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  • Brussels blocks Hungary’s nuclear deal with Russia
    Published: 13/03/2015 - 08:28

    The European Commission has objected to Hungary's €10 billion plan to expand its Soviet-era Paks nuclear power plant in a deal with Russia, and may force Budapest to revise the terms of the agreement, EU sources said yesterday (12 March). Hungarian officials strongly denied the reports.

    Confirming a report in Friday's Financial Times, one diplomat said objections by the EU's nuclear fuel purchasing agency Euratom against a plan for Moscow to supply fuel to new reactors at the Paks facility was backed by the Commission. Hungary may have to review the deal.

    In January 2014, Hungarian Prime Minister Viktor Orbán and Russian President Vladimir Putin agreed that Russia would build two new reactors at Paks, and provide a 30-year loan of some €10 billion, covering 80% of the costs.

    The Soviet-constructed plant in central Hungary now supplies about 40% of the country's electricity. Many in Hungary have protested against the plan to increase the country’s energy dependence from Russia.

    Benedek Javor, a Hungarian member of the Greens bloc in the European Parliament, has opposed the deal. He told Reuters the EU objection was to a fuel supply contract signed with Russia.

    According to the FT, Euratom refused to approve Hungary’s plans to import nuclear fuel exclusively from Russia. Hungary appealed against the decision, but last week the Commission threw its weight behind EurAtom.

    Reportedly, the move blocks the expansion of the Paks central. To revive it, Budapest would need to re-negotiate its contract with Moscow or pursue legal action against the Commission.

    The Euratom Supply Agency (ESA) ensures a regular and diversified supply of nuclear fuels to EU users. In particular, the ESA recommends that EU facilities operating nuclear power plants maintain stocks of nuclear materials and cover their needs by entering into long-term contracts with a diverse range of suppliers. It also monitors the EU nuclear fuel market.

    A government spokesman in Budapest quoted by Reuters, Zoltan Kovacs, denied that the EU executive had "blocked" the expansion of Paks.

    A Hungarian cabinet state secretary Andras-Giro-Szasz also "firmly denied" the report, in a statement to Hungarian state newswire MTI.

    "It is not true that the EU has blocked the Paks II construction," Giro-Szasz, communication state secretary for the prime minister s office, told MTI.

    Giro-Szasz said he has asked the FT to issue a correction, MTI added.

    The European Commission and Euratom had no immediate comment.

    According to reports, on 3 March the Hungarian parliament classified the contract with Russia for the expansion of the Paks nuclear plant for 30 years.


    EU energy chief Maroš Šefčovič declined to comment today (13 March) on the talks between the bloc and Hungary over the country's plans to expand its Paks nuclear power plant.

    "On this issue, we agreed with the Hungarian authorities that this matter will be treated as classified and therefore I cannot comment," Šefčovič , the EU's vice president in charge of energy union, said on the sidelines of a meeting of foreign ministers in the Slovak mountain resort of Strbske Pleso.

    A Hungarian government spokesman said on Friday that talks with the European Union about a fuel supply deal for the Paks plant do not block its expansion in any way.
    Brussels blocks Hungary’s nuclear deal with Russia | EurActiv
    Giro-Szasz, communication state secretary for Orban's office, denies above news.

    Victor Orbán, whose conservative Fidesz party in April won a new four-year term, has been accused by some parts of the EU of seeking to amass too much power and rejecting democratic checks and balances.

    He has made it clear that Hungary would act according to what was in its national interest, even if that meant annoying its allies in the European Union and the United States over the country’s relations with Russia.

    Last year, Orbán agreed with Putin on a loan of about €10 billion to build two additional reactors in the country’s only nuclear central in the central city of Paks.

    Many Hungarians have expressed anger at the government's decision to expand the nuclear power plant without consulting the people.

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    Hannia - Hania - Mighthelp


    • The oil price - So much for the rally
      Mar 17th 2015 | THE ECONOMIST

      WORLD oil stockpiles are rising by 1.6m barrels a day—and drowning hopes of a price rally. America’s Energy Information Administration will give the latest picture of crude supplies tomorrow, but already the main American benchmark, West Texas Intermediate, has fallen to a new six-year low of $44.30 per barrel. Brent (the main international price) is stronger, at $53. Demand is soggy (notably from China’s slowing economy) and supply strong. Libya has confounded expectations by doubling its production in the past few weeks. Price falls haven’t hurt production in America: though the number of idle drilling rigs is still rising, only the least profitable wells are shutting down. Output is still buoyant, confounding gloomsters—and oilmen say that they can pump even more oil, and quickly, if the price rises. OPEC says America’s oil boom will be over by the year-end. Wishful thinking. The oil price: So much for the rally | The Economist

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      • Russia's failing designs for Arctic oil exploration
        Sanctions over Ukraine and low fossil-fuel prices have drowned Moscow's grand plans for an Arctic energy boom.
        Mansur Mirovalev | 19 Mar 2015 16:06 GMT ALJAZEERA

        Moscow, Russia - When the Arctic Sunrise, an icebreaker with three dozen Greenpeace activists on board, approached a Russian offshore oil rig just above the Arctic Circle, its crew did not suspect they would be rounded up, branded "pirates", and face up to 15 years in jail.

        The activists left the ship on inflatable boats towards the Prirazlomnaya platform that rose from the frigid Pechora Sea like a red-and-white Lego toy the size of a shopping mall. Russian coastguards met them with warning shots and water cannon, while rig workers threw metal pieces at the activists who tried to scale the platform and attach a banner that read "Save the Arctic."

        Balaclava-wearing, gun-toting guards seized the Arctic Sunrise, and its crew spent two months in a Russian jail on charges of piracy. They were freed following relentless international pressure - but Moscow's message was as clear and cold as a chunk of ice: Don't mess with our Arctic plans.

        The plans include staking and tapping the enormous hydrocarbon reserves in the Arctic, claiming more than a million square kilometres of the ocean all the way to the North Pole as Russia's territorial waters, and beefing up its military presence there.

        Russian officials and media celebrated the plans as their nation's "next space programme" and "another Cold War".

        The terms perfectly describe Russia's phantom pain over the loss of its superpower status with global and even extraterrestrial assertions.

        Under President Vladimir Putin, the pain was somewhat sedated as the Kremlin rebranded itself as an "energy superpower" that dictated its political will and projected its influence via tankers and pipelines - as three-digit oil prices kept rising even higher.

        Despite the six-month-long nights and nine-month-long winters, the Arctic Circle has been a strategic hot-spot for decades. It provides the shortest way from North America to Russia's European part for ballistic missiles or nuclear submarines - and the latter that can hide from radars and satellites under thick ice.

        And as global warming melts the ice cap, the Northern Passage can become a reality - allowing a shortcut from Asia to Europe that may one day compete with the Suez Canal or the Malacca Strait.

        During the "fat years" of high oil prices, Moscow renewed its claims over the region it has long considered its barren backyard - and now sees as an icebox full of mineral riches.

        "The Arctic is, unconditionally, an integral part of the Russian Federation that has been under our sovereignty for several centuries," President Vladimir Putin said in 2013.

        "It will remain such for the times to come."

        A hydrocarbon klondike?

        The areas north of the Arctic Circle hold at least 90 billion barrels of yet undiscovered but technically recoverable oil - or about one-seventh of the world's undiscovered oil reserves, according to a 2008 US Geological Survey assessment.

        There is also some 1,670 trillion cubic feet of technically recoverable natural gas - almost twice as much as Qatar's proven reserves - and 44 billion barrels of technically recoverable natural gas liquids, the assessment said.

        Russia's share of this bonanza is impressive - 41 percent of oil and 70 percent of gas, according to Norwegian officials.

        Despite technological and environmental challenges, an international race for Arctic resources began in the early 2000s. Every country with an Arctic shelf - the US, Canada, Denmark via Greenland, and Norway - wanted a piece of the pie.

        Russia seems to have the biggest piece - but still disagrees with others about its size.

        Claiming the North Pole

        Legend has it that Soviet dictator Joseph Stalin once took a ruler and drew two straight lines from the North Pole to USSR's westernmost and easternmost territories - the Kola Peninsula that borders Norway and the Big Diomede Island right next to Alaska.

        And although Russia's Arctic borders remained intact after the 1991 Soviet collapse, Moscow encountered an unexpected challenge. The international maritime law stipulates that a country can only claim 200 miles (320 kilometres) of adjacent waters as its exclusive territory.

        In 2007, Russia sent an expedition to prove 368421the "morphological structure" of underwater Lomonosov and Mendeleyev ridges made them part of Russia's continental shelf - so that Russia's territorial waters should be extended by 1.2 million square kilometres - and include the North Pole.

        Polar explorer Artur Chilingarov led the expedition and a submarine that planted a tiny Russian flag at the sea bottom in the Pole's area some 4.5 kilometres below the ice. After the expedition, Putin pinned a Hero of Russia medal on him.

        "If you want to, go down and plant your flag nearby," Chilingarov said in televised remarks responding to international condemnation. "But no one will dare do that."

        The steps, however, did nothing to change the North Pole's international status.

        "All the talk about us planting a little flag and getting some preferential rights for the bottom is aimed at people who do not understand anything about maritime law," political analyst Dmitry Oreshkin told Al Jazeera.

        Militarising the Arctic

        In December, Russia unveiled the Northern Command Centre on an Arctic island that was abandoned after the Soviet collapse. The centre now coordinates Russia's icebreaker fleet, the world's largest, and long-range air patrols of missile-armed bombers that cover the supposedly Russian part of the Arctic.

        "In 2015 we will be almost fully prepared to meet unwelcome guests from east and north," Defence Minister Sergei Shoigu said.

        Yet, the plans to guard a frozen white desert the size of South Africa do not seem feasible or even logical.

        "Several outposts that have been opened with much pomp will not do the job," military analyst Alexander Golz told Al Jazeera.

        "What is the military objective of two brigades that will be deployed in the giant area between [the Arctic port of] Murmansk to [the Pacific port of] Vladivostok?"

        A failed breakthrough

        The Prirazlomnaya platform, where the Greenpeace activists were seized, is the world's first ice-resistant rig that weighs half a million tons and is supposedly spill- and explosion-proof, says its operator, the oil arm of Gazprom, Russia's state-run natural gas giant.

        The rig started pumping oil in April 2014, and the launch was hailed in almost military terms.

        "Today, we pioneered the development of Russia's Arctic shelf," Gazprom's CEO Alexei Miller said in a statement. "No doubt, Gazprom will continue the conquest of the Arctic."

        Putin symbolically commanded to start the pumping from Moscow and proclaimed it commenced "our country's big, extensive work in the Arctic."

        The Prirazlomnaya oil was proudly christened ARCO ("Arctic oil") and was described as similar to Kuwait's Ratawi and Saudi Arabia's Arabian Heavy brands.

        A promotional film glorified the rig as a continuation of the USSR's groundbreaking efforts to subdue the forces of nature.

        Environmentalists and experts were less optimistic, though.

        "Despite the president's celebratory tone, this shipment is very late, it contains very poor quality oil and it poses a huge risk to the pristine Arctic environment," Greenpeace International Executive Director Kumi Naidoo said in a statement.

        "The fanfare surrounding its departure looks more like a PR stunt than a credible new source of oil."

        While state media described the rig as a made-in-Russia technological breakthrough, a former deputy energy minister claimed it took Russian engineers 15 years and $3bn to build the platform's base that was topped with a 1984 rig hauled from a Norwegian oilfield.

        "The Prirazlomnaya rig is not a thing Russia should be proud about," Vladimir Milov said in an op-ed published in The Forbes magazine.

        "It should be considered a monument to the ineffectiveness of Russia's oil and gas sector."

        The only fly in the ointment was Gazprom's admittance that Prirazlomnaya's production was profitable only when oil prices exceeded $80 per barrel.

        Less than a year later, the price slumped well below that. Western sanctions slapped on Moscow specifically restrict access to drilling technologies - and Russia simply lacks the expertise.

        However, Gazprom said in November that it would team up with PetroVietnam for a project in the Pechora Sea, not far from the Prirazlomnaya.

        The future of Russia's Arctic programme now looks uncertain.

        "It's been put on hold," Leonid Grigoriev, chief adviser of the Kremlin's Analytical Centre, told Al Jazeera. "But there is no final decision so far." Russia's failing designs for Arctic oil exploration - Al Jazeera English

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        Hannia - Hania - Mighthelp


        • Exclusive: Russia could postpone gas pipe to China touted by Putin - sources
          Denis Pinchuk, Svetlana Burmistrova and Katya Golubkova
          MOSCOW Wed Mar 18, 2015 12:05pm GMT REUETERS

          Russia may postpone completion of a huge pipeline to bring gas from two new fields to China, three sources with direct knowledge of the plans of export firm Gazprom said, delaying one of President Vladimir Putin's signature projects.

          The sources, speaking on condition of anonymity, said the "Power of Siberia" project may be put off until Moscow completes a separate, less ambitious project to send gas from existing fields to China through a pipeline thousands of kilometres further west.

          Russia has denied that it has any plans to postpone the $55 billion "Power of Siberia" pipeline, despite a fall in global energy prices that has hurt the case for the investment required to develop the new fields it would serve.

          Energy Minister Alexander Novak told Reuters last week that Gazprom was sticking to its plan to bring first gas under "Power of Siberia" by 2019. Gazprom is already clearing the route, and five Russian pipe producers have won contracts to supply around a third of all large-diameter pipes needed for the project.

          Gazprom declined to comment.

          The three industry and banking sources said Moscow could postpone completion of the route until after it builds the cheaper "Altai" route from existing fields to China's west.

          Such a change would effectively downgrade and delay a project that had been a centrepiece of Moscow's plans to find new markets for its energy resources in Asia.

          Putin has personally overseen work on the 4,000 km (2,500 mile), $55 billion eastern "Power of Siberia" pipeline.


          Moscow is determined to find new markets for its gas as Europe cuts back its reliance on Russian energy. The signing of the long awaited "Power of Siberia" deal in May was a diplomatic coup for the Kremlin.

          It which would deliver 38 billion cubic metres of gas a year from new gas fields to China's eastern industrial heartland. Some gas could also be shipped from Russia's Pacific Ocean port at Vladivostok.

          But the global fall in energy prices hurts the case for the investment required to develop the new gas fields in remote eastern Siberia north of Mongolia that would be hooked up to the pipe. The prices for gas in the deal, though not made public, are believed to be linked to the global price of oil, which has halved since it was signed last May.

          Meanwhile, Moscow needs new outlets for gas from fields it has already developed further west, including the giant Bovanenkovo Yamal field opened in 2012, which now pumps around 40 billion cubic metres a year but can produce up to 140 bcm.

          Europe, Moscow's main export market, cut imports from Russia by 9 percent to 147 bcm last year.

          "Yamal gas needs new markets - that's why Gazprom is pushing for the Altai route. That's why neither Vladivostok nor the Power of Siberia are a priority - the last one even has no source to be connected to," a banker close to Gazprom said.

          A Gazprom source agreed with the assessment, saying that Altai "is a priority".


          The western alternative Altai route would provide China with gas from Yamal, which is now pumped south from the Arctic to Russia's domestic system and westwards to Europe. But the route is considerably less attractive to China, which already has gas in its far west, and needs it in the industrial east.

          Russia and China signed a framework agreement in November for the Altai gas pipeline to sell 30 billion cubic metres of gas to China per year for 30 years. Russia hopes to sign a final deal in the first half of 2015.

          The Altai pipeline is much cheaper to build for Russia than the "Power of Siberia" project, and would soak up existing spare capacity rather than require the development of new fields.

          But Altai gas would reach China at its remote far western border, requiring a huge new pipeline system within China to take it to cities mainly in the centre and east.

          "Linking the Altai pipeline with major gas consumers of China is a huge project. It would require a serious change of the Chinese five-year plan. It is a major obstacle for Gazprom," said gas analyst Mikhail Korchemkin.

          He predicted that Chinese customers would demand steep discounts, with a price "likely to be much lower than the average price of European exports of Gazprom".

          For now, Beijing says it is still interested in both projects, which would help it reduce its reliance on coal, but its preference for the eastern route is clear.

          "Russia's idea of the western route first is not new. It's been put on the table for discussions for some time," said Zeng Xingqiu, industry veteran and advisor to China National Petroleum Corp, with which Gazprom is in talks.

          "The Chinese side has also made it clear that we want both lines. But the reality is we are short of gas on the eastern side, but have surplus supplies on the west."

          A source in a consultancy firm which works with Gazprom said the Russian gas firm should decide by summer which pipeline to build first.

          "If there is a solid contract ... then the western route could be built faster than the one from Yakutia (in the east)," the source said. A Gazprom source confirmed the timeframe for the decision.
          Exclusive: Russia could postpone gas pipe to China touted by Putin - sources | Reuters

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          • Oil is gushing. Everyone and their mother is producing it. Today April 6, 2015, TV Talking Head, Bart Chilton, DLA Piper Sr. Policy Analyst, says we should not be surprised when price of WTI crude drops to $30 a barrel and stays there for a while.

            Buckle up! Oil 'could fall to $30 say trading pros
            Holly Ellyatt | @HollyEllyatt
            Friday, 27 Mar 2015 | 3:34 AM ET
            Above is one of many articles currently found on finance and investment sites.

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            Hannia - Hania - Mighthelp


            • Saudi Arabia Has a Solution to the Global Oil Glut Problem
              Bloomberg Grant Smith 4/24/2015

              Saudi Arabia has a response to the global surplus of oil: Raise output to near-record levels and then pump even more.

              The world’s biggest oil exporter, having abandoned last year its role of keeping global markets in balance, now has incentive to maximize output and undermine rival producers by using its reserve capacity, according to Citigroup Inc. and UBS AG. Just meeting its own domestic demand this summer will require a lot more fuel, others estimate.

              The increase -- a snub to fellow OPEC members calling on the kingdom to cut production -- will heighten tensions when the organization meets in June. Oil plunged to a six-year low near $45 a barrel in January, six weeks after the Saudis overcame opposition within the group to keep up output despite surging U.S. shale supplies.

              “Increasing production and exports is the clear implication of Saudi’s new oil policy,” Seth Kleinman, head of European energy research at Citigroup in London, said by e-mail. “If you want to pressure high cost producers, why hold oil back on spare capacity? Use it all and use it now.”
              Output Surge

              The biggest member in the Organization of Petroleum Exporting Countries boosted output to 10.1 million barrels a day in March, close to an all-time peak, the International Energy Agency reported on April 15. Saudi Oil Minister Ali Al-Naimi, who has stressed that his country won’t cede market share to higher-cost producers, said in the capital Riyadh on April 7 that production was at 10.3 million barrels and would remain close to that.

              The output decision was “forced upon them” by the runaway growth of U.S. shale, which threatened to erode their market share, Yusuf Alireza, chief executive officer of commodity trader Noble Group Ltd., said at a conference in Lausanne, Switzerland, on April 21.

              Saudi Arabia’s crude exports slumped to a three-year low of 7.11 million barrels a day last year amid reduced U.S. imports, according to information the nation provided to the Joint Organisations Data Initiative.

              Refusing to cut has already been effective in slowing growth in U.S. shale, Tony Hayward, chief executive officer of Genel Energy Plc, said at the Lausanne conference. The IEA, the Paris-based adviser to 29 developed economies, forecasts that non-OPEC supplies, led by the U.S., will expand by only 630,000 barrels a day in 2015, down from a projection of 1.3 million a day in November.
              Refinery Expansion

              The outlook for demand suggests the Saudis will keep production at “elevated levels,” said Miswin Mahesh, an analyst at Barclays Plc in London. Domestic oil consumption rises in the summer months as air conditioning use climbs, and supplies also will be needed for two new refineries, Mahesh said. Summer demand may require output of 11 million barrels a day, London-based consultant Energy Aspects Ltd. said in an April 13 report.

              “The implication of the ‘use it all and use it now’ strategy is that they will continue to ramp up production to 11 and possibly beyond,” said Kleinman of Citigroup.

              The extra crude won’t necessarily weaken oil prices because it will be consumed locally rather than shipped abroad, said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. Price increases for Asian customers indicate the country isn’t trying to push supplies onto consumers or capture market share, he said.

              OPEC Please

              “Oil exports to the market may not necessarily move higher,” said Tchilinguirian. “We don’t think there’s a discretionary push to expand market share to the detriment of other OPEC producers.”

              Fellow OPEC members keep calling on Saudi Arabia to reverse course and curtail supplies. The organization’s 12 members will next meet in Vienna on June 5.

              OPEC should trim “at least 5 percent” from its output target of 30 million barrels a day, Iranian Oil Minister Bijan Namdar Zanganeh said on April 14. Venezuelan Oil Minister Asdrubal Chavez, whose predecessor Rafael Ramirez tried to broker a production cut between OPEC and non-members, visited Saudi Arabia this week.

              Iran, suffering from both the collapse in crude prices and international sanctions on its exports, needs an oil price roughly double current levels to cover government spending this year, the International Monetary Fund estimates. Brent crude futures rose 22 cents to $65.07 a barrel on the London-based ICE Futures Europe exchange at 4:08 p.m. London time Friday. The contract has lost 43 percent since June.

              Tapping Capacity

              The organization is likely to persist with its current course, Genel’s Hayward said. With no group accord to restrain output, Saudi Arabia will choose to tap its spare capacity, according to UBS. The kingdom has about 2.2 million barrels a day in reserve, the IEA estimates.

              “Saudi Arabia will go from record to record,” Giovanni Staunovo, an analyst at UBS, said by e-mail from Zurich. “Considering that OPEC isn’t balancing the market any more, why should they hold an unutilized spare capacity, rather than use it and make money with it?”
              Saudi Arabia Has a Solution to the Global Oil Glut Problem - Yahoo Finance

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              • Wed Jun 3, 2015 2:00pm BST REUTERS Vladimir Soldatkin
                UPDATE 5-Oil prices drop on dollar, oversupply in volatile session

                LONDON, June 3 (Reuters) - Oil prices fell in volatile trade on Wednesday as the dollar rose and investors adjusted positions ahead of a key meeting of OPEC oil producers.

                Core Gulf members of the Organization of the Petroleum Exporting Countries, which pumps over a third of the world's oil, have a consensus to maintain the group's oil output at its meeting on Friday, a senior Gulf OPEC source has told Reuters.

                "There is consensus among Gulf OPEC countries, and others, to keep the (production) ceiling unchanged," the OPEC delegate told Reuters in Vienna. "Nobody wants to rock the boat. The meeting is expected to be smooth sailing."

                Carsten Fritsch, senior commodity analyst at Commerzbank, said oil was hit by talk among some traders that OPEC might raise its production ceiling.

                "It's a minor chance, but of course it's not zero," Fritsch said, adding a rising dollar was also a negative factor for oil.

                The dollar gained around 0.5 percent against a basket of other currencies as the euro slipped, making fuel more expensive to holders of other currencies.

                Brent crude oil for July dropped $1.75 a barrel to a low of $63.74 before recovering to around $64.40 by 1250 GMT. U.S. crude was $1.04 lower at $60.22 a barrel.

                Another setback for oil was an industry report on Tuesday showing a U.S. stock build last week versus market expectations for a draw.

                U.S. government oil data was due at 1430 GMT.

                Brent collapsed last year, falling to almost $45 a barrel in January from above $115 last June, squeezing many oil producers in countries outside OPEC, including U.S. shale drillers.

                Comments by OPEC ministers in Vienna this week have reinforced a view among investors that the big Middle East oil producers will carry on pumping oil nearly flat-out for many months to come, content that lower prices will knock out some of their competitors.

                Saudi Arabian Oil Minister Ali al-Naimi told a conference organised by OPEC in Vienna on Wednesday that the group was "currently meeting global demand and I don't see this changing".

                "In terms of the long-term energy outlook, the future looks very positive," the veteran Saudi minister said.

                OPEC is pumping around 2 million barrels per day (bpd) more than needed at the moment, helping fill oil inventories worldwide and keeping the price of oil for delivery now at a discount to futures prices. UPDATE 5-Oil prices drop on dollar, oversupply in volatile session | Reuters

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