Main page > Comments > Top events of the month > Top events of Jule 2015

Top events of Jule 2015

The National Energy Security Fund introduces top-ten events in the oil and gas industry in Jule 2015 and is ready to comment on them in detail.

  1. Agreements with Iran

    It was the most discussed topic. Experts debated what would happen to world oil prices should Iran come to the world oil market. Some fantastic figures of possible Iranian exports were mentioned. Some experts even cited figures of Iranian oil exports before the 1979 revolution and claimed that the country would reach that level, although it was almost 40 years before. In reality Iran’s export potential is substantially smaller. A one million barrel rise per day is too much – this expectation is overrated by two-fold at least. Besides, Iran will need several years and billions of dollars in serious investments to restore its potential. Thus, we should understand that the Iranian issue is a way to press Russia with reference to decline in oil prices and future natural gas supplies. The latter are feasible in 10 years at the earliest, because it is necessary to ensure a corresponding output and create the infrastructure. As a far as world oil prices are concerned, they are retreating not because of Iran but because of expectations of increase in the key interest rate in the USA, which will trigger advance in the US dollar that always leads to decline in oil prices. So, there is another attempt to psychologically influence oil producers and generate panic sentiments.

  2. BRICS and SCO summits in Ufa

    While the conflict with the West is unfolding, Russia is responding by turning towards the East. The BRICS and SCO summits were to demonstrate this turn.

  3. Turkish Stream faces difficulties

    In July many observers rushed to bury this project. Although Turkey turned out to be a tougher negotiator than expected, it does not mean that Russia should make concessions only for the sake of laying all four lines of the Turkish Stream. Turkey demands the right to take part in reselling Russian natural gas, which Russia obviously cannot agree to. However, there is a way out of this situation. Turkey may make a rod for itself: Russia can reduce the Turkish Stream to two lines and correspondingly expand the Nord Stream by two lines.

  4. Nord Stream-2 project active development

    It means construction of the third and fourth lines to Greifswald, Germany. There were active talks with BASF in July; Wintershall is likely to become a shareholder in the project. France’s gas company Engie may also join the consortium. The project keeps developing, and it is likely to be carried out in this format. There will be two lines laid to Greifswald; the infrastructure on that side will provide for connecting the German city to Baumgarten, Austria. It means Ukraine will have practically no chance to preserve transit gas flows after 2019.

  5. Ukraine

    Gas supplies to Ukraine stopped on July 1. Kiev keeps saying that it is not satisfied with the price, although Gazprom’s proposal, including the discount, is the most beneficial for Ukraine, because reverse supplies of gas, which is Russian gas anyway, will be more expensive. But Kiev is openly blackmailing the European Union trying to get the money from Europe.

  6. Turkmen scandal

    There is a serious oversupply of natural gas in Russia following the launch of the Bovanenkovo deposit. In this situation there is a logical question: why do we need to buy natural gas in Central Asia if we have the oversupply of domestic gas? Thus, Gazprom’s intention is quite justified. The gas giant is going to buy at least 4bn cu m of natural gas in Turkmenistan. As far as accusations of the violation of agreement provisions are concerned, when the agreement was signed at fixed prices in 2003 and then gas prices began surging, Turkmenistan said it was not an agreement but a declaration of intent. Thus, Ashkhabad violated the accord on several occasions and it should not be acting out injured innocence now.

  7. LUKOIL assets seized in Romania

    For decades there have been speculations about how dangerous it is to be an investor in Russia, about Russia not observing European norms and not safeguarding the property. Now we have a case of the seizure of property in Romania; state bodies are impudent in pressing the company. LUKOIL is suggested to sell assets; it is hinted that there is a potential buyer. This situation is similar to the post-Soviet practice in former Soviet republics. However, the current situation is observed in a EU member state. So, the question is where it is safer for investors: in Russia or Romania?

  8. New US sanctions

    New sanctions were imposed on Rosneft subsidiaries. Actually it is not surprising. These sanctions testify to the fact that the variety of instruments is limited and there are no new ideas. The USA is preparing for a long siege. So, let’s see what it will lead to.

  9. Rosneft sends another letter to gov’t

    The company demands continuation of reforms in the gas industry; it wants independent gas producers to be granted access to gas projects. These ideas are not new. On the other side, the effect from such proposals is not properly assessed. It is clear that Rosneft would like to have access to export pipelines to increase its profits. However, from the point of view of state interests, there are much more questions. If Gazprom is split, who will finance construction of export pipelines? Why should Rosneft that does not invest in construction of the infrastructure, be granted the right to have access to and use this infrastructure or have a share in export revenues? Do we need to assist independent producers to increase their output while there is an overproduction of natural gas? There are no answers to these questions so far, unfortunately. However, the issue of the domestic gas market remains highly explosive.

  10. FAS and FST merger

    It was a strange decision. It is not clear why the federal antimonopoly service should set tariffs. This was a typically Russian administrative decision made not from the point of view of economic expediency but from the point of view of lobbying capacities. It is no secret that this merger will lead to a higher pressure on Gazprom; FAS head Igor Artemyev has many times mentioned that. Actually it has already happened. For instance, it was proposed to reduce tariffs of gas transportation for independent producers. In this case we go back to the previous issue in our rating whether certain decisions are motivated by economic interests of the state or of particular companies? We have no definite answer to this question yet.


Bookmark and Share

Analytical series “The Fuel and Energy Complex of Russia”:

State regulation of the oil and gas sector in 2023, 2024 outlook
Gazprom in the period of expulsion from the European market. Possible evolution of the Russian gas market amid impediments to exports
New Logistics of Russian Oil Business
Russia’s New Energy Strategy: on Paper and in Fact
Outlook for Russian LNG Industry

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

Rambler's Top100
About us | Products | Comments | Services | Books | Conferences | Our clients | Price list | Site map | Contacts
Consulting services, political risks assessment on the Fuel & Energy Industry, concern of pilitical and economic Elite within the Oil-and-Gas sector.
National Energy Security Fund © 2007

LiveInternet