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Rosneft Feels Sanctions’ Chill in Failed Oil-Unit Deal

Morgan Stanley (MS) ’s failure to complete the sale of its oil storage, trading and transport unit shows the chilling effect U.S. sanctions are having on Russian companies including OAO Rosneft. The U.S. bank and Rosneft, the Russian state-owned oil giant, said Monday that their deal, for an undisclosed amount, had expired after the companies failed to win regulatory approval. Morgan Stanley had warned in October that the agreement might not be completed. U.S. sanctions against Rosneft explicitly prohibit selling certain oil-exploration equipment to the company or giving it long-term debt financing. The sale of Morgan Stanley’s oil-trading unit didn’t appear to trigger those prohibitions. Even so, such a sale would have undercut the broader U.S. goal of isolating the energy company. “It’s appropriate to stop deals with companies that have been targeted in one form or another,” said David Kramer, a former U.S. assistant secretary of state and […]

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Russia’s ills spread around the region

When Russia sneezes, the rest of the former Soviet Union catches a cold. Last week, as the rouble plunged as much as 36 per cent queues appeared at currency exchange points around Russia. Within days, the sense of alarm at Russia’s brewing economic crisis spread to Minsk, Bishkek and Dushanbe . More On this topic IN Europe “Such rouble weakness in Russia puts pressure on all the other currencies in the region,” says Oleg Kouzmin, economist at Renaissance Capital in Moscow. “When Russian is not doing well it’s a drag for growth in the whole region.” Agris Preimanis, chief Central Asia economist at the European Bank for Reconstruction and Development in Almaty, says concerns are running high about the rouble meltdown. “What keeps policymakers awake at night here is some of the scenarios for what might happen next in Russia,” he says, predicting that the current economic distress in […]

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Rosneft Repays $7 Billion and Says Has No Need to Buy Dollars

OAO Rosneft (ROSN) repaid $7 billion in debt and said it is generating enough dollars to meet the obligations taken on to buy TNK-BP last year and become the world’s largest traded oil producer. The state-led company, hit by sanctions from the U.S. and EU limiting access to capital markets , said it has settled $24 billion this year in line with credit agreements. Rosneft has sufficient foreign currency to cover debt, Chief Executive Officer Igor Sechin said in a statement. “To service debt the company does not need to enter the currency market , because it generates enough foreign currency earnings,” Sechin said. The latest repayment doesn’t mean the end of financial pressure on Rosneft however. The oil producer has to grapple with the slump in oil prices, sanctions that bar it from international capital markets and a Russian economy at risk of sliding into recession. Rosneft is […]

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Rich Russians head for UK in record numbers

LONDON, ENGLAND – MAY 28: Passengers arriving at Gatwick Airport use the ‘ePassport gates’ at Passport Control on the UK Border on May 28, 2014 in London, England. Border Force is the law enforcement command within the Home Office responsible for the security of the UK border by enforcing immigration and customs controls on people and goods entering the UK. Border Force officers work at 140 sea and airports across the UK and overseas. (Photo by Oli Scarff/Getty Images) Rich Russians are gaining entry to the UK in record numbers amid a worsening economic outlook in their home country. The number of Russians who were granted investor visas this year has soared by 69 per cent, according to Home Office statistics. The visas gave foreigners from outside the EU a fast track to residence and citizenship in return for buying gilts worth £1m to £10m. In the first nine […]

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German Government Denies Pressuring BASF to Cancel Gazprom Asset Swap

FRANKFURT—German chemicals maker BASF SE’s decision to call off a long-planned asset-swap deal with Russia’s OAO Gazprom wasn’t the result of political pressure from the German government, the German Economics Ministry said Friday. BASF, the world’s largest chemical company by revenue, announced Thursday it had canceled the deal with Russian state gas group Gazprom amid mounting political tensions between Russia and the West. BASF, through its wholly-owned oil and gas unit, Wintershall AG, had planned to divest itself of its gas trading and storage operations through an asset exchange with Gazprom. The trade, announced in November 2012, would have given Wintershall access to natural-gas fields in Siberia. “This is a corporate process. From the German side, there was no political influence over the deal,” said Julia Modes, a spokesperson for the ministry. “For us, it is only important that the gas supply or the security of supply is not […]

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BASF, Gazprom Call Off Asset Swap Amid Political Tensions

FRANKFURT—Germany’s BASF SE , the world’s largest chemical company by revenue, and Russia’s OAO Gazprom have called off an asset-swap deal amid mounting political tensions between Russia and the West, BASF said Thursday. The collapse of the deal means BASF now expects an only “slightly higher” increase in earnings before interest and taxes for 2014, rather than the “considerable rise” the company previously forecast, as it won’t collect expected income from the transaction. BASF had planned to divest itself of the gas trading and storage business of its wholly owned oil and gas subsidiary Wintershall AG as part of an asset exchange with Russian state gas group Gazprom that was scheduled to be completed by the end of this year. The trade, announced in November 2012, would have given Wintershall access to natural-gas fields in Siberia. “Due to the current difficult political environment, BASF and Gazprom have decided not […]

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Defiant Vladimir Putin blames west for Russia’s economic woes

Russian President Putin attends his annual end-of-year news conference in Moscow…Russian President Vladimir Putin speaks during his annual end-of-year news conference in Moscow, December 18, 2014. Putin said on Thursday the central bank and government were taking adequate measures to support the rouble and that Russia’s current economic situation was casued by external factors. REUTERS/Maxim Zmeyev (RUSSIA – Tags: POLITICS BUSINESS) A defiant Vladimir Putin said Russia should brace itself for two years of recession, as he blamed economic woes on a western plot to defang the Russian bear. The president was speaking at a three-hour press conference during which he addressed this week’s market turmoil in public for the first time. More On this story On this topic IN Europe He claimed that a period of economic hardship was the price Russia would have to pay to maintain its independence in the face of western aggression, repeatedly blaming […]

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Russian President Vladimir Putin Strikes Harsh Tone on With West

ENLARGE Russian President Vladimir Putin during his news conference in Moscow. Associated Press MOSCOW—President Vladimir Putin accused the West of trying to subdue and disarm Russia at a defiant annual news conference Thursday, and blamed “external factors”—chiefly the drop in oil prices—for the collapse of Russia’s currency and stock market. He acknowledged that Western sanctions over the country’s annexation of Crimea and role in Ukraine were biting, but said the economic troubles “are payment for our independence, our sovereignty.” He reassured Russians that they would last no more than two years, as Russia retools its economy away from oil, upon which it had become overly dependent. Mr. Putin ’s comments, the first since the ruble plunged earlier this week, signal he may hunker down for a long chill in relations with the West, although he appeared to be softening his stance in Ukraine. He appeared to rebuff the pro-Russian […]

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Putin Says Russian Economy Must Brace for $40-a-Barrel Oil

The Russian economy must adapt to the reality of oil prices that could fall as low as $40 a barrel, President Vladimir Putin said as he faces the worst financial crisis since coming to power in 2000. “I don’t know how quickly it will happen if prices stay at today’s level, or if they will drop lower than $60, $40,” Putin said today at his annual press conference in Moscow. “The economy will structure itself accordingly, however much is necessary.” The U.S. and Saudi Arabia , which with Russia are the world’s three biggest crude producers, may be colluding to push down the price of oil, Putin said. The collapse of prices, which are down more than 40 percent this year, may also be due to a battle for market share between traditional producers and shale-oil companies, he said. Oil is heading for its biggest annual loss since the […]

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Ukraine, Russia: EU Bans Investment In Crimea

The European Union banned investment in the disputed territory of  Crimea on Dec. 18, outlawing investment in Russian oil and gas exploration in the Black Sea and prohibiting European cruise ships to dock at Crimean ports, Reuters reported. The new measures, which come into effect Dec. 20, are meant to pressure Russia following its annexation of the area. Meanwhile, EU leaders will meet Dec. 18 to discuss measures against Russia. They are expected to maintain pressure on the country over its involvement in Ukraine, despite the recent fall in the ruble.

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