The Norwegian Petroleum Directorate expects…
Oil prices spiked on Wednesday…
Russia and Ukraine have sparred for years over transit issues of Russian natural gas using Ukraine’s pipeline network to supply is European customers.
Last week Ukraine announced that it was dismantling its national natural gas company Naftogaz.
Ukrainian Prime Minister Mykola Azarov has said that Ukraine would welcome Russia's participation in its new gas production company, Kiev’s Vlasti.net news agency reported.
Azarov told journalists that the new Ukrainian with Russian participation could obtain a license for the production of about one trillion cubic meters of natural gas, commenting,
"We hope the necessary compromise with Russia will be found. Long-term interests must outbalance the spur of the moment."
Ukraine currently produces around 20 billion cubic meters of natural gas annually, but a major source of its revenue comes from Russia’s state-owned natural gas company Gazprom utilizing the nation’s extensive pipeline network to transmit Russian natural gas to its eastern European markets. While Ukraine’s Energy and Coal Ministry predicts gas consumption will fall to 54 billion cubic meters in 2011 and by another 10 billion cubic meters, in 2012, Azarov recently said that Ukraine had proven gas reserves of around 1 trillion cubic meters and resources of 11-20 trillion cubic meters.
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com