Energy Blast, March 5, 2008

Germany and central Europe were “bracing themselves” for cuts in gas supplies after Gazprom halved gas supplies to Ukraine. President Dmitry Medvedev has personally asked Ukrainian leader Viktor Yushchenko to settle the country’s gas debt to Moscow, saying “Russia is expecting Kiev to intensify efforts in solving its gas debt problem.” Yushchenko, in turn, told Prime Minister Yulia Tymoshenko to restart talks with Moscow urgently. Meanwhile the International Energy Agency said Russia’s use of supply cuts to resolve a gas payments row with Ukraine was “excessively harsh” and urged the two countries to settle the dispute in a more commercial way. The US State Department has called for the countries to resolve the dispute “transparently”. Russia’s UN Ambassador is advising Iran that it suspend its nuclear enrichment program, and that it study the incentives to do so offered by the West. Iran labeled the latest round of UN sanctions “worthless”.

France’s EDF is discussing a possible asset swap with Russian electricity trading firm Inter RAO to secure a stake in the Russian firm in two years. BP will remain in the Sakhalin project despite the joint venture’s decision to temporarily stop drilling work on the gas fields. Russian power producer TGK-4 will now accept bids for the government’s stake in the company starting in April, after a postponement.WORLD ENERGYStatoilHydro, Norway’s state-controlled oil and gas company, has continued its expansion by spending up to $2.1bn on operations in Brazil and the Gulf of Mexico. It bought what it did not own of Peregrino, a heavy oil field in Brazil, and 25% of the deep water Kaskida discovery in the Gulf of Mexico, from Anadarko Petroleum of the US.PHOTO: Graphic illustrating Gazprom gas supplies to Europe. Russia and Ukraine are sliding towards a new gas war as Moscow prepared to slash supplies to the ex-Soviet republic by 50 percent and Ukraine’s state gas company said it might cut deliveries to Europe. (AFP/Graphic/Vanessa Gouge)