The Gazprom – Belarus dispute appears to have come to an end as various news sources reported Belarus has paid its debts to Gazprom in full.

The current impasse can probably be best described as an aftershock of the seismic events of last winter when Gazprom unceremoniously informed selected Former Soviet Republics that they would no longer supply natural gas at the subsidized prices many had been enjoying. Ukraine was outraged, Belarus claimed poverty, but Gazprom played hard-ball by cutting off Ukrainian and Belorussian supplies until their price demands were met. 

Unfortunately, Western European supplies were lost in the maelstrom, as both Belarus and Ukraine hold strategic geographical positions and are transit countries for the natural gas pipelines supplying the EU.

Russia’s Ministry of Natural Resources Monday said it had earmarked 97 mineral resources fields in western and eastern Siberia to be offered for preliminary exploration.

The list includes 38 hydrocarbon fields, with estimated reserves of around 100 million metric tons of oil and 500 billion cubic meters of gas.

Last month, BP, BP-TNK and Gazprom signed a memorandum of understanding described by BP CEO, Tony Hayward as a ‘ historic agreement [which] lays the ground for powerful co-operation [between the three companies]”.

The memorandum contained an agreement that BP, TNK-BP and Gazprom will form a strategic partnership to identify worldwide investment opportunities, work together on long term energy projects and swap assets around the world.

In Oil and Gas Eurasia’s view, this change in attitude and revised approach to the Russian energy market is a sensible move by BP and TNK-BP, and is an approach other multi-national energy giants would do well to replicate.

It’s reasonable to say that Russia’s rediscovery of assertive diplomacy has caused its fair share of hysteria and alarm in the West. These days, hardly a day goes by when one of the British, American or Australian media outlets doesn’t run a negative story about Russia. Whether it’s Russia’s propensity to use its oil and gas resources as leverage to get it’s way, the independence (more specifically, the lack of independence) of the judiciary and media, the antics of Nashi – Russia’s politicized youth movement – or the Litvinenko affair, there’s always some easy target for a slothful  journalist to turn into a ‘New Cold War’ article.

To be sure, modern Russia is not a liberal utopia radiating benevolence and enlightenment to the rest of the world; and it’s fair to say that there are aspects of contemporary Russia that should concern the diplomats, realpolotik acolytes and liberal advocates alike. But we at Oil and Gas Eurasia believe the ‘New Cold War’ is more lazy journalism than real danger. Pat Davis Symczak tells us why in this excellent article.

Russian oil company Lukoil suffered a major setback last week in its attempts to secure developing rights for the West Qurna oil field in Iraq.  Although Lukoil signed a contract with the now deposed Saddam Hussein which gave it rights to develop the field, Iraq will open all oil fields in the country to fresh, unrestricted tenders.  It had been rumored that Lukoil may be able to coerce the Iraqi government to allow it to develop the field by citing the existing contract while using as additional leverage the large debt Iraq still owes Russia for Arms the Soviet Union sold to Hussein.  However, Lukoil failed to make progress toward its aims during talks between the two sides in Moscow last week.

Belarus is set to settle its gas debt to Gazprom today after Belarusian president, Alexander Lukashenko ordered his country to take $460 million dollars from the countries reserves to pay the debt.

However, in an interesting twist, it seems that Belarus may be saved not by negotiating a large loan with Gazprom, but instead with Venezuela.  Lukashenko, quoted in Interfax, said, “Today I ordered money taken from our reserves and the payment of $460 million. Of course, we are draining our resources, but our good friends, in particular [Venezuelan President] Hugo Chavez, said they are ready to extend a loan at advantageous terms,” adding, according to Interfax, that Western banks were also willing to provide funds.

It’s official: Gazprom will take more partners for it’s liquefied natural gas (LNG) Shtokman project. Regular readers of this blog and our mother site,  www.oilandgaseurasia.com, will be aware that our experts have long predicted Gazprom would likely take more partners to help it exploit the Shtokman gas field. First came the surprise news that French company Total would be awarded partnership status in Shtokman. Then came a series of official statements from the other potential partners, ConocoPhillips and the  Norwegian company Norsk Hydro, that they would still be open to involvment despite Total’s award. Finally, last week, Gazprom slashed investment in Shtokman by more than half, highlighting their need for third party investment. And now, Gazprom chairman, Dmitry Medvedev, has told Reuters “co-participation in this project makes sense for Gazprom. There could be two models for this — it could be where our partners join the project as fully fledged participants in the equity of the joint company, or as … contractors which in my view … could create a little less stability in relations.”

Russneft, whose owner, Mikhail Gutseriyev, was charged with tax evasion and illegal business practices for acquiring Yukos assets before the company was declared bankrupt, will be bought by the Russian billionaire Oleg Deripaska’s Basic Element investment group, pending a decision by the Russian Federal Monopoly Service.The deal has been confirmed by both sides and, according to the FT, the assets of Russneft, reputedly worth $6.5 billion have been handed over to investment structures.

Within a week of BP announcing it was seeking more joint ventures in Russia in order to deliver long term growth, the Moscow Times has reported that the British energy giant’s Russian vehicle, TNK-BP, is hoping to gain access to Gazprom’s assets in return for selling Gazprom some of it’s own.

TNK-BP will press on with their gas utilisation program which runs until 2010, Reuters reported yesterday.  Speaking to Reuters, TNK-BP executive vice president for production, Sergei Brezitski, said “We have a programme of over $500 million approved by the board and could expand it potentially to $1 billion”.

Oil and Gas Eurasia reported recently that Russia wastes $14.22 billion annually through the flaring of associated petroleum gas – the equivalent of the total reserves left in a large gas field.  It seems the Kremlin is now set to toughen up their stance against companies involved in this practice, as Reuters reports that Vladimir Putin has promised to take tough action against companies flaring gas and the Natural Resources Ministry is now working on an enforcement plan.