Font Size

- Aa +

Sun 22 Aug 2010 05:23 PM

Font Size

- Aa +

Russia's Rosneft to invest $630m in Crescent JV

Russia's largest oil producer joins hands with UAE oil firm to drill for gas in the Mideast.

Russia's Rosneft to invest $630m in Crescent JV
BIG DEAL: Rosneft joined Crescent Petroleum in a gas concession in May in Sharjah, the first regional project for the Russian firm.(Getty Images - for illustrative purposes only)

Russia's largest oil producer Rosneft will invest $630m in a joint project with an UAE oil firm to drill for gas in the Middle East, a top Russian official said.

Rosneft joined UAE-based Crescent Petroleum in a gas concession in May in the emirate of Sharjah, the first regional project for the Russian firm.

Deputy Prime Minister Igor Sechin said late on Saturday Rosneft and UAE-based Crescent Petroleum aim to start production in 2013 at the field which is estimated to contain 70 billion cubic meters of gas and 16 million tonnes of gas condensate.

Sechin said the project, in which Rosneft will hold 49 percent, was discussed on Saturday by Russian Prime Minister Vladimir Putin and former Iraqi PM Ayad Alawi, now MP, as Moscow is seeking to boost its presence in the region.

In May, Sechin, who is also chairman at Rosneft, said Russia was keen for projects to drill for gas in Iraq.

Last year, Crescent and UAE affiliate Dana Gas formed a consortium with Austria's OMV and Hungary's MOL that aims to pump enough gas from Iraq's Kurdistan region to kick-start the Nabucco pipeline to Europe via Turkey.

Nabucco is seen as the main competitor of the Gazprom-led South Stream pipeline and is aimed at lessening European dependence on Russia, which supplies a quarter of the EU's gas needs.

Russia has repeatedly said it does not see Nabucco as a competitor but many analysts have said they would not rule out Moscow joining the project or one of its key suppliers to better understand its dynamic and assert certain control over it.

Sechin also said that Russian state-owned Russian Technologies and Crescent shareholders agreed to inject $500m in a joint-investment fund to develop transportation projects in Russia.

The fund is expected to be set up in September in Sochi, as both parties are expected to sign an establishing agreement. (Reuters)

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.