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Gazprom Profit Falls on Ruble, Ukraine

ENLARGE Russian gas giant Gazprom has reported a sharp drop in third-quarter profit, hit by the slide in the ruble and a lack of deliveries to Ukraine. Photo: Reuters MOSCOW—Russian state-controlled gas group OAO Gazprom said net profit plunged 62% in the third quarter of 2014 compared with same period the previous year, hit by the slide in the ruble and a lack of deliveries to key customer Ukraine. Net profit fell to 105.7 billion rubles ($1.56 billion) from 276.1 billion rubles in the third quarter of 2013. Revenue dropped 6% to 1.13 trillion rubles, the company said on Thursday. Shares in Gazprom, which reports its earnings well after other listed Russian companies, were up 0.6% in early trading in Moscow after the results were released, broadly in line with the market. Write to James Marson at [email protected]

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Russian Coffers, and Sway, Fall Along With Gas Prices

ENLARGE Lower gas prices have made it harder for Gazprom to dictate terms to European consumers. Above, Chairman Alexei Miller in June 2014. Photo: European Pressphoto Agency The collapse of oil prices—added to the weight of Western financial sanctions—has hammered Russia’s economy. But Moscow is also suffering from the fall in prices of another important energy export: natural gas. Gas represented 14% of Russia’s export revenues in 2013, compared with 54% for crude oil and oil products. But its gas is more important to Europe and Ukraine. Gas is more than a commodity for Moscow: It has been a political tool that has helped it assert its influence in Central and Eastern Europe and beyond. Because of pipeline architecture, some European Union countries have had few alternatives to buying gas from Russia. But its grip over Europe’s gas markets is weakening. As natural-gas prices have fallen in the European […]

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EU fails to agree Russia sanctions as cracks in unity appear

On guard: a pro-Russian rebel patrols the road near the airport of Donetsk, with Ukrainian military vehicles in the background Increasingly divided EU ministers failed to issue a specific threat of further economic sanctions against Russia on Thursday, despite fears that the conflict in eastern Ukraine was entering a dangerous new phase. European foreign ministers held an emergency meeting in Brussels to determine how to respond to the collapse of a ceasefire in eastern Ukraine, fearing that this weekend’s bombardment of the port city of Mariupol marked a dramatic escalation of the fighting. More On this topic IN Europe However, diplomats in Brussels said it was increasingly difficult to preserve a united front among the 28 members of the EU, partly because of the recent election of a leftwing government in Greece which has vowed to act as a bridge between Europe and Russia . In a weak final […]

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Ruble Extends Rout as Ukraine Sanctions Loom, Central Bank Meets

(Bloomberg) — The ruble fell, extending its worst start to the year since 2009, as the escalating conflict in Ukraine boosted the likelihood of further sanctions against Russia. The currency is headed for a 12 percent drop in January, the worst performance in emerging markets this month. With oil trading near the lowest level since 2009 and violence spreading in eastern Ukraine, only one of 32 economists in a Bloomberg survey expects the central bank to pare back December’s emergency 6.5 percentage point rate increase at a meeting today. Pressure on the ruble “will escalate” and the currency will weaken 16 percent to 82 rubles per dollar in the next three months, according to Credit Suisse AG. Russia’s economy is set for a 5.6 percent contraction this year and the world’s biggest energy exporter won’t repeat 2009’s V-shaped rebound “particularly given the rising risk of further sanctions,” Morgan Stanley […]

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EU Foreign Ministers Extend Targeted Sanctions on Russia Over Ukraine

ENLARGE Ukraine’s Foreign Minister Pavlo Klimkin addresses the media following a meeting at NATO headquarters in Brussels on Thursday. Photo: Agence France-Presse/Getty Images BRUSSELS—European Union foreign ministers agreed on Thursday to extend targeted sanctions against separatist leaders in Ukraine and their Russian backers by six months and hit additional people with sanctions but showed no appetite for broader economic measures against Russia in the immediate future. The extension of the sanctions suggested that Greece’s new government, while openly skeptical of sanctions on Russia, wouldn’t break European Union unity on the issue. The statement foreign ministers agreed maintained a tough tone on Russia, saying Moscow had given the rebels “continued and growing” support and held “responsibility” for the latest violence. However, a tougher test for the bloc’s unity will come if there is a fresh surge in violence in eastern Ukraine and the pressure builds to seriously consider fresh economics […]

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Leaked Document Could Shatter UK Shale Dreams

U.K. Prime Minister David Cameron’s hopes for a British-style shale gas revolution recently took a major hit. Cameron has promised that his government will be “going all out” to develop Britain’s shale gas resources, which he argues will create new jobs and cut dependence on imported gas. But a committee made up of members of parliament (MPs) from several political parties issued a damning new report on the state of “fracking” in the United Kingdom. The Environmental Audit Committee published a report that called for a 30-month moratorium on fracking, citing “huge uncertainties” regarding the environmental fallout from widespread drilling. On top of the usual controversies over water supplies, the report says that allowing fracking will upend British climate change goals. “Ultimately fracking cannot be compatible with our long-term commitments to cut climate-changing emissions unless full-scale carbon capture and storage technology is rolled out rapidly, which currently looks unlikely,” […]

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Shell to Cut Spending Amid Lower Oil Prices

Royal Dutch Shell reported a rise in fourth-quarter profit despite weaker oil prices. ENLARGE Photo: Agence France-Presse/Getty Images LONDON—Royal Dutch Shell PLC said Thursday it would curb its planned spending over the next three years by some $15 billion, freeze dividends at current levels and scale back shale investments to cope with weaker oil prices. Shell, the first of the four giant, integrated oil companies to announce quarterly results, posted an improved profit compared with the year-earlier quarter. But earnings were below some analysts’ forecasts, driving shares down nearly 5% in London trading. “The macro environment has moved against us,” Shell Chief Executive Ben van Beurden said during a Thursday news conference. He and Chief Financial Officer Simon Henry said Shell is cutting costs but continuing some big investments—including a potential $1 billion exploration project in Alaska’s Arctic this year. Shell forecasts rebounding oil prices in coming years, and […]

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Shell preaches resiliency despite spending cut

Don’t panic, Shell’s top boss says as low oil prices curb spending forecasts for Dutch supermajor. UPI/Shutterstock/tcly While spending is taking a dramatic hit, Royal Dutch Shell’s chief executive said Thursday there’s no reason to overreact to the bear market for crude oil. Shell followed precedent set by its supermajor rivals by announcing a spending cut of about $15 billion as low oil prices crimp the company’s momentum. Chief Executive Ben van Beurden, however, warned against panicking as oil prices continue trading below the $50 per barrel mark, less than half the June price. "We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices," he said in a statement. "Shell is taking structured decisions to balance growth and returns." The company, he said, is delivering where it counts . Upstream, or production, income fell 30 percent year-on-year […]

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Scotland enacts fracking moratorium

Scottish government places moratorium on fracking, citing need for more research. Photo by Steve Oehlenschlager/Shutterstock EDINBURGH, Scotland, Jan. 29 (UPI) — The Scottish government will take a cautious look at shale oil and gas extraction during a moratorium period, the energy minister said Thursday. "I am announcing a moratorium on the granting of planning consents for all unconventional oil and gas developments, including fracking," Scottish Energy Minister Fergus Ewing said in a statement. The ban comes as those in the British government press ahead with its shale ambitions despite frustration surrounding the frontier natural gas sector. Authorities in Lancashire County in England, said to hold vast shale natural gas deposits, are reviewing drilling applications submitted by Cuadrilla Resources. Ewing said the moratorium was enacted so Scottish legislators could take time to review public health or other concerns associated with hydraulic fracturing, known also as fracking. "We recognize that local […]

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Crude-Oil Futures Volatile

An oil refinery in Singapore on Jan. 13. ENLARGE Photo: Agence France-Presse/Getty Images LONDON—Oil futures were volatile on Thursday with U.S. oil prices hovering near six-year lows as the global oil glut that has pummeled prices since midsummer showed no signs of abating. The U.S. reported record high oil supplies and the dollar continued to strengthen after the Federal Reserve’s meeting on Wednesday, further weighing on dollar-denominated commodities such as oil. On the New York Mercantile Exchange, March-dated WTI, the U.S. price benchmark, traded down 0.1% at $44.40 a barrel after settling at its lowest level since March 2009 on Wednesday. On London’s ICE Futures Exchange, Brent, the global marker, rose 0.3% to $48.65 a barrel Data from the U.S. Energy Department showed the country’s oil stockpiles rose by a more-than-expected 8.9 million barrels in the week ended Jan. 23. The stockpiles are now near 407 million barrels, an […]

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