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Energy Blast – June 3, 2008

Gazprom could become a buyer of Azeri gas as the country prepares to ramp up production and start competing with Gazprom in southern Europe. “Azerbaijan, being a big hydrocarbons producer in CIS, is a natural partner for Russia and we have common interests.” Three of Gazprom’s managers have reportedly sold $25.5 million worth of shares, “which may signal their belief the stock has reached its peak.” Hydropower producer RusHydro said that capital expenditures could reach a record $3.3 billion this year. Its chief executive commented, “The era of cheap electricity is over.” Vladimir Putin’s Putin proposed tax cuts for the oil industry to stimulate investment “may not go far enough to revive production growth.” Royal Dutch Shell has signed a $700 million deal to buy a stake in Australia’s Arrow Energy to jointly produce natural gas from coal deposits. The opening of the United Nations food summit saw an attack on biofuels subsidies: “Nobody understands how $11bn-$12bn a year on subsidies and protective tariff policies had the effect of diverting 100m tonnes of cereals from human consumption, mostly to satisfy a thirst to fuel for vehicles.