Russia, which was able to outproduce Saudi Arabia for a couple of years there, may be on the oil production treadmill now too.
Reuters: Russian March oil output falls again, exports recover.
Quotes:
Russia failed to grow its oil output for a third month in a row in March and closed the first quarter with a one percent production decline year-on-year, confirming gloomy outlook by analysts for the whole of 2008.
Energy Ministry data showed on Wednesday March oil production edged down to 9.76 million barrels per day from 9.79 million bpd in February, and well below the post Soviet high of 9.93 million bpd reached in October last year.
In absolute figures, March production was over 5 million barrels - the size of five large tankers - down from October.
Since October, oil production in Russia has been balancing between decline and stagnation, prompting many analysts to revise down their oil production forecasts for 2008.
Showing posts with label Russia. Show all posts
Showing posts with label Russia. Show all posts
Thursday, April 03, 2008
Saturday, July 14, 2007
Oh my God.
Joe Kernen utters the above priceless quote when Boone Pickens first appears on the screen and it's apparent the interview is being conducted with Mr. Pickens in gym attire and with his foot up on his desk.
I'm not sure what exactly that suggests; a man of 78 and still on top of his game having a bit of fun, or a ton of hubris from a guy who's been right so long he's getting cocky. I think the former. [At least he didn't end with "Party on, dude".]
Predictions: $80 by next May, but first possibly a dip to the high sixties due to an excess of oil around right now. He suggests people not be short oil.
CNBC TV: Oil May Dip Slightly, But Will Hit $80 by Next May: Pickens.
Quotes:
"What I see from the producers’ side is that the Saudis, the Russians -- all the producers -- want a higher price for oil and what they’re searching for is how much can the market stand, how much can the world economy stand on price. They’ll keep pushing it on up as far as it will go.”
Pickens shorted natural gas last year because there was “too much gas” -- and said the action “made our day.”
“We got a late start to the summer this year, so gas is still suffering,” Pickens said. “I think gas will suffer on into 2008. All those things will clear up with time. A few months in a commodity market going down or up just scares hell out of everybody… You need to look at it on a longer-term basis than that. At the same time, if you’ve got your neck stuck out in a commodity market, you can lose a lot of money real quick.”
I'm not sure what exactly that suggests; a man of 78 and still on top of his game having a bit of fun, or a ton of hubris from a guy who's been right so long he's getting cocky. I think the former. [At least he didn't end with "Party on, dude".]
Predictions: $80 by next May, but first possibly a dip to the high sixties due to an excess of oil around right now. He suggests people not be short oil.
CNBC TV: Oil May Dip Slightly, But Will Hit $80 by Next May: Pickens.
Quotes:
"What I see from the producers’ side is that the Saudis, the Russians -- all the producers -- want a higher price for oil and what they’re searching for is how much can the market stand, how much can the world economy stand on price. They’ll keep pushing it on up as far as it will go.”
Pickens shorted natural gas last year because there was “too much gas” -- and said the action “made our day.”
“We got a late start to the summer this year, so gas is still suffering,” Pickens said. “I think gas will suffer on into 2008. All those things will clear up with time. A few months in a commodity market going down or up just scares hell out of everybody… You need to look at it on a longer-term basis than that. At the same time, if you’ve got your neck stuck out in a commodity market, you can lose a lot of money real quick.”
Monday, January 01, 2007
Energy Hot Spots to Watch in 2007.
Christopher Edmonds of Pritchard Capital and thestreet.com highlighting the energy spots to watch in 2007 in this interview with Bloomberg News. The hot spots include Iran, Russia, Nigeria, Oklahoma, and Iraq. [Okay, one of those was thrown in to see if you've cleared your head yet from New Year's - Happy New Year, btw.] Chris suggests a 'normalized' (I assume this means the price absent a geopolitical event) price of oil is $55-65, and that if troubles develop in one of these areas, a spike to $80-100 a barrel oil is possible.
Bloomberg News: Christopher Edmonds of Pritchard Capital Partners.
Bloomberg News: Christopher Edmonds of Pritchard Capital Partners.
Friday, December 22, 2006
They Shoot Journalists, Don't They?
So, the inevitable happened, and Shell and it's Japanese partners caved in and let the Russian government Gazprom buy a stake in Sakhalin 2. Basically, they had absolutely no choice.
If you ask the Russians, they will say that the West took unfair advantage of them when they were down, and that now these deals will be renegotiated, one way or the other. And to some extent, these events are not a huge surprise, as this Russian re-nationalization of it's resource industry is just another in a fairly long line of re-nationalizations that have happened in resource rich countries.
The scary part though is that at the same time this is happening, other unsettling events are occuring inside and outside Russia, including a takeover/intimidation of the media, murders/intimidation of prominant opposition members, etc. It is basically the Wild West there, and the danger is that something spins out of control at some point, and you get serious foreign capital flight as a result. And with the general popularity of emerging markets these days, you have to wonder if something were to happen in Russia, would it trigger a more widespread sell off in emerging markets in general?
A year ago I suggested Gazprom was worthy of a speculative investment and the stock has gone up since then. There is probably more upside to this stock in the future and to Russia in general.
But seriously here: caveat emptor.
New York Times: Russians Buy Control of Oil Field.
[Note the article headline says "Russians" and not "Gazprom" in a sly reference to the fact that Gazprom is basically an instrument of the Russian government.]
Quotes:
Gazprom, the Russian energy monopoly, bought control of the world’s largest combined oil and natural gas development Thursday after a highly publicized campaign of pressure on its foreign operator, Royal Dutch Shell.
Shell’s sale of 50 percent plus one share followed months of accusations against the project by a Russian environmental regulator — a problem that President Vladimir V. Putin, in announcing Gazprom’s entry, said would now most likely be resolved.
Critics of the sale called it the first effective nationalization of a large foreign oil or gas project in Russia, which this year surpassed Saudi Arabia in oil production.
If you ask the Russians, they will say that the West took unfair advantage of them when they were down, and that now these deals will be renegotiated, one way or the other. And to some extent, these events are not a huge surprise, as this Russian re-nationalization of it's resource industry is just another in a fairly long line of re-nationalizations that have happened in resource rich countries.
The scary part though is that at the same time this is happening, other unsettling events are occuring inside and outside Russia, including a takeover/intimidation of the media, murders/intimidation of prominant opposition members, etc. It is basically the Wild West there, and the danger is that something spins out of control at some point, and you get serious foreign capital flight as a result. And with the general popularity of emerging markets these days, you have to wonder if something were to happen in Russia, would it trigger a more widespread sell off in emerging markets in general?
A year ago I suggested Gazprom was worthy of a speculative investment and the stock has gone up since then. There is probably more upside to this stock in the future and to Russia in general.
But seriously here: caveat emptor.
New York Times: Russians Buy Control of Oil Field.
[Note the article headline says "Russians" and not "Gazprom" in a sly reference to the fact that Gazprom is basically an instrument of the Russian government.]
Quotes:
Gazprom, the Russian energy monopoly, bought control of the world’s largest combined oil and natural gas development Thursday after a highly publicized campaign of pressure on its foreign operator, Royal Dutch Shell.
Shell’s sale of 50 percent plus one share followed months of accusations against the project by a Russian environmental regulator — a problem that President Vladimir V. Putin, in announcing Gazprom’s entry, said would now most likely be resolved.
Critics of the sale called it the first effective nationalization of a large foreign oil or gas project in Russia, which this year surpassed Saudi Arabia in oil production.
Wednesday, December 13, 2006
Gazprom issued License to Kill.
Deals, that is.
Wow, fascinating statistic from the below CNBC video: 78% of the top energy executives in Russia are ex-KGB.
And we thought the Cold War was over. Nah, it just took on a whole new meaning.
By the way, watch Mr. Shuvalov (a senior economic advisor to Russian President Vladimir Putin) being interviewed here closely. He expresses himself pretty clearly in this video.
CNBC Video: From Russia, With No Love.
Which is why I find the following interesting: When interviewed by Forbes magazine, Mr Shuvalov answered a question about ExxonMobil's status in Russia in a somewhat ambiguous way, if you ask me. Well, let's hope Rex Tillerson [ExxonMobil's CEO] is current on his pledges to the St. Petersburg ballet. [Not that they need any money over there, it just pays to hang out with the right crowd.]
Forbes: Russia's Western Strategy.
Quotes:
Q: I'm interested to hear you had such positive interactions here. A lot of people are troubled about Russia's role in the oil and gas sector--and that worry is increasing. From an investment perspective, Lukoil, TNK-BP, we're starting to see government influence.
A: Government influence in these companies?
Q: There's discussion that TNK-BP is going to be forced to give up the [East Siberian] Kovykta field. Lukoil is doing business with Gazprom. Within that context, following what happened in Ukraine, people are starting to worry.
A: TNK-BP and Lukoil, they have nothing to do with government influence. We welcome [Lukoil's] partnership with the American company ConocoPhillips. If [Lukoil has] other partnerships to exploit something new, not existing ones, it's OK. To be honest, it's a kind of nonsense. There is no government influence or interference in their business.
It's true we're working with Lukoil and Rosneft and Sakhalin and others--they were told by environment agencies to fulfill environment laws. But not the business as a whole. Again, for me, TNK-BP and Lukoil, they're completely private companies. I know the investors and the management of the companies pretty well.
There is a lot of speculation that the Russian investors of TNK-BP are going to sell the shares. It's not true. I spoke with [majority shareholders Victor] Vekselberg and [Mikhail] Fridman. Their position is that they are strong, long-term strategic investors. They are not giving up; they don't want to sell their shares. They think that the value of them is growing also. There were a lot of articles about possible change in investors, but it's not true.
Q: What about Lukoil? Is ConocoPhillips' stake safe?
A: [Looks surprised.] I think so. Why not?
Q: What is it you think we don't understand?
A: For you, I think in general Russia is an unpredictable partner. Whatever you get from my country, any kind of signal, you would like to interpret it in a negative way, because you don't understand what's going on, so any kind of information for you is bad, first, and then you would like to find justification for better things. But we may have mismanaged our explanation of what we aimed at the beginning, why we raised the gas prices, why we behaved like this with Sakhalin and everything else.
But again, we support the principles outlined in the G-8 strategy first, and we internally changed our plans for energy strategy. And we announced plans for growth to raise gas prices by 2011, to build new coal power stations. Everything is changing in Russia--and changing toward a positive scenario.
If our Western clients and consumers would like to get enough gas on time, they need to understand we need cash to maintain the reserves and exploit the fields. It's our commodity, and we would like real cash for that. We would like to be seen--and we will be pursuing this--that Russia is the most reliable partner for energy for the United States and other G-8 countries.
Q: Do you see how people can be panicked after all the scandals that happened in Sakhalin? Companies invested billions of dollars, they're working fine, and suddenly--
A: But not suddenly. First, they knew exactly what they did, and possible outcomes. Everything was obvious. I met with one of the top managers of the Shell company, and they're meeting [this] week with the minister of energy in Russia, and they're quite positive they will be able to resolve the issue.
Q: So do you think Shell will be able to stay?
A: No doubt about that. Shell will stay, and it is one of the biggest and best investors in Russia with a good reputation. We accept that Sakhalin is a very important project for Russians. There are difficulties, and they have to resolve them. At the end, it will be a successful story. Exxon had cost overruns, but Shell's was twice more than planned.
Q: So Exxon has no problems?
A: [Shakes head.]
----------------------------------------------------------------
The squeeze starts:
----------------------------------------------------------------
AP: Gazprom Nears Deal to Join Shell Project.
Quotes:
Earlier Tuesday, Oleg Mitvol, of the state environmental watchdog Rosprirodnadzor, said Sakhalin-2 had caused environmental damages worth $10 billion, news agencies reported.
He said a final evaluation of the damages would be completed by fall next year and that by March he would be ready to sue the company in Russia and in the Arbitration Institute of the Stockholm Chamber of Commerce, which settles such disputes.
Mitvol and other Russian officials say that the Shell-led consortium developing the energy project has silted rivers and felled trees illegally.
Representatives for the consortium, Sakhalin Energy, were not immediately available to comment.
Mitvol also said he planned to begin an inspection of the Sakhalin-1 project, which is 30 percent-owned by Exxon Mobil Corp.
--------------------------------------------------------------------
Oh, and Lord Browne [BP's CEO]. I suggest an appearance as Santa at the St. Peterburg's Childrens hospital, and a whole lot of Elmo TMXs.
--------------------------------------------------------------------
Further quotes from AP article above:
If control of Sakhalin-2 does eventually go to Gazprom it could set a precedent for BP PLC's Russian joint venture: Prosecutors have threatened to revoke TNK-BP's license for the giant Kovykta gas field in Russia's Far East for alleged underproduction.
Wow, fascinating statistic from the below CNBC video: 78% of the top energy executives in Russia are ex-KGB.
And we thought the Cold War was over. Nah, it just took on a whole new meaning.
By the way, watch Mr. Shuvalov (a senior economic advisor to Russian President Vladimir Putin) being interviewed here closely. He expresses himself pretty clearly in this video.
CNBC Video: From Russia, With No Love.
Which is why I find the following interesting: When interviewed by Forbes magazine, Mr Shuvalov answered a question about ExxonMobil's status in Russia in a somewhat ambiguous way, if you ask me. Well, let's hope Rex Tillerson [ExxonMobil's CEO] is current on his pledges to the St. Petersburg ballet. [Not that they need any money over there, it just pays to hang out with the right crowd.]
Forbes: Russia's Western Strategy.
Quotes:
Q: I'm interested to hear you had such positive interactions here. A lot of people are troubled about Russia's role in the oil and gas sector--and that worry is increasing. From an investment perspective, Lukoil, TNK-BP, we're starting to see government influence.
A: Government influence in these companies?
Q: There's discussion that TNK-BP is going to be forced to give up the [East Siberian] Kovykta field. Lukoil is doing business with Gazprom. Within that context, following what happened in Ukraine, people are starting to worry.
A: TNK-BP and Lukoil, they have nothing to do with government influence. We welcome [Lukoil's] partnership with the American company ConocoPhillips. If [Lukoil has] other partnerships to exploit something new, not existing ones, it's OK. To be honest, it's a kind of nonsense. There is no government influence or interference in their business.
It's true we're working with Lukoil and Rosneft and Sakhalin and others--they were told by environment agencies to fulfill environment laws. But not the business as a whole. Again, for me, TNK-BP and Lukoil, they're completely private companies. I know the investors and the management of the companies pretty well.
There is a lot of speculation that the Russian investors of TNK-BP are going to sell the shares. It's not true. I spoke with [majority shareholders Victor] Vekselberg and [Mikhail] Fridman. Their position is that they are strong, long-term strategic investors. They are not giving up; they don't want to sell their shares. They think that the value of them is growing also. There were a lot of articles about possible change in investors, but it's not true.
Q: What about Lukoil? Is ConocoPhillips' stake safe?
A: [Looks surprised.] I think so. Why not?
Q: What is it you think we don't understand?
A: For you, I think in general Russia is an unpredictable partner. Whatever you get from my country, any kind of signal, you would like to interpret it in a negative way, because you don't understand what's going on, so any kind of information for you is bad, first, and then you would like to find justification for better things. But we may have mismanaged our explanation of what we aimed at the beginning, why we raised the gas prices, why we behaved like this with Sakhalin and everything else.
But again, we support the principles outlined in the G-8 strategy first, and we internally changed our plans for energy strategy. And we announced plans for growth to raise gas prices by 2011, to build new coal power stations. Everything is changing in Russia--and changing toward a positive scenario.
If our Western clients and consumers would like to get enough gas on time, they need to understand we need cash to maintain the reserves and exploit the fields. It's our commodity, and we would like real cash for that. We would like to be seen--and we will be pursuing this--that Russia is the most reliable partner for energy for the United States and other G-8 countries.
Q: Do you see how people can be panicked after all the scandals that happened in Sakhalin? Companies invested billions of dollars, they're working fine, and suddenly--
A: But not suddenly. First, they knew exactly what they did, and possible outcomes. Everything was obvious. I met with one of the top managers of the Shell company, and they're meeting [this] week with the minister of energy in Russia, and they're quite positive they will be able to resolve the issue.
Q: So do you think Shell will be able to stay?
A: No doubt about that. Shell will stay, and it is one of the biggest and best investors in Russia with a good reputation. We accept that Sakhalin is a very important project for Russians. There are difficulties, and they have to resolve them. At the end, it will be a successful story. Exxon had cost overruns, but Shell's was twice more than planned.
Q: So Exxon has no problems?
A: [Shakes head.]
----------------------------------------------------------------
The squeeze starts:
----------------------------------------------------------------
AP: Gazprom Nears Deal to Join Shell Project.
Quotes:
Earlier Tuesday, Oleg Mitvol, of the state environmental watchdog Rosprirodnadzor, said Sakhalin-2 had caused environmental damages worth $10 billion, news agencies reported.
He said a final evaluation of the damages would be completed by fall next year and that by March he would be ready to sue the company in Russia and in the Arbitration Institute of the Stockholm Chamber of Commerce, which settles such disputes.
Mitvol and other Russian officials say that the Shell-led consortium developing the energy project has silted rivers and felled trees illegally.
Representatives for the consortium, Sakhalin Energy, were not immediately available to comment.
Mitvol also said he planned to begin an inspection of the Sakhalin-1 project, which is 30 percent-owned by Exxon Mobil Corp.
--------------------------------------------------------------------
Oh, and Lord Browne [BP's CEO]. I suggest an appearance as Santa at the St. Peterburg's Childrens hospital, and a whole lot of Elmo TMXs.
--------------------------------------------------------------------
Further quotes from AP article above:
If control of Sakhalin-2 does eventually go to Gazprom it could set a precedent for BP PLC's Russian joint venture: Prosecutors have threatened to revoke TNK-BP's license for the giant Kovykta gas field in Russia's Far East for alleged underproduction.
Tuesday, December 12, 2006
Gazprom: "No more Mr. Nice Guy."
Well, it looks like it's going to get very interesting in Russia soon. This is not good news for ExxonMobil, BP, and ConocoPhillips, all of which have fairly substantial investments in Russia.
WSJ: Shell May Cede Control of Project To Russia's Gazprom. [$]
Quotes:
The person close to Gazprom also said gaining a controlling stake in Sakhalin-2 would set a precedent for Gazprom to press for control of other big Russian gas projects, such as the Kovykta field in Siberia, currently owned by the Anglo-Russian venture TNK-BP Ltd.
----------------------------------------------------------------------------
Be all that you can be. Sign up for Operation Alberta Freedom now.
WSJ: Shell May Cede Control of Project To Russia's Gazprom. [$]
Quotes:
The person close to Gazprom also said gaining a controlling stake in Sakhalin-2 would set a precedent for Gazprom to press for control of other big Russian gas projects, such as the Kovykta field in Siberia, currently owned by the Anglo-Russian venture TNK-BP Ltd.
----------------------------------------------------------------------------
Be all that you can be. Sign up for Operation Alberta Freedom now.
Monday, December 11, 2006
From Russia With Love.
Shell finally throwing in the towel on this thing and ceding control to Gazprom? Not entirely unpredictable, but wow.
Reuters: Gazprom yet to decide on Shell Sakhalin offer.
Quotes:
Russian gas monopoly Gazprom said on Monday it had yet to decide on Royal Dutch Shell's offer for it to take majority control in the Sakhalin-2 project due to ecological concerns.
CNBC Video (free for 24 hours): Gazprom to control Sakhalin-2?
Reuters: Gazprom yet to decide on Shell Sakhalin offer.
Quotes:
Russian gas monopoly Gazprom said on Monday it had yet to decide on Royal Dutch Shell's offer for it to take majority control in the Sakhalin-2 project due to ecological concerns.
CNBC Video (free for 24 hours): Gazprom to control Sakhalin-2?
Friday, February 11, 2005
Them darn Ruskies.
Yesterday, the Russian government announced that henceforth only majority (51%) Russian owned companies would be allowed to bid on major oil fields this year. Since Russia is, er, was considered one of the few areas that oil majors might have been able to find some breathing room in terms of promising new reserves, this isn't a favorable development.
WSJ quotes a Western industry official as saying "This sets a bad precedent." (Apparently they found the one gentleman in the industry who lay in a coma as Russia dismantled OAO Yukos.)
Oil prices jumped, as did oil stocks. Looks like them Russians caught on that this oil stuff was worth a few bucks. Interestingly, Russian growth in oil production appears to be trending lower.
As an aside, I've read that if Russia's economy hadn't been a train wreck through most of the 90's, their internal oil needs would be a lot higher and their oil exports subsequently lower with the supply/demand equation in the oil market consequently much tighter.
WSJ quotes a Western industry official as saying "This sets a bad precedent." (Apparently they found the one gentleman in the industry who lay in a coma as Russia dismantled OAO Yukos.)
Oil prices jumped, as did oil stocks. Looks like them Russians caught on that this oil stuff was worth a few bucks. Interestingly, Russian growth in oil production appears to be trending lower.
As an aside, I've read that if Russia's economy hadn't been a train wreck through most of the 90's, their internal oil needs would be a lot higher and their oil exports subsequently lower with the supply/demand equation in the oil market consequently much tighter.
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