Tag Archives: Gazprom

Russia delays BP license verdict

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Russian regulators have held the much debated and criticized decision on BP license row for the Kovykta gas field in East Siberia. Licensing agency, Rosnedra, is looking into case whether TNK-BP’s operations should be stopped but seeks two weeks to decide, as case history is complex than it appears. Some analyst suggested that Moscow delayed the decision because of coming G8 Summit and the Russian Economic Forum, which is schedule in next week. Russian authorities claim that TNK-BP is not drilling enough oil that it was authorized for. BP said in its protest that market does not need additional oil supply and Russian regulators did not provide export license. Oil giant also alleged that regulators did not give any warning latter beforehand. But regulators denied all allegation and clear its stance that apprehension latter had sent to BP three month before. Russian regulators have already thwarts the Shell and Exxonmobile to expend in Russian oil base and give their shares to the state owned Gazprom. Russian authority has shown its interest to gain control of Russia’s energy supplies and makes Gazprom more competitive. Image: Scotsman Via: Turkishpress

Gazprom and Eni to develop pipeline to EU

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Gazprom and Italian oil firm Eni have agreed to build a massive pipeline to take Russian gas under the Black Sea to Europe. In the 50-50 joint venture, ‘South Stream’ stretch of pipeline is 900km, which will pass through Bulgaria and then branch to Austria and Slovenia in one spur and southern Italy in another. With this project, Russia will avoid the problem of oil stealing and threat of block supplies to Europe as two transit countries Ukraine and Belarus did in the early months of the year. The South Stream will carry about 30 billion cubic meters, or one trillion cubic feet, of natural gas a year. To make South Stream more secure and safe, delegations from the joint venture are pursuing the Bulgarian government. The total cost of the project isn’t disclosed yet, as they said that it will be decided after a feasibility study of the entire project will be completed by the Italian oil services company Saipem. The construction might begin next year. The projects will empower Russia to supply uninterrupted oil supplies to EU. Russia based Gazprom alone provides about a quarter of European natural gas needs. The company’s profitability depends on exports since state-set gas prices in Russia are about a fifth of those in Europe. For Eni, the pipeline would secure supplies for the third-largest natural gas market in Europe, behind Britain and Germany. Italy buys 86 percent of its natural gas from abroad, mainly from Algeria and Russia. Eni’s CEO Paolo Scaroni said:Building South Stream is the most audacious plan in the history of gas pipelines and in our sector it aims to meet the gap between Europe’s gas supply and demand Russia recently forced western oil drillers out from the country, in the wake of empowering state owned oil driller Gazprom. To be the market leader in the world, Russia is planning to increase its influence in southeastern Europe by buying state assets, supplying fuel through new pipelines and linking power grids. Russian government has also invited Balkan countries to join South Stream project, which will make it more viable. Via: gulf-times

Gazprom to strengthen gas supply with $420bln investment by 2030

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Gazprom has agreed to invest $420 billion in the gas sector by 2030 to ensure enough supplies to the domestic and foreign market. This announcement strengthens the speculation that Russian state-controlled energy producer could further try to take a half share in TNK-BP or buy British Gas’s parent group, Centrica. Russian government has already pushed western drillers out from the country. Most of the countries, which depend on Russia for oil were accusing that state-controlled Gazprom was investing too little in production and leaving dependant countries in scarcity. Chairman Dmitry Medvedev, rules out criticism and asserts that Russian government is aware for the dependent countries need and will take all necessary measure to meet the growing demands. Making oil viable for its customers, Gazprom is considering possible swap deals with a number of foreign companies, such as Germany’s E.ON, BASF and Britain’s BP Plc. Experts assert that joint ventures and asset swap deals with foreign partners would ensure that Gazprom can supply the market in full. Gazprom supplies a quarter of Europe’s gas needs, an average of $260 per 1,000 cubic meters of gas. State owned oil driller produced 556 billion cubic meters of natural gas last year and plans to raise output to 940 billion cubic meters by 2020. Image Via: Guardian

Gazprom acquires Kovykta oil field from BP

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Ultimately, British oil giant BP is knees down before Russians as it has agreed to sell its stake in Kovykta field to Gazprom. BP, which drilled oil in Siberian oil field with Russian driller TNK, will get $700 million to $900 million for its 62.89 percent stake in the Kovykta gas field. Precise price would be fixed in 90 days whereas BP had already invested about $500 million in the field. Analysts impeached that sell out money is only a fraction of what TNK-BP’s stake is worth, and that it is the latest example of the Kremlin forcing out Western energy firms. After dejected from the lucrative pie of the Russian oil sources British company will continues to have major oil holdings here, which account for 10 percent of its global revenue and to soothe dejected oil driller, it will have an option to purchase a 25 percent stake in the field within 12 months, which might allow it to share in potentially vast profits. In the addition of agreement, BP and Gazprom also agreed to invest at least $3 billion jointly in energy projects in Russia and around the world. All these development occurred as Russian government start taking its shares back from the western oil drillers. Shell has already thwarted from the Russian soil, whereas BP was alleged to not producing enough oil from the Kovykta field as it produced only 2.5 billion cubic meters of gas in 2006, which was much lower than permitted nine billion cubic meters. Russian officials pressed hard on it at confiscated its license to further drilling oil in Russia. BP drags Russian authority to court and claimed that it could not produce any more because the local region did not require additional supplies and it had been denied an export license. After throwing two western oil giant from the Russian territory, now doubts on another oil giants ExxonMobil are gearing up. Although ExxonMobil is confident for its future in Russia, if it happens, oil driller threatens, than investment in the country would be jeopardized. Image: Thedesignblog Via: NYTimes

EU’s concern over gas supplies melts as Gazprom calls off gas cuts to Belarus

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Russia’s state-controlled gas monopoly has called off planned gas cuts to its former Soviet neighbor Belarus after Minsk paid a substantial part of a $456 million gas debt before a Friday morning deadline, the national gas monopoly said. However, Russian energy giant, Gazprom has reportedly extended its deadline by one week for Belarus to pay in full. Comforting European Union, Gazprom’s official spokesmen have stated that there will be no cuts of the Russian gas supplies to Belarus. Earlier, Gazprom had warned it would cut gas supplies to neighboring Belarus by almost half on Friday, in punishment for what it claims are unpaid bills. The EU had been watching nervously the gas dispute between Russia and Belarus and was in a process to call a meeting of stakeholders next week to review the natural gas supply situation due to the eventual impact on the flow of gas to the European recipient countries. The recent gas dispute once again fueled concerns that consumers in West European countries might also be affected and further raising questions about Russia’s reliability as an energy supplier. According to the Russian energy giant the main bone of contention was Belarus’ failure to pay $460 million for gas delivered in the first half of this year. Belarus is the crucial transit route for Russian gas exports in Europe and a potential cut of gas supplies by Gazprom could affect customers in Poland, Lithuania and Germany. According to the reports, Belarus pipeline operator Beltransgaz has paid $190 million, or more than 40 percent of the bill. Earlier, following the gas dispute between Russia and Ukraine, supplies to the EU had considerably plummeted in the initial days of 2006 as Ukraine was accused of siphoning gas from a transit pipeline after Gazprom halted direct shipments. And that raised question over the reliability of Russia as a trusted gas supplier to Europe. At present, the Russian energy giant supplies a quarter of the gas used by Europe. However, the recent face-off stemmed out of an agreement struck in the last minutes of 2006 that required Belarus to pay $100 per 1,000 cubic meters of gas, instead of $46. The agreement had permitted Minsk to pay $55 per 1,000 cubic meters for the first half of the year, but required payment of the balance of $456 million to Gazprom by July 23. In the meanwhile, the EU had issued a statement after the dispute surfaced urging Gazprom and Belarus to ‘react in proportionate manner to disagreements and in any event not to disturb, either directly nor indirectly, the gas supply to EU member states.’ Belarussian President Alexander Lukashenko, until recently a close Kremlin ally, has been discontented over the fact that Russia had been raising prices for oil and gas supplies to Belarus at the start of the year. In response he had raised a transit duty on Russian oil going to Europe across his country by more than 30 percent. Read Image