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Energy Blast – June 23, 2010

Gas tensions are fully flaring: Gazprom has increased the cut on supplies to Belarus to 60% of normal volumes.  Belarus is reportedly threatening to halt transit to Europe, with President Alexander Lukashenko demanding that the Russian exporter pay $260 million in transit fees for the first half of this year, a payment which Gazprom claims Belarus is hindering.  Belarus has reportedly threatened Gazprom that gas would be taken from its Europe-bound shipments if the country’s supplies were reduced further.  German Economy Minister Rainer Bruederle has waded in to express hope that supplies to Europe will be unaffected.  Conflicting reports are out on whether Europe will face disruptions: Bloomberg reports that Gazprom CEO Alexei Miller is assuring European customers, whilst Reuters reports that Deputy Prime Minister Igor Sechin has apparently told the EU that there could be some interruptions (which the Union estimates could be up to 6.25% of its gas consumption).  Ukraine is reportedly willing to step in and take over transit.  Consult Bloomberg for another party who stands to benefit from the gas row.  Russia is apparently looking for guarantees from BP that TNK-BP will not be affected by the costs of cleaning up the oil spill in the Gulf of Mexico.  Meanwhile the beleaguered British major says it has no plans to exit the North Sea.