Author`s name Alex Naumov

Gazprom to explore oil and gas reserves in Africa

Libya, the holder of Africa's largest oil reserves, gave Russia’s Gazprom and Royal Dutch Shell Plc permits to explore for natural gas, as the North African nation seeks to increase fuel exports to Europe to meet rising demand.

Shokri Ghanem, chairman of state-owned National Oil Corporation (NOC), told a brief ceremony in Tripoli that the companies were awarded a total of 10 blocks of gas-prone territory in the north African oil and gas producing country.

A results sheet posted on a notice board at the ceremony showed that Russian gas export monopoly Gazprom was awarded blocs 1, 2 and 3 in contract area 64 in the Ghadames Basin, Reuters reports.

As Pravda.Ru previously reported Russia’s JSC Gazprom announced second-quarter net profit fall as sales to Europe fell and operating costs increased with rising prices for gas from Central Asia.

Net profit for the quarter ending June 30 totaled 102.87 billion rubles (US$4.21 billion; EUR2.86 billion), down 25 percent on the year, the company said in a report.

A warm winter in many parts of Europe weakened sales there, but higher prices in Russia and other former Soviet republics helped hike revenue by a modest 5.3 percent, to 532.37 billion rubles (US$21.79 billion; EUR14.82 billion), Gazprom said.

Operating profit for the state-controlled giant fell 19 percent to 141.88 billion rubles (US$5.80 billion; EUR3.95 billion) as expenses jumped 18 percent, while financial expenses were up 50 percent to 31.09 billion rubles (US$1.27 billion; EUR0.87 billion) on increased borrowing.

Higher prices for oil and gas the company purchased accounted for most of the increase in operating expenses in the first half of 2007, Gazprom said, with price increases for Central Asian gas it buys for resale driving the hike.

Gazprom, which controls virtually all of Turkmenistan's gas exports, agreed late last year to begin paying Turkmenistan US$100 (EUR67.84) per 1,000 cubic meters, up from US$65 (EUR44.09). Last month, it agreed to new increases that will take effect in 2008.

But Gazprom has also been raising rates for ex-Soviet neighbors that have long enjoyed politically charged discounts. Gazprom said last week that Ukraine would pay nearly US$180 (EUR122.11) per 1,000 cubic meters beginning next year, a 40 percent increase.

Gazprom also signed a memorandum on deep hydrocarbons refining with chemicals maker Dow Chemical Co.

The companies said in a statement that they would consider creating a joint venture to process natural gas produced at Gazprom's deposits in the Yamalo-Nenets region.

"The document envisages studying the prospects of creating a joint venture at the base of new Dow Chemical petrochemical capacities in Germany , joint refining of natural gas from the deposits in the Yamalo-Nenets region and cooperation in other fields," the companies said in a statement.

Gazprom has used offers of participation in projects in resource-rich Russia to secure deals that expand its presence in gas refining and distribution in Europe.

Source: agencies