Energy Blast, March 7, 2008

The last-minute deal between Russia and Ukraine to restore gas supplies “appears to be little more than a temporary bandage.” Gazprom may choose to buy a minority stake in one of five Italian power assets run by electricity company Enel in exchange for joint development of its domestic gas fields. Enel is willing to sell or swap assets in Italy for a maximum value of $200 million. Italy’s oil and gas giant Eni, together with Enel, plans to launch natural gas production at deposits in northwest Siberia in early 2010. The construction of the second stage of an oil pipeline being built from East Siberia to the Pacific Ocean could begin in 2009. The East Siberia-Pacific Ocean (ESPO) pipeline project is set to pump up to 1.6 million barrels of crude per day from Siberia to Russia’s Far East and then on to China and the Asia-Pacific region.

Russian utility Mosenergo, the main supplier of electricity and heat to Moscow controlled by Gazprom, said its net loss had more than tripled year-on-year to $90.35 million in the first nine months of 2007.WORLD ENERGYThe head of BP’s alternative energy division has denied rumors that the company is planning to divest its renewable energy business.Oil prices have steadied after nearing a record $106 a barrel as investors reacted to a surprise drop in US crude supplies and the dollar struck new lows against the euro. Venezuela’s border tensions are also contributing to the price, as well as OPEC‘s decision to hold crude output steady.Iraq and China are close to wrapping up negotiations on a $1.2-billion oil contract that was originally agreed to in 1997 under Saddam Hussein’s government.Norwegian energy group StatoilHydro has found oil and gas in an exploration well in the Barents Sea.