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Eurasian Business Briefing Oil, Gas, Energy, & Power

Turkmen President in talks with Qatar over TAPI pipeline development

Berdimuhamedov and Al-Thani March 2016Turkmenistan is considering turning to Qatar for financial and technical help with the development of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, President Gurbanguly Berdimuhamedov announced after a meeting with Sheikh Tamim Bin Hamad Al-Thani in Doha this week. (more…)

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Gazprom’s Asian charm offensive struggles to excite investors

Singapore Stock ExchangeAs their board considers the possibility of a share placement on one of Asia’s major stock exchanges – most likely Hong Kong – executives from Russian energy giant Gazprom flew into Singapore and Hong Kong this week for the first time since 2015 in a bid to drum up interest; but even after last year’s commodities rally and a revival in Russian stocks, Asian money managers have yet to be persuaded that Gazprom is worth adding to their portfolio.
Deputy Chief Executive Officer Andrey KruglovNews that Gazprom (more…)

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Tehran agrees to sell $1.5bn in bonds to develop communal oil and gas fields

South ParsThe Iranian parliament has given the country’s oil ministry permission to sell more than $1.5bn in bonds to raise funds for the development of some of the oil and gas fields that it shares with its neighbours in the Gulf. In an open session of the parliament on Saturday, the Iranian lawmakers approved the relevant clause in next year’s budget that begins on March 21.
Iran shares (more…)

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Saudi Aramco to woo Chinese with IPO

Saudi Aramco compound DahranSaudi Aramco has asked JPMorgan Chase & Co and Morgan Stanley to help with what, at $100bn, is expected to be the world’s biggest IPO, according to the Wall Street Journal, while HSBC has emerged as the leading contender for a role among a list of five banks that could provide a pipeline to Chinese investors. (more…)
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Turkish Stream #2 gets sign-off

Gazprom and Switzerland’s Allseas are reported to have signed an agreement for the construction of a second, 900km Turkish Stream pipeline running from its Siberian gas fields along the the bed of the Black Sea to Turkey.
The two companies (more…)

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Putin signs up to Turkish Stream

Putin ratifies Turkish Stream 080217The new axis that has been developing between Istanbul and Moscow in recent months appeared to strengthen even further yesterday when President Vladimir Putin signed a bill ratifying the construction of the Turkish Stream pipeline that will eventually carry natural gas from Russia under the Black Sea to Thrace on Turkey’s border with Greece.
Turkish Stream (more…)

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Now QIA eyes up Novatek JV

Putin greets Al-Thani watched by Messina (Intesa) and Glasenberg (Glencore) 250117Following its acquisition of a 19.5% stake in Rosneft via its shareholding in the Anglo–Swiss multinational commodity trading and mining company Glencore last month, the Qatar Investment Authority (QIA) is thought to be on the verge investing a further $2bn in the Russian energy sector. After Russian President VladimirPutin and Rosneft CEO Igor Sechin met with QIA chief Abdullah Bin Mohammed Bin Saud Al Thani in Moscow yesterday, speculation was rife that the Qatari sovereign wealth fund could be about to buy Fund Energy’s 49% share in the Yargeo joint venture that it set up with Novatek to develop the Yarudeyskoe oil field on the Yamal peninsula in Northern Siberia.
Igor Yusufov, CEO Fund EnergyThe QIA had made “another deal that will mean additional investment of $2bn”, Al-Thani said before the meeting, although neither side would give further details. However, industry insiders are claiming that Fund Energy, the investment fund set up and run by former Russian energy Minister and Gazprom board director Igor Yusufov, was looking to sell its stake in Yargeo, the JV in charge of the largest oil asset in Novatek’s portfolio.
Yarudeskoye field, Yamal PeninsulaLaunched in December 2015, the field has an annual production capacity of 3.5m tonnes or 9,700 tons of crude oil a day, while the JV also runs a central oil treatment facility, oil and gas gathering systems, a pumping station and gas and crude oil pipelines. After treatment, the oil is transported 350km south to Purpe where it is injected into Transneft’s trunk pipeline system.
In December, Russia’s President Vladimir Putin took to the TV airways to celebrate the news that the commodity trader Glencore and Qatar’s QIA sovereign wealth fund had agreed to buy Moscow’s 19.5% stake in the state-run Rosneft oil giant for a figure Putin put at $11bn, boosted by what he described as “the rising trend in oil prices.”

 
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Russia overtakes KSA as No. 1 Chinese oil supplier and tops investment charts

Transneft oil containersHaving overtaken Saudi Arabia as China’s top oil supplier over the course of 2016, Russia has got off to a cracking start to 2017and has more inflows of foreign portfolio money than any other global emerging market fund so far this year.
According to data released yesterday (more…)

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Gazprom pumps $1.8bn into Nord Stream as German exports hit new high

Nord Stream2 pipesGazprom underlined its determination to go ahead with the construction of the controversial Nord Stream 2 gas pipeline this week with the announcement that it is planning to invest $1.9bn in the project over the course of the next 12 months. (more…)

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Saudis to launch $30bn renewable energy programme within weeks

Saudi Arabia is getting ready to launch a 15-year, $30-50bn renewable energy program as it prepares for the post-oil era, its Energy, Industry and Mineral Recourses Minister Khalid Al-Falih announced this week. Speaking at the the World Future Energy Summit in Abu Dhabi, the Minister said that the first round of bidding for a series of projects able to produce up to 10GW of power would begin within weeks.
The announcement (more…)

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Trump victory gifts Russian oligarchs $29bn as energy share prices soar

Gennady TimchenkoRussian oligarchs: Rising share prices and a resurgence in the value of the rouble brought on partly by the prospect of a Trump administration have added approximately $29bn to the fortunes of some of Russia’s richest men, making President Putin’s inner circle among the chief beneficiaries of last November’s presidential election, according to figures compiled and released by Forbes this week.
Among the biggest winners (more…)

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China blows competition away with $360bn plan for renewable energy

Wind farms ChinaChina is planning to plough nearly $360bn into renewable energy generation by the end of the decade and expects 25% of its electricity needs to be met from wind power by 2030 – and is also investing heavily overseas in an attempt to position itself as the leading force in the global renewables market. 
Over the past week, (more…)

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Concerns over Trump hard-line policy prompt BP to step back from Iran

Trump on IranLess than two months after deciding to exclude its US national CEO Bob Dudley from its attempts to capitalise on the potential of the Iranian oil industry, doubts over the policies that incoming President Donald Trump’s administration will adopt towards the Islamic Republic has prompted energy giant BP to stand back altogether, leaving the field open to its two biggest European rivals Royal Dutch Shell and Total. (more…)

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Obama hits Trump with new Russian sanctions and Arctic drilling ban

Navy Day Parade SevastopolOutgoing US President Barack Obama this week did his best to thwart his successor Donald Trump’s plans to improve relations with Moscow and to increase US oil and gas production by extending the sanctions imposed on Russia over its 2014 annexation of Crimea while almost simultaneously withdrawing (more…)

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Sinopec considers IPO for retail arm

Sinopec petrol stationThe state-run China Petroleum & Chemical Corp (Sinopec), was this week reported to have dusted off plans for an IPO of its gas-station and convenience-store retail business. According to unnamed sources, Sinopec, which is itself listed in Hong Kong and also trades on the Shanghai and New York stock exchanges, has asked banks to submit proposals by this month for roles to manage a potential Hong Kong listing of Sinopec Marketing Coin in 2017. (more…)

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Putin celebrates as Qatar wealth fund and Glencore buy $11bn Rosneft stake

PutinRussian President Vladimir Putin took to the TV airways yesterday to celebrate the news that the commodity trader Glencore and Qatar’s QIA sovereign wealth fund – Glencore’s largest shareholders – had agreed to buy Moscow’s 19.5% stake in the state-run Rosneft oil giant for a figure Putin put at $11bn, boosted by what he described as “the rising trend in oil prices.”
The transaction was so big that Putin specifically asked Sechin to work with the Finance Ministry and central bank to ensure that it did not destabilize the currency market when the proceeds were converted into roubles. The rouble gained against the dollar in late trading after the deal was announced. and shares in Rosneft jumped by 6.4% on the news.
Glencore Chief Executive Officer Ivan GlasenbergPutin haled the surprise deal as the “largest acquisitions in the oil and gas sector in the world in 2016.” It is certainly the biggest foreign investment in Russia since the crisis in Ukraine and comes little more than a year after Glencore Chief Executive Officer Ivan Glasenberg had to go cap in hand to his shareholders for a cash injection. Qatar’s involvement also marks a rare venture of an OPEC member into the Russian energy sector.
Putin was joined on air by his long-term ally and Rosneft CEO Igor Sechin who thanked the President for his part in brokering the deal which, he said, only “became possible thanks to your personal contribution,…..the negotiated price is in our view the maximum possible with the minimum discount of 5% to market prices.” Financing will be provided by “one of the largest European banks,” he added, without specifying which one.
Putin and UlyukaevThe deal comes at the end of an eventful few weeks for Russia’s privatisation programme which has seen Economy Minister Alexey Ulyukaev dismissed and put under house arrest, accused of taking a bribe to end his objections to Rosneft taking part in the privatisation of Bashneft; and Deputy Finance Minister Alexei Moiseev announcing that hundreds of SMEs were likely to put up for sale next year as Moscow scrambles to raise cash to fill its $21bn budget deficit.
The new deal will go a long way to reducing that debt, but with Rosneft and Sechin himself subject to the sanctions imposed by the West after the annexation of Ukraine, Glencore announced that it would be “fully ring-fenced” from exposure to the Russian state company, apart from a 0.54% “indirect equity interest.”
Russia will retain a controlling stake in Rosneft after the deal, while BP owns a further 19.75% stake in the company.

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Erdogan rubber-stamps Turkish Stream

Turkish President Tayyip ErdoganTurkish President Recip Erdogan has paved the way for construction of the Turkish Stream pipeline to begin after officially ratifying the Russian-Turkish accord concerning a new natural gas pipeline running from Krasnodar in southern Russia, along the bed of the Black Sea to Turkish Thrace. The announcement (more…)

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Rouhani threatens to revive nuclear programme after Senate votes for 10-year extension to Iran Sanctions Act

Isfahan nuclear plantIran’s President Hassan Rouhani yesterday called on outgoing US President Barack Obama not to sign a 10-year extension to Washington’s Iran Sanctions Act, amid reports that the Iranian parliament is preparing to table a motion that would give the government a mandate to resume its nuclear programme in retaliation. (more…)

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Gazprom puts out call for Nord Stream 2 bids in face of EU opposition

Landfall of the Nord Stream Pipeline in GermanyNord Stream 2: Russia’s state energy giant Gazprom continued its defiance to the EU over its plans to build a second gas pipeline under the Baltic Sea to Germany this week by putting out a call for bids for the $11bn Nord Steam 2 project. On completion, the new pipeline would push Nord Stream’s combined annual capacity up to 55bcm and boost Germany’s importance as a transit hub for Russian gas into Europe. (more…)

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BP US CEO Bob Dudley stands back from special Iranian task force

 BP CEO Bob DudleyBP has formed a special task force to study the investment potential of the Iranian oil industry in the post-sanctions era – but, in an attempt to mitigate the risk of the US sticking to its ban on any American involvement in the Islamic Republic, the team is to be headed by its UK-born CFO Brian Gilvary rather than US national CEO Bob Dudley. (more…)

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