Page 15 - FSUOGM Week 10 2021

FSUOGM NEWS IN BRIEF FSUOGM

RUSSIA is why the countries will need to pump at excessive reserves but OPEC+ must not
least 50% more gas into their underground overheat the market.
CPC MT crude oil shipments storages than in the summer of 2020, bin Salman Al-Saud said that Saudi Arabia
Saudi Arabia’s Energy Minister Abdulaziz
Russian gas giant Gazprom said in a
up by 8.4% y/y in Jan-Feb statement on May 9. has no fear that the decision to keep oil
production at the current level will overheat
“The European consumers are still
The Caspian Pipeline Consortium Marine syphoning off the gas from the underground the market.
Terminal (CPC MT) shipped 9.61mn storages, whose reserves plummeted The OPEC+ countries agreed to reduce
tonnes of crude oil in January-February during the winter. According to Gas their oil output by 9.7mn bpd in May 2020
2021, down by 8.4% y/y, PortNews reported Infrastructure Europe, 61.1bn cubic meters to fight the consequences of the global
on March 2, citing the company’s statistics. of gas have been taken off as of March 7, coronavirus crisis, with Russia’s share
In February alone, MT loaded 5.5 tonnes of and that the remaining gas in the European of 2.5mn bpd. The cut was narrowed to
crude oil onto 52 tankers. underground gas storages is 23.3 bcm below 7.7mn bpd for August–December 2020,
Overall, MT processed 93 tankers in the previous year’s level,” the company said. and then to 5.8mn bpd until May 2022. The
Yuzhnaya Ozereevka during the first two “Europe will have to pump at least 50% agreement is valid until April 30, 2022, but
months of this year. The CPC pipeline more gas (into the storages) than in the the members will revise its extension in
system is one of the largest investment summer of 2020.” December 2021.
projects with foreign capital in the energy The heating season is still going on The next OPEC plus meeting is slated
sector of the former USSR. The Tengiz- in Europe, and the gas storages are only for April 1, while a meeting of the Joint
Novorossiysk pipeline has a length of 1.511 34% full, with the gas content in German Ministerial Monitoring Committee will take
km and accounts for two thirds of all crude storages falling to 29%, the Netherlands to place on March 31..
oil exports from Kazakhstan and Russian 28%, and in France to 20%. “This means
fields in the Caspian Region. The CPC that the European gas market will operate
MT relies on three Single Point Moorings under a ‘green winter’ regime this summer,”
(SPMs) to load tankers safely at a significant the company said. EASTERN EUROPE
distance offshore.
In February, 2.5mn tonnes of crude oil Ukraine’s Cabinet of
came from the Tengiz field, around 960,000 Russia needs oil output
tonnes from the Karachaganak field, and Ministers orders Naftogaz
1.4mn tonnes from the Kashagan field. growth to meet seasonal
demand to fix household gas prices
OPEC+ agrees to limited oil Russia will raise oil production in April by for one year

output increases for Russia 130,000 barrels per day to cover higher local Ukraine’s Cabinet of Ministers ordered the
Economy Ministry on March 3 to secure
demand, Deputy Prime Minister Alexander
and Kazakhstan Novak told channel Rossiya 24 late on Naftogaz natural gas supplies to households
March 4 after a meeting of the OPEC+
at a price that will be fixed for one year,
The OPEC+ states agreed on an oil output agreement participants. Interfax-Ukraine reported the same day.
increase for Russia of 115,000 barrels per "Production in the OPEC plus states will The Economy Ministry is ordered to
day and for Kazakhstan of 18,000 bpd in remain at the level of March in April, while prepare respective resolutions by March 5.
April, and the other members will maintain exemptions will be made for Russia and According to a draft cabinet resolution
their output under the oil production Kazakhstan,” Novak said. presented by the Energy Ministry, Naftogaz’
cut deal unchanged, a source with one of “We will raise output by 130,000 barrels subsidiary and Ukraine’s largest natural gas
the delegation at the OPEC+ ministerial per day (bpd) in April… It is very important producer UGV will be ordered to offer a
meeting told PRIME on March 4. for us because we have seasonal demand, fixed wholesale price for one year for gas
“(The members) discussed a rise in we have to raise refining volumes at the that will be supplied to households and
Russia’s output by 115,000 barrels per day refineries and provide for rising demand for heating utilities. Also, UGV will be ordered
and in Kazakhstan’s output by 18,000 barrels oil products in Russia." to sell its natural gas to all local traders at
per day, and freezing of the remaining The official said that since there is no no worse conditions compared to Naftogaz
350,000 barrels per day out of a 500,000 lockdown in Russia, demand at the fuel trading subsidiaries starting April 2021.
barrel increment. It has been agreed,” the stations is higher than in March 2020. This will help all local traders offer natural
person said. Russia is raising oil production faster gas for households at the price fixed for
Bloomberg reported, citing its sources, than the rest of the agreement participants one year, as the power sector regulator is
that the OPEC+ alliance had decided not to but will join the common schedule when demanding, acting Energy Minister Yuriy
increase production in April, and that Saudi demand in the other countries recovers. Vitrenko stated.
Arabia plans to keep its extra output cut of "We assume that if in the future, OPEC+ “It looks good that Naftogaz as a gas
1mn bpd in the month. states raise output, when demand recovers, supplier would not have non-competitive
we will join the general schedule," Novak benefits due to control over the leading
said. natural gas producer. However, the key
Gazprom says Europe has of the deal by 100%, while in February risk in the Cabinet’s decision is that by
But Russia has always fulfilled the terms
ordering UGV to set [the] natural gas price
to pump 50% more gas into compliance was even a bit higher. for the next 12 months, the government
Global oil demand will reach the pre-
will also control such price. In other
storages in 2021 crisis level at the beginning or in mid-2022, words, there is a risk that the natural gas
price for households will remain de facto
he said.
The European gas market will work in a According to Novak, deficit on the global regulated, which might contradict Ukraine’s
“green winter” regime this summer, this market is a good thing because it diminishes commitments to the IMF. Hopefully, on

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