Energy Blast – June 19, 2009

The Energy Ministry is investigating ways of reducing taxes on undeveloped gas fields, having seen that even with high oil prices most projects would not be financially solvent.  Ukraine’s energy company Naftogaz has said that to avoid the possibility of a gas suspension, European firms should consider buying Russian gas and storing it in Ukraine.  Russian gas exports to Europe via Ukraine fell 45.5% in January-May 2009, year-on-year.   The European Commission has cautioned Gazprom and Naftogaz to secure a long-term contract to maintain steady supplies of gas to Europe.  Sergei Lavrov has met with EU ambassadors and ‘positively assessed Russian-EU cooperation’ over this issue.  The FT reports that a lack of investment in modernizing the energy infrastructure of central and eastern Europe is an obstacle to guaranteeing upplies.  If oil rises to $90 a barrel next year then Russia and Gulf Cooperation Council countries could enjoy a windfall, says Reuters.  The move towards nuclear power is being accompanied by a global scramble to secure uranium supplies.  Dow Chemical Co and Gazprom have agreed to work together to develop greenhouse gas reduction plans.