Gazprom’s gas exports inch higher

18 Aug 2017   Russia

Russia natural gas company Gazprom said it’s scaling up its deliveries to consumers that would be fed eventually by a pipeline through Turkey. The company said its natural gas shipments to countries outside the Russian commonwealth were up 12 percent year-over-year for the period ending August 15. By countries, gas exports to Bulgaria were up 11 percent, up 13.2 percent to Greece, up 24.4 percent to Hungary, up 40.8 percent and 22.4 higher year-over-year for Turkey, according to Russia news agency Tass. The first leg of the pipeline would primarily feed the Turkish market, with the second leg expected for southern European demand. Gazprom in December approved a three-and-a-half-year loan to aid the construction of the planned pipeline. The […]

Russia Claims To Have Invented Alternative To Fracking

18 Aug 2017   Russia

Russian scientists and local oil field services companies claim to have created a technology for thermochemical gas fracturing that could be an alternative to hydraulic fracturing and could increase oil production by between 1.7 and 6 times, Russia’s news agency RIA Novosti reports , citing the University of Tyumen’s press service. In hydraulic fracturing, rocks are fractured with high-pressure injection of fluids, while the new breakthrough technology, as claimed by Russian scientists and media , is creating chemical reactions in the strata that contain oil. The chemicals react and emit heat and gas, which makes extraction easier and lifts well productivity, according to the scientists and researchers. The other upside in the technology, the Russians claim, is that the main component in the chemical reactions is ammonium nitrate, which is often used as fertilizer. According to Professor Konstantin Fedorov, Director of the Institute of Physics and Technology at the […]

Russian company Lukoil reports slight dip in oil production

17 Aug 2017   Russia

Russian energy company Lukoil said total oil production for the second quarter was slightly lower, in part because of a reduction from operations in Iraq. One of Russia’s largest energy companies, Lukoil said second quarter production of crude oil was around 156 million barrels, a decline of about a half percent from the first quarter. Russian oil production for the period was 148 million barrels, a decline of about 0.3 percent. Its share of oil from the West Qurna-2 project in Iraq actually increased for the second quarter by 19 percent, but year-on-year compensation was lower by 75 percent to 6.4 million barrels for the first half of the year. “The year-on-year dynamics was mainly driven by the reduction […]

Russian scientist says leave coal in the ground

17 Aug 2017   Coal, Russia

Nearly all of the world’s coal reserves and 30 percent of its oil should be left alone in order to keep climate change at bay, a Russian scientist said. Mikhail Yulkin, the director general at the Center for Environmental Investments, told Russian news agency Tass that investors were moving to low-carbon energy resources with such vigor that it was “needless” to call it alternative energy. A report last week on the global energy balance from the International Energy Agency found coal was more or less at parity with natural gas as an energy source for the first time ever. According to the IEA, global coal production declined last year by 458 million tons as advanced economies move toward greener resources. “In order to […]

Libyan Oil Liberator Aims To Boost Russian Ties

16 Aug 2017   Libya, Russia

In a sign that Libya’s powerful military is moving closer to Russia, Libyan National Army (LNA) commander Khalifa Haftar—the man responsible for recapturing the country’s oil ports and essentially restarting production—is meeting top officials in Moscow. Haftar is the key political and military rival to the Western-backed central government in Tripoli, and his trip to Russia indicates a fragile game of alliances that could upset the delicate balance of control over Libyan oil. Last weekend’s was not Haftar’s first visit to Moscow: he had visited Russia at least twice in the past year, and has been forging friendly relations with Moscow, while the U.S. is supporting the increasingly weakened internationally recognized Government of National Accord (GNA). During Haftar’s meeting with Russia’s Defense Minister Sergei Shoigu this past weekend, “Special attention was paid to situation in the North Africa focusing on situation in Libya. The parties stressed the importance of […]

Gazprom expects no changes to key projects from new U.S. sanctions

15 Aug 2017   Russia

Gazprom said on Monday that new U.S. sanctions against Moscow would not result in the Russian gas exporter having to make changes to key projects, although they could cause delays.  Several provisions of the sanctions law signed by U.S. President Donald Trump earlier this month target Russia’s energy sector, which produces much of its foreign income, with new limits on U.S. investment in Russian companies.  Last month Gazprom said the sanctions might delay some giant gas projects, including Nord Stream 2, Turkish Stream gas pipelines and deepwater, Arctic offshore or shale projects.  “For the time being (sanctions) are not cause for changing the strategic direction of business or adjusting the list of key Gazprom projects”, the state-owned company said in statement.

Special Report: Vladimir’s Venezuela – Leveraging loans to Caracas, Moscow snaps up oil assets

12 Aug 2017   Russia, Venezuela

Venezuela’s unraveling socialist government is increasingly turning to ally Russia for the cash and credit it needs to survive – and offering prized state-owned oil assets in return, sources familiar with the negotiations told Reuters. As Caracas struggles to contain an economic meltdown and violent street protests, Moscow is using its position as Venezuela’s lender of last resort to gain more control over the OPEC nation’s crude reserves, the largest in the world. Venezuela’s state-owned oil firm, Petroleos de Venezuela (PDVSA), has been secretly negotiating since at least early this year with Russia’s biggest state-owned oil company, Rosneft ( ROSN.MM ) – offering ownership interests in up to nine of Venezuela’s most productive petroleum projects, according to a top Venezuelan government official and two industry sources familiar with the talks. Moscow has substantial leverage in the negotiations: Cash from Russia and Rosneft has been crucial in […]

Rosneft says lent Venezuela’s state oil firm a total of $6 billion

9 Aug 2017   Russia, Venezuela

 Russia’s largest oil producer Rosneft said on Tuesday it had made around $6 billion in pre-payments to Venezuelan state oil company PDVSA and had no immediate plans to make any further advance payments soon.  OPEC member Venezuela is struggling to pay back creditors as its economy endures triple-digit inflation and chronic shortages of food and medicine.  Last Friday, Venezuela inaugurated a new legislative superbody that is expected to rewrite the constitution and give vast powers to President Nicolas Maduro’s ruling Socialist Party, defying protests and worldwide condemnation that it undermines democratic freedoms.  Russia is a close political ally of Venezuela’s leaders. Rosneft Chief Executive Igor Sechin said earlier this year his company, the world’s top listed oil firm by output, would continue to work in Venezuela and would never leave the country.  As of Tuesday, Rosneft’s pre-payments to PDVSA have totaled around $6 billion, Rosneft said on a conference call with investors. This includes principal of $5.7 billion and interest of $245 million, it said.  “The repayment is proceeding according to schedule,” the company said. “To date, a total of $743 million on the principal has been repaid and another $489 million in interest.”  “We expect the final repayment to be made in oil and oil product deliveries, which are ongoing strictly according to a schedule which we cannot provide to you. We expect full repayment before the end of 2019. No new pre-payments are planned.”

Russian Crimea Project Faces New EU Sanctions

7 Aug 2017   Russia

Deputy Russian Energy Minister Andrew Cherezov and three new Russian companies now face new sanctions from the European Union due to their involvement in the delivery of gas turbines to Crimea. The additions contribute to the existing blacklist of 150 people and 37 firms subject to asset freezes and a travel ban to European countries. “The decision of Brussels to include a number of Russian officials and companies as a retaliatory measure for alleged illegitimate supply of Siemens gas turbines to Crimea prompts deep regret,” according to a statement by the Russian Foreign Ministry. The EU’s stance against Russian interference in Ukraine began in 2014 when Moscow led a campaign to annex Crimea. Russia is currently in the process of constructing new energy infrastructure in Crimea, but Western sanctions continue to derail the efforts. The $1.3-billion project is to have two new high-tech plans in Crimea to ensure electricity […]

Wintershall warns U.S. against playing ‘geopolitical football’

3 Aug 2017   Germany, Russia, USA

German energy company Wintershall, a European partner with Russia’s Gazprom, said the European energy sector can’t be used for “geopolitical football .” President Donald Trump on Wednesday signed a bill into law that sanctions Iran, North Korea and Russia. The Russian measure in particular is significant given the election issue clouding the Trump administration. Trump in a signing statement expressed reservations about the bill’s impact, saying it encroaches on presidential authority and may harm U.S. interests as they relate to Russian diplomacy and outreach with European allies. Sanctions on Russia relate in part to crude oil and natural gas pipeline infrastructure and came as the European market works to address diversity issues. Russia meets about a quarter of Europe’s […]

Exclusive: Sanctions gap lets Western firms tap Russian frontier oil

3 Aug 2017   Russia, USA

A gap in U.S. sanctions allows Western companies to help Russia develop some of its most technically challenging oil reserves, and risks undermining the broad aim of the measures, a Reuters investigation has found. When Washington imposed the sanctions on Moscow in 2014 over its annexation of Crimea and role in the Ukraine conflict, the U.S Treasury said it wanted to “impede Russia’s ability to develop so-called frontier or unconventional oil resources”. The restrictions were designed to prevent Russia countering declining output from conventional wells by tapping these hard-to-recover reserves which require newer extraction techniques like fracking, an area where it relies on Western technology. Three years on, however, Norway’s Statoil is helping Kremlin oil giant Rosneft ( ROSN.MM ) develop unconventional resources while British major BP ( BP.L ) is considering a similar project. Statoil is not breaching sanctions, nor would BP be doing so. […]

Russian oil producer highlights Asian reach

3 Aug 2017   Russia, Vietnam

Russian oil producer Rosneft highlighted its focus on operations offshore Asia by boasting of its future exploration and production plans for Vietnam. The Vietnamese subsidiary said it was marking 15 years of operations offshore Vietnam. Though a dominant player on the global energy stage, and one of the top exporters to the European economy, Russian energy companies have maintained a strong footing in the Asia-Pacific region. “Implementation of Vietnam projects is one of the priorities of Rosneft’s international strategy,” the company stated . The Rosneft division in Vietnam draws mostly natural gas from offshore fields, and steers about a fifth of its production toward power generating facilities in the country. Gazprom, Russia’s main natural gas company, estimates the Moc Tinh and […]

How Will The EU Respond To Fresh US Sanctions On Russia?

3 Aug 2017   Europe, Russia, USA

“Okay, you think we’re the bad guys, we’re going to be bad guys and we’ll see whether you like it or not” Konstatin Eggert, a political commentator, told The Washington Post in response to U.S.’s bid to introduce fresh economic sanctions on Russia. With the expulsion of tens of U.S. diplomats from Russia, this next stage in the great political battle is underway. Though the Trump administration has given mixed signals about whether it would sign the new sanctions bill into law, it might not matter. Combined with an earlier piece of legislation based by the Senate this summer, there could be, as Vox says, veto-proof majorities in both chambers of Congress. Effectively it would mean Trump would require permission before he could ease any sanctions on Russia – creating an obstacle in his bid to develop improved relations with Moscow. And it’s not just causing ructions between Washington […]

Russian gas pipelines to go ahead despite U.S. sanctions

3 Aug 2017   Pipelines, Russia

New U.S. sanctions will make it harder for Russia to build two gas export pipelines to Europe but the projects are unlikely to be stopped. U.S. President Donald Trump has reluctantly signed into law further sanctions on Russia but some of the measures are discretionary and most White House watchers believe he will not take action against Russia’s energy infrastructure. This would allow Gazprom’s two big pipeline projects to go ahead, although at a higher price and with some delays. The Kremlin, dependent on oil and gas revenues, sees the pipelines to Germany and Turkey – Nord Stream 2 and TurkStream – as crucial to increasing its market share in Europe. It also fears that Western partners – needed to develop the deepwater, shale and Arctic gas deposits that will fill the pipelines – will be scared off by sanctions. Gazprom warned investors last month that […]

Is Russia Poised To Own A Stake In U.S. Oil?

2 Aug 2017   Russia, USA, Venezuela

As the country’s economy continues to tank, Venezuela’s national oil company PDVSA is approaching the deadline for a $1.1bn note issue due in November, and there’s a pretty good chance they’re not going to be able to make the payment. With a dire need for more cash and credit and soaring inflation rates at an all-time high of 886 percent, Venezuela is in desperate need of allies with deep pockets. In their search for funding Venezuela has turned to Russian oil giant Rosneft. In 2016 PDVSA signed onto a loan from Rosneft offering 49.9 percent of its shares in Citgo, a U.S.-based, Venezuelan-owned refining company, as collateral. Thanks to this deal, Rosneft has a lien on all of PDVSA’s Citgo refineries in the US, meaning that if and when Venezuela defaults on the bond, Russia will seize their assets and own a number of refineries on U.S. soil. This […]

Russian Oil Output Down 307,600 Bpd

2 Aug 2017   Russia

Russian oil output is down 307,600 barrels per day, compared to October levels, according to the country’s oil minister. “At the end of July 2017, the reduction of oil production stood at 307,600 barrels a day as compared to October 2016,” Minister Alexander Novak told reporters. “Therefore Russia is meeting is obligations on lowering production.” Novak was referring to the promise Moscow made to OPEC and 10 other NOPEC nations in November to cut production by 300,000 bpd in an effort to rebalance oil supply wth demand. A week ago, Novak had said Russian cuts totaled 308,000 bpd in June. OPEC and non-member partners agreed to extend the agreement through March 2018 in late May, but the news has not translated to substantially higher barrel prices. High output from Libya, Nigeria, and the United States has offset the intended effect of the cartel’s production cuts. Nigeria recently announced its […]

Will Sanctions On Russia Push The EU To US Energy?

1 Aug 2017   Europe, Russia, USA

We just need the smoke to settle, first. It brings me back to just a few years ago, when I found myself in the middle of a political tiff between Moscow, Brussels, and Washington. Then, the issue has centered on a move by the Obama Administration to decrease European reliance on Russian natural gas by offering alternative energy sourcing. The alternative source being considered back then was gas coming from Iraq and Kurdistan, something still being discussed today. At the time, I was a consultant to both the Iraqi Ministry of Oil and the Kurdish Ministry of Natural Resources. That meant I was in the middle of what was on occasion some rather rancorous negotiations. While the EU in Brussels wanted to diversify away from relying heavily on fuel from Russia, it has also always disliked being lectured to by Washington. This morning had all those memories coming back. […]

Russia to Cut 755 U.S. Diplomats, Staff Amid New Sanctions

31 Jul 2017   Russia, USA

Russian President Vladimir Putin said Sunday that the U.S. would have to cut 755 diplomats and staff in the country by September in retaliation for impending U.S. sanctions on Moscow. In an interview with Russian state television, Mr. Putin said the U.S. presence in Russia would be reduced by more than half, following the passage of new sanctions legislation by Congress that has further frayed ties between Moscow and…

Russia drafts agreement to tap Iranian oil fields

29 Jul 2017   Iran, Russia

Russia and Iranian agreement involves the potential to tap into Iranian oil fields. The signing of the deal comes as both countries face tighter sanctions pressure from U.S. lawmakers. Image courtesy of Gazprom Neft. July 28 (UPI) — An agreement with an Iranian engineering services company expressed mutual interest in working in the oil fields of Iran, a Russian energy company said. Russian energy company Gazprom Neft signed a memorandum of understanding with Iran’s Oil Industries’ Engineering & Construction. The agreement confirms “both companies’ mutual interest in combining forces in the preliminary assessment and investigation of the geological potential of oil fields located in the Islamic Republic of Iran,” the Russian company stated . The memorandum came as both sides faced pressure from U.S. lawmakers. On Tuesday, the U.S. House of Representatives, in a 419-3 vote , opted to toughen sanctions on Iran, North Korea and Russia. House Speaker […]

Why Are Majors Shying Away From Gazprom?

Despite being the operator of Russia’s only operating LNG project, Sakhalin II, Gazprom has experienced quite a bit of misfortune with its pursuits. Its flagship endeavor, Shtokman LNG , ran aground and has been postponed indefinitely after the United States, the main presumed end market, witnessed an unprecedented surge in gas production on the back of to the shale revolution. Another project, Vladivostok LNG, destined to supply the Asia-Pacific region, was also shelved indefinitely after the Gazprom management prioritized the development of the Power of Siberia gas pipeline project to China. However, its recent initiative, Baltic LNG, might be just the thing Gazprom needed to kickstart its LNG portfolio on the Western front. The clock is ticking, too, as the emergence of a powerful Russian rival, and the general surge in LNG facilities, might sideline Gazprom from a market which it is still yet to conquer. Bolstered by palpable […]

New Sanctions On Russia Anger EU, Oil & Gas Industry

27 Jul 2017   Russia, USA

With a vote of 419 to 3, the House of Representatives passed legislation envisaging firmer economic sanctions against Russia as well as a stipulation that would make it harder for the White House to weaken any future sanctions against Moscow. The overwhelming vote, media noted, was a blow to President Trump, who had asked for flexibility in the adjustment of the sanction policy. Instead, the House passed the new sanction bill with veto-proof majority, The Hill reports , taking away Trump’s chance to block it. Now, the bill must pass through the Senate, but it’s still unclear when the upper house will vote on it. If it approves the bill, sanctions imposed on Russia two years ago will become a law. Also, fresh sanctions against Iran and North Korea are included in the package. In short, the future law stipulates that American oil and gas companies cannot do business […]

Stakes for Exxon in Sanctions Case Go Far Beyond a $2 Million Fine

22 Jul 2017   Russia, USA

The $2 million fine that the Treasury Department levied on Exxon Mobil this week for violating sanctions against Russia is just a sliver of the oil company’s $7.8 billion in profit last year. But Exxon has decided nonetheless to wage a legal battle — one that could make President Trump’s cabinet meetings decidedly awkward. Rex W. Tillerson , now the secretary of state, was Exxon’s chief executive at the time of the actions in dispute in 2014. And his former company is suing the Treasury and Steven Mnuchin, the Treasury secretary, in hopes of getting the penalty withdrawn and its reputation cleared. The clash has created a new wrinkle in the intrigue that has captivated Mr. Trump’s Washington, and it has left some wondering why Exxon would fight over a paltry sum as a political furor over Russia swirls. “It’s a fascinating dynamic playing itself out,” said […]

Schlumberger takes control of Russian driller

22 Jul 2017   Russia, USA

U.S. oilfield services company Schlumberger announced a deal that establishes it as the majority owner in Russia’s largest drilling and services provider. Extending a six-year relationship, the leading services contractor Schlumberger said it acquired a 51 percent stake in Eurasia Drilling Co. Ltd. The terms of the deal weren’t disclosed by either company. The Wall Street Journal valued the deal at $1.7 billion. EDC holds one of the largest fleets of onshore drilling units in the world and described itself as the “premier supplier” of services to the Caspian Sea region, home to some of the larger oil and gas fields in the world. “The combination of the technology knowhow and operational expertise of Schlumberger coupled to the financial strength of the investment funds, brings significant […]

Schlumberger Buys Eurasia Drilling Stake In Test Of Russia-US Ties

22 Jul 2017   Russia, USA

Schlumberger NV has agreed to buy a 51% stake in Russian peer Eurasia Drilling Co (EDC) in a deal likely to test Russia-US ties. MOSCOW, July 21 (Reuters) – U.S. oilfield services giant Schlumberger NV has agreed to buy a 51 percent stake in Russian peer Eurasia Drilling Co (EDC) in a deal likely to test Russia-U.S. ties. The deal marks Schlumberger’s second attempt to buy into EDC and the first U.S. stake in Russia’s oil and gas sector since sanctions were imposed on Moscow after its 2014 annexation of Crimea. “I warmly welcome Schlumberger as our majority shareholder. It builds on our strategic alliance with Schlumberger since 2011 and our mutually beneficial business relationship since 2007,” EDC Chief Executive Alexander Djaparidze said in a statement late on Thursday. In 2015, Schlumberger agreed to buy 45.65 percent of EDC for $1.7 billion but the deal fell through after Russia’s […]

Exclusive: Russia, Venezuela discuss Citgo collateral deal to avoid U.S. sanctions

21 Jul 2017   Russia, Venezuela

Russia’s top oil producer Rosneft is negotiating to swap its collateral in Venezuelan-owned, U.S.-based refiner Citgo for oilfield stakes and a fuel supply deal – a move to avoid complications from U.S. sanctions, two sources with knowledge of the negotiations told Reuters. State-owned Rosneft holds a 49.9 percent stake in Citgo as collateral for a loan last year of about $1.5 billion to the OPEC nation, which is reeling from low oil prices and a severe recession. The arrangement with Venezuela’s state-owned oil firm, PDVSA, has drawn fire from U.S. senators who do not want Russia in a position to own a substantial stake of U.S.-based energy assets in potential violation of existing economic sanctions. The negotiations took on more urgency this week, one of the sources told Reuters, when U.S. President Donald Trump threatened to impose “strong economic actions” on Venezuela unless embattled leftist President […]

Exxon sues to stop $2m fine over Russia sanctions breach

21 Jul 2017   Russia, USA

ExxonMobil has sued the US Treasury in an attempt to stop a fine for allegations it behaved with “reckless disregard” for violating Russian sanctions while Rex Tillerson, now US secretary of state, was chief executive in 2014. The Treasury’s Office of Foreign Assets Control fined Exxon the maximum penalty of $2m in what it called an “egregious” case, saying it had failed to disclose breaches of sanctions over deals with Igor Sechin, chief executive of Russia’s state-controlled oil group Rosneft. Exxon responded with a lawsuit and an angry rejection of the Treasury’s allegations, describing Ofac’s action as “fundamentally unfair”. It accused Ofac of “trying to retroactively enforce a new interpretation of an executive order” inconsistent with guidance from the White House and Treasury. The lawsuit asks the court to deem the finding of sanctions violations “unlawful” and set it aside, as well as wipe away the $2m penalty. The oil group is seeking to permanently preventing Ofac from collecting further civil penalties related to the alleged offence. The dispute comes at a time of intense scrutiny of links between the US and Russia, prompted by allegations of Russian interference in last year’s election campaign to help Donald Trump become president. Ofac said on Thursday that presidents of Exxon’s US subsidiaries had violated sanctions by signing “eight legal documents related to oil and gas projects in Russia with Igor Sechin”, who had been designated as a sanctioned individual. It said the documents were signed in May 2014, a month after the sanctions on Mr Sechin and others were imposed.

The strange legal battle that is pitting Trump’s secretaries of the Treasury and State against each other

21 Jul 2017   Russia, USA

Russian President Vladimir Putin and then-ExxonMobil chief executive Rex Tillerson, right, attend a signing ceremony of an agreement between state-controlled Russian oil company Rosneft and Exxon Mobil corporation in 2012. At left is the CEO of Rosneft OAO, Igor Sechin. (AP Photo/RIA-Novosti) Two of President Trump’s most senior cabinet members became embroiled Thursday in an unusual legal battle over whether ExxonMobil under Secretary of State Rex Tillerson’s leadership violated U.S. sanctions against Russia. Treasury officials fined ExxonMobil $2 million Thursday morning for signing eight business agreements in 2014 with Igor Sechin, the chief executive of Rosneft, an energy giant partially owned by the Russian government. The business agreements came less than a month after the United States banned companies from doing business with him. Hours after the fine was announced, Exxon filed a legal complaint against the Treasury Department — naming Treasury Secretary Steven Mnuchin as the lead defendant […]

Russia boasts of Turkish gas pipeline progress

20 Jul 2017   Russia, Turkey

Russian energy company Gazprom is moving forward with developments of a gas pipeline through Turkey with shallow-water preparations, a spokesperson said. Russian energy company Gazprom said construction of a pipeline known variably as TurkStream or Turkish Stream started in May. Sergei Kupriyanov , a spokesman for the energy company, told Russia news agency Tass progress is still in the preliminary stage. “Only preparations are underway in shallow waters now,” he said. The pipeline’s route would mirror the now-abandoned South Stream project and run under the Black Sea to Turkey and then to the European market. South Stream was scrapped because of concerns about Russian business practices expressed by some European countries. Turkey, meanwhile, aims to capitalize […]

Russians worried about the cost of living

18 Jul 2017   Russia

With an economy tied strongly to the oil and gas export market, pollsters in Russia said there’s mounting concern about inflation and external shocks. Russia’s economy relies heavily on oil and natural gas exports and recent sector weakness, as well as Western sanctions, added to the strains of recession. The International Monetary Fund last week said emerging stability for oil prices meant the Russian economy had returned to growth, and gross domestic product was expected to expand by 1.4 percent next year. “With adverse demographics, and barring significant structural reforms that lifts productivity, potential growth is likely to stay at around 1.5 percent over the medium term,” the IMF’s report read. “The main risk to the outlook remains a fall […]

US Said to Stymie Japan’s Plan to Explore for Russian Oil

15 Jul 2017   Japan, Russia, USA

A Japanese group’s plans to explore for Russian oil with state-run Rosneft PJSC have been stymied by U.S. intervention over sanctions, according to people familiar with the matter. Washington’s objection to the Japanese project to explore for oil in the ocean off Russia’s Far East shows the U.S. Treasury is maintaining a firm line on sanctions, even as some international companies press on with Russian energy deals. In April, the U.S. turned down a request from Exxon Mobil Corp. for a waiver to allow it to drill with Rosneft in the Black Sea. Rosneft signed a preliminary deal with a Japanese consortium of Japan Oil, Gas & Metals National Corp., known as Jogmec, Inpex Corp., and Marubeni Corp. for offshore exploration at a license […]

Russia committed to oil price stability effort

10 Jul 2017   OPEC, Russia

Russian President Vladimir Putin says his country is committed to a multilateral effort to stabilize the energy markets through coordinated production declines. File Photo by Yuri Kadobnov/Pool/EPA July 7 (UPI) — Russia is committed to playing an active role in working with its oil-producing peers to reduce volatility in the energy market, the country’s president said. Russia is the largest contributor to a multilateral effort to balance an over-supplied market that’s not a member of the Organization of Petroleum Exporting Countries. It’s also one of the members of a steering committee that monitors the deal’s effectiveness, a committee that meets later this month in St. Petersburg. Russia’s contribution is vital to the arrangement , though the Kremlin offered mixed support for the agreement last year after publicly stating in 2015 that coordinating with OPEC was an unsavory proposal. Dmitry Peskov , a spokesman for the Russian president, told reporters […]

Russia Now Ready To Consider More Oil Output Cuts If Needed

10 Jul 2017   OPEC, Russia

Just a day after Russia’s Energy Minister Alexander Novak said that the OPEC/non-OPEC production cut pact was working and that there was no need to make immediate additional moves, an energy minister official told Russian reporters on Friday that Moscow was ready to review proposals from partners in the deal, including changes to production cuts. On Thursday, Minister Novak told Reuters in an interview that the output cut deal was working to reduce global oversupply and price volatility, and there was no need to make immediate additional moves to lift the price of oil. “We believe that it is necessary to move within the framework of the agreed decisions and that new, snap decisions are not necessary,” Novak told Reuters. The minister was echoing the words of four Russian government officials who told Bloomberg on Wednesday that Russia would oppose any attempts to deepen the oil production cuts currently […]

Russia’s Novak says global oil pact working, no new steps needed

7 Jul 2017   Prices, Russia

Russian Energy Minister Alexander Novak said a global pact by OPEC, Russia and other producers to cut oil output had dampened price volatility and was reducing bloated inventories, so no immediate extra measures were needed to prop up prices. The minister also told Reuters there was potential for an oil price rise from current levels and that $50 to $60 was “fair” value for a barrel, after benchmark Brent fell 20 percent in the first half of the year. It now trades at around $48. The Organization of the Petroleum Exporting Countries and other producers led by Russia agreed to cut production by almost 1.8 million barrels per day (bpd) from January this year to rein in inventories and support prices. The deal runs to March 2018. Despite the initiative, oil prices have registered their biggest first-half decline in almost two decades, as OPEC-led supply cuts have been undermined […]

Russian Energy Minister: No Additional Output Cuts Are Needed

7 Jul 2017   OPEC, Russia

While the oil market is increasingly questioning if OPEC/non-OPEC’s production cuts have any effect, Russia’s Energy Minister Alexander Novak weighed in on Thursday, saying that the production cut pact was working to reduce global oversupply and price volatility, and there was no need to take immediate additional moves to lift the price of oil. “We believe that it is necessary to move within the framework of the agreed decisions and that new, snap decisions are not necessary,” Novak told Reuters in an interview published on Thursday. “I think that the decisions that were taken, they were the right ones,” according to the Russian minister. Any new moves to prop up oil prices would create more “chaos” in the market, Novak told Reuters. The minister was echoing the words of four Russian government officials who told Bloomberg on Wednesday that Russia would oppose any attempts to deepen the oil production […]

Gazprom confident of $400bn Chinese gas supply

6 Jul 2017   China, Russia

Snaking across the forests, swamps and permafrost of eastern Siberia, Gazprom’s 3,000km-long pipeline is inching its way to the Chinese border to seal a $400bn gas pact that will bind together the world’s largest energy exporter and consumer.  The Power of Siberia gas pipeline, the first to connect Russia and China, will start pumping in December 2019, Gazprom said on Tuesday, paving the way for a 30-year supply agreement of more than 1.15tn cubic metres of gas for the Kremlin-controlled export monopoly.  “Gazprom, like our Chinese partners, is carrying the project out strictly on schedule, and I can even say ahead of schedule,” says chief executive Alexei Miller. “An agreement was signed today between Gazprom and [China National Petroleum Corporation] on the date to start supplying gas along the Power of Siberia pipeline. This is December 20 2019.”  Mr Miller’s affirmation is important. The project, which will cost Gazprom more than $55bn just to build the necessary infrastructure to get the gas flowing, is one of the most critical investments for Russia’s energy sector, which has targeted a long-term strategic supply link with China to match its market penetration in Europe.  “It is hugely important for both. For Gazprom, it basically opens up a huge, rapidly growing market. And more importantly, it allows them to monetise gasfields that otherwise would be left untouched,” says Kateryna Filippenko, senior research analyst at energy consultancy Wood Mackenzie. “For China, it provides stable, relatively cheap supply in the long term.”  Exports accounted for three-quarters of Gazprom’s revenues from gas sales last year, as the company ramped up output to offset a slide in prices. Gazprom supplies about a third of Europe’s gas, and plans new pipelines across the Baltic and Black seas to help defend that market share. But Power of Siberia gives it access to a vast new market. It is forecast to account for more than 12 per cent of a Chinese gas market that Mr Miller expects to reach 300bn cubic metres in the next few years.

Gazprom to start gas supplies to China via Siberia in December 2019

5 Jul 2017   China, Russia

Russia’s largest natural gas producer Gazprom will start supplying fuel to China through Siberia on Dec. 20, 2019, Gazprom Chief Executive Alexei Miller told reporters on Tuesday, after a meeting with China National Petroleum Company (CNPC). CNPC chairman Wang Yulin and Gazprom’s Miller met during this week’s visit to Moscow by President Xi Jinping and signed a China-Russia supplementary purchase and sale contract, the state-owned Chinese company said on its website on Wednesday. It did not provide further details. The deal is the latest sign that Russia is tightening its ties with China, a major gas buyer. It comes at a time of turmoil for rival major exporter Qatar amid a dispute with its Gulf neighbors who have imposed political and economic sanctions on Doha. The new […]

Germany Is Addicted to Russian Gas

New pipeline would cut costs of shipping gas to western Europe Hearing on local objections scheduled for later this month Hidden by pine forests near the deserted site of what was once East Germany’s biggest nuclear reactor, two shiny pipelines emerge from the Baltic Sea to mark the spot where Chancellor Angela Merkel is trying to secure the country’s energy future. Not far from the Hanseatic town of Greifswald — an area Merkel represents in parliament — the chancellor wants a $10 billion pipeline expansion built to increase the amount of Russian natural gas imported from Siberia, more than 3,000 kilometers (1,864 miles) away. Nord Stream 1 pipelines near Lubmin. The project, led by Russia’s state-run Gazprom PJSC , is intended to bolster German confidence that it has enough gas to underpin an unprecedented transition from the coal and nuclear plants, which are being closed, to a future dominated […]

Gazprom touts progress of Chinese gas pipeline

1 Jul 2017   China, Pipelines, Russia

Russian gas monopoly Gazprom chief Alexei Miller says he expects imminent development on a natural gas pipeline bound for the Chinese economy. File photo by Anatoli Zhdanov/UPI June 30 (UPI) — Russian natural gas company Gazprom expects to sign off on developments to increase its footprint in the Asian market, the company’s top executive said. “Today we’re finalizing the discussion of the exact schedule for the launch of supplies via the ‘eastern route’ in compliance with the contract,” Gazprom Chief Executive Alexei Miller was quoted by Russian news agency Tass as saying. “The plan is to sign the relevant document in nearest days.” The eastern route refers to the so-called Power of Siberia natural gas pipeline. Gazprom has a 30-year sales agreement with China National Petroleum Corp. that calls for 1.3 trillion cubic feet of natural gas per year through the pipeline. Russian President Vladimir Putin described the 2,500-mile […]

Russia’s Rosneft set for global gas tussle with Gazprom

1 Jul 2017   LNG, Russia

Russia’s Rosneft, the world’s top listed oil producer, wants to supply gas in parts of Europe where Gazprom is not present to avoid the risk of losing those markets to U.S. liquefied natural gas (LNG), a Rosneft executive said. Gazprom, the leading global gas producer, enjoys monopoly rights on gas pipeline exports from Russia. It has lost its exclusive rights to ship seaborne LNG overseas to Rosneft and Novatek, Russia’s largest non-state gas producer. Rosneft, headed by Igor Sechin, an ally of President Vladimir Putin, has long been vying for pipeline gas exports as it strives to grow globally. It has a memorandum with BP, which owns a 19.75 stake in the Russian company, to trade up to 20 billion cubic meters (bcm) of gas annually […]

Rosneft in talks to develop disputed oilfields with Iraqi Kurdistan

30 Jun 2017   Iraq, Russia

Russia’s state-controlled oil company is in discussions with Iraqi Kurdistan over helping it develop oilfields in disputed territory at the heart of tensions with Baghdad, in a move that pitches Moscow into one of Iraq’s oldest faultlines. Rosneft, in which the Kremlin holds a controlling stake, is examining several exploration blocks and existing fields in disputed territory under Kurdish control, according to three people familiar with the talks. They include sites near the oil city of Kirkuk and close to the Syrian border, areas formerly under Baghdad’s rule. The move is the latest suggestion that Moscow is using Rosneft to bolster a more aggressive foreign policy stance in the Middle East, as the Kremlin moves to cement new political alliances with deeper economic ties. In the past year Rosneft chief executive Igor Sechin — a close ally of Vladimir Putin, the Russian president — has signed deals to buy oil from Libya and the Kurdistan Regional Government and sold a sizeable stake in the company to Qatar. The talks between Rosneft and the KRG over exploration and production were at an early stage and no concrete deal had yet been reached, the people familiar with the discussions said.

No problem, Russian oil company says after cyberattack

29 Jun 2017   Russia

Russian oil producer Rosneft, one of the first to admit its systems were hit by Tuesday’s cyberthreat, said production was unaffected by the attack. Rosneft said Wednesday its operations were proceeding as usual after it switched over to a reserve control system following a cyberattack that swept across most of Europe. “The company works as usual [and] the situation is under control,” it said through its official Twitter account. “It is premature to evaluate the cyber attack impact.” The large scale hacker attack has not affected the Company production processes. There are particular issues, that are resolved promptly. — Rosneft (@RosneftEN) June 28, 2017 The ransomware cyberattack from the so-called Petya or NotPetya bug targeted thousands of government and private corporate […]

13 Of 28 EU Nations Support Intervention In Nord Stream 2 Deal

27 Jun 2017   Pipelines, Russia

The European Union should negotiate the terms of the North Stream 2 pipeline, which would double the existing pipeline’s capacity to bring Russian gas to Europe, according to 13 of 28 nations in the continental bloc, a new Reuters report said. “We had 13 delegations intervening, with all of them being supportive of the Commission’s approach,” Commission Vice President Maros Sefcovic told Reuters by phone. “I am definitely optimistic about getting the mandate, but I know this is just the beginning of the debate.” Germany, which would be the direct recipient of the new energy supplies, strongly supports the pipeline expansion, but some of Berlin’s allies spoke against the project, citing the leverage it would add to President Vladimir Putin’s geopolitics, especially regarding Ukraine. Berlin believes the European Commission does not need to play a part in negotiations with Russia, because the project is only a commercial enterprise. Italy, […]

Rosneft aims to export Egyptian natural gas

24 Jun 2017   Egypt, Russia

Russian energy company Rosneft is expected to start exporting natural gas from an Egyptian field considered to be among the world’s largest. Eni made its initial gas discovery in the Zohr field in Egypt two years ago and quickly described it as the largest ever made in regional waters and potentially the largest in the world. Egypt aims to become a regional hub for gas and liquefied natural gas, though availability at the domestic sector could complicate growth. In December, the Italian company sold off a 30 percent stake in the Egyptian basin to Rosneft in an agreement valued at about $1.6 billion. A source close to the company was quoted by Russian news agency Tass as saying Rosneft aims to deliver gas to regional […]

Russian Maritime Oil Exports Fall For First Time In 2017

23 Jun 2017   Russia

Russia exported 4.822 million bpd of crude oil by sea in May, down from a record 5.21 million bpd in the previous month, energy data provider Kpler has said, adding that this is the first monthly decline in Russia’s crude oil exports this year—another tentative gleam of hope for oil bulls, after the Energy Information Administration yesterday reported a 2.5-million-barrel decline in crude oil inventories. What’s more, Kpler says, this month should see another draw in Russian exports. The data provider sees them, based on loadings until now, at between 4.2 million and 4.4 million barrels daily. This, the company notes, is the lowest since August 2016. Further falls are also likely: preliminary loadings data seen by Reuters suggests that loadings from Russian ports on the Baltic Sea are set for a decline in the first 12 days of July. The decline is seen at 300,000 tons of crude, […]

Russia claims new oil field discovered in the Arctic

20 Jun 2017   Arctic, Russia

Preliminary data indicate a new oil field has been discovered in an area said to hold at least a dozen promising reservoirs, Russian oil company Rosneft said. Rosneft said three core samples from the Tsentralno-Olginskaya-1 well in the northern Laptev Sea showed “high oil saturation.” “On the basis of primary studies already, it can be concluded that a new oil field has been discovered, the volume of the resource potential of which is increasing as the drilling continues,” the company said in a statement . The well was the first drilled into the area by Rosneft, which holds 28 licenses in the Russian Arctic. The company boasted that it’s success in the region has been “excellent” so far and said the preliminary […]

US oil groups feel Russia sanctions freeze more than Europeans

20 Jun 2017   Russia, USA

Russian President Vladimir Putin this month made an emotional tribute to Christophe de Margerie, the former boss of France’s Total who was killed in an accident in 2014.  At the launch of a new gas tanker named after Mr de Margerie, Mr Putin declared him a “great friend of our country”, a sentiment that extends to many executives at Total’s European oil and gas peers.  While US energy groups stepped back from Russia in response to a sanctions regime that Washington lawmakers moved to tighten this month, rivals in the EU have held fast, ducking through loopholes in Brussels’ restrictions to keep joint ventures running.

Elizabeth Rosenberg, a sanctions expert formerly at the US Treasury and now with the Center for a New American Security, points to the “regulatory arbitrage” between the EU and US sanctions. “US firms see an uneven playing field,” says Ms Rosenberg. Since the collapse of the Soviet Union, Russia has been a glittering prize for foreign oil companies. With proved reserves of 110bn barrels of oil and 32tn cubic metres of gas, according to BP, it is one of the world’s largest holders of economically producible hydrocarbons.Sanctions slapped on Moscow in 2014 by the US, EU and other countries in response to Russia’s invasion of Crimea were aimed at cutting off the development of its new oil frontiers from western help.

Russia’s Rosneft says oilfield discovered offshore Eastern Arctic

19 Jun 2017   Russia

Russia’s largest oil producer Rosneft said on Sunday it had found an oilfield in the Laptev Sea in the eastern Arctic. “The result of the drilling at the Khatanga license block allows Rosneft to be considered the discoverer of (oil) fields in offshore Eastern Arctic,” the company said in a statement. (Reporting by Vladimir Soldatkin; Editing by Mark Potter)

Are Russia And The Saudis Planning A Natural Gas Cartel?

The fledgling production cut strategy of OPEC (Saudi Arabia) and non-OPEC (Russia and the FSU) shows that a new strategy is needed to counter the ongoing doubts in the markets. At the same time, Russia and Saudi continue to give indications of a possible OPEC 2.0 scenario, in which a possible Russian membership is on the table. This would confront the market with a renewed and stronger oil cartel, although the overall strategies need to be adjusted. At the same time, Saudi Arabia, via its oil giant Aramco has openly stated to be interested in global gas investment opportunities, starting in Russia’s Siberian region. While the media still looks at the current discussions as a pure crude oil cooperation strategy, some see another development on the horizon. The real power of OPEC, non-OPEC cooperation would increase if they would not only include a crude oil production cut, but also […]

Russia’s Central Bank sees mid-term risk from oil prices

17 Jun 2017   Russia

Russia’s Central Bank cuts its key lending rate, saying there are mid-term risks present from lower-than expected crude oil prices. File photo by DyMax/Shutterstock June 16 (UPI) — Crude oil prices are lower than expected following a decision to extend an OPEC-led production deal, presenting a risk to growth, Russia’s Central Bank said. Contrasting a decision from the U.S. Federal Reserve this week to raise its rates, Russia’s Central Bank said Friday it was cutting its key rate to 9 percent annually. “Mid-term risks remain elevated,” the bank’s press secretary said in a statement . “First, they are connected with the further dynamics of oil prices, which [under the agreements reached] began to take shape at a lower level than expected.” Russia is party to an agreement led by the Organization of Petroleum Exporting Countries to offset supply-side strains by trimming production. Russia is the largest contributor among non-OPEC […]

Russia’s Central Bank Sees Oil Prices Down To $40 In 2018-2019

17 Jun 2017   -, Prices, Russia

In view of the current price movements and the oil market outlook, Russia’s central bank is keeping its oil price forecast for this year at US$50 per barrel, and still believes that the price of oil will drop to roughly US$40 in 2018-2019, Bank of Russia Governor Elvira Nabiullina said in a statement on Friday, after the bank cut the key interest rate to 9 percent annually. Although the pace of economic recovery has somewhat exceeded the Bank of Russia’s expectations, medium-term inflation risks remain in place, governor Nabiullina said. In the medium-term, “ The external economic situation will likely remain unstable, as confirmed by the volatility of oil prices. We do not rule out that [oil] production in the US will grow and other countries, which are not parties to the agreement, will expand their supplies to the global market. Demand-side risks are also in place. They result […]