Page 9 - EurOil Week 14 2022

EurOil COMMENTARY EurOil

(tpy) of LNG by the end of the decade now looks market it is likely that alternative buyers would
doubtful. be found if suitable discounts are offered, as is
“The resources are certainly in place, but the already being seen.”
market for any LNG is now more limited and the However, an increasing share of Russian oil
availability of Western liquefaction technology production is coming from hard-to-recover res-
could certainly undermine development pros- ervoirs, offshore, using enhanced oil recovery
pects, as the domestic Arctic Cascade technol- (EOR) and other difficult sources such as tight
ogy is limited to small trains at present,” the OIES oil and shale, the OIES said.
said. “It is here where production might be at
Prospects for Rosneft’s Far East project look risk in the medium term, as new develop-
bleak, given ExxonMobil’s departure, the OIES ments become more remote and the technol-
said, although it noted that it was already unclear ogy required to develop more complex fields
how much the US major was committed to the is in shorter supply as Western oil companies
project. and, perhaps more importantly, service com-
As for oil production, the impact of the West- panies end new investment and start to exit
ern departures “varies by location and times- the country,” the institute said. “This leads
cale.” Gazprom, Rosneft and others are more to the conclusion that short-term Russian
than capable of maintaining output at traditional oil production is not at risk from a technical
Russian oilfields, the OIES said, and the domes- perspective, but the medium-term prospects
tic service sector has developed the abilities to may be.”
keep production at the current level. The OIES concludes by saying that "collapse
“As a result, the major risk to short-term Rus- in output is not forecast and a short-term decline
sian oil production is a lack of market for Russian will be driven more by market forces than tech-
crude and oil products,” the OIES said. “If import nical issues, but the risk of Russian oil produc-
bans become more widespread and effective tion being markedly lower by 2030 has increased
then oil production could be shut in, although as a result of the reaction to the current war in
it should be borne in mind that in a liquid global Ukraine." ™

INVESTMENT

Gazprom no longer owner of

German subsidiary

RUSSIA RUSSIA’S Gazprom is no longer the owner of its company over Russia’s war in Ukraine. In Ger-
German trading arm Gazprom Germania as well many, the government is planning to nationalise
A number of Gazprom's as its London-based subsidiary Gazprom Mar- or possibly even expropriate Gazprom Germa-
European subsidiaries keting & Trading, the company announced in its nia, business newspaper Handelsblatt reported
have come under Telegram channel on April 1. on March 31.
financial strain. The company confirmed it had “termi- Apart from Gazprom Market & Trading and
nated its participation” in the assets in a brief Wingas, Gazprom Germania’s other properties
statement, without providing an explanation include Gazprom NGV Europe, which sup-
for the move or saying who the new owner plies gas as a road transport fuel, Prague-based
was. Based in Berlin, Gazprom Germania lists VEMEX, Kassel-based WIEH and Astoria, and
its main business areas as storage, trading and Zurich-based Gazprom Schweiz. Gazprom Mar-
the supply of gas as a fuel for road transport keting & Trading subsidiaries include GM&T
and shipping. Its key subsidiaries are Wingas, Mexico, GM&T Switzerland, GM&T France,
which supplies around 20% of German gas GM&T USA, Gazprom Global LNG, GM&T
demand, and Gazprom Market & Trading, Retail and GM&T Singapore.
which has a number of divisions in various Besides Gazprom Germania and Gazprom
countries, with its main operation being gas Marketing & Trading, Gazprom did not mention
supply in the UK. any other of these divisions by name.
A number of Gazprom’s European subsidi- The offices of Gazprom Germania and Win-
aries have come under financial strain, as cus- gas were raided by European anti-trust regula-
tomers and partners have shunned them and tors on March 29, according to Bloomberg, over
sanctions have created difficulties with transac- allegations that Gazprom has abused its dom-
tions. Gazprom Marketing & Trading reportedly inant position on the market. The European
narrowly avoided insolvency in late March, and Commission confirmed that the “unannounced
could be placed into administration, as numer- inspections” took place but did not mention the
ous UK businesses seek to cut ties with the companies involved. ™

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