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Russia says to discuss oil markets, Iran with OPEC on July 30

Iranian Foreign Minister Mohammad Javad Zarif reacts during a plenary session at the United Nations building in Vienna, Austria July 14, 2015. Russia and OPEC Secretary-General Abdullah al-Badri will discuss oil markets and the Iran situation in Moscow on July 30 amid sliding oil prices, Russian Energy Minister Alexander Novak said. The prospect of an influx of Iranian crude onto the already-overhung market has dampened oil prices, which have halved from their level in June last year of $115 per barrel. "We will discuss the situation on the oil and gas market on the whole, taking into account the lifting of sanctions on Iran," Novak told reporters about the forthcoming meeting with Badri. He said he did not expect a big impact on prices from additional oil volumes from Iran. "The prices will be determined by the production costs of shale oil," Novak said. Iran and six world powers […]

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Wood Mackenzie: Russia’s energy players resilient

Russian energy companies should be able to remain competitive in the weakened crude oil market, Wood Mackenzie finds. Photo by DyMax/Shutterstock EDINBURGH, Scotland, July 16 (UPI) — Consultant group Wood Mackenzie said Thursday oil and gas companies in Russia are suited well to withstand any protracted slump in the crude oil market. Crude oil prices starting in June 2014 began a steady decline, dropping from levels above the $100 per barrel mark to below $50 per barrel in early 2015. This year in June, Russian Minister for Economic Development Alexei Ulyukayev said "the oil market has attained certain stability." Analysis from Wood Mackenzie finds oil and gas producers in Russia break even near $60 per barrel. "Costs are largely ruble denominated and among the lowest in the world, underpinned by vast conventional domestic legacy production; and the ruble devaluation has cushioned the negative effect from the fall in oil […]

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Bypassing Ukraine will be costly for Russia’s Gazprom: analysts

An employee turns a valve at a gas compressor station in the village of Boyarka, outside Kiev, Ukraine, in this April 22, 2015 file photo. Russia’s plans to drop Ukraine as a route for pumping natural gas to Europe will still leave state-run Gazprom facing about $1 billion in annual transit fees to Slovakia and Bulgaria for years to come, analysts and industry sources say. Russia wants to circumnavigate Ukraine to pipe its gas to Europe because of pricing disagreements, which at times have led to disruptions in supplies to the European Union, but doing so will come at a cost which some analysts say is too high. Billions of euros will be needed to build and expand alternative routes, and the route of the existing pipeline means transit fees to Slovakia and Bulgaria will have to be paid by Gazprom even if Russia manages to bypass Ukraine by […]

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Russia Quickly Maneuvers to Capitalize on Iran Nuclear Deal

Photo Sergey V. Lavrov, center, the Russian foreign minister, with Frank-Walter Steinmeier, the German foreign minister, left, and Secretary of State John Kerry before a session Tuesday in Vienna. Credit Pool photo by Joe Klamar MOSCOW — Sergey V. Lavrov, the Russian foreign minister, lost no time in talking about the accord on Iran ’s nuclear program . He was on television minutes after the deal was clinched, and even before the formal news conference had begun, announcing the landmark agreement to the audience back home and emphasizing the many potential benefits, strategic and economic, that it holds for Russia . The deal reopens the door for lucrative contracts to expand Iran’s civilian nuclear energy program, which Russia has been looking forward to for years. And it may neutralize a major reason the United States has offered for developing a missile defense system in Europe, a project that President […]

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BofA Sees Weaker Ruble Mitigating Iran-Spurred Oil Swings

Russia current account Potential economic risks to Russia triggered by oil-price volatility in the aftermath of Iran’s nuclear accord will be mitigated by the ruble, according to Bank of America Corp. Though the country will ultimately be a “net-loser” of the deal, “further ruble weakness should continue to re-balance Russia’s current account and fiscal balances, which should help limit the negative impact on the broader economy,” Vladimir Osakovskiy, the chief Russia economist at Bank of America in Moscow, said in an e-mailed note. Iran and six world powers on Tuesday sealed a historic deal to curb the Islamic Republic’s nuclear program in return for ending sanctions. While Russia is set to suffer from Iran’s future supplies of energy resources to Europe, Moscow’s key export market, “ruble flexibility will continue to help absorb external shocks” and energy cooperation between the two countries could offset some of the negative impact, Bank […]

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Russia ETF Extends Decline as Industrial Production Contracts

Russian Industrial Production Shrank More Than Forecast in June The biggest exchange-traded fund tracking Russian stocks ended a four-day gain as data showed industrial production fell more than forecast and oil slumped, dimming the economic outlook for the world’s biggest energy exporter. The Market Vectors Russia ETF slid 1.6 percent to $17.82 in New York. Energy companies, which account for 43 percent of the fund’s weighting, tumbled as Brent crude slid to a one-week low. A Bloomberg gauge of U.S.-traded Russian stocks fell for a second day. Russian equity assets tumbled after government data on Wednesday showed output at factories, utilities and mines dropped 4.8 percent in June from a year earlier, exceeding the median forecast for a 4 percent decline among 18 economists surveyed by Bloomberg. It was the fifth consecutive month that industrial production fell, the longest slump since 2009. The report further damped speculation that a […]

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Russian Oil Production Hits Post-Soviet Record

Russian oil and condensate production reached a new post-soviet record of 10.7 million barrels a day in 2015, according to the latest analysis from Wood Mackenzie. The research firm claims that condensate production will increase by 50 percent by 2018, compared to 2014 levels, although Wood Mackenzie warns that Russia could face a sizeable production gap after 2020, when the impact of Western sanctions kick in. Mr Christian Boermel, Russia upstream analyst for Wood Mackenzie, commented: “We see Russia defying expectations in terms of 2015 liquid production levels achieving a new post-soviet record of 10.7 million barrels per day. The steady increase seen in the first half of this year is contrary to many pessimistic predictions, due to the turbulent geopolitical situation for the country as a result of the Ukraine crisis and subsequent Western sanctions. We see actual growth in liquids being driven by condensate, but given the […]

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Russia extends energy hand to Greece

Russian government said its ready to do its part to support Greek economic recovery through a role in the nation’s energy sector. File Photo by Dimitris Michalakis/UPI MOSCOW, July 13 (UPI) — The Kremlin will do its part in the Greek economic recovery by working to support the country’s energy sector, Russia’s energy minister said. European finance ministers ended 17 hours of negotiations Monday that set the stage for a $39 billion support mechanism for Greece, nearly two weeks after it defaulted on its $1.73 billion loan from the International Monetary Fund. Hours before the deal was secured, Russian Energy Minister Alexander Novak said the Kremlin was ready to lend a hand in the Greek energy sector. "In connection with this we study options for direct supplies of energy resources for the Greek government, and they may begin shortly," he said. Greek Prime Minister Alexis Tsipras met in April […]

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Foreigners Seen Pulling Dividend Cash From Russia as Rally Fades

As Russian companies pay out an estimated 875 billion rubles ($15 billion) in dividends this year through July, some asset managers think foreigners are set to take the money and run. A 14 percent gain in dollar terms has put Russia among the 10 best-performing markets after the worlds’ worst drop in 2014. And the Micex Index’s 4.5 percent dividend yield is the highest among the biggest emerging-market benchmarks. While those may look like reasons to be bullish, GL Financial Group and Royal Bank of Scotland Group Plc are among those predicting that slumping oil prices and a worsening economic outlook will prompt shareholders to cash out after they’re paid. “The dividend season could serve as an opportunity for investors to exit Russian shares,” Sergey Vakhrameev, a money manager at GL Financial, which oversees about $100 million in assets, said by phone from Zurich. “The majority of foreign investors […]

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Saipem loses Russian pipe-laying contract

Italian energy services contractor Saipem loses contract to build pipeline for Russian energy company Gazprom. Photo courtesy of Saipem. MILAN, Italy, July 9 (UPI) — Italian energy services company Saipem said Thursday it received word from Gazprom its contract to build a natural gas pipeline through Turkey was cancelled. The Italian company said it received official notice late Wednesday that its contract to build part of the South Stream natural gas pipeline for Europe was pulled under a termination for convenience clause . "The termination for convenience is a standard contractual clause which provides for the termination of the agreement in the absence of a contractual breach, with compensation determined in accordance with the terms and conditions of the contract," the company explained. Russian officials in mid-December confirmed South Stream, touted as the answer to European transit woes, was no longer viable as envisioned in 2007. Instead, Russian energy […]

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