Results tagged “energy”

I just couldn't resist the alliteration temptation. What we're looking at here is the broader directions that should result from next week's Obama-Medvedev powwow.

Former U.S. National Security Adviser Zbigniew Brzezinski offers a three-pronged strategy in the Financial Times for President Obama when he travels to Moscow next week. In the July/August issue of Foreign Affairs, Robert Legvold offers a template for improving US-Russia relations in general. Since this is a blog, and not a newspaper or brick-sized bi-monthly periodical, I'm going to re-engineer the formats of these two articles into what should be an easy reference in the future for those not willing to plow through a 6,000-word appeal to the Obama Administration to redesign relations with Russia NOW. First, Brzezinski:

Remember this number

Grigory Pasko, journalist

Если Вы хотите прочитать оригинал данной статьи на русском языке, нажмите сюда.

I recently had the pleasure of participating in a screening of my short documentary film on the Nord Stream pipeline project in the cinema hall of the Berlin historical museum.  Our modest event was graced with some impressive attendees: Nord Stream AG Jens Müller (who heads up their public relations), Neel Strøbæk of Rambol (the group which carried out the environment assessment report in accordance with the Espoo Convention); Tobias Münchmeyer of Greenpeace, Bundestag Deputy Rainder Steenblock and around 70 audience members. A discussion took place after the showing of the film.

I can't help but notice a pattern of multiplicity taking place.  When we first showed the film inside the Swedish Parliament, just one Nord Stream representative showed up.  When we were invited for a screening in the Finnish Parliament, there were two waiting there for us.  And finally, when we came to Berlin, there was a foursome.  Logically, I suppose we can expect eight Nord Streamers to come to the next showing.

Despite coming third in a bid for Iraq's West Qurna-1 field, Lukoil says it would be interested in bidding again.  Apparently Russia has offered Turkey an opportunity to participate in the South Stream pipeline project.  The Baltic Pipeline System, created to transfer oil from western Russia's Bryansk Region to the Leningrad Region, will start operating in late 2011.  International Power has left the Czech energy market after finding it 'difficult to grow' in the region.  Finnish environmental authorities have concluded that the Nord Stream pipeline will not pose serious problems to Finland's environment and the project can move one step forward in the approval process.  Poland is seeking a deal to increase gas supplies from Russia by between 2 billion to 3 billion cubic meters annually.  Hungary and Slovenia are considering the possibility of connecting their gas and electricity networks to improve the security of their supplies.  President Gurbanguly Berdymukhammedov of Turkmenistan has invited Medvedev to a desert auto rally in an attempt to propitiate Russia after energy disputes.

A friend of mine sharply rebuked me the other day for not writing enough on my blog.  While I can assure you all I haven't exactly been napping in the recliner, I will do my best to start picking up the slack while still juggling my legal workload (which lately consists several sharp knives, a hot potato, a bowling ball, and a nuclear warhead - let's hope I don't drop anything).  To begin with, why not revisit one of my favorite subjects:  the murky machinations of Gazprom-related business in Hungary, where the goulash state corporatism and Russia's most cheerful barracks live on despite the ravages of the economic crisis.  Although much of this story is background for the initiated, there is some wild news about Emfesz uncovered by Roman Kupchinsky that merits discussion.

The last few times I have checked in on this story, we've seen the Austrian company OMV backstab the Hungarians (with Russian help) in an attempt to take over MOL, South Stream vs. Nabucco continued to roil Hungarian politics (while Russo-skeptic Viktor Orban's party Fidesz made big advances in the EP elections), and lastly the tricksters behind the much maligned RosUkrEnergo trading company dissolved this shadowy group only to replace it with another proxy, known as RosGas.

It looks like the unfortunately named joint venture between Nigeria and Gazprom is still causing some problems.  Luke Harding as a piece taking a look at all the reactions, while I found this eyebrow-raising quote at the bottom of a Reuter's piece:

"White people are making too much of this. As long as the Russians pay us, they can call it what they like," said one Nigerian in the commercial hub, Lagos, asking not to be named.

Problem is, I wouldn't count on that Russian money arriving any time soon.  They make this promise about once a year.

From Yulia Latynina's column in the Moscow Times:

On June 17, President Dmitry Medvedev and Chinese President Hu Jintao signed an agreement in which Russia will sell 300 million tons of oil to China over 20 years for $100 billion. That breaks down to $57 per barrel.

In order for Russia to deliver that oil, a new pipeline must be built to China. This is something that Yukos had originally planned to build by the mid-2000s at a cost of $4 billion.

By March 2008, however, the price for the project had risen to $29 billion. At that cost, oil deliveries through the pipeline would only recoup expenses given oil prices of at least $80 per barrel. But Russia has agreed to a price of just $57 per barrel for its exports to China. (...)

The Gas Exporting Countries Forum has delayed a vote for secretary general after Russia did not propose a candidate.  Lukoil has been unsuccessful in its attempt to win a bid for Iraq's West Qurna oil field, but the company may have a second chance as Royal Dutch Shell has withdrawn its offer.  A BP-led consortium has won a deal to develop Iraq's largest oilfield in a landmark televised auction.  'It is not difficult to see that the Kremlin's China strategy is identical to the course pursued by former Yukos CEO Mikhail Khodorkovsky' says Yulia Latynina in the Moscow Times, but the Kremlin's version is 'killing off the Far East'.  The Washington Post reports that the last shipment of bomb-grade uranium has been transported out of Romania.  The EU is reportedly ready to lend Ukraine $2 billion for gas payments to Russia.  Gazprom has said that Ukraine's financial problems may provoke gas disruptions this winter.  Gazprom, Total and Eni SpA have apparently expressed an interest in developing the trans-Saharan gas pipeline from Nigeria.  Read here to see why Russia's joint gas venture with Nigeria is becoming a branding nightmare.

Robert Amsterdam has a new blog post up over on Huffington Post about Obama's approach to Iran and Venezuela.  Here is a short excerpt:

There are two reasons why both the authoritarians of Persia and the Orinoco Belt represent a common foreign policy challenge to the United States. Firstly, they both lean upon a brand of populism that is heavily dependent upon an outdated conception of anti-Americanism. They have woven a narrative, backed only by selective scraps of facts combined with myths, that the United States is a hostile, hateful, and aggressive power which is responsible for nearly every social problem of their country. Oh yes, and they also want to invade us, so we had better arm ourselves to the teeth.

This narrative makes for efficient politics and tosses more fuel to the ever growing fires of nationalism, but becomes a harder story to sell when you have an African-American president of an immigrant father with the middle name "Hussein" who is more popular on the streets on Tehran and Caracas than their own angry leaders.

Secondly, I consider Iran and Venezuela together because of their mutually supportive and burgeoning alliance (this has also been pointed out by Moisés Naím). They are cooperating together along with Russia to build a natural gas cartel, they have unregistered flights allegedly bring scores of Hezbollah members into Latin America, Chávez happily provides Iran with Bolivian and possibly Venezuelan Uranium, while the Venezuelan government even engages in vigorous anti-Semitism to please their friends in Persia and the Middle East (see this interview we recorded with a Jewish student leader who was attacked on state television). Additionally, while Iran maintains a stable of political prisoners such as Behrooz Javid-Tehrani, Chávez is doing his best to copy these tactics with prisoners such as Eligio Cedeño - a case I am directly involved in.

Gazprom and Azeri company Socar have signed a deal to give Russia the first rights to Azeri gas that was previously seen as reserved for the Nabucco pipeline.  Medvedev referred to the deal as a 'milestone' for cooperation in the future.  Gazprom will buy 500 million cubic meters of natural gas from Azerbaijan annually from 2010, with plans to increase orders.  The International Energy Agency has warned that Europe's gas supplies are at almost constant risk of disruption.  Russian and Ukrainian officials have met with international lending institutions to try and establish ways of paying for Russian gas.  Poland has signed an agreement with Qatar to receive one million tons of LNG annually from 2014.  Russian companies may invest in oil exploration and natural gas distribution in China, following an agreement between Beijing and Moscow to increase bilateral trade.  E.ON's Russia-backed Baltic pipeline, Nord Stream, is on schedule to begin delivering gas to Germany by 2011, whilst Nabucco is still struggling with delays due to lack of steady supply and customers.  

Gazprom head Alexei Miller has said that situation in Ukraine must be dealt with through 'systemic efforts and policies'.  He has also asserted that January's gas cut-off was an 'anomaly' and a situation to be avoided.  The CEO added that Europe's plans to diversify energy supplies away from Russia will not necessarily ensure greater energy security.  Gazprom has said it plans to use the South Stream pipeline to transport 35% of its gas exports to Europe by 2015, threatening the role of Ukraine, who now handles most gas transit.  Despite Sakhalin-2 holding bad memories for Shell, the company has welcomed Vladimir Putin's hopes for its participation in the Sakhalin-3 and Sakhalin-4 projects. Russia's precarious financial situation is seen by the Telegraph as the motivation for the surprise invitation.  Putin has pledged to maintain Belarus' preferential rate for crude and gas imports and will offer a $9 billion loan for a nuclear plant.   Apparently the EU and Turkey are approaching an agreement on the Nabucco pipeline.  Structures close to Gazprom Neft have taken over 50% of Bennfield, the company that represents the main owners of Sibir Energy.

Robert Amsterdam was interviewed on the Lionel Show on Air America, discussing the Iran-Venezuela link, Eligio Cedeño and the new white paper, as well as some discussion about Russia:

Everybody's been reading all the exciting news of President Medvedev's trip to Nigeria, and all the seemingly big energy deals he's been signing (we'll have more commentary on that later).

But I would respectfully point out that Gazprom really should have picked a better name for its joint venture with the Nigerians.  Let's hope this was just one of those accidents, but somehow I get the feeling that they will stubbornly stick with the name.

Total is willing to invite Gazprom to collaborate in Africa and elsewhere.  Gazprom has hit out at the EU for allegedly discriminating against its gas pipeline projects, just two days before its meeting with Ukraine to discuss payment issues.  The company may decrease its capital investment for gas production by as much as 30%.  China has offered Turkmenistan a $4 billion loan as Beijing seeks to establish a foothold in the nation's energy resources.  The two countries have signed a 30-year agreement, by which Turkmenistan will export 30% more gas to China each year, and which, according to the Guardian, will threaten Russia's 'hegemony over energy supplies from central Asia'.  Reuters examines why China has more luck securing reserves in developing countries as opposed to developed nations.  Gazprombank and the National Petroleum Corporation of Namibia have agreed to finance the construction of an 800 MW gas turbine power plant in Namibia.  Alexander Lebedev's Russia's National Reserve Bank has taken a 50% share in the troubled oil explorer Timan.  Siberian Coal Energy Co. has announced that this year it intends to increase exports by 10% as demand from Asia grows. 

I would be very interested to hear some reactions to this one...

France's Total and Russian independent gas producer Novatek have concluded a $900 million project to develop a Siberian gas field.  'The cooperation can expand even further', says Vladimir Putin. Gazprom has defended its performance in response to recent criticism about underselling: 'we . . . don't see any reason for panic and pessimism'.  The company hopes that the US will approve its plans to produce and export gas in Alaska.  Prime Minister Putin has instructed that a plan be drawn up to improve Russia's gas liquefying facilities.  Russia has been granted an invitation to bid for a nuclear power plant in Egypt.  Ukrainian Prime Minister Yulia Tymoshenko says that Kiev will pay its gas bill on time.  Medvedev has said that Russia is ready to invest billions in the Nigerian energy sector.  Gazprom has agreed to a natural-gas joint venture with the country which includes construction of a 360-kilometer pipeline.  Apparently mass post-election protests will not affect the Bushehr nuclear power plant in southern Iran, says Rosatom.  China has bought Addax petroleum, in order to begin oil exploration in Iraq.   Reuters reports on a $554 billion project called Desertec to bring African solar power to Europe.

In its current issue, Global Finance Magazine lists what it calls the "Stars of the New Russia" across a variety of business sectors. A lot of the preamble will probably not come as a shocker to those watching Russia on a continuous basis, but there are a couple of quotes that leapt out at me:

Kingsmill Bond, London-based senior Russia analyst at Troika Dialog:

"Russian corporates are used to handling volatility and difficult times. They can adapt quite quickly. Other countries are not used to such dramatic changes in the economic landscape. Russian firms are used to being thrown around and rebounding very quickly. They have had periods of high growth and high inflation in the past, and they have recovered. Russia is better positioned to bounce back when markets return. Russia will bounce back harder and quicker [than in 1998]."

Alexandra Evtifyeva, Senior Economist of VTB:

"They still need to do a lot on cleaning of banks' balance sheets. Non-performing loan levels are rising quickly." Most estimates put the proportion of non-performing loans in the system at between 10% and 20%. "There will be a major shakeout of Russia's 900 banks. Risks are quite concentrated in the largest banks. The smallest banks don't take risks. We expect some restructuring in the banking sector."

Unnamed analyst:

"The country needs to produce a good-bank/bad-bank structure, but politicians appear to be shying away from the big decision." Such a lack of clarity mirrors the early reluctance of Russia's politicians to admit that the country was facing any sort of crisis.

Ok, enough of the peanut gallery. On to the award winners:

Please believe me that I'm not just making this one up.  According to a report in Die Welt am Sonntag, Germany's counter-intelligence agency has its hands full dealing with an influx of SVR agents from Russia targeting the energy sector. Their activities include illegal investigations of Germany energy companies and government plans for diversification, with the goal of increasing business shares in the energy market for Russian companies.  Roman Kupchinsky, who is blogging the story, suggests that other evidence may point to illegal hacking and phone taps to give Moscow more intelligence on Germany and other member states such as Poland, Hungary, the Czech Republic, Bulgaria and Romania.

It seems unclear whether the SVR is conducting industrial espionage for pure profit, or if this is part of a strategic push to lock down control of the markets.  The problem is that it could be both.

Jason Bush has a devastating piece published in BusinessWeek about the Council of Europe report on Russia's rule of law vacuum.

Prosecutors accuse the ex-Yukos managers of embezzling 350 million metric tons of oil, equivalent to Yukos' entire oil output for six years. Defense lawyers and several independent legal observers have expressed bewilderment at the new claims. They note that in their previous trial, the two managers were convicted of underpaying taxes on this same output, implying that it was legal business activity. The alleged embezzlement occurred when Yukos was Russia's largest oil company and one of its most visible companies overall.

Now these concerns have been echoed by the author of the Council of Europe report, Sabine Leutheusser-Schnarrenberger, a former German Minister of Justice. "The legal justification of the new criminal cases against Mr Khodorkovsky and Mr Lebedev has me perplexed," she writes, adding that "any accusation must fulfill minimum standards of logic."

Deputy Energy Minister Sergei Kudryashov has lamented Gazprom's slow sales during the period of high gas prices as a mark of 'incompetence'.  Gazprom expects export sales to fall to $40 billion in 2009.  A Natural Resources and Environment Ministry official has said that guidelines for foreign companies accessing oil and gas in Russia should be changed so as to ensure foreign investors are not deterred.  Lukoil has revealed that bank VEB owns roughly 2% of the gas company.  Bloomberg comments on the fact that if talks to reduce nuclear weapons between Russia and the US succeed, a large amount of stockpiled uranium will come onto the market.  Russia's pipeline operator, Transneft, may use its loans as part of an oil supply deal to pay debts it owes to Sberbank.  Russia's competition watchdog has said it will fine four oil companies, including Rosneft and Gazprom Neft, for not lowering fuel prices when crude prices collapsed.  TNK-BP has won a court rule repealing a $35 million fine imposed by regulators.  France's Total is planning to build a LNG plant in Russia's arctic region with local partner Novatek.

President Dmitry Medvedev has unveiled a rather curious environment plan to put greenhouse gas emissions back to the level they were at in 1990 - which essential means a 30% increase.  At least they are talking about the issue, point out some environmentalists with diminished expectations....

From the Wall Street Journal:

As countries announce their emissions targets in advance of the talks in Copenhagen this December, there's been some maneuvering on this issue. The Australian delegation has proposed a plan that would allow each country to submit its own schedule for reducing emissions, effectively allowing them to choose their own baseline year. Japan would like to use 2005, because the country's emissions have been creeping up in recent years.

All this, of course, has to do with politics. Nations that commit to emissions targets want other countries to try just as hard. It's easier for politicians to sell belt-tightening at home if it appears that everyone in the international community is shouldering an equal burden.

And on that front, Russia's plan looks like a dud.