Page 13 - FSUOGM Week 47 2022

FSUOGM POLICY FSUOGM

time to implement the plan. JP Morgan notes that Russia has already
“Poland says they can't go above $30 per bar- demonstrated its willingness to curb energy
rel. Cyprus wants compensation. Greece wants supplies, after significantly cutting gas flow to
more time. It is not going to happen tonight,” one Europe since the start of the war in Ukraine. ™
diplomat told Reuters on November 23, refer-
ring to the talks that took place that day.
Russia exports around 70-85% of its crude on
tankers, rather than pipelines, and the price cap
is primarily targeting these seaborne supplies, by
prohibiting shipping, insurance and reinsurance
firms from dealing with Russian crude cargoes
across the world unless they are sold at no more
than the price cap.
Critically, most of the world’s major shipping
and insurance firms are based in G7 countries.
Analysts at BCS Global Markets note that
the price ceiling of $65-70 per barrel would have
limited impact, but once the framework is in
place, the price could be lowered at a later point.
“In our opinion, such a price level is being
chosen so as to cause as little disruption as pos-
sible while the cap mechanisms are being put
in place, but it will likely be lowered later,” BCS
GM said in a research note. “In any event, we do
not think it will work as intended, as the Russian
government has made its own clear statements
regarding the price cap, and that is that Russian
oil will not be exported to countries that partici-
pate in it, regardless of the set price level.”

NEWS IN BRIEF

Georgian economy minister happen in a year,” he said, adding, “First of support for Ukraine’s energy sector as
Ukraine’s allies have stepped up their
all, we need a complete picture… then [to]
talks of renewed plans for form a detailed action plan… and start the it reaches a critical point. The United
Kingdom expressed further support during
step-by-step implementation of this plan,
Caspian Sea gas pipeline including attracting investments.” a meeting between Prime Minister Rishi
Sunak and President Volodymyr Zelenskiy.
through Georgia to Europe Meanwhile, Belgium, Finland, Germany,
Slovakia, Luxembourg and Sweden sent the
Georgia’s Vice Prime Minister and Minister Norway gives €195mn grant to latest EU aid package.
of Economy, Levan Davitashvili, announced Naftogaz “The destruction of Ukraine's energy
at a briefing on November 21 that the infrastructure is reaching a critical point.
government is working on a project to Ukraine’s state-owned gas company, On the eve of winter, people are being cut
supply gas from the Caspian Sea to Europe Naftogaz, will receive NOK2bn (€195mn) off from electricity and heating. The key
through Georgia, Civil Georgia reports. from Norway, Ukraine Business News priority of our humanitarian operations
According to Davitashvili, the project reported on November 22. today is to scale up winterisation assistance,”
– in which Azerbaijan, Romania, and The grants will be provided via the stated European Commissioner for Crisis
Hungary are also taking part – started in European Bank for Reconstruction and Management Janez Lenarčič.
2015 and envisages a plan in which “gas will Development (EBRD) to help Ukraine’s
be transformed into a liquid state on the energy security as nearly half of the
territory of Georgia, and then gasified in country’s energy infrastructure has been Ukraine wants Russian oil
Romania”. damaged in virulent Russian attacks. In
“Unfortunately, this project was stopped addition to the grant, Norway pledged a producers to pay more for
and had no further development,” he said, €300mn EBRD loan to Naftogaz as part of a
adding that now “Europe is particularly NOK10bn ($976mn) package for 2022 and transport through Druzhba
interested in alternative sources of gas 2023.
supply, when everyone is talking about With millions of citizens suffering power pipeline
diversifying the energy supply, this project outages, the funding will allow Naftogaz to
acquired special relevance this year.” purchase gas to keep the country warm and Ukraine’s oil transit operator Ukrtransnafta
Davitashvili noted that an assessment of produce electricity. Recent Russian strikes will again increase the transit fee for
the project and the existing infrastructure have also targeted gas-producing facilities. Russian oil transported through the
on Georgian and Azerbaijani territory is According to Oleksii Chernyshov, director Druzhba (Friendship) pipeline, New Voice
now in the works. of Naftogaz, several facilities were destroyed of Ukraine reported on November 22.
“It won’t happen in one day, and it won’t in eastern Ukraine last week. Ukrtransnafta will increase the base

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