the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Norway
Russia and Norway have agreed to settle a dispute over their maritime border in the Barents Sea, signing
a treaty in September 2010. The dispute, which centred on 176,000sq km of sea, had prevented the area
from being fully opened up to oil and gas exploration. The resolution of the dispute will boost efforts to
develop the oil and gas resources of the Barents Sea.
The disagreement between the two countries, which dates back to around 1970, was based on conflicting
claims to an area of around 176,000sq km in the centre of the sea. Norway based its claim on the 'median
line' principle outlined in the UN Convention on the Territorial Sea and Contiguous Zones (1964) and the
UN Convention on the Law of the Sea (UNCLOS, 1982), which stated that the maritime border should be
drawn equidistantly between the two countries. The Soviet Union, and later Russia, countered that
Russia's size relative to Norway dictated that it should receive a proportionally larger share of the sea and
that it had claimed the area under dispute since 1926 using the meridian line rather than the median.
The treaty includes provisions for cooperation in the development of hydrocarbons in the case of any new
discoveries being made that straddle the demarcation line. The two sides will also cooperate on
determining the outer limit of the continental shelf in accordance with UNCLOS.
Qatar
In a March 2010 press statement Gazprom said that Qatar had expressed interest in becoming involved in
projects in the Yamal Peninsula at a working meeting between Gazprom's management committee and
the Qatari Prime Minister Sheikh Hamad Bin Jassem Bin Jabor al-Thani. According to Gazprom, the two
sides discussed potential cooperation in LNG transactions and swap deals between LNG and pipeline gas
in the European and Asia-Pacific markets. In addition Gazprom claimed that the Qatari delegation had
expressed interest in projects in the Yamal Peninsula, particularly in the possibility of commercialising
the Tambeyskoe gas fields through the Yamal LNG project.
Qatar's discussion of gas cooperation with Russia will sound worrying to European gas consumers, which
have taken advantage of the changing differential between LNG and pipeline gas prices to drive down the
cost of energy imports. By cooperating over pricing the two countries could benefit as European gas
demand recovers in the aftermath of the global economic downturn.
Belarus
Russia and Belarus have had several disputes over energy supplies and pricing since 1991 when the latter
became independent. As a former Soviet Union country, in the early 2000s Belarus received gas at a price
of around US$46/mcm from Russia, a figure far below the market rate. In late 2006, however, as part of a
more general policy of reducing energy subsidies to former Soviet satellites, Russia announced that it
would increase gas prices, prompting Belarus to introduce an oil transit fee that led to Russia temporarily
cutting off its supplies.
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