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    Russian Oil and Gas Industry: News

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    Vladimir79

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    Signs of Russian economic recovery

    Post  Vladimir79 on Fri Nov 20, 2009 6:51 am

    Gazprom: Russia Gas Demand In Nov Up 8% On Year

    MOSCOW (Dow Jones)--Russian domestic demand for natural gas so far in November is 8% higher than in the same period last year, the country's state-controlled gas company OAO Gazprom (GAZP.RS) said Wednesday.

    "We see stable growth in demand in Russia," Gazprom's Chief Executive Alexei Miller said.

    Gazprom also expects "significantly higher" European exports in November compared to November last year, Miller said.

    Company Web site: www.gazprom.ru

    Austin

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    Russian Oil and Gas Industry: News

    Post  Austin on Sat Dec 18, 2010 9:28 am

    Russia Energy Data - Oil, Gas, Electricity,Coal ( November 2010 )
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    GarryB

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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Sun Dec 19, 2010 1:06 am

    Ironic really.

    After over a century of ensuring international dependency on fossil fuels... because western countries controlled the main sources so it was a cheap energy supply for the west, the fact that Russia has reserves of gas and coal and oil will likely lead the west to suddenly start properly investing in alternative energy technologies.
    Ironically China has invested in this area and has been criticised by the US... it seems they want to develop new clean energy technologies and sell them to everyone else... they don't want China to beat them to the goal.
    Their likely reasoning for developing alternative energy sources is not because of a shortage, or to reduce pollution, but to prevent Russia from making too much money from energy exports.

    Smile Just because I am paranoid it doesn't mean the western world isn't out to get Russia. Smile
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    IronsightSniper

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    Re: Russian Oil and Gas Industry: News

    Post  IronsightSniper on Sun Dec 19, 2010 2:17 am

    Well with all that land out back (Eastern Siberia), you can do what I always suggest and build Algae plantations or Solar farms and the like. That's probably the only thing Russia has on the rest of the world, large pieces of uninhabited land, because otherwise we'd have to shove Las Vegas out of the way for new Solar farms Very Happy Either way, Energy is going to be the only thing driving Russia's economy for a few decades, so I'd suggest they start diversifying now when there'll be a time when Fossil fuels are null and void. Rusnano seems quite promising too, but they'll need more than nanotech to expand their Economics. One trivial way for me to see what countries are not at the peak of their economies is their Export/Import ratios. For example, we in the U.S., and they in China, are importing more USD worth of goods than we are exporting. Russia on the other hand, is Exporting almost a $100b USD more than they are Importing.

    Austin

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Fri Apr 08, 2011 6:11 pm

    Russias Oil Income to Reach USD 40.37b

    Oil price: no panacea for Russia

    Russia Stocks Soar on Rising Oil Prices

    Austin

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Sun Apr 10, 2011 6:48 pm

    Russia’s Ivanov ‘Not Happy’ With Oil Above $100, Prefers $80

    Oil prices above $100 a barrel are discouraging Russia from diversifying its economy, Deputy Prime Minister Sergei Ivanov said.

    Ivanov said the current price was unsustainable and that Russia’s budget will fall into a deficit when it drops. He would prefer oil and gas prices to be “around maybe $80 per barrel,” which is a “more realistic” level.

    “When the gold rain is pouring on your head, you are not motivated to diversify,” Ivanov said in an interview yesterday in Miami, where he was speaking at the Everest Capital Emerging Markets Forum. “I wouldn’t say I hate high oil and gas prices, but I am not happy with them.”

    Oil today climbed above $111 in New York for the first time in 30 months. Crude for May delivery rose $1.25, or 1.1 percent, to $111.55 a barrel at 11:10 a.m. on the New York Mercantile Exchange.

    Higher oil prices have helped boost Russia’s international reserves to $504.5 billion, the most since 2008. The cost of protecting Russian bonds against default also fell to its lowest level yesterday since August 2008, according to data provider CMA.

    Once prices fall, running a long-term budget shortfall is not an option for Russia, Ivanov said. “We can’t live for long with a deficit budget. We are not like the” U.S., he said.
    Space, Nuclear

    He said that even with high oil prices, the country was taking steps to diversify, including investing in technology industries, space and aviation programs, and nuclear energy.

    Ivanov stopped in Miami after meeting with U.S. Secretary of State Hillary Clinton, Trade Representative Ron Kirk and several lawmakers to discuss Russia’s entrance into the World Trade Organization.

    The “political window of opportunity” for Russia to enter the WTO may “start to close down” at the end of the year as the U.S. and Russia enter election years, Ivanov said. He is hopeful an agreement will be reached before then, he said.

    Ivanov said Russian arms exports, which doubled to $10 billion in 2010 over the previous five years, may rise to $10.6 billion to $11 billion this year.

    Ivanov, 58, was appointed first deputy prime minister in 2007 after serving as the country’s defense minister since 2001, according to the Russian government’s website. The former KGB officer was regarded as a potential successor to then-President Vladimir Putin before the 2008 election.

    Ivanov also said he would resign as chairman of the board of Rosavtodor, a federal toll-road operator, and United Aircraft Corp., an airplane manufacturer, after Russian President Dmitry Medvedev called for government officials to step down from their posts at state-owned companies and be replaced by independent directors.

    “I will leave with a light heart because apart from those two boards I have lots of other fish to fry,” he said. Whether the independent directors will improve corporate governance “remains to be seen” he said.

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    Russian Patriot

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    Re: Russian Oil and Gas Industry: News

    Post  Russian Patriot on Sun Apr 10, 2011 8:02 pm

    Austin wrote:
    Russia’s Ivanov ‘Not Happy’ With Oil Above $100, Prefers $80

    Oil prices above $100 a barrel are discouraging Russia from diversifying its economy, Deputy Prime Minister Sergei Ivanov said.

    Ivanov said the current price was unsustainable and that Russia’s budget will fall into a deficit when it drops. He would prefer oil and gas prices to be “around maybe $80 per barrel,” which is a “more realistic” level.

    “When the gold rain is pouring on your head, you are not motivated to diversify,” Ivanov said in an interview yesterday in Miami, where he was speaking at the Everest Capital Emerging Markets Forum. “I wouldn’t say I hate high oil and gas prices, but I am not happy with them.”

    Oil today climbed above $111 in New York for the first time in 30 months. Crude for May delivery rose $1.25, or 1.1 percent, to $111.55 a barrel at 11:10 a.m. on the New York Mercantile Exchange.

    Higher oil prices have helped boost Russia’s international reserves to $504.5 billion, the most since 2008. The cost of protecting Russian bonds against default also fell to its lowest level yesterday since August 2008, according to data provider CMA.

    Once prices fall, running a long-term budget shortfall is not an option for Russia, Ivanov said. “We can’t live for long with a deficit budget. We are not like the” U.S., he said.
    Space, Nuclear

    He said that even with high oil prices, the country was taking steps to diversify, including investing in technology industries, space and aviation programs, and nuclear energy.

    Ivanov stopped in Miami after meeting with U.S. Secretary of State Hillary Clinton, Trade Representative Ron Kirk and several lawmakers to discuss Russia’s entrance into the World Trade Organization.

    The “political window of opportunity” for Russia to enter the WTO may “start to close down” at the end of the year as the U.S. and Russia enter election years, Ivanov said. He is hopeful an agreement will be reached before then, he said.

    Ivanov said Russian arms exports, which doubled to $10 billion in 2010 over the previous five years, may rise to $10.6 billion to $11 billion this year.

    Ivanov, 58, was appointed first deputy prime minister in 2007 after serving as the country’s defense minister since 2001, according to the Russian government’s website. The former KGB officer was regarded as a potential successor to then-President Vladimir Putin before the 2008 election.

    Ivanov also said he would resign as chairman of the board of Rosavtodor, a federal toll-road operator, and United Aircraft Corp., an airplane manufacturer, after Russian President Dmitry Medvedev called for government officials to step down from their posts at state-owned companies and be replaced by independent directors.

    “I will leave with a light heart because apart from those two boards I have lots of other fish to fry,” he said. Whether the independent directors will improve corporate governance “remains to be seen” he said.


    Finally we realize this.. it took 20 years of bad management by the liberals.
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    GarryB

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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Mon Apr 11, 2011 4:24 am

    What a sourpuss that guy is.

    They should be taking advantage of the extra revenue to make some things happen quicker.

    All the diversification programs should benefit from the extra investment, plus at a time when European countries are being forced to adopt austerity measures Russia should be glad it is getting extra income that can be put into education, and health and infrastructure, and invested in new tooling or new equipment to make diversification easier and quicker.

    Don't ignore the silver lining and see clouds.

    Austin

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Mon Apr 11, 2011 6:12 am

    Ivanov has not known to be a reformer or some one who can bring in new ideas , no wonder he was not chosen to succeed Putin although he was a very strong candidate and Putin loyalist , I think he still holds the position that he does because he is a Putin Loyalist.

    Having said that he is also a system man and knows how the system thinks its strength and weaknesses , he must have seen through his long stay that more money just makes the system go easy and it gets lethargic to reforms , lets hopes thats not the case.

    They can use that extra dollar and save it for bad days or use it for health care , reforms , education and infrastructure to improve peoples life , More money is not bad as long as they are wisely used.

    I would assume if there is some problem in Saudi , Oil Prices will sky rocket, probably right time for Iran to pay in kind and support movements in saudi Smile
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    GarryB

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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Mon Apr 11, 2011 9:15 am

    No point in doing anything now while the price of oil is high.

    Wait till it starts falling again and then do something.

    Having oil 200 dollars a barrel is not good for Russia either.

    For the moment while Russia is not part of the WTO it can subsidise the price of energy for its own people and any lackeys that can earn that privilege.

    Austin

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Mon Apr 11, 2011 9:24 am

    GarryB wrote:No point in doing anything now while the price of oil is high.

    Wait till it starts falling again and then do something.

    I disagree , reforms should go on in a planned manner irrespective if oil prices are high or low , they should push for privatisation and reforms as planned.

    The fear that Ivanov is expressing is they may just slow reforms if prices are high there by affecting the plans to reduce budgetary dependency on oil dollars.

    Having oil 200 dollars a barrel is not good for Russia either.

    Oil prices are manipulated by US and OPEC to keep it low , so if the oil prices rises based on demand and supply no one should complain.

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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Mon Apr 11, 2011 6:00 pm


    I disagree , reforms should go on in a planned manner irrespective
    if oil prices are high or low , they should push for privatisation and
    reforms as planned.

    Hahahaha... privatisation is the solution is it?

    What a freakin joke privatisation is here.

    The government used to control the electricity generation and delivery and also the telecommunications network.

    Then another government got into power and the economy wasn't so good and the brilliant solution was to privatise stuff.

    Telecom was the first thing to get sold and we were told it was OK because ma and pa investors in NZ would buy it and everything would be ok.

    What actually happened was that NZers were initially sold shares but eventually foreign companies made offers and bought up majority share holdings and now Telecom is foreign owned.

    The initial price was something pathetic... and in their first year of operation they fired all the staff and rehired the 1/3rd that were actually doing the work and made that one third do the work of all the workers laid off.

    Prices didn't go down, they went up... because the next thing they did was allow competition and blamed Telecom for having a monopoly because it owned all the lines and infrastructure... not really a surprise... they did have to buy it.

    Now competition has pushed prices up, not down.

    It is even worse with electricity... here in New Zealand we have a few hydro electric dams and in the far north some dirty coal fired power stations. Way back when it was all government run it was fine... use hydro and only fire up the dirty coal plants when the lake levels were low.
    Now that all the power stations and power lines have been sold the coal fired stations run all the time because the company that owns them doesn't own the hydro power stations and only makes money when coal is burning...
    Workers are fired and a skeleton staff are rehired for the same or less pay to do the work of all the people fired and their own work.
    Money is saved by not doing maintainence and when lines go down they just cut the power.

    Trust me... privatisation is only good when it goes so far... the reality is that private companies can fu#$ things up just as easily as any government department, but private companies are not as publicly accountable as a government department is.

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Tue Apr 12, 2011 6:12 am

    Well privatisation does not mean the Government has to sell the entire stake to private investors but it can part sell and diversify its equity , for eg if the government owns 100 % in Power Trans mission and Distribution , it can sell 49 percent stake to private players and keep the 51 % as majority holders or do it vice or verse.

    That would help government raise money and improve its performance in such organisation by bringing in competition , sure people would be fired because they could be over staffed or not working to its full potential.

    I can tell you from my experience in India privitisation has done wonders , I remember a time when all banks were government owned and depositing money in a bank or withdrawing it would be half a day job with long queues and poor work ethics.

    With the entry of private players in banking sector in the market , they have brought a very welcome relief , although government still owns most of the banks 100 % , there is a big difference in the way bank work these days ,compared to how they used to 15 years back because of competition that private players brought in , it simply made government bank work more efficient and be more responsive to customers.

    Another example is power supply , with the coming in of private player prices have gone up but services are much better and then there is more than one player in one city or couple of them in city that brought in competition between them.

    The same goes for telecom revolution in my country , I remember we got out first phone after 3 years of applying for it like 20 years back and 3 years was considered quick other wise they would normally take 5 ! these days you could get a phone within a day and get connected. thanks to privatisation that made the change.

    Same with out government postal service , they used to very inefficient but with private courier service like DHL and many other things have gone better and today I have a choice.

    I can give you many such example how privitisation has done more good than bad to my country and even today the most ineffecient sectors in my country are the government owned one.

    Russia too would have its own experience with its drive , as long as its done via competitive bidding process and fair play .Russia and Russian people in general in the long run would gain more from it and loose less.

    I always believed Government should do pump in money where it should like infrastructure , education , health care and some strategic sectors for the rest they can be completely privately owned by many players or jointly owned by government and private players.
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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Tue Apr 12, 2011 7:09 am

    Well privatisation does not mean the Government has to sell the entire
    stake to private investors but it can part sell and diversify its equity
    , for eg if the government owns 100 % in Power Trans mission and
    Distribution , it can sell 49 percent stake to private players and keep
    the 51 % as majority holders or do it vice or verse.

    Most of the time that merely results in foreign interests owning large portions of your most profitable companies for a reduced return.

    Sell off non strategic non infrastructural assets of course, but market forces have proved to be unreliable because the focus is making a profit and most of that profit heads overseas.

    In practical terms privatisation means selling off assets for a short term gain... and considering the price of oil at the moment that is not really necessary.

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Tue Apr 12, 2011 1:07 pm

    Russian Oil A Strategic Alternative Amid Middle-East Turmoil

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Tue Apr 12, 2011 1:37 pm

    GarryB wrote:
    Most of the time that merely results in foreign interests owning large portions of your most profitable companies for a reduced return.

    Sell off non strategic non infrastructural assets of course, but market forces have proved to be unreliable because the focus is making a profit and most of that profit heads overseas.

    In practical terms privatisation means selling off assets for a short term gain... and considering the price of oil at the moment that is not really necessary.

    Well Privatisation is good in some sectors because it induces competition , why do you think India managed to grow its economy so rapidly , how do you think China did , due to reforms and privatisation.

    You can have a russian partner and a private player working in tandem for privatisation , ofcourse companies works for profit no body wants to start a business or be in it to make losses , only the government might do so due to ineffeciency and guess what they end up spending more public money to take care of sick unit.
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    GarryB

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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Wed Apr 13, 2011 3:09 am

    Well Privatisation is good in some sectors because it induces
    competition , why do you think India managed to grow its economy so
    rapidly , how do you think China did , due to reforms and privatisation.

    Hahahaha... you really think that?

    First of all I would say that privatisation of some things makes a lot of sense... the Government has no business making toothpaste or baking bread.

    Controlling a countries power grid however is the business of the Government... and in modern times in many ways is a licence to print money because here in NZ it was taxpayers money that built the huge hydro electric dams that generate power with its main fuel a renewable resource called water.

    All they have to do is keep the dam maintained and it is a licence to print money. All the power lines are in place, they don't need to build anything substantial, they don't even need to compensate the people whose land is now under water in the lake they created cause that was all done when the government built the dams.

    It is like spending a small fortune on a person training them and teaching them and getting them to the point that they will be a very productive worker for 30-50 years and then selling them for one years wages.

    That one years wages is a nice short term cash injection that makes the books for this year look really good, but after two years whomever you sold them to is already making more than what they paid for him each year in earnings.

    Most politicians claim they need to be paid what they would be paid if they were in an equivalent business job to keep them happy... how about we make them work the same and also make the performance of their department decide their wage level.

    All the advantages of privatisation without selling to overseas interests.

    You can have a russian partner and a private player working in tandem
    for privatisation , ofcourse companies works for profit no body wants to
    start a business or be in it to make losses , only the government might
    do so due to ineffeciency and guess what they end up spending more
    public money to take care of sick unit.

    Selling food or furnature it makes sense to make a profit, but why would your focus be for profit in education or health?
    Efficiency is one thing, but service to the customer in private business is usually to justify the higher costs... it is the reason for first class service and costs and economy service and costs... such things certainly make sense in the private sector so that those that can and want to afford a better service can do so... it makes no sense in Health or Education. Unless you think there are people that deserve better treatment because of their political or economic or social situation.
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    Vladimir79

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    Re: Russian Oil and Gas Industry: News

    Post  Vladimir79 on Thu Apr 14, 2011 2:47 am

    Austin wrote:

    Well Privatisation is good in some sectors because it induces competition , why do you think India managed to grow its economy so rapidly , how do you think China did , due to reforms and privatisation.

    China managed to grow rapidly by encouraging sweat shops.

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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Thu Apr 14, 2011 10:58 am

    China managed to grow rapidly by encouraging sweat shops.

    Very good point.

    The way the US "used" China to get at the Soviet Union... who are we kidding... to get at Russia, you'd think there was no problem at all with communism in the first place.

    The real issue was that Russia was a potential rival to US dominance... which is ironic because as a communist state having to carry most of the other soviet republics and eastern europe and most of its client states around the world were generally poor as well... the end of communism and the breakup of the warsaw pact and the soviet union will likely be very good for Russia in the long term.

    Without communism it has not ideology to spread... it can just do business.

    I will repeat I have no problems in privatisation of some things, but in areas of Russian strategic interests like its mineral and energy wealth and infrastructure I think the government should retain some control.

    In areas where profits are good why share it with the private sector?

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Thu Apr 14, 2011 12:26 pm

    GarryB wrote:In areas where profits are good why share it with the private sector?

    The reasons why private sector is invited even when profits exists

    1 > New Project or Existing Projects needs vast amount of funding and even there could be potential risk involved for eg you may have an estimate of oil in some area but there is always uncertainity and you may want to involve a private player to risk share it , you may not have all the fund necessary to complete the project.

    2 > Technology , government may not have modern technology to do things which big private multinational may have , for eg the new BP-Rosneft deal to drill in the arctic where BP has the technology to obtain maximum oil/gas in deep arctic below the ice , something the Russian controlled companies dont.

    3 > Besides Technology and Financial Risk sharing , there is also an issue of market reach , brand value involved that comes into the picture that only big multinational can bring in.

    So in many ways privatization does help even if there could be government controlled companies thats running in profit. Hence government tends to part sell its share for the above mentioned reason and its happening in India in many strategic sectors including the profit making

    Austin

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Tue Apr 19, 2011 1:02 pm

    Gazprom to produce 200 bln cu m of gas a year under new offshore program to 2030

    Gazprom will produce 200 billion cubic meters of gas and 10 million metric tons of oil in a new hydrocarbon development program for the Russian continental shelf to 2030 approved by the energy giant's board of directors, Gazprom said on Tuesday.

    The adjusted program adopted by the Gazprom management committee in early March, projects an increase in Gazprom's offshore deposit reserves by over 11 billion metric tons of fuel equivalent to 2030 and also excludes the energy giant's gas output under the Sakhalin-II oil and gas project off Russia's Pacific Coast.

    Total hydrocarbon reserves on Russia's continental shelf are estimated at about 100 billion metric tons of fuel equivalent, of which gas accounts for about 80 percent. The larger part of hydrocarbon reserves (over 80 percent) are concentrated in the Barents, Pechora, Kara and Okhotsk Seas. Offshore deposits in the Barents and Kara Seas abound in gas and gas condensate while the Pechora Sea largely contains oil and the Okhotsk Sea has oil and gas reserves.

    The company's plan for the Barents Sea includes development of the infrastructure of the giant Shtokman gas condensate deposit and its satellites. The firm also plans efforts to develop the Prirazlomnoye and Dolginskoye oil fields in the Pechora Sea.

    Operations in the Severo-Kamennomysskoye and Kamennomysskoye Sea fields offshore the Ob and Taz Bays will lay the foundation for developing a field cluster. The Sakhalin shelf will see comprehensive development of fields located within Gazprom's licensed areas (Sakhalin III project), the energy giant said.

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Wed Jun 01, 2011 8:50 am

    Russian Gas Beckons for Germany as Merkel Turns From Nuclear
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    Re: Russian Oil and Gas Industry: News

    Post  GarryB on Thu Jun 02, 2011 7:06 am

    It is funny that Russia gets criticised for being so focused on Energy exports, and of course diversification is a good thing but the basic facts of life are that everyone needs energy and the more sophisticated your country is in many ways the more dependent it is on some form of energy source.

    When the Ukraine was stealing gas from european customers the Europeans blamed Russia and when Russia decided to invest billions creating alternative pipelines to prevent it from happening the Europeans jumped up and down about the monopoly Russia has with energy imports into Europe.

    The Europeans had the balls to demand Russia sell parts of its energy delivery infrastructure... which it built and maintained... now if a western company buys the pipes cheap and decides to make maximum profit by taking transit fees but not spending money on maintainence when the energy fails to get to the customer you can be sure the Europeans will blame the Russians for not delivering.

    Then the Europeans got all high and mighty and decided they would reduce their dependence on Russian energy exports (exports by the way that remained stable throughout the cold war) by looking at more nuclear power generation.

    Sounds like the problems in Japan have reminded them that there are worse things that being dependent on natural gas.

    The huge irony is that most rubbish dumps around the world generate enormous amounts of methane that simply escapes into the atmosphere.

    Personally I think the Russians should build a few oil refineries and produce their own fuel and stop exporting crude, and in gas they should develop and produce liquid natural gas and deliver it by super tanker... the profit margins on refined fuels like LNG and petrol are much higher than for the raw gas and crude oil.

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Thu Jun 02, 2011 12:03 pm

    Gazprom to boost LNG supplies to India

    Russia’s state-run energy giant Gazprom is set to increase its liquefied natural gas (LNG) deliveries to India up to 7.5 million tonnes per year.

    The LNG will come from Gazprom`s plant on the Pacific island of Sakhalin.

    The sides are expected to sign a respective 25-year contract in the coming months.

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    Re: Russian Oil and Gas Industry: News

    Post  Austin on Thu Jun 02, 2011 12:33 pm

    China and Russia on the way to energy cooperation

    Russian Deputy Prime-Minister Igor Sechin said on Tuesday following the seventh round of the China-Russia energy negotiators’ meeting that Russia will finalize a 30-year deal with China by the 10th of June to supply a total of 68 billion cubic meters of gas annually. Commenting on this will be our guest Neal McKinnon, global macrostrategist at VTB Capital in London.

    As we know, Russia and China have enjoyed a close economic relationship since the middle of 2000s, so how would you describe the economic cooperation between these two countries at present?

    I think there is a significant degree of economic cooperation between China and Russia; both countries have been key leaders in terms of economic growth over the last year or two years, as far as the global economy is concerned, and both countries are key commodity producers and certainly in recent years there has been increase in cooperation in terms of joint ventures, trade relationships, and investment relationships between Russia and China.

    Russian Deputy Prime-Minister Igor Sechin who oversees energy issues in the government, says that Gasprom and Chinese national petroleum cooperation will soon prepare a commercial contract, adding that the deal span will be at least 30 years. But as we know so far the bodies have failed to reach a final agreement on gas prices, so what results can be expected?

    Certainly I think that it is very positive that there are these negotiations taking place. And certainly the issue with the natural gas prices is an important one, I think that the current discussions can make progress, there are also discussions under way in other countries as well, and certainly with the very large increase in oil prices that we have seen over the past year – that means that natural gas prices, which tend to follow the price of oil, are an important linkage. I am certain at the moment that there are countries’ meeting in Egypt, tomorrow one day meeting of the gas exporting countries and these discussions on the relationship between natural gas prices and oil prices are certainly high on the agenda, and it is likely that contract prices will probably rise by around 15% in the next 3 or 6 months. So the price of gas is going up and it is certainly an important consideration for any discussions between the leading gas producing companies.

    Russia and China may also reach an agreement by the end of 2011 to build a joint oil refinery and as China’s energy chief said the countries planned to extend cooperation in retail oil products sales, so how do you think this cooperation is going to develop?

    I think that certainly it is not surprising that there are these discussions. China is an important commodity demander globally, giving the move towards organization and modernization of the Chinese economy. China is certainly a big buyer of oil, it has been increasing its storage capacity because if the very large additions to the power network in China, so it makes commercial sense for Russia to have these discussions, for Russia is an important producer, and certainly I think it is very constructive, I would hope, that before too long we will see some progress that will be to the advantage of the Russian economy.

    Some experts believe that Beijing sees its giant neighbor to the west rather as a little more than a source of energy and other commodities to feed China’s rapidly growing economy, and the economic relationship between Russia and China is unlikely to change any time soon. Can you comment on it?

    I think that it is important to remember that both Russia and China are important economies on the world basis, they both enjoyed fairly significant economic growth and now they play an important role in the production of commodities particularly oil and gas. I think that going forward it makes sense to try to improve the trade relationship; I think both countries will benefit from that. I would hope that certainly over the next 12 months or so we will see important progress on all these discussions.

    Russian politicians declare from time to time that the country seeks to totally re-orientate its natural gas exports away from Europe towards China, but this doesn’t seem realistic at this point as Gasprom is bound by long-term commitments to western customers. What do you think of that?

    Certainly there is no doubt that western European countries like Germany, for example, are important customers for Gasprom and for Russian commodity and energy producers generally, it is highly unlikely that this relationship is going to change, Germany is an important economy, and certainly the strongest manufacturing economy in western Europe, so it makes sense for Russia to maintain its relationship in the same way that it makes sense for Germany to ensure that there is continuing supply. But China is clearly a growing economy, and a very important economy, and it also makes sense for Russian companies like Gasprom to look towards China in order to build commercial relationships. I don’t think that these are mutually exclusive considerations, I think it makes perfect business sense to try and expand business generally and look towards the new growing economies like China that will be profitable for Russian companies in the long-term.

    Can Russia consider Chinese companies as an alternative to BP as we know that the deal between BP and Rosneft collapsed earlier in May, and now Rosneft has to look for another partner?

    This is a very good question. It certainly is a possibility that Chinese partners could step into the breach; certainly there is no particular reason why it is a problem. It is always up to the two parties involved, but in principle my opinion is that there’s no particular reason to prevent such a relationship and partnership from taking place.

    Thank you very much for your commentary. Thank you for joining us!

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