'Threat' to Future of Russia Oil

The future supply of Russian oil is threatened by a likely decline in production levels, one of the country's top oil executives has warned.

Lukoil's Leonid Fedun said $1 trillion would have to be spent on developing new reserves if current output levels were to be maintained.

Recent figures show Russian output fell 1% in the first quarter of 2008.

The possibility of less oil from one of the world's key suppliers will add more pressure to prices now at record highs.

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Russia needs new oil reseverves inorder to maintain there economic status. They can either make new ones or spend trillions trying to maintain the old ones. This article shows some of the future complications for Russia. It also deals with one of the major problems throughout the world today, oil.

Gazprom Threatens Ukraine Gas Cut

"Russian gas monopoly Gazprom has warned Ukraine it will reduce its gas supplies from next Monday if a $1.5bn (£772m) gas debt is not paid off." They say that this would affect only 25% of the country's total fuel supply.


On Wednesday, Ukraine joined the World Trade Organisation after 14 years of negotiations. Russia is the world's only major economy not to be a member.


This leads to claims Gazprom is also being accused of making this warning for political reasons, but Mr Kochevrin, the Gazprom spokesman, insisted "We're a commercial company: our investors won't understand if our profits fall."


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Lately, Russia's government and businesses have been uncomfortabley chaffing with its surrounding nations and the larger power of the world. Aside from negatively impacting the Ukraine, this act will most likely further the already declining international opinion of Russia.

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Vladimir Putin May Become Dmitry Medvedev’s Successor at Gazprom

"Many observers say that there will not be a major confrontation held during the presidential election in Russia on March 2. First Vice Prime Minister Dmitry Medvedev will most likely replace Vladimir Putin on the top state position. Putin in his turn will chair the government.

However, it is still unclear who will chair the Board of Directors of Russia’s natural gas giant Gazprom. It is Dmitry Medvedev who takes the position at the moment. If he becomes Russia’s next president he will not be able to stay at Gazprom. It is worthy of note that Gazprom’s administration will have to approve the new list of candidates to its Board of Directors on February 4. The annual meeting of Gazprom’s shareholders is slated to take place on June 27.

Gazprom’s Board of Directors consists of ten people. Four of them represent the state structures, four others are from Gazprom itself, and the remaining two act as independent economists. The list of candidates is longer this year, spokespeople for the gas monopoly said. It counts 42 names as opposed to 26 in 2007.

Like it was mentioned above, Dmitry Medvedev will not be able to combine two positions of the president and the chairman of the Board of Directors of Gazprom. However, Vladimir Putin will have a full right for this, experts say.

It is not ruled out that Vladimir Putin may thus become Dmitry Medvedev’s successor at Gazprom. "

Gazprom is the largest Russian company. Gazprom is the biggest extractor of natural gas in the world With sales of US$31 billion in 2004. It accounts for about 93 percent of Russian natural gas production; with reserves of 28,800 km3, it controls 16 percent of the world's gas reserves (as of 2004, including the Shtokman field.) After acquisition of the oil company Sibneft, Gazprom, with 119 billion barrels of reserves, ranks behind only Saudi Arabia, with 263 billion barrels, and Iran, with 133 billion barrels, as the world's biggest owner of oil and oil equivalent in natural gas.

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This is important because it gives further insight into how powerful Putin is and can be. Not only will he still be in control of the government if Medvedev is elected, but he could also have control of a large oil company with billions at his disposal.

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Expanding Energy

MOSCOW — Russia expanded its growing European energy empire Friday, signing two more deals raising fears among Western leaders that the growing dependence is giving the Kremlin a powerful geopolitical weapon.

Announcing the signing of two agreements to construct pipeline and storage facilities in Serbia, Russian officials said the deal would make the poor Balkan nation an important hub for the distribution of Russian gas.

Russia has been rushing to build or acquire European pipelines, storage facilities, ports and energy companies. Russia already supplies one-quarter of Europe's natural-gas and oil needs.

Just last week, Bulgaria agreed to become a major hub for a proposed 550-mile underwater pipeline from the southern Russian coast to the Black Sea's western shore. In December, Turkmenistan signed a deal with Russia to build a pipeline that would increase shipments of gas to Russia. The U.S. has led an effort to limit its inroads — in part by planning new energy pipelines that would bypass Russian territory, but Chris Weafer, chief strategist at UralSib, a Russian investment bank, said fast action by Russia to increase its energy deals has made it difficult for Western countries to organize the huge financial investment needed for rival pipelines.

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Russia is now expanding its energy reserves. This poses a potential problem for westernized countries. Could Russia be planning something? From this article we learn about Russia's interaction with other countries and Russia's solution the approching energy crisis.

STOCKHOLM, Jan 15 (Reuters) - Sweden-listed oil
firm West Siberian Resources (WSIBsdb.ST: Quote, Profile, Research) said on
Tuesday it had signed a preliminary agreement to buy Alliance Oil in a stock
deal valuing the Russian firm at about $1.5 billion.

West Siberian, which has its operations in
Russia, said payment for Alliance Oil would consist of around 1.75 billion new
West Siberian shares. Under the terms of the deal, Alliance shareholders would
own 60 percent of stock in the merged firm.

The firms said in a joint statement the deal
would create a vertically integrated oil company with stable access to crude oil
and operations ranging from prospecting and production to refining of petroleum
products.

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In today's world oil is becoming a major concern. The price of oil is skyrocketing. In this article we can take a look at how the oil problem is effecting Russia and what they are doing to cope.