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Energy Blast – July 2, 2008

Investors are betting that the oil price could surge to $300 a barrel by the end of the year, and the King of Saudia Arabia has announced that the current price is “cheap”. BP executives working at TNK-BP “have already begun leaving the country” after being refused visas. It is being widely reported that chief executive Robert Dudley is one of the employees whose visa has been denied, and “day-to-day control of TNK-BP is leaking towards the oligarchs”. British Prime Minister Gordon Brown is due to appeal directly to Dmitry Medvedev for help in resolving the dispute. One letter published in today’s FT says that the conflict “should not overshadow the real progress being achieved elsewhere.” A Unified Energy System investor has bought the chair Anatoly Chubais used as the company’s chief executive officer for $68,000. Russian oil production declined by 1% in June, the first drop in output for ten years. Gazprom and Lukoil “may revive Soviet-era ties to enter the oil-rich Gulf of the Mexico” through Cuba. Medvedev’s trip to Azerbaijan and Turkmenistan this week “underlines Russia’s determination to maintain its grip on resources flowing out of the region.” What is the potential for alternative energy in Russia? Kiev and Moscow have renewed efforts to solve a management dispute at Ukrtatnafta, Ukraine’s largest refinery, leading to a cut in supplies from Russia’s Tatneft, which says it is owed $400 million in unpaid bills.