Signing of a Memorandum of Understanding between Gazprom, Rosneft and Statoil

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On 8 September, Alexey Miller, Gazprom’s Management Committee Chairman, Sergey Bogdanchikov, Rosneft’s President and Helge Lund, Statoil’s President and CEO signed in Moscow a Memorandum of Understanding.

The Memorandum envisages joint involvement in the following project surveys:

- 1st phase of the Shtokmanovskoye gas condensate field development, along with the construction of a gas liquefaction plant and Statoil’s participation in said project

- Russia’s role in the Statoil-operated Snohvit liquefied natural gas (LNG) project in the Norwegian Barents Sea

- Russia’s role in the use of Statoil-owned regasification capacities in North America

A tripartite steering committee and a working group are planned to be formed to exercise control over the surveys.

“The Memorandum signed today opens a new page in our cooperation with Statoil. While we count on gigantic gas reserves of the Barents Sea offshore, Statoil has vast experience of LNG production and transportation and access to the strategically critical for us North American market. By joining forces to analyze our most promising projects, we’ll be able to achieve good results,” – stated Alexey Miller after signing the Memorandum.

“The Arctic offshore was and remains to be a region of Rosneft’s strategic interests. We are looking upon the commencement of our intensive cooperation with Statoil in the Barents Sea as a crucial step towards commercial development of gigantic oil and gas reserves of this area,” – maintained Sergey Bogdanchikov.

“Statoil is considering the Barents Sea as a region for the company’s natural growth. We look forward to promoting fruitful long-term cooperation with Gazprom and Rosneft, by focusing first and foremost on sharing our Snohvit LNG project experience and our opportunities to sell gas extracted from this field in the USA,” – Helge Lund was quoted as saying.

Reference:

On 4 October 2001, Gazprom and Rosneft entered into an Agreement to join forces for the development of the Prirazlomnoye and Shtokmanovskoye gas condensate fields. To implement the Agreement, the parties set up the 50/50 Sevmorneftegaz joint venture.

The Shtokmanovskoye gas condensate field is located in the central Barents Sea. The field reserves are valued at 3.2 trillion cubic meters of gas and 31 million tons of condensate. The field is currently being prepared for the development with the view of marketing LNG in the USA and other markets.

Statoil is a vertically integrated oil and gas firm. In 2003, the company’s net profit totaled NOK 16.6 billion (USD 2.33 billion).

As of 31 December 2003, Statoil’s natural gas and oil & condensate reserves were estimated at 392 bcm and 1.77 billion barrels, respectively. Statoil is carrying on business in 21 countries of the world. The company counts on vast experience of operations on the Norwegian continental shelf and is the world’s third-largest crude oil seller.

Statoil is one of Europe’s major natural gas suppliers. Over 2003, the company was producing 1.07 barrels of oil equivalent per day.

This year, Statoil plans to build up its daily domestic production to 1.12 million barrels of oil equivalent, with further growth to be maintained by production activities abroad. Statoil’s 2003 foreign operations (largely in Angola, Azerbaijan, Venezuela and the Great Britain) yielded some 90 thousand barrels of oil equivalent a day.

The Snohvit (White-Snow) field is sutuated in the Norwegian Barents Sea. Recoverable reserves of the field are valued at 190 bcm of gas and over 20 million tons of condensate. The field will be developed solely with remote-controlled underwater vehicles and equipment.

The resources to be withdrawn from the field will be channeled to the Hammerfest LNG terminal (Norway) via a 143-km-long underwater pipeline. One train of the first European natural gas liquefaction plant will have an annual capacity of 5.7 bcm. Statoil started technically developing the Snohvit field in 2002 and LNG production and supply to the USA and Europe is due 2007.

Statoil is serving as operator of the 2.4 bcm/y Cove Point regasification terminal, which is one of the 4 existing regasification terminals in the USA. The terminal is based in Maryland, US West Coast, between Washington DC and New York City. Said area is being regarded upon as the most promising US gas market.

Statoil has recently entered into an agreement to modernize the terminal with the view of boosting its throughput. Upon finalization of the modernization due 2008, Statoil will control the 10 bcm/y regasification, storage and transmission Cove Point terminal.

GAZPROM DIVISION OF RELATIONS WITH MASS MEDIA

ROSNEFT PRESS-CENTRE

STATOIL PR-SERVICE