Issue 8: August-September 2011

A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• Gazprom partners raided by European Commission Anti-trust Inspectors
• The dispute between Moscow and Kiev continues. Ukraine knows that it has a weak bargaining position and is in no hurry to make concessions to Russia
• Prime Minister Vladimir Putin launched the first string of Nord Stream, meaning Ukraine is now in danger of losing its status as the main transit country for Russia’s European gas exports
• Gazprom has signed roadmap with South Korea's Kogas for the construction of a pipeline from Vladivostok to South Korea
• Gazprom may suspend its project in Nigeria because of the lack of a law governing the oil and gas industry, although experts say Gazprom may have lost interest in this project because of potential difficulties in selling Nigerian gas
• Gazprom is looking to acquire two state-owned oil and gas companies in Kyrgyzstan
• The Gazprom affiliate Vemex has acquired a 51% stake in RSP Energy, marking the first time a Gazprom Group company will sell gas and electricity to Czech households
• Gazprom has signed a legally-binding agreement with its European partners on the implementation of the South Stream project, but has attracted criticism from the EU. According to Russian sources, EU Energy Commissioner, Guenther Oettinger, views South Stream as an attempt by Moscow to derail the ‘Southern Corridor’ gas supply diversification concept
• In line with new oil production projects in the region, Gazprom Neft is considering the construction of a new oil refinery near Murmansk
• Gazprom expects a doubling of the Mineral Extraction Tax by 2013.

• EGF Editorial  |  Published on EGF: 12.10.2011  |  Energy
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Insights into Turkish Domestic and International Politics during September 2011
Key developments:

• Turkish Prime Minister Erdogan’s September is filled with tumultuous foreign policy issues, coalescing disputes with Israel, Cyprus and the world’s stance towards Somalia in his statement to the UN General Assembly.
• The prime minister visited Libya, Egypt and Tunisia in a quick tour of countries touched by the Arab Spring while continuing his condemnation of Syrian repression of civilians and rebuffing Iranian and Russian anger at Ankara’s participation in NATO’s missile shield.
• Kurdish-related violence seizes the country through terrorist attacks and military operations between PKK fighters and the Turkish military. BDP Kurdish Peace and Democracy Party parliamentary deputies end their boycott of the parliament in order to end the hostilities.
• The European Commission instigates raids on Gazprom subsidiaries on suspected competition violations, with many calling it a political move to garner support for Nabucco and undermine South Stream and Nord Stream.
• Energy major BP announces a planned pipeline from the Shah Deniz II field in Azerbaijan traversing Turkey, Romania, Bulgaria and Hungary.

• EGF Editorial  |  Published on EGF: 12.10.2011  |  Energy
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Insights into Turkish Domestic and International Politics during August 2011
Key developments:

• Turkish Prime Minister Erdogan visits Mogadishu on a famine aid mission, the first visit by a non-African head of state in nearly 20 years. The trip is a huge boost to Turkey’s international image.
  
• Violence in the south-east of the country continues, leading to Turkish Armed Forces (TSK) cross-border raids into Iraq.
  
• Following criticism from the US Secretary of State, the justice ministry contradicts the number of journalists said to be held by Turkish authorities.
  
• Ankara continues to condemn the Syrian regime despite not calling for the resignation of President Bashar al- Assad. The country wins a seat at the Paris meeting of the new Libyan government following the apparent collapse of the Gaddafi regime.
  
• Azerbaijan and Turkey continue to negotiate a gas transit agreement, while Turkey’s reliance on foreign energy imports has reportedly increased 5 % since the AKP came to power.
  

• EGF Editorial  |  Published on EGF: 15.09.2011  |  Energy
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Issue 7: June-July 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

This year, Gazprom is likely to report an income of about $60 billion from the export of 158 bcm of gas to Europe, according to expert estimates. This represents a 12 percent growth in income compared to the previous year and, according to Alexander Medvedev, Deputy Chairman of Gazprom’s Board of Executive Directors, the company’s profits will be close to the record-breaking levels of 2008, when its income from exports reached $65 bn. READ MORE

• EGF Editorial  |  Published on EGF: 21.08.2011  |  Energy
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A wide strip of mainland and continental shelf territory starting from the Rus- sian sector of the Arctic up to the Arabian Peninsula can be labelled an Arctic - Arabian hydrocarbon belt (CH-belt) of Eurasia. It is the strip where the major mainland oil and gas fields are located on the territory of Russia, Kazakhstan, Uzbekistan, Turkmenistan, Iran, and the Gulf and Arabian Peninsula countries. As the production of hydrocarbons has been developing, transport routes to the markets of their consumption, the major of which is the European Union, started to branch off this diagonal CH-belt of Eurasia in the latitudinal direction. Practically, these transport routes connect the area of production (upstream) with the consumption market (downstream).

• Mykhailo Gonchar, Alexander Duleba, Oleksandr Malynovskyi  |  Published on EGF: 27.06.2011  |  Energy
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Issue 6: May 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

The President of Belarus, Alexander Lukashenko, seems to be optimistic about the possibility of obtaining Russian credits to rescue the Belarusian economy. On May 17, he stated that Moscow was ready to lend Minsk $6 billion in 2011. However, the Kremlin responded by suggesting that it will only lend $1 billion and that even this amount will only be possible in combination with the sale of a number of Belarusian assets, notably a 50 percent stake in Beltransgas. Gazprom already holds a 50 percent stake in the company. READ MORE

• EGF Editorial  |  Published on EGF: 13.06.2011  |  Energy
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Issue 5: April 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

On April 25 of this year Gazprom head, Alexei Miller, predicted that the price of gas sold to European gas consumers would increase to $500 per 1,000 cubic metres by the end of 2011. This suggests a price hike of almost 40 percent as currently the average European gas price is $350 per 1,000 cubic metres. While Gazprom officials do make public references to limitations to increases in the gas price, most such comments tend to refer to Russian domestic gas prices. READ MORE

• EGF Editorial  |  Published on EGF: 01.05.2011  |  Energy
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Issue 4: March 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

The dispute between the Lithuanian Government and Gazprom continues. As we wrote in the preceding issue of the Gazprom Monitor, the dispute flared up after the Russian monopoly refused to give Vilnius the same gas price discount that it grants to the other Baltic States. Consequently, the Lithuanian side is forced to pay high gas prices. In response, Vilnius is trying to use the implementation of the Third Energy Package, in relation to the gas transport system of the country, as a lever of pressure against Gazprom. In the end this may bring about both a rupture in the agreement on the privatisation of Lietuvos dujos (37 percent of which belongs to Gazprom) and the separation of control over gas transmission pipelines from companies which own them. READ MORE

• EGF Editorial  |  Published on EGF: 29.04.2011  |  Energy
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By Hrvoje Ćiković, Expert on EU Integration, Energy Security and New Diplomacy

In recent years energy security has become not only a political buzzword but a fundamental concept in (re)shaping relations between governments within the framework of a newly emerging global energy order. Furthermore, factors such as the growing asymmetrical dependence of energy consuming states on producing states, the delicate question of transport (particularly the definition of future pipeline routes), changing trends of economic development, and geopolitical tensions tend to distort established negotiating positions and shift the balance of global power relations. In such a complicated context, it is easy to overlook developments in countries such as Poland which are not in the international spotlight. As Poland has shown resilience in avoiding recession and is becoming an important player in the international arena, it may be interesting to examine the actual dynamics and the core challenges of the country’s energy sector. READ MORE

• Hrvoje Ćiković  |  Published on EGF: 25.04.2011  |  Energy
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Issue 3: February 2011

A Snapshot Of Key Developments In The External Relations Of The Russian Gas Sector

The dispute over the implementation of the EU Third Energy Package in Lithuania continues: the question of Europe’s energy security topped the agenda of the first ever EU energy summit which took place in Brussels on 4 February (2011). The summit began with a speech on the integrated EU energy market and general energy policy towards third countries. Special attention is being given to Russia and the dispute between Gazprom and the Government of Lithuania, which has arisen from plans to nationalise gas transmission pipelines belonging to Lietuvos Dujos. READ MORE

• EGF Editorial  |  Published on EGF: 17.03.2011  |  Energy
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