Energy Blast – April 18, 2008

Investors believe oil prices could hit $125 a barrel over the coming weeks amid fears of supply shortages and a continued fall in the value of the dollar. Rising prices have triggered “a buyout scramble in the sector”. Gazprom and UES have ended a stalemate over a lack of gas supplies which left a $375 million power turbine idle for months. Gazprom has already signed a Memorandum on Cooperation with the National Oil Corporation of Libya, and Eni says that Libya’s ‘Elephant’ oil field is among the asset options offered to Gazprom as part of the accord the two energy companies signed in 2006. Analysts say Gazprom is “undervalued”. BP’s head says the company is “too bureaucratic” and burdened by costs. Kazakhstan, which holds more than 3% of the world’s oil reserves, is imposing a tax on crude exports. Dmitry Medvedev has ordered the formation of a working group to resolve a dispute over a share sale by power producer TGK-11.