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Geopolitics / Europe

  • Kremlin Says Sanctions Will Cost Europe

    The Kremlin says strengthened sanctions from the European Union and United States against Moscow will cost the West more than Russia.The EU on Sept. 12 formally extended its ban on 15 companies’ access to shares or bonds issued by European institutions that mature in more than 30 days. The companies include three energy giants – Gazprom Neft, Rosneft and Transneft – and three major manufacturers – Oboronprom, Uralvagonzavod and United Aircraft Corp.The new sanctions also forbid EU companies from signing new contracts for oil drilling and exploration in partnership with Russian firms.  And they prohibit European companies from providing related…

  • Putin is Losing Eastern European Energy Gamble

    Russian President Vladimir Putin said he doesn't think the European community can do without the natural gas it gets from energy monopoly Gazprom.  With a Russian economy starting to decline, however, it may be Gazprom that's too strongly interconnected to the European market to break free.The narrative over European energy security reaches at least back to 2006 when Gazprom first cut gas supplies through Ukraine. The fallout from the latest disruption in 2009 put opposition darling and former Prime Minister Yulia Tymoshenko in prison, but now the tables have turned for a Ukraine tilting more strongly toward the European Union.Last…

  • Southeastern Europe Energy Advisory

    This week we are focusing on some potential opportunities opening up in an area that gets little attention and largely flies under the oil and gas radar. Croatia to offer up offshore Adriatic blocksCroatia, which joined the European Union in July, is preparing to publish tenders for offshore oil and gas exploration in the central and southern Adriatic Sea in the second quarter of this year, with the first drilling permits likely to be awarded in 2015. The government plans to open the data room in February for interested companies.Norway’s Spectrum just completed a five-month seismic survey of 15,000 kilometers…

  • Make No Mistake About It: The Storm Has Hit in Turkey

    Last week we took you through an emerging crisis in Turkey that will set the investment terrain for 2014. This week, we feel the subject warrants another installment as Prime Minister Erdogan, the Justice and Development Party (AKP) and the business elite attached to them become targets of a very focused corruption scandal that Erdogan may not survive—and that should shake investor confidence to its core.A series of raids and 60 arrests have Erdogan thinking that he is the real target of the corruption probe—and he is not mistaken. This is what happens when you take on the Gulenists as…

  • Turkey After the New Year

    Turkey has been the darling of foreign oil and gas investors who are looking to new frontiers that are less risky, from a security and political stability point of view. This is Turkey—for now. Despite the fact that they still haven’t made that one big find, Turkey is an extremely significant strategic investment, depending on how you play it. But the uncertainty has been piling up ever since the Gezi Park protests that shook the foundations—however mildly—of Prime Minister Recep Erdogan’s power base. Next year—indeed, four months from now--will be a definitive one for Erdogan—he could either solidify his power,…

  • Ukraine Balances Energy Needs and European Aspirations

    Ukraine is one step farther away from Europe. A sudden decision made by the Ukrainian president Viktor Yanukovich to cancel the signing of a pre-agreed deal with the European Union is a strong blow to Brussels and, at the same time, an important victory for the Kremlin. The key person responsible for snatching the bride at the altar is President of Russia Vladimir Putin, who used Ukraine’s economic dependency on Russia to prevent further bonding between Kiev and Europe.Despite clearly accepting a marriage of convenience with Russia, Ukraine still seems determined to diversify its energy sources and continue with energy…

  • Ukraine's Energy Sector Retreats Behind Iron Curtain

    Ukrainian energy company Naftogaz said it agreed with Russian gas giant Gazprom to defer payments for winter gas supplies until early 2014. With Ukraine embroiled in protests, and Europe making headway on energy diversification strategies, the move signals a tilt by Kiev back to its former Kremlin patrons. Naftogaz Chief Executive Officer Yevgeny Bakulin said his company agreed with Gazprom to hold off on settling natural gas debts for imports since October in order to cope with "problems and issues" in the region. Ukraine racked up millions of dollars in debt to Gazprom for natural gas deliveries during the summer. The Naftogaz…

  • Ukraine & Turkey: The European Energy Coup

    Though Norway in June overtook Russia in total exports of natural gas to Europe, the balance of Russian gas to Europe comes through Ukraine, which itself is dependent upon Russia for 60% of its current gas consumption.  While Ukraine controls the transit of 90% of its gas to Europe, Russia is consistently trying to use its gas exports to Ukraine to gain greater control of the Ukraine transit system, which itself deems a strategic asset. The struggle for control of export to Europe and Ukraine’s own struggle to increase domestic production and move closer to Europe, with an European Association…

  • Ukraine, Gazprom and the Return of Dmytro Firtash

    Russia’s surprising move to offer Kiev a ‘gas discount’ marks the return of Ukrainian oligarch Dmytro Firtash to the international energy scene, a move that speaks volumes on the current state of affairs between the two nations.  When Russia’s state-owned giant Gazprom announced it was granting Ukraine a ‘gas discount’ of approximately 35% last Wednesday, many commentators were unsure what to make of it. The announcement was carefully crafted to appear as charitable “assistance” from the Kremlin to its eastern neighbor, who has long accused Gazprom of overcharging the Ukrainian national oil and gas company Naftogaz. In 2012, Ukraine paid…

  • Trans-Adriatic Pipeline Enhances European Energy Security

    Those concerned with European energy are excited for the arrival of finalized plans for the Southern Gas Corridor that will carry natural gas from Azerbaijan, through Turkey, Albania, Greece to Italy. The Trans-Adriatic Pipeline (TAP), a project of Norwegian Statoil, Swiss Axpo and German E.ON Ruhrgas is due for completion in 2019 and lauded as a way to reduce Europe’s dependency on Russian reserves. As European demand for energy grows, many Europeans fear falling vulnerable to Russian supply manipulations will have negative economic and political implications in the future.A wide variety of energy security concerns, however, underscore the need for…