New Caspian pipeline to secure Western oil supply
TCMnet
The Caspian pipeline was mainly built to relieve the West’s oil dependency on the unstable Middle Eastand the OPEC producers. Its key objective was to improve American and European security of energy supply. But the original hype over the vast Caspian reserves has tailed off. Energy expertsfrom the American Energy Information Administration (EIA)now estimate theoil reserves of the regionat between 17 billion and 33 billion barrels (comparable to the North Sea oil reserves) and several big oil companies have decided to pull
out of exploring in the region. Some are even questioning the economic viability of the 2.5 billion euro BTC project.
(7 Jan 2006)
Ukraine, Russia, Natural Gas: Ideology or Hypothermia?
Jamie Hecht, From The Wilderness
In 2004, both the U.S. and Ukraine had Presidential Elections with artificial results. In the country whose WMD arsenal dwarfs that of the entire outside world, the fraudulent victory stood unchallenged. But in the agricultural backwater of a long-fallen imperial power (I mean Kiev, not Ohio), the suspect result was negated and a new election held. This time the Viktor was Yushenko, a former Prime Minister who seems to embody the desire of non-Russian Slavs to avoid reabsorption into the Soviet relationship with Russian power. He may not be Lech Walesa or Vaclav Havel, but Yushenko is no friend of Mr. Putin.
The current “cold” war over gas is pure realpolitik; there’s nothing ideological about it. Putin is punishing Ukraine for its political resistance to Russian power. He’s not doing this by imposing a high price and inflicting it on the Ukrainians; he’s removing a Soviet-era subsidy and offering the gas at what he calls an international market value. But other former Soviet Republics and satellites are still receiving the cheap Russian energy that Cuba and North Korea – and now Ukraine – have lost.
The Americans, for their part, “support a move toward market pricing for energy, but believe that such a change should be introduced over time rather than suddenly and unilaterally.” But that is not what the Russians have chosen to do, and the Ukrainian economy cannot afford the 400% price hike – so Ukraine wants from Russia what Caribbean clients get from Hugo Chavez: the opportunity to barter for energy. They would do it by tapping a percentage of the Russian gas that crosses through Ukranian pipelines, in exchange for the transit costs. But Chavez is a genuine leftist, whereas the Putin Presidency represents a total break with the Soviet era in every respect except its imperial ambitions. No energy company could be more different from Citgo than is Gazprom, who greeted the barter idea this way:
“The price of 150 cubic meters of gas is not the same as the transit cost for this volume of gas… Ukraine refuses to understand that.” Nonsense. Ukraine never asked to tap 100% of the gas; it claimed “the legal right to take 150 cubic meters of gas from every 1,000 as a transit fee.” These articles are good, but they cast the conflict as a struggle for power in which energy is being used as a leveraging device. On FTW’s map, the energy is the power.
(5 Jan 2006)
Russia: Gazprom — A Troubled Giant
Roman Kupchinsky, RAdioFreeEurope
Gazprom, the largest gas company in the world, is the jewel in the crown of Russian business. It employs over 300,000 people and its tax contributions account for more than 25 percent of the Russian budget.
Gazprom owns the entire gas-pipeline infrastructure in Russia — all 144,000 kilometers, along with the compressing stations. Not only is the company the largest producer of gas in Russia, it also controls the sole means of getting gas to domestic and export markets.
Despite its size and predominant position in Russia and the world, Gazprom is seen by many as a mismanaged giant unable to reform itself into a modern company and one with substantial problems hidden from the public inside its glass and steel headquarters in Moscow.
…
The [EIA] study found that in order for Gazprom to meet its obligations in 2020 it will need to begin a serious revamping and expansion of its gas transportation system — the trunk pipelines and compressor stations — as well as develop new fields.
The recent liberalization of ownership of Gazprom shares is intended to raise the money needed for these projects and might indeed succeed in doing so — or it might not, depending on how institutional investors react to the recent Russian-Ukrainian gas conflict and the price for Gazprom shares.
(5 Jan 2006)
Includes some number crunching on upcoming Gazprom projects -AF
Gazprom raises pressure on three more nations as price row widens
Carl Mortished, Busines Times
GAZPROM’S campaign to increase sharply the cost of gas sold to neighbouring countries moved to Bulgaria, Moldova and Turkey yesterday as details emerged in the Ukraine of Gazprom’s tightening grip over the gas market in the former Soviet satellite.
Confidential terms of this week’s Ukrainian deal, leaked to the media by Yulia Timoshenko, the former Prime Minister and nationalist leader, reveal that the new gas price of $95 (£54) per 1,000 cubic metres is valid only for six months, exposing Ukraine to the risk of a second round of price increases before the end of the year.
(7 Jan 2006)
Australia: US push for gas exports
Geoff Elliott, The Australian
WHITE House officials are working to clear the final barriers to the sale of billions of dollars worth of Australian gas to the US by the end of the decade.
Speaking ahead of crucial talks in Sydney this week on climate change and energy markets, a senior Bush administration official said the US Government was keen to see Australian liquefied natural gas gain direct access to US customers for the first time.
(9 Jan 2006)
Europe seeks home-grown power solutions
Aoife White, Business Week
The EU has a harsh New Year’s resolution to keep after a gas dispute between Russia and Ukraine led to official exhortations for Europe to look for a wider range of suppliers and energy sources.
European governments must tighten their belts, concentrate more on renewable energy and reconsider nuclear power, EU officials said this week.
(5 Jan 2006)
US reiterates strong opposition to Iran-Pakistan-India gas pipeline
AFX, Forbes.com
The US is ‘absolutely opposed’ to a natural gas pipeline project linking Iran with Pakistan and India, a State Department official reiterated.
Iran is reportedly nearing an accord with India and Pakistan for the 2,600-kilometre pipeline costing more than 7 bln usd.
‘The US government supports multiple pipelines from that (the Caspian) region but remains absolutely opposed to pipelines involving Iran,’ senior State Department official Steven Mann told a forum in Washington late yesterday.
(1 Jan 2006)
Morales seals energy accord with Chávez
Andy Webb-Vidal, FT.com
Bolivia’s president-elect Evo Morales on Tuesday sealed an accord with Hugo Chávez, Venezuela’s president, to help rewrite Bolivia’s constitution and bankroll forthcoming radical reforms to its economy and energy sector.
…Foreign investors in Bolivia, such as Brazil’s Petrobras, Spain’s Repsol and British Gas, are watching closely for elaboration of Mr Morales’s declared plans to “nationalise” the country’s oil and gas industry.
(3 Jan 2006)
Norway: Politician wants to spread the oil wealth, literally
Aftenposten.no
A politician from Norway’s most conservative party wants to spread the wealth created by the country’s booming oil industry, by sending all Norwegians on vacations outside the country, armed with NOK 18,000 just waiting to be spent.
Gjermund Hagesæter of the Progress Party (Fremskrittspartiet) wants to issue a credit card that’s already paid up to the tune of NOK 18,000 (about USD 2,700). The money, however, can only be spent outside Norway, in order to keep domestic inflation under control.
Hagesæter also thinks it’s wrong that high oil prices mean Norway is raking in much more money than it expected or, perhaps, deserves. This “petro-kroner” means the country’s so-called “Oil Fund” (set up to stash away oil wealth for future generations) is growing at such a fast clip that it likely held NOK 80 billion, or USD 12 billion, more than expected in the state budget.
So Hagesæter wants to divvy up the excess and place it directly into the hands of Norwegians, with the proviso that it be spent in places that also can benefit the economies of Norway’s many oil customers.
(3 January 2006)
