OREANDA-NEWS. February 21, 2013. Zarubezhneft has proved to be unable to participate in Turkmenia’s shelf development. The company was supposed to become ITERA’s partner in the Block 21 development, having received 51 percent in the Project. However, this issue has never been agreed by the Turkmenian authorities. As a result, ITERA is working on the Project alone, hoping to partner with Rosneft, with which it has merged its gas assets in Russia, reported the press-centre of ITERA.  

Yesterday, Sergei Kudryashov, Head of Zarubezhneft, said that their joint project with ITERA in respect of development of Block 21 of the Turkmenian shelf in the Caspian Sea was "still in the conservation stage". However, ITERA clarified that this referred to Zarubezhneft’s participation in the project rather than the project itself. According to ITERA, the field development is underway – in the fall of 2012, the seismic data interpretation was completed, the Block’s reserves were reassessed (up to 700-800 billion cubic meters), and the first exploration well drilling is scheduled be started this year. Just the Company has been actually left alone in the project, – they point out in ITERA.

In September 2009, ITERA and Turkmenia executed the Production Sharing Agreement (PSA) in respect of the Block 21 development, and two months later the Company declared that it would transfer a 51 percent share in the project to Zarubezhneft. In February 2011, the latter said it was prepared to sell a part of the share to Rosneft which confirmed its interest in the Project. ITERA, Rosneft and Zarubezhneft had tried to enter the Turkmenian shelf in 2006-2008 but had been unable to agree with the country’s authorities. Turkmenia holds the world's third-largest proven natural gas reserves (over 24 trillion cubic meters) after Russia and Iran. However, the agreement to enter the Turkmenian shelf had been reached by ITERA only, which has been operating in the country for a long time, being engaged in implementation of other projects not related to natural gas production.

In August 2011, ITERA and Zarubezhneft executed a joint venture agreement pursuant to which Zarubezhneft, as expected, received a 51 percent stake in the Project and operatorship, while ITERA got 49 percent. However, this required an approval by the Turkmenian authorities which had not been issued. Currently, ITERA is "working through" Rosneft’s entrance into the project with which it has merged its Russian gas assets.

The Project in Turkmenistan still remains beyond the transaction. Nevertheless, according to Vitaliy Kryukov from IFD Kapital, ITERA may transfer the license for the Block 21 development to the Joint Venture with Rosneft, if the latter, in its turn, provides it new assets, for example, Kharampurskoe field (the reserves are 400 billion cubic meters of gas) or Rospan owned by TNK-BP (the reserves are 890 billion cubic meters of gas, and 100 percent of TNK-BP have been acquired by Rosneft). In November 2012, Igor Sechin, Rosneft CEO, said that ITERA might become the operator of the company’s new gas assets if it could demonstrate its efficiency.