{"id":48628,"date":"2014-03-17T22:25:29","date_gmt":"2014-03-18T02:25:29","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=48628"},"modified":"2014-03-17T22:25:29","modified_gmt":"2014-03-18T02:25:29","slug":"russia-eyes-crimeas-oil-gas-reserves","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/03\/17\/russia-eyes-crimeas-oil-gas-reserves\/","title":{"rendered":"Russia Eyes Crimea\u2019s Oil and Gas Reserves"},"content":{"rendered":"

By OilPrice.com<\/strong><\/p>\n

According to Reuters<\/a> , Crimea may nationalize oil and gas assets within its borders belonging to Ukraine, and sell them off to Russia. Crimea\u2019s Deputy Prime Minister hinted at the possibility that it would take control of Chornomorneftegaz, a Ukrainian state-owned enterprise, and then \u201cprivatize\u201d it by selling it to Gazprom. \u201cAfter nationalisation of the company we would openly take a decision – if a large investor, like Gazprom or others emerges – to carry out (privatisation),\u201d Deputy Prime Minister Rustam Temirgaliev said.<\/p>\n

Crimea\u2019s Russian-backed government has decided to hold a referendum on March 16 to secede from Ukraine. At the time of this writing, Russia\u2019s heavy involvement in the drive for Crimean secession makes it hard to believe that Sunday\u2019s 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<\/a> Crimea, leaving open the possibility of some diplomatic way of resolving the crisis.<\/p>\n

The ongoing political standoff in Crimea has already halted Ukraine\u2019s 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<\/a> investment to drill two offshore wells. The consortium led by ExxonMobil \u2013 with stakes held by Shell, Romania\u2019s OMV Petrom, and Ukraine\u2019s Nadra Ukrainy \u2013 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\u2019s consortium outbid Russian oil company Lukoil for the rights to the block.<\/p>\n

Those plans were still in the early stages \u2013 the consortium and the Ukrainian government led by Viktor Yanukovych couldn\u2019t agree on terms. Obviously, once Yanukovych was ousted, ExxonMobil had to put those plans on hold<\/a> until further notice.<\/p>\n

Exxon\u2019s plans for Skifska may not have a future if Russia simply takes Ukraine\u2019s assets. The speaker of Crimea\u2019s 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,\u201d said Vladimir Konstantinov<\/a>. The new Ukrainian government in Kiev may not have much control over the situation if Crimea\u2019s government nationalizes<\/a> Chornomorneftegaz and its assets. Ukraine had been optimistic about developing its offshore oil and gas reserves<\/a>, but after Sunday\u2019s referendum, those reserves may suddenly be in Crimean (or Russian) territory.<\/p>\n

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\u2019t see much upside in getting into a tiff with Russia over the Black Sea, especially since it hadn\u2019t even agreed on a production sharing agreement with Kiev yet. Exxon\u2019s plans for the Russian Arctic are too important.<\/p>\n

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\u2019s annexation of Ukraine\u2019s energy resources will only add fuel to the fire.<\/p>\n

Source: http:\/\/oilprice.com\/Energy\/Energy-General\/Russia-Eyes-Crimeas-Oil-and-Gas-Reserves.html <\/a><\/p>\n

By Nicholas Cunningham of Oilprice.com<\/a><\/p>\n

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By OilPrice.com According to Reuters , Crimea may nationalize oil and gas assets within its borders belonging to Ukraine, and sell them off to Russia. Crimea\u2019s Deputy Prime Minister hinted at the possibility that it would take control of Chornomorneftegaz, a Ukrainian state-owned enterprise, and then \u201cprivatize\u201d it by selling it to Gazprom. \u201cAfter nationalisation … <\/p>\n

Continue reading “Russia Eyes Crimea\u2019s Oil and Gas Reserves”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-48628","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/48628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=48628"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/48628\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=48628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=48628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=48628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}