts 23% increase in RAS revenues in 1Q08

The parent company of electricity monopoly Unified Energy System (UES) of Russia said on Wednesday its revenues calculated to Russian Accounting Standards (RAS) increased 23% in the first quarter of 2008 to 6.9 billion rubles ($290.4 million) year-on-year.

The company's net profit fell 6.8% in the reporting period to 2.7 billion rubles ($112.6 million) against the third quarter of 2007. The electricity holding also said it will pay 245 million rubles ($10.3 million) in back taxes for 2004-2005. The government holds 52.69% in UES, energy giant Gazprom controls 11.6%, the SUEK coal champion owns around 6% and the country's nickel giant Norilsk Nickel controls another 3.5%.

Russian oil and gas companies interested in Mediterranean area

Russian oil and gas companies are interested in developing the Mediterranean region and are set to expand their presence in the area, an executive of Russia's largest independent natural gas producer said Wednesday.

Last September Novatek bought a 50% stake in a concession agreement for the exploration and development of the El-Arish offshore deposit in Egypt from Tharwa Petroleum S.A.E.

The offshore block covering an area of approximately 2,300 sq km (888 sq miles) is located along the Mediterranean coast to the north of the Sinai. Half of the block lies at depths of up to 50 meters (164 ft) with the remaining area reaching up to 500 meters (1,640 ft).

The agreement provides for a minimum exploration period of four years, which will include geophysical studies and the drilling of two wells.

Established in 1994, Novatek handles the prospecting, production and refining of gas and liquid hydrocarbons. Its gas fields are located in the Yamal-Nenets autonomous area in West Siberia, which has the world's largest natural gas reserves. The region accounts for over 90% of Russian natural gas output and around 20% of global gas production.

Russian oil-field service companies could be among the biggest winners as the government slashes oil-sector taxes in a bid to revive stagnating production, industry participants say.

After annual growth of up to 10% at the start of the decade, Russia - the world's second-largest crude producer - saw output edge up by just 2.2% last year, with oil production down 0.1% year to date as what many deem an excessive tax burden hampers investment in new fields.

But following much lobbying on the part of the industry, the government recently agreed to reduce its key extraction tax and promised tax holidays for producers developing certain regions of the country.

The proposals could boost sector profits by as much as $20 billion a year according to some estimates and could benefit local service firms like Eurasia Drilling Co. Limited (EDCL.LN) and Integra Group (INTE.LN) to an even greater extent.

While high world oil prices increase demand for - and pricing power at - service providers, even a sharp drop in crude prices wouldn't be critical for those working in Russia, Abdoullaev and Batunin said, highlighting the structure of Russia's tax regime, which swallows a large part of prices above $27 a barrel.

Integra, which like Eurasia is listed in London, has also said it sees scope for a better operating environment following the potential tax relief.

The pair vie with international service providers like Schlumberger AG (SLBS.VI) and Halliburton (HAL) for business from Russian heavyweights like OAO Rosneft (ROSN.RS) and OAO Gazprom Neft (SIBN.RS).

In Dushanbe, senior World Bank official Chiara Bronchi said on May 5 that Tajikistan will receive a new $6.5 million aid package designed to address its energy crisis, ITAR-TASS reported. After its approval by the World Bank executive board in Washington, the new assistance will focus on bolstering Tajikistan's energy-production capability by prioritizing the need for expanding electrical supplies. The announcement followed a meeting between Tajik Finance Minister Safarali Najmuddinov and Bronchi during which the longer-term strategic details of the World Bank agreement were worked out, according to the Khovar website. In March, the International Monetary Fund reprimanded Tajikistan for violating the terms of its poverty-reduction agreement and demanded the repayment of some $48 million in aid (see "RFE/RL Newsline," March 7, 2008). In a demonstration of the severity of the Tajik energy crisis, the Shuroobod, Muminobod, Baljuvon, and Khovaling districts of the southern Khatlon region have been totally without electricity since May 3, Asia-Plus reported.

In return for closer ties with Kazakhstan, visiting Tajik President Imomali Rahmon has hinted at support for a Kazakh plan to form a Central Asian Union -- an idea also backed by Kyrgyzstan but soundly rejected by Astana’s main regional rival, Uzbekistan, and unlikely to please Russia.

Rahmon offered his upbeat appraisal during a visit to the Kazakh capital this week to "improve bilateral ties," including to seek economic help from his oil-rich neighbor. The agreements that Rahmon signed with President Nursultan Nazarbaev, and the plans about which the two leaders spoke, could signal a new regional alignment at the expense of Russian and Uzbek influence in Central Asia.

President Nazarbaev has long sought greater influence for his country, but appears to have stepped up the effort recently. More than a decade and a half after the Soviet Union collapsed, Kazakhstan is emerging as a regional power in at least several areas. The money from its oil industry, just now starting to produce in large quantities, gives Astana the kind of revenues that its Central Asian neighbors can hardly imagine. Its banks are among the region’s pioneers in tapping foreign stock markets. Kazakhstan is also investing in other countries in Europe and Asia, but also closer to home in Kyrgyzstan and Tajikistan, where Kazakh companies own shares in banks and various industries.

With wealth comes prestige. In 2010, Kazakhstan will assume the rotating presidency of the Organization for Security and Cooperation in Europe (OSCE), raising Astana’s international clout.

Nazarbaev is once again proposing the idea of a Central Asian union. Kyrgyz President Kurmanbek Bakiev visited Kazakhstan in the second half of April and said his country supported the plan. Less than a week later, Uzbek President Karimov -- Nazarbaev’s rival vying for regional leadership since independence in 1991 -- visited Kazakhstan and said Tashkent was not at all interested in being a member of such a grouping.

But with both Dushanbe and Bishkek standing to benefit from Kazakh aid and other preferential treatment, Astana’s bid to boost its leadership role in Central Asia appears to be moving forward without the Uzbek president-for-life.

Besides Russia, the former Soviet republics that have hit the energy jackpot are all clustered around the Caspian Sea. While Azerbaijan, with the Baku-Tbilisi-Ceyhan pipeline, is already hardwired into the Western economy, Turkmenistan's potential has yet to be fully developed, and its natural gas exports have been locked in for the foreseeable future first by Russia and, to a lesser extent, by China.

Kazakhstan, while currently relying on the international joint venture Caspian Pipeline Corp. pipeline to Russia's Novorossiysk port on the Black Sea, nevertheless has plans to diversify its export routes to international markets and in this desire has no more ardent suitor than energy-poor Turkey, angling to position itself as the Caspian's premier energy hub.

Turkish intentions were made clear May 6 by Turkish State Minister Kursad Tuzmen in discussions with Kazakh Tourism and Sports Minister Temirhan Minaydarovic Dosmuhambetov, who was in Ankara to attend the Turkey-Kazakhstan Joint Economic Commission meetings.

Gunay's remarks about Kazakhstan using the BTC pipeline for oil exports and shipping Kazakh natural gas through the Baku-Tbilisi-Erzurum pipeline highlight the difficulties facing Turkish hopes. Kazakhstan does not have an oil or natural gas export pipeline terminating in Baku, and such projects exist solely on paper. Furthermore, the construction of either would be certain to annoy the Caspian's reigning petro-states, Russia and Iran, as such pipelines would bypass them both.

In the end, Turkish interest in Caspian energy is a subset of the U.S.-Russian struggle over Eurasian energy assets. Given the disputed nature of the Caspian's waters, it would seem likely that, for the foreseeable future, Turkish aspirations for involvement in Kazakh energy exports will remain exactly that -- aspirations. As Michael Corleone might say, "It's just business."

Turkey: Negotiations with Russia continues on Nabucco

Turkey determined to complete Nabucco project. Turkish Energy & Natural Resources Minister Hilmi Guler on Tuesday denied rumors that the chance of Nabucco project was becoming less likely, and said works of partners were going quite well. The Nabucco project is a planned 3,300 kilometres natural gas pipeline that would carry Iranian, Azeri, Kazakh, Turkmen, Egyptian and Syrian natural gas from Turkey to Austria via Bulgaria, Romania and Hungary.Guler, who attended a meeting of Turkish-Russian Joint Economic Commission in Moscow, said talks among the partners were going on.

Contracts with Kazakhstan and Turkmenistan for Sangachal-Garadagh Terminal loading to be signed for one or two months

Baku, Fineko/abc.az. Sangachal-Garadagh Oil & Gas Terminal (SGOGT) CJSC is finishing negotiations with Kazakhstan and Turkmenistan about supplies of oil and gas products for transshipping through the Sangachal-Garadagh Terminal under construction.

Azersun’s president Abdolbari Gozal said that the relevant agreements with both countries would be signed within one or two months.

Railway tracks have been already laid to the Terminal location site. The SGOGT expects signing of an agreement on construction of a reservoir depot of the Terminal. Currently the Sangachal-Garadagh Terminal project is financed by its shareholder founders, but a range of foreign investors has displayed an interest to participate in the project and among them are Societe Generale, BNP Paribas, Commerzbank and YapiKredi.

Caspian: Azerbaijani-Turkmen Summit marks potentially lucrative thaw in relations

Azerbaijani President Ilham Aliyev declared that "all issues have been resolved" with Turkmenistan following his talks in Baku this week with Turkmen President Gurbanguly Berdymukhammedov.

Aliyev and Berdymukhammedov declared a "new stage" has been reached in relations that could enrich both countries as they seek -- with prodding from the United States and European Union -- to find ways to ship their Caspian energy resources to Western markets.

Both presidents used words like "brotherly nation" and "common interest" often in their comments to the media. Berdymukhammedov, in the first visit to Azerbaijan by a Turkmen president since 1996, praised his hosts and also announced that Ashgabat would write off $44 million in debt owed it by Baku.

But when it came to the major question -- the construction of a pipeline to carry Turkmen gas across the Caspian to Azerbaijan and on to Europe, bypassing Russia -- the presidents were optimistic but noncommittal.
Berdymukhammedov, who has steered Ashgabat along a more pragmatic course since taking over last year following the death of his predecessor, Saparmurat Niyazov, said the two countries are uniquely positioned to play a key role in energy exports.

The presidents announced, as a symbol of their new warm ties, that a conference on the "Oil and Gas of Turkmenistan and Azerbaijan" would be held in September. And in keeping with the flurry of diplomacy in the region this year, there will be more bilateral meetings before then. The EU and the United States, eager to see a trans-Caspian pipeline, can be expected to encourage this new warmth in relations.

For now, the Western powers can take comfort in what Aliyev hailed as a "qualitatively new stage" in relations with Ashgabat.

EU, Turkmenistan sign long awaited MoU on energy cooperation

The European Union and Turkmenistan signed Monday in Ashgabat a long-awaited memorandum of understanding on energy cooperation.

The MoU was signed on conclusion of talks between President Berdymuhamedov and a heavyweight EU delegation, led by Andris Piebalgs, EU commissioner for energy.

Later, the delegation traveled with the Turkmen president for the opening and foundation stone laying ceremony of two gas compressor stations in Daulatabat in southeastern Turkmenistan.

The contents of the MoU were not immediately available to the media but it was obvious that after rejection of several drafts the sides had reached common grounds.

Berdymuhamedov’s remarks sum up the hopes attached by both sides to the MoU. He said, “The present negotiations are a major step for further strengthening the friendship and mutually advantageous cooperation between Turkmenistan and the European Union.”

He added that the memorandum solidifies the legal base for bilateral cooperation.
The Turkmen president underlined that development of mutually advantageous relations with the countries of the European Union was one of the priority areas of the foreign policy of neutral Turkmenistan. The consistent basic principles of such cooperation are equality in partnership, mutual respect and mutual benefit, he said.

Andris Piebalgs, EU commissioner for energy, followed the basic drift but added some insightful observations.
The EU has shown great flexibility and the MoU is a proof of that. As we have said, it is not breakthrough. The real breakthrough would be when construction work begins on some EU-backed pipeline.

For that to happen, we would remind once again that EU must demonstrably detach itself from the US foreign policy goals and practices.

The success of good intentions enshrined in the MoU would depend on three areas where the EU would need to come out with its best diplomatic talent: Settlement of disputed Caspian fields should come under a formula satisfactory to Turkmenistan. The offer of sharing one field is hogwash.

There is no need to annoy Russia. EU must engage Iran. The forthcoming French presidency of EU should make it a point of priority.

Ukrainian official says Odesa-Brody pipeline in July will pump oil in planned direction.

Oleh Dubyna, the head of the state-owned Naftohaz Ukrayiny, told journalists in Kyiv on May 7 that the Odesa-Brody oil pipeline will start pumping oil from the Ukrainian port of Odessa to Brody "by the end of the first half of 2008," Interfax-Ukraine reported. Dubyna added that "485,000 tons of light crude will be bought to use [the pipeline in] the other direction." The pipeline, built by Ukraine in 2002, was originally intended as part of a project to transport Caspian Sea crude to the Polish port of Gdansk and on to other points in Europe. But in 2004, the Ukrainian government gave permission for the Russian-British TNK-BP holding to use the Odesa-Brody pipeline to transport Russian oil in the opposite direction. Poland has repeatedly promised to help Ukraine use the pipeline according to its original intention but progress on the Odesa-Brody-Gdansk project has been extremely slow because of its estimated cost of $2 billion and doubts whether oil shipped via this route can compete with Russian oil transported to markets through pipelines without sea transport.

Ukraine calls for international probe into oil license scandal

The Ukrainian government plans to involve the international community in an investigation into a mineral license scandal concerning a U.S. oil company, Prime Minister Yulia Tymoshenko said on Monday.

Ukraine revoked the license of U.S. company Vanco International, a subsidiary of Vanco Energy Company, to develop and produce oil and gas on the country's Black Sea shelf last month. Tymoshenko earlier described the move as "plundering of Ukraine's mineral reserves" and accused President Viktor Yushchenko of lobbying for the U.S. firm.

Presidential spokesperson Irina Vannikova dismissed Tymoshenko's allegations as inappropriate, while Yushchenko demanded the license be returned to Vanco.

Vanco International signed a 30-year production sharing agreement with former premier Viktor Yanukovych's government in October 2007, covering the Prykerchenska area just south of the Crimean Peninsula. Under the deal, the company received a 65% stake and Ukraine 35% at the prospecting and development stage. The sides were to go 50-50 with the launch of commercial production.

Vanco Energy Company is an integrated independent oil and gas company which operates its exploration and production activities through its wholly owned overseas subsidiary and subsidiaries of Vanco International Ltd.

Heating plant significantly cutting greenhouse gas emissions created in Ternopil

A heating plant created by the Ternopil state scientific and technical enterprise Promin helps significantly cut greenhouse gas emissions in the air that is important for Ukraine after ratification of the Kyoto Protocol. According to the enterprise's director, Volodymyr Syrotiuk, the first pre-production models of heating plants with a capacity of 25-180 kW have already been designed at the enterprise. The plants are operating both on solid fuel, including coal and peat, and on the waste of wood, milled straw, sunflower and buckwheat pods.

Ukraine withdraws from PSA with Vanco International

Ukraine's cabinet of ministers has decided to unilaterally withdraw from a production sharing agreement with a U.S. oil company to develop the Black Sea shelf, a first deputy prime minister said on Wednesday.

Ukraine revoked the oil and gas license of U.S. company Vanco International, a subsidiary of Vanco Energy Company on April 25.

Ukrainian Prime Minister Tymoshenko earlier called for an international investigation into the license scandal, describing the Vanco deal as "plundering of Ukraine's mineral reserves" and accused President Viktor Yushchenko of lobbying for the U.S. firm.

Vanco International signed a 30-year production sharing agreement with former premier Viktor Yanukovych's government in October 2007, covering the Prykerchenska area just south of the Crimean Peninsula.

Under the deal, the company received a 65% stake and Ukraine 35% at the prospecting and development stage. The sides were to go 50-50 with the launch of commercial production.

Vanco Energy Company is an integrated independent oil and gas company which operates its exploration and production activities through its wholly owned overseas subsidiary and subsidiaries of Vanco International Ltd.

The company holds and operates six large licenses in five countries, including the Ivory Coast, Ghana, Equatorial Guinea and Gabon.

Victor Yushchenko offers Azerbaijan and Kazakhstan to establish new oil refineries in Ukraine

Lachin Sultanova-APA. Official Kiev has called on Azerbaijan and Kazakhstan to review the possibility of participating in the construction of new oil refineries in Ukraine.

APA reports quoting Ukraine sources that President Victor Yushchenko has put forward the initiative in the opening of the international energy forum in Kiev. He said that Ukraine was interested in the development of oil refining field and therefore offered Azerbaijan and Kazakhstan to review the possibility of reconstructing the present facilities and constructing new oil refineries on Odessa-Brodi route.

Vice Prime Minister Hryhoriy Nemyria met with Special Envoy for Energy Security of the U.S. Department of State and U.S. Deputy Assistant Secretary of State for European and Eurasian Affairs

Yesterday, Vice Prime Minister of Ukraine for European and International Integration Hryhoriy Nemyria held a meeting with Special Envoy for Energy Security of the U.S. Department of State C. Gray and U.S. Deputy Assistant Secretary of State for European and Eurasian Affairs Matthew Bryza.

During the meeting the interlocutors discussed an issue on energy cooperation, including the ensuring of energy security of Ukraine and diversification of energy supply sources.

Trade-economic and investment cooperation of two states was separately discussed.

Ukraine, Moldova to create joint group of experts to assess effect of Novodnistrovska Hydroelectric Station on environment

Ukraine will present to Moldova documents on assessing the effect of the Novodnistrovska hydroelectric power station on the environment, Moldpress reported, citing the press service of the Ministry of Environment and Natural Resources.

A respective agreement was recently reached in Chisinau following Moldovan-Ukrainian consultations on the effect of the Giurgiulesti oil terminal and the Novodnistrovska hydroelectric power station on the environment.

The parties decided to create a joint team of experts to assess and forecast the influence of the Novodnistrovska hydroelectric power plant on the ecosystem of Dniester River. The parties also took a decision to ask the Secretariat of the Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention) to allocate financial aid to conduct a thorough expertise of the river's ecosystem. A protocol on the results of the Moldovan-Ukrainian consultations on the issues of the possible effect of the Giurgiulesti oil terminal and the Novodnistrovska hydroelectric power station on the environment was signed after the talks. The Moldovan delegation included Minister of Environment and Natural Resources Violeta Ivanova, Vice Justice Minister Nicolae Esanu and Vice Minister of Transport and Road Management Pavel Untura. The Ukrainian delegation was headed by Deputy Environmental Protection Minister Ivan Makarenko.

Energy accents shift to Tashkent

More than 180 companies from 30 countries displayed their goods and services at the 12th international exhibition “Oil and Gas of Uzbekistan – OGU 2008” in Tashkent, which is to reach its end today. It was supported by the Uzbekneftegas National Holding Company, Ministry of Foreign Economic Relations, Investment and Trade and Chamber of Commerce and Industry of Uzbekistan.

At a press conference held prior to the exhibition First Deputy Chairman of “Uzbekneftegas” Shavkat Majitov noted that the number and geography of participants was growing every year. More new players from foreign countries have shown interest in the Uzbek market, which is attributable to the fact that Uzbekistan pays special attention to the development of its oil and gas sector. Nearly a third of Central Asia’s gas condensate, 31% of oil and 40% of natural gas are accounted for by Uzbekistan. The country is implementing several oil and gas projects with foreign partners and its market of special technological equipment always shows demand for new supply.

At the exhibition leading companies from countries as Austria, China, France, Germany, Great Britain, Kazakhstan, Netherlands, Russia and United States presented their newest technologies for all stages of processing, producing, storing, processing and transporting oil and gas. These also include drilling equipment, seismological technology and security and supervision systems.

The majority of companies debuted in this vast forum. For instance, “SibGeoFizPribor”, scientific production company, based in Novosibirsk (Russia), exhibited electric prospecting stations, synchronization, management and control systems and testers of explosion network resistance indicators. At the same time, the company offers complete maintenance of the equipment it offers.

Impressive upswing in gas production

The operational company LUKOIL Uzbekistan Operating produced the first billion cubes of gas in Hauzak gas-field. The phased introduction of 15 gas wells out of 23 projected wells let the company to gradually increase its production volumes. Recently the company launched the 16th well; another 3 are in drilling. As the head of producing and processing department of LUKOIL Uzbekistan Operating Valery Dronin noted, “well coordinated work and high professional training of the staff plays a huge role in effective operation of the Hauzak field.”From the day of launching of the gas-producing complex the monthly producing capacity has grown 4 times and has reached almost 200 mln cubes. The project capacity of the gas-field is 3 bln cubes a year. The company is to reach the level this year.

From the day of launching of the gas-producing complex the monthly producing capacity has grown 4 times and has reached almost 200 mln cubes. The project capacity of the gas-field is 3 bln cubes a year. The company is to reach the level this year.