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Tag:

Russia

Why Hasn’t The U.S. Gone After Gazprom?

Why Hasn’t The U.S. Gone After Gazprom?

written by CleanTechies.com Contributor

Amidst the deepening war of words over Moscow’s annexation of Crimea, U.S. President Barack Obama on April 28 added more Russian individuals and companies to a sanctions list that already included influential members of Russian President Vladimir Putin’s inner circle and Bank Rossiya, which has close ties to the Russian leadership. The new list freezes the assets of Igor Sechin, head of Russia’s major oil company, Rosneft, six other individuals and 17 companies.

Significantly, the new U.S. list does not include Alexei Miller, CEO of the Russian natural gas state monopoly, Gazprom.

Although the European Union has imposed its own tough sanctions on 48 Russian individuals, Gazprom is arguably where daylight exists between the Obama administration and the EU on the issue of penalizing Moscow for its actions in Ukraine.

The numbers make it clear why. Russia is the EU’s third-biggest trading partner, after the U.S. and China; in 2012, bilateral EU-Russian trade amounted to almost $370 billion. The same year, U.S. trade with Russia amounted to just $26 billion.

More than half of Russia’s exports go to Europe, and 45 percent of its imports come from Europe, according to the EU EUROSTAT agency. Out of 485 billion cubic meters of gas consumed by the EU annually, Russia supplies about 160 billion cubic meters, or almost one-third the total volume.

Germany, the EU’s economic powerhouse, has been explicit about the costs for the German economy from increased sanctions. Anton Borner, the president of Germany’s main trade group, BGA, warned that more than 6,000 German businesses with $105 billion of turnover are interlinked with Russia and stand to lose if sanctions are ratcheted up.

U.S. Representative Lois Frankel (D-FL), who recently visited Ukraine with a Congressional delegation, has offered the likeliest official explanation for why the White House left Gazprom and CEO Miller untouched in the most recent round of sanctions.

In an April 28 appearance on MSNBC, Frankel said, “I think our president is taking a cautious approach warranted because our European allies are…trade partners with Russia, they depend on Russia’s energy. And so we have [to] be careful because sanctions against Russia also have the good probability of hurting our allies.”

Other members of Congress have shown less willingness to accommodate the EU’s delicate economic position. In recent days, senior members of the U.S. Senate have increased their calls for the White House to move against Gazprom. Carl Levin (D -MI), John McCain (R-AZ) and Bob Corker (R-TN) want Obama to use an executive order that allows him to punish broad sectors of the Russian economy in response to Russia’s actions in Crimea.

The lawmakers’ statements on the issue have been widely covered in the Ukrainian and Russian press.

In an April 12 letter to Obama, Corker, a ranking member of the Senate Foreign Relations Committee, said, “Unless Russia ends its destabilization of eastern Ukraine and drastically reduces troop levels on the Ukrainian border immediately, further sanctions against strategic sectors of the Russian economy, particularly targeting Gazprom and additional important financial institutions, should be imposed within days.”

After the latest round of U.S. sanctions this week, Corker repeated that call in a joint statement with Senator Kelly Ayotte (R-NH), the ranking member of the Senate Armed Services Readiness Subcommittee, in which he said, “Until Putin feels the real pain of sanctions targeting entities like Gazprom, which the Kremlin uses to coerce Ukraine and other neighbors, as well as some significant financial institutions, I don’t think diplomacy will change Russian behavior and de-escalate this crisis.”

During an April 25 visit to the Ukrainian capital, Kiev, Levin told reporters, “The existing authority is sufficient to take very strong sanctioning action against Russian banks that have correspondent accounts in the United States. The authority exists. It should be used, and that includes Gazprom.”

McCain advocated in an April 25 press release, “The United States needs to expand sanctions to major Russian banks, energy companies, and sectors of its economy, such as the arms industry, which serve as instruments of Putin’s foreign policy. NATO needs to move toward a robust and persistent military presence in central Europe and the Baltic countries, including increased missile defense capabilities. We need a transatlantic energy strategy to break Europe’s dependence on Russian oil and gas,” which would include sanctions against Gazprom, according to his office.

McCain recently suggested he has a broader agenda in mind when he said, “The strategy of the U.S. for saving Ukraine must be built in opposition to Russia’s gas strategy, as this will be the end of Putin and his empire.”

Given Gazprom’s centrality to the Russian economy, it’s unlikely that Putin won’t react if and when the company comes in for Western sanctions. In preparation for that possibility, Gazprom’s subsidiary, Gazprombank, Russia’s third largest, last month transferred nearly $7 billion to the Central Bank of the Russian Federation.

Gazprom has already warned that further Western sanctions could disrupt gas exports to Europe.

And Russian Natural Resources Minister Sergei Donskoi has made it explicit that there will be consequences for Western energy firms that comply with sanctions. Speaking on April 24 to journalists in Russia’s far eastern city of Birobidzhan, Donskoi said, “It is obvious that they won’t return in the near future if they sever investment agreements with us, I mean there are consequences as well. Russia is one of the most promising countries in terms of hydrocarbons production. If some contracts are severed here, then, colleagues, you lose a serious lump of your future pie.”

Donskoi also expressed the certainty that if Western firms leave Russia, other foreign energy companies would take their place.

That kind of threatening rhetoric will only make it harder for U.S. officials to sell an already nervous Brussels on the idea of more sanctions, if it comes to that, and on targeting Gazprom, in particular.

Article by John C.K. Daly of Oilprice.com



May 7, 2014 0 comment
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Exxon Mobil Arctic Project Possibly at Risk Over Russia Sanctions

Exxon Mobil Arctic Project Possibly at Risk Over Russia Sanctions

written by Yale Environment 360

Exxon Mobil’s development of a Russian Arctic oil project valued at nearly $900 billion is at risk following recent U.S. sanctions on Russian officials as a result of Ukraine’s ongoing political crisis, Bloomberg News reports.

Exxon Mobil has partnered with the Russian state-controlled oil company OAO Rosneft to drill an oil-rich geological structure known as Universitetskaya, which contains an estimated 9 billion barrels of oil, valued at $900 billion at current market prices.

Rosneft’s CEO, Igor Sechin, a longtime member of Russian President Vladimir Putin’s inner circle, was sanctioned by the U.S. this week, exposing the partnership with Exxon Mobil to additional scrutiny. Exxon Mobil and Rosneft are set to invest an estimated $600 million in drilling at the site in the Kara Sea, which would make the project Exxon’s most expensive to-date.

A U.S. Treasury official said yesterday that U.S. companies can still do business with Rosneft, but some analysts say Russian companies could become wary of working with Western corporations in the future. Exxon said last week that the project is on schedule.



April 30, 2014 1 comment
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Sochi Powers Up: Bringing Energy to Site an Olympic Feat

written by Walter Wang

Luge athletes had an early taste of the pre-Olympics disarray that foreign journalists began cataloguing only last week on their arrival at Sochi.

In the middle of luge teams’ November training sessions at Sliding Center Sanki, where they practiced supine sledding down a banked track at

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February 10, 2014 0 comment
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Russian Oil Giant Becomes First in World to Pump Oil From Arctic

written by Yale Environment 360

The Russian national oil company Gazprom has begun drilling for oil at a highly contested site in the Arctic. The oil field, an offshore site in the Russian Arctic known as Prirazlomnoye, drew international attention in September when a contingent of Greenpeace members boarded the platform in protest and were jailed in Russia for two

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December 24, 2013 0 comment
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Ukraine & Turkey: The European Energy Coup

written by Walter Wang

Though Norway in June overtook Russia in total exports of natural gas to Europe, the balance of Russian gas to Europe comes through Ukraine, which itself is dependent upon Russia for 60% of its current gas consumption.

While Ukraine controls the transit of 90% of its gas to Europe, Russia is consistently trying to use its gas

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October 25, 2013 0 comment
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Russia Looks to Israel for Water Technology, at Ecwatech

written by Walter Wang

Ecwatech Russia, the largest water technology event in Eastern Europe, took place in Moscow at the beginning of this month, with 700 exhibitors from around the globe and over 12,000 visitors.

The Israeli booth at the event drew some of Russia’s most prominent players in the water arena, including

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June 18, 2012 0 comment
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Shale Oil Impact in Russia

written by Walter Wang

Shale oil, known also as kerogen oil or oil-shale oil, is an unconventional oil produced from oil shale by pyrolysis, hydrogenation, or thermal dissolution. These processes convert the organic matter within the rock (kerogen) into synthetic oil and gas. The resulting oil can be used immediately as a fuel or upgraded to meet refinery feedstock

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April 16, 2012 1 comment
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Massive New Russian Gas Pipeline to Europe Now in Operation

written by Walter Wang

Yesterday, a ceremony was held in Lubmin, Germany to inaugurate the Nord Stream gas pipeline, connecting natural gas in Russia to Western Europe. The new pipeline is unique in that it goes directly to Germany from Russia without passing through any other country. The pipeline runs along the bottom of the

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November 9, 2011 0 comment
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North Korean Leader Supports Russian Natgas Pipeline to South Korea

written by Walter Wang

North Korean leader Kim Jong Il, following a summit meeting with Russian Federation President Dmitry Medvedev in the Siberian city of Khabarovsk, has expressed support for a proposed Russian project to send Siberian natural gas to South Korea through North Korean territory.

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August 31, 2011 1 comment
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Top Ten Highlights of Cleantech in Russia

written by Shawn Lesser

Russia, by far, is the largest producer of gas in the world. The country has commonly relied on coal and natural gas for its growing energy demand. However, because of this, Russia is labeled as the third largest greenhouse gas emitter in the world as one-fourth of the emissions come from energy generation. Not only that, but in 2010 the EBRD stated that Russia uses

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February 25, 2011 1 comment
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Energy Intensity: Energy Use by Country

written by Siddharth Kalla

Energy is required for any economy to function. From the industrial revolution, the total energy used by the world has only increased in magnitude. However, the good news is that while a hundred years ago we were getting our energy from sources like coal, today’s energy sources are not only less polluting but also more efficient. As a

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January 21, 2011 0 comment
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Russia and the World Looks Towards High Speed Rail

written by Justmeans

Hot on the heels of the announcement of Russia’s first ever electric vehicle hybrid another announcement came about the bolstering of Russia’s green transportation systems. According to the announcement that came from Prime Minister Vladimir Putin, the country is preparing to begin serious work towards a high speed rail system. Russia isn’t alone on this plan either. Many

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December 22, 2010 0 comment
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Russia Announced Her First Electric Vehicle Hybrid

written by Justmeans

The Russian automotive industry is not one that is totally familiar with the green changes towards electric vehicles and other models that have been sweeping other countries throughout Europe or the world. In fact, historically, there has never been much to say about the automotive industry as a whole. In past decades car models tended to be outdated while time was spent

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December 20, 2010 1 comment
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Russia to Invest $300 Billion in Energy Efficiency

written by Edouard Stenger

Some interesting news recently went unnoticed. Indeed, last month, Russia unveiled a massive energy efficiency plan as the country wastes as much energy as the French economy consumes.

Soviet-era buildings and factories completely lack energy efficiency as they were built as cheaply as possible to answer the demands of the government at that time.

But this might soon change. The Moscow Times

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November 29, 2010 3 comments
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