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Getting the Facts Right about Russia’s Gas

Here is a letter to the editor of the FT by energy expert Jonathan Stern:

Important new Russian gas fields Sir, Regular readers of the Financial Times have no expectation that your leader page will ever say anything positive about Russia but, whatever their opinions, your writers should at least make an effort to get their facts right. Contrary to the assertion that “in 15 years, Gazprom has yet to open a single important new gas field” (“Gazprom at 15”, editorial, February 13), in 2001 the company began production from the super-giant Zapolyarnoye field, which now produces 100 bcm/year – more than the annual production of the UK North Sea at its peak.

Late last year, Gazprom started production at the South Russkoye field which, over the next two years, will increase to 25 bcm/year. By any standards, these are important new fields; Zapolyarnoye will be one of the largest gas fields brought on stream in the world this century.The assertion that “new prospects such as the Yamal Peninsula and the offshore Shtokman field are years from coming on stream” is correct, but worthy of the qualification that, until the post-2003 surge in international (oil and) gas prices, followed by increases in Russian domestic gas prices, these hugely complex and immensely costly fields were not commercially viable.There are many reasons to criticise both the Russian government and Gazprom, but this type of commentary suggests a lack of balance which is regrettable.Jonathan Stern,Director of Gas Research,Oxford Institute for Energy Studies,Oxford OX2 6FA