Exporting Heat: A National Suicide

Feanor · 12-29-2007, 08:16 AM

It's no secret that Russia is the coldest country on Earth. What most people don't realize is that seemingly limitless Russian oil and natural gas supplies are really running low. Known oil deposits are already visibly running low, and even natural gas may be a serious problem.

Quote:

In Russian energy plan, coal is a question mark

When President Vladimir Putin signed a major energy deal in the Kremlin last week with his counterparts from Kazakhstan and Turkmenistan, state television made a big deal of it. As if to show how relations between Russia and those Central Asian regimes had improved, it gave ample coverage to a smiling Putin, praising the merits of a contract that commits Turkmenistan to building a natural gas pipeline along the Caspian Sea to Russia.

And what a deal. Two years of intense negotiations between Gazprom, Russia's state-owned natural gas monopoly, and the leaders of Kazakhstan and Turkmenistan, helped by Putin's persistent intervention, showed just how much the Kremlin wanted this accord. "It is extremely important," Putin said at the signing ceremony. "It will become a new, important contribution of our nations into strengthening the European energy security."

For some energy industry analysts, that said it all. With Gazprom committed to fulfilling its contracts to Europe, this was probably the first time the Kremlin has admitted that Russia requires gas from Central Asia because it does not have enough of its own to meet the increase in domestic and European demand.

"The reality is that Russia faces an energy deficit," said Andrew Monaghan, director of the Russian Research Network at the Defense Academy of the United Kingdom.

Russia's reliance on Central Asia for natural gas poses big questions for Europe, which imports nearly 50 percent of its gas from Russia, and particularly Germany. Its big energy companies, Wintershall and E.ON Ruhrgas, continue to tighten their links with Gazprom in the expectation that Russia will start investing in its own gas sector so as to tap the huge reserves that lay deep in the inhospitable regions of Western Siberia. But all this takes time, which is why Gazprom is prepared to pay heavily for the deal with Central Asia.

Indeed, Turkmenistan's president, Gurbanguli Berdymukhamedov, struck a hard bargain. Gazprom agreed to pay $130 per 1,000 cubic meters of gas during the first half of 2008, compared with $100 it now pays. It will increase to $150 during the second half of 2008.

In practical terms, these hefty prices could be catastrophic for Russia's western neighbors like Ukraine and Belarus, which are dependent on Russia for its energy. They can expect to be saddled with higher energy bills in order to carry some of the cost of this Central Asian deal. As for the average Russian consumer, long accustomed to subsidized heating, the Kremlin will be very wary about raising prices.

This is not the time for Putin or Dmitri Medvedev, Gazprom's chairman, to raise prices. It would prove too unpopular just before the presidential elections, scheduled for March, when Putin is poised to become prime minister. Medvedev has already been nominated by Putin to succeed him as president.

Regardless of the outcome of that election, neither Putin nor Medvedev, nor for that matter the Europeans, can continue to ignore Russia's inability to produce enough gas for its own needs and Europe. Viktor Khristenko, Russia's minister for industry and energy, has already predicted that Russia will face a gas shortage of about 4 billion cubic meters this year, rising to 27.7 billion cubic meters by 2010. By 2015, it could surge to 46.6 billion cubic meters, or about a quarter of what Europe buys annually from Gazprom.

So even if Gazprom embarked on a major investment program instead of investing in newspapers, ski resorts and other unrelated expensive energy projects, there would still be a time lag before the natural gas reaches the transmission pipelines. That may explain why, in his quest for more energy resources, Putin is now seriously considering raising coal production. The plan, still under intense discussion, entails using coal increasingly for domestic consumption as well as exports so as to relieve the pressure on the demand for natural gas both inside Russia and outside it.

It is risky but fascinating option. At a time when Europe is beginning to take climate change seriously, several countries, including Britain, Germany and Russia, are relying ever more heavily on coal as an energy source. According to the International Energy Agency's World Energy Outlook, coal is the fastest-growing fossil fuel, with global consumption rising by 4.5 percent a year. It now accounts for more than 50 percent of the growth in global consumption.

If Putin is serious about diversifying into coal, this could provide the Kremlin with a unique opportunity to modernize the industrial sector.

Monaghan argues that Russian coal is particularly attractive to European consumers because of its low sulfur content. This means that it can be used in European plants that lack desulfurization units.

In Germany alone, nearly 50 percent of power production in 2005 was based on coal. Chancellor Angela Merkel's coalition government plans to build up to 30 new coal-fired power plants over the next decade, despite Merkel's commitment to reducing greenhouse gases. The decision by the government, however, to halt coal production by 2018, because of its high costs, means that these power stations will have to be fed by imported coal, most likely Russian.

Here comes the second challenge for Russia. If its natural gas industry is seriously underfinanced, its long-neglected coal mines are even more so. Over half of the mines have been operating for more than 40 years.

The coal seams are thin and deep, making the mines prone to accidents. Production costs exceed revenues. Few new mines have been brought into production because of lack of investment. More important, Putin has to modernize Russia's railway stock, crucial for transporting coal and for the development of the economy.

Above all, Putin has yet to unveil a long-term energy strategy that details the investments Russia will undertake over the next decades.

So far, the Kremlin has gone only for stopgap measures, paying dearly for gas from Central Asia. Unless Putin is prepared to match his speeches about modernizing the gas and coal sectors with serious money, Russia's long-term reliability as an energy partner is questionable. Europe, with its increasing dependency on its big neighbor to the east, may finally start asking some hard questions.

In Russian energy plan, coal is a question mark - International Herald Tribune

Feanor · 12-29-2007, 08:20 AM

Background

In 2006, Russia’s real gross domestic product (GDP) grew by approximately 6.7 percent, surpassing average growth rates in all other G8 countries, marking the country’s seventh consecutive year of economic expansion. Russia’s economic growth over the past seven years has been driven primarily by energy exports, given the increase in Russian oil production and relatively high world oil prices during the period. Internally, Russia gets over half of its domestic energy needs from natural gas, up from around 49 percent in 1992. Since then, the share of energy use from coal and nuclear has stayed constant, while energy use from oil has decreased from 27 percent to around 19 percent.

Russia’s economy is heavily dependent on oil and natural gas exports, making it vulnerable to fluctuations in world oil prices. According to an International Monetary Fund (IMF) study , a $1 per barrel increase in Urals blend oil prices for a year is estimated to raise federal budget revenues by 0.35 percent of GDP, or $3.4 billion. In order to manage windfall oil receipts, the government established a stabilization fund in 2004 worth. By the end of 2006, the fund was expected to be worth almost $80 billion, or about 7 percent of the country’s nominal GDP. Raw materials, such as oil, natural gas, and metals, dominate merchandise exports and account for over two-thirds of all Russian export revenues.

Although estimates vary widely, the IMF and World Bank suggest that in 2005 the oil and gas sector represented around 20 percent of the country’s GDP, generated more than 60 percent of its export revenues (64% in 2007), and accounted for 30 percent of all foreign direct investment (FDI) in the country.

Kremlin policy makers continue to exhibit an inclination to advance the state's influence in the energy sector. Taxes on oil exports and extraction are still high, and Russia’s state-influenced oil and gas companies are obtaining controlling stakes in previously foreign-led projects. State-owned export facilities have grown at breakneck pace, while private projects have progressed more slowly or have been met with roadblocks by state-owned companies or by various government agencies.

http://www.eia.doe.gov/emeu/cabs/Russia/Background.html

Feanor · 12-29-2007, 08:24 AM

Natural Gas

Russia holds the world’s largest natural gas reserves, with 1,680 trillion cubic feet (Tcf)-- nearly twice the reserves in the next largest country, Iran. In 2004 Russia was the world’s largest natural gas producer (22.4 Tcf), as well as the world’s largest exporter (7.1 Tcf). According to official Russian statistics, production during 2005 and 2006 is predicted to be about the same with around 1 percent growth rate per year.

Gazprom, Russia's state-run natural gas monopoly, produces nearly 90 percent of Russia’s natural gas, and operates the country’s natural gas pipeline network. Gazprom is also Russia’s largest earner of hard currency, and the company’s tax payments account for around 25 percent of federal tax revenues. Despite its enormous size and significance, Gazprom is seriously encumbered by domestic regulation. By law, the company must supply the natural gas used to heat and power Russia's vast domestic market at government-regulated prices (approximately $28 per thousand cubic meters), regardless of profitability.

Gazprom’s natural gas production forecast calls for modest growth of 1-2 percent per year by 2008. Russia’s natural gas production growth has suffered due primarily to aging fields, state regulation, Gazprom’s monopolistic control over the industry, and insufficient export pipelines. Three major fields (called the 'Big Three') in Western Siberia--Urengoy, Yamburg, and Medvezh'ye comprise more than 70 percent of Gazprom's total natural gas production, but these fields are now in decline. Although the company projects increases in its natural gas output between 2008 and 2030, most of Russia’s natural gas production growth will come from independent gas companies such as Novatek, Itera, and Northgaz.

The Mid-term outlook for Gas Supply from Russia
For Gazprom to fulfill its long-term aim of increasing European sales, it will need to boost its production, as well as to secure more reliable export routes to the region. According to a 2006 International Energy Agency (IEA) report, Gazprom’s three largest fields are declining at an average rate of 700 Bcf per year, necessitating around 6,100 Bcf per year of new production by 2015 to maintain current production levels. Gazprom began importing natural gas from Turkmenistan to help fulfill its supply contract with the Netherlands. Since then, Turkmenistan and Russia have had repeated disputes over the pricing of the natural gas which resulted in a halt to natural gas suppliesto Russia in 2004.

Gazprom’s management approved an aggressive investment program in 2005 of around $10.8 billion per year. Much of the investment has gone into foreign acquisitions and planning for the Nordstream pipeline. Little, in comparison, has been spent on investing in some of Gazprom’s known, yet undeveloped resources in the Yamal peninsula, partly because of their high cost.

Oil companies, whose natural gas is largely flared, and independent gas companies will play an important role by increasing their share of Russian total production from 9 percent in 2005 to around 17 percent by 2010. Their success, however, depends largely on gaining access to Gazprom’s transmission system

Shtokhman
Discovered in 1988 in the Barents Sea, the Shtokhman field contains reserves of an estimated 19 billion barrels of oil equivalent. The field’s location, roughly 340 miles northeast of the Russian mainland and 1000 feet deep, makes its development particularly challenging. International Oil Companies (IOCs) had hoped to participate in the field’s development, but in Fall 2006, Russia announced it would develop the field on its own. Originally, the plan for field development would have used LNG exports, but Gazprom is now tentatively planning to pipe the gas and connect it to the Nordstream pipeline (see below). A 2006 Deutsche Bank report estimated that the pipeline option’s capital expenditures might be twice as expensive as small-scale LNG exports. IOCs may still be involved in the giant field’s development but on a contractor basis.

Domestic Gas Prices
Domestic gas prices in Russia are only around 15-20 percent of the market rate at which Russia’s gas is sold to Germany, and Gazprom lost around $420 million in 2006 on domestic natural gas sales. The government regulates prices only for Gazprom's domestic supplies, which currently make up 76 percent of the market, while independents are free to set their own price. Given Gazprom's dominance, the going price of independent gas is usually higher only by 10 percent to 15 percent.

Low prices have impacted the gas industry’s ability to finance capital spending and have hurt incentives to increase efficiency. Raising domestic prices towards parity with market rates in Europe is now a major component of the country’s energy strategy that will play a significant role in avoiding supply shortfalls in the future. In November 2006, the Russian government approved a program to gradually increase gas prices to market levels, with initial increases of around 15 percent in 2007. Under the program, the Federal Tariff Service will stop setting caps on Gazprom's prices for industrial consumers in 2011 and for residential consumers in 2013.

Import and Export Markets
Russia exports significant amounts of natural gas to customers in the Commonwealth of Independent States (CIS). In addition, Gazprom (through its subsidiary Gazexport) has shifted much of its natural gas exports to serve the rising demand in countries of the EU, as well as Turkey, Japan, and other Asian countries (see Table 3). Rising domestic demand

In 2006, Gazprom, which has a monopoly on Russian gas exports, transported 5.3 Tcf (roughly 60%) to destinations outside the CIS and the Baltic states, an increase of 3 percent from 2005. Exports of Russian gas to neighboring Baltic and CIS countries totaled 1.3 Bcf in 2006 (not including re-exports of Central Asian gas). The latest data for 2005 estimates that exports to neighboring Baltic and CIS countries, including re-exports, was approximately 2.7 Bcf.

Ukraine-Russia Natural Gas Dispute of January 2006
Due to an ongoing dispute about natural gas prices, on January 1, 2006, Gazprom shut off gas supplies to Ukraine, and as a result supplies to Europe were also affected. Even though Russia has used the threat of a cutoff to demand higher natural gas prices in recent years, this was the first time that a supply disruption affected flows to Europe. After negotiations with Ukraine, Russia’s natural gas company agreed to a sell its natural gas to RosUkrEnergo, a trading company that also imports natural gas from Central Asia, at the market price of $6.51/mcf ($230 per thousand cubic meters).

Ukraine’s January 4, 2006 agreement entails the purchase of 580 Bcf of natural gas from RosUkrEnergo at $2.69/mcf each year for five years. Some of the natural gas is comprised of less expensive natural gas from Central Asia). The contracts are also subject to review each year and may be adjusted to new market prices. In 2007, Ukraine proposed a return to the barter agreement where Ukraine would receive 1.06 Tcf from Russia in exchange for transiting roughly 4.4 Tcf of Russian natural gas to Europe.

Major Proposed Natural Gas Pipelines
Yamal-Europe II
The Yamal-Europe I pipeline (1 Tcf), which carries natural gas from Russia to Poland and Germany via Belarus, would be expanded another 1 Tcf under this proposal. Gazprom and Poland currently disagree on the exact route of the second branch as it travels through Poland. Gazprom is seeking a route via southeastern Poland to Slovakia and on to Central Europe, while Poland wants the branch to travel through its own country and then on to Germany. Expansion is expected to be complete by 2010 at a cost of around $10 billion.

Blue Stream Expansion and Interconnection
The Blue Stream natural gas pipeline connects the Russian system to Turkey through a 750-mile pipeline, 246 miles of which extends underneath the Black Sea (see map). Natural gas began flowing through the pipeline in December 2002, under an initial schedule of 71 Bcf per year, which was to increase by 71 Bcf annually. Even though flows through the pipeline totaled only 113 Bcf during 2004, the recent launch of a new gas compressor station in Russia will allow the pipeline to run at its design capacity of 565 Bcf per year. During 2005, roughly 160 Bcf of natural gas has been transported via Blue Stream. Gazprom is still discussing plans with its project partner Eni whether to construct an extension to Ceyhan or Izmir (in Turkey), where the gas could be liquefied for export. Another option is to access the planned 280-350 Bcf Poseidon pipeline, which will bring Caspian and Middle East gas to Italy via Turkey and Greece starting in 2010.

In March 2003, Turkey halted deliveries through Blue Stream, invoking a clause in the contract allowing either party to stop deliveries for six months. After Russia filed suit in Stockholm's International Arbitration court, the two sides came to an agreement in November 2003 and the supply of natural gas to Turkey resumed in December 2003.

Nordstream Pipeline (or North European Gas Pipeline)
A northern pipeline extending over 2,000 miles from Russia to Finland and the United Kingdom via the Baltic Sea, was proposed in June 2003 by Russia and the UK, and was renamed Nordstream by the stakeholders in 2006. About 700 miles of the pipeline will pass under the Baltic Sea. In November 2006, Gazprom (51% shareholder), and Germany’s BASF and E.ON (24.5% each) submitted project information to Baltic Sea countries for the start of an environmental impact assessment. Offshore pipe laying is expected to begin between 2008 and 2010. The project is expected to cost $5.7 billion and to transport approximately 0.9-1.0 Tcf of natural gas via two strings beginning by 2010. A second pipeline, which would double the transmission capacity could be built if demand necessitates it.

The main advantage of this pipeline is Russia will no longer have to negotiate transit fees with nearly half a dozen countries or pay them in natural gas. A possible spur connection to Sweden has also been considered. Polish and Latvian leaders have expressed frustration that they were not included in the negotiations.

Natural Gas for China
The Kovytka natural gas field, 63 percent owned by TNK-BP, could provide China with natural gas in the next decade via a proposed pipeline (see Maps section). The project is expected to come online in June 2007 after an 80-mile pipeline to Irkutsk is completed that would only provide natural gas to largely local industrial users in E. Siberia. China has stated it is ready to import up to 700 Bcf per year from the project; but since the natural gas would not arrive until 2012 at the earliest and since China is pursuing other natural gas import plans in the meantime, it is possible that Kovytka natural gas will not have a buyer. Also, Gazprom, which has long wanted a stake in the Kovytka field, does not favor a direct link from the field to China that is not a part of its natural gas pipeline network. The Russian government is also threatening to revoke TNK-BP’s production license if a deal is not made during 2007 to pave the way for construction of the main export pipeline to China.

http://www.eia.doe.gov/emeu/cabs/Russia/NaturalGas.html

Feanor · 12-29-2007, 08:27 AM

Oil

Reserves
According to the Oil and Gas Journal, Russia has proven oil reserves of 60 billion barrels, most of which are located in Western Siberia, between the Ural Mountains and the Central Siberian Plateau. Eastern Siberia is one area where little exploration has taken place. There, only four or five oil and gas fields have been discovered, and a 1996 Petroconsultants study (the latest available) estimated that around 35 million barrels of oil and 5 Trillion Cubic feet (tcf) of natural gas exist in the region.

Production
In the 1980s, the Western Siberia region, also known as the “Russian Core,” made the Soviet Union a major world oil producer, allowing for peak production of 12.5 million barrels per day in total liquids in 1988. Following the collapse of the Soviet Union in 1991, Russia’s oil production fell precipitously, reaching a low of roughly 6 million bbl/d, or around one-half of the Soviet-era peak (see Fig. 1). According to observers, several other factors are thought to have caused the decline, including the depletion of the country's largest fields due to state-mandated production surges and the lack of investment in field maintenance.

A turnaround in Russian oil output began in 1999. Many analysts attribute the rebound in production to the privatization of the industry following the collapse of the Soviet Union. The privatization clarified incentives and increased less expensive production. Higher world oil prices (oil prices tripled between January 1999 and September 2000), the use of technology that was standard practice in the West, and the rejuvenation of old oil fields also helped raise production levels. Other experts partially attribute the increase to after-effects of the 1998 financial crisis, the fall in oil prices, and the subsequent devaluation of the ruble.

In 2006 Russian total liquids production averaged almost 9.7 million bbl/d, including 9.2 million bbl/d of crude oil, a 220,000 bbl/d increase over 2005. This growth rate was down from annual growth of roughly 700,000 bbl/d between 2002-2004.

In upcoming years, total Russian oil production is expected to grow at an annual rate of around 1.5-2.5 percent partially due to growth in output from the Sakhalin projects, (see Sakhalin Fact Sheet ). Government taxation of production and export revenues along with the continued lack of clarity concerning the ownership of subsoil resources contributed to lower output for 2006 and could possibly contribute to lower than expected output during 2007. As Table 1 (below) shows, production from mature oil fields also has a major role in the recent slowdown in Russian oil supply growth.

In the upcoming decade, a few major oil fields (listed in Table 1 below) will contribute to most of Russia’s supply growth and others will offset decreasing production from mature fields. In 2004, around 20 percent (or 1.8 million bbl/d) of Russia’s oil production came from fields that had already produced 80 percent of their total recoverable reserves. Achieving continued growth at post-peak fields will become more problematic as oil companies run out of easy and less costly opportunities to manage the rate of decline.

“Pre-peak” fields, which have come online in the last decade, can add between around 1.2-1.5 million bbl/d to Russian supply according to John Grace’s recent analysis of Russia’s oil supply. New field developments will produce almost all of Russia’s annual oil growth in the next five years and will likely produce more than half of the country’s oil in 2020. In the next five years, new field developments at Sakhalin Island, the Shell Joint Venture's West Salymskoye project, Lukoil/ConocoPhillips's TimanPechora project, Rosneft/Gazprom's offshore Prirazlomnoye project, and Rosneft's Vankorskoye and Komsomolskoye will help stem production losses at older fields.

Refinery Sector
Russia has 41 oil refineries with a total crude oil processing capacity of 5.4 million bbl/d, but many of the refineries are inefficient, aging, and in need of modernization. According to Energy Intelligence, refinery throughput at Russian refineries increased by roughly 5.8 percent to around 4.4 million bbl/d in 2006. Russian refineries produced around 1.1 million bbl/d of Mazut, 1.3 million bbl/d fuel oil, and 800,000 bbl/d gasoline. Retail product prices are typically lower than world oil product prices, hurting incentives to supply the local market. For example, in 2005 retail gasoline and automotive diesel prices in Russia were approximately $2.05 and $1.88 per gallon, respectively. In contrast, gasoline and diesel prices average around $5.50 and $4.90 in OECD Europe.

Feanor · 12-29-2007, 08:32 AM

Outside View: Russian oil, gas drying up

by Oleg Mityayev
Moscow (UPI) Dec 11, 2007
Russia must increase investment in oil and gas exploration and production, and save its energy resources, say German scientists.

"At the current level of production, (Russia's) reserves will have been used up in around 22 years," says a report by the Berlin-based German Institute for Economic Research (DIW) released Dec. 4.

Russian experts are unanimous in their reaction to this gloomy German forecast. They say this is "nonsense and distortion of reality."

The report claims that although Russia is the second-largest oil producer (9.7 million barrels per day) after Saudi Arabia, it holds only the seventh place for proven oil reserves (6 percent to 7 percent of the world's total).

German scientists point to such drawbacks of the Russian energy policy as insufficient investment into increasing commodities production, inadequate energy-saving technologies and low domestic energy prices, which results in mindless burning of hydrocarbons.

They say that Russia must do something now to improve the situation and reassure Western Europe that hydrocarbon supplies from Russia are reliable.

According to the German institute, the EU imports 29 percent of its oil and one-third of its gas from Russia.

Russian oil and gas experts said the gloomy forecast was not true, despite problems in the Russian oil and gas sector.

Timur Khairullin, an analyst with the AntantaPioglobal investment group, described the report as inaccurate. He said that Russia has enough oil for at least 30 years, and the situation in its commodities sector is not deteriorating year-on-year.

Russian oil producers conduct enough prospecting and exploration to replenish between 70 percent and 80 percent of their reserves, which keeps the reserves-production ratio at a stable level.

Khairullin said Russia's seventh place in terms of proven reserves was not a cause for concern. As much as 60 percent of the global oil reserves are located in the Gulf countries, which have enough oil for more than 70 years, he said. However, Russia leads the world in the amount of gas (more than 25 percent of the total).

The pace of oil production in Russia has been slowing down by 2 percent to 2.5 percent annually in the past three years (it grew by 6 percent to 11 percent in 2000-2004), because companies spend only 1 percent of their revenues a year on exploration and the basic deposits in western Siberia are becoming depleted.

But Russia is establishing new oil production centers in eastern Siberia and the shelf, where it offers tax privileges. It is also building the East Siberia-Pacific Ocean pipeline to transport oil from these fields to the rapidly developing Asian countries.

Khairullin said that high oil production and export taxes would hinder a substantial growth of production in Russia in the next few years.

Valery Nesterov, an analyst with the Troika Dialog investment company, believes the replenishment of oil reserves is a problem in Russia. More funds are being invested in oil production at the depleted fields in western Siberia, but this has not increased the production of the local low-quality oil.

However, it is not right to say that Russian reserves will have been exhausted in 22 years, Nesterov said. Many large Western companies have oil reserves that will last only 15 years, but they are replenishing them every year. Russian companies have enough oil for 20-30 years and are currently replenishing their reserves by nearly 100 percent.

The analyst admitted that oil exploration was stalled in the early 1990s, when oil production was turned over to private companies in Russia. He said exploration should become a government task. The Cabinet has approved a state program for developing the mineral sector, which stipulates the replenishment of reserves, and licenses are being issued for the eastern Siberian oilfields.

Nesterov does not think that Russia should increase production at all costs. We should leave something to the future generations, he said.

Oil production has been growing at 2 percent to 2.5 percent in Russia, whereas the global figure is 1.5 percent to 2 percent, and has been the same for years thanks to the efforts of the Organization of Petroleum Exporting Countries. The oil cartel, set up to uphold the interests of oil exporters, is doing its best to prevent oil prices from going down.

The DIW report reflects the fears of consumers that Russia will be unable to meet their growing hydrocarbons requirements. They have an alternative -- look for other options, such as alternative energy or still more effective energy saving technologies.

Outside View: Russian oil, gas drying up

RIA Novosti - Opinion & analysis - When will Russia run out of oil and gas?

Feanor · 12-29-2007, 08:35 AM

British Petroleum states that Russian oil reserves equal to 60 billion barrels.

by Alexander Sutyagin

Such relatively modest amount leads us to believe that a new Russian law consummated in February 2004 was no coincidence. According to the new law, any information concerning oil reserves in the country is in fact State secret. Actual oil and gas reserves in Russia turned out to be not quite as big as the Russian elite had envisioned them. Taking into account today's export tempo of oil products, Russia could soon begin importing oil.

Perhaps, that is why Russian President Vladimir Putin has signed a decree on November 11, 2003 (Federal Law ¦-153) thus bringing certain changes to article 5 of the Federal Law regarding ?State secret¦. In particular, the new law regards any information revealing the exact amount of supply, reserves, production, and the actual use of strategic types of minerals of the Russian Federation as State secret.

A list of minerals, which remains secret, has been issued by a special decree of the Russian government on April 2 2002 (¦210). According to the list, ?any information concerning oil reserves and reserves of solute gas in oil¦ is classified.

At the same time, however, things could have been much simpler. Since no one ever possesses exact information on anything in our country, especially when it concerns such complex subjects as geology, it was decided to simply make all the data classified to avoid the hassle of finding out the exact numbers. So the government decided to use an alternative: make all the data classified.

The Federal law ¦153 has been consummated after 3 months since the day it was officially introduced in 2004. Therefore, it follows that any public official, such as ex or present-day governing body of MinPromEnergo (the Ministry of Industry and Energy), prime-minister and even the president himself, who has made the information concerning oil resources public more than once, should be hold liable for revealing classified info. We can only hope that the FSB (Federal Security Bureau) will actually inform the public of their actions regarding these government officials.

Interestingly, information concerning Russian oil reserves is being continuously published by British Petroleum in its ?BP Statistical Review¦ magazine. According to the agency Media-Press with reference to BP, which was published April 19, 2004, Russia possesses 60 billion barrels of oil, its daily oil production for July 2003 constituted 7 million 698 thousand barrels, consumption?2 million 469 thousand barrels.

To compare, according to the SHANA agency, confirmed oil reserves in Iran on its major production plant constitute 130 billion barrels, production?3 million 729 thousand barrels per day, consumption?1 million 350 thousand barrels per day.

Such comparison appears to be rather distressing for the ?Kremlin dreamers.¦ So they really do have something to hide.

It is characteristic that the new ?State secret¦ amendment mentions not only reserves but also extraction scale, production, hydrocarbon transportation; whereas the list mentions only minerals. Had the list been extended, not only the entire government of the Russian Federation along with its analysts could have ended up behind bars but also any journalist who ever attempted to write on the ?hydrocarbon¦ subject.

Shareholders of NK ?SibNeft¦ for instance suggest adding a new clause in the NK guidebook of rules and regulations prohibiting the firm-s co-owner to reveal any information containing classified materials. First of all, such condition will concern foreign management and the company's owners.

It would also be noteworthy to remind that according to this Federal ?State secret¦ law, information concerning emergency situations, catastrophes, ecology, threats to public security and facts revealing unlawful activity of government officials is NOT considered classified.

Alexander Sutyagin, project ?Monitoring BTS/Bellona CPB¦

British Petroleum states that Russian oil reserves equal to 60 billion barrels. | EnergyBulletin.net | Peak Oil News Clearinghouse

12-29-2007, 08:20 AM	#2 (permalink)
Feanor Banished Join Date: 06-12-07 Location: San Jose, CA Posts: 2,385 Country:	Background In 2006, Russia’s real gross domestic product (GDP) grew by approximately 6.7 percent, surpassing average growth rates in all other G8 countries, marking the country’s seventh consecutive year of economic expansion. Russia’s economic growth over the past seven years has been driven primarily by energy exports, given the increase in Russian oil production and relatively high world oil prices during the period. Internally, Russia gets over half of its domestic energy needs from natural gas, up from around 49 percent in 1992. Since then, the share of energy use from coal and nuclear has stayed constant, while energy use from oil has decreased from 27 percent to around 19 percent. Russia’s economy is heavily dependent on oil and natural gas exports, making it vulnerable to fluctuations in world oil prices. According to an International Monetary Fund (IMF) study , a $1 per barrel increase in Urals blend oil prices for a year is estimated to raise federal budget revenues by 0.35 percent of GDP, or $3.4 billion. In order to manage windfall oil receipts, the government established a stabilization fund in 2004 worth. By the end of 2006, the fund was expected to be worth almost $80 billion, or about 7 percent of the country’s nominal GDP. Raw materials, such as oil, natural gas, and metals, dominate merchandise exports and account for over two-thirds of all Russian export revenues. Although estimates vary widely, the IMF and World Bank suggest that in 2005 the oil and gas sector represented around 20 percent of the country’s GDP, generated more than 60 percent of its export revenues (64% in 2007), and accounted for 30 percent of all foreign direct investment (FDI) in the country. Kremlin policy makers continue to exhibit an inclination to advance the state's influence in the energy sector. Taxes on oil exports and extraction are still high, and Russia’s state-influenced oil and gas companies are obtaining controlling stakes in previously foreign-led projects. State-owned export facilities have grown at breakneck pace, while private projects have progressed more slowly or have been met with roadblocks by state-owned companies or by various government agencies. http://www.eia.doe.gov/emeu/cabs/Russia/Background.html Last edited by Feanor : 12-29-2007 at 08:28 AM.

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
INDIA’S NEW "COLD START" WAR DOCTRINE STRATEGICALLY REVIEWED	Ray	Land Forces	125	06-20-2008 23:33 PM
Chinese Navy White Paper	rickusn	Naval Forces	5	01-06-2007 12:04 PM
Articles and links for the Military Professional	Officer of Engineers	The Staff College	115	11-20-2006 11:28 AM
Suicide Attacks Evolving, Increasing	LUND	The War in Iraq	5	08-03-2005 07:29 AM
Inside the Mind of Suicide Terrorist	Leader	International Defense Topics	0	12-04-2004 00:34 AM

12-29-2007, 08:24 AM	#3 (permalink)
Feanor Banished Join Date: 06-12-07 Location: San Jose, CA Posts: 2,385 Country:	Natural Gas Russia holds the world’s largest natural gas reserves, with 1,680 trillion cubic feet (Tcf)-- nearly twice the reserves in the next largest country, Iran. In 2004 Russia was the world’s largest natural gas producer (22.4 Tcf), as well as the world’s largest exporter (7.1 Tcf). According to official Russian statistics, production during 2005 and 2006 is predicted to be about the same with around 1 percent growth rate per year. Gazprom, Russia's state-run natural gas monopoly, produces nearly 90 percent of Russia’s natural gas, and operates the country’s natural gas pipeline network. Gazprom is also Russia’s largest earner of hard currency, and the company’s tax payments account for around 25 percent of federal tax revenues. Despite its enormous size and significance, Gazprom is seriously encumbered by domestic regulation. By law, the company must supply the natural gas used to heat and power Russia's vast domestic market at government-regulated prices (approximately $28 per thousand cubic meters), regardless of profitability. Gazprom’s natural gas production forecast calls for modest growth of 1-2 percent per year by 2008. Russia’s natural gas production growth has suffered due primarily to aging fields, state regulation, Gazprom’s monopolistic control over the industry, and insufficient export pipelines. Three major fields (called the 'Big Three') in Western Siberia--Urengoy, Yamburg, and Medvezh'ye comprise more than 70 percent of Gazprom's total natural gas production, but these fields are now in decline. Although the company projects increases in its natural gas output between 2008 and 2030, most of Russia’s natural gas production growth will come from independent gas companies such as Novatek, Itera, and Northgaz. The Mid-term outlook for Gas Supply from Russia For Gazprom to fulfill its long-term aim of increasing European sales, it will need to boost its production, as well as to secure more reliable export routes to the region. According to a 2006 International Energy Agency (IEA) report, Gazprom’s three largest fields are declining at an average rate of 700 Bcf per year, necessitating around 6,100 Bcf per year of new production by 2015 to maintain current production levels. Gazprom began importing natural gas from Turkmenistan to help fulfill its supply contract with the Netherlands. Since then, Turkmenistan and Russia have had repeated disputes over the pricing of the natural gas which resulted in a halt to natural gas suppliesto Russia in 2004. Gazprom’s management approved an aggressive investment program in 2005 of around $10.8 billion per year. Much of the investment has gone into foreign acquisitions and planning for the Nordstream pipeline. Little, in comparison, has been spent on investing in some of Gazprom’s known, yet undeveloped resources in the Yamal peninsula, partly because of their high cost. Oil companies, whose natural gas is largely flared, and independent gas companies will play an important role by increasing their share of Russian total production from 9 percent in 2005 to around 17 percent by 2010. Their success, however, depends largely on gaining access to Gazprom’s transmission system Shtokhman Discovered in 1988 in the Barents Sea, the Shtokhman field contains reserves of an estimated 19 billion barrels of oil equivalent. The field’s location, roughly 340 miles northeast of the Russian mainland and 1000 feet deep, makes its development particularly challenging. International Oil Companies (IOCs) had hoped to participate in the field’s development, but in Fall 2006, Russia announced it would develop the field on its own. Originally, the plan for field development would have used LNG exports, but Gazprom is now tentatively planning to pipe the gas and connect it to the Nordstream pipeline (see below). A 2006 Deutsche Bank report estimated that the pipeline option’s capital expenditures might be twice as expensive as small-scale LNG exports. IOCs may still be involved in the giant field’s development but on a contractor basis. Domestic Gas Prices Domestic gas prices in Russia are only around 15-20 percent of the market rate at which Russia’s gas is sold to Germany, and Gazprom lost around $420 million in 2006 on domestic natural gas sales. The government regulates prices only for Gazprom's domestic supplies, which currently make up 76 percent of the market, while independents are free to set their own price. Given Gazprom's dominance, the going price of independent gas is usually higher only by 10 percent to 15 percent. Low prices have impacted the gas industry’s ability to finance capital spending and have hurt incentives to increase efficiency. Raising domestic prices towards parity with market rates in Europe is now a major component of the country’s energy strategy that will play a significant role in avoiding supply shortfalls in the future. In November 2006, the Russian government approved a program to gradually increase gas prices to market levels, with initial increases of around 15 percent in 2007. Under the program, the Federal Tariff Service will stop setting caps on Gazprom's prices for industrial consumers in 2011 and for residential consumers in 2013. Import and Export Markets Russia exports significant amounts of natural gas to customers in the Commonwealth of Independent States (CIS). In addition, Gazprom (through its subsidiary Gazexport) has shifted much of its natural gas exports to serve the rising demand in countries of the EU, as well as Turkey, Japan, and other Asian countries (see Table 3). Rising domestic demand In 2006, Gazprom, which has a monopoly on Russian gas exports, transported 5.3 Tcf (roughly 60%) to destinations outside the CIS and the Baltic states, an increase of 3 percent from 2005. Exports of Russian gas to neighboring Baltic and CIS countries totaled 1.3 Bcf in 2006 (not including re-exports of Central Asian gas). The latest data for 2005 estimates that exports to neighboring Baltic and CIS countries, including re-exports, was approximately 2.7 Bcf. Ukraine-Russia Natural Gas Dispute of January 2006 Due to an ongoing dispute about natural gas prices, on January 1, 2006, Gazprom shut off gas supplies to Ukraine, and as a result supplies to Europe were also affected. Even though Russia has used the threat of a cutoff to demand higher natural gas prices in recent years, this was the first time that a supply disruption affected flows to Europe. After negotiations with Ukraine, Russia’s natural gas company agreed to a sell its natural gas to RosUkrEnergo, a trading company that also imports natural gas from Central Asia, at the market price of $6.51/mcf ($230 per thousand cubic meters). Ukraine’s January 4, 2006 agreement entails the purchase of 580 Bcf of natural gas from RosUkrEnergo at $2.69/mcf each year for five years. Some of the natural gas is comprised of less expensive natural gas from Central Asia). The contracts are also subject to review each year and may be adjusted to new market prices. In 2007, Ukraine proposed a return to the barter agreement where Ukraine would receive 1.06 Tcf from Russia in exchange for transiting roughly 4.4 Tcf of Russian natural gas to Europe. Major Proposed Natural Gas Pipelines Yamal-Europe II The Yamal-Europe I pipeline (1 Tcf), which carries natural gas from Russia to Poland and Germany via Belarus, would be expanded another 1 Tcf under this proposal. Gazprom and Poland currently disagree on the exact route of the second branch as it travels through Poland. Gazprom is seeking a route via southeastern Poland to Slovakia and on to Central Europe, while Poland wants the branch to travel through its own country and then on to Germany. Expansion is expected to be complete by 2010 at a cost of around $10 billion. Blue Stream Expansion and Interconnection The Blue Stream natural gas pipeline connects the Russian system to Turkey through a 750-mile pipeline, 246 miles of which extends underneath the Black Sea (see map). Natural gas began flowing through the pipeline in December 2002, under an initial schedule of 71 Bcf per year, which was to increase by 71 Bcf annually. Even though flows through the pipeline totaled only 113 Bcf during 2004, the recent launch of a new gas compressor station in Russia will allow the pipeline to run at its design capacity of 565 Bcf per year. During 2005, roughly 160 Bcf of natural gas has been transported via Blue Stream. Gazprom is still discussing plans with its project partner Eni whether to construct an extension to Ceyhan or Izmir (in Turkey), where the gas could be liquefied for export. Another option is to access the planned 280-350 Bcf Poseidon pipeline, which will bring Caspian and Middle East gas to Italy via Turkey and Greece starting in 2010. In March 2003, Turkey halted deliveries through Blue Stream, invoking a clause in the contract allowing either party to stop deliveries for six months. After Russia filed suit in Stockholm's International Arbitration court, the two sides came to an agreement in November 2003 and the supply of natural gas to Turkey resumed in December 2003. Nordstream Pipeline (or North European Gas Pipeline) A northern pipeline extending over 2,000 miles from Russia to Finland and the United Kingdom via the Baltic Sea, was proposed in June 2003 by Russia and the UK, and was renamed Nordstream by the stakeholders in 2006. About 700 miles of the pipeline will pass under the Baltic Sea. In November 2006, Gazprom (51% shareholder), and Germany’s BASF and E.ON (24.5% each) submitted project information to Baltic Sea countries for the start of an environmental impact assessment. Offshore pipe laying is expected to begin between 2008 and 2010. The project is expected to cost $5.7 billion and to transport approximately 0.9-1.0 Tcf of natural gas via two strings beginning by 2010. A second pipeline, which would double the transmission capacity could be built if demand necessitates it. The main advantage of this pipeline is Russia will no longer have to negotiate transit fees with nearly half a dozen countries or pay them in natural gas. A possible spur connection to Sweden has also been considered. Polish and Latvian leaders have expressed frustration that they were not included in the negotiations. Natural Gas for China The Kovytka natural gas field, 63 percent owned by TNK-BP, could provide China with natural gas in the next decade via a proposed pipeline (see Maps section). The project is expected to come online in June 2007 after an 80-mile pipeline to Irkutsk is completed that would only provide natural gas to largely local industrial users in E. Siberia. China has stated it is ready to import up to 700 Bcf per year from the project; but since the natural gas would not arrive until 2012 at the earliest and since China is pursuing other natural gas import plans in the meantime, it is possible that Kovytka natural gas will not have a buyer. Also, Gazprom, which has long wanted a stake in the Kovytka field, does not favor a direct link from the field to China that is not a part of its natural gas pipeline network. The Russian government is also threatening to revoke TNK-BP’s production license if a deal is not made during 2007 to pave the way for construction of the main export pipeline to China. http://www.eia.doe.gov/emeu/cabs/Russia/NaturalGas.html

12-29-2007, 08:27 AM	#4 (permalink)
Feanor Banished Join Date: 06-12-07 Location: San Jose, CA Posts: 2,385 Country:	Oil Reserves According to the Oil and Gas Journal, Russia has proven oil reserves of 60 billion barrels, most of which are located in Western Siberia, between the Ural Mountains and the Central Siberian Plateau. Eastern Siberia is one area where little exploration has taken place. There, only four or five oil and gas fields have been discovered, and a 1996 Petroconsultants study (the latest available) estimated that around 35 million barrels of oil and 5 Trillion Cubic feet (tcf) of natural gas exist in the region. Production In the 1980s, the Western Siberia region, also known as the “Russian Core,” made the Soviet Union a major world oil producer, allowing for peak production of 12.5 million barrels per day in total liquids in 1988. Following the collapse of the Soviet Union in 1991, Russia’s oil production fell precipitously, reaching a low of roughly 6 million bbl/d, or around one-half of the Soviet-era peak (see Fig. 1). According to observers, several other factors are thought to have caused the decline, including the depletion of the country's largest fields due to state-mandated production surges and the lack of investment in field maintenance. A turnaround in Russian oil output began in 1999. Many analysts attribute the rebound in production to the privatization of the industry following the collapse of the Soviet Union. The privatization clarified incentives and increased less expensive production. Higher world oil prices (oil prices tripled between January 1999 and September 2000), the use of technology that was standard practice in the West, and the rejuvenation of old oil fields also helped raise production levels. Other experts partially attribute the increase to after-effects of the 1998 financial crisis, the fall in oil prices, and the subsequent devaluation of the ruble. In 2006 Russian total liquids production averaged almost 9.7 million bbl/d, including 9.2 million bbl/d of crude oil, a 220,000 bbl/d increase over 2005. This growth rate was down from annual growth of roughly 700,000 bbl/d between 2002-2004. In upcoming years, total Russian oil production is expected to grow at an annual rate of around 1.5-2.5 percent partially due to growth in output from the Sakhalin projects, (see Sakhalin Fact Sheet ). Government taxation of production and export revenues along with the continued lack of clarity concerning the ownership of subsoil resources contributed to lower output for 2006 and could possibly contribute to lower than expected output during 2007. As Table 1 (below) shows, production from mature oil fields also has a major role in the recent slowdown in Russian oil supply growth. In the upcoming decade, a few major oil fields (listed in Table 1 below) will contribute to most of Russia’s supply growth and others will offset decreasing production from mature fields. In 2004, around 20 percent (or 1.8 million bbl/d) of Russia’s oil production came from fields that had already produced 80 percent of their total recoverable reserves. Achieving continued growth at post-peak fields will become more problematic as oil companies run out of easy and less costly opportunities to manage the rate of decline. “Pre-peak” fields, which have come online in the last decade, can add between around 1.2-1.5 million bbl/d to Russian supply according to John Grace’s recent analysis of Russia’s oil supply. New field developments will produce almost all of Russia’s annual oil growth in the next five years and will likely produce more than half of the country’s oil in 2020. In the next five years, new field developments at Sakhalin Island, the Shell Joint Venture's West Salymskoye project, Lukoil/ConocoPhillips's TimanPechora project, Rosneft/Gazprom's offshore Prirazlomnoye project, and Rosneft's Vankorskoye and Komsomolskoye will help stem production losses at older fields. Refinery Sector Russia has 41 oil refineries with a total crude oil processing capacity of 5.4 million bbl/d, but many of the refineries are inefficient, aging, and in need of modernization. According to Energy Intelligence, refinery throughput at Russian refineries increased by roughly 5.8 percent to around 4.4 million bbl/d in 2006. Russian refineries produced around 1.1 million bbl/d of Mazut, 1.3 million bbl/d fuel oil, and 800,000 bbl/d gasoline. Retail product prices are typically lower than world oil product prices, hurting incentives to supply the local market. For example, in 2005 retail gasoline and automotive diesel prices in Russia were approximately $2.05 and $1.88 per gallon, respectively. In contrast, gasoline and diesel prices average around $5.50 and $4.90 in OECD Europe.

12-29-2007, 08:32 AM	#5 (permalink)
Feanor Banished Join Date: 06-12-07 Location: San Jose, CA Posts: 2,385 Country:	Outside View: Russian oil, gas drying up by Oleg Mityayev Moscow (UPI) Dec 11, 2007 Russia must increase investment in oil and gas exploration and production, and save its energy resources, say German scientists. "At the current level of production, (Russia's) reserves will have been used up in around 22 years," says a report by the Berlin-based German Institute for Economic Research (DIW) released Dec. 4. Russian experts are unanimous in their reaction to this gloomy German forecast. They say this is "nonsense and distortion of reality." The report claims that although Russia is the second-largest oil producer (9.7 million barrels per day) after Saudi Arabia, it holds only the seventh place for proven oil reserves (6 percent to 7 percent of the world's total). German scientists point to such drawbacks of the Russian energy policy as insufficient investment into increasing commodities production, inadequate energy-saving technologies and low domestic energy prices, which results in mindless burning of hydrocarbons. They say that Russia must do something now to improve the situation and reassure Western Europe that hydrocarbon supplies from Russia are reliable. According to the German institute, the EU imports 29 percent of its oil and one-third of its gas from Russia. Russian oil and gas experts said the gloomy forecast was not true, despite problems in the Russian oil and gas sector. Timur Khairullin, an analyst with the AntantaPioglobal investment group, described the report as inaccurate. He said that Russia has enough oil for at least 30 years, and the situation in its commodities sector is not deteriorating year-on-year. Russian oil producers conduct enough prospecting and exploration to replenish between 70 percent and 80 percent of their reserves, which keeps the reserves-production ratio at a stable level. Khairullin said Russia's seventh place in terms of proven reserves was not a cause for concern. As much as 60 percent of the global oil reserves are located in the Gulf countries, which have enough oil for more than 70 years, he said. However, Russia leads the world in the amount of gas (more than 25 percent of the total). The pace of oil production in Russia has been slowing down by 2 percent to 2.5 percent annually in the past three years (it grew by 6 percent to 11 percent in 2000-2004), because companies spend only 1 percent of their revenues a year on exploration and the basic deposits in western Siberia are becoming depleted. But Russia is establishing new oil production centers in eastern Siberia and the shelf, where it offers tax privileges. It is also building the East Siberia-Pacific Ocean pipeline to transport oil from these fields to the rapidly developing Asian countries. Khairullin said that high oil production and export taxes would hinder a substantial growth of production in Russia in the next few years. Valery Nesterov, an analyst with the Troika Dialog investment company, believes the replenishment of oil reserves is a problem in Russia. More funds are being invested in oil production at the depleted fields in western Siberia, but this has not increased the production of the local low-quality oil. However, it is not right to say that Russian reserves will have been exhausted in 22 years, Nesterov said. Many large Western companies have oil reserves that will last only 15 years, but they are replenishing them every year. Russian companies have enough oil for 20-30 years and are currently replenishing their reserves by nearly 100 percent. The analyst admitted that oil exploration was stalled in the early 1990s, when oil production was turned over to private companies in Russia. He said exploration should become a government task. The Cabinet has approved a state program for developing the mineral sector, which stipulates the replenishment of reserves, and licenses are being issued for the eastern Siberian oilfields. Nesterov does not think that Russia should increase production at all costs. We should leave something to the future generations, he said. Oil production has been growing at 2 percent to 2.5 percent in Russia, whereas the global figure is 1.5 percent to 2 percent, and has been the same for years thanks to the efforts of the Organization of Petroleum Exporting Countries. The oil cartel, set up to uphold the interests of oil exporters, is doing its best to prevent oil prices from going down. The DIW report reflects the fears of consumers that Russia will be unable to meet their growing hydrocarbons requirements. They have an alternative -- look for other options, such as alternative energy or still more effective energy saving technologies. Outside View: Russian oil, gas drying up RIA Novosti - Opinion & analysis - When will Russia run out of oil and gas?

12-29-2007, 08:35 AM	#6 (permalink)
Feanor Banished Join Date: 06-12-07 Location: San Jose, CA Posts: 2,385 Country:	British Petroleum states that Russian oil reserves equal to 60 billion barrels. by Alexander Sutyagin Such relatively modest amount leads us to believe that a new Russian law consummated in February 2004 was no coincidence. According to the new law, any information concerning oil reserves in the country is in fact State secret. Actual oil and gas reserves in Russia turned out to be not quite as big as the Russian elite had envisioned them. Taking into account today's export tempo of oil products, Russia could soon begin importing oil. Perhaps, that is why Russian President Vladimir Putin has signed a decree on November 11, 2003 (Federal Law ¦-153) thus bringing certain changes to article 5 of the Federal Law regarding ?State secret¦. In particular, the new law regards any information revealing the exact amount of supply, reserves, production, and the actual use of strategic types of minerals of the Russian Federation as State secret. A list of minerals, which remains secret, has been issued by a special decree of the Russian government on April 2 2002 (¦210). According to the list, ?any information concerning oil reserves and reserves of solute gas in oil¦ is classified. At the same time, however, things could have been much simpler. Since no one ever possesses exact information on anything in our country, especially when it concerns such complex subjects as geology, it was decided to simply make all the data classified to avoid the hassle of finding out the exact numbers. So the government decided to use an alternative: make all the data classified. The Federal law ¦153 has been consummated after 3 months since the day it was officially introduced in 2004. Therefore, it follows that any public official, such as ex or present-day governing body of MinPromEnergo (the Ministry of Industry and Energy), prime-minister and even the president himself, who has made the information concerning oil resources public more than once, should be hold liable for revealing classified info. We can only hope that the FSB (Federal Security Bureau) will actually inform the public of their actions regarding these government officials. Interestingly, information concerning Russian oil reserves is being continuously published by British Petroleum in its ?BP Statistical Review¦ magazine. According to the agency Media-Press with reference to BP, which was published April 19, 2004, Russia possesses 60 billion barrels of oil, its daily oil production for July 2003 constituted 7 million 698 thousand barrels, consumption?2 million 469 thousand barrels. To compare, according to the SHANA agency, confirmed oil reserves in Iran on its major production plant constitute 130 billion barrels, production?3 million 729 thousand barrels per day, consumption?1 million 350 thousand barrels per day. Such comparison appears to be rather distressing for the ?Kremlin dreamers.¦ So they really do have something to hide. It is characteristic that the new ?State secret¦ amendment mentions not only reserves but also extraction scale, production, hydrocarbon transportation; whereas the list mentions only minerals. Had the list been extended, not only the entire government of the Russian Federation along with its analysts could have ended up behind bars but also any journalist who ever attempted to write on the ?hydrocarbon¦ subject. Shareholders of NK ?SibNeft¦ for instance suggest adding a new clause in the NK guidebook of rules and regulations prohibiting the firm-s co-owner to reveal any information containing classified materials. First of all, such condition will concern foreign management and the company's owners. It would also be noteworthy to remind that according to this Federal ?State secret¦ law, information concerning emergency situations, catastrophes, ecology, threats to public security and facts revealing unlawful activity of government officials is NOT considered classified. Alexander Sutyagin, project ?Monitoring BTS/Bellona CPB¦ British Petroleum states that Russian oil reserves equal to 60 billion barrels. \| EnergyBulletin.net \| Peak Oil News Clearinghouse

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)