Energy Blast, Feb. 22, 2008

Total and StatoilHydro have landed a major deal with Gazprom to create a joint venture to develop phase 1 of the Shtokman Field. AP reports that “The new operating company, based in Zug, Switzerland, will plan, finance and build the first stage of the Shtokman development, which could eventually produce up to 100 billion cubic meters of gas per year. Gazprom CEO Alexei Miller said Shtokman’s first phase was expected to produce about 11 bcm of pipeline gas annually. LNG production would reach 7.5 bcm annually.” The recent meetings in Moscow between Russia and Algeria have once again raised speculation over the future OPEC-like gas cartel, and a grassroots Bulgarian movement in Bourgas is opposing a Russian backed pipeline. A spokesman for Lukoil says that the company hopes to resume oil shipments to Germany next month. Matthew Bryza, the U.S. Deputy Assistant Secretary for southeastern Europe, strongly stated that Europe needs alternatives to overpriced Russian gas: “We especially don’t like them when they threaten at least the economic security of our most important allies. (…) When you have these gigantic rents generated because of the difference in price between Central Asia and Europe, some not so savory people get involved in the distribution of that money.”