the RUSSIA oil & gas competitive intelligence report - Report Buyer

More documents

Recommendations

Info

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 © Business Monitor International Ltd Page 13
Russia Oil and Gas Competitive Intelligence Report 2010 look at ways of transporting gas from Vladivostok to Japan, with additional deals likely to be signed in future. Gas Transit Executives from US oil majors have accompanied US President Barack Obama on his state visit to Moscow in July 2009, holding negotiations over expanding their presence in Russia. Neil Duffin, head of ExxonMobil project development unit, told Reuters during the trip that the company wanted Russia to make sweetening amendments to its subsoil law. Ukraine As a result of pricing, payment and transit disagreements, Russia cut off gas supplies to Ukraine on January 1 2009, causing a knock-on effect on European flows by January 7. Bitter wrangling between Moscow and Kiev ensued while supply disruptions in Eastern and south-eastern Europe reached crisis point. After a number of false starts, the flow of gas was eventually restored on January 20. Tense negotiations between the two countries over gas-related debts and prices continued throughout 2009 before an uneasy truce between Prime Minister Vladimir Putin and his Ukrainian counterpart Yulia Tymoshenko was established in November of that year. While the likelihood of a new gas supply cut in the winter of 2009/10 is significantly lower, the reputations of both countries as a reliable energy supplier and a transit state respectively have taken a battering, and the dispute has encouraged the EU to accelerate its gas supply diversification programme. Gazprom and Ukraine's state-owned Naftogaz in November 2009 agreed to reduce Ukraine's gas imports in 2010 to 33.75bcm, down from the previously contracted 52bcm for that year. It was also agreed that Ukraine would not be fined for buying less gas in 2009. Between January and October 2009, Ukraine is said to have imported just 18.85bcm compared with the contracted 31.7bcm, according to Gazprom. Over 2009, Ukraine had agreed to buy a total of 42bcm. Furthermore, Russia had agreed to increase the transit fees it pays Ukraine by 60% in 2010. In 2009, transit fees stood at US$1.70 per mcm per 100km. While the actual gas prices have not been released, Tymoshenko said that the gas price Ukraine pays 'will be almost the same in 2010 as it [was] in 2009'. Further details on the gas price and the transit fees Ukraine and Russia will pay respectively in 2010 have not been released. In January 2009, Putin and Tymoshenko agreed that in 2009 Ukraine would receive a 20% discount on European market prices in return for maintaining transit fees at the same rate as in 2008, with Ukraine to start paying European-level prices and for transit fees also to reach market levels as of January 1 2010. It is unclear whether Tymoshenko’s comment means that the absolute price Ukraine will pay for gas imports in 2010 will remain more or less the same or whether the same 20%-discount principle will continue to apply. The price that Gazprom charged Ukraine in Q109 was US$360/mcm, almost exactly double the US$179.50/mcm Ukraine paid in 2008. © Business Monitor International Ltd Page 14
Page 1 and 2: 2010 www.businessmonitor.com the RU
Page 3 and 4: Russia Oil and Gas Competitive Inte
Page 13: Russia Oil and Gas Competitive Inte
Page 65 and 66:
Russia Oil and Gas Competitive Inte
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Russia Oil & Gas Competitive Intell
Page 87 and 88:
Page 89 and 90:
show all

the RUSSIA oil & gas competitive intelligence report - Report Buyer

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?