Russia 100419 Basic Political Developments

RIA: Requirements for foreign car producers may be tightened

http://en.rian.ru/business/20100419/158648050.html
12:2119/04/2010

Several Russian car manufacturers have asked the government to introduce a minimum assembly requirement for foreign producers of 300,000 cars per year by 2013-2014, Russian business daily Kommersant said on Monday.

Kommersant said a group of car manufacturers, including French Renault, Fiat partner Sollers and Russian AvtoVAZ, has requested that requirements be tightened for foreign investors.

If it came into force, foreign car producers would have to have exclusive intellectual property rights on cars and motors produced in Russia. This means Western auto concerns would have to open their own engineering centers in Russia.

These proposals would not deal with already operating automobile concerns because they signed agreements to regulate their work in Russia in 2006-2007, which cannot be changed. A project between Peugeot - Citroen and Hyundai, due to start in 2010, will also escape the proposed changes.

However, the majority of car assembly agreements are due in 2013-2014 and the car manufacturers requesting the new requirements believe agreements signed after 2013-2014 should include the new amendments.

Sources at the Ministry of Economics have already criticized the project, saying it would only be advantageous to its instigators. The Ministry of Industry and foreign auto concerns have not commented.

MOSCOW, April 19 (RIA Novosti) 

Activity in the Oil and Gas sector (including regulatory)

Upstreamonline: Russia calls to rein in gas spot sale

http://www.upstreamonline.com/live/article212409.ece
Top gas exporting country Russia has called on gas producers to work together to limit the impact of spot sales on their long-term deals.

News wires  19 April 2010 02:18 GMT

A global gas supply glut has hit prices in spot markets, so consumers have looked to reduce what they purchase on long-term contracts to instead buy as much as they can in the open market. Gas powers holding 70% of the world's reserves were set to meet today to discuss ways to combat low prices, according to a Reuters report.

Russian Energy Minister Sergei Shmatko stopped short of calling for other members of the Gas Exporting Countries Forum (GECF) to reduce spot sales, a plan that host country Algeria aims to put before the forum's 11 members today.

"The spot market is also important, but it should not start to compete with long-term contracts in the form that is happening today," Russian Energy Minister Sergei Shmatko told reporters in Algeria's Mediterranean resort of Oran, where the GECF is meeting.

"We supply within the framework of long term contracts, and we believe that other suppliers should or could express their approach to that and join with us."

The GECF has never before coordinated supply policy, but analysts say the pain from low prices may force them to consider action. New supplies from unconventional sources in the United States combined with a fall in demand due to the global economic downturn have hit gas producers' export income.

The GECF's statement after the meeting would register ministers' concern about the gas market and the need to draft a consolidated approach, Shmatko said. He gave no more detail on what that approach would be.

Ministers from Russia, Algeria and Qatar met informally yesterday as they prepared for the GECF gathering. Asked after the meeting if the three had come to any agreement, Shmatko said "Not yet."

Algeria's Energy Minister Chakib Khelil said yesterday that he had yet to present to other ministers a study his country had commissioned into the global gas market. The study outlines the case for the GECF to cut spot supplies to the market.

Gas producers needed to do something soon about low prices, he said.

"There is, in the short term, the problem of oversupply in the market that we have to deal with and that's the discussion we're going to have tomorrow," Khelil said.

The group needed to find an appropriate price for gas for buyers and sellers of gas, Khelil said. Consumers could face a supply crunch in the future if the price is so low it discourages producers from investing in new capacity, he said.

"If you don't have a just price for both producers and consumers, you are not going to ensure the appropriate investments in the right time so that they will meet demand in the future," Khelil said.

Qatar's energy minister Abdullah Attiyah yesterday said gas prices should be more closely connected to oil prices, which hit an 18-month high earlier in April.

"Current prices aren't fair. They should be linked to oil prices," he told reporters.

Most of Europe's gas is delivered on long-term contracts through pipelines. Globally, an increasing volume is being shipped as liquefied natural gas.

LNG suppliers have more flexibility to target the best-paying spot markets for delivery of their cargoes of gas chilled to liquid form for exports on specially designed ships.

Qatar is the world's largest LNG exporter, and is also a member of the GECF. It sends cargoes to Europe, Asia and the United States.

While the three countries are fellow members of the GECF, they also compete in Europe's market. Qatar has supplied some of the spot cargoes that have put pressure on prices in Europe.

Published: 19 April 2010 02:18 GMT  | Last updated: 19 April 2010 03:11 GMT

RIA: Gas exporting countries to consider increase in gas prices for Europe

http://en.rian.ru/world/20100419/158645398.html
07:1619/04/2010

The Gas Exporting Countries Forum (GECF), a "gas equivalent" of the OPEC oil cartel, will convene on Monday in the Algerian city of Oran to decide whether to raise prices for gas supplies to Europe and other regions, the Russian energy minister has said.

Sergei Shmatko said participants in the forum's 10th ministerial meeting will discuss the situation "in certain regional markets, including the European."

He said Russia, which holds the bulk of the world's known reserves of natural gas, together with Qatar and Iran, had earlier significantly decreased natural gas supplies to Europe, which helped avoid major fluctuations in gas prices.

In late March, Algeria proposed countries participating in the forum to reduce gas exports to restore balance in the global gas market.

Algerian energy minister Chakib Khelil has said that current gas prices were too low and should be raised. He has said the ideal price for gas should account for one sixth of the price for a barrel of oil.

Shmatko said "we consider that gas prices should be fair, based on long-term contracts", adding European countries were welcome for negotiations.

He said Khelil was going to make a presentation of his view of the situation during the talks in Oran, adding some of the measures already proposed by the Algerian energy minister were "quite timely."

Russia, Algeria, as well as Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Trinidad and Tobago, and Venezuela are members of the GECF. Kazakhstan and Norway are observers.

Russian Prime Minister Vladimir Putin has said he expected that the GECF, which is now making its first steps, will become an effective tool for coordinating the international gas industry in the future.

In December last year, Shmatko said the forum will become fully operational in 2010.

The GECF headquarters is situated in Qatar's capital Doha. In December 2009, the GECF elected Russian Leonid Bokhanovsky as its secretary general.

Shmatko also said that the gas forum would play a key role in coordinating activity on the market of liquefied natural gas (LNG) as it comprised the world's largest LNG producing countries.

ORAN (ALGERIA)