UPDATE 2-UAE's Crescent, Russia's Rosneft team up for energy JVs

Wed May 19, 2010 9:15am EDT

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* To work together on deals in Middle East, North Africa

* First focus on gas opportunities in Arab Gulf

* Expects to announce first project in GCC in weeks

(Adds Rosneft statement)

By Simon Webb

DUBAI, May 19 (Reuters) - The UAE's Crescent Petroleum and Russia's Rosneft (ROSN.MM) will seek joint deals in the Middle East and North Africa, the firms said on Wednesday, marking the first major foray into the region for the Kremlin's oil arm.

State-run Rosneft ROSN.NN pumps over a fifth of Russia's oil, and is the largest oil company of the world's top crude producer. Crescent is a privately-held energy firm based in the emirate of Sharjah, in the northern UAE.

The two would initially focus on opportunities in natural gas in the Gulf, said Crescent Petroleum Executive Director Badr Jafar.

"We have already identified a number of robust opportunities, and we expect to be able to announce our first joint project in the Gulf Cooperation Council (GCC) region within the coming weeks," he told Reuters in a written statement.

The partnership aims to capitalise on Rosneft's technical expertise and financial strength and Crescent's international operating experience and knowledge of the MENA region.

"This agreement creates the framework for the joint pursuit of specific oil and gas exploration and development opportunities in the Middle East and North Africa (MENA) region," Crescent said in the statement.

Rosneft's chief Sergei Bogdanchikov signed the deal with Jafar in Moscow on Tuesday. "We have made the first step toward entering one of the world's most significant regions in terms of hydrocarbon production," Bogdanchikov said in a statement.

Last year, Crescent and UAE affiliate Dana Gas DANA.AD formed a consortium with Austria's OMV (OMVV.VI) and Hungary's MOL MOLB.BU that aims to pump enough gas from Iraq's Kurdistan region to kick-start the Nabucco pipeline to Europe via Turkey.

NABUCCO DELAYS, DIFFICULTIES

Nabucco aims to lessen European dependence on Russia, which supplies a quarter of the EU's gas needs. But the Nabucco project has been hit by delays and difficulties in finding gas suppliers.

Russia's gas export monopoly Gazprom (GAZP.MM) is pushing a rival project, South Stream, and has already signed up a number of central European countries as customers.

Rosneft and Gazprom have repeatedly competed for different assets in Russia but abroad both firms are seen as agents of the Kremlin's energy policies.

Rosneft is working in upstream projects in Kazakhstan, Venezuela and Algeria.

Rosneft has big expansion plans but has so far refrained from aggressive purchases abroad due to what analysts describe as the company's concerns about potential legal suits it could face from former shareholders and managers of defunct oil firm YUKOS.

Rosneft became the owner of most of YUKOS' assets after the Kremlin-inspired demise of Russia's former top producer and its politically ambitious shareholders.

Aside from Iraq and the UAE, Crescent also has operations in Egypt, Yemen and Oman.

The GCC, which Crescent and Rosneft are initially targeting for gas opportunities, is a loose political and economic alliance between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. (Additional reporting by Dmitry Zhdannikov in Moscow; Editing by Sue Thomas )

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