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Energy Blast – July 29, 2008

Read Yulia Latynina on the Mechel affair: “It sticks out like a sore thumb that this is already Premier Putin’s second attempt at direct interference in the economy.” Putin yesterday accused Mechel of evading taxes by selling products at bargain prices through offshore companies. The situation “won’t do anything to change investors’ perceptions that the big names in government can do as they please with private companies that fall out of favor.” TNK-BP’s Russian shareholders are warning that Robert Dudley’s exiting Russia to try and run the venture from abroad could have serious tax implications, and are apparently demanding to know his whereabouts. BP has reported an almost 30% rise in second-quarter profits, boosted by TNK-BP’s “strong performance”. Militants in the Niger Delta attacked two major crude oil pipelines belonging to Royal Dutch Shell. Gazprom reportedly offered interest-free loans to Turkmenistan in an effort to keep the price of gas from the Central Asian country below European levels. OPEC has warned that oil could rise to $500 a barrel, but that it should be trading at a price of $70-80.