Posted by: russiaoilandgas | July 26, 2007

Shtokman Watch: Gazprom Slash Investment; Norsk Hydro Back in the Game

Gazprom Shtokman LNG Liquified Natural Gas Norsk Hydro StatoilRegular readers of this blog will be aware that Oil and Gas Eurasia’s resident experts don’t think for one moment the Shtokman saga ended with Gazprom’s allocation of a 25% share in the Liquified Natural Gas (LNG) project to French oil and gas firm, Total.  And today, two news stories have emerged that seem to confirm this.  First, various news agencies reported that Gazprom have made significant changes to their 2007 investment plan, including cutting the Shtokman Budget by more than half.

Second, Norsk Hydro, the Norwegian oil and gas company currently in the process of merging with Statoil, threw their hat back into the Shtokman ring, according to the Financial Times.

Norsk Hydro’s chief executive, Eivind Reiten, claimed in the Financial Times that there was still a chance for Norsk Hydro to get involved in Shtokman in spite of Gazprom’s choice of Total of France as its main development partner.

Of course, on its own, it may appear that Norsk Hydro are merely maintaining their position after ConocoPhillips made their own Shtokman statement recently. But combined with the Barents Observer report today that Gazprom have downscaled their Shtokman investment program from $671 Million to $265 million, Reiten’s statement takes on new significance.

StatoilHydro Statoil Norsk Hydro Shtokman LNG GazpromAccording to the Barents observer, even before today’s investment plan announcement from Gazprom, there was wide spread skepticism the Russian energy leviathan would be able to bring the Shtokman project online by its target date of 2013.  It is clear, especially in light of today’s news, that Gazprom needs investment, and, as reported by Oil and Gas Eurasia earlier this week, the kind of deep water, Arctic expertise that Statoil would be well placed to provide.

It seems clear that when Norsk Hydro’s merger with Statoil is completed in October there will be place for the new company, to be named StatoilHydro. 

For the full story and a more detailed report and analysis, click here. ( )



  1. […] that they would still be open to involvment despite Total’s award. Finally, last week, Gazprom slashed investment in Shtokman by more than half, highlighting their need for third party investment. And now, Gazprom chairman, Dmitry Medvedev, […]

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