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Energy Blast – Nov 16, 2011

Ukraine may be able to save as much as $6 billion annually following a review of its gas contract with Russia.  The two sides have agreed on a new gas price, and expect to sign documents shortly; the new rates ‘could help Kiev to regain access to a $15 billion International Monetary Fund programme.’  At a meeting of natural gas producers, the ruler of Qatar called for a pricing system that links gas price to oil markets. Will Russia mount a challenge against EU energy regulations that would limit Gazprom’s control over its European pipeline assets?  The Iraqi cabinet has approved a gas collecting contract for Royal Dutch Shell that will reportedly ‘eventually greatly reduce Iraq’s greenhouse gas emissions’; Iraq will hold a 51% stake in the venture, South Gas Co.  A range of international oil companies will hire Cuba’s new Chinese-built oil rig, starting ‘alarm bells ringing’ in the US.  ‘[D]espite each party having something to potentially gain from the [gas pipeline] project, there are still concerns about whether North Korea can be trusted to not use the pipeline to gain leverage over South Korea’s energy supply.’  BP’s chief economist expects oil prices to stay at their current levels above $100 per barrel ‘for some time to come’.