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Russia-Europe Gas Game Heats Up as Winter Looms

A cat and mouse game is on between Europe and Russia over gas supplies as the continent switches into the winter heating season. Since September, Russia’s state-controlled Gazprom has sent less-than-requested deliveries to Poland, Slovakia, Austria and Hungary — after the European Union began sending gas to Ukraine — in a clear warning from Moscow ahead of the winter heating season which officially starts on Oct. 1, when the industry switches to higher pricing. “Nobody should be surprised by what Russia does. They want to keep pressure on Ukraine… at the start of the heating season,” said Michael LaBelle, a gas expert at the Central European University in Budapest. Russia is Europe’s biggest supplier of natural gas, meeting almost a third of annual demand and in return, Gazprom receives around $80 billion in annual revenues from its European customers, making up the majority of its income. Moscow halted gas flows to Ukraine three times in the past decade, in 2006, 2009 and since June this year, although this year gas for the EU via Ukraine has so far continued to flow. Opening up gas flows eastward was part of the […]

Posted On : Published By : Tom Whipple
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Putin Trumpets Economic Strength, but Advisers Seem Less Certain

MOSCOW — President Vladimir V. Putin did his best to paint a rosy picture of the Russian economy in a speech to business leaders on Thursday, saying the country remains “open to the world” and has a plan for growth in spite of American and European sanctions. Appearing relaxed and joking with the financiers gathered for a banking conference, Mr. Putin tried to soothe worries that Russia is hemorrhaging money in capital flight, headed into a deep recession with rising inflation and a collapsing ruble and, according to stubborn rumors , preparing to impose capital controls if investors continue to take money out of the country. Russia is well prepared to hold out against hard times, he said, because of its still-sizable foreign currency reserves of about $460 billion. To attract investment, he said jokingly as he began a question-and-answer session, “all I have to do is smile and […]

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Sanctions hurt, Russian Central Bank says

Russian economy getting pinched by sanctions, Central Bank says. UPI/Alex Volgin MOSCOW, Oct. 2 (UPI) — The head of the Russian Central Bank said Thursday sanctions on the energy sector are getting in the way of efforts to control inflation. The U.S. and European governments have imposed punitive sanctions on Russian energy companies Rosneft, Gazprom Neft and others in response to the crisis in Ukraine. In September, the European Bank for Reconstruction and Development said sanctions were taking their toll on the Russian economy. "It’s already obvious that we will not reach our goal on inflation this year; according to our assessments, inflation will be around 8 percent," Russian Central Bank Director Elvira Nabiullina said Thursday. The bank this year said it expected Russian inflation would be around 7 percent for 2014. In August, it said it was ready prop up some of the institutions burdened by sanctions pressure. […]

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Europe Skirting Freeze Preserves Gas Amid Ukraine Crisis

Europe will have another mild month in October, preserving the region’s fuel reserves as it braces for a winter with the threat of natural gas supply disruptions. All eight meteorologists surveyed by Bloomberg projected higher-than-normal temperatures for most parts of Europe, with Germany and Poland the warmest relative to normal. Levels exceeded the average last month for most of the continent, according to in Gaithersburg, Maryland . Warmer weather may slow declines in Europe’s record gas stores. Most countries will be able to meet normal levels of gas demand if a conflict between Russia , which meets more than 30 percent of Europe’s demand, and Ukraine halts flows from the east for three months, according to the Institute of Energy Economics at the University of Cologne, Germany . “If above average temperatures continue, it will slow down storage withdrawals during the heating season,” James Brabben, an analyst at Cornwall […]

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Rosneft claims united oil win in arctic

Russian oil company Rosneft announces oil find in arctic reaches of Kara Sea. UPI/Jeremy Potter/NOAA MOSCOW, Sept. 29 (UPI) — Russian oil company Rosneft said the discovery of oil in an arctic license area came as the result of a united effort with its Western energy partners. Rosneft estimates the discovery at an area in the Prinovozemelskiy-1 license area in the Kara Sea holds at least 700 million barrels of oil. "This is an outstanding result of the first exploratory drilling on a completely new offshore field," Rosneft Chief Executive Officer Igor Sechin said in a statement Saturday. "This is our united victory; it was achieved thanks to our friends and partners from ExxonMobil, Nord Atlantic Drilling, Schlumberger, Halliburton, Weatherford, Baker Hughes, [and others]." The company said the entire area could hold as much as 87 billion barrels of oil. Greenpeace activists this year trailed some of the international […]

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Schlumberger Said to Pull Expat Managers From Russia

Schlumberger Ltd. (SLB) , the biggest oilfield services provider, is withdrawing employees who are citizens of the U.S. and the European Union from Russia amid sanctions, two people with knowledge of the matter said. About 20 mid-level and senior managers will be pulled, one of the people said. Both asked not to be identified because they aren’t authorized to discuss the matter. The U.S. and the EU targeted Russia’s oil industry by banning exports of some equipment and technology after Russia annexed Crimea and allegedly stoked a separatist insurgency in eastern Ukraine. The sanctions have forced Exxon Mobil Corp. to suspend some projects with Russia’s OAO Rosneft, threatening a project where the state-run company announced a billion-barrel crude discovery in the Kara Sea last week. Exploration and production companies were expected to spend $51.7 billion in Russia this year, according to estimates from Barclays Plc. A large part of […]

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Exxon says it’s safe from Russian sanctions

Russian Far East project shielded from sanctions, Exxon spokesman says. (UPI Photo/Tiffini M. Jones/U.S. Navy) MOSCOW, Sept. 30 (UPI) — Exxon Mobil can operate freely with Russian energy company Rosneft at a Far East energy project without fear from sanctions, a spokesman said. The Sakhalin-1 project envisions the development of three oil and natural gas fields located in extreme sub-Arctic conditions off the coast of Sakhalin in Russia’s Far East. Alan Jeffers, a spokesman for project partner Exxon Mobil, said Monday the company was isolated from the economic impact of Western pressure . "The Sakhalin-1 project is not impacted by U.S. sanctions," he told state news agency RIA Novosti. Western governments blacklisted Rosneft and other Russian energy companies in response to the Kremlin’s stance on the separatist campaign in eastern Ukraine. In mid-September, the European Union took additional steps by barring Russian oil company Rosneft and its counterparts Transneft […]

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Russia Oil Chief Says Sanctions No Bar to Arctic Drilling

The most powerful man in Russia’s oil industry says U.S. sanctions won’t prevent the development of discoveries in the Arctic Ocean. Igor Sechin, chief executive officer of state oil producer OAO Rosneft (ROSN) and a long-time ally of President Vladimir Putin, spent two days traveling by plane, ship and helicopter last week to announce a billion-barrel crude strike in the iceberg-prone Kara Sea region of Russia’s Arctic Ocean. “We will continue working no matter what,” Sechin said in an interview on board a polar research vessel as he prepared to unveil the find he named Victory. “We will plan the work for next season. As I said, now we’ve drilled only the first structure — at Universitetskaya. There are more than 30.” But Sechin has a problem. The first well, the costliest yet drilled in Russia, relied on money and expertise from Exxon Mobil Corp. (XOM) , Rosneft’s partner […]

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ExxonMobil ‘winding down’ Arctic well, complying with US, EU sanctions on Russia

HOUSTON, Sept. 19 09/19/2014 ExxonMobil Corp. released a statement that the company is complying with all US sanctions on Russia after news reports that the operator had halted operations on its first arctic exploration well—University-1—in Russia’s Kara Sea. In an energy industry brief, Raymond James & Associates Inc. analysts Darren Horowitz and Edward Rowe noted, “This being the first major exploration prospect drilled in the Russian Arctic, the well (part of a joint venture with [OAO] Rosneft) has garnered an exceptionally high profile in the media—even though its results would be completely inconsequential for production and reserves over any investable timeframe….” By halting the well, the analysts noted, “it appears that Exxon was unable to find a creative ‘workaround’ to last week’s tightened US and [European Union] sanctions on technology transfer to Russia.” In its statement, the supermajor said, “The US Treasury Department, recognizing the complexity of the University-1 […]

Posted On : Published By : Tom Whipple