Posted on 07/14/2005 7:42:29 AM PDT by Lukasz
Territorial claims
Yesterday it was learned that the American oil and gas company Moncrief Oil International has filed suit in the U.S. District Court of the Northern District of the State of Texas against OAO Gazprom and its affiliates OAO Zapsibgazprom and OAO Severneftegazprom. The company is demanding a restoration of its rights to participate in developing the Yuzhno-Russkoe gas field. Kommersant has learned that Moncrief is demanding either 40 percent in this project or compensation, which the company has tentatively estimated at several billion dollars. Spokesmen for Gazprom told Kommersant that the company is now studying the extent of competence of Moncrief's claims.
Moncrief Oil International was founded as a private company of the Moncrief family in 1935; Richard Moncrief, the company's president, now controls it. The company has explored fields in Texas, Louisiana, Alaska, Oklahoma, as well as separate areas in Africa and the Middle East. Moncrief is also operating in oil and gas fields in Azerbaijan.
The Yuzhno-Russkoe field (Yamalo-Nenets Autonomous Area) is the main source of raw materials for future deliveries through the North European Gas Pipeline (NEG). Recoverable reserves are estimated at 700 billion cu. m. Severoneftegazprom owns the development license.
Information about Moncrief's claims against Gazprom is contained in an issue prospectus of the first tranche of Gazprom's Eurobonds valued at $640 million distributed yesterday. The prospectus states that on June 7, 2005, Moncrief Oil International filed suit in the U.S. District Court of the Northern District of the State of Texas demanding a restoration of its rights to develop the Yuzhno-Russkoe field or monetary compensation amounting to several billion dollars to cover past and future losses. Moncrief flatly refused to comment on the suit yesterday, but promised to do this at the beginning of next week. Gazprom was unable to give details of the Americans' claims.
Kommersant has managed to obtain a copy of Moncrief's suit and other documents the company presented to the American court. The text of the suit states that an investment agreement was signed between Vladimir Nikiforov, the general manager of Zapsibgazprom, and Richard Moncrief, the president of Moncrief, on September 17, 1997. The agreement stated that a separate company would be formed to develop the Yuzhno-Russkoe field. Under the terms of the agreement, Zapsibgazprom was to transfer the license to this company and receive a majority stake. Moncrief committed to attracting Western credits in the amount of $600-800 million in exchange for a minority stake.
The sizes of the stakes were fixed in a later agreement signed on November 23, 1998. Moncrief was to receive 20 percent of the shares in the joint venture being set up in exchange for $120 million of its own investments and the attraction of $300 million in loans. Under this agreement, Zapsibgazprom received 50 percent of the shares in the joint venture, while Edison Gas Italy was to receive 20 percent, and another 9 percent would go to an unnamed Russian company. Moncrief was later informed that the unnamed company was MGK Itera (Itera told Kommersant yesterday that it knew nothing about Moncrief or the formation of a joint venture). Edison Gas withdrew from the project in February 1999, and it was immediately agreed that its stake would pass to Moncrief. Thus, the Americans should have obtained 40 percent of the shares in the joint venture.
Gazprom lost control over Zapsibgazprom in 2000 after reducing its stake in it from 75 percent of the shares to 39 percent. At that time, the license for the Yuzhno-Russkoe field was transferred again to the newly formed OAO Severneftegazprom, in which Zapsib owned 51 percent of the shares and Itera owned 49 percent. Itera controlled 49 percent of Severneftegazprom until May 2001, but after an additional share issue was held, its stake increased to 89 percent.
In time, Zapsibgazprom lost its entire stake in Severneftegazprom. Towards the end of 2002, Gazprom recovered 85 percent of Zapsibgazprom through the efforts of its new management team headed by Aleksey Miller and reestablished control over the development license for the Yuzhno-Russkoe field (in return, Itera received the development license for the Beregovoe field). Moncrief's suit states that in November 2002, company representatives met with Gazprom vice presidents Aleksandr Riazanov and Boris Yurlov to confirm the terms of the agreements to develop the Yuzhno-Russkoe field. In the course of the meeting, both vice presidents agreed to renew the deal. Moncrief increased its commitments to attract credit to $1 billion. Negotiations continued throughout 2003-2004, but the American company never received a final answer from Gazprom. In April 2005, Gazprom and the German concern BASF AG signed a memorandum, according to which Wintershall, a BASF subsidiary, would get 50 percent minus one share of Severneftegazprom. In exchange, the Russian monopoly would increase its stake in Wingas (a gas distribution structure of BASF) from 35 to 50 percent minus one share. In addition, BASF would receive 49 percent of the shares in the joint venture being set up to build the NEG.
According to Kommersant's information, District Judge of the State of Texas Terry Means will hear the case. Yesterday, Gazprom limited itself to the following statement: “Gazprom specialists are studying the extent of the competence of Moncrief's claims. We will assert our legal rights.”
ping! That is free market and capitalism in Russia. Who cares about some deals, Germany is a friend and Germany got a contract.
Well, that's what lawsuits are for.
They would probably files suit in Russian court but since they know that there is no independent courts in Russia they did it in Texas.
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