Page 12 - FSUOGM Week 03 2022
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FSUOGM                                       NEWS IN BRIEF                                          FSUOGM


       January 2022.                       Party’s reservations over the Nord Stream   situation in Ukraine. The Kremlin has made it
         Gas production from the Shah Deniz   2 pipeline, the new Chancellor Olaf Scholz   clear that since Merkel’s departure from office
       field began in December 2006. Exports of   has so far continued his predecessor Angel   it prefers bilateral talks with the US rather
       Azerbaijani gas from the Shah Deniz field in   Merkel’s policy of supporting it. Piping gas   than multilateral talks with bodies like Nato
       2020 amounted to 12.256 bcm and exceeded   cannot start until it has been certified by the   or the EU..
       the figure for 2019 by 17.8%..      German regulators.
                                              On the same day following a meeting
                                           between Scholz and Nato Secretary-General   VTB sees potential for credit
       Germany warns Nord Stream           Jens Stoltenberg, the German premier said it   standing of Uzbekneftegaz to
                                           was “clear that there will be a high price to pay
       2 will be blocked if Russia         and that everything will have to be discussed   strengthen
                                           should there be a military intervention in
       attacks Ukraine                     Ukraine”.                            Russian investment bank VTB Capital (VTB)
                                              Approval of the pipeline was due before
       Baerbock went on her first official visits to   the end of last year, but the German regulator   has published an overview of Uzbekistan’s
       Ukraine and Russia, which took place against   delayed the decision as tensions rose following   state-owned oil producer Uzbekneftegaz
       the backdrop of the tense military situation   the reports of the Russian military build-up in   (UNG), including a look at its debut eurobond
       close to the Ukrainian border and following   November.                  and development prospects for the coming
       a week of meetings between Russia and the   The fate of the project could ultimately   years.
       Nato-Russia Council as well as the OSCE.    be out of Germany’s hands, as it is subject to   UNG placed its eurobond (tenor seven
         “I will listen very closely to my   the approval of European Union regulators.   years, size $700mn and coupon at 4.75%) in
       interlocutors, both in Moscow and Kyiv. But   The EU’s foreign policy chief, Josep Borrell,   November 2021. The issuer’s credit standing
       I will also clearly convey the position that we   said last week that approval was tied to any   is backed up by its dominant positions in the
       unanimously share within the EU, the G7   potential conflict with Russia over Ukraine.  Uzbek energy sector and proven track record
       and the transatlantic alliance,” Baerbock said   Baerbock has been attempting to establish   of state support, while the key credit risks in
       in a statement issued on the German foreign   her credentials and made a symbolic stop-off   VTB’s view comes from declining production
       ministry website.                   in Ukraine to meet with Ukrainian President   and a revenue-debt FX mismatch.
         “Germany is willing to engage in serious   Volodymyr Zelenskiy on the day before she   “We see potential for UNG’s credit
       dialogue on what we can do to increase   arrived in Moscow, where she reaffirmed   standing to strengthen in the coming years on
       security for everyone in Europe. Our guide   Berlin’s commitment to upholding Ukraine’s   the back of Uzbekistan’s natural gas market
       is and remains the fundamental principles of   territorial integrity in the face of Russian   being liberalised and should the company
       the Helsinki Final Act, which have served as   aggression.               deliver on its strategic targets,” VTB noted.
       guarantors of peace and security in Europe   Baerbock called for a peaceful resolution   UNG is an integrated Uzbek producer
       over the last 50 years. They include territorial   to the current stand-off during her visit to   of natural gas, liquid hydrocarbons and
       integrity and the right of states to choose their   Kyiv on January 17 as relations with Russia   petrochemicals, controlling around 50% of
       own alliances,” Baerbock said.      dominated the agenda.                hydrocarbon deposits in the country. It is
         The pipeline was completed last September   “Diplomacy is the only viable way,”   99.94% owned by the Ministry of Finance of
       and links the huge Russian Yamal gas fields   Baerbock said during a press conference   Uzbekistan and is rated on par with the Uzbek
       in the Arctic directly with Germany through   following a meeting with her Ukrainian   sovereign by S&P and Fitch (at BB-/Stable)..
       a pipe that runs under the Baltic Sea. Critics   counterparty Dmytro Kuleba. She added that
       have claimed the purpose of the pipeline   “any further aggression would come at great
       is to cut Ukraine out of the loop and deny   cost to Russia.”            SOCAR and Axens signs
       the government in Kyiv some $2bn a year   Later in Moscow Baerbock announced that
       it earns in transit fees. The US in particular   she had discussed restarting the Normandy   contract
       has claimed the new pipeline will undermine   Four talks between France, Germany, Russia
       European energy security and hand the   and Ukraine that were designed to bring a   The international group of companies “Axens”
       Kremlin a new geopolitical tool.    resolution to the undeclared war in Ukraine’s   has become the licensor and designer of
         Baerbock was recently appointed Foreign   eastern region of Donbas.     the catalytic cracking unit at the Heydar
       Minister in the new coalition government,   Following the week of meetings last year,   Aliyev Baku Oil Refinery (BOR) of SOCAR
       and as the head of the German Green Party   the Kremlin suggested that the talks had failed   (State Oil Company of Azerbaijan): “The
       she has been critical of the gas pipeline.    blaming Washington for refusing to consider   signing of a contract between BOR and
         A foreign policy political novice, Baerbock   Russia’s key demand: open talks on excluding   Axens for licensing and designing a catalytic
       has started her new job during one of the   Ukraine from “ever, ever” joining Nato,   cracking unit as part of the project for the
       most tense periods in East-West relations   according to Russian Deputy Foreign Minister   modernisation and reconstruction of the
       since the fall of the Soviet Union after Russia   Sergei Ryabkov.        Baku Oil Refinery was held on Monday (17
       built up its forces on Ukraine’s border ahead   However, Lavrov has suggested that talks   January),” SOCAR said in a statement.
       of issuing an eight-point list of demands,   will continue with a proposed meeting with   “We are pleased to expand co-operation
       including “legal guarantees” that Nato’s   his US counterpart US Secretary of State   with SOCAR. In this context, choosing us as a
       eastward expansion halt.            Antony Blinken on January 22.        licensor for the construction of a new facility
         During her press conference after talks   The Kremlin has not yet pronounced the   is great confidence in our company. We will
       with Lavorv, a foreign policy veteran,   talks entirely dead, as it is still waiting on a   do our best to complete the design work in
       Baerbock said it was difficult not to assess   written response from the White House on its   a short time and at a high level. We believe
       Russia’s military build-up near Ukraine’s   eight-point demands in writing that are due   that after the construction of the new catalytic
       borders as “a threat.”              any day.                             cracking unit, the operation of the plant will
         However, Baerbock also tried to strike a   During his talks with Baerbock, Lavrov   become more sustainable and efficient,” said
       consolatory tone, saying that Berlin remains   said that the Kremlin remains open to   Jean Sentenac, CEO of Axens.
       open to negotiation and despite the Green   including Washington in the talks over the   According to the State Oil Company



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