ROSNEFT-TRANSNEFT WAR: RUSSIAN OIL PIPELINE OPERATOR WARNS OF FINANCIAL DISASTER

Northern areas of the Caspian Sea have been the core for Lukoil’s geological exploration since 1995. In 1999, the oil major began deep drilling. In total, the energy firm found ten hydrocarbons fields with proven reserves of some 7 billion barrels of oil. Some of these are massive oilfields, including V. Filanovsky, Y. Korchagin, Sarmatskoe, Khvalynskoye, and V.I. Grayfer. But Lukoil seeks to get more than just that. In late January, Vagit Alekperov, the CEO of Lukoil, wrote a letter to Vladimir Putin, saying that Lukoil’s subsidiary, Lukoil Nizhnevolzhskneft, has “a shortage of new exploration projects.” He therefore asked 29 June 2020

halving the company’s total income.

after a meeting with Russia’s Deputy Prime Minister Yury Borisov. While in talks, a delegation from Transneft presented a calculus, in line with which extra measures will be needed with a decrease in crude oil transportation to the 2008 levels, Grishanin said. In an interview with Kommersant, a Russian daily, Grishanin added his company would mark a deficit of 130 billion roubles in 2020 while the next two years could for a permit to explore three locations close to the Tyuleny Island: Tyuleny-1, Tyuleny-2, and Tyuleny-3. Lukoil has long eyed them all yet it has no access rights to the sites. Thus Alekperov has suggested adopting a simple principle. In line with it, the ministry may issue a license to carry out geological exploration of the required area without holding an auction. Yet Dmitry Kobylkin, Russia’s minister for natural resources and ecology, is not at all keen to do so. He said granting exclusive rights “may be regarded by other state authorities and market participants as premature and

Russian oil pipeline operator Transneft has reiterated the company would be in big trouble once oil transportation costs slumped significantly sometime soon,

That is what the company’s first vicepresident Maksim Grishanin said right insufficiently substantiated.” produce losses of 227 billion roubles and 304 billion roubles, respectively. “Thus we will be inadequate to meet our debt-related duties, nor could we develop our infrastructure as we are set to lose roughly 40 percent of the income,” Grishanin told journalists. Russia’s state oil major Rosneft requested that Transneft align its transportation fees with the 2008 levels amid the low prices in April. “If these are to be tied to oil prices,” Transneft deputy head asked, “what would happen after they rise in value, attaining $50, thus a 25 percent increase,