IJ Online

Doha, Qatar (IJ Online) – The board of directors of Lukoil have approved the Russian energy giant’s plans to spend US$48 billion on expansion and project development between 2011 and 2014 according to company sources.

An investor relations spokesperson for Lukoil told IJ News that 2012 alone would see the company invest US$14 billion on projects in prospection zones located in the Caspian Sea, Iraq, Uzbekistan and Western Siberia.

“There is more to come from us, as the stated investment capital for the next three years is only indicative of what we wish to invest over the medium term,” she added.

"Working with companies that have information and expertise in the area of developing projects in challenging environment makes sense"

A more “substantial” 10-year plan will be unveiled by Lukoil when the company files its Q1 2012 results. “This plan would take Lukoil forward to 2021 and would outline further details,” the spokesperson concluded.

Concurrently, its Russian peer Rosneft has hinted it was open to a partnership with Norway’s Statoil for developing Barents Sea projects. The latter has recently inked deals with UK’s Centrica and Qatar Petroleum and already partners Russia’s Gazprom on the planned Shtokman field development in Northern Russia.

Last week IJ News also reported that Centrica and Qatar Petroleum had inked a non-exclusive MoU detailing joint development of energy projects and inward investment.

Speaking to RosBusiness Consulting, Rosneft chief executive Eduard Khudainatov said, “Working with companies that have information and expertise in the area of developing projects in challenging environment makes sense. Norway already has this in abundance.”

Separately, on the subject of Shtokman, Russian energy minister Sergei Shmatko told the World Petroleum Congress that potential tax benefits and related privileges would only be granted to the project developers when they present a “credible” business plan along with revenue generation projections to the Government.

The Shtokman field

Of the developers, Total and Statoil’s combined stake in the project stands at 49 per cent, with Gazprom retaining the remaining majority stake.The project involves the design, construction and finance of the first phase of development of the Shtokman gas field in Russia.

The Shtokman field, situated in the Barents Sea in the Arctic Circle, is the world's largest undeveloped gas field with 3.8 trillion cubic metres of gas and 37 million tonnes of gas condensate. The project is slated to supply the Nord Stream pipeline from Russia to Germany under the Baltic Sea. Development will be carried out in four phases. Phase one of the project should produce 23.7bcm of natural gas per annum.

The LNG liquefaction plant for the project will be located at the Bay of Orlovka in Gazprom's Murmansk region.