Russia, Gazprom and the European Gas & Oil Mess

Russia sharply cut gas flows to Europe via Ukraine on Tuesday in a dramatic worsening of a pricing dispute with Kiev that threatened to disrupt supplies as far west as Italy and Germany.

Russian export monopoly Gazprom said it supplied some 65 million cubic meters (mcm) to Europe on Tuesday through ex-Soviet neighbor Ukraine, a fall of 78 percent from the 300 mcm it had been shipping since the dispute erupted on January 1.

Reuters

The European Union, dependent on Russia for a quarter of its gas, urged Moscow and Kiev to find a solution this week and German Economy Minister Michael Glos said it was very important the two sides began negotiations.

The head of Ukraine’s state energy firm said he would fly to Moscow on Thursday. Gazprom said it was ready to talk any time but did not expect Ukraine to return to the talks table for now.

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http://news.yahoo.com/s/nm/20090106/ts_nm
/us_russia_ukraine_gas
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By GEORGE JAHN and MARIA DANILOVA, Associated Press Writers

The Russia–Ukraine natural gas dispute hit Europe with the force of a winter storm Tuesday, cutting or limiting supplies to nearly a dozen nations. Tens of thousands of people were left without heat and governments scrambled to find alternate energy sources.

Shocked by how fast the shortages were spreading, the European Union demanded a quick end to the dispute — a sharp turnaround from their earlier stance, when officials had downplayed the conflict between Moscow and Kiev as primarily a business matter.

But by Tuesday evening, gauges on delivery pipelines to six countries — including some depending totally on Russian gas — were pointing toward zero and an increasing number of other nations reported significant reductions.

The Ukrainian gas company Naftogaz said Russia’s gas giant Gazprom had sharply reduced its shipments to Europe through pipelines crossing Ukraine, triggering the cuts.

Bulgaria, Greece, Macedonia, Romania, Croatia and Turkey all reported a halt in gas shipments, and even France, Germany, Austria and Poland reported substantial drops in supplies from Russia.

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http://news.yahoo.com/s/ap/20090106/ap_on_
bi_ge/eu_ukraine_russia_gas

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What Is Gazprom?

Gazprom is the world’s biggest producer and exporter of natural gas — and Russia’s most powerful company.
It controls 20 percent of the world’s natural gas reserves and operates the world’s largest gas distribution network — approximately 157,000 kilometers of pipelines covering an area from Europe to the Far East, according to its Web site.

Gazprom exports energy to 32 countries and provides around 25 percent of the European Union’s gas supplies.

Last month it reported an 85 percent increase in net profits to $20.8 billion for the first six months of 2008. In 2007 it reported annual profits totaling nearly $61 billion. In 2008 the Financial Times placed it fourth on its list of the world’s top 500 corporations, as ranked by market capitalization.

CNN

Formed in 1989 to replace the Soviet Ministry of the Gas Industry, Gazprom is closely tied to the Russian government, which owns a controlling 50 percent stake in the company. Current Russian President Dmitry Medvedev is a former Gazprom chairman.

In recent years, an increasingly confident Moscow has used Gazprom to assert its authority over Russia’s former sphere of influence by offering heavily subsidized gas to ex-Soviet countries such as Ukraine and Belarus.

But that policy has led to disputes as Gazprom has then sought to raise prices.

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http://www.cnn.com/2009/WORLD/europe/0
1/06/gazprom.profile/index.html?section=cnn_latest