Replies to post #1935 on The Rising Influence of Rising Affluence

[DewDiligence]

Speaking of ketchup…HNZ was up sharply today; this PR on low-petroleum packaging may be part of the reason:

http://finance.yahoo.com/news/ADDING-MULTIMEDIA-CocaCola-bw-321693526.html?x=0&.v=2

[DewDiligence]

Totally Russian?

http://online.wsj.com/article/SB10001424052748703300904576177713147431464.html

›MARCH 4, 2011
By JACOB GRONHOLT-PEDERSEN

French energy giant Total SA said it will pay $4 billion for a minority stake in Russia's largest independent natural-gas producer and its massive Arctic gas project, in another sign that Russia is opening its lucrative energy sector to foreign investors.

Total said it will get a 12% stake in privately held OAO Novatek and a seat on the company's board, with the stake rising to 19.4% in three years. The deal, announced late Wednesday, also gives Total a 20% share of Novatek's liquefied natural gas, or LNG, project in the Yamal-Nenets autonomous region of western Siberia.

Total said it will gain access to production of 120,000 barrels of oil equivalent a day and to proven and probable reserves of about one billion barrels.

The agreement was signed by Total Chief Executive and Chairman Christophe de Margerie and Novatek CEO Leonid Mikhelson during a meeting with Russian Prime Minister Vladimir Putin.

The accord comes less than two months after British oil company BP PLC entered a $16 billion deal to swap shares and develop three Arctic licenses with Russian state oil producer OAO Rosneft.

Russia is trying to lure major Western oil companies to apply their know-how to developing complex Arctic sites. The Total-Novatek alliance reflects those companies' renewed interest in Russia amid political turbulence in other petroleum centers like the Mideast.

"The upheavals taking place in a number of the oil-and-gas producing countries now send a signal to investors to come to Russia, because it offers a much safer environment for investment," said Total's Mr. de Margerie.

Analysts say the Total and BP deals show that the attractiveness of Russia's energy resources overshadows the risks of doing business in the country.

"These deals also show that international energy companies have few alternatives to Russia if they want to get access to major new resources," said Chris Weafer, chief strategist at UralSib, a Russian investment bankRussia aims to be a major LNG producer. Total is a partner in two Arctic projects due to come on line in the next decade, the Yamal LNG project and the Shtokman project.

Novatek has gained popularity with investors recently, as it has grabbed market share from state-owned OAO Gazprom and won political support through ties to oil trader Gennady Timchenko, co-founder of Gunvor International BV. Mr. Timchenko,a longtime acquaintance of Mr. Putin who last year raised his Novatek stake to 23%. His investment has added momentum to Novatek's Yamal LNG project, in contrast to Gazprom's Shtokman LNG project in the Arctic, which has shown signs of trouble.

Total owns a 25% stake in the Shtokman project, and a Total spokeswoman said Thursday that it remains committed to it despite its new partnership in the Yamal venture. The ambitious Arctic field was originally planned to start production in 2013, but has been delayed amid a glut of natural gas. A Total vice president said last month that Shtokman "looks too expensive to our taste."

Novatek plans to launch the Yamal project in 2016 and eventually reach production of 15 million tons of LNG a year. Novatek's Mr. Mikhelson said Total's "experience in implementing complex oil and gas projects, as well as their global presence in LNG markets, will significantly contribute to the project's overall performance and timely implementation."

Apart from Total, industry titans such as ExxonMobil Corp., ConocoPhillips and Royal Dutch Shell PLC have expressed interest in the Yamal project. Novatek says it will retain a 51% stake in the project and pick minority partners this year.

Under the BP-Rosneft venture unveiled in mid-January, BP will get an additional 9.5% stake in Rosneft, while the Russian firm will take a 5% stake in BP ordinary voting shares. Unlike the Total-Novatek venture, the BP-Rosneft tie-up has so far not announced representation on each other's board.

The BP-Rosneft deal has hit a recent obstacle, however, in light of objections by the Alfa-Access-Renova consortium, BP's partner in its other Russian venture, TNK-BP Ltd. TNK-BP's board is expected to consider a plan on Friday to allow TNK-BP to replace BP in the venture.‹

[DewDiligence]

Pfizer goes prospecting in Russia: #msg-64740121.