x Abu Dhabi, UAETuesday 16 January 2018

Crescent in Moscow talks

Sharjah company in discussions with prime minister Putin.

Sharjah's Crescent Petroleum is in talks with Moscow over major projects in Russia, Iraq and the UAE. The privately held oil and gas company said it took part in a round table discussion in Moscow on Saturday hosted by Vladimir Putin, the Russian prime minister. The talks covered a proposal for Crescent shareholders and the Russian state-owned Rostekhnologii, also known as Russian Technologies, to establish a US$500 million (Dh1.83 billion) fund to invest in transportation and logistics projects in Russia.

It would be the first foray into Russia's industrial sector by UAE investors. "Crescent has had unprecedented backing to pursue ventures with Russian enterprise in the oil and gas, logistics and other complementary sectors, which are a model for the region, and we sincerely look forward to developing these ties further with our Russian counterparts and colleagues," said Badr Jafar, the executive director of Crescent Group and its largest subsidiary, Crescent Petroleum.

Crescent said in an e-mailed statement: "Mr Badr Jafar met with the prime minister of Russia [and] with other business leaders and discussed possible involvement for the Crescent Group through Crescent Investments in the logistics sector in Russia. "Following this meeting, details are being discussed with senior members of Russian Technologies Group. However, the exact terms are still to be agreed."

Igor Sechin, the deputy prime minister of Russia and the country's top oil official, said Rostekhnologii and Crescent shareholders had signed a preliminary agreement for the fund. They would finalise the agreement next month at a business forum to be held at the Russian Black Sea port of Sochi, he added. Rostekhnologii is a huge Russian conglomerate with interests in industries including aviation, car manufacturing, rare minerals and defence.

In a related development, the Russian government's press service Itar-Tass said Mr Putin discussed energy co-operation in the Middle East with Hamid Jafar, the Crescent chairman. "During the talks, future co-operation in the energy sector of Iraq and other Middle Eastern countries was discussed," the press service said.

Crescent officials were not immediately available to comment on this issue. However, the company's existing Russian partner, the state-run oil producer Rosneft, said it would invest $630m in its Sharjah gas development joint venture with Crescent. That is a substantial step up from the Dh220m the companies announced in June that they would spend on drilling the programme's first two exploration wells. They started drilling the first well near Al Madam in Sharjah on June 5, after Crescent brought Rosneft into its onshore Sharjah exploration concession in May.

Mr Sechin, a director of Rosneft, said the partners were drilling a prospect that potentially contained 2.5 trillion cubic feet of gas and 117 million barrels of condensate, a type of light oil produced from gasfields. Crescent and Rosneft have previously discussed potential joint ventures in Iraq, where Crescent is already in a consortium with its Sharjah affiliate Dana Gas, Austria's OMV and Hungary's MOL to produce and export gas and condensate from the country's Kurdistan region.

Crescent is also in talks with Iraqi authorities over projects to meet infrastructure needs in the southern province of Basra, and to use gas that is currently flared at the region's giant oilfields. Crescent Investments owns stakes in two Iraqi-focused companies, Uruk Engineering and Contracting and Uruk Projects Development. The success of Crescent's plans to expand its involvement in Iraq could depend on the outcome of the current political power struggle to form the country's next government.