Russia is rethinking investor friendly dividend reforms as the Ukrainian crisis weighs on its faltering economy. Rules introduced last year that would oblige state companies to put more of their profits in shareholders’ pockets may be shelved, according to a report out on Wednesday.

Russia has been pushing state companies to pay more generous dividends in an effort to improve the country’s investment image and boost interest in upcoming privatisations. Rules introduced in late 2012 setting a minimum 25 per cent pay out were a step in the right direction but, as often happens with Russian regulations, there was room for interpretation. Continue reading »

As beyondbrics foresaw last week, Russia has turned to Gazprom, its state-controlled natural gas monopoly, to put pressure on the new Ukrainian government. Over the weekend, Gazprom warned that Kiev may lose the discount agreed by ousted president Viktor Yanukovich from the second quarter of 2014. The big question now is, should the European Union worry that an escalating gas row between Russian and Ukraine would lead to cuts in Gazprom’s gas exports to Europe? Continue reading »

As the dust settles after the ousting of Ukrainian president Viktor Yanukovich, few doubt that Moscow is ready to protect its interests in this cash-strapped country through economic levers. Gazprom, Russia’s natural gas monopoly, will be front and centre in this process. Continue reading »

By Leslie Palti-Guzman of Eurasia Group and Tatiana Mitrova of the Russian Academy of Sciences

As the global market for natural gas is transformed, Russia and its national champion Gazprom have found their long-term export strategy challenged. No longer able to rely on their core European market, the Russians are looking eastwards, where they have long been seeking a strategic gas deal between Gazprom and the China National Petroleum Corp (CNPC) that would provide an easily accessible market for gas from new fields in eastern Siberia. Continue reading »

Gazprom boosted gas exports to Europe to record levels last year, as customers negotiated price discounts and competition from rival international gas producers fell away.

But the rebound in sales to Europe was not matched in the domestic market where Russia’s natural gas monopoly continued to lose ground to local independent gas producers. Continue reading »

Novatek has taken a final investment decision on the Yamal LNG project, paving the way for the launch of the pioneering liquefied natural gas venture in the Russian Arctic.

Legal amendments approved by the Russian parliament last month allowing rivals of Gazprom to export LNG are working wonders for Russia’s pushy independent gas producer. Continue reading »

By Sujoyini Mandal and Marika Semerdzhian

Gazprom’s traditional economic and strategic business models are coming under tremendous pressure. Shifting LNG trade patterns are impacting spot markets in Europe and Asia, partly as a result of the shale gas boom in the US; lack of investment in new fields is depleting Russia’s gas reserves; and Russia’s domestic gas market is facing market pressures from liberalisation.

There is no doubt that Russia remains a central player in the global energy sector. Vertically integrated, Gazprom controls about half of the country’s proved reserves of natural gas and its export monopoly is enshrined in law. This could change very soon. Gazprom experienced a difficult 2012, with net profits falling by a third in the first half of the year. This comes in the wake of a weaker demand from Europe caused by the economic crisis and perhaps unwillingness to put up with the gas giant. In spite of these challenges, we believe Gazprom is actually positioned to take advantage of, rather than suffer from, rapid changes in the energy industry, both at home and abroad. Here is why. Continue reading »

On the geopolitical front, Ukrainian President Viktor Yanukovich’s relationships with Russia to the east and Europe to the west are currently going through a testy period. Which is putting it mildly. The struggle for Ukraine’s future between Brussels and Moscow is one of the most tense and high-stakes geopolitical stand-offs between the two sides in recent years.

Russian pressure, domestic politics and Yanukovich’s attempts to play east and west against each other – offering to sign with whichever side provides the bigger bailout for his ailing economy – may all have factored in on his government’s stunning decision last week to back out of historic EU integration agreementsContinue reading »

The Russian parliament dealt Gazprom a blow on Friday, passing legislation that will allow independent gas producers to export liquefied natural gas.

But read the small print of the law and it’s not as bad for Russia’s natural gas monopoly as it sounds. Only two independents will be permitted to muscle into the LNG export business and the scope of their operations will be limited to specific gas fields. Continue reading »

Firtash: solving problems

Ukraine’s parliament stuck the Yulia Tymoshenko to-do item into the “later” basket on Tuesday, putting off until Thursday a vote on legislation that could set in motion the release of the jailed opposition leader. Her freedom is a key condition set by the EU to sign historic free trade and association agreements next week in Vilnius. Tick, tock.

Yet while Ukraine’s handling of this case of “selective justice” drags on, there was also news out of Ukraine on Tuesday reinforcing the view that Russia – which is pressuring Ukraine to back away from the EU agreements – is meddling in the Ukraine gas market somewhat “selectively”, too. Continue reading »

Ukraine has stepped back from the brink of another gas war with Russia and resumed gas imports from its powerful neighbour after a one week lull.

It’s a relief for the EU that relies on Ukraine as a transit hub for most of its Russian imports. But reconciliation of the latest gas spat could be part of a poker game that Moscow and Kiev are playing in the run up to the EU summit in Vilnius. Continue reading »

Tight relationship

Russia and Vietnam signed a raft of economic agreements on Tuesday that will strengthen their strategic partnership and counter rising Chinese influence in southeast Asia.

The deals, signed during a visit by Vladimir Putin to Vietnam, will see Russia step up involvement in Vietnamese energy markets and help boost security in the country that has been a close Kremlin ally since Soviet times. “Vietnam has been a long-term, trustworthy partner for Russia and the political dialogue between the two countries is at a high level,” Putin told reporters after talks with Truong Tan Sang, his Vietnamese counterpart. Continue reading »

As Russia moves to liberalise liquefied natural gas exports, foreign companies are getting serious about buying gas from the Novatek-led Yamal LNG venture. In the space of just over one week both Chinese National Petroleum Corporation and Spanish Fenosa have signed up to take LNG from the groundbreaking venture that will end Gazprom’s monopoly on Russia’s foreign gas trade. Continue reading »

The Kremlin, and Russian gas giant Gazprom, must be watching events in Ukraine with a bit of concern.

Not only is Kiev calmly defying Russia’s bullying, steadily moving closer to breaking free of its eastwards geopolitical pull by looking to sign historic free trade and association agreements with the EU in late November, but it is also pushing two new energy deals which could cut sharply the reliance on imports of Gazprom’s gas. Continue reading »

Foreign media coverage of Ukraine has been dominated over the past year by the European Union’s repeated warnings: the signing of historic bilateral association and free trade agreements is conditional on the release of jailed opposition leader Yulia Tymoshenko.

But lost in the Tymoshenko buzz is a desperate plea from Kiev to Brussels: help us import more gas from EU markets at lower prices than those charged by Gazprom, the Russian gas giant. Continue reading »