GAZPROM & SHELL SWAP
According to Reuters, Russia's state-controlled gas giant Gazprom (GAZP.MM) could gain control over some of the assets that Shell (RDSa.L) acquired earlier this year from BG group, a senior Gazprom executive said in an interview.
Gazprom's Deputy Chief Executive Alexander Medvedev said the BG holdings could be included in an asset swap deal between Gazprom and Shell that was announced last year. He did not say what the BG holdings were or where they were located.
"The work is under way, progress has been made and the final result is just around the corner - it's certain that the (deals will be completed) by the year-end, maybe earlier," Medvedev said in an interview cleared for publication on Monday.
"Obviously, the BG assets are also in that basket," Medvedev told Reuters in the interview.
Gazprom is subject to U.S. financial sanctions imposed on Russia over the conflict in Ukraine.
Shell signed a deal with Gazprom last week to study jointly building a $10 billion gas plant on the Baltic Sea, as part of their strategic partnership which also foresees asset swaps.
Shell, which wants to sell as much as $30 billion worth of assets and exit 10 countries after merging with BG, has never commented on the assets it plans to offer to Gazprom.
The asset swap deal is not covered by the scope of the sanctions. Nevertheless, it could still arouse political sensitivities, especially if as part of the deal the Russian company, run by a close ally of Russian President Vladimir Putin, ends up controlling assets in western Europe.
Shell acquired BG Group for $54 billion in February.
Under the previously-announced terms of their asset swap deal, Gazprom and Shell will jointly invest $13 billion in three projects in Russia, including construction of a liquefied natural gas plant on the Baltic Sea and the Sakhalin-2 LNG plant expansion, in the Pacific Ocean.
Shell is also eyeing the Yuzhno-Kirinskoye gas field off Sakhalin island as part of the asset swap deal. That asset is specifically subject to the U.S. sanctions, complicating any involvement by Shell.
GAS AUCTION, LNG
Gazprom has another asset swap deal with Austrian energy firm OMV OMV.VI which will include OMV-owned assets in the North and Norwegian seas. Medvedev said in the interview that deal too would be completed by year end.
Medvedev also told Reuters that Gazprom plans to offer no less than 3 billion cubic meters (bcm) of gas at an auction for northwest Europe for supplies between October and March.
Last year, Gazprom started holding gas auctions for sales to Europe as part of efforts to protect its market share against other producers and types of fuel.
Medvedev also reiterated Gazprom's position that the United States will struggle to market its LNG to Europe because other markets offer more favorable conditions.
"Under the current pricing situation, they will resend (LNG cargoes) to other markets," Medvedev said.
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IEA - For the third consecutive year, global energy investment declined, to USD 1.8 trillion (United States dollars) in 2017 – a fall of 2% in real terms. The power generation sector accounted for most of this decline, due to fewer additions of coal, hydro and nuclear power capacity, which more than offset increased investment in solar photovoltaics.
EIA - Crude oil production from the major US onshore regions is forecast to increase 143,000 b/d month-over-month in July from 7,327 to 7,470 thousand barrels/day , gas production to increase 1,066 million cubic feet/day from 69,466 to 70,532 million cubic feet/day .
U.S. FRB - Industrial production rose 0.6 percent in June after declining 0.5 percent in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. Manufacturing output moved up 0.8 percent in June.
U.S. DT - The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $69.9 billion. Of this, net foreign private inflows were $58.8 billion, and net foreign official inflows were $11.1 billion.