Pipeliners

MOSCOW, April 28 (RIA Novosti)

On a Side

Transneft takes CPC bite 29 April 2007 - Upstream OnLine - Russia has transferred its 24% stake in the Chevron-led Caspian Pipeline Consortium (CPC) to state-controlled pipeline monopoly Transneft, the Kremlin has announced. The stake was previously managed by Russia's government and the Kremlin said in a statement that President Vladimir Putin's order to transfer it aimed to "increase management efficiency". Transneft's head Semyon Vainshtok has been one of the main critics of the CPC, which takes crude from Kazakhstan to Russia's Black Sea coast, as he claims the group pays very low fees to Russia despite pumping over 700,000 barrels per day of crude. He opposes the expansion of the CPC capacity to over 1.35 million bpd amid rising production in Kazakhstan and says the group should first help Russia build a bypass around the Bosphorus to reduce pressure on the congested Turkish straits. The CPC has said it would take part in the project only if it was simultaneously allowed to expand capacity. Chevron has a 15% stake in the CPC, with Russia's Lukoil and UK supermajor BP each holding 12.5%. ExxonMobil and a joint venture of Rosneft and Shell hold 7.5% each, while Agip and BG have 2% each. The governments of Kazakhstan and Oman control 19% and 7% respectively.

- Russian President Vladimir Putin has signed a decree to transfer a government stake in the Caspian Pipeline Consortium (CPC) to state-owned pipeline monopoly Transneft, the Kremlin press service said Saturday. Proposed by the government, the move aims to increase the stake management efficiency, reads the document, which comes into effect on the day of publishing. In mid-March Transneft CEO Semyon Vainshtok said that the Caspian Pipeline Consortium, which pumps Russian and Kazakh oil to a terminal on the Black Sea, had made a loss of over $5.5 billion, and called for higher oil transit tariffs. Commenting on the idea behind the plan for transferring Russia's 24% in the company to Transneft, Vainshtok said: "The owner, the Russian government, has made a decision to transfer its stake in the CPC to Transneft to profit from the project." Apart from Russia, the CPC's shareholders are Kazakhstan, which has a 19% stake, and the Sultanate of Oman with a 7%. The consortium also includes such private companies as Chevron Caspian Pipeline Consortium Company (15,0%), LUKARCO B.V. (12,5%), Rosneft-Shell Caspian Ventures Limited (7,5%), Mobil Caspian Pipeline Company (7,5%), BG Overseas Holding Limited (2,0%), Agip International (N.A.) N.V. (2,0%), Kazakstan Pipeline Ventures LLC (1,75%) and Oryx Caspian Pipeline LLC (1,75%). The governments of Russia, Kazakhstan and Oman established the CPC in 1992. In 1996 the consortium was reorganized, with eight international oil producers admitted to the project. The CPC oil pipeline, which is 1,510 km (938 miles) long, was commissioned in October 2001, and now pumps 30 million tons (220.5 million bbl) a year. The Russian Federal Property Management Agency holds the Russian stake in the project, and Transneft is 75% state owned.