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Transneft calls for CPC talks



By Upstream staff 

Russia's pipeline monopoly Transneft will ask shareholders of the Chevron-led Caspian Pipeline Consortium (CPC) to meet again in July to resolve a strategy dispute with Moscow over the country's only private oil link.

Transneft boss Semyon Vainshtok told Reuters he wanted the shareholders to meet again to discuss Transneft's proposals for higher transportation fees, lower borrowing costs and a bond issue.

Earlier this month, most shareholders of the CPC turned down suggestions by Transneft, which represents Russia in the group pumping oil from Kazakhstan to the Black Sea across Russian territory.

Russia, Kazakhstan and Oman own stakes in CPC, while private shareholders include BP, Shell, ExxonMobil, Lukoil, Rosneft and Chevron, which holds 15%.

Russia, which has a 24% stake in the consortium as a host stake, has long opposed the group's plans to double capacity from the current 700,000 barrels per day as it claims the project brings little benefit to Russia.

CPC has to pay back $5.5 billion in loans from its private shareholders before sharing profits with its state owners. Sources have told Reuters Transneft wants the group to raise $5 billion via a new bond to cut interest on the old debt.

To refinance the loan, Transneft wants the consortium to cut its borrowing rate to 6% from the current 12.5% and raise fees to $38 per tonne from $24.6 per tonne, which experts say could drive oil flows towards competing routes.

Russia has also slapped CPC with a 4.7 billion rouble ($183 million) back tax claim for 2002-2003 and is checking its accounts for 2004-2005.

CPC has been carrying oil since 2001 and pumps up to 730,000 barrels per day from Kazakh oilfields to Novorossiisk, Russia's largest Black Sea port, for re-export to world markets.


Thursday, 12 July, 2007, 08:26 GMT  | last updated: Thursday, 12 July, 2007, 08:26 GMT

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