Russia

Analysts consider that the news about resignation of A.Popov is negative for Sechin

Alexander Popov, who headed Rosnedra more than a year, has been dismissed. The former Head of RUSIA Petroleum Valery Pak was assigned at his post of the Deputy Minister of Natural Resources. Popov was called “a Sechin’s man”, that’s why analysts see strengthening the position of the Minister of Natural Resources, Sergei Donskoy in the personnel replacements.

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Gas transportation tariff for independent producers to increase by 6.4%

The tariff for gas transportation via the main pipelines of Gazprom will increase by 6.4% from August 1st for independent producers. The decision was made at the recent meeting of the Board of the Federal Tariff Service.
Before that the department was going to increase the gas transportation tariff for independent producers by 7.65% from July 1st. The Head of the Federal Tariff Service, Sergey Novikov said, the growth of this tariff in 2013 could be less and the indexation would start in August.

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China’s Arctic Strategy

China has certainly been busy since it won observer status at the May Arctic Council summit in Kiruna, Sweden.
First, Yu Zhengasheng, Chairman of China’s Political Consultative Conference, visited Finland, Sweden and Denmark with an eye to boosting general trade and cooperation, particularly in the Arctic.
China then announced an expanded research and scientific polar institute that will collaborate with Nordic research centers to study climate change, its impact and desired Arctic policies and legislation. With this, Beijing made clear it did not intend to be a passive member of the Council; it planned to have a real say in its future proceedings. China National Offshore Oil Corporation meanwhile announced a deal with Iceland’s Eykon Energy firm to explore off Iceland’s Southeast coast.
State-owned mining firm Sichan Xinue Mining has also agreed to finance a major international mining project at Greenland’s Isua iron-ore field*. If this venture succeeds, other Chinese state-owned mining companies, such as Jiangxi Zhongrun Mining and Jiangxi Union Mining, which have prospected in Greenland but have not yet started production, would then join it to explore for gold and copper. And other projects like aluminum smelting are already taking shape or will begin, espeically if the Isua project is successful.
These moves come on top of recently announced deals with Rosneft and Gazprom to explore Arctic fields for oil and gas. At the recent Sino-Russian summit, China concluded a contract with Rosneft to triple the size of current oil deliveries to China to 900,000 BPD, putting it on a par with Saudi deliveries to China, according to a recent report in the Financial Times print edition.
But Rosneft won that contract only by accepting further huge Chinese loans of $25-30 billion as cash infusions and agreeing to facilitate the acquisition of oil and gas assets in Russia by Sinopec, an oil and gas company. In other words, as part of its huge energy deals in the Arctic and the Russian Far East (RFE), China has added to Rosneft’s already sizable indebtedness to China, going back to the 2009 deal for the East Siberia Pacific Ocean pipeline. This indebtedness and the size of the planned oil deliveries from Rosneft will give China substantial leverage in the region.
Rosneft will consequently consider Sinopec’s participation in its large-scale project in the RFE, namely the Eastern Petrochemical Refinery jointly established in 2007 by Rosneft and Sinopec’s rival CNPC, China National Petrochemical Corporation. While China will loan Rosneft $2 billion backed by 25 years of oil supply, Rosneft will boost oil exports to China by 800,000 metric tons this year. Annual exports may reach 31 million tons annually or 620,000 barrels a day, more than doubling present volumes.
Igor Sechin, Rosneft’s boss and Putin’s right-hand man, even hinted at going to 50 million tons per annum. Rosneft’s other deal deal with CNPC to drill in the Pechora and Barents Seas in the Arctic similarly highlights CNPC’s growing clout in global markets.

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Amurmetall exempted from taxation, though it cannot help the plant resume its work

The Khabarovsk authorities have claimed, they exempted the idle plant Amurmetall from taxes at the amount of about 1 billion RUR. They believe, this can help resume  production. Though, the debt of the enterprise makes up 27 billion RUR and it has no money for raw materials, some sources say. Besides, the 2.2 billion RUR credit from VEB which owns the plant got hung up due to lack of the plan of Amurmetall's development and the creditors insisting on bankruptcy proceedings.
On July 8th, Amurmetall (the only ferrous metallurgical enterprise in the Far East) resumes its production,the temporary acting Governor of the Khabarovsk Territory, Vyacheslav Shport claimed. As he had reported, local authorities exempted the plant from taxes at the amount of about 1 billion RUR which Amurmetall can use as working capital. The Territory “hopes to regain this sum later due to the profit tax when the enterprise stars working”, the official said
 

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In 2013, Gazprom to plan to invest 500 million rubles in development of gas supply in the Perm region

In 2013, Gazprom plans to invest 500 million rubles in the development of the gas supply in the Perm region. This was discussed during the working meeting of the Gazprom’s Head, Alexei Miller and the Governor of the Perm region, Viktor Basargin, the press centre of the gas holding company reports.
Funds will be also transferred to the completion of an LNG plant's construction, the continuation of the building of two and completion of construction of one complex for LNG storage and regasification.
Besides, the construction of three regional gas pipelines will be started, and construction of four other ones will be completed.

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Gazprom and Rosneft to get new benefits – state companies may save up to $20 billion per year

Rosneft and Gazprom, the main subsoil users of the Arctic Russian shelf, may get additional benefits. The State Duma’s Committee offered to decrease MET rates for the most difficult offshore fields to 1-1.3%. Such exemptions will make the Russian Arcic shelf tax treatment one of the most liberal in the world. Analysts believe that the state companies will save up to $20 billion per year due to this.
On Friday, Deputies of the State Duma sent a draft law on the promotion of hydrocarbons production on Russian Arctic shelf for reconsideration in the second reading. At present, licenses for almost all its distributed sites belong to Gazprom and Rosneft. As the Deputy Chairman on Energy of the State Duma’s Committee and the Head of the Russian gas society, Pavel Zavalny explained to  Kommersant, the document will be considered during the autumn session (the spring one finished on Friday). It was approved in the second reading on July 3rd, but some amendments were introduced at the session of the Committee on Budget and Taxes.

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Lukoil completes the sale of the Odessa oil-refining plant

Lukoil has completed the sale of the Odessa oil-refining plant to VETEK Group, the Ukraine. As reported by VETEK, the enterprise will resume its work soon.
Business-TASS reports, the information has been confirmed by Lukoil. The transaction was closed on July 5th, VETEK reported.
Previously Lukoil had started technological launch of the enterprise which had become the main auxiliary condition of the sale the plant to VETEK.
In June the Head of Lukoil, Vagit Alekperov reported,the Russian oil company was ready to supply Odessa plant with up to 2 million tons of oil per year in the event of restoration of the reverse operation of the Odessa-Brody pipeline. The top manager had also noted that the pipeline was filled with oil from Azerbaijan and this fact hampered the restoration of the the reverse deliveries to Odessa.

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Russia’s Energy Deals with East Asia: Who Wins?

Russia has consummated some huge energy deals with China in recent weeks. These deals are – or at least are being advertised as – major steps forward in the Russo-Chinese energy relations, Russia’s pivot to Asia – which uses big energy sales to upgrade its influence and standing – and the development of the energy base in Eastern Siberia, the Arctic and the Far East. All seen in Moscow as necessary preconditions for Russia’s return to the stage as a great, independent Asian power, and as a major energy player for years to come.
In the biggest deal, worth an estimated $270 billion, Rosneft agreed to supply CNPC (China National Petroleum Corporation) with 365 million tons of oil over 25 years. In return, CNPC has apparently made a pre-payment to Rosneft of around 70 billion. The deal represents 15 million metric tons of crude oil annually for 25 years, at just over $10 billion each year. The oil will probably go through the existing Eastern Siberia-Pacific Ocean (ESPO) pipeline to Daqing, China
 

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As of July the 4th of 2013, the volume of daily production of oil and gas condensate in the Russian Federation made up 1 425.2 thousand tons

As of July the 4th of 2013, the volume of daily production of oil and gas condensate in the Russian Federation made up 1 425.2 thousand tons (about 10.403 million barrels) against 1 425.4 thousand tons (roughly 10.405 million barrels) as of the previous reporting date (03.07.2012), the Central Dispatch Department of the Fuel and Energy Sector reports.

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On July 4, the daily gas output was 1.4758 billion cubic m in Russia

On July 4, the daily gas output was 1.4758 billion cubic m in Russia ,  the Central Dispatch Department of the Fuel and Energy Sector reports. Gas production was 1,024.7 million cubic m in Gazprom, 155.5 million cubic m in Novatek, 215.8 million cubic m in oil companies and 42.8 million cubic m in other companies.
The Ministry of Energy reports that in H1 Russia declined gas production by 0.4% to 337.0422 billion cubic m. Internal gas consumption declined by 0.9% to 243.532 billion cubic m.
Translated by Nadezhda Poltoratskaya

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