Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Russia Eyes Crimea’s Oil and Gas Reserves

Politics / Energy Resources Mar 17, 2014 - 05:50 PM GMT

By: OilPrice_Com

Politics

According to Reuters , Crimea may nationalize oil and gas assets within its borders belonging to Ukraine, and sell them off to Russia. Crimea’s Deputy Prime Minister hinted at the possibility that it would take control of Chornomorneftegaz, a Ukrainian state-owned enterprise, and then “privatize” it by selling it to Gazprom. “After nationalisation of the company we would openly take a decision - if a large investor, like Gazprom or others emerges - to carry out (privatisation),” Deputy Prime Minister Rustam Temirgaliev said.


Crimea’s Russian-backed government has decided to hold a referendum on March 16 to secede from Ukraine. At the time of this writing, Russia’s heavy involvement in the drive for Crimean secession makes it hard to believe that Sunday’s result will be anything other than an overwhelming result in favor of breaking ties with Kiev (either greater autonomy or annexation by Russia). The next steps are much less clear, however. Secretary of State John Kerry is hoping Russia will hold off on fully annexing Crimea, leaving open the possibility of some diplomatic way of resolving the crisis.

The ongoing political standoff in Crimea has already halted Ukraine’s oil and gas ambitions. Ukraine came close to inking a deal with a consortium of international oil companies that would have led to an initial $735 million investment to drill two offshore wells. The consortium led by ExxonMobil – with stakes held by Shell, Romania’s OMV Petrom, and Ukraine’s Nadra Ukrainy – had been particularly interested in the Skifska field in the Black Sea, which holds an estimated 200 to 250 billion cubic meters of natural gas. If it can get the field up and running, Exxon hopes to eventually produce 5 billion cubic meters per year. Exxon’s consortium outbid Russian oil company Lukoil for the rights to the block.

Those plans were still in the early stages – the consortium and the Ukrainian government led by Viktor Yanukovych couldn’t agree on terms. Obviously, once Yanukovych was ousted, ExxonMobil had to put those plans on hold until further notice.

Exxon’s plans for Skifska may not have a future if Russia simply takes Ukraine’s assets. The speaker of Crimea’s parliament said on March 13 that its oilfields should be under the care of Moscow. "Russia, and Gazprom, should take care of the oil and gas production,” said Vladimir Konstantinov. The new Ukrainian government in Kiev may not have much control over the situation if Crimea’s government nationalizes Chornomorneftegaz and its assets. Ukraine had been optimistic about developing its offshore oil and gas reserves, but after Sunday’s referendum, those reserves may suddenly be in Crimean (or Russian) territory.

Exxon is in a bit of a pickle, as it has billions of dollars of investments in the Russia Arctic in a co-venture with Rosneft, its largest non-U.S. project. It is therefore staying pretty quiet about its position in Skifska, and will likely maintain a low-key position even after the referendum. Exxon likely doesn’t see much upside in getting into a tiff with Russia over the Black Sea, especially since it hadn’t even agreed on a production sharing agreement with Kiev yet. Exxon’s plans for the Russian Arctic are too important.

ExxonMobil aside, If Crimea and Russia move forward with the nationalization/privatization of Ukrainian oil and gas reserves, it will heighten the conflict between Russia on the one hand, and Ukraine and the West on the other. The U.S. has promised tougher sanctions over what it argues as an illegal annexation of Crimea. Russia’s annexation of Ukraine’s energy resources will only add fuel to the fire.

Source: http://oilprice.com/Energy/Energy-General/Russia-Eyes-Crimeas-Oil-and-Gas-Reserves.html

By Nicholas Cunningham of Oilprice.com

© 2014 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in