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Ukraine crisis: EU leaders warn of more sanctions against Russia

Part of a missile outside an apartment building in Mariupol, eastern Ukraine, on Sunday Leaders from all 28 members of the EU have warned Russia that it faces further sanctions after fighting in Ukraine’s eastern provinces escalated in recent weeks. The heads of state noted “evidence of [Russia’s] continued and growing support” for separatists in eastern Ukraine and called on the EU to consider “further restrictive measures”, in one of the most explicit statements yet by the EU. Foreign ministers will meet on Thursday to discuss further measures at an emergency meeting called by Federica Mogherini, the EU’s foreign policy chief. The call to consider stricter sanctions marks a more cohesive line on Russia from the EU after weeks of internal disputes over how to approach the situation in Ukraine. The bloc had previously been split between hawkish member states, who had pressed for tougher sanctions, and others who […]

Posted On : Published By : Tom Whipple
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U.S., Europe Threaten New Sanctions Against Moscow

ENLARGE A girl joins adults in lighting candles during a mourning ceremony in Kiev on Sunday for people who died during shelling in Mariupol. Photo: European Pressphoto Agency U.S. and European leaders threatened new sanctions against Moscow after a missile attack blamed on pro-Russian separatists killed 30 civilians in the eastern Ukrainian city of Mariupol, the latest escalation in violence that has brought Kiev’s fight with rebels back toward full-scale war. Russia reacted with defiance, blaming Kiev and its Western backers for the surge in fighting, but it also called for urgent talks on implementing a September cease-fire. Separatists backed off earlier threats of a broad offensive on Mariupol and other targets, but shelling along the contact line between the two sides was extremely heavy over the weekend, Ukrainian military officials said. U.S. President Barack Obama said he was deeply concerned about the latest break in the cease-fire and […]

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Rosneft to Raise $6.1 Billion in Ruble Bond Placement Today

OAO Rosneft will place 400 billion rubles ($6.1 billion) in ruble bonds today as Russia’s largest oil producer plans to repay loans raised for deals and growth. Rosneft completed collecting bids for the sale in 1 hour on Jan. 23 and set the coupon at 11.9 percent, the Moscow-based company said in a statement. Russian government bonds due in June this year yield 14.65 percent, according to data compiled by Bloomberg. Sanctions on the Kremlin-led company related to Russia’s actions in Ukraine have restricted Rosneft’s access to international debt markets. At the same time, falling oil prices have reduced the availability of cash to service debts raised for deals that made Rosneft the world’s biggest publicly traded oil producer by output. The largest of the acquisitions was $55 billion for TNK-BP in 2013. Rosneft may utilize a similar plan as in December, when lenders purchased 625 billion rubles of […]

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Russian ruble tumbles after violent weekend in east Ukraine

MOSCOW (AP) — The Russian currency fell by more than 3 percent early Monday, after Western leaders threatened to punish Russia for escalated fighting in eastern Ukraine over the weekend. The ruble tumbled to 65.8 to the dollar from 63.7, one day after rocket fire left at least 30 civilians dead in the city of Mariupol. Western leaders announced that they would consider further punitive measures against Russia for what they say is its role in supporting the separatists, while Russian officials blamed Ukrainian forces for the attack. The Russian currency, buffeted by Western sanctions and plummeting oil prices, has already lost about half its value in the past year. While sanctions are set to expire this summer, U.S. President Barack Obama said Sunday that his country would work with its European partners to "ratchet up the pressure on Russia" after the latest violence. EU officials said they would […]

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Russian economy in bad shape, minister says

Russia’s economic woes predate crises in Ukraine, minister says from sidelines of the World Economic Forum. Photo by Denis Larkin/Shutterstock DAVOS, Switzerland, Jan. 23 (UPI) — Russian economic woes predate the steady decline in oil prices and sanctions triggered by crises in Ukraine, a Russian minister said Friday from Switzerland. Russian First Deputy Prime Minister Igor Shuvalov said from the sidelines of the World Economic Forum in Davos the Russian economy never fully emerged from the economic crises that ensnared the global economy in 2008-09. "We briskly started to lose our rate of growth and it became clear that a structural crisis was looming," he said. Analysis from the World Bank in December finds the Russian economy will face difficulties through 2016 because of the decline in global oil prices. A January report from the International Monetary Fund said the Russian economy should shrink by 3 percent this year. […]

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Russia, OPEC Jostle to Meet China Oil Demand

China’s President Xi Jinping and Russia’s President Vladimir Putin. ENLARGE Photo: Itar-Tass/Zuma Press BEIJING—Warming ties between China and Russia are giving a big boost to Chinese imports of Russian oil, to the chagrin of OPEC nations jockeying for a slice of China’s market. Faced with falling prices and lower demand from the U.S., oil-exporting nations are increasingly putting their hopes in China’s still-robust demand for crude. But Saudi Arabia and other big producers like Venezuela have seen such sales drop as Moscow’s isolation from the West over Ukraine prompts it to turn to Beijing. The death of Saudi Arabia’s King Abdullah adds a measure of uncertainty to OPEC’s oil policies, which boosted prices in global oil markets after the news early Friday, though analysts say the kingdom is unlikely to change its strategy and reduce production. That is despite a global glut of crude that is fueling new rivalry […]

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Russian Oil Producer Surgut’s $36 Billion Cash Pile Is Both Blessing and Curse

Recent history has shown that Russian leaders aren’t afraid to help themselves to companies they covet. And with the country’s cash squeeze growing, stock investors are worrying about which one could fall next. OAO Surgutneftegas is a name that many keep coming back to. The oil producer is sitting on $36 billion, a cash hoard that would go a long way to alleviating the financing squeeze at state-run energy company OAO Rosneft. Locked out of U.S. and European capital markets by international sanctions tied to the Ukraine conflict, Rosneft needs to pay back $19.5 billion of debt maturing this year. Surgut is hovering near a record low , having sunk 33 percent in New York trading since crude prices began plunging in June. Analysts at BCS Financial Group and UralSib Financial Corp. cite President Vladimir Putin ’s past takeovers as a key cause for concern. Putin moved to nationalize […]

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Moscow: Turkish Stream the new South Stream

Russian Foreign Minister Sergei Lavrov says Europe needs Turkish gas project, despite abandoning larger network last year. UPI/Li Tao/Pool MOSCOW, Jan. 21 (UPI) — Moscow said Wednesday a Turkish gas project will help ensure European energy security, the same reason given for the abandoned South Stream pipeline. Russian Foreign Minister Sergei Lavrov said the so-called Turkish Stream gas pipeline will do the same as a project the government in Moscow pulled off the table in late 2014. "We expect it to be realized and help enhance Europe’s energy security, therefore freeing it from problem transit states," he told reporters. Russia meets about a quarter of the natural gas needs for the European economy. The majority of that runs through the Soviet-era transit network in Ukraine, where lingering debt issues and ongoing conflict present risks to traditional energy routes. Russian officials in mid-December confirmed South Stream, touted as the answer […]

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Russia Presses Ahead With Plan for Gas Pipeline to Turkey

LONDON — President Vladimir V. Putin surprised the world in December when he aborted long-laid plans for a natural gas pipeline under the Black Sea to Europe, saying Russia would run pipes to Turkey instead. Many in the West thought it might be merely a bluff, to make the European Union reconsider its opposition to the pipeline project, known as South Stream. But in recent weeks, the Russian state-owned company Gazprom has shown signs that it is serious about proceeding with what it calls Turkish Stream. Gazprom quickly bought out its European partners in South Stream Transport, the Amsterdam company that was to build the Black Sea leg of the pipeline. And the chief of that Dutch company has petitioned the Netherlands government to let it keep working with Gazprom, despite European sanctions against Russia over the invasion of Ukraine. On the Turkish front, Gazprom is actively negotiating with […]

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Schlumberger to Pay $1.7 Billion for Stake in Russia Driller

Schlumberger Ltd. (SLB) will pay $1.7 billion for a stake in Eurasia Drilling Co. (EDCL) , a bet by the world’s largest oilfield services provider that economic sanctions won’t hold back Russia’s energy industry. Schlumberger, based in Houston and Paris, will pay $22 a share for a 46.45 percent holding in London-traded Eurasia Drilling, according to a statement today. Schlumberger has an option to buy the rest of the company’s shares three years after the deal closes. By buying into Russia’s largest driller, Schlumberger is putting aside concerns about economic sanctions and the state of the country’s economy. The deal comes as the slide in the crude price to less than $50 a barrel spurs consolidation in the services industry as demand for rigs drops and oil producers lean on suppliers to drive down costs. “Schlumberger believes that the sanctions will be lifted sooner or later, and the company […]

Posted On : Published By : Tom Whipple