Energy Blast – April 22, 2008

If given more freedom to invest, Russia “could soon follow the Middle Eastern sovereign wealth funds and invest billions of dollars in direct overseas investments.” Deputy Finance Minister Dmitry Pankin says Russia should keep investing its oil and gas revenues abroad rather than trying to use them to prop up domestic growth. Analysts are concerned that crude oil supply disruptions in Nigeria will reduce the amount of US gasoline available over the summer. Angola is now the biggest supplier of oil to China, surpassing Saudi Arabia. One UK journalist comments on Russia’s gas dominance in the EU: “Europe, which relies on Russia for a quarter of its gas, has been dreaming of divorce since January 2006.” A Russian journalist writes about Gazprom’s grip on the EU. The company announced that it is negotiating the details of an accord with Italy’s Eni to jointly develop a natural gas project in Libya. The European Bank of Reconstruction and Development will pay €175 million ($277.6 million) to buy a stake in Russian power producer OGK-5. Russian proposals to create a “gas OPEC“, which would involve creating a “universal pricing formula”, will come under scrutiny at a meeting of officials from gas-producing countries in Tehran next week.