Russian Oil and Gas Industry: News #4

Trollstoy
@Trollstoy88
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3h
Russia cut off oil supplies to Poland via Druzhba oil pipeline passing through Belarus.

South Korea seems to be keeping a somewhat ambivalent stance towards US led sanctions on Russia and this news item is just one example of it.

https://www.highnorthnews.com/en/novateks-massive-lng-storage-now-en-route-murmansk

Novatek’s Massive LNG Storage Now En Route to Murmansk
Feb 24 2023
A key piece for Novatek’s Arctic operation has left the shipyard in South Korea and has begun its four-months journey to the Barents Sea. Saam FSU and its three escort tugs will reach their first main waypoint of Singapore in around three weeks.

Vessel tracking data and new satellite images show Novatek’s Saam FSU departing the South Korean Okpo shipyards during the afternoon of 22 February.
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The convoy has been traveling at a modest speed of around 4-5 knots, with around 12,000 nautical miles to go to the transshipment hub near Murmansk. At a steady 4-5 knots the journey would take a minimum 3-4 months making for an arrival at the beginning of the Northern Sea Route summer shipping season in June.
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With a gross weight of 247,540 tons Saam FSU is almost twice as large as the ice-capable Arc7 carriers carrying LNG from Yamal to Europe.
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Approximate route Saam FSU will take over the coming 3-4 months before it arrives at the transshipment terminal near Murmansk. (Source: MarineTraffic)
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Novatek placed its order for the Saam FSU almost 3 years ago and work on it and its sister ship Koryak FSU was completed before sanctions took effect. The two floating storage units will be part of offshore trans-shipment terminals where LNG from the Yamal LNG project can be transferred from ice-capable LNG carriers to conventional carriers. This will optimize Novatek’s logistics operation and provide cost savings. The second FSU is expected to take up position off the coast of the southern part of the Kamchatka peninsula later in 2023.

https://www.highnorthnews.com/en/massive-lng-storage-ship-travel-norwegian-coast-russian-arctic

“Above all, the daily operating cost of the Arc7 [ice-capable LNG carriers] will be halved as they will make half the journey. It will be conventional LNG tankers that will finish the journey,” explains Hervé Baudu Chief Professor of Maritime Education at the French Maritime Academy (ENSM).

The FSUs will also provide a logistical “lifeline” to Novatek with respect to its next Arctic project, Arctic LNG 2. Western sanctions have delayed its orders for additional ice-capable LNG carriers. With the FSUs in place the company can for the next 2-3 years make due with fewer ice-capable vessels, until production at Arctic LNG 2 ramps up in 2026.

Who are the voracious buyers of Russian oil products?, 02.27.2023.

North African countries significantly increased their imports of Russian diesel and other refined petroleum products, while the region's petrochemical exports experienced a notable uptick, The Wall Street Journal reported, citing trade analysts.

In the light of new restrictive measures imposed on Russia by Europe, oil sector experts seem to fear that sanctioned Russian cargoes will be mixed with other oil products and resold. The procedure hides the origin of the products, undermining the efforts of Western states to expel Russian fossil fuels from their economies, The Wall Street Journal highlighted.

In particular, imports of Russian diesel by Morocco soared to two million barrels in January, compared to about 600,000 barrels registered during the whole of 2021, according to analysts at the commodity market data company Kpler, who also stressed that another 1.2 million barrels will be sent to the country this month. Tunisia, in turn, increased its purchases of Russian diesel, gasoline and naphtha to 2.8 million barrels in January, and is expected to import another 3.1 million barrels in February. Kpler also recorded an increase in imports from Algeria, Egypt and Libya.

According to Kpler senior oil analyst Viktor Katona, the volumes absorbed by North African countries are too much for domestic consumption, so he predicts that part of Russian products will reach Europe.

The North African ports are considered convenient for Russian cargoes departing from the Baltic Sea, since the trips are not much longer than those made to European ports before the sanctions, the newspaper noted. This, he continued, allows Russia to keep transport costs low and prevents its limited fleet of tankers from being immobilized on long trips to Asia or elsewhere.

"Even if you wanted to regulate that, how would you do it? If a shipment comes 51% from Morocco and 49% from Russia, how can it be regulated?" asked the head of petroleum research at the Oxford Institute for Energy Studies, Andreas Economou, rhetorically.

In general, some of the largest imports of North African diesel from Russia displaced the region's usual suppliers in the Middle East and North America, suggesting that part of the activity has been bargain hunting, Rystad Energy senior vice president Jorge León summed up.

Since February 24, 2022, Russia has been continuing a special military operation in Ukraine, the goal of which, according to President Vladimir Putin, is the demilitarization and denazification of the neighboring country.

Since then, the European Union has approved 10 packages of sanctions against Moscow that include restrictions on the oil sector. In addition, on February 2, he approved a price cap for a number of Russian oil products transported by sea. The Russian Foreign Ministry stated in this regard that Moscow will simply not supply oil to countries that join the introduction of a ceiling on Russian fuel prices.

Yandex Translate from Spanish

https://sputniknews.lat/20230227/quienes-son-los-voraces-compradores-de-productos-petroliferos-rusos-1136238952.html

Russia boosts oil exports to China– Bloomberg. 02.27.2023.

Overall supplies of crude and fuel oil in January reportedly surpassed a record set in April 2020.

China has further increased purchases of Russian oil in January, Bloomberg reported this week, citing data intelligence firm Kpler.

According to the report, Beijing imported an average of 1.66 million barrels of crude and fuel oil from Russia daily in January, which is more than the previous record set in April 2020. Kpler data showed that China bought the entire monthly loading of Russian ESPO grade oil, as well as Arctic grades and flagship Urals grade oil.

China has been competing with India as the biggest buyer of Russian crude after the conflict in Ukraine and Western sanctions that followed forced Moscow to look for new buyers by offering heavy discounts on its fuel. The EU and the UK banned imports of Russian crude in December, and at the same time the EU and G7 countries imposed a price cap on seaborne Russian crude.

China is ramping up purchases just as the country is gradually reviving its economy following the lifting of Covid-19 restrictions late last year. According to the International Energy Agency (IEA), recovering Chinese consumption will be the main driver in the growth of global oil demand this year, which it expects to rise to 101.9 million barrels per day.

The main allure of Russian oil currently is its relatively low price. Russia’s flagship grades are trading much lower than Brent or similar West African grades. Urals grade, for instance, averaged $49.48 per barrel in January, compared to $82 per barrel for Brent.

https://www.rt.com/business/571894-russia-boosts-oil-exports-china/

The main allure of Russian oil currently is its relatively low price. Russia’s flagship grades are trading much lower than Brent or similar West African grades. Urals grade, for instance, averaged $49.48 per barrel in January, compared to $82 per barrel for Brent.

This is a red herring. I expected better from RT. China mostly buys ESPO oil, not Urals. ESPO is trading at like $70 per barrel.
The cheap Urals oil has mostly been snapped up by India and Turkey.

Japan decided to resume oil purchases in Russia, 03.03.2023.

Platts: Japan resumed buying Russian oil for the first time in eight months.

Japan decided to return to the purchase of Russian oil for the first time in eight months from the Sakhalin-2 field, follows from the data of the Ministry of Economy, Trade and Industry of the country.

Platts, citing the agency, writes that Japan imported 747,706 barrels of Russian oil "Sakhalin mixture" in January, which was the first import of crude oil from Russia in eight months.

Sakhalin Blend's January import was the first since Japan bought 650,793 barrels of Russian oil in May, according to METI* data. Japan has not imported Russian oil for seven consecutive months, as the country's largest refineries ENEOS and Idemitsu Kosan have not signed new contracts.

The move by Japanese refiners follows comments from Prime Minister Fumio Kishida on May 9, 2022 that Japan will impose a "fundamental" ban on Russian oil imports following the G7 leaders' latest commitment.

The suspended inflow of crude oil resulted in a 60.2% reduction in Russian oil imports to Japan to just 35,548 bpd in 2022. At the same time, Japan increased its share of crude oil imports from the Middle East in 2022 to 94.1% from 92.7% a year ago, METI data showed.

Earlier it was reported that Japan in January 2023 reduced oil imports from Russia by 76% compared to the same period a year earlier, imports of liquefied natural gas (LNG) dipped by 9.7%.

* The organization (organizations) are liquidated or their activities are prohibited in the Russian Federation.

Africa is Becoming New Market for Russian Oil Products Amid EU Embargo, Report Says, 03.04.2023.

Western sanctions that were imposed on Russia following the onset of the country's special military operation in Ukraine, among other things, have targeted Russian hydrocarbons, including crude oil and petroleum products. Against this backdrop, Moscow has been forced to diversify its export destinations and explore new markets.

New buyers from Africa doubled their imports of Russian fuel in February, following the European Union's embargo on oil and refined petroleum products from Russia, according to data provided by S&P Global Commodities at Sea.

The EU imposed a ban on the purchase and import of seaborne Russian crude oil starting from December last year. Early last month, an EU ban on imports of refined petroleum products from Russia, including diesel and jet fuel, came into effect. The moves are ostensibly part of Western efforts to cut off Russian fossil fuels from their economies, end their energy dependence on Russia, and limit Moscow's sources of funds.

The agency noted that following the sanctions, in February this year, Europe's imports of Russian fuels plummeted significantly. In general, the impact of the embargo was seen in the diesel and fuel oil markets. Last month, Russian diesel exports decreased by over 100,000 barrels per day (b/d) to 830,000 b/d, while fuel oil exports slumped by 170,000 b/d from the previous month to 614,000 b/d.

As for the destinations, flows of Russian fuel to Europe fell from approximately 1.5 million b/d in December to less than 500,000 b/d in February.

At the same time, the very structure of Russian oil product exports in regard to the main buyers has changed. According to the agency, Turkey, the UAE, and China are now the biggest importers of Russian fuels, as about 35% of all the country's oil product exports are now headed to these states.

The agency noted that African buyers include Morocco, Algeria, Nigeria, Senegal, Tunisia, Ghana, and Egypt. In February, these countries increased Russian fuel imports to 440,000 b/d.

As for Russian crude oil exports, the agency noted that they "remained resilient" in February, as the country managed to redirect large volumes of its crude to other states, in particular to India. Russian-origin crude loadings averaged 3.31 million b/d, down 8% from January levels.

Last month, a leading US-based newspaper reported that North African countries, namely Tunisia and Morocco, had increased imports of diesel and other refined petroleum products from Russia. In January, Tunisia acquired 2.8 million barrels of Russian oil products, while Moroccan imports of Russian diesel stood at two million barrels. The newspaper stressed that North African nations had "picked up the slack," as Russia is now largely cut off from the European market.

In response to the situation, Russia has been increasing its cooperation in the energy field with its African partners. Moreover, the development of oil production and refining on the continent through Russian investment will be one of the key topics of the upcoming Russia-Africa summit, which is slated to be held in July in St. Petersburg.

Furthermore, according to NJ Ayuk, the head of the African Energy Chamber, Russia could take the lead in assisting energy projects in Africa.

https://sputniknews.com/20230304/africa-is-becoming-new-market-for-russian-oil-products-amid-eu-embargo-report-says-1108021214.html

This was to be expected. Saudi Arabia is selling to more profitable markets in Europe and Russia is picking up the slack for their former clients.
Since oil is basically fungible, and not easily replaced, that is what you get. Eventually the oil price for Russian oil products will stabilize upwards in the range again.
Russia is also not like the Soviet Union, some supposed godless atheist nation, so there is no moral qualm about it for the Muslims either.

I fully expect the G7 nations to begin resorting to international piracy once they figure out that Russian oil supplies still continue to flow. That will be the next battleground.

India’s imports of Russian oil hit record high – media. 03.05.2023.

Refiners continue to snap up cargoes at discounts to other grades.

Russian oil exports to India, the world's third-largest crude importer after China and the US, climbed to a record 1.62 million barrels per day (bpd) in February, The Hindu reported on Sunday, citing cargo tracker Vortexa. The numbers suggest that Russia is India's largest crude supplier for the fifth straight month.

According to the report, Moscow’s oil exports to the country surged 28% month-on-month and surpassed combined deliveries from Iraq and Saudi Arabia, India’s main suppliers for decades. Imports from Saudi Arabia dropped 16% month-on-month to 647,800 bpd, while deliveries from Iraq amounted to some 939,900 bpd.

Russia now supplies 35% of all India’s oil imports, a significant increase from its share of less than 1% of India's energy market in 2021. New Delhi began to boost purchases of Russian crude shortly after the start of Russia’s military operation in Ukraine and the ensuing Western sanctions. The restrictions resulted in Russia losing its traditional oil buyers from the West, and forced the country to seek alternative markets for its energy by introducing discounts.

“Indian refiners are enjoying a boost in refining margins from processing discounted Russian crude… Refiners' import appetite for Russian barrels are likely to remain robust as long as the economics are favorable, and financial and logistical services to support the trade are available,” Vortexa's head of Asia-Pacific analysis, Serena Huang, said.

India has kept up its Russian oil purchases despite calls from the West to stop the imports. New Delhi has stressed that energy security is a top priority, and it will continue to make its own choices on suppliers. According to the Russian ambassador to India, Denis Alipov, Western sanctions have in fact drawn Russia and India closer together, causing an unprecedented growth in bilateral trade.

https://www.rt.com/business/572490-india-imports-russian-oil-record/

Russia’s Oil Revenues Plunged By 48% In February
By Charles Kennedy - Mar 03, 2023, 8:30 AM CST

Russian tax revenue from crude oil and petroleum products plummeted by 48% in February from a year earlier due to the much lower price of Russia’s flagship crude grade after the EU banned imports of Russian oil, according to Bloomberg estimates based on official Russian data.

Total tax revenues from oil and natural gas dipped by 46% year over year to $6.9 billion (521 billion Russian rubles) in February, per data from the Russian Finance Ministry published on Friday.

Russia’s revenues from crude oil and oil products alone crumbled by 48% annually to $4.8 billion (361 billion rubles), according to Bloomberg’s calculations. Oil accounted for more than two-thirds of Russia’s energy tax revenue in February.

Russian natural gas revenues also plummeted last month compared to February 2022, when Russia invaded Ukraine. Natural gas revenues slumped by 42% as Russia cut off gas supplies to a number of EU customers after the invasion.

The plunge in the price of the flagship Russian crude grade, Urals, was the key reason for the lower revenues for the country for both January and February this year.

Russia’s budget was $23.3 billion (1.76 trillion rubles) into deficit in January, compared to a surplus for January 2022, as state revenues from oil and gas plunged by 46.4% due to the low price of Urals and lower natural gas exports, the Russian Finance Ministry said last month. Russia’s budget revenues from oil and gas plunged in January by 46% compared to the same month last year due to the sanctions on Russian oil exports, which led to a slump in the price of Russia’s flagship crude grade.

The average price of the Urals blend stood at $49.52 per barrel in January and February 2023, compared to $88.89 per barrel for the same months last year, the Russian Finance Ministry said earlier this week. The price of Urals averaged $49.56 a barrel in February 2023, or 1.86 times lower than the average price in February 2022 – $92.15 per barrel.

By Charles Kennedy for Oilprice.com

https://oilprice.com/Latest-Energy-News/World-News/Russias-Oil-Revenues-Plunged-By-48-In-February.html

So much for Putin being an idiot in making "unprofitable" pipelines to China like ESPO and Power of Siberia according to Navalny types.
I looked at the chart and in 2021 the profits from oil export tax were even lower. The major collapse is actually in the gas export taxes.
The oil price will continue to rise after the production cut and the world continuing to get out of the lockdowns.
And the Europeons will find out of the consequences of daddy US cutting Nord Stream this year. Already this February is much colder than usual and this will only continue.

Two statements of the obvious

AZ
@AZgeopolitics
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2h
‍"We don't know who is conducting the investigation [on Nord Stream sabotage] and how. Bundestag deputies do not receive information about the process," - Klaus Ernst, head of the Bundestag Energy and Climate Committee

AZ
@AZgeopolitics
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2h
"Norway is not able to completely replace Russia in the European energy market." - Equinor company

More like it has something to do with their countries economy sinking rather fast due to being uncompetitive with high energy prices and also a real loss with the airline industry since Europeans have a hard time flying that way in a reasonable cost.

So much for Putin being an idiot in making "unprofitable" pipelines to China like ESPO and Power of Siberia according to Navalny types.
I looked at the chart and in 2021 the profits from oil export tax were even lower. The major collapse is actually in the gas export taxes.

I was reading and hearing that now with China ramping up production not seen since 2012, demand for oil and gas will skyrocket as China, being one of if not largest consumer of it, will now require drastically more.

Their best option is of course Russia. With that, India will up its consumption and orders as well to compete and not fall behind. In that regard, Russia will earn so much more and Europe will either eventually flop and jump back asking for trade with Russia or they will just sink to obscurity. Even US is still buying Russian oil and gas as it's mixed and called something else. Same with Europe.

This was inevitable

Aaron Maté
@aaronjmate
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2h
One month after Sy Hersh reports that US blew up Nord Stream, US officials declare that "newly collected intelligence" "suggests" that it was in fact a "pro-Ukraine group."

US has used Ukrainians for a proxy war against Russia. Now using them to take the blame for Nord Stream.

The New York Times https://archive.is/4Qmxx
@nytimes
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3h
Breaking News: A pro-Ukrainian group may have carried out the attack on the Nord Stream pipelines last year, intelligence reviewed by U.S. officials suggested. https://nyti.ms/3ZN7qJf

Gonzalo Lira
@GonzaloLira1968
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1h
LAUGHING MY ASS OFF!!!

The US is blaming *Ukraine* for the Nord Stream pipeline bombing!

“The bullshit piles up so fast, you need wings to stay above it.”

Intelligence Suggests Pro-Ukrainian Group Sabotaged Pipelines, U.S. Officials Say


Probably based on this:

Pro-Ukrainian group allegedly destroyed Nord Stream pipelines
The investigations into the attacks on the Nord Stream pipelines have apparently achieved a breakthrough (machine translations from https://www.zeit.de/zustimmung?url=https%3A%2F%2Fwww.zeit.de%2Fpolitik%2Fausland%2F2023-03%2Fnordstream-2-ukraine-anschlag%2F)

   The German investigative authorities have apparently made a breakthrough in solving the attack on the Nord Stream 1 and 2 pipelines. After joint research by the ARD capital studio, the ARD political magazine Kontraste, SWR and ZEIT, it was possible to largely reconstruct how and when the explosive attack was prepared in the course of the investigation. Accordingly, traces lead in the direction of Ukraine. However, investigators have not yet found any evidence as to who commissioned the destruction.(...)

   Specifically, according to information from the ARD capital studio, Kontraste, SWR and ZEIT, the investigators succeeded in identifying the boat that was allegedly used for the secret operation. It is said to be a yacht rented from a company based in Poland, apparently owned by two Ukrainians. According to the investigation, the secret operation at sea was carried out by a team of six people. It is said to have been five men and one woman. Accordingly, the group consisted of a captain, two divers, two diving assistants and a doctor, who are said to have transported the explosives to the crime scenes and placed them there. The nationality of the perpetrators is apparently unclear. The assassins used professionally forged passports, which are said to have been used, among other things, to rent the boat.

   According to the investigation, the command set sail from Rostock on September 6, 2022. The equipment for the secret operation was previously transported to the port in a delivery truck, it is said. According to the research, the investigators subsequently managed to locate the boat again the following day in Wieck (Darß) and later on the Danish island of Christiansø, north-east of Bornholm. The yacht was then returned to the owner in an uncleaned condition. According to research, investigators found traces of explosives on the table in the cabin. According to information from the ARD capital studio, Kontraste, SWR and ZEIT, a Western secret service is said to have sent a tip to European partner services in the autumn, i.e. shortly after the destruction, according to which a Ukrainian commando was responsible for the destruction. After that, there are said to have been further intelligence indications that a pro-Ukrainian group could be responsible.

   Security authorities in Germany, Denmark, Sweden, the Netherlands and the USA were involved in the investigation into the destruction of the pipelines. In Germany, the Attorney General is in charge of the investigation, which has commissioned both the Federal Criminal Police Office and the Federal Police. Even if traces lead to Ukraine, the investigators have not yet been able to find out who commissioned the suspected group of perpetrators. In international security circles, it is not ruled out that it could also be a "false flag" operation. This means that traces could also have been deliberately laid that point to Ukraine as the culprit. However, the investigators have apparently found no evidence that confirms such a scenario.

   The Ukrainian government could not initially be reached for comment. The Attorney General also declined to comment. A German government spokesman referred to the ongoing investigations by the Attorney General and the authorities in Sweden and Denmark. Only "a few days ago," Sweden, Denmark and Germany "informed the United Nations Security Council that the investigations are ongoing and that there are still no results," said the government spokesman.

Well, we don't know anything about the "perpetrators", but we see a "breakthrough" that goes public to distract from Hersh and Washington at least short after Scholz has returned from his privat visit in DC: Luckily "uncleaned condition" of the boat offered "traces of explosives" for the investigation, but still a 'false-flag' is possible. However, the political outcome of this plot is as clean as whishful thinking.