Gazprom Pulls out of Kudu!

[Michael Alexander]

The tales are doing the rounds...

"The long-delayed Kudu development in Namibia just took another hit as the company that was seen as the force needed to push it forward, Russia's Gazprom, bailed out on the project.

The Kudu gas field has an estimated 2 Tcf of gas and was seen as a way of saving the country's extremely beleaguered power generation capacity. The exit of the Russian firm came with little fan fare, with Mines and Energy Minister Isak Katali recently confirming Gazprom's exit with Namibia's New Era. Katali said "Last week, we received a letter saying they are not interested because the project did not pass their high-level approval," Katali said.

Gazprom's exit is just one of many setbacks the project has had since the Kudu field was discovered in the early 1970s, although some progress was made in recent years on the project. Tullow Oil joined the project when it acquired Energy Africa and was eager to get the ball rolling on the project as far back as 2004. Over the past eight years the project received passing interest from companies however nothing really ever panned out. "

LINK: http://www.oilandgaseurasia.com/news/p/0/news/11479

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NAMIBIA is looking for a new investment partner to develop its offshore Kudu gas field after the Russian state company Gazprom decided to pull out of the N$7 billion project. "It is true, they sent us a letter about two weeks ago that an investment in the Kudu gas field did not get approval from the highest authority of the Company," Mines and Energy Minister Isak Katali confirmed to Informanté yesterday.
"We heard that a restructuring process had taken place at Gazprom recently," Katali added saying this could have led to the decision to withdraw from the Kudu gas field.
"We are now looking for a new investment partner, but so far there is no new partner on the horizon," Katali said.
In December last year the renowned business news agency Bloomberg still reported that Gazprom, the world's largest natural gas producer, and NamCor planned to buy a part of Britain's Tullow company share in the Kudu gas field.
Gazprom and NamCor planned to set up a joint venture to hold 54% in the Kudu gas field, Boris Ivanov, head of Gazprom's international exploration and production unit, then said in Gazprom's corporate magazine.Tullow was to keep 31% and Japan's Itochu, the remaining 15% according to Ivanov. The offshore gas field is alleged to hold 1.8 trillion cubic feet.
On 23 November last year Namibia's new ambassador to Russia, Ndali Che Kamati was hosted at Gazprom's headquarters in Moscow to discuss the Kudu gas project.
Gazprom was in talks with Namibian and South African authorities about plans to also build an 800 megawatt power plant, although Namibia's electricity utility NamPower is actually tasked to do this. Some electricity generated from the gas is to cover Namibia's energy needs and the surplus to be exported to Botswana, South Africa, Zambia and Angola, Ivanov was quoted.
Namibia had chosen Gazprom to set up a new consortium with NamCor and Tullow Oil to develop the Kudu gas project, which has been delayed several times due to differences about the price of surplus gas exports to South Africa. Ivanov was replaced in February this year with Valery Gulev who is now at the helm of Gazprom EP International B.V., wholly owned by the mother company Gazprom.
In February this year Gazprom announced it would buy a stake in a Libyan offshore gas field together with Italian oil and Natural Gas Company. This was put on hold last month due to the civil war which erupted in Libya two months ago.
According to well-placed sources, another reason why
Gazprom might have pulled out of the Kudu gas field could have been the suspension of NamCor boss Sam Beukes and the accumulated debt of N$538 million NamCor had towards the company Glencore Energy UK. The debt was quietly paid back by Government.
Glencore and NamCor took Government to court recently after Cabinet decided to stop NamCor to import fuel via Glencore and its subsidiary Petroneft and they won the case.
A 2009 PricewaterhouseCoopers audit of NamCor says that dealing with Glencore "forces NamCor to continue to purchase from its current suppliers even though other suppliers may potentially offer lower (fuel) prices".
A recent Cabinet briefing paper submitted by the Mines and Energy Ministry noted that "Glencore has been negotiating with NamCor in bad faith and seems to have undisclosed ambitions to control the local oil industry in future."

LINK: http://www.informante.web.na/index.php?option=com_content&task=view&id=8159&Itemid=101