The Rendon Group Snapshot Report – 29 September 2014

by TRG Alerts Admin on September 29, 2014

The Rendon Group Snapshot Report

(29SEPT14)

 

Each week The Rendon Group’s media analysts will focus on a different continent and a different issue affecting that continent. As always, we remain available to answer any questions you may have and to provide additional information upon request. For more information regarding The Rendon Group’s products and services, please contact us at Alert@Rendon.com or +1-202-745-4900.

Source: RIA Novosti, Igor Zarembo

Russia-Ukraine Gas Dispute

 

This week’s Snapshot focuses on the gas dispute between Russia and Ukraine. Russia shut off gas supply to Ukraine in June, insisting that Gazprom, the state gas company, had to first be paid a USD5 billion debt for 2013 incurred by the Ukrainian state. The military conflict between the countries is exasperating an issue that can put not only Ukraine but EU member states in danger of gas shortages during the winter. Negotiations to find a compromise deal have been mediated by the European Union and a temporary agreement on supply was worked out this week, but commitment from both sides remains to be confirmed.

 

 

News Summary of events during the week of 22SEP – 28SEP:

 

23SEP14: German Chancellor Angela Merkel emphasized finding a quick solution to the Russia-Ukraine gas dispute. (AP)

25SEP14: Russia warned Europe it may cut off gas because of countries re-exporting gas to Ukraine. (AFP)

25SEP14: Norway, Europe’s second biggest gas supplier, said it could slightly boost deliveries to countries affected by the dispute, should the need arise. (AFP)

26SEP14: Hungary halted gas supply to Ukraine, drawing criticism from Brussels. (AFP)

26SEP14: The EU unveiled a gas deal it brokered that temporarily ensures gas deliveries. (AFP)

27SEP14: Ukraine energy officials said no final decision was adopted on the gas deal with Russia. (AFP)

 

 

Sample of Twitter handles regarding the gas dispute:

 

@PaulSonne – Paul Sonne, Moscow correspondent for The Wall Street Journal

@CGI_DC  – Founded in 2012 by Nikolai Zlobin, the Center on Global Interests brings new analysis on modern international relations with a focus on the U.S. and Russia.

@AkinUnver  – Akin Unver, Winner of the MESA Social Sciences Award – Faculty of International Relations. Tweets about Turkey, EU MidEast, Energy Politics, Defense News

@CSISRussia – The Russia and Eurasia Program at @CSIS provides research, analysis, assessment, and recommendations regarding all the regions of the former SU

@MariaSerra84  – Maria Serra, International Relations: EU, Balkans, Middle East. Work at #Saipem. Contributor @aspeniaonline @Ce_S_I @ispionline. Director @BloGlobal_OPI

 

Sample of Third Party Validators regarding the gas dispute:

 

Edward Chow, Energy Expert, Center for Strategic and International Studies

“There’s still a lot of short-term brinksmanship that people can play, depending on what else is going on in the political sphere. The government that took over when President Viktor Yanukovych was ousted in February had done little to push energy-sector reforms that would reduce opportunities for corruption, a major problem that has contributed to Ukraine’s long-term dependence on Russian energy.”

–       Russia’s Gazprom and Ukraine are in a gas dispute as winter approaches, 27SEP14, Washington Post

 

Chris Weafer, Founder, Macro Advisory, Moscow

“A final gas agreement is only likely “as part of a comprehensive reset of relations between Moscow and Kiev and that may only come after the status of eastern Ukraine is resolved. Clearly that is a long way off.”

–       Russia, Ukraine Move Toward Interim Gas Deal Before Winter, 26SEP14, Bloomberg News

 

Claudia Kemfert, Energy expert, German Institute for Economic Research (DIW)

“Russia is highly dependent on energy supplies to Europe. Sixty percent of Russian government revenues come from the sale of oil, gas and coal – a large part of it from doing business with Europe. And Russia would cut into its own flesh by stopping the exports.”

–       Europe’s approach to Russia’s gas power, 28AUG14, Deutsche Welle

 

Fredrik Erixon, Director, European Center for International Political Economy, Brussels

“People are fooling themselves if they believe you can sign a deal with Putin to sustain a predictable, commercial gas relationship for Russia, Ukraine and the EU. Any deal signed will last a few weeks or months before the Kremlin finds a new reason to disrupt it.”

–       Russia, Ukraine Move Toward Interim Gas Deal Before Winter, 26SEP14, Bloomberg News

 

Kurt Oswald, Energy expert, AT Kearney

“In the short term, it would be very difficult to find substitutes for such huge quantities of gas. In the next three to five years, therefore, Europe will remain relatively heavily dependent on Russia.”

–       Europe’s approach to Russia’s gas power, 28AUG14, Deutsche Welle

 

 

Sample of open source research conducted by TRG analysts related to the Russia-Ukraine gas dispute:

 

  1. Germany pushes for solution to Ukraine gas spat

 

Media: Associated Press
Byline: N/A
Date: 23 September 2014

BERLIN (AP) — German Chancellor Angela Merkel is pressing for a solution to the long-running gas dispute between Russia and Ukraine ahead of a meeting of the two countries’ energy ministers this week.

Though Merkel noted “small successes” in the overall effort to calm the crisis in Ukraine, she said a long-lasting solution remained far off.

 

Speaking to business leaders Tuesday, she said the dispute over payments for past deliveries and future gas prices is one of many uncertainties that must be resolved “as quickly as possible.”
Continue reading

 

 

  1.  EU warns Russia not to use gas as weapon in Ukraine crisis

 

Media: Agence France-Presse (AFP)
Byline: N/A
Date: 23 September 2014

KIEV, Sept 23, 2014 (AFP) – The chief European Union energy official warned Russia on Tuesday not to use gas supplies as a weapon in its standoff with Ukraine over the fate of its neighbour’s separatist east.

EU Energy Commissioner Guenther Oettinger said he hoped to reach an “interim solution” with Russia over its gas supply cut to Ukraine when the three sides meet for crunch talks in Berlin on Friday.

Russia halted all gas sales to the ex-Soviet nation in June after Ukraine balked at paying a higher price imposed by Moscow in the wake of the February ouster in Kiev of a pro-Kremlin president.

Continue reading

 

 

  1. Norway can ‘slightly’ boost gas to Russia-reliant EU

 

Media: Agence France-Presse (AFP)
Byline: N/A
Date: 25 September 2014

 

BRUSSELS, Sept 25, 2014 (AFP) – Norway can slightly boost its gas supply this winter to

EU countries hit by tensions with Russia over Ukraine but has little room for manoeuvre, the energy minister said Thursday.

Norway is the second biggest supplier of gas to the European Union after Russia, and is therefore one of the short-term options Brussels is looking at in case of a cut-off by Moscow.

“The capacity of the gas pipeline system is more or less fully utilised in the wintertime,” Energy Minister Tord Lien said after talks with EU Energy Commissioner Guenther Oettinger, when asked if Norway could increase the supply.

“But of course if the situation should develop there will be a slight increase in production and export from the continental shelf,” he said, adding that the decision was a commercial one.

Continue reading

 

 

  1. Ukraine backs off from EU-backed Russia gas deal

 

Media: Agence France-Presse (AFP)
Byline: N/A
Date: 27 September 2014

KIEV, Sept 27, 2014 (AFP) – War-torn Ukraine on Saturday distanced itself from an EU-brokered agreement with Russia that would have restored its gas supplies during winter and helped rebuild trust between the neighbouring foes.

 

The European Union’s energy commissioner emerged from hours of acrimonious negotiations in Berlin on Friday to pronounce the three month dispute on the verge of being resolved.

“We have developed a workable design for a winter package,” Guenther Oettinger said.

Continue reading

 

 

  1. Ukraine’s Gas Deal With Russia Reflects Shifting Pressures

 

Media: Wall Street Journal

Byline: Anton Troianovski in Berlin and Gregory L. White in Moscow

Date: 28 September 2014

 

Residents in the rebel-stronghold of Donetsk fill water bottles from a fire truck on Friday. Weeks of fighting destroyed some pumping stations.

 

Ukraine moved closer to resolving its monthslong dispute with Russia over natural gas Friday, as mounting economic pain at home—and pressure from Europe—increasingly force the pro-Western government in Kiev into compromising with Moscow.

 

The outlines of the potential deal, reached in Berlin, show how the Kremlin is shifting from a military to an economic strategy to fight Ukraine’s efforts to align itself with the West.

 

The two sides tentatively agreed that Ukraine would pay $3.1 billion in debt by the end of the year in return for OAO Gazprom, GAZP.RS -3.54% the Russian state-owned gas giant, resuming some deliveries—but only for the winter months and at an above-average price, according to European Union and Russian energy officials.

 

Continue reading

 

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