Plans to develop the world's largest untapped offshore natural-gas field got a lift when Russia's OAO Gazprom chose Norwegian energy company StatoilHydro ASA as a partner in the Shtokman project.
But technological challenges, as well as the Kremlin's history of holding the long-delayed project hostage to Moscow's roller-coaster relations with the West, led industry analysts to question whether the arctic field will start producing gas in 2013 as planned.
Located hundreds of miles offshore in deep, icy waters in Russia's section of the Barents Sea, Shtokman presents difficulties few international oil companies have faced. In an environment where even conventional oil projects are seeing costs soar and production delayed, most expect the official start-up date to slip by several years.
The terms of StatoilHydro's involvement remain vague. The company said its final investment decision on Shtokman would come in late 2009. In an interview, Chief Executive Helge Lund said the company wouldn't know until then whether it could book reserves from the field. International oil companies generally avoid energy projects that don't allow them to add reserves to their books.
StatoilHydro announced yesterday that it received a 24% stake in Shtokman Development Co., which will design, build and run the first of several phases of the development. France's Total SA in July was given a 25% stake. State-owned Gazprom will hold the remaining 51% and will effectively own the gas in the Shtokman field.
Underlining the project's politicized nature, it was the Kremlin's press service that first announced StatoilHydro's selection as a partner. Gazprom's statement came hours later.
When talks on the project first heated up in about 2003, Shtokman was to be a model of the burgeoning energy partnership between Russia and the U.S. Gazprom would turn Shtokman's gas into liquid, known as LNG, and ship it to the U.S. market, where Gazprom wasn't a player. U.S. majors like Chevron Corp. and ConocoPhillips were on the short list of foreign companies Gazprom was considering as partners.
But when Russia's relations with Washington cooled, Gazprom changed its mind. It announced last year that it would develop the field on its own, and said that it would send most of Shtokman's gas by pipeline to Europe instead. It later seemed to soften its position, tapping Total as a partner.
StatoilHydro's Mr. Lund said Gazprom chose his company because of its experience in developing oil and gas in arctic conditions, and said the agreement paved the way for cooperation between Gazprom and StatoilHydro on other projects in the Barents Sea.
(The Wall Street Journal)