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Rosneft Must Keep Hands Off State Wealth Fund, Kudrin Says

The man who designed Russia’s rainy-day fund to protect against swings in commodity prices says the country’s state oil company shouldn’t be allowed anywhere near the money. OAO Rosneft (ROSN) , headed by Igor Sechin , a long-time ally of President Vladimir Putin , asked last month for more than $44 billion from Russia’s Wellbeing Fund to finance investment after sanctions closed capital markets for the company. The request runs totally against the spirit of the reserve, designed to hedge against dependence on energy exports, said Alexei Kudrin , who was finance minister for more than a decade until 2011. Investing the fund’s $81.7 billion in oil and gas defeats the purpose, as does concentrating so much of the money in one place, said Kudrin, who charted Russia’s path through the 2008 financial crisis when oil crashed to less than $40 a barrel. He envisaged one of the fund’s […]

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Russian primary industry cannot withstand this roller coaster.

4705 Votes Russian primary industry cannot withstand this roller coaster. Katarina Lagervall DN called me last Friday and we had a long and interesting conversation about oil and the global economy. A summary of our conversation is now available at dn.se [ in Swedish ] under “Russian primary industry cannot withstand this roller coaster.” (I have added some clarifications with parentheses) (Published 2014-11-07 13:17) Falling oil prices on the world market are hard on the Russian economy. But those who should be most worried about these developments are the oil-dependent nations of the EU. So says oil analyst Kjell Aleklett. – Our energy costs will be expensive in the long run because we do not have any of our own fossil natural resources. Russia has oil in the ground and if they do not produce it now, they can do so later, he said. Since June, the price of […]

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Russia presses ahead with fully floating the rouble

A Russian national flag flies above the headquarters of Bank Rossii, Russia’s central bank, in Moscow, Russia, on Tuesday, Sept. 10, 2013. The ruble gained for a fifth day as Chinese economic data improved and a Russian proposal for Syria to surrender its chemical weapons eased concern over a U.S. strike, boosting investor appetite for riskier assets. Photographer: Andrey Rudakov/Bloomberg ©Bloomberg The Bank of Russia pressed ahead with fully floating the rouble on Monday, a move that helped the currency to stabilise on the foreign exchange market as the central bank showed its determination to deter investors from betting against it. The central bank abandoned the dual-currency trading band with which it had so far calculated the nominal exchange rate and ended a policy of daily foreign exchange interventions to prop up the rouble. More On this story Editorial Rouble dive exposes Putin miscalculation Rouble’s wobbles worry Putin’s Kremlin […]

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Russia, China Add to $400 Billion Gas Deal With Accord

China and Russia deepened their energy ties yesterday with a second blockbuster deal that lessens Russian reliance on Europe and would secure almost a fifth of the gas supplies China needs by the end of the decade. Russian President Vladimir Putin and Chinese President Xi Jinping signed the preliminary gas-supply agreement in Beijing the day before U.S. President Barack Obama arrived in the Chinese capital for the Asia-Pacific Economic Cooperation summit. The deal is slightly smaller than the $400 billion accord reached earlier this year, shortly after Russia’s annexation of Crimea. Russian oil firm OAO Gazprom is negotiating the supply of as much as 30 billion cubic meters of gas annually from developments in West Siberia to China over 30 years, it said yesterday. At the same time, another Russian producer, OAO Rosneft, agreed to sell a 10 percent stake in a Siberian unit to state-owned China National Petroleum […]

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Russia to increase gas supply to China

Russian President Vladimir Putin and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in Beijing ©Getty Russia and China have signed a memorandum of understanding to supply gas from western Siberia to China. It is the second big gas deal to be sealed this year as President Vladimir Putin builds investment ties with China to counter increasing isolation from the west . The framework agreement between China National Petroleum Corporation and Russian energy group Gazprom is for an additional 30bn cubic metres of gas per year. It follows a $400bn agreement in May for Russia to sell up to 38bcm of gas per year from eastern Siberia to northeastern China. The deals represent welcome diplomatic and financial support for Mr Putin, whose regime is under fire from the west over its support for Russian separatists in Ukraine . Energy exports are Russia’s primary source of hard currency […]

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China, Russia sign new 30 Bcm/year framework gas deal using western route

Home | News & Analysis | Latest News Headlines | China, Russia sign new 30 Bcm/year framework gas deal using western route Singapore (Platts)–10Nov2014/1228 am EST/528 GMT Russia and China have signed a framework agreement which envisages an additional 30 billion cubic meters of gas delivered annually to China using the western Altai route, nearly doubling current proposed shipments. The latest agreement between state-owned Gazprom and China National Petroleum Corp. was signed over the weekend following a meeting between China’s President Xi Jinping and Russia’s President Vladimir Putin on the sidelines of the Asia-Pacific Economic Cooperation Summit in Beijing. It comes just months after both companies signed a landmark deal in May for Gazprom to send up to 38 Bcm/year of gas from East Siberia to China through the future Power of Siberia pipeline, beginning as early as 2018. The 30-year supply deal is worth an estimated $400 billion. […]

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Fredriksen Said to Delay Rosneft Deal Decision on Sanctions

North Atlantic Drilling Ltd. (NADL) , the rig company controlled by billionaire John Fredriksen, will extend a deadline to complete deals with Russia’s OAO Rosneft (ROSN) that include $4.25 billion in contracts amid concern over trade sanctions, a person familiar with discussions said. The deadline for breaking the accords will be extended from Nov. 10, said the person, asking not to be named because the talks are private. North Atlantic, a unit of Seadrill Ltd. (SDRL) , is considering alternative assignments for two rigs due to start operating for Rosneft next year, the person said. North Atlantic and Rosneft rushed to sign five-year contracts for five offshore rigs at the end of July, just days before the European Union broadened sanctions against Russia to target its energy industry over the country’s role in the conflict in Ukraine. Seadrill, which owns 70 percent of Hamilton, Bermuda-based North Atlantic, said at […]

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Plunging rouble raises spectre of fresh financial crisis for Russia

Russia faces the risk of financial instability, the country’s central bank warned, after dramatic gyrations in the currency amid renewed tension in Ukraine revived fears of a currency crisis. Russia in 10 numbers 30% – The rouble’s year-to-date decline against the dollar 8% – Rouble’s drop in past week 10.3% – Yields on 10-year sovereign debt 2009 – The last time the RTS stock market index was this low 0% – 2015 GDP growth estimates from the OECD. The worst of the G20 8.4% – Inflation 9.5% – Interest rates 29% – Fall in Brent crude oil price from its June closing high to Friday’s intraday low $30bn – Russian corporate external debt due this year $68bn – The amount Russia’s central bank has spent defending the currency this year The warning came after a day of huge swings in the rouble and capped a weekwhen the currency fell […]

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New low for Russian currency

Value of Russian currency sinking to new lows under sanctions pressure. UPI/Dennis Van Tine MOSCOW, Nov. 7 (UPI) — It’s becoming more difficult to find good news for the Russian economy, an analyst said Friday after the national currency crashed to a new low. By midday in Moscow, the currency hit bottom with trade at 45.7 rubles to the U.S. dollar, besting the previous low by 8 percent. Dmitry Polevoy, a chief Russian analyst at ING, told Russian news agency ITAR-Tass there were few bright spots for the nation’s economy. "It is increasingly difficult to find augments to describe the current situation, when you look at market figures every morning," he said. The Russian economy is burdened by Western sanctions targeting Russian energy companies. With oil trading below the $100 mark, sanctions were blamed for record inflation and a struggling ruble. A report this week from the European Commission […]

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