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Russia, Ukraine ‘Still Far Apart’ on Gas Deal

BRUSSELS—Russia and Ukraine “are still far apart” on a deal to ensure stable natural-gas deliveries to Ukraine and the European Union over the winter, the EU’s energy czar said Tuesday. The statement from the EU’s vice president for the energy union, Maros Sefcovic, came after the energy ministers from both sides met in Vienna, along with the chief executives of their gas companies, Russia’s OAO Gazprom and Ukraine’s OAO Naftogaz. The EU gets about one-third of its gas from Russia and about half of that is transported through Ukraine. But the conflict in eastern Ukraine and the broader standoff between Moscow and Kiev has put these deliveries in doubt. “As the meeting has shown today, the parties are still far apart,” Mr. Sefcovic said. “We have agreed that the [European] Commission will put forward ideas to prepare next steps so that the next consultation could take place.”

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Rosneft First-Quarter Profit Falls 35% After Oil Prices Drop

OAO Rosneft, Russia’s largest oil producer, said first-quarter profit fell 35 percent, hurt by last year’s decline in crude prices. Net income dropped to 56 billion rubles ($1 billion) from 86 billion rubles a year earlier, the Moscow-based company said in a statement on its website. That topped the 36.5 billion-ruble average estimate of nine analysts surveyed by Bloomberg. The state-owned company has sought to cut costs while keeping output as it repays debt from the $55 billion 2013 acquisition of Russia’s third-largest oil producer, TNK-BP. U.S. and European sanctions in response to Russia’s support for separatists in Ukraine have complicated Rosneft’s task by curbing its access to debt and equipment. The difficulty compounded by a more than 50 percent slump in the average oil price in the first three months of 2015 compared with the year-earlier period, Rosneft said. Free cash flow, adjusted for supply prepayments, fell to […]

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Gazprom: New lines for Nord Stream by 2019

Russian energy company Gazprom said an expanded Nord Stream gas network through the Baltic Sea may be in service by the end of 2019. Photo by Igor Golovniov/UPI MOSCOW, June 26 (UPI) — New corridors along the Nord Stream natural gas pipeline through the Baltic Sea to European markets should be in service by 2019, Russia’s Gazprom said. Gazprom Chief Executive Officer Alexei Miller said new lines along what he said was the shortest link between northern Russia and the European market are less than five years off . "The successful track record on the Baltic Sea will help us to optimize construction costs and timeframe," he said Friday. "Both lines of the Nord Stream-2 will be commissioned by 2019 year-end." The first leg of the pipeline system went into service in 2011. British energy company BP a year after the pipeline went into service said it was considering […]

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U.S. West Coast refiners snap up Russian crude cargoes

SINGAPORE Refiners on the U.S. West Coast and Hawaii have stepped up purchases of Russian crude, taking advantage of a narrow gap between U.S. and global prices as they look to guard against a seasonal shortage of Alaskan supply, trade and industry sources said. Up to four tankers were expected to carry nearly 3 million barrels of Russia’s ESPO crude from Kozmino near the city of Vladivostok to refineries in the United States this month and next, the sources said. That will help Russia diversify beyond key buyers in China, South Korea and Japan at a time when Asian markets are grappling with oversupply. Sanctions against Russia over its actions in Ukraine bar U.S. oil companies from drilling in the country, but purchases of oil are still allowed. But traders said the shipments marked only a temporary trend as refineries were buying amid uncertainty over the supply of Alaska […]

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Russia Pips Saudi Arabia in Race to Grab China Oil Market Share

Russia surpassed Saudi Arabia to become China’s top crude supplier as the fight for market share in the world’s second-largest oil consumer intensifies. China imported a record 3.92 million metric tons from its northern neighbor in May, according to data emailed by the Beijing-based General Administration of Customs on Tuesday. That’s equivalent to 927,000 barrels a day, a 20 percent increase from the previous month. Saudi sales slumped 42 percent from April to 3.05 million tons. China is becoming a key market for global oil exporters as surging output from shale fields from Texas to North Dakota allows the U.S., the biggest crude consumer, to rely less on overseas supplies. The Asian nation will account for more than 11 percent of world demand this year, the Paris-based International Energy Agency predicted this month. “This is a clear sign of how spoilt Asia is for choice these days, with Middle […]

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Ruble Slides as Tax Boost Damped by Debt, Bank of Russia Sales

The ruble headed for the lowest level in a week as support from monthly tax deadlines subsided and investors turned their attention to the Bank of Russia’s dollar purchases and companies’ foreign debt payments. The Russian currency weakened 1.3 percent to 54.6350 per dollar by 4:21 p.m. in Moscow, extending its drop this month to 4.2 percent, the most among 24 emerging markets tracked by Bloomberg. Government bonds fell, lifting the yield on five-year ruble debt four basis points to 11.16 percent. Companies have accumulated the rubles they need to pay the equivalent of about $10 billion in local tax this week, bringing concern over looming external debt redemptions and dividend payments to foreigners to the fore, according to VTB Capital. The Bank of Russia has bought almost $5 billion on the market since May 13 as it seeks to gradually boost its foreign currency reserves to $500 billion […]

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EU Extends Economic Sanctions on Russia Until End of January

LUXEMBOURG—European Union foreign ministers extended broad economic sanctions on Russia until the end of January 2016, a move designed to give the bloc time to gauge if the Kremlin will fully implement its side of February’s Minsk cease-fire and peace plan by year-end. The EU decision came without a debate among ministers, underlining that despite months of public questioning of sanctions by the likes of Greece and Hungary, the bloc remained united in opposing Russian pressure on Ukraine. That unity will continue to be tested in coming months if the fragile cease-fire holds as pressure grows within the bloc to broaden dialogue with Russian President Vladimir Putin and his government. EU officials have argued that the banking, technology and defense industry sanctions have had a significant impact in weakening Russia’s economy, helping to push the country into recession alongside a sharp drop in the oil price. The sanctions were […]

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Exclusive: Gazprom building global alliance with expanded Shell

ST PETERSBURG, Russia Gazprom is building a global strategic alliance with energy major Royal Dutch Shell that will include asset swaps and allow the Russian gas giant to penetrate new markets, its chief executive told Reuters. Gazprom, the world’s top gas producer, said on Thursday that Shell and its long-time gas buyers in Europe – Germany’s E.ON and Austria’s OMV – had agreed to build two new Nord Stream gas pipelines under the Baltic sea to Germany. In a rare interview, chief executive Alexei Miller said the agreement with Shell also foresaw an expansion of the firms’ joint $20 billion liquefied natural gas plant on the eastern island of Sakhalin as well as global upstream asset swaps. "Documents of such significance are signed only once every five years or maybe even 10," Miller said on the sidelines of Russia’s top forum for investors in Saint Petersburg. The deal with […]

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Novak: Russian Arctic Offshore Drilling To Be Postponed To 2016 Or Later

MOSCOW, June 18 (Reuters) – Russia’s Energy Minister Alexander Novak said on Thursday that Arctic offshore drilling planned for this year will be postponed until 2016 or later. "Drilling of wells (in Russia’s Arctic offshore territory) scheduled for 2015 will be delayed to the next year and possibly even longer," Novak told Rossiya-24 state TV in an interview. He did not name specific projects. Sources previously told Reuters that Russian state oil producer Rosneft will be forced to postpone drilling a second well in the Kara Sea for at least two more years, as a result of Western sanctions over the Ukraine crisis. (Reporting by Katya Golubkova; Editing by Jack Stubbs)

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BP to Pay Rosneft $750 Million for Part of Siberian Oilfield

BP Plc will pay OAO Rosneft $750 million for a stake in an East Siberian oil producer, following Royal Dutch Shell Plc’s plans to expand a natural gas export project in Russia. BP will take a 20 percent stake in Taas-Yuriakh Neftegazodobycha LLC in Russia’s Far East, according to statements from Rosneft and BP. The companies will also jointly explore areas in Siberia and, if successful, form a venture with Rosneft holding 51 percent. Holdings in their German refineries will be reorganized as well, the partners said. Europe’s two biggest oil companies are looking for increased access to Russia’s vast energy reserves and their proximity to the markets of China and Japan even as the world’s second-biggest oil and gas producing nation seeks to maintain sales to Europe in the face of U.S.-led sanctions. BP reset its Russia strategy two years ago when it swapped its half in TNK-BP […]

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