Category: Russia

Russian oil production rose to a post-Soviet record last month, showing how pumping of the nation’s biggest source of revenue has so far been unaffected by U.S. and European sanctions or a price collapse for the commodity. The nation increased output 0.3 percent to 10.667 million barrels a day, according to preliminary data today e-mailed today by CDU-TEK, part of the Energy Ministry. The figure is for crude and condensates, an ultralight oil that yields a greater proportion of high-value fuels. Production averaged 10.58 million barrels a day for 2014, also a post-Soviet record. The U.S. and the European Union imposed sanctions against Russia last year in response to the country’s annexation of Crimea and what they say was support for separatists in eastern Ukraine. Measures included targeting the country’s energy sector by banning exports of some equipment and technology. Russia gets about half of its revenue from oil […]

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With Russian President Vladimir Putin blaming external factors for economic woes, Central Bank reveals efforts to prop up nation’s currency. File photo by Yuri Gripas/UPI MOSCOW, Dec. 31 (UPI) — With low oil prices and Western sanctions taking their toll, the Central Bank of Russia said it was forced to take action to keep the national currency stable. The Russian currency is recovering somewhat, valued at about 56.45 to the U.S. dollar, up from recent lows of around 65 rubles to the U.S. dollar. In mid-December, the Russian Central Bank raised its key interest rate by 6.5 percent to 17 percent in an effort to arrest the decline of the nation’s currency. In a Wednesday statement, the bank said it sold more than $80 million on the national currency market this week in an effort to keep the ruble stable . With the value slipping from 33 rubles to […]

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An OAO Gazprombank logo, right, sits illuminated outside a bank branch against a backdrop of St Basil’s Cathedral near Red Square in Moscow, Russia, on Thursday, July 17, 2014. OAO Rosneft, Russia’s biggest oil company, natural gas producer OAO Novatek and OAO Gazprombank, the third-largest lender, are among those hit by the penalties, the U.S. Treasury Department said. Photographer: Andrey Rudakov/Bloomberg Russia has moved to support a number of large companies and banks as it tries to prop up a struggling economy and a banking sector battered by the rouble’s jitters. On Wednesday, the government said it would support Yamal LNG, the Arctic gas project of Novatek, with Rbs150bn. Separately Gazprombank, the country’s third-largest lender, said the government had bought Rbs39.95bn in preferred shares, using money from a subordinated deposit the bank had returned to the National Wealth Fund. “The conversion allows the bank to strengthen its capital structure […]

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Russian buys out partners in South Stream project meant to splash on the European coast of the Black Sea. (Photo: Gazprom) Gazprom announced it bought out its partners at Italian energy company Eni, French major EDF and Germany’s Wintershall to take full control over the venture. None of the companies involved in the operation disclosed the financial terms of the sale, other than to say they were reimbursed fully for their cash investments . South Stream had an optimum capacity of 2.2 trillion cubic feet per year. It would’ve stretched across the Black Sea to Bulgaria and then north to European markets. Russian officials in mid-December confirmed the project was no longer viable as envisioned in 2007. Instead, Gazprom Deputy Chief Executive Officer Alexander Medvedev said a project dubbed Turkish Stream may take its place in the Black Sea. Fitch Ratings said the South Stream decision reflects low demand […]

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SOFIA, Bulgaria — Barely two weeks after President Vladimir V. Putin annexed Crimea on one side of the Black Sea, he won a different prize on the other side. In Bulgaria’s Parliament, lawmakers gave initial passage to a bill clearing the way for a mammoth gas pipeline from Russia . The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity. The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. It was a dream bill for […]

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Russian development minister backs President Vladimir Putin’s assessment the government has the mettle to arrest economic decline. File Photo by Monika Graff/UPI MOSCOW, Dec. 29 (UPI) — Russia may lose as much as $30 billion as a result of a downgrade by Standard & Poor’s of its credit rating, Russia’s development minister said Monday. S&P last week put Russia on notice because of a weakened economy and negative review of monetary flexibility. Russian Minister of Economic Development Alexei Ulyukayev said in an interview with Russia’s Business FM radio station that the consequences of a credit downgrade may be severe. "We can’t specify this sum right now but intuitively this is about $20 billion – $30 billion," he said. "However, this amount still needs to be specified and requires additional work. This is a new risk." Western sanctions imposed in response to the Kremlin’s policies on Ukraine, coupled with a […]

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MOSCOW (Reuters) – Russian authorities are facing some unpalatable options as they try to keep the economy afloat – unless they can persuade President Vladimir Putin to curb massive military spending. Officials fear that without limiting the defense budget, the government will have to raise taxes, increase the pension age or print money to prevent the state deficit from running out of control. Despite a crisis brought on by diving oil markets and Western sanctions, they believe Russia can muddle through next year provided the price of crude, its dominant export earner, holds near current levels. But even at $60 per barrel, the present oil price is little more than half what the Kremlin needs to balance the budget, and it is quickly running out of money. Without radical action, the officials are much less confident about 2016-17 – and even sooner, should global oil prices continue their slide […]

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Russian stocks traded in New York fell to the lowest level in a week as the economy shrank for the first time in five years and a court hastened the scheduled reading of a verdict in the case against opposition leader Alexey Navalny. The Bloomberg Russia-US Equity Index dropped 4.5 percent to 50.41 in New York. The Market Vectors Russia ETF, the biggest exchange-traded fund tracking the country’s stocks, sank percent 8.7 percent to $14.61. The ruble tumbled 7.4 percent against the dollar. Stocks slid and the ruble weakened after the government said gross domestic product shrank 0.5 percent in November. The economy is contracting as oil, the country’s top export, is trading at the lowest level in five years and sanctions linked to the Ukraine conflict stoke the country’s worst currency crisis in 16 years. A Moscow district court said it will hand down a verdict in Navalny’s […]

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MOSCOW (Reuters) – Russia will introduce a duty on wheat exports from Feb. 1, the government said, adding to other restrictions with which it is battling a rise in domestic grain prices. Russia, expected to be the world’s fourth-largest wheat exporter this year, has been exporting record volumes from a large grain crop of 105 million tonnes as the ruble’s plunging value has spurred a dash for foreign currencies. But last week, Moscow imposed informal export controls, including tougher quality monitoring and slashed railway loading programs, in a bid to cool domestic prices while also unveiling plans to impose a duty on exports. The government said late on Thursday the duty on wheat exports would amount to 15 percent of the customs price plus 7.5 euros and would be no less than 35 euros ($43) per tonne from Feb. 1 until June 30, 2015. Trade sources expect business to […]

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The Russian currency extended its losses on Monday after a report showed the economy has started shrinking in annual terms for the first time since 2009 as the country is buffeted by falling oil prices and Western sanctions. Meanwhile, the government, which has been scrambling to support the ruble and the economy, announced fresh steps to keep the banks afloat. The ruble has been one of the world’s worst performing currencies this year and was down another 5 percent on Monday, trading at 56 rubles per dollar in early afternoon in Moscow, wiping off some of the gains it made last week. The fall came as the Economic Development Ministry issued a report showing the economy shrank by 0.5 percent in November compared with a year earlier. The ministry attributed the year-on-year decline in the economy, Russia’s first in five years, to a sharp drop in manufacturing and investment. […]

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