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Russia oils new ties with
US
By Sergei Blagov
MOSCOW -
Russian companies are attempting, with government
backing, to take over from Saudi Arabia as the main oil
provider to the US. The companies are also seeking
American capital for investment in Russian oil.
US Commerce Secretary Donald Evans spoke of
Russia's "important strategic role in diversity of the
supply of world oil" at the energy summit between Russia
and the US in Houston last week. Russian Energy Minister
Igor Yusufov signaled Russian readiness to supply oil,
but said that the Russian oil industry needed an
investment of about US$1 billion a year. US investment
and technology could help deliver Russian oil to
America's West Coast, he said.
Companies have
moved in line with political agreements. Russia's
state-owned Rosneft oil company and the US firm Marathon
Oil Corporation announced a decision October 1 to
participate jointly in Urals North American Marketing
(UNAM), a project to supply oil from the Urals region in
Russia to North America.
UNAM would use the
existing transport and marketing infrastructure, the two
companies announced. Oil supply under this project is
due to begin in the third quarter of next year.
Russian executives are reported to have told the
Houston summit that Russia could export as much as a
million barrels a day to the US within five years. But
Russia lacked pipelines and suitable port facilities,
they said.
The US received its first direct
shipment of Russian oil in July. YUKOS, the second
largest oil company in Russia, began shipment on an
experimental basis in the face of fears that high
transportation costs could mean a loss of up to 50 cents
a barrel.
YUKOS spokesman Alexander Shadrin
announced in Moscow that YUKOS had sent three oil
tankers to the US so far, and that these supplies had
been profitable. YUKOS planned to ship 5 million tonnes
of crude to the US next year, Shadrin said.
LUKoil, Russia's biggest oil producer, already
owns the Getty gas station chain on the East Coast of
the US. The company plans to build a new sea terminal in
Murmansk for shipping oil across the Arctic Sea to the
US from its Timan-Pechora oilfield in northern Russia.
Direct oil shipment to the US remains a challenging task
given the distance and the lack of the necessary
infrastructure in Russia.
The US market is "very
attractive and prestigious" despite the high cost of
transportation, says Mikhail Odintsov, head of the
natural monopolies committee of the Federation Council,
the upper house of Russian parliament. Russia should
also target East Asian markets like China and Japan
because it is much cheaper to supply oil to them, he
says.
But there are some dissenting voices in
Moscow. Yevgeny Ischenko, deputy of the state Duma, the
lower house of the Russian parliament, has urged caution
in selling oil to the US. The two countries have
different oil interests, he says; the US wants to divide
oil producers, particularly members of OPEC
(Organization of Petroleum Exporting Countries) and push
prices down, while Russia should band together with
other producers to create a "hydrocarbon international",
he says.
OPEC has pressed Russia to keep exports
to present levels. OPEC announced in November last year
that it would withdraw 1.5 million barrels per day (bpd)
from the market this January to hold prices, and asked
the other major exporting countries Russia, Norway,
Mexico and Oman to come up with another 500,000 bpd cut.
Russia announced a 150,000 bpd cut, but only after OPEC
threatened Russian producers with a price war. Russian
oil has a position in the market now only because OPEC
cut supplies, oil analysts say.
Russia exports
100 million tonnes of oil a year, and oil earns Russia
half its hard currency. But it has been reluctant to
join OPEC because it wants to build independent
relations with major buyers. Now OPEC faces the prospect
of a major producer acting on the side of consumers.
Officials at the Kremlin say growing energy exports from
Russia are changing the status quo in the world energy
market, and the target is the supply from Saudi Arabia.
(Inter Press Service)
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