Category: Russia

By Andrey Ostroukh MOSCOW–Russia’s government has picked 199 "strategic" companies that will have state legal support and a greater crack at bailouts, the economy ministry said Sunday. Russia is preparing for its first economic recession since 2009, suffering from massive capital flight and double-digit inflation. The government, which has limited funds when global capital markets are closed to it because of Western sanctions, is looking for ways to save the economy from a deeper collapse. It has picked companies, including the country’s largest oil producer Rosneft and gas monopoly Gazprom, that collectively generate 70% of Russia’s national income and employ more than 20% of the working population across the country. This should steady the economy and mitigate the effects of the crisis, the economy ministry said in a statement. Inclusion on the list of strategic companies doesn’t guarantee a state-funded bailout, the ministry said. Late last month, the government […]

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(Bloomberg) — Russia’s international reserves fell to the lowest in almost six years as the weakening euro caused a currency revaluation and the central bank intervened to stem the ruble’s depreciation. The value of the stockpile, which includes the central bank’s holdings and two sovereign wealth funds, declined $9.25 billion in January to $376.2 billion, the Bank of Russia said Friday on its website. That compares with a $33.4 billion plunge in December, when the central bank tried to arrest the ruble’s slump to record lows. Russia sold $2.3 billion in market interventions last month, according to central bank data. Policy makers have relied on their reserves to mount a defense of the ruble after it went into a tailspin in December. While President Vladimir Putin said Russia won’t “mindlessly burn up” reserves to defend its currency, the central bank spent about $88 billion of reserves on interventions last […]

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West has declared economic war on Russia with sanctions, foreign ministry spokesman says. Photo by Denis Larkin/Shutterstock MOSCOW, Feb. 6 (UPI) — Low credit ratings issued against a Russian economy crippled by low oil prices and sanctions are part of a Western economic war, a Kremlin official said Friday. Russian Foreign Ministry spokesman Alexander Lukashevich said credit downgrades are based on the political motives of Western powers frustrated with Kremlin policies. "The use of targeted and deliberate downgrades of ratings of Russian companies and the sovereign rating of the country has become a part of the U.S. and EU economic war against us," he said. Standard & Poor’s in January cut Russia’s foreign currency rating to junk status. Russia’s currency, the ruble, continues to lose value, trading Friday at 67 to the U.S. dollar, down about 6.25 percent from the start of the year. Low oil prices and pressure […]

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MOSCOW–Russian Energy Minister Alexander Novak said Friday that about 15% of investments in the country’s oil and gas projects may be cut if oil prices remain at current levels, Russian news agencies report. The comments come as the country’s energy companies, including OAO Rosneft (ROSN.MZ) and the country’s second-largest gas company OAO Novatek (NVTK.MZ), have sought government help in plugging holes in their budget amid sliding oil prices. Russia may withdraw up to 500 billion rubles ($7.45 billion) from the reserve fund, tapping the coffers for the first time in six years. Write to Olga Razumovskaya at [email protected]

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Moscow expects to spend less on the upstream sector of the oil and gas business this year, resources minister says. (UPI/Shutterstock/ekina) MOSCOW, Feb. 5 (UPI) — The amount of money geared toward the exploration side of the Russian energy sector is expected to decline, a resource minister said Thursday. Low oil prices and pressure from Western economic sanctions imposed in response to the Kremlin’s stance on crises in Ukraine are diminishing government finances. Russian Natural Resources Minister Sergei Donskoy said government support for exploration may be 15 percent less than last year. "The exploration funding from the state budget is exactly in question, rather than exploration expenditures of private companies," he said. Analysis produced in 2011 by Ernst & Young finds the existing network of fields in Russia is such that there isn’t a "pressing need" for extensive exploration programs . Russia is among the world leaders in oil […]

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Moscow (Platts)–5Feb2015/813 am EST/1313 GMT Standard & Poor’s Thursday announced a number of downgrades to Russian oil and gas companies, following its downgrading of Russia’s sovereign ratings to junk last week. S&P, which like Platts is a unit of McGraw Hill Financial, lowered ratings on gas giant Gazprom and its oil arm Gazprom Neft, as well as Rosneft, Transneft and Novatek. In line with S&P’s criteria, companies which have strong links to the government cannot be rated higher than the sovereign. This is because it assumes that the government could use its power to intervene negatively, which could include burdening the company with additional taxes, dividends or other liabilities, S&P said. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily […]

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(Bloomberg) — The ruble headed for the strongest weekly currency rally worldwide and Russian stocks surged as oil climbed and investors wagered Ukraine talks in Moscow on Friday will ease the crisis. The currency of the world’s biggest energy exporter is shaking off its weakness at the start of the year after crude oil rebounded 27 percent from a Jan. 13 low. Oil’s earlier slump and sanctions over Ukraine have dragged the economy toward its first contraction since 2009. Talks between President Vladimir Putin and his German and French counterparts fueled bets spreading bloodshed in Ukraine can be staunched. The negotiations encourage “cautious optimism,” Tom Levinson, foreign exchange and interest rates strategist at Sberbank CIB in Moscow, said in e-mailed comments. “While Ukraine-related risks seem as great as ever, the ruble has this week been underpinned by a 15 percent rise in oil prices.” The ruble advanced 1.1 percent […]

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(Bloomberg) — OAO Rosneft, Russia’s largest oil producer, will cut spending 10 percent this year after oil prices slumped. “For the past year and a half we have cut spending by 10 percent annually, and this year this tendency will continue,” Rosneft Chief Executive Officer Igor Sechin told Russian President Vladimir Putin outside Moscow. The company has set its plans for this year based on an average oil price of $50 a barrel, Sechin said. Russia’s largest oil and gas producers, Rosneft and OAO Lukoil, have both cut spending plans after oil prices halved over the past six months. The price squeeze has hit Rosneft particularly hard as it seeks to repay debts raised for the $55 billion acquisition of TNK-BP in 2013. Rosneft was able to maintain oil and gas output growth even as it cut spending, Sechin said. Hydrocarbons output grew 4.6 percent to 252 million tons […]

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