fbpx

The Gap Between Gazprom’s Announcements and Capabilities

Here’s an interesting comment by blogger Tim Newman that I found over at SRB, which in a way backs up Robert Amsterdam’s arguments about “premature contractualization” with regard to the Gazprom-Nigeria deal rumors…

“I’d be interested to see how Gazprom go about developing the Nigerian reserves, given that their progress in developing their Russian reserves has advanced practically nowhere beyond announcing grand projects, promising funding, and using the force of the state to appropriate others’ projects. I have had a meeting or two with Gazprom at the middle-management level, and it is clear that there is a rather large gap between the announcements the senior managers and politicians as to what Gazprom will do, and the managers and engineers who are tasked with making it happen.

They have admitted they are desperate for foreign help, yet so far I have seen no sign that Gazprom even has the ability to put together a tender package for foreign companies. Look beyond the imposing headquarters and the columns in the financial papers, and companies like Gazprom are desperately short on experience, expertise, and basic management and engineering systems. In a manner which seems odd to most of us in the industry, people seem to believe having access to reserves is the only, or at least most important, factor behind an oil company’s power. Unless that company can get the oil from the ground and to the customer in a reliable, efficient, and safe manner, merely having access to reserves is nigh-on useless.Then again, Gazprom might do well in Nigeria. The problem was never that the oil was difficult to extract (it is incredibly easy), the problem was the political instability. Shell could have solved the problem overnight by hiring an army to keep the place save, and to hell with the local population, but Shell have a reputation to protect and an army of activists and journalists watching its every move. Gazprom isn’t restricted in such a manner, and activists and journalists of any nationality seem only concerned with the activities of western, private oil companies and happily give state-run oil companies a free pass. One only needs to wonder what happened to the Sakhalin II environmental concerns to realise that.My guess is this offer never comes to pass, or Gazprom stumps up a load of funding which ends up in the pockets of corrupt officials and they get precisely nowhere with the development of any Nigerian field.”