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Ukraine's Naftogaz Files Lawsuit in Stockholm Over Russia Gas

Ukrainian gas monopoly Naftogaz said Monday it is suing Russia in the Stockholm arbitration court to get a fair price for the natural gas it receives and to recoup $6 billion in what Kiev said was overpayment for gas deliveries over the past four years. After Moscow and Kiev failed to resolve a long-running dispute over Russian gas supplies to Ukraine, Russian gas giant Gazprom said Monday it would only ship fuel to Ukraine if it pays in advance. Naftogaz said in a statement it had filed a claim in the Stockholm court demanding a "fair and market price" for the gas that Gazprom ships to Ukraine. Kiev had been asking for a gas price of $268.5 per 1,000 cubic meters, the level that was agreed in late 2013 between Russian President Vladimir Putin and his ousted Ukrainian counterpart Viktor Yanukovych. On Friday, Kiev said it was ready to […]

Posted On : Published By : Tom Whipple
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Gazprom delays pre-payment scheme for Ukraine

Russian energy company Gazprom said it was delaying a move to force Ukraine to pay in advance for gas because of the intensity of contractual negotiations. Russian President Vladimir Putin this week said he was ready to offer Ukraine a discount on natural gas on a permanent basis. The Ukrainian government had balked on earlier proposals , something Putin said would take the gas relationship to an "absolutely different stage." Gazprom has said it would force Ukraine to pay in advance unless it settles the billions of dollars of debt owed for natural gas deliveries. Gazprom CEO Alexei Miller said Wednesday he was holding off on the pre-payment scheme because of trilateral talks involving members of the European Union. "The Russian side made a move towards continuing talks which have been very intense lately," he said . "The Russian side has decided to postpone the switch to prepayment until […]

Posted On : Published By : Tom Whipple
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Ukraine wants Russian gas contract changed

As disputes drag on, Ukrainian Prime Minister Arseniy Yatsenyuk said Wednesday he was questioning a discount offered by Russia for natural gas. Ukraine, before political upheaval in November pushed it closer to the European Union, was paying $268 per 1,000 cubic meters of natural gas, the standard purchase volume. Russia later suspended the discount and changed the price to $485.50. It has now offered a $100 discount from that price. Yatsenyuk said Wednesday he was frustrated with Russian changing the price terms at a whim. "The contract [itself] must be changed," he said . European countries get about a quarter of their gas needs met by Russia, though most of those supplies run through a Soviet-era transit network in Ukraine. Price disputes in 2006 and 2009 resulted in Russian energy company Gazprom cutting gas supplies briefly through Ukraine. Members of the European Union met Russian and Ukrainian delegates this […]

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Russia Extends Ukraine Gas Talks Deadline

Russia gave Ukraine a further six days to reach a final agreement on natural gas prices, postponing its threat to cut off supply, Gazprom Chief Executive Alexei Miller said Wednesday, Interfax news agency reported. The move comes after talks between Gazprom , Ukraine’s state-run Naftogaz and the European Comission in Brussels failed to come up with an agreement. The deadline for a deal is now June 16. Ukraine is urging Russia to keep the price for natural gas supplies at a discount level agreed between Russian President Vladimir Putin and Ukraine’s ousted President Viktor Yanukovych. After annexing the country’s Crimea region, Moscow raised the price it charges Ukraine for gas to $485.5 for 1,000 cubic meters in April, more than $200 above the price agreed between the two neighboring countries in late 2013. Ukraine’s Prime Minister Arseniy Yatsenyuk said Wednesday that the government had refused a $100 discount offered […]

Posted On : Published By : Tom Whipple
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Kremlin: Too early to comment on South Stream

It’s too early to comment on word the Bulgarian government has backed out of the planned South Stream gas pipeline, a Kremlin spokesman said Monday. Bulgarian Prime Minister Plamen Oresharski said his government’s role in the gas pipeline planned through southern European countries would have to wait for consent from a European Union wary of expanding Russia’s energy influence. Kremlin spokesman Dmitry Peskov said Monday any formal comment from Moscow would be premature. "[The issue] needs to be clarified," he said . "It is early to say anything." Russian energy company Gazprom said last month it signed the necessary contracts needed to start construction of the onshore section of the pipeline later this year. South Stream has an optimum capacity if 2.2 trillion cubic feet per year and should begin service by late 2015. European lawmakers in April passed a resolution to reconsider the pipeline. Oresharski said following meetings […]

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Russian bank chiefs take aim at US dollar

Russia, China have their sights set on undercutting dollar’s dominance as reserve currency but economists are skeptical Russian companies will make bypassing the U.S. dollar in international transactions a top priority, the heads of three Russian banks said this week, in the latest sign that Russia is turning its back on the West and moving toward Asia. Sanctions imposed by the U.S. and European Union after Russia annexed Ukraine’s Crimea peninsula in March have spurred Western banks to drastically reduce their lending activity in Russia in recent months. Concerned the Russian economy was too reliant on the U.S. dollar and therefore vulnerable to Western political opprobrium, Russian politicians have called for a “de-dollarization” of their economy, underpinning a desire for greater independence from U.S. and European financial markets. “Over the last few weeks there has been a significant interest in the market from large Russian corporations to start using […]

Posted On : Published By : Tom Whipple
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For Western Oil Companies, Expanding in Russia Is a Dance Around Sanctions

Like many chief executives of American companies, Rex W. Tillerson of Exxon Mobil didn’t attend the major business forum in Russia last month, at the urging of White House officials. But the company’s exploration chief, Neil W. Duffin, did. In a ceremony at the event, Mr. Duffin signed an agreement with Igor I. Sechin, the head of the state-owned Rosneft, to expand its joint ventures to drill offshore in the Arctic Ocean, to explore for shale oil in Siberia and to cooperate on a liquefied natural gas plant in Vladivostok. The deal came just weeks after the United States government imposed sanctions on the personal dealings — though not the corporate activities — of Mr. Sechin, a former military intelligence agent and longtime aide to President Vladimir V. Putin. Despite the push by Western governments to isolate Moscow for its aggression in Ukraine, energy giants are deepening […]

Posted On : Published By : Tom Whipple
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Russian Stocks’ Oil Link Gains on Eased Ukraine Concern

Russian stocks are showing the strongest link to oil prices in more than a year as concern that the Ukraine crisis will escalate fades and investors focus on a main driver of economic growth. The dollar-denominated RTS stock index rose 4.9 percent in Moscow last week, pushing its 35-day correlation coefficient with West Texas Intermediate crude to 0.53, the highest since May 2013. A reading of 1 implies two securities are trading in lockstep, while -1 signals the opposite. Oil is Russia ’s top export and along with natural gas contributes about half its budget revenue. The RTS index had a negative correlation coefficient of as much as 0.37 in March as stock-market volatility surged during the country’s standoff with Ukraine. The link between crude and equities is returning to more typical levels as tensions ease. President Vladimir Putin met with the former Soviet republic’s new leader on June […]

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90% Of Gazprom Clients Have “De-Dollarized”, Will Transact In Euro & Renminbi

90% Of Gazprom Clients Have “De-Dollarized”, Will Transact In Euro & Renminbi Following Obama and Putin’s “caught on tape” meeting Vine’d by the French President, we can’t help but wonder if the Russian leaders comments were something akin to “this is not over yet.” With “De-Dollarization” efforts already broadly under discussion , ITAR-TASS reports that Gazprom had signed additional agreements for clients to switch from dollars to euros and renminbi, “nine of ten consumer had agreed to switch.” Via ITAR-TASS, Gazprom Neft had signed additional agreements with consumers on a possible switch from dollars to euros for payments under contracts, the oil company’s head Alexander Dyukov told a press conference. “Additional agreements of Gazprom Neft on the possibility to switch contracts from dollars to euros are signed. With Belarus, payments in roubles are agreed on,” he said. Dyukov said nine of ten consumers had agreed to switch to euros. […]

Posted On : Published By : Tom Whipple
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90% Of Gazprom Clients Have “De-Dollarized”, Will Transact In Euro & Renminbi

90% Of Gazprom Clients Have “De-Dollarized”, Will Transact In Euro & Renminbi Following Obama and Putin’s “caught on tape” meeting Vine’d by the French President, we can’t help but wonder if the Russian leaders comments were something akin to “this is not over yet.” With “De-Dollarization” efforts already broadly under discussion , ITAR-TASS reports that Gazprom had signed additional agreements for clients to switch from dollars to euros and renminbi, “nine of ten consumer had agreed to switch.” Via ITAR-TASS, Gazprom Neft had signed additional agreements with consumers on a possible switch from dollars to euros for payments under contracts, the oil company’s head Alexander Dyukov told a press conference. “Additional agreements of Gazprom Neft on the possibility to switch contracts from dollars to euros are signed. With Belarus, payments in roubles are agreed on,” he said. Dyukov said nine of ten consumers had agreed to switch to euros. […]

Posted On : Published By : Tom Whipple