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OilMARKET 04 / 2007
TOPIC OF THE ISSUE
The right to chooseThe right to choose
Free market and competition are becoming an intrinsic attribute of the time. In the nearest future, dynamic development of Russia's pipeline system is poised to ensure increasingly wide choice of lucrative export destinations for Russian crude exporters. This rough but fair reality was outlined by Igor Solyarskiy, vice president of Russia's pipeline operator Transneft, on International Investment Forum in Kyiv on 3 April. Ukraine's pipeline operator Ukrtransnafta and Ukraine's refiners are well advised to gear up to tight competition for Russian volumes.
PERSON OF THE ISSUE
A personal responsibilityA personal responsibility
On 28 April Ukraine's minister of fuel and energy Yuri Boiko chaired International Consortium on management and development of Ukraine's natural gas transportation system. The consortium was set up as a 50-50 JV of Ukraine's state-owned Naftogaz Ukrainy and Russia's Gazprom following the orders of Russian and Ukrainian Presidents and inter-governmental Agreement on strategic cooperation in natural gas segment of 7 October 2002.
PHOTO OF THE ISSUE
No way out?No way out?
Pictured, a dreaded but possible outcome of a pullout for Iraq oil infrastructure workers try to fix damage on oil pipeline caused by planted explosives near the city of Safwan, Iraq, near Kuwait border, on 5 April, 2007. A bomb struck an oil pipeline, cutting off supplies and causing a huge fire in southern Iraq near the border with Kuwait.
EVENT
Pushed into survivalPushed into survival
The Queen Elizabeth II Conference Centre welcomed 10th annual Russian Economic Forum on 22-24 April.
EVENT
Profound sense of going down the barrelProfound sense of going down the barrel
Russia's growing refinery runs (in 2006 processing volumes grew to 4.38mn b/d, 6% up y.o.y.) exacerbate the challenge of refining depth at the domestic refineries. In 2006 Russia's average refining depth stood at 71.2%, compared to over 90% in the EU and USA. The reason lies in the lack of advanced treatment facilities for processing heavy bottoms of atmospheric and vacuum distillation into gasoil, naphtha, kerosene, cutting down production of fuel oil, bitumen and tar. This was the key note of the Bottom of the Barrel conference hosted by EPC in Grand Marriott Hotel on 18-19 April.
EVENT
Bunker and energy resources market in the Black Sea regionBunker and energy resources market in the Black Sea region
On 22-23 March Novorossiysk welcomed 2nd international forum Energy Resources Trade and Bunkering in Southern Region, organised by Vostok Capital UK. The members of the forum discussed wide range of issues, including bunkering market, quality issues, oil products supplies problems, transportation, etc., spread over four sessions Crude Distribution and Exports in Russia's Southern Region, Logistics and Development of Transportation Infrastructure, Bunker Fuel Market: Quality Issues for Traders and Tanker Owners, Bunkering Overview in the Regions.
EVENT
Belarus diversification strategyBelarus diversification strategy
Belarus wants to consolidate its position on Western Europe's markets, said Mikhail Osipenko, acting head of Belneftekhim concern, at the conference Belarus Oil Industry Yesterday, Today, Tomorrow. Oil Products Export from Belarus. Belarus Refining in Minsk on 12-13 April. The conference was organised by Belneftekhim Oil Trade House and UK consulting firm Confidence Energy.
EVENT
Many happy  returns!Many happy returns!
Russia
On 4 May Russia's R&D Institute of radial and rotary compressors celebrates 50 years anniversary. For the half-century, Shnepp's NIIturbocompressor institute has been closely linked to development of Russian and Tatarstan economies. Over the years, a special compressor design bureau with only several young engineers and specialists has transformed into Russia's leading R&D design and construction centre for radial, helical, rotary and scroll compressors. The institute now employs some 500 of highly qualified personnel.
EXPLORATION AND PRODUCTION
The difficult growthThe difficult growth
Chornomornaftogaz, the pioneers of Ukrainian (and soviet, from 1979) shelf oil&gas production, has had its share of suffering lack of financing for cash-intensive offshore production projects. Low attention of state authorities to this strategic direction resulted in chronic shortage of financing for the state-owned company (Chornomornaftogaz is a 100% subsidiary of state oil&gas company Naftogaz Ukrainy). Surge of natural gas prices in 2006 and this winter has become a blessing in disguise: today's management of Chornomornaftogaz, jointly with Ukraine's fuel and energy ministry and Naftogaz Ukrainy, are trying to attract top government officials and foreign companies to offshore development projects.
TRANSPORTATION
Pressure in the arteriesPressure in the arteries
Hidden currents in the Nord Stream project
The creators of the Nord Stream pipeline Baltic Sea undersea pipeline link between Russia and Germany and one of the biggest recent pipeline projects have run into new problems. The pipeline laying work will start a year later than planned, it appears. The news came to Brussels in February: the grandeur pipeline construction plans could be put off for an undetermined amount of time. Experts say, one of the key reasons is concern about the environmental impact of the project. Simply carrying out the required investigations could put the project off until 2010, EU Energy Commissioner Andris Piebalgs said.
NATURAL GAS
Pro and contra of the gas cartelPro and contra of the gas cartel
On 9 April the Forum of Gas-Exporting Countries (FGEC) in Doha, Qatar, adopted a decision to set up a high-level group to control the natural gas prices formation. Fourteen countries took part in the forum Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Nigeria, Qatar, Russia, Trinidad and Tobago, the UAE and Venezuela. The group will be engaged in working out a mechanism for forming gas market prices understandable and transparent to consumers and suppliers. This group is to meet at least six times a year. At the conclusion of the forum's meeting of ministers, Russian minister of energy and industry Viktor Khristenko said no decision was made to set up a gas OPEC.
COMPANIES
Farewell, YukosFarewell, Yukos
Oil company's assets will be sold out by summer
Divestiture of assets of beleaguered Yukos entered the final stage, having started back in December 2004 by auction on Yuganskneftegaz, at the time Yukos key production asset. Other significant assets of the company (now in bankruptcy administration) went under hummer in March-April 2007. These include Yukos stake in oil companies Rosneft and Gazprom Neft, as well as natural gas producing subsidiaries Arcticgaz and Urengoil Inc. In May, Yukos remaining significant upstream and downstream subsidiaries will be auctioned the sale would effectively erase the company which for 14 years had been the leader of domestic oil&gas industry. Its subsidiaries, on the other hand, would start a new life, closely monitored by new holders, state-owned oil&gas giants.
TECHNOLOGY
Bio-fuelled SkodaBio-fuelled Skoda
In February, Ukrainian car-maker Eurocar and grain trading company Allseeds Ukraina signed an agreement on concept developing for bio-diesel production and usage. To the date, the sides set up a workgroup to draft an integrated strategy for the project.
03 / 2018