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Energy Blast, March 12, 2008

A report by Russian brokerage UralSib says Russian energy exports are close to reaching a milestone $1 billion per day value mark. Gazprom, KazMunayGaz, Uzbekneftegaz and Turkmengaz officially declared their 2009 transfer to European prices for Central Asian gas. The move possibly signals that Ukraine will no longer be able to find a supplier of cheap gas. Meanwhile Ukraine’s prime minister, Yulia Tymoshenko, has urged Russia to stick to gradual price rises, saying that in all previous negotiations, Russia had agreed gas prices would be raised to market levels over four years from 2008. Russia’s Energy Minister has approved a resolution allowing oil firms to switch to annual oil export plans from the previous quarterly schedules, in order to improve long-term planning. Big companies will benefit especially from these measures. Russia could halve taxes on coal production from 2009, seeking to encourage use of coal instead of gas in power generation. Russian coal producer SUEK has appointed six banks to arrange an $800 million syndicated pre-export loan.

In return for gas supplies to OGK-5, of which it owns 59.8%, Enel is offering Russia’s gas export monopoly Gazprom a stake in an Italian power plant.WORLD ENERGYNew research from Standard Chartered says the soaring oil price did little to stimulate mergers and acquisitions activity in the oil and gas industry last year.Japanese refiner Nippon Oil Corp is close to finalizing its first long-term fuel export deals with oil majors and traders as shrinking domestic demand forces it to step up overseas sales.