Page 13 - FSUOGM Week 19 2022

FSUOGM NEWS IN BRIEF FSUOGM

On May 4, Reuters reported that Czechia pipeline. "If it comes to an approved
SOFAZ's revenues from the joined Slovakia and Hungary and is also embargo of Russian oil as part of a further
seeking an exemption period to the EU
package of sanctions against Russia, then
sale of oil and gas from ACG embargo on Russian oil. It is reported that Slovakia will request an exemption," the
Slovak economy ministry said to Reuters.
they will be allowed to buy Russian oil
and Shah Deniz exceeded exports until the end of 2023, while other told the BBC that the country isn't ready
Slovakia's Prime Minister Eduard Heger
states have to cease crude deliveries in six
$3.3bn in January-April months. to give up supplies of Russian energy
Bulgaria is also reported to be seeking a
commodities at the moment, but it's doing
Revenues to the State Oil Fund of temporary exemption from the planned full everything it can to become less dependent
Azerbaijan (SOFAZ) from the sale of embargo on import of Russian oil to the EU on Russian gas.
profitable oil and gas from the Azeri- if such an option is provided. According to him, the Slovak
Chirag-Guneshli (ACG) block and the Shah Slovakia is dependent on Russia for government is doing everything possible
Deniz field in January-April amounted to virtually all its needs, while Hungary is to disconnect Slovakia from Russian gas
$3.3bn, which is 2.2 times higher than the around 65% dependent and Czechia 30%. and oil as soon as possible. Together with
same period in 2021, the fund said in a Bulgaria's Lukoil-owned refinery supplies Poland the country is working on a Slovak-
report. In January-April, SOFAZ's revenues 60% of the country's needs. The countries' Polish gas pipeline which is technically
from the sale of Azerbaijan's profitable oil refineries are adapted to use high-sulphur almost complete.
from the ACG block amounted to $2.8bn (a Russian crude and processing of different An alternative to Russian gas could be
twofold increase). types of oil for them is not immediately liquefied natural gas, Heger said. "We could
In addition, the total income of possible. transport it via infrastructure to Slovakia.
SOFAZ from the sale of profitable gas and The EU will sanction all Russian oil However, we are landlocked, which is why
condensate produced from the Shah Deniz imports, both crude and refined and both we are such strong advocates of unity and
field in January-April amounted to $405.475 oil delivered by ship and pipeline, but the solidarity," he was quoted by the Slovak
mn (an increase of 9.6 times). At the same ban will be “phased in in an orderly way,” News Agency as saying.
time, income from the sale of condensate EU President Ursula von der Leyen told The Slovak government has so far refused
amounted to $96.995 mn (an increase of 2.3 the European Parliament on May 4. The to give a straight answer to speculation
times), and from the sale of gas $308.48 mn. sanctions will be phased in over the next earlier last week that the state-owned
The contract for the development of the year with crude deliveries banned in six energy company SPP has agreed to open a
Azeri, Chirag and deepwater Gunashli fields months and refined productions by the end ruble account with Russia's Gazprombank.
was signed on September 20, 1994, and of the year, von der Leyen said. It could then put money for Russian gas in
entered into force on December 12 of the "We are ready to support this decision euros into its euro account and this could
same year. This agreement expires in 2024. [on sanctions including oil], given be converted by the bank into rubles in its
However, on September 14, 2017, a new the Czech Republic will have some ruble account before being transferred to
contract for the development of the ACG postponement until capacity is increased Gazprom. This would in effect be paying
block, calculated until 2050, was signed in in oil pipelines which can deliver oil to the for Russian gas in rubles, circumventing EU
Baku. Czech Republic," said Czech Prime Minister sanctions.
Under the new contract, the share of Petr Fiala, as quoted by Reuters, adding that Heger only told the BBC that "[for gas]
British BP (project operator) is 30.37%, Czechia is trying to get a postponement for we will pay in euros".
SOCAR (25%), Hungarian MOL (9.57%), two or three years. The European Commission has said
American ExxonMobil (6.79%), Indian Fiala said that Czechia is seeking to that payment should be made in euros, the
ONGC (2.31%), Japanese Inpex Corp. increase the capacity of the TAL pipeline transaction should be declared complete,
(9.31%) and ITOCHU Oil (3.65%), (from Italy through Austria to Germany). and then it is up to the Russian side to
Norwegian Equinor (7.27%), Turkish TPAO Fiala will discuss this with German convert the payment into euros.
(5.73%). Chancellor Olaf Scholz during his visit to The Slovak government has a few weeks
Germany this week. to clarify its approach as its next payment
"The Czech Republic will face a serious for Russian gas is not due until May 20.
Czechs join Slovakia and problem if an embargo is imposed on
imports of Russian oil and products into
Hungary in demanding the EU. Not only drivers will suffer, as fuel India reportedly angling for
will become more expensive again, but
exemption from EU embargo also [Czech] industry. The Czech Republic steep discount on Russian
does not have a satisfactory solution for the
on Russian oil complete replacement of Russian oil," said oil
analyst Lukas Kovanda, according to iDnes.
Czechia, Slovakia and Hungary appear cz. India is reportedly putting pressure on
to have won a carve-out from planned Slovakia's Economy Minister Richard Russia to lower the price of its crude oil
EU sanctions against exports of Russian Sulik said Slovakia will seek an exemption to make up for the extra challenges that
oil because of their continuing heavy from any embargo of Russian oil agreed by buyers have encountered in the wake of
dependence on Russian supplies. Hungary the EU countries, and will request a longer the invasion of Ukraine in late February,
had threatened to veto the sanctions unless transition period for oil transported by Bloomberg reported on May 4.
it got its way and has still not fully signed pipeline. Sources with knowledge of the matter
up to the plans. Slovakia is also still pushing Slovakia receives almost all of its told the news agency that India had offered
for a longer transition period. imported crude from Russia via the Druzba to buy Russian crude at less than $70 per

Week 19 11•May•2022 www. NEWSBASE .com P13