Putin Confirms Norway Energy Cooperation

Dow Jones Newswires

OSLO, Nov 28, 2006 (Dow Jones Newswires)

Russia President Vladimir Putin has confirmed a strategic partnership between the two countries and that a decision to rebutt international involvement in Shtokman wouldn't preclude future partnerships in the Russian oil and gas sector, the Norwegian prime minister's office said Tuesday.

The two premiers met at the end of last week during an E.U. summit in Helsinki.

Ingvard Havnen, director general of the Norwegian prime minister Jens Stoltenberg's office, said: "Putin confirmed the strategic partnership when it comes to energy co-operation and also with regard to further development and co-operation."

Havnen added that Putin said a decision taken by Russian gas company OAO Gazprom (GSPBEX.RS) to proceed with the development of the giant Shtokman gas field without international partners wouldn't preclude the future participation of Norwegian companies in Russia's oil and gas sector.

"Putin said that although no foreign companies would be involved directly in the ownership side of Shtokman, that did not in any way mean Norwegian companies would not be able to (participate) in the oil and gas sector in Russia," Havnen said.

Putin also clearly stated that the Russians are very much aware of the expertise Norwegian companies have in the oil sectors and other industries, Havnen added.

Bids to join Gazprom in developing the 3.6 trillion- cubic-meter Shtokman natural gas field by Norway oil companies Norsk Hydro ASA (NHY) and Statoil AS (STL) and oil majors Total SA (TOT), ConocoPhillips (COP) and Chevron Corp. (CVX) were rejected in a surprise move by the Russian company in October.

Gazprom had earlier indicated that it would accept two or three of the companies as minority partners in the project, but had long stalled in reaching a decision.

The expertise of Norwegian oil companies in the difficult conditions of the Barents Sea region had been seen by industry analysts as an advantage in the bidding war.

In addition to oil and gas project partnerships, the delimitation line between Norway and the Russia Federation in the Barents Sea is a hot topic of negotiation between the two governments.

Norway would prefer an internationally recognized "median line principle," creating an equidistant border between the two countries, while Russia would prefer to retain the pre-1970 line which is drawn directly up towards the North Pole from the Russian coastline.

Copyright (c) 2006 Dow Jones & Company, Inc.