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IEA Chief Says Europe Must Rely on Russian Gas

STAVANGER, Norway—Europe has limited options for finding natural-gas supplies from outside of Russia despite tensions over Ukraine, the International Energy Agency’s chief executive, Maria van der Hoeven, said on Monday. "In the short term, Europe has very, very little means to diversify its gas imports," Ms. van der Hoeven said on the sidelines of the Offshore Northern Seas energy conference. "As far as we can see, Russian gas will be needed in Europe." About a third of Europe’s gas supply comes from Russia and a fifth is supplied by Norway, while other key sources include imported liquefied natural gas and producers like the Netherlands and the U.K., Ms. van der Hoeven said. "If you want to change that and diversify, it takes time. You can’t do it overnight," she said. The agency—which advises industrialized nations on oil and gas policies—forecast last year that the European Union’s annual gas imports […]

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Statoil mulls impact of Russian sanctions

Norwegian energy company Statoil stands by its partners in Russia, though Western sanctions do present some obstacles, the company’s top executive said Monday. Rosneft last week announced it started an exploration program in the Barents Sea through a partnership with Statoil. Rosneft was the target of Western economic sanctions imposed in response to the Kremlin’s stance on crises in Ukraine. Statoil Chief Executive Officer Helge Lunde said Rosneft is a steady partner , though sanctions have complicated the relationship. "We hope for a diplomatic solution, but of course [the imposition of sanctions] hasn’t made it any easier for either Rosneft or companies working with that company and other Russian companies," he told the Wall Street Journal. "But our aim is to continue the [Rosneft] partnership, and we hope for diplomatic solutions." Russia and Norway are the top energy suppliers to the European market. Lund said, however, bilateral ties may […]

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Statoil Warns of Delays in Russian Energy Projects

Statoil CEO Helge Lund said Monday that Western sanctions against Russia might delay some of the Norwegian oil group’s projects with Russian partner Rosneft. Bloomberg News STAVANGER, Norway— Statoil AS A has warned that Western countries’ sanctions against Russia will slow down the process of gaining approval for some of the company’s joint ventures with Russian oil group OAO Rosneft . Norway’s largest oil group said Monday that it will stand by its 27-month-old partnership with the state-controlled Russian company because it hopes diplomacy will resolve Russia’s standoff with the U.S. and Europe over the crisis in Ukraine . "This will be a more bureaucratic process, so that things will take more time," Statoil Chief Executive Helge Lund said in an interview at the Offshore Northern Seas energy conference. Mr. Lund said not all of Statoil’s joint-venture projects with Rosneft would be slowed down, as sanctions target mainly shale-, […]

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Can You Guess Which Country Depends Most Heavily on Russian Gas?

When it comes to energy, Germany is a bit of a conundrum. It’s a global leader in renewables usage, having increased the share of renewables in its total energy consumption from 6% to an impressive 25% over the past decade. Yet it’s also a heavy user of coal – a fact that’s glaringly inconsistent with its sustainable energy leadership. What’s even more surprising, however, is that Germany is actually the biggest importer of natural gas from Russia. According to BP’s latest annual review , it imported close to a whopping 40 billion cubic meters of gas from the Russian Federation in 2013. That places it well ahead of even Ukraine, which imported about 25 billion cubic meters, as the chart below shows. German reliance on Russia Germany relies on imports to supply more than 70% of its domestic energy demand, with Russia alone representing a quarter of the country’s […]

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Russia's Rosneft grabs Norwegian drilling assets

"This deal will allow Rosneft to acquire new capabilities in the sphere of oilfield services, by engaging the best professionals, with unique expertise in operations in harsh climate conditions," Rosneft Chief Executive Officer Igor Sechin said in a statement Friday. Rosneft was the target of sanctions imposed by Western powers in response to Russia’s stance on crises in Ukraine. Sechin himself was sanctioned by the U.S. government. Nevertheless, the Russian oil company has signed a string of agreements with its international counterparts, including an Aug. 1 deal to acquire Venezuelan assets from oil services company Weatherford International. Last week, Rosneft announced it started an exploration program in the arctic waters of the Barents Sea with Norwegian energy company Statoil. On the latest deal, Sechin said Rosneft and its Norwegian partners are creating an international partnership in drilling services. "The company will notably strengthen its positions on the market of […]

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Russia’s Rosneft grabs Norwegian drilling assets

"This deal will allow Rosneft to acquire new capabilities in the sphere of oilfield services, by engaging the best professionals, with unique expertise in operations in harsh climate conditions," Rosneft Chief Executive Officer Igor Sechin said in a statement Friday. Rosneft was the target of sanctions imposed by Western powers in response to Russia’s stance on crises in Ukraine. Sechin himself was sanctioned by the U.S. government. Nevertheless, the Russian oil company has signed a string of agreements with its international counterparts, including an Aug. 1 deal to acquire Venezuelan assets from oil services company Weatherford International. Last week, Rosneft announced it started an exploration program in the arctic waters of the Barents Sea with Norwegian energy company Statoil. On the latest deal, Sechin said Rosneft and its Norwegian partners are creating an international partnership in drilling services. "The company will notably strengthen its positions on the market of […]

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Gazprom Neft readies arctic oil shipments

The company said it would ship a low sulfur blend of crude oil , dubbed Novy Port, from the field bearing its name from the Yamal peninsula. "A sea tanker will deliver the oil to Europe in September and over 80,000 tons of the new Novy Port oil classification are scheduled to be delivered from the field by two tankers during the 2014 ice-free season," the company said in a statement. Changes in global weather patterns are leaving parts of the arctic region ice-free for longer periods of time. Gazprom Neft said it confirmed in 2011 that using a nuclear-powered icebreaker would facilitate transportation of oil from the port on the northern peninsula, where pipeline infrastructure is lacking. When ice is heavy, the company said it would ship oil by rail to a northern rail terminal for transportation to the regional market until an export terminal is completed in […]

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Russia Said to Forgo $6.7 Billion of Oil Revenue for Investment

Russia may lose as much as 240 billion rubles ($6.7 billion) of oil revenue next year after the government chose a three-year tax plan favored by crude producers, according to two state officials. Deputy Prime Minister Arkady Dvorkovich picked the lower of two proposed oil output tax rates, leaving an additional 55 billion rubles in producers’ pockets, the officials said, asking not to be identified because discussions were confidential. Dvorkovich, who made his choice to encourage investment, met yesterday with government and business representatives to set the rates before the budget is sent to parliament. Russia, the world’s biggest energy exporter, is trying to balance the interests of producers and the budget with the $2 trillion economy on the brink of recession amid a standoff with the U.S. and Europe over Ukraine . Oil taxes provide about 45 percent of the country’s budget revenue. The oil companies got what […]

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Russia-China deal will supply Siberian natural gas to China’s northern, eastern provinces

Source: U.S. Energy Information Administration, International Energy Outlook 2013, IHS Energy, Eastern Bloc Research Note: Volumes shown for Russia-China gas deal assume minimal contract obligations. Increases in these volumes will lessen the amount needed from LNG imports and other contracts. China’s natural gas demand has been growing as the government seeks to move away from coal in favor of cleaner fuels. According to EIA’s International Energy Outlook 2013 (IEO2013) Reference case, demand will more than triple from 5.2 Tcf in 2012 to 17.5 Tcf by 2040. Russia’s largest natural gas company, Gazprom, finalized a deal with the Chinese National Petroleum Corporation (CNPC) in May. Under the first phase of the new 30-year contract, Russia will supply China 38 billion cubic meters (bcm), or 1.3 trillion cubic feet (Tcf), per year of natural gas starting in 2018. Future phases could increase this volume to as much as 60 bcm (2.1 […]

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Construction on Russian gas line to China slated for September

Construction on a natural gas pipeline meant to feed the Chinese market is set for the beginning of September, a Russia official said Tuesday. A pipeline contract between Gazprom and China National Petroleum Corp. is for 30 years and calls for 1.3 trillion cubic feet of natural gas per year. Russian energy company Gazprom said it started working on the infrastructure necessary for the pipeline almost immediately after signing a contract for gas to China in May. A Russian source told state news agency RIA Novosti construction on the pipeline should begin next month. "Sept. 1 is a tentative date, and it will all depend on the schedules of the country’s leaders," the source said Tuesday. Gazprom has been looking to expand into the growing Asian market in an effort to diversify an asset base tied to a European economy still struggling to grow. Ongoing disputes over gas debt […]

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