Posted on 08/24/2007 9:54:51 PM PDT by bruinbirdman
Last updated: August 24 2007 18:58
Russia has made significant cuts to oil supplies sent to German refineries recently, rekindling concerns in Germany over the reliability of Russian energy supplies.
Lukoil, Russia’s second largest oil producer, on Friday acknowledged that supplies to Germany had been reduced by about one-third in July and August but refused to explain why the reduction had occurred.
Analysts said Lukoil’s decision not to provide previously contracted quantities of oil could be aimed at extracting higher prices from German refineries or be part of Lukoil’s efforts to acquire stakes in German and European refineries.
Germany’s economics ministry said the country’s energy supplies were not in danger, as refineries could turn to other oil suppliers to make up shortfalls.
The Schwedt refinery north-east of Berlin said supplies via the Druzhba, or “Friendship”, pipeline from Russia had been reduced but “talks were under way” with Russian oil companies.
“The situation is not dramatic,” a spokesman said, adding that the refinery – owned by Total, Shell, Ruhr Oel and Agip – had increased supplies from the North Sea in recent weeks.
Germany’s MWV oil industry association said Russian supplies had fallen in June and July but stressed that refinery production had not been hit. Germany receives about a fifth of its oil supply via the Druzhba pipeline.
Russia in January briefly suspended crude oil supplies through the Druzhba pipeline following a pricing dispute with Belarus.
Transneft, the Russian state oil pipeline monopoly, said it was fulfilling its contracts to refineries served by the Druzhba pipeline. Sergei Grigoriyev, the vice-president of Transneft, said: “Transneft has not reduced any deliveries. We are working to a normal regime.”
Lukoil said the company would next week explain the cutbacks but noted there was still time to make up the shortfall for the month.
Oil traders said a dispute between Lukoil and Sunimex, Germany’s biggest oil importer, might account for the supply cut, but the aggressive Russian strategy to acquire European refining assets could also play a role.
Russian supplies to Mazeikiu refinery in Lithuania have been reduced several times since PKN Orlen, the Polish oil company, beat off Russian competition to buy the plant from the bankrupt Yukos oil corporation last year. Lukoil bought Soviet-era refineries in Bulgaria, Romania and Ukraine in the 1990s. It is hunting for more European plants as part of its strategy to process oil closer to end markets. It expressed interest this year in a refinery in Wilhelmshaven, northern Germany.
Ivan Mazalov, a portfolio manager at Prosperity Capital Management, said, “It is difficult to tell the cause of this supply reduction. One explanation could be that Russian export taxes are higher on crude oil than products so it is more profitable for companies to sell oil products abroad.”
Interesting. Russia shows its true colors...Reagan had it right when he said “Trust but Verify...”
Tell me about it. This has Schroeder and Fischer written all over it.
Just ask the pseudo-Marxist goldbuggering contingent of economic whackos at FR - oil prices are up because evil Wall Street speculators are all colluding together to drive up the price of oil.
Actual hard facts like refinery capacity and proven reserves and supply and delivery of crude are just so boring - rather than bother our heads with following the actual oil flows or monitoring current events (tedious!) let's just build a bizarre and completely unsupportable conspiracy theory out of thin air.
And if anyone disagrees with us and cites boring facts, we can just tell them they are neocon oneworlders who belong on DU.
At one time, because the field had very heavy oil, they used a NUCLEAR BOMB to see if the field would flow better.
For some reason setting off a nuclear bomb underground did not help the flow/production of oil in this field...
Schoroder has a “mouth-piece” contract...to simply talk for the company...supposedly in the $3-$4 million a year range. To be honest...the guy didn’t ever clean up big as a politician or a lawyer...so he is trying to make an ample income now after leaving politics. No one much in German politics listens to the guy now...and in the German business community he is a virtual zero. Its difficult to see how the Russians can find reasoning to pay an idiot money for getting nothing accomplished (except when he was chancellor).
As for this pipeline episode...I’m betting on unscheduled maintenance and the Russians don’t want to admit that it was a major breakage somewhere. Unlike the idiots in South America who advertise far and wide on every breakage...the Russians tend to keep their mouth shut and just fix the problem.
Actually, the U.S. also set off 3 nuclear bombs to increase gas production. It worked to some degree, but the resulting gas was radioactive.
http://en.wikipedia.org/wiki/Operation_Plowshare
I’m with #8, this just doesn’t make much sense in “Great Game” terms. They have no reason to be mad at Germany and no reason to want their continental customers think they like to jerk them around for fun. They’re not the only game in town after all.
The russkies have a long-standing mania for covering up their boo-boos (see the classic “Uncovering Soviet Disasters” by space-guy James F. Oberg from 20 years ago). I think it’s maintenance or breakage and the ivans are reflexively covering up.
Perhaps the payments now for useless service if really payment for previous valuable “service” received while he was chancellor...
Not a big thing in the media here, so it´s probably non-political.
Turns out Iraq is #2 behind SA in proven reserves. Back in the intitial invasion, we asked many countries to write off loans made to Saddam. I’m guessing the biggest writer-offers have the best shots at investment. As it should be.
maybe they are still mad about that II thing
Wait a minute these so call investors were investing in defiance of a UN resolution that made it supposedly illegal to assist Saddam in rebuilding his military and funding those homicide bomber's families. How now after our own blood and treasure can it be or should be these that were willing to break an agreed resolution get first pick at profitable oil contracts. That newly Iraqi government is not obligated to these that assisted Saddam's own terroristic, rape chambers, or wholesale slaughter of any and all who gave him the wrong look. I thought this whole thing was NOT to be about blood for oil.
Give ANWAR to Germany. In exchange Germany provides us with 75% of the oil extracted from there.
Germany gets oil, we get oil and the envirowhackos get to pound sand.
Correct you are! In any petro-political situation you can see, in the aftermath, the (before the laywers showed up) and the (after the lawyers showed up).
Blackmail. A KGB trademark.
They are not savvy when it comes to business. Russia bullies little countries, restarts flyovers of U.S.A. facilities, and cuts oil supply to Germany - this shows a definite lack logic. Putin is just trying to show how tough he is and comes off looking stupid.
Ping.
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