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Russian Energy Denied Detonators as U.S. Exports Halted

Russia ’s energy industry will be denied detonators from the U.S. used for oil and gas drilling as the Obama administration expands its response to the annexation of Crimea by suspending sales of goods with military uses. The State Department said yesterday it halted licensing for exports of defense items and services on March 24. The Commerce Department posted a notice on its website saying it had also suspending export licensing, effective March 1. Goods licensed by Commerce alone represented $1.5 billion, or 14 percent of all U.S. exports to Russia last year. “This is a lot more significant than blocking some oligarchs,” said Michael Burton , a Washington lawyer who works on export controls. “In light of the allegations that have been made, how could we continue to license, say, rifle scopes to Russia?” The U.S. has previously imposed sanctions on business leaders and government officials with ties […]

Posted On : Published By : Tom Whipple
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Obama Envisions Russia Sanctions Limiting Global Impact

The U.S. is looking to minimize the global harm from further penalties on Russia over Ukraine , as the International Monetary Fund moves forward with a multibillion-dollar lifeline to the government in Kiev. President Barack Obama said that Russia’s military, energy and finance industries are possible targets if it moves deeper in Ukraine. While additional sanctions would inevitably also affect the economies of the U.S. and Europe, Obama said, the goal is to limit the collateral damage. “Hopefully, we can design sanctions that minimize the impact on U.S. companies or Italian companies, and maximize the impact on the narrow set of interests in Russia that help drive the decisions that they’re making,” he said yesterday at a news conference in Rome with Italian Prime Minister Matteo Renzi. Obama spoke hours after the IMF unveiled a preliminary accord with Ukraine for a two-year loan of $14 billion to $18 billion […]

Posted On : Published By : Tom Whipple
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Russian Energy Denied Goods as U.S. Exports Suspended

The Obama administration is blocking certain U.S. exports to Russia , including some used in its oil and gas industry, expanding the response to the annexation of Crimea. The State Department said today it halted licensing for exports of defense items and services on March 24. The Commerce Department posted a notice on its website saying it had also suspending licensing, effective March 1. Goods licensed by Commerce alone represented $1.5 billion, or 14 percent of all U.S. exports to Russia last year. “This is a lot more significant than blocking some oligarchs,” said Michael Burton , a Washington lawyer who works on export controls. “In light of the allegations that have been made, how could we continue to license, say, rifle scopes to Russia?” Full coverage of the : The U.S. has previously issued sanctions to business leaders and government officials with ties to Russian President Vladimir Putin […]

Posted On : Published By : Tom Whipple
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IHS: Western sanctions indirectly could hinder Russian oil, gas revenues

Western sanctions imposed against Russian government officials and business executives regarding Russia’s conflict with Ukraine could slow the availability of capital for Russian oil and gas companies trying to launch major new projects, IHS said. The US and Europe earlier this month strengthened economic sanctions against Russia in response to Russia’s annexation of Crimea. “While the sanctions so far do not impose any direct restrictions on the Russian energy sector, they undermine investor confidence, impeding Moscow’s efforts to generate economic growth through expanded investment,” said Julia Nanay, IHS Russia and Caspian energy analyst based in Washington, DC. International sanctions could weaken the ruble, resulting in what Nanay calls “negative momentum for Russian economic growth.” She said, “The sanctions on Russian officials, as well as ratings downgrades on investment, may negatively impact various big-ticket upstream and midstream projects perceived as vital for the Russian state–including gas pipelines, LNG projects , […]

Posted On : Published By : Tom Whipple
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Russian Buildup Stokes Worries

Russian troops massing near Ukraine are actively concealing their positions and establishing supply lines that could be used in a prolonged deployment, ratcheting up concerns that Moscow is preparing for another major incursion and not conducting exercises as it claims, U.S. officials said. Such an incursion could take place without warning because Russia has already deployed the array of military forces needed for such an operation, say officials briefed on the latest U.S. intelligence. The rapid speed of the Russian military buildup and efforts to camouflage the forces and equipment have stoked U.S. fears, in part because American intelligence agencies have struggled to assess Russian President Vladimir Putin ‘s specific intentions. The troop movements and the concealment—involving covering up equipment along the border—suggest Mr. Putin is positioning forces in the event […]

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Ukraine crisis: Old constraints spike Kremlin’s firepower

From armour and kit to structure and logistics, the Kremlin has for six years been on a mission to transform Russia’s military from a clunking Soviet-era relic into a modern, flexible fighting force. Given the surgical ease with which Russian troops secured Crimea, wrongfooting Kiev and blindsiding Nato, it would be tempting to judge the reforms as having worked. Indeed, to many in Europe, Russia is proving itself a militarily resurgent power, adroitly, if aggressively, wielding its newfound heft. Russia’s defence budget is forecast to rise to just under 2.5tn roubles ($70bn) this year compared with 1.8tn roubles in 2012. But this perception belies the real state of Russia’s armed forces, which contains 850,000 active service personnel and 2m reservists. Although much changed since the country’s last major campaign, against Georgia in 2008, Russia’s military remains ill-organised and largely underprepared. In depth Crisis in Ukraine Russia has annexed the […]

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Total and Lukoil in talks over Russian shale deal

Total is in talks to partner with Lukoil on its shale oil projects in Russia, as Moscow targets unconventional resources to replace falling production at ageing fields in Siberia. Lukoil, the largest private energy company in Russia, is exploring the giant but unproven Bazhenov formation, which holds the lion’s share of Russia’s shale oil reserves, estimated by the US Department of Energy to be the biggest in the world. People familiar with the matter said that Lukoil and the French oil major are discussing a joint venture to co-operate on the production of “difficult oil” in Russia – a category that includes shale oil. There is no guarantee that the talks would result in a deal, they added. Total and Lukoil declined to comment. The two companies have been discussing a tie-up since before Russia’s annexation of Crimea and the subsequent sanctions imposed on the country by the US […]

Posted On : Published By : Tom Whipple
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The outlook for Russian oil output in a post-Crimea world

Could economic sanctions finally halt Russia’s crude production growth? In June last year, I wrote a blog post for The Barrel making much of the fact that Russia is the world’s biggest oil producer and has been for quite a while. Its output has consistently ranked above that of Saudi Arabia in the past few years and production has continued to rise in recent months, averaging some 10.53 million b/d in February this year. There is no sign of output starting a material decline — like those seen in a number of the world’s more mature producing regions such as the UK, Norway and Denmark — and Russia keeps finding new ways to pump more oil whether it be through improved technology or tapping new, under-explored regions like East Siberia. So while the geology and the technology keep on bringing in the barrels, what factors are there that could […]

Posted On : Published By : Tom Whipple
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Russia’s Black Sea Oil Flows Declining as Baltic Cargoes Gain

Russia is poised to cut crude exports from the biggest oil port near Crimea next month while shipping more in the Baltic Sea about 1,000 miles away. Cargoes will leave the Black Sea port of Novorossiisk at about 620,000 barrels a day in April, the lowest rate since at least 2008, according to loading programs obtained by Bloomberg News . Daily shipments from Primorsk in the Baltic will average 1 million barrels, the most since November. Igor Dyomin, a spokesman for OAO Transneft, Russia’s pipeline operator, declined to comment. Russia increases sales from Primorsk in April most years . Next month’s change in volumes between the country’s two main oil terminals will be the largest in a year when measured in barrels. There is also maintenance work scheduled on a pipeline running to Novorossiisk, which is about 70 miles from Crimea, the peninsula Russia annexed this month. “One loading […]

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Energy Needs Put Japan in Difficult Position Over Ukraine

Japan’s increasing reliance on Russian energy has put Tokyo in a difficult position in the dispute over Ukraine and Crimea, with the latest developments gaining close scrutiny from an energy industry that has been disrupted by sanctions on its suppliers in the past. “Japan’s crude imports from Russia have risen sharply in recent years,” noted Petroleum Association of Japan Chairman Yasushi Kimura at his monthly news conference Monday. “While there hasn’t been any impact so far, we’ve been watching developments carefully,” said Mr. Kimura, who is also chairman of JX Holdings Inc., the country’s biggest oil refiner by capacity. Japan imports about 250,000 barrels a day, or 7% of its crude supply, from Russia. Industry minister Toshimitsu Motegi has noted that Russia is a major energy supplier for Japan and has also said he has been watching developments carefully. Russian President Vladimir Putin formally annexed Crimea on Friday. In […]

Posted On : Published By : Tom Whipple