Russia-Ukraine fiasco: Making western sanctions inconsequential

Russia seems to be carrying on business as usual giving its economy boost and making western sanctions look inconsequential. Russia keeps gliding from one deal after another even with the face-off with EU and US in place.

Russsia and China sign $400 billion deal

In the face of the western sanctions, Russia and China recently signed a huge deal that called for Russia to export 38 billion cubic meters of gas worth some $400 billion to China. The agreement begins in 2018 and will involve one of the largest engineering projects that link Russia’s remote gas fields to China’s pipeline system. In addition, China will invest at least $20 billion in Russian industry and boost imports of Russian products. China will become Russia’s largest trade partner.

Gazprom and Austria sign gas pipeline deal

Austria’s OMV and Russia’s Gazprom signed a contract for the construction of the pipeline’s Austrian section. Vladimir Putin, Russian President accused the US of trying to derail a project to build a gas pipeline that bypasses Ukraine to supply Europe. He said this after Russian and Austrian energy firms agreed to build the pipeline’s western end. Putin said that US’ motive of derailing the project is because they want to supply Europe with gas themselves. “They do everything to derail this contract. There is nothing unusual about it. Its competition and political means are used in this competition,” he said.

Gazprom set to list in Hong Kong 

Gazprom is reportedly looking at listing its shares in Hong Kong, a week after it joined Singapore stock exchange as the Russian gas giant increasingly turns eastward to achieve growth. 

Andrei Kurglov, Gazprom’s chief financial officer said “We are in talks to add a listing on the Hong Kong stock exchange, [but] the next step is upgrading the level of our listing in Singapore.” Kurglov added that Gazprom was preparing to receive payments in Chinese yuan in the wake of Russia’s giant supply deal to sell 38 billion cubic metres a year to Beijing starting from 2018.

An initial public offering could lead to scrutiny from Hong Kong’s financial regulators as seen by Russian aluminium producer United Company Rusal when it entered the market in a 2010 IPO.

Repsol makes Russia’s biggest discovery 

Spain’s Repsol reported that it has made two new hydrocarbon discoveries in the Karabashsky 1 and 2 blocks in western Siberia, Russia. Repsol said that the finds could add 240 million barrels of oil equivalent to the company’s reserves tally – which, according to Russia’s Ministry of Natural Resources and Environment, would means they amount to largest discovery in Russia for two years.

Repsol said the wells that found the hydrocarbons, Gabi-1 and Gabi-3 on the Ouriyinskoye field, were drilled using innovative drilling and seismic techniques developed by the company. The firm added that for the last three years it has beaten its own resource addition targets that it outlined in its 2012-2016 strategic plan.

Czech refinery renews deal for Russian oil supply

Czech refiner Ceska Rafinerska said it had signed a further contract with Slovak pipeline company Transpetrol for the shipment of Russian oil to its Litvinov refinery for the years 2015 and 2016. The company said fees were unchanged from the present contract. Volumes, running along the Druzhba pipeline which goes through Slovakia to the Czech Republic, should reach up to 4 million tonnes each year.

Frank Uzuegbunam