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Energy Blast, Feb. 29, 2008

Dmitry Medvedev turned Gazprom, “a Soviet-era industrial basket case that made $670 million in 1998 into one of the world’s biggest industrial concerns, with profits reaching $25 billion last year. Gazprom is far more than a mere energy provider: it is a crucial political resource that has financed Mr Putin’s dream of restoring Russia’s international prestige.” The first joint project of Zarubezhneft and PetroVietnam could be the development of four blocks of fields in Yamal-Nenets Autonomous District, which has aggregate resources of 78 million tons of oil. “But the partners will have to compete with Rosneft and LUKOIL in the battle for the fields.” Russia’s envoy to the UN says that the UN Security Council will not sanction using force against Iran over its controversial nuclear program. Gazprom‘s CEO Aleksey Miller says there’s still no resolution in the issue of Ukraine‘s gas debt. While Ukraine announced mid-week it had settled the bill for gas supplied in 2007, it is still not paying for this year’s gas. Gazprom maintains that it will cut natural gas deliveries to Ukraine by 25% next week unless outstanding disputes are settled.

A “triumphant” President Vladimir Putin praised Hungary for joining the South Stream pipeline and “poured scorn on the rival Western-backed Nabucco project.”WORLD ENERGYE.ON, Germany’s biggest energy group, agreed yesterday to sell off its entire transmission grid in a deal worth billions of euros that is designed to bring to an end its long-running competition battle with the European commission and avoid huge fines. The move “could fundamentally change the continent’s energy industry.”Crude oil rose above $102 a barrel to a record in New York after the US dollar dropped to an all-time low against the euro for a third day, prompting investors to buy commodities as an inflation hedge.“The grip of Europe’s energy monoliths on much of its gas and electricity networks remains strong. European Union member states, led by France and Germany which oppose sweeping energy liberalisation, have persuaded the European Commission to rethink a forced split of companies’ production and distribution assets.