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Cablegate: Extrancheck: Pre-License Check:

VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #1866/01 1131233
ZNR UUUUU ZZH
P 231233Z APR 07
FM AMEMBASSY MOSCOW
TO RUCPDOC/USDOC WASHDC PRIORITY
INFO RUEHC/SECSTATE WASHDC 9623
RHMFIUU/US CUSTOMS AND BORDER PROTECTION WASHINGTON DC

UNCLAS MOSCOW 001866

SIPDIS

SIPDIS

USDOC FOR 532/OEA/MHAMES/LRITTER
USDOC FOR 3150/USFCS/OIO/CEENIS/MCOSTA

E.O. 12958: N/A
TAGS: BEXP ETRD ETTC RS
SUBJECT: EXTRANCHECK: PRE-LICENSE CHECK:
SEVMORNEFTEGEOFIZIKA (SMNG), MURMANSK, RUSSIA, LICENSE
NO. D371224

REFTEL: USDOC 01279

1. Unauthorized disclosure of the information provided
below is prohibited by Section 12C of the Export
Administration Act.

2. Reftel requested a Pre-license check to determine
the legitimacy and reliability of the end-user,
Sevmorneftegeofizika, Murmansk, Russia. The company is
listed on BIS license application D371224 as the
ultimate consignee of a Syntrak active receiver array.
These items are controlled for national securities
reasons under ECCN 6A001. The licensee is Ocean
Geophysical Services, Inc., 10850 Richmond Ave., 165,
Houston, TX 77042.

3. On April 19, 2007, Export Control Attache Donald
Pearce and FSN Natalya Shipitsina conducted the
requested pre-license check at the offices of
Sevmorneftegeofizika (SMNG), 17, K. Marks St.
Murmansk, Russia. The export control team met with
Sergey Rabey, Head of Foreign Economic Relations
Department and Mikhail Zhestkov, Head of Sea Works
Department.

4. SMNG was founded in 1979 to provide oil and gas
geophysical and geological exploration services in the
arctic seas of the former Soviet Union. SMNG was a
Federal-State Unitary Enterprise until 2003, when it
was transformed into an Open Joint Stock Company.
Currently the Government of Russia (GOR) owns 100% of
the shares, though recently the Duma (GOR legislative
branch) approved the full privatization of the
company. Mr. Rabey stated that Gazprom, Rosneft and
several foreign companies have expressed interests in
obtaining shares of SMNG. The company employs around
540, and is headquartered in Murmansk, with offices in
Gelendzhik (SMNG South) and a data processing center
in Moscow.

5. SMNG has a fleet of seven vessels. Four of the
vessels are designed for deep-water operations, and
three principally used in littoral areas though they
can be employed on the high seas as well.
Currently four of the seven vessels are at sea on
projects, with one heading into port for maintenance,
one in port for overhaul, and a third in long-term
dry-dock in Bulgaria due to lack of business activity
in the area. The last three years have been very
profitable for SMNG, which has lead the company to
reinvest profit to upgrade the capabilities of the
fleet and shore installations. The company works in
the Arctic zone from May through September, and then
transfers vessels to warmer climes for winter work.
SMNG's clients are the GOR Ministry of Natural
Resources and many major oil and gas companies. SMNG
provided a CD-ROM with detailed information on the
organization services provided, which is available
from post upon request.

6. The equipment in reftel will be installed aboard
the Iskatel-5 (Searcher-5), a catamaran built in 1987.
The vessel provides two-dimensional geophysical
charting from shallow waters, through the littoral
transition zone, to deep waters. The equipment will
be secured aboard the vessel, and the crew maintains a
24-hour watch while the vessel is in port. ECO Pearce
inquired about foreign contract work, specifically
requesting information about potential contracts
involving Iran, Syria, North Korea, and Cuba. Mr.
Rabey stated that Iskatel 5 would only be employed on
projects in the Barents Sea along the coasts of Russia
and Norway. Both Mr. Rabey and Mr. Zhestkov are
familiar with U.S. export controls, as the company
utilizes U.S. equipment and technology on several
vessels, and assured the ECO that license conditions
will be strictly observed. NOTE: the CD-ROM noted in
paragraph 5 indicates that Iskatel-5 has operated in
Cuban waters in the past. END NOTE.

7. Recommendations: While post believes
Sevmorneftegeofizika, Murmansk, Russia, to be a
reliable recipient of sensitive U.S. origin
commodities, we call the licensing officer's attention
to the fact that the company has participated in
contract work in the Caribbean, including Cuban


waters. ECO recommends a specific license condition to
prohibit the use of the equipment in Cuban territorial
waters. It is requested that post be notified of
final disposition of the application, and of any
shipments for this organization in order to conduct
appropriate FCS follow-up and statistical reporting.
(FCS MOSCOW/SBOZEK/DPEARCE)
BURNS

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