the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Under a deal to solve the crisis, Belarus agreed that Russia would increase gas export prices to
US$100/mcm rather than the initially planned US$200/mcm. The price reportedly increased to
US$119/mcm in 2008. In return for these subsidised rates, Belarus allowed Gazprom to purchase 12.5%
of its state gas transit company Beltransgaz annually from 2008 to 2010 for a total payment of
US$2.5bn. Gas prices continued to rise in 2009, averaging US$150/mcm. During the winter period of
peak demand, prices rose further from US$121.98/mcm in Q409 to US$169.22/mcm in Q110. In
response, Beltransgaz started paying for gas at the lower rate of US$150/mcm, the average 2009 price.
Gazprom claims that Beltransgaz owes US$137.49mn for gas imports in the peak period of Q110. This
amount is set to increase, and Gazprom estimates that at this rate Belarus's gas debt could reach
US$500mn by the end of 2010.
In BMI’s view the current situation is unsustainable and is likely to lead to a renewed flare-up of the two
countries’ long-running dispute unless Belarus agrees to pay the higher price demanded by Russia. One
possible outcome is that Belarus will offer Russian companies an increased stake in its main energy
infrastructure companies, most likely in Beltransgaz and Belarus’s Mozyr refinery.
Kazakhstan
Russia and Kazakhstan in September 2010 agreed to start jointly developing the Imashev gas and
condensate field, which straddles the border of the two countries. The move follows a five-year period of
near inactivity at the field, following a deal in January 2005 demarcating the Russia-Kazakhstan border.
This progress on the field's development is a sign of Russia and Kazakhstan's willingness to cooperate on
the development of shared resources.
The Imashev field is located on the border between Russia's Astrakhan Oblast and Kazakhstan's Atyrau
Province near the Caspian Sea. The field is Kazakhstan's second largest gas field after Karachaganak,
according to Kazakh news agency IRBIS, but it has not been developed owing to a dispute over the
border with Russia. In January 2005, however, the two countries signed a border demarcation agreement
under which Kazakhstan ceded a border village covering part of the field to Russia, in return for territory
elsewhere and an agreement to develop the field jointly with Russia.
Following the Seventh Forum of Russia-Kazakhstan Inter-Regional Cooperation held in Ust-
Kamenogorsk on September 6-7 2010, the two countries announced that they have now agreed to survey
the field's reserves and prepare it for development. Russia's ITAR-TASS news agency reported that the
field has estimated reserves of 128.7bcm of gas and 20.7mn tonnes of gas condensate, equivalent to
186.6mn bbl. Kazakh oil minister Sauat Mynbayev said that the field will be the first to be developed on
the territory of the two states.
Others
In May 2009, Japan and Russia signed a raft of energy cooperation deals. The deals include a joint oil
exploration agreement, an accord that will see Russia supply enriched uranium to Japan, and a MoU to
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