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Vol. XXIII, No. 14
April 10, 2014
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Russia Mulls Plan B
In Case Sanction Escalate
Russian oil and gas companies claim their operations have
Print
not been affected by the sanctions imposed so far by the
West over Moscow’s annexation of Crimea. But to counter
the threat of new restrictions, Russia is considering various protective measures, including a possible switch to
rubles in payments for Russian oil and gas, and the delisting of Russian companies’ shares from Western stock markets. Those proposals are taken with a pinch of salt by
experts but there is little doubt they would be implemented if a political order is given.
Insisting that it is business as usual, Russian companies recognize that the most sensitive issue could be in
attracting financing from Western banks, with costs likely
to rise. Novatek’s Yamal LNG project could be the first to
feel the impact as US Eximbank has refused to participate
in financing the $27 billion project because Novatek’s major shareholder Gennady Timchenko is on the US sanctions list (NC Mar.27’14).
France’s Total, which holds 20% in Yamal LNG, says it
doesn’t expect any other credit agency to withdraw. However,
it understands that the cost of the loan that the Yamal LNG
shareholders are negotiating with a group of international
and Russian banks could rise. “We will have to optimize the
benefit of having external financing with the cost of it and
what is the right balance which we will be comfortable with,”
Jacques de Boisseson, general director of Total E&P Russie,
said in an exclusive interview with Nefte Compass (p5).
However, market rumors claim that Novatek, to be
more confident of the project’s success, is interested in
selling another 9% out of its current 60% stake in Yamal
LNG to China National Petroleum Corp., which already
has 20%. This could not only secure a reliable gas buyer
for Yamal LNG, but also provide sources of finance that
are out of the reach of Western sanctions.
Turning to Asian banks is also being considered by other
Russian companies. Gazprom Neft President Alexander
Dyukov told reporters last week that the company “has
paved the way to Asian creditors” in case Western banks stop
cooperating. Dyukov said such a move by Western banks
would be “unlikely,” pointing to the receipt of a loan after
sanctions had been introduced from a club of international
banks, including Bank of America Merrill Lynch. “Everything
Web
(see Russia, page 2)
Inside This Issue:
■
■
■
■
■
■
Gazprom Neft approaches Iraq field start-up, page 3
Russia falls short of flaring target, page 4
NC interview with Total Russia’s chief, page 5
US rattles sabers in energy war with Russia, page 7
No light at tunnel’s end for Kashagan, page 10
Russia could force Ukraine to pre-pay for gas, page 11
Kazakhstan Spooked by
Russia Sanctions Talk
Alarmed by the prospect of the West imposing tougher sanctions against Russia over Ukraine, Kazakhstan has drawn up
contingency plans to reduce oil exports via the Russian pipeline system and reroute the barrels to other destinations, including China, Georgia and Iran.
In a presentation this week to members of Parliament,
Kazakhstan’s Oil and Gas Minister Uzakbai Karabalin said
concrete measures needed to be taken to deal with the repercussion of any sanctions on Russia. “We cannot feel relaxed
and wait for what might happen. We cannot predict what
sanctions Russia may face from the West,” he was quoted as
saying. Karabalin said it was imperative for Kazakhstan to
have as many export routes as possible at its disposal. “The
current global situation once again emphasizes how important it is to diversify crude exports routes,” he said.
Karabalin, an industry veteran who spent several years as
head of state oil company Kazmunaigas (KMG), told deputies that last year more than 60% of Kazakhstan’s crude oil
exports by pipeline went via Russia. He said 28.7 million
metric tons (560,000 barrels per day) of crude was sent via
the Caspian Pipeline Consortium (CPC) system to the
Russian Black Sea port of Novorossiysk, making up 40% of
the total, while deliveries via the Atyrau-Samara pipeline accounted for 5.4 million tons (310,000 b/d), or 21% of the
total. Of the remainder, 11.8 million tons of Kazakh crude
was piped to China via the pipeline running from Atasu to
Alashankou on the Chinese border, while 9.3 million tons
was sent to the Caspian port of Aktau, for onward shipment
either to Baku and then by rail to the Georgian Black Sea port
of Batumi, or to the Russian port of Makhachkala and then
by pipeline to Novorossiysk.
If exports through Russia are hampered, Kazakhstan
(see Kazakhstan, page 2)
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NC page 2
Russia
(continued from page 1)
happened in the usual way. There have
been no delays, no questions, either
oral or written,” he said.
Another “Plan B” that Gazprom
Neft and other Russian companies
are working on is abandoning US
dollars in their oil and gas contracts.
The idea was launched by Andrei
Kostin, chairman of the executive
board of state-controlled VTB bank.
“This to a certain extent will be a
guarantee that if someone wants to
impose sanctions against us similar
to the Iranian ones, we will have
some degree of protection against
that,” he said in a interview with the
Russian television station Rossiya. He
added though that a move to use a
certain currency as a means of payment should be a free decision taken
by Russian exporters and importers,
as well as by their Western and
Eastern partners.
Kostin said the heads of Russia’s
three state-controlled companies —
Rosneft, Gazprom and Rostechnologies
— are ready for such a switch.
G a z p ro m s p o k e s m a n S e rg e i
Kupriyanov confirmed the gas giant
is considering a more active use of
rubles in payments with counteragents overseas.
Dyukov was more cautious. “We
have discussed with our buyers the
possibility of switching contracts to euros and ... 95% said they are ready.” He
added that if the order is issued to
move to rubles, “nothing is impossible.” The only thing that needs to be
studied is the efficiency of such a move
... For me, this remains an open question,” Dyukov said.
Representatives of other Russian
companies are even less enthusiastic.
Rosneft said it uses the currencies
stipulated in its contracts with buyers. “What is important for us is to
fulfill the contract obligations,”
Rosneft President Igor Sechin was
quoted as saying.
A representative of one Russian
independent was blunt: “I don’t
understand how this could be
done,” he said. A source in another
April 10, 2014
company pointed to the possible
loss of advantages that Russian exporters have enjoyed as they receive revenues in dollars while the
majority of their expenses are in
rubles, where the exchange rate has
dropped. As for switching to euros,
Europe is not the only market for
Russian oil and gas, experts say,
adding that the banks could be the
main winners from such a move.
Traders are skeptical about the
plan too and don’t foresee any
changes, noting the significance of
Rosneft’s multibillion-dollar five-year
prefinancing deals with traders
Glencore, Vitol and Trafigura.
The call from Russia’s First Deputy
Minister Igor Shuvalov for Russian
companies to switch the registration of
their shares to the Moscow stock exchange from London and New York
has met with even less enthusiasm.
Lukoil President Vagit Alekperov
simply reiterated the company’s outstanding plan to obtain a listing in
Hong Kong.
Nelli Sharushkina, Moscow
Kazakhstan
(continued from page 1)
could ship more oil from Aktau, which
has a working capacity of 12 million
tons per year, Karabalin said. More barrels could be sent out of Batumi, which
is 100% owned by KMG subsidiary
Kaztransoil and is used as a regular export outlet for waxy crude from
K a z a k h s t a n ’s K u m k o l f i e l d .
Alternatively, oil could be shipped
south to Iran — but only provided that
the US and EU ease sanctions which
prohibit oil trade with Iran. This may
not happen for some while, as negotiations between Iran and the West on resolving the impasse over Iran’s nuclear
program make slow progress.
Karabalin said Iran was an “effective” route for Kazakhstan before the
shipments ground to a halt in July
2010 because of sanctions. At their
peak, as much as 50,000 b/d of
Kazakh crude was being shipped in
small tankers to Iran’s Neka terminal
and then swapped for better-quality
Iranian Light crude at Kharg Island.
The deliveries were handled by
Caspian Oil Developments, a
Dutch-registered joint venture between well-connected Kazakh interests and Swiss trader Vitol. On
the receiving end was Naftiran
Intertrade Co., a subsidiary of
state-owned National Iranian Oil
Co. which has been blacklisted by
the US and the EU over its alleged
links to the Iranian regime.
Kazakhstan is also eager to increase exports to China, but
Karabalin says this will not happen
until the capacity of the AtasuAlashankou pipeline is expanded
to 20 million tons/yr, a process he
said would take another two years
(NC Oct.24’13).
Pipelines are not the only way for
Kazakhstan to get its crude to market. Last year, around 9 million tons,
or some 12% of overall exports, were
dispatched by rail, mostly to ports on
Russia’s Black Sea. In recent years,
some oil from the Karachaganak and
Tengiz fields was being railed across
Russia to the Crimean port of
Feodosiya, but shipments have
stopped since Russia annexed the
peninsula and are unlikely to resume
(NC May9’13).
The main Russian Black Sea outlet for railed Kazakh crude is the term i n a l a t Ta m a m n o r t h o f
Novorossiysk which is developing
into a key transshipment hub for
high quality Tengiz crude produced
by the Chevron-led Tengizchevroil
(TCO) joint venture. More than five
cargoes of 80,000 tons each are now
shipped each month out of Tamam,
which is owned by private Russian
group Oteko. Industry sources say
Tamam offers TCO by far the best
tariffs compared to other routes such
as Baku-Batumi. TCO still sends the
bulk of its oil via the CPC pipeline,
which is now in the process of being
expanded (NC Feb.13’14).
Paul Sampson, London
Editorial Staff: Moscow Bureau Chief: Nelli Sharushkina. Senior Correspondents: Axel Busch, Paul Sampson, Nadezhda Sladkova. Staff Reporter: Gary Peach.
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NC page 3
April 10, 2014
Russia
Total Buys First Cargo
From Arctic Oil Field
The first crude oil cargo from the
Gazprom Neft-operated Prirazlomnoye
offshore field in the Arctic has been
bought by Total, market sources say.
The 70,000-ton tanker is to start
its journey from the Pechora Sea to
Rotterdam in the next few days.
The cargo was sold in the course
of direct negotiations with a discount to Russia’s Urals export blend
because the Prirazlomnoye crude is
heavy and contains a lot of sulfur,
traders say.
Market players do not expect
Gazprom Neft, which is developing
the 530 million bbl Prirazlomnoye
field, to tender crude from the acreage this year but rather to continue
selling it based on direct talks with
buyers, as output this year is
pegged at only 300,000 tons. It will
also want the markets to develop a
taste for the new crude.
Gazprom Neft, the oil arm of
state-controlled gas giant Gazprom,
started production at Prirazlomnoye
at the end of December, with output expected to peak at 120,500
b/d in 2021.
Gazprom Neft President
Alexander Dyukov said last week that
development of the acreage would be
economically viable even at an oil
price of $80/bbl, thanks to tax breaks
granted by the government for offshore fields (NC Apr.3’14).
Russia to Test New
Profits-Based Tax
Russia has seemingly made some
progress in long-term discussions
over switching to a new profitsbased tax system from the current
one based on revenues. However,
the effectiveness of the new system
will initially only be tested on selected projects.
R u s s i a ’s e n e rg y m i n i s t e r,
Alexander Novak, said on Apr. 9
that the country’s tax issues up to
2018 were discussed the day before
at a meeting chaired by First Vice
Premier Igor Shuvalov. Novak said
all the participants of the meeting,
except for Russia’s finance ministry,
supported the idea of introducing
an excess profits tax for pilot projects starting from 2015.
A “decision has been made by
R u s s i a ’s P r e m i e r ” [ D m i t r y
Medvedev] to prepare the necessary
legislative changes, the minister
said. “Shuvalov also supported the
issue yesterday,” Novak added. The
energy ministry hopes that the list
of pilot projects eligible for the new
tax system should be prepared in
the autumn.
Russian oil firms have been asking for a shift to the profits-based
tax system for at least 10 years.
Russian officials earlier said that it
makes sense to test the system first
in pilot schemes.
Among those companies that
might start enjoying the new system next year are Lukoil,
Surgutneftegas, Bashneft and
Tatneft, which have all been dis-
cussing the move with state officials
for the last two years. Lukoil might
get an excess profit tax for its giant
Imilorskoye field in West Siberia,
where the country’s second-large s t c r u d e p ro d u c e r re c e n t l y
started drilling with a view to
launching production in March
2015 (NC Feb.27’14).
Surgutneftegas hopes the new
system will be applicable to its giant Shpilmana (North-Rogozhn i k o v s k o y e ) f i e l d i n We s t
Siberia, one of the largest deposits discovered in Soviet times,
which it won in 2012.
Gazprom Neft Confirms
Iraq Start-Up Target
Gazprom Neft has confirmed its
plans to start production at the
Badra field in Iraq next month, although sources claim the launch
could be delayed if surface facilities
Russian Oil Exports Drop in March
Russian crude oil exports to countries outside the former Soviet
Union (FSU) stood at 4.04 million
b/d last month, down from 4.14
million b/d in the same period last
year as a result of lower shipments
from key Russian export outlets on
the Baltic and Black Seas.
Exports to neighboring Belarus
and Kazakhstan dropped by 31% to
428,000 b/d. Exports to Kazakhstan
are currently labeled as shipments
outside the FSU under a swap agreement between Moscow and Astana
that envisages supplies of Rosneft’s
crude to Kazakh refineries and the
subsequent shipment of the same
amount to China, in line with an
agreement between Rosneft and
China National Petroleum Corp.
Exports via the system of Russia’s
oil pipeline monopoly Transneft averaged 3.56 million b/d in March, down
by 5% on the year largely due to lower
shipments from the Primorsk and
Ust-Luga outlets on the Baltic Sea,
which dropped by 25% to just 1 million b/d (table, p12). Russia’s Energy
www.energyintel.com
Minister Alexander Novak confirmed
on Apr. 9 that crude shipments from
those ports will start declining in favor
of higher exports to the east, but in
turn, Moscow is planing to use the
freed capacities for expanded product
shipments (NC Mar.13’14).
Exports via the Druzhba pipeline to Europe dropped slightly
from 982,000 b/d last year to
941,000 b/d last month.
In the east, shipments to China via
the spur from the East Siberia-Pacific
Ocean (Espo) pipeline and via
Kazakhstan increased last month to
452,600 b/d as opposed to 302,000
b/d from the Espo spur alone last year.
Shipments from the port of Kozmino
at the end of the Espo pipeline
jumped by 11% to 472,700 b/d.
Exports bypassing the
Tr a n s n e f t s y s t e m a v e r a g e d
490,000 b/d, up by 18% on the
year mainly due to higher shipments of crude from the Trebs and
Titov oil fields developed by
Bashneft and Lukoil. The crude
was exported from Lukoil’s Arctic
NC page 4
April 10, 2014
Russia
are not installed on time. Work is
progressing at a “very slow” pace,
according to insiders, which may
push back commissioning of the 6
billion bbl field. Gazprom is developing Badra together with Korea
Gas, Malaysia’s Petronas and
Turkey’s TPAO.
It’s not the first time Gazprom
Neft has had to postpone production
start-up at Badra, which was originally scheduled to begin in August
or September of last year. UK-listed
services company Petrofac has been
working on surface installations, and
Gazprom Neft recently changed its
drilling contractor, choosing Chinese
Zhongman Petroleum and Natural
Gas Group to replace Schlumberger,
which had run into geological difficulties. Gazprom Neft produced its
first oil from the field in December
last year before completing testing
of the BD-4 well. In mid-March,
the company completed tests at the
second well and is currently drilling the third well at the site. This
year work should start on drilling
more exploration wells across the
acreage (NC Jan.16’14).
Gazprom Neft says output
should reach 350,000 metric tons
this year and eventually rise to over
1 million tons (20,000 b/d) in
2015. Peak production of 170,700
b/d should be reached in 2017
and last for several years under
the Badra service contract, which
Gazprom Neft won in a tender in
late 2009.
According to Gazprom Neft
head Alexander Dyukov, about $1
billion has been invested in the
project. The Russian major will
start recouping costs and a $5.50/
bbl remuneration fee in kind once
Badra’s production stands at
15,000 b/d for 90 days.
Dyukov told reporters last
week that members of the consortium could market their shares
of oil separately or could nominate a special company to do that
if this turns out to be more efficient. He failed to give the specifications of the crude to be
pumped from Badra, noting only
that it would be in line with the
characteristics of Basrah Light,
which is of 30.2° API gravity with
a 2.5% sulfur content.
Gazprom Oil Find
Boosts Sakhalin Reserves
Russian officials confirmed that a
big oil discovery has been made by
Gazprom at its Yuzhno-Kirinskoye
field in the Sakhalin-3 Block,
which was supposed to become
the resource base for gas for the
planned Vladivostok LNG project.
According to data from Russia’s
energy ministry, exploration carried
out at the field by the state-controlled gas giant has unearthed reserves estimated at 464 million metric tons (3.4 billion bbl) of crude oil
under Russia’s C1+C2 classification.
Russia’s Natural Resources
Minister Sergei Donskoi told journalists on Apr. 9 that Rosnedra, the
ministry’s subsoil agency, has re-
jected an application from Gazprom
for permission to formalize the discovery and approve the draft development plan for the field.
“We think the development plan
can be improved, particularly regarding the crude extraction ratio,”
Donskoi said. “The project should
become more rational,” the minister
added. The Yuzhno-Kirinskoye field
was supposed to feed Gazprom’s
planned 10 million ton/yr
Vladivostok LNG plant, where the
first of two equal trains was originally supposed to be launched in
2018. However, a recent eurobond
prospectus from Gazprom delays the
Yuzhno-Kirinskoye start-up until after 2019 and the field’s peak production to 2023-24, which is understood to be in light of the new oil
discovery. Analysts say Gazprom
would be forced to delay the
Vladivostok LNG plant as well, despite the gas giant’s insistence that all
plans are on track (NC Feb.27’14).
Russia Falls Short of Flaring Target
Russian oil and gas firms increased
sive flaring after companies failed to
associated gas utilization rates in
meet the previous deadline in 2012,
2013, but they have yet to reach the
and then planned to increase them
official goal of 95%.
again in 2014 to spur companies to
Russian companies reduced flarinvest more to reach the desired utiliing, which is harmful to the environzation rate (NC Jan.16’14).
ment, to 21.2% of associated gas outMost companies have made sigput last year from 23.8% in 2012, acnificant progress and stand a good
cording to data released by the energy
chance of reaching the target in
ministry on Apr. 9.
2015, Renaissance Capital analyst
Last December, Natural Resources
Ildar Davletshin said, adding that inMinister Sergei
stead of imposing
Donskoi estimated
fines, the authoriAssociated Petroleum Gas Production ties might make
the associated gas
ProductionUtilization (%)
utilization rate at companies reduce
(Bcm)
20122013 2012 2013
75.9% for 2013 Rosneft
gas flaring by pro20.221.3 66.6 68.7
8.3 9.1 86.687.5
and projected it at Lukoil
viding them with
12.212.1 99.2 99.3
86.7% for 2014 Surgutneftegas
opportunities to
Gazprom Neft
4.2 5.4
65.7 79.5
and 93.7% for Tatneft
sell the associated
0.9 0.9 94.593.6
0.4 0.4 75.272.7
2015, which is Bashneft
gas on beneficial
Slavneft
0.8 0.8 74.576.6
still less than the Russneft
terms. Some com1.1 1.2 69.876.6
48.1 51.2
76.7 79.4
95% target con- Total panies have low
firmed by the Gazprom utilization rates be1.5 1.3
86.0 93.1
energy ministry Novatek
cause they lack the
0.1 0.3 47.193.1
Independent Producers 2.9 3.5
63.5 62.2
for 2015.
infrastructure to
PSA Operators
2.2 2.3
83.8 90.1
The govern- Russia Total
pump the associ54.8 58.6
76.2 78.8
ment introduced
ated gas into pipefines for exces- Source: Energy Ministry
lines, he said.
www.energyintel.com
NC page 5
Russia
Total Russia Chief Stresses Commitment
To Russia with New Shale Plays
Total is not going to alter its long-term investment plans in Russia despite the current frictions between Moscow and the
West over Ukraine. As evidence of its commitment, the company is expanding in
shale oil in Russia. In an exclusive interview with Nefte Compass, Jacques de
Boisseson, general director of Total E&P
Russie, outlines the company’s plans, from
the details of its new joint venture with
Lukoil to the status of the “sleeping beauty”
Shtokman field, and shares the French
major’s views on the development of EURussia relations.
Q: Three years ago, when Total was
celebrating 20 years in Russia, the
company was saying it would be targeting a production level of 18 million-20 million metric tons of hydrocarbons in Russia by 2020. How
have the plans changed since then?
A: We are still heading towards 20
million tons, which is 400,000 barrels per day, roughly in three to four
years’ time. Most of this production
comes from our participation in
Novatek and the rest from our projects in Russia. So, most of it depends
on Novatek’s capacity to grow its
production and we will reap the benefits of it. So far, Novatek has met its
objectives and we believe that they
will continue doing so.
Q: Have Total’s Russian plans
been impacted by the standoff
between Russia and the West
over Ukraine? Is there any fear
that Total would have to curtail
its operations in Russia?
A: This has not had any impact on our
plans and on our operations. There is
always political risk in any country.
This is part of the risk that we have
taken when we decided to invest. We
are here for the long term and we will
certainly not change our plans because
of short-term issues.
Q: So, you are confident in your
investment.
A: Yes, unless and until things change
significantly, I feel confident.
Q: What should change “significantly”
that would change your position?
A: We have decided to invest in Russia
for 20, 30, 40, 50 years, so we are still
confident that over that period our investment makes sense. What will happen in three months, or in a year or
two, and what ups and downs there
will be on the way, I don’t know. We
are monitoring the situation and will
take note of all political and economic
changes in Russia.
Total’s Russia Interests*
Project
StakePartner
Kharyaga PSA
40%
Statoil (30%)
Zarubezhneft (20%)
Nenets Oil Co. (10%)
Yamal LNG
20%
Novatek (60%)
CNPC (20%)
Shtokman
25%
Gazprom (75%)
Termokarstovoye 49%
Novatek (51%)
Khvalynskoye 17%
Kazmunaigas (25%)
GDF (8%)
Lukoil (50%)
Shale Oil JV 49%
Lukoil (51%)
* Total also holds 17% in Novatek, which it is to grow
to a maximum of 19.4%. Source: Energy Intelligence
Q: We know that business in general is not interested in the escalation of the situation. But what happens when politics prevails over
economic interests?
A: If politicians take sanctions that
prevent us legally from investing in
Russia, then we will not invest in
Russia, if those sanctions are applicable to us. For the time being, it’s
business as usual. My sense is that
there is too much at stake on all sides
for the situation to get to the extreme
that I have mentioned. But I don’t
know what can actually happen and
I don’t want to speculate about that.
Again, this is part of the risk we have
assessed when we decided to invest
here and this is not a decision that
will change for short-term reasons.
Q: You have decided to invest in
shale oil in Russia. What are your
plans in this area, including the
joint venture you are setting up
with Lukoil?
www.energyintel.com
April 10, 2014
A: We’ve got three blocks from an
auction that was conducted in
January. The bid took place in
January and then there was a process
of selection and we received a confirmation in March that we had those
three blocks, which are in the
Khanty-Mansiysk region. This is
part of our strategy to invest in the
Bazhenov play of shale oil in Russia
that we think has a very big potential, which still needs to be proven
though. This will be done by applying our ideas, our technology
and our capacity to concrete cases.
That is why getting those blocks
was so important.
Q: Are these licenses going to be
part of your joint venture with
Lukoil?
A: First, we have to finalize our JV
with Lukoil. We signed a memorandum of understanding back in
December and we are currently negotiating the detailed agreement for
the JV, which we hope will be set up
in the next few months. We don’t
have a fixed timetable for that, but I
would say that the talks we are having with Lukoil are progressing well.
It will be a 51%-49% division, with
Lukoil holding the majority.
Q: What will the two sides contribute?
A: It will be a combination of what
both can contribute. Having exploration for shale hydrocarbons in
Argentina, Denmark, Poland and the
UK, and setting up others in China and
Australia, we will bring our know-how,
our technology, our experience in developing similar reserves. Lukoil will
bring its capacity to work in Western
Siberia. Both sides will contribute licenses, money and their specific expertise. We believe we will make a
good combination with Lukoil. We
think that putting our forces together
is the right mix.
Q: Is your partnership model with
Lukoil going to be the same as the
one that Rosneft has with international companies?
A: No, as far as I know, the scheme is
not the same.
NC page 6
Russia
Q: What does Lukoil have that
you lack?
A: Certainly, it’s their experience in the
region. They have demonstrated their
capacity to operate in this particular
environment, not only the physical environment but also the business environment — I mean the service industry, the contractors, the engineering
and drilling companies that they have
been working with for many, many
years. They are one of the major actors
in Russia as a whole and in that region
in particular, so this gives us access to a
lot of industrial capacity, which is
something that will be key in the development of the shale oil. The success of
the shale oil and shale gas in the US is
due to a number of factors. One of
them is certainly the capacity to line up
the contractors and the service companies in order to drastically reduce costs,
particularly the cost of drilling, and this
is one of the key parameters for this
kind of development. Lukoil is certainly one of the best partners to mobilize the drilling contractors and the
service companies that will be required
to make this project profitable. So, here
they can bring a lot. Rosneft and others
are also capable of lining up all that but
Lukoil was keen to work with us.
Q: And Rosneft was not?
A: Lukoil was keen to work with us.
This is very important and we’ve found
a fit. And if we’ve found a fit we don’t
need to look for someone else. We are
very happy with Lukoil.
Q: Do you have an estimate how
much it could cost?
A: That is the key. We think we can
do it but we have to demonstrate
it, we have to prove it. Nobody has
so far proven that this can be produced profitably, this is a challenge.
I am not saying we will be successful but at least we will try. And as I
said, we need to have the right
combination of cost, price, tax, industrial capacity, incentives, etc.
Q: At what oil price will the shale
play be profitable?
A: Our scenarios do not anticipate a significant reduction in the
current oil price but the challenge
April 10, 2014
is to have costs that make operations profitable given the productivity of the wells.
that. Obviously, it will be challenging
because building a plant in Yamal is
not easy but we can make it.
Q: Are the tax breaks given by the
government enough to develop
shale oil?
A: The government has recognized
that this needs special treatment to
incentivize companies to start this
adventure. We clearly require as low
taxes as possible in order to make the
combination right.
Q: Do you foresee any impact on the
project from the sanctions placed on
Novatek shareholder Gennady
Timchenko? US Eximbank has already refused to participate in the
financing of Yamal LNG.
A: First of all, my understanding is that
the US sanctions that apply to Mr.
Timchenko only affect the companies
which he is a shareholder of with more
than 50%, which is not the case with
Novatek. So, formally these sanctions
do not affect Novatek and Yamal LNG.
According to some press reports, US
Eximbank is reconsidering its participation in the project due to US sanctions. US Eximbank is government
owned. I think it is logical that they
are more careful regarding US sanctions. I don’t expect any other export
credit agency or financing body or
entity to follow the same route. As
things stand now and independently
of any further moves, I am not expecting the financing of Yamal LNG
to be affected. Q: Are the ones that have already
been passed enough?
A: Not only Total and Lukoil but
the whole industry still needs to
see how they will be applied and
how it will work. What I think is
that the government is aware that it
needs to play its part and the government has proved in the past
that it can be flexible enough to
make the development possible. A
good example is Yamal LNG.
Q: What are your estimates of the
potential for shale oil in Russia?
A: It’s difficult to make estimates because you can estimate what is in the
ground, but how much we will be
able to produce of that is anybody’s
guess at this stage.
Q: How is the Yamal LNG project
progressing? What is the targeted date for start-up? Doesn’t
2017 look ambitious?
A: It is progressing well and according to plan. The targeted date for the
first train start-up is 2017. I know it
looks ambitious to many but you
have to take into account various factors. First of all, it seemed ambitious
to take the final investment decision
[FID] in 2013 but we did it because
we have a joint venture and we have
partners that are able to make quick
decisions and make things happen.
Second, the FID was not the start of
the story. We started making significant investments before the FID in
terms of infrastructure, logistic and
other facilities, so if you take all this
into account then 2017 is much
more achievable. Today nothing can
make me believe that we cannot do
www.energyintel.com
Q: What about gas buyers?
A: I am not seeing any of our gas
buyers uncomfortable today with today’s sanctions. And again, if things
stand as they are today, to me it’s not
a significant probability that any
buyer or any financier will withdraw
from Yamal LNG.
Q: What are the latest cost estimates for Yamal LNG? How is financing coming along?
A: The latest estimate is the one that
we announced at FID, which is $27
billion. The idea is to take project financing with a consortium of
Russian and international banks and
the plan is to negotiate this in the
course of 2014 and hopefully to have
that ready by the end of the year. We
don’t know how much would come
from the banks and how much from
the shareholders. We will be looking
for as much as we can, but this is not
only in our hands.
Read the interview in full online.
NC page 7
April 10, 2014
Russia
US Heading for Cold Energy
War With Russia
Four months ago, Morgan
Stanley’s announcement that it
would sell key parts of its global
oil trading business to state-controlled oil company Rosneft was
seen in the US as a sign of growing energy cooperation with
Russia. Now, as tensions remain
high over Ukraine and the US
slaps sanctions on Russia, it is
seen as a pact with the enemy. In
Washington at least, the deal is
politically dead.
As reported earlier, Rosneft’s
investment must be approved by
the Committee on Foreign
Investment in the United States
(CFIUS), a panel with 14 agencies that screens for national security risks (NC Apr.3’14).
CFIUS prides itself on being a factdriven and apolitical entity. Typically,
the committee’s Department of
Defense hawks are balanced by the
doves of the Department of State. In
this case, however, even the
Department of State is one of
Moscow’s most vocal critics.
In the five years through
2012, CFIUS dealt with 538
cases where foreigners wanted to
buy or buy into US companies.
Of these proposed deals, 168
were investigated and 70 were
withdrawn. Just one deal met a
presidential veto. Ralls Corp.,
owned by Chinese nationals, was
not allowed to buy four wind
farm projects. Without spelling it
out, national security was a key
consideration. “The wind farm
sites are all within or in the vicinity of restricted air space at
Naval Weapons Systems Training
Facility Boardman in Oregon,”
says the latest annual CFIUS report to Congress.
Russian interest in US companies has been limited. Russian
firms bought four US entities in
2010, zero in 2011 and two in
2012. Data for 2013 is not yet
available. Of these deals, three
were in the financial information
and services sectors.
Rosneft’s transaction is likely
to be the most valuable of recent
Russian deals, although the parties haven’t mentioned a price.
To boost its global trading business, Rosneft wants to take over
some 100 traders from Morgan
Stanley in New York, London
and Singapore, a global book of
supply and storage contracts,
and a 49% stake in the US tanker
management company Heidmar
in Norwalk, Connecticut.
This takeover would catapult
Rosneft — now mostly dependent on others to market its
crude oil and products — into
the big league in global oil trading, including the US market,
where Morgan Stanley is one of
the largest players.
A former member of the
National Security Council (NSC)
who worked with CFIUS argues
that national security is not an issue in this deal. “This is a political
issue,” he says. Washington is
looking to punish Moscow, not to
sell it a business. CFIUS, which includes the Departments of
Homeland Security, Defense, State
and Energy, can look for ways to
make this deal go away. “CFIUS
can torture (Morgan Stanley and
Rosneft) a thousand ways,” the
former NSC official notes.
Morgan Stanley and Rosneft
might decide to rip up the deal.
But that is not yet the official line
of Morgan Stanley. “We intend to
submit the transaction for all necessary regulatory approvals, and
are targeting a close in the second
half of 2014,” says spokesperson
Mark Lane with Morgan Stanley in
an email. “We are not making any
other public comment.”
The maximum time for a full
CFIUS procedure is three months,
including 15 days at the end if it
ends up on President Barack
Obama’s desk for a decision. A filing in September could possibly
still meet the companies’ timetable. A lot can happen in five
www.energyintel.com
months. What is unlikely to
change is that Rosneft wants to
go ahead with the deal and will
push for a filing. It would either
deliver Rosneft the much-wanted
trading business. Or Rosneft
could try to collect a termination
fee if Morgan Stanley has to pull
out, a fee that analysts say is
likely built in the preliminary
agreement. Or Rosneft could
push for a presidential rejection,
which could trigger retaliation
from Moscow in turn.
Moscow is known for its titfor-tat actions. The Kremlin could
decide to no longer buy US products, or stop exporting oil to the
US. It could also make life difficult
for Exxon Mobil, which has many
joint ventures with Rosneft — in
Sakhalin Island, the Russian Arctic
and the US Gulf of Mexico, among
others. “Exxon has been quiet
lately,” the former NSC member
notes wryly. Exxon has a relationship of more than 20 years with
Rosneft, and both companies have
much riding on their ventures.
It might not come to a tit for
tat. That Morgan Stanley and
Rosneft have not filed yet with
CFIUS could mean that “they are
either looking for the tensions to
dissipate or may be working towards an amicable exit from the
deal,” says Reuben Miller, an expert on filings and editor-at-large
with Policy and Regulatory Report.
If it comes to a filing, a realistic
option could well be that CFIUS
can convince the companies “to
withdraw their filing and walk
away from the deal,” Miller notes.
“Obama doesn’t want this on his
desk and would rather do this
through pressure from CFIUS.”
Yet, Miller can also foresee that
Rosneft wants to take this all the
way, and hear the rejection from
the president himself.
“But if this deal goes through,
the president will have zero credibility,” says a broker familiar
with the business of Morgan
Stanley. “This is the only leverage
the US has over the Russians.”
John van Schaik, New York
NC page 8
April 10, 2014
Finance
Gazprom Dividends Rise
Despite Ukraine Debt
Despite Gazprom boss Alexei Miller’s
warnings that Ukraine’s growing gas
debt could negatively affect dividend
payments, the company intends to
pay larger dividends than expected.
Gazprom’s management committee recommended on Apr. 7 paying
7.2 rubles ($0.20) per share in 2013
dividends, which is 8% above analysts’ expectations and 20.2% more
than it paid for 2012 (NC Apr.3’14).
If approved by shareholders on
Jun. 27, the natural gas giant will pay
25% of its net profit calculated under
Russian Accounting Standards, adjusted for the amount of financial investment revaluation and similar
business activities of the company.
According to analysts’ calculations,
the total payout would be around
628 billion rubles ($17.6 billion).
The dividends will rise despite
the fact that Miller has repeatedly
said in recent weeks that they will be
negatively affected by Ukraine’s
growing gas bill, which could rise by
$5 billion-$6 billion by the end of
this year from about $2 billion.
Ukraine’s debt would only affect
Gazprom’s net profit and dividends if
the company creates reserves for bad
debts or writes off the debt, Raiffeisen
Bank analyst Andrei Polishchuk told
Nefte Compass.
Rosneft Brings
Drilling Back In House
As part of its strategy to develop its
own drilling business — bucking the
general trend in the Russian oil industry — Rosneft has finalized a deal
to fully acquire Orenburg Drilling
Co. from VTB-Leasing Group.
The value of the deal was not disclosed, but according to Uralsib
Capital analyst Alexei Kokin, each rig
may cost about $20 million. Rosneft
reportedly planned to buy 30 rigs
from VTB Group, but it is unclear
whether all the rigs were owned by
Orenburg Drilling.
The acquisition of the Orenburg
firm is Rosneft’s first major purchase
of an oil services company after the
company’s boss Igor Sechin said in
February it would develop its own
drilling business and reduce its operations with services companies, in
particular with Eurasia Drilling Co.,
which now faces a downturn in operations in Russia (NC Feb.27’14)
(NC Apr.3’14). Eurasia Drilling was
formerly the drilling arm of Lukoil
but was hived off in line with an industry trend for majors to focus on
their core production activity.
Apart from avoiding what it
viewed as unreasonably high prices
set by contractors, the key reason
behind Rosneft’s decision to develop its own drilling business was
its dissatisfaction with independent
contractors’ insufficient investment
into equipment upgrades. The lack
of upgrades could make it difficult
to provide reliable services for
Rosneft’s hard-to-recover oil projects, analysts polled by Nefte
Compass say, adding that Rosneft is
primarily interested in buying new
rigs rather than drilling companies.
Despite Rosneft officials’ statements that the company will provide
drilling services to third-party customers, the key focus will be to use
the rigs for its own production units,
at least over the next two or three
years, Alfa-Bank analyst Alexander
Kornilov said.
Equities
Share Prices Closing On April 8, 2014 ($/Share)
Closing
Chg. From——— 12 Months ——–
Market Cap
Locally Traded Shares
Price
Apr 1, 2014
High
Low
($ mill.)
Bashneft
53.90 -0.30 62.6845.3510,573.0
Gazprom
3.74 -0.13 4.34 3.2188,415.0
Lukoil
53.90 -2.17 60.3548.3640,623.0
Rosneft
6.45 -0.15 7.62 5.5668,306.0
Novatek
9.55 -0.51 12.06 7.8331,060.0
Gazprom Neft
3.92
-0.16
4.50
3.58
18,554.0
Surgutneftegas
0.72 -0.02 0.86 0.6631,233.0
Surgutneftegas pref.
0.70
-0.03
0.80
0.60
5,462.8
Tatneft
5.86 0.13 6.37 5.0912,933.0
ADRs
Gazprom
7.54-0.23 9.87 6.25 NA
Lukoil
53.95 -1.79 66.9547.03
NA
Gazprom Neft
19.72
-0.72
23.28
16.61
NA
Surgutneftegas
7.29-0.16 9.71 6.90 NA
Tatneft
36.00 1.46 42.7930.22
NA
Indices
RTS
1,195.71 -40.03 1,518.541,062.47
RTS prices are given for companies listed on the exchange.
Market capitalization updated weekly.
Currencies
US Dollar Exchange Rates
Former Soviet Union
Russian Ruble
Armenian Dram
Azerbaijani Manat
Belarussian Ruble
Georgian Lari
Kazak Tenge
Kyrgyz Som
Latvian Lat
Lithuanian Lit
Moldovan Lei
Ukrainian Hryvna
Uzbek Som
Apr 9’14
35.67
416.50
0.78
9,920.00
1.75
182.07
54.44
0.51
2.50
13.57
12.25
2,277.00
Apr 2’14
35.07
415.00
0.83
9,897.08
1.75
182.15
55.03
0.51
2.50
13.59
11.40
2,287.00
www.energyintel.com
Eastern Europe Apr 9’14 Apr 2’14
Albanian Lek
101.70
101.85
Bulgarian Lev
1.42
1.42
Croatian Kuna
5.53
5.54
Czech Koruna
19.88
19.93
Hungarian Forint
221.75
222.82
Macedonian Denar
44.73
44.82
Polish Zloty
3.02
3.03
Romanian Leu
3.23
3.23
Ruble exchange rates
US Dollar
35.67
35.07
Euro
48.8648.25
Pound Sterling
59.14
58.36
Japanese Yen
0.35
0.34
NC page 9
April 10, 2014
Caspian/Europe
Massimov Makes
A Comeback as Kazakh PM
In a sign of his disillusionment
with the sluggish economy, Kazakh
President Nursultan Nazarbayev
has sacked his prime minister,
Serikh Akhmetov, and reappointed
Karim Massimov, who held the job
from 2007-12. Nazarbayev also appointed his eldest daughter, Dariga,
as deputy speaker of the Majlis, or
lower house of parliament — representing the president’s ruling
OTAN party — fueling speculation
that she may be further groomed to
succeed him.
Massimov, who had most recently served as head of Nazarbayev’s
chief of staff, will automatically take
over as chairman of Samruk-Kazyna,
the state holding that owns shares in
dozens of companies, including full
ownership of oil and gas giant
Kazmunaigas (KMG) (NC
Oct.18’12). Samruk is in the process
of restructuring KMG and other subsidiaries and, as part of this process,
recently appointed an experienced
oilman, Christopher Hopkinson,
who worked for several years at BG,
as KMG’s first deputy chairman.
The 73-year old Nazarbayev has so
far given no indication he is ready to
hand over power or pick a successor.
But the promotion of Dariga, who has
kept a low profile since her ex-husband
Rakhat Aliyev, now living in exile in
Europe, was convicted in absentia in
2007 on multiple charges including
kidnapping and extortion.
gotiations on the proposed barter
deal were “intensifying,” although
he would not say when an agreement would be finalized.
The mechanics of the arrangement remain sketchy. Javadi said Iran
could supply some of its crude oil
from the Neka terminal on the
Caspian Sea, but industry sources
say this would be impractical, as the
terminal is configured only to receive
crude from the Caspian, and not for
transshipment.
Another question is whether
Russian state companies would be
authorized to buy the Iranian
crude. Rosneft is unlikely to get involved as it is US-listed and would
be automatically hit with sanctions.
The most likely scenario, industry
sources say, is that Moscow would
nominate a state entity that has no
US or European assets to handle
the shipments.
Belarus Commences
Drilling for Shale
Belorusneft, a state-owned vertically
integrated company, has announced
the start of drilling for shale oil in the
Rechitsa region in the southern part
of Belarus. The company said in an
Apr. 4 statement that it had begun
drilling its first horizontal well, after
which it will begin multistage hydraulic fracturing. The well is in the
Rechitsa field where first oil was produced in Belarus a half-century ago.
“It is believed that there could be reserves of so-called shale oil here,
which to this point had been inaccessible to Belarusian oilmen,” the
company said.
Last year Belorusneft reportedly
created a joint venture with UK
group Toros for the exploration
and production of nonconventionals in Belarus. Acreage under sur-
Kazakh Refining Dives in February
Crude oil refining at Kazakhstan’s
three refineries in February slumped
10% compared to January, finishing
the month at 1.04 million metric
tons (274,000 b/d). Compared to
the same month a year ago, processing was down 6% (table).
Activity was down on both a
monthly and an annual basis, with
the Pavlodar facility suffering an
11.6% fall in monthly output compared to February 2013.
Output was also down across the
four core segments — fuel oil, gasoil,
gasoline and jet fuel — with gasoline
output declining nearly 9% in
February year-on-year.
Oil and Gas Minister Uzakbai
Karabalin was quoted in Kazakh media on Apr. 7 as saying that the
country was struggling with upgrading its refining capacities, which will
cost the budget at least $1 billion/refinery. He said the 2016 deadline for
Euro-4 and Euro-5 production targets might have to be postponed.
Kazakh Refinery Activity, February 2014
US Threatens Iran
Over Russia Deal
US lawmakers are urging President
Barack Obama to re-impose all
sanctions on Iran if it goes ahead
with a planned multi-billion-dollar
counter-trade deal with Russia under which the Russians would supply a range of goods to Iran in exchange for up to 500,000 b/d of
Iranian crude oil (NC Mar.20’14).
The head of National Iranian
Oil Co., Rokneddin Javadi, was
quoted as saying this week that ne-
Processing
(‘000 metric tons
— Year To Date —
— Feb —
— Jan —
–— Chg.* —–
or ‘000 b/d)
b/d tons
b/d tons
b/d tons
b/dtons
Pavlodar
98.8 795.5
97.7 373.2
99.8 422.3
-2.2-49.1
PetroKazakhstan Oil Products
81.4
655.6
82.1
313.5
80.9
342.0
1.2
-28.5
Atyrau
94.5 760.3
94.2 360.0
94.6 400.3
-0.4-40.3
Total
274.72,211.3
274.0 1,046.7
275.4 1,164.6
-1.3-117.8
February Output
— Mazut —
–— Gasoil —–
–— Gasoline —–
–– Jet Fuel ––
b/d tons
b/d tons
b/d tons
b/dtons
Pavlodar
18.276.8 26.198.2 28.794.5 1.55.1
PetroKazakhstan Oil Products
15.2
63.9
21.3
79.8
20.2
66.4
5.2
18.1
Atyrau
31.6133.3
23.5 88.0 14.7 48.3
0.4 1.4
Total
65.0274.0
70.9266.0 63.6209.2
7.024.6
* Change from previous month. Notes: Table is based on the following factors for conversion to barrels: Crude
- 7.33; Mazut - 6.64; Gasoil - 7.46; Gasoline - 8.51; Jet Fuel - 8.00. Data for the previous month were revised.
www.energyintel.com
NC page 10
April 10, 2014
Caspian/Europe
vey is around 580 sq km, lying to
the north of the border with
Ukraine. According to reports,
Belorusneft was to be responsible
for vertical drilling, while Toros
would carry out the horizontal
drilling and fracking. Belarus
could contain some 1 billion metric tons of shale oil, according to
the US Geological Survey.
Crude production at Gomelbased Belarusneft has stagnated over
the past decade at about 1.65 million tons/yr, and the company is undertaking efforts to boost output
both at home and abroad.
Belarusneft also produces crude in
Russia and Venezuela and has a subsidiary in Ecuador, where it is carrying out seismic studies.
Pro-Russia Party Wins
Big in Hungary
The right-wing Fidesz party scored
a resounding victory in parliamentary elections on Apr. 6, giving
Prime Minister Viktor Orban the
mandate to forge ahead with reforms that have called into question the Central European country’s democratic credentials.
Although Fidesz mustered
merely 44.5% of the party-list
vote, thanks to the election law it
controversially amended this
could give it up to 66% of parliamentary seats in the 199-member
legislature, depending on the results of several single-mandate districts that will be determined later
this week. If Fidesz does win in
one of these races, it will obtain
the parliamentary supermajority
that will allow it to ram through
more economic reforms.
In terms of energy, the government will continue cutting consumer prices for heating and electricity and effectively transform utilities into nonprofit businesses, analysts said. Speaking to journalists on
Apr. 8, National Development
Minister Zsuzsanna Nemeth said
that lower energy prices were essential for strengthening the competitiveness of Hungarian firms.
Nemeth also said that the state will
continue its program of buying back
stakes in strategically important energy companies.
Although highly critical of
Russia as early as a decade ago,
Orban has become a key ally of
Moscow in the EU (NC
Feb.20’14). During a visit to
Russia in January, he won a reduction in natural gas prices —
Hungary consumed about 6 Bcm
last year — and, in a deal worth
over $10 billion, a pledge to finance up to 80% of the construction of two new nuclear reactors at
Paks that, in the words of Fidesz
officials, will guarantee Hungary a
cheap source of energy for up to
60 years.
Gazprom ‘Blocks’ Ukraine
Reverse Flow Deal
Ukraine’s increasingly desperate efforts to make progress on a possible
deal to use Slovakia’s natural gas
pipeline for reverse deliveries have
so far failed despite a direct appeal
to EU officials.
Energy Minister Yuri Prodan was
quoted in Ukrainian media as saying
that talks in Brussels with Slovakian
and EU officials revealed what many
had feared — that Slovakia’s pipeline
operator, Eustream, has contractual
obligations to Gazprom that prevent it
from agreeing on reverse gas supplies
to Ukraine. “The meeting with
Slovakian representatives showed that
the issue isn’t technical but more tied
More Woe in Store for Kashagan
Kazakhstan’s giant Kashagan oil
field may not come back on stream
until next year, or possibly even
later, if the international consortium in charge of the project has to
replace an offshore pipeline that
sprang a gas leak last September,
forcing early oil production to be
suspended just days after it had
started (NC Apr.3’14).
Kazakhstan’s Oil Minister
Uzakbai Karabalin, who gave an
update on the project this week to
the Majlis, or lower house of
Parliament, told reporters that
there were indications that the
pipeline apparently had “microcracks” that would take considerable time to repair and thus push
back the date for production restart even further. “If they really are
there, this would lengthen the duration of previously planned
work,” he said, but cautioned that
it was “impossible to say anything”
until the North Caspian Operating
Co. (NCOC) finished testing the
pipeline system in May. He said
tests were made more difficult by
ice melting in the shallow waters of
the North Caspian.
NCOC would not comment on
reports that the damage to the offshore pipeline network is so bad that
www.energyintel.com
it would need to replaced, delaying
the resumption of early oil to 201617. The consortium has identified
the problem as “stress cracking”
caused by the presence of hydrogen
sulfide mingled with water, but it
has given no indication so far on
how long repairs would take.
Karabalin said the companies
had come up with “various scenarios” as to when production might
restart. The best-case scenario involved damage only to the onshore
pipeline, which could be fixed relatively easily and have oil back on
stream “probably” by the end of the
year. He did not say what the worstcase scenario involved. Kashagan
was due to come on at an initial rate
of around 60,000 b/d, ramping up
to an initial plateau of 370,000 b/d
before rising in a second phase toward 1 million b/d.
The outlook for NCOC, which
until output resumes has to recover all its own costs, could get
even worse if the government upholds a $739 million claim slapped
on the consortium last month by
the Ministry of Environmental
Protection for flaring more gas
than allowed (NC Mar.27’14).
NCOC says it will appeal the fine
vigorously.
NC page 11
April 10, 2014
Europe
to agreements with Gazprom,”
Prodan was quoted by the Unian
agency as saying. “We were told that
the existing agreements won’t entirely allow reverse flow.”
A Eustream official was quoted
by Reuters as saying that for reverse deliveries to work, Gazprom’s
approval is necessary, and since
Gazprom is against west to east
supplies in the pipeline system it
uses, “it is not an option.”
However, when contacted by Nefte
Compass about this report,
Eustream refused to comment.
“Eustream is a fully competent
company with absolute control over
all gas transmission operations on
Slovak territory. So we cannot confirm the information that Eustream
would need any kind of permission
[from Gazprom] for reverse flow to
Ukraine,” spokesman Vahram
Chuguryan wrote in an email response on Apr. 9 (NC Apr.3’14).
“Negotiations with the Ukrainian
side are continuing in accordance
with the agreed schedule [and]
partners from Ukrtransgaz have accepted Eustream’s invitation to visit
Bratislava for a working meeting
during the coming week.”
Ukrtransgaz is Ukraine’s gas pipeline operator.
Ukrainian obser vers have
claimed for months that Gazprom is
hindering a reverse flow deal, which
could potentially provide up to 12
billion cubic meters of gas for
Ukraine — or about one-fourth of
annual consumption (NC Mar.6’14).
Analysts say that the capacity of the
four pipelines connecting the two
countries is only 40% occupied,
which would easily allow Eustream
to use one for reverse deliveries.
Eustream told Nefte Compass that its
contract with Gazprom is until 2028,
and Ukrainian analysts claim the
Russian gas giant has paid for capacity it doesn’t use to ensure that reverse flow cannot be used.
In addition, on Mar. 28 Slovakian
gas company SPP announced it had
signed a new price deal with
Gazprom that includes a discount.
SPP refused to share details, but reports in Slovakian and Ukrainian
media indicate that the new price
was even backdated, which granted
the Slovakians $200 million in cash.
Ukrainian analysts slammed the deal
as a “bribe.”
Slovak Prime Minister Robert Fico
has previously expressed reservations
about reverse flows, saying he doubted
the Ukrainians’ ability to pay and that
Slovakia didn’t have the funds to make
the necessary infrastructure invest-
ments. Analysts say the two countries
would have to build a several-kilometer long looping on the border, priced
at about 20 million, to facilitate westeast deliveries.
Gazprom Chief Executive Alexei
Miller said on Apr. 5 that reverse
deals are likely illegal, while others
have argued that once the gas is on
EU territory it can be piped in any
direction.
Russia May Ask Kiev to Prepay for Gas
Russia could force Ukraine to prepay
for natural gas deliveries if Kiev does
not cancel its gas debt of $2.23 billion to Gazprom. Government ministers told President Vladimir Putin
on Apr. 9 that Russia had the basis to
switch to a prepayment system, but
Putin asked them to wait and see if
talks with the West and Ukraine,
scheduled for next week, could
break the gridlock. He said that prepayment was a legitimate contractual
stipulation that would be used if the
debt issue was not resolved.
Officials in Kiev, meanwhile, said
on Apr. 9 that Ukraine would cancel
the outstanding gas bill once there was
clarity on the new gas price. Over the
weekend Prime Minister Arseniy
Yatsenyuk told government ministers
that Ukraine would not pay Russia’s
new price of $485.50 per thousand
cubic meters and that the price agreed
on in December and paid during the
first quarter, $268.50/Mcm, was acceptable (NC Apr.3’14). Interestingly,
Energy Minister Yuri Prodan said
that for now Ukraine had stopped
buying Russian gas and suggested
there was sufficient time to replenish
www.energyintel.com
underground reservoirs before the
next heating season.
Ukrainian leaders are hoping to
convince Moscow to buy a new $2
billion eurobond issue that had been
prepared in February but later cancelled due to the political instability
(NC Mar.6’14). Kiev said it would
use those funds to pay the outstanding gas debt.
It is far from certain, however,
that Moscow will be willing to dip
into its coffers to bail out a government it does not acknowledge — all
the more if Kiev refuses to accept the
new gas price. Further complicating
matters is a disagreement over the
debt figure. Prime Minister Dmitry
Medvedev told Putin that Ukraine’s
total debt is actually $16.6 billion,
consisting of $2.2 billion for gas, $3
billion for the December eurobond
purchase, and $11.4 billion for “unrealized profit” for previous gas sales.
The last number apparently
takes into account four years of
discounted gas deliveries Ukraine
received in exchange for allowing
Russia to house its Black Sea fleet
in Crimea.
NC page 12
April 10, 2014
Russia
Russian Crude Oil Exports to Non-CIS Markets, March 2014
Bosnia &
China
Mar
Feb Mar Total
(‘000 metric tons)
Novo
Primorsk
Ust-LugaKozmino
Germany
PolandCzechSlovakia
Hungary
HerzegovinaChina
(Skovorodino)TotalTotal
(‘000 b/d)
GRAND TOTAL*
3,150
3,8071,634 1,9991,4721,539 230 440 419 18 595 1,312 16,792
15,527
3,970
TOTAL FOR RUSSIA*
2,397 3,607
1,000
1,999
1,334
1,539
230
440
419
18
595
1,312
15,066 13,827 3,562
Lukoil
674
6790
10000072
1090 0 0
1,634
1,500
386
Lukoil-AIK
95
-
-
-
-
-
-
18
20
-
-
-
132
130
31
Ritek
219
-- ----28-- - -247
194
58
Lukoil-Perm
-
-
-
-
-
-
-
20
20
-
-
-
40
60
9
Lukoil-Nizhnevolzhskneft
129
-- ---- --- - -129
116
31
Tursunt
-
-
-
-
-
-
-
5
1
-
-
-
6
5
1
Lukoil-West Siberia
232
130
-
100
-
-
-
1
68
-
-
-
531
555 126
Lukoil-Komi
-
548- ---- --- - -548
438
130
Rosneft
719
1,484600 613989
1,108170 0 0 0 5951,312 7,588
7,080
1,794
NK Rosneft
719
1,484600 613989
1,108170 0 0 0 595 807 7,083
6,610
1,675
NK Rosneft
469 1,257
204
-
385
1,048
-
-
-
-
595
-
3,957 4,046 936
Verkhnechonskneftegas
-
--
613--- --- - -613
690
145
Uvatneftegas
-
-
156
-
-
-
-
-
-
-
-
-
156
0
37
Samotlorneftegas 80
-- ---- --- - - 80
204
19
Orenburgneft
-
-
240
-
-
-
170
-
-
-
-
-
410
0
97
Udmurtneft
-
228- ---- --- - -228
206
54
Samaraneftegas
70
-
-
-
604
60
-
-
-
-
-
-
734
667 173
Vankorneft
100
-- ---- --- -807907
717
214
Transneft
-
-- ---- --- -505505
470
119
Vankorneft
-
-- ---- --- -505505
470
119
Surgutneftegas 0
600400 632327306 0 0 0 0 0 0 2,264
2,102
535
Russneft
80
400 0000
13800 0 0258
269
61
Mokhtikneft
-
-- ----20-- - - 20
20
5
Varyoganneft
21
13- ---- --- - - 34
21
8
Aki-Otyr
-
-- ----50-- - - 50
30
12
Goloil
-
-- ----18-- - - 18
9
4
Nefterazvedka
-
-- ---- 1-- - - 1
0.5
0.1
Aganneftegasgeologia-
27- ----10-- - - 37
95
9
Ulyanovskneft
-
-- ----39-- - - 39
34
9
White Nights
59
-
-
-
-
-
-
-
-
-
-
-
59
59
14
Slavneft
20
00 0000 000 0 0 20
44
5
Gazprom Neft
20
-- ---- --- - - 20
44
5
Slavneft-Nizhnevartovsk
20
-- ---- --- - - 20
44
5
Gazprom Neft
280
00790060 000 0 0419
254
99
Gazprom Neft-NNG
159
-
-
-
-
-
-
-
-
-
-
-
159
0
38
Gazprom Neft-Khantos
121
-
-
-
-
-
60
-
-
-
-
-
181
206
43
Tomskgazprom
-
--47--- --- - - 47
42
11
Gazprom Neft-Vostok
-
-
-
32
-
-
-
-
-
-
-
-
32
5
8
Tatneft
280
640 00
1250
115
1440 0 0728
674
172
Bashneft
271
002000085
1030 0 0479
363
113
Neftisa
0
1670 000022120 0 0202
198
48
Udmurt Oil Co.
-
20
-
-
-
-
-
-
-
-
-
-
20
18
5
Belkamneft
-
64- ---- --- - - 64
70
15
Regional Oil Consortium
-
38
-
-
-
-
-
-
-
-
-
-
38
37
9
Komnedra
-
9- ---- --- - - 9
8
2
YurskNeft
-
-- ----22-- - - 22
20
5
CanBaikal Resources
-
11
-
-
-
-
-
-
-
-
-
-
11
10
3
Samarainvestneft
-
-
-
-
-
-
-
-
12
-
-
-
12
12
3
Sibintek
-
9- ---- --- - - 9
8
2
Udmurt National Oil Co.
-
4
-
-
-
-
-
-
-
-
-
-
4
3
1
Reshetnikovskaya Oil Co.
-
1
-
-
-
-
-
-
-
-
-
-
1
1
0.2
Ryabovskoye
-
6- ---- --- - - 6
5
1
Uralskaya Neft
-
1
-
-
-
-
-
-
-
-
-
-
1
1
0.2
Okunevskoye
-
1- ---- --- - - 1
1
0.3
Udmurtgeologia
-
4- ---- --- - - 4
4
1
Irkutskaya Oil Co.
0
00
208000 000 0 0208
174
49
INK
-
--
206--- --- - -206
171
49
www.energyintel.com
NC page 13
April 10, 2014
Russia
Russian Crude Oil Exports to Non-CIS Markets, March 2014 (cont.)
Bosnia &
China
Mar
Feb Mar Total
(‘000 metric tons)
Novo
Primorsk
Ust-LugaKozmino
Germany
PolandCzechSlovakia
Hungary
HerzegovinaChina
(Skovorodino)TotalTotal
(‘000 b/d)
INK-NefteGasGeologia-
-- 2--- --- - - 2
3
0.4
Yukola-Neft
0
00 0300 00
11 0 0 14
17
3
Yukola-Neft
-
-- ---- --
11 - - 11
11
3
Povolzhskneft
-
-
-
-
3
-
-
-
-
-
-
-
3
6
1
Other Companies
73
573 034815 0 0 8517 0 01,077
989
255
Aloil
10
-- ---- --- - - 10
22
2
Allianceneftegas
-
--13--- --- - - 13
12
3
Bental
-
-- ---- -
0.4- - - 0.4
1
0.1
Bitex
-
-- ---- -
29- - - 29
12
7
Blagodarov-Oil
-
4- ---- --- - - 4
4
1
Carbon-Oil
1
-- ---- --- - - 1
1
0.3
Dinyu
-
1- ---- --- - - 1
1
0.2
Dulisma
-
--81--- --- - - 81
48
19
East Transnational Co. -
--10--- --- - - 10
5
2
Geologia
-
13- ---- --- - - 13
12
3
Geological Exploration Center
-
4- ---- --- - - 4
3
1
Geotex
-
2- ---- --- - - 2
7
0.5
Ideloil
-
7- ---- --- - - 7
6
2
Inga
-
5- ---- --- - - 5
5
1
Kara-Altyn
-
15- ---- --- - - 15
19
3
Khit-R
-
-- ---- -4- - - 4
8
1
Kolvaneft
-
27- ---- --- - - 27
30
6
Kondurchaneft
-
2- ---- --- - - 2
2
1
Kosyuneft
-
2- ---- --- - - 2
2
0.5
Makoil
-
-- ---- --1 - - 1
1
0.1
Mellyaneft
-
-- ---- --2 - - 2
5
1
Neftus
-
10- ---- --- - - 10
9
2
Nizhneomrinskaya Neft-
0.1- ---- --- - - 0.1
1
0.03
Nord Imperial
-
-- 1--- --- - - 1
1
0.3
Novatek-Tarkosaleneftegas
-
-- ---- 6-- - - 6
38
1
Okhtin-Oil
-
7- ---- --- - - 7
7
2
Orenburgnefteotdacha -
-- ---- --3 - - 3
2
1
Pechoraneft
-
25- ---- --- - - 25
28
6
Pechoraneftegas
-
7- ---- --- - - 7
7
2
Polar Lights
-
15- ---- --- - - 15
13
3
Purneft
-
4- ---- --- - - 4
0
1
Region-Neft
-
-- -3-- --- - - 3
2
1
Reimpex-Samara-Neftepromysel
2
-- ---- --- - - 2
0
0.4
Rusvietpetro
-
156- ---- --- - -156
206
37
Sadacoil
-
-- ---- -1- - - 1
1
0.2
Salym Petroleum
-
100- ---- --- - -100
0
24
Selengushneft
-
0- ---- --- - - 0.4
0.3
0.1
Sheshmaoil
-
11- ---- --- - - 11
16
3
Sial
-
3- ---- --- - - 3
3
1
Sorovskneft
-
-- -
10-- --- - - 10
23
2
Taas-Yuryakh-Neftegasdobycha
-
--55--- --- - - 55
59
13
Tatex
-
-- ---- -
17- - - 17
15
4
Tatnefteprom
10
-- ---- --- - - 10
9
2
Tatnefteprom-Zyuzyeyevneft
-
12- ---- --- - - 12
11
3
Tatneft-Geologia
-
13- ---- --- - - 13
12
3
Tatneft-Samara
11
-- ---- --- - - 11
11
3
Tatoilgas
16
-- ---- --- - - 16
13
4
Terrigen
2
-- ---- --- - - 2
0
0.5
TNS-Razvitiye
3
-- ---- 3-- - - 5
2
1
Total
-
125- ---- --- - -125
131
30
Troitskneft
9
-- ---- --- - - 9
8
2
TsNPSEI
-
1- ---- --- - - 1
1
0.1
Ulyanovskneftegas
-
-- ---- --2 - - 2
2
0.4
UNK-Perm
-
-- -3-- --- - - 3
2
1
Vinka
5
-- ---- --- - - 5
0
1
VUMN
5
-- ---- --- - - 5
13
1
Welloil
-
0.1- ---- --- - - 0.1
0.1
0.03
Yambuloil
0.3
-- ---- --- - - 0.3
1
0.1
Yelabuganeft
-
1- ---- --- - - 1
1
0.1
Gazprom Neft
-
--
188--- --- - -188
95
44
Tomskneft
-
-
-
188
-
-
-
-
-
-
-
-
188
95
44
Transit via Russia 753
200
634 0000 000 0 0
1,588
1,575
375
Kazakhstan
608
200
634 0000 000 0 0
1,442
1,486
341
www.energyintel.com
NC page 14
April 10, 2014
Russia
Russian Crude Oil Exports to Non-CIS Markets, March 2014 (cont.)
Bosnia &
China
Mar
Feb Mar Total
(‘000 metric tons)
Novo
Primorsk
Ust-LugaKozmino
Germany
PolandCzechSlovakia
Hungary
HerzegovinaChina
(Skovorodino)TotalTotal
(‘000 b/d)
Altius Petroleum
-
-
22
-
-
-
-
-
-
-
-
-
22
10
5
Anaco
-
-
7
-
-
-
-
-
-
-
-
-
7
8
2
Arman
5
-- ---- --- - - 5
5
1
Atyraumunai
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.4
Caspian neft 55
-
-
-
-
-
-
-
-
-
-
-
55
47
13
CNPC International
48
-
16
-
-
-
-
-
-
-
-
-
64
79
15
CNPC-Aktobemunaigas
51
-
20
-
-
-
-
-
-
-
-
-
71
104
17
Embamunaigas 142
-- ---- --- - -142
140
34
Embavedoil
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.2
Gyural
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.2
Karachaganak Petroleum
-
-
80
-
-
-
-
-
-
-
-
-
80
75
19
Karakudukmunai
-
-
63
-
-
-
-
-
-
-
-
-
63
46
15
Karazhanbasmunai
60
64
12
-
-
-
-
-
-
-
-
-
137
166
32
Kazakhturkmunai
-
-
18
-
-
-
-
-
-
-
-
-
18
17
4
KazMunaiTeniz
8
-- ---- --- - - 8
20
2
Ken-Sary
-
-
8
-
-
-
-
-
-
-
-
-
8
7
2
KhazarMunai
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.2
KMK Munai
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.2
Kommunai
-
-
17
-
-
-
-
-
-
-
-
-
17
15
4
Kozhan
-
5- ---- --- - - 5
5
1
Lines Jump
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.1
Maersk Oil Co.
-
-
21
-
-
-
-
-
-
-
-
-
21
21
5
Mangistaumunaigas
29
100
294
-
-
-
-
-
-
-
-
-
422
364 100
Meerbusch
-
-
5
-
-
-
-
-
-
-
-
-
5
6
1
Nelson Petroleum Buzachi 48
-
16
-
-
-
-
-
-
-
-
-
64
79
15
Phiztekh Firm
5
-
-
-
-
-
-
-
-
-
-
-
5
9
1
Potential Oil
-
10
1
-
-
-
-
-
-
-
-
-
11
9
3
Precaspian Petroleum
-
2
-
-
-
-
-
-
-
-
-
-
2
2
0.5
Sagiz Petroleum
-
12
-
-
-
-
-
-
-
-
-
-
12
13
3
Saigak Kazakhstan
-
-
1
-
-
-
-
-
-
-
-
-
1
2
0.1
Samek International
-
-
8
-
-
-
-
-
-
-
-
-
8
8
2
Sazankurak
-
6- ---- --- - - 6
6
1
Svetland-oil
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.4
Tabynai
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.4
Tandai Petroleum
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.1
Tasbolat Oil Corp.
-
-
13
-
-
-
-
-
-
-
-
-
13
12
3
Tenge
-
-
2
-
-
-
-
-
-
-
-
-
2
2
1
Tobearal Oil
-
-
1
-
-
-
-
-
-
-
-
-
1
1
0.2
Uzenmunaigas
155
-- ---- --- - -155
185
37
Zhalgiztobemunai 3
-- ---- --- - - 3
5
1
Azerbaijan
85
00 0000 000 0 0 85
85
20
Socar
85
-- ---- --- - - 85
85
20
Turkmenistan
61
00 0000 000 0 0 61
5
14
Mitro International
24
-
-
-
-
-
-
-
-
-
-
-
24
0
6
Burren Resources Petroleum 37
-
-
-
-
-
-
-
-
-
-
-
37
5
9
Transit outside Russia 0
00 0000 00
18 0 0 18
61
4
Belarus
0
00 0
13800 000 0 0138
125
33
Belarusneft
-
-
-
-
138
-
-
-
-
-
-
-
138
125
33
Rail Shipments
0
00 0000 000 0 0 0
0
0
CPC
0
00 0000 000 0 0177
164
42
Notes: Crude exports via Transneft pipeline system. *Total for Russia includes all categories except transit via Russia, transit outside Russia and Belarus. Grand Total
includes total for Russia, transit via Russia, Belarus.
Crude Oil Exports Bypassing the Transneft Pipeline System, March 2014
MarFeb
By Sea
Total forBy Rail
Total for CPC
Total for
Total for
(‘000 metric tons)
De Kastri Sakhalin
Kaliningrad Varandei Exports by Sea Kazakhstan Belarus Exports by Rail (Caucasus) Sea/Rail/CPC Sea/Rail/CPC
Rosneft
0.0 0.0
0.0 0.0 0.0 0.026.8 26.8 259.8 286.6 287.5
Gazprom Neft
0.0
0.0
0.0
0.0
0.0
0.0
21.7
21.7
0.0
21.7
15.3
Lukoil
0.0 0.0
82.8 430.8513.6 0.0 0.0 0.0
0.0 513.6 547.0
Novatek
0.00.0 0.0 0.00.0 0.00.0 0.0
0.0 0.0 0.0
PSA Operators
756.1
480.9
0.0
0.0
1,237.0
0.0
0.0
0.0
0.0
1,237.0
940.9
Other Producers
0.0
0.0
0.0
0.0
0.0
4.9
10.0
14.9
0.0
14.9
4.5
Grand Total for Exports
756.1
480.9
82.8
430.8
1,750.6
4.9
58.5
63.4
259.8
2,073.8
1,795.2
www.energyintel.com
NC page 15
April 10, 2014
Markets
Crude Oil — Brent Ignores Ukraine Clashes
Brent futures picked up and resumed
trading in their $105-$110/bbl trading range in recent days. Traders are
at a loss to explain the bullishness.
They dismiss claims that Brent is
adding steam on renewed supply
fears in response to clashes in eastern
Ukraine. The strength of the flat
price belies a well-supplied market.
Yet a possible supply overhang is reflected in the price structure of the
forward curve, with both Brent futures and the physical Brent market
flirting with contango, where prompt
crude trades at a discount versus
later supplies.
The flat oil price might again be
supported by financial players who
see the lower economic growth outlook from the International Monetary
Fund as a signal that central banks
will keep cheap money flowing. In
the real world, though, lower economic growth will hurt oil demand
growth, but for now that is not the
worry of traders looking at parking
cheap money in oil futures.
Slower growth of consumer demand for refined products comes as
supply of crude oil remains high, especially for sweeter grades of oil.
PVM Brokerage suggests that “contango will become a regular feature
of the Brent market” if more oil
comes to the market from Libya and
“if Russian developments do not escalate to the levels where energy supplies is perceived as an issue.”
If markets become really sloppy,
the physical market might pull down
the flat price of oil. It might come
with a delay, as refiners are returning
Products — Russian Imports to the Rescue
European diesel cargo premiums hit
new heights late last week before a
wave of Russian short-haul imports
came to the market’s rescue.
French major Total was forced to
pay up to a $40/metric ton premium to
front-month April ICE gasoil futures
for two cargoes of French summer
grade diesel into France on Apr. 3 —
twice what it would have paid in early
March. Total has bought almost
200,000 tons of summer grade French
diesel in Platts’ price-setting market-onclose window since mid-March. The
company has been struggling to balance its massive system during peak
European refinery turnarounds and in
the midst of an import drought.
Premiums fell sharply this week af-
ter fresh Russian and US barrels came
onto the market. Total went on to buy
two Russian-origin cargoes from traders Gunvor and Litasco on Apr. 7 and
Apr. 8 at only a $27/ton premium to
April and a $25/ton premium to second-month May ICE gasoil futures, respectively.
Russian diesel traffic is expected to
nudge 1 million tons this month, when
US flows are also set to jump by onethird to 1.2 million-1.4 million tons.
Traders point out that rising
Russian diesel exports are at the expense of higher-sulfur gasoil exports, which have barely been
missed during the recent mild winter. Latest government figures show
heating oil demand in Europe’s
Marketplace
1-Month View
Urals c.i.f. Med vs. Dated Brent
2.50
2.00
1.00
0.00
-2.00
-1.00
-2.00
-3.50
May 23
Jul 19
Sep 14
Nov 10
Jan 6
Mar 4
0.1% Gasoil NWE
$/metric ton
1150
-3.00
05.03
12.03
19.03
26.03
02.04
09.04
1005
960
850
915
700
870
550
825
May 23
Jul 19
Sep 14
Nov 10
Jan 6
Mar 4
780
05.03
12.03
19.03
26.03
$/barrel f.o.b. terminal, or c.i.f. destination
Apr 9’14
Apr 2’14 Chg.
Dated Brent f.o.b. (38 API)
107.48
103.30
4.18
Russian Urals c.i.f. NWE (33 API)*
106.18
103.02
3.16
UK Flotta (38 API)
105.88
102.47
3.41
†
Russian Urals c.i.f. Med (33 API) 107.13 103.523.61
Saharan Blend (46 API)
107.73
103.30
4.43
Siberian Light c.i.f. Med (36 API)† 108.36 104.873.49
†
CPC Blend c.i.f. Med (47 API) 107.13 102.574.56
*Basis Rotterdam. †Basis Augusta.
Product Prices
0.1% Gasoil NWE
$/metric ton
1050
1000
400
Mar 27
Urals c.i.f. Med vs. Dated Brent
$ 1.00
-0.50
-5.00
Mar 27
main German, French, Swiss and
Belgian markets down 25% versus
last year in January and February.
That could change next year when
ships traveling through the region’s
emissions control area will have to
burn 0.1% sulfur gasoil instead of the
current 1% sulfur fuel oil bunkers.
Regional bunker heavyweight
Royal Dutch Shell recently spoke out
about the even greater market chaos
from 2020-25 when the global bunker
fuel market will have to switch from
the current high-sulfur fuel oil to 0.5%
sulfur maximum fuel. Shell says that
will have to be marine diesel, dismissing shipping industry claims that up to
a quarter of the world’s fleet could be
powered by LNG by then.
Spot Crude Oil Prices
12-Month View
$/bbl
from maintenance and demanding
more crude. And they will need to
run some time at higher levels to replenish low refined product inventories. But if consumers then buy fewer
oil products than expected, refinery
margins will tank and the crude surplus will once again rise.
Some signals are confusing. In a
note, Citibank says that a lower
North Sea loading program for May
“sounds like bullishness into May,
yet Brent spreads over the last four
years have actually bottomed out in
May or June.” Citi points out that
Forties crude, the price setter for
dated Brent, remains trapped in the
North Sea in those months as its
Hound Point jetty is undergoing
maintenance, and that will further
depress Brent.
02.04
09.04
www.energyintel.com
$/ton, c.i.f. basis
Apr 9’14
Apr 2’14
ICE Gasoil Futures (front month)
904.00
876.50
0.1% Gasoil NWE
909.00
882.50
0.1% Gasoil Med
910.50
883.25
10 ppm Diesel NWE
934.00
915.50
M-100 Cracked NWE
578.00
570.00
ICE Gasoil Futures (second month)
904.50
877.25
Chg.
27.50
26.50
27.25
18.50
8.00
27.25

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