Tweet
Russian President Dmitry Medvedev visits Algeria tomorrow as the two natural-gas exporters seek to protect their share of the European market.
Medvedev’s delegation includes Mikhail Fridman, the billionaire chairman of TNK-BP, as the Russian oil producer considers buying assets in North Africa from its partner BP Plc.
Russia and Algeria, the first- and third-largest suppliers of gas to Europe, will prioritize “tighter cooperation in the energy sector,” Medvedev’s foreign policy aide, Sergei Prikhodko, told reporters in Moscow. “We are interested in developing cooperation with Algeria in European gas markets.”
OAO Gazprom, the world’s biggest gas producer, supplies about a quarter of Europe’s gas. The Moscow-based producer plans to increase the share to 32 percent in 2020 even as suppliers including Norway and Qatar offer more flexible terms at a time of oversupply. Likewise, Algeria has said it won’t change long- term contracts linked to the price of crude oil.
Algerian state energy company Sonatrach and Gazprom have made little progress on joint projects in Africa since signing an energy co-operation agreement in 2006, Chris Weafer, chief strategist at Uralsib Financial Corp. said in an e-mail today.
“Russia is keen to revive the deal in order to strengthen its position in North African gas and to develop this platform as a source of exports into Europe,” Weafer said. “This is partly in response to the threat to Gazprom’s market share in Europe as supplies of LNG and Norwegian gas increase.”
Russian Billionaires
TNK-BP, a venture between a group of Russian billionaires and BP Plc, is interested in BP’s North African assets, Chief Financial Officer Jonathan Muir said in an interview last month. BP has production in Algeria and Egypt and exploration acreage in Libya. The venture is considering buying assets from BP as the London-based oil producer seeks $30 billion to cover costs related to the Gulf of Mexico oil spill.
Gazprom spokesman Sergei Kupriyanov declined to comment on agenda of the visit today. Chief Executive Officer Alexei Miller and his deputy Alexander Medvedev will travel with the Russian president.
Russia’s share of gas imports by European members of the Organization for Economic Cooperation and Development shrank to 27 percent in the first half of 2010 from 39 percent in 2000, Mikhail Korchemkin, director general of East European Gas Analysis said last month. Algeria’s share dropped to 12 percent from 20 percent over the same period.
Spot Pricing
Algeria isn’t supplying gas to spot markets and doesn’t favor renegotiating long-term supply contracts to add spot pricing, Ali Hached, a principal adviser to the country’s Ministry of Energy and Mines, said yesterday. Gazprom has agreed to adapt some contracts for a period after the recession cut gas demand without altering the structure of the agreements in the long-term.
Military cooperation with Algeria will also be discussed, an area where the two countries “have very noticeable movement forward,” Medvedev’s aide Prikhodko said. No new contracts will be signed during the visit.
During his visit in 2006, then President Vladimir Putin signed a multibillion arms deal with Algeria. The $7.5 billion contract which included Su-30 fighter jets and S-300 air defense systems made Algeria Russia’s second-biggest ams importer after India, said Konstantin Makiyenko, deputy head of the Center for the Analysis of Strategies and Technologies.
Makiyenko said Algeria may buy additional S-300 systems as well as frigates.
By Anna Shiryaevskaya and Lyubov Pronina
Medvedev’s delegation includes Mikhail Fridman, the billionaire chairman of TNK-BP, as the Russian oil producer considers buying assets in North Africa from its partner BP Plc.
Russia and Algeria, the first- and third-largest suppliers of gas to Europe, will prioritize “tighter cooperation in the energy sector,” Medvedev’s foreign policy aide, Sergei Prikhodko, told reporters in Moscow. “We are interested in developing cooperation with Algeria in European gas markets.”
OAO Gazprom, the world’s biggest gas producer, supplies about a quarter of Europe’s gas. The Moscow-based producer plans to increase the share to 32 percent in 2020 even as suppliers including Norway and Qatar offer more flexible terms at a time of oversupply. Likewise, Algeria has said it won’t change long- term contracts linked to the price of crude oil.
Algerian state energy company Sonatrach and Gazprom have made little progress on joint projects in Africa since signing an energy co-operation agreement in 2006, Chris Weafer, chief strategist at Uralsib Financial Corp. said in an e-mail today.
“Russia is keen to revive the deal in order to strengthen its position in North African gas and to develop this platform as a source of exports into Europe,” Weafer said. “This is partly in response to the threat to Gazprom’s market share in Europe as supplies of LNG and Norwegian gas increase.”
Russian Billionaires
TNK-BP, a venture between a group of Russian billionaires and BP Plc, is interested in BP’s North African assets, Chief Financial Officer Jonathan Muir said in an interview last month. BP has production in Algeria and Egypt and exploration acreage in Libya. The venture is considering buying assets from BP as the London-based oil producer seeks $30 billion to cover costs related to the Gulf of Mexico oil spill.
Gazprom spokesman Sergei Kupriyanov declined to comment on agenda of the visit today. Chief Executive Officer Alexei Miller and his deputy Alexander Medvedev will travel with the Russian president.
Russia’s share of gas imports by European members of the Organization for Economic Cooperation and Development shrank to 27 percent in the first half of 2010 from 39 percent in 2000, Mikhail Korchemkin, director general of East European Gas Analysis said last month. Algeria’s share dropped to 12 percent from 20 percent over the same period.
Spot Pricing
Algeria isn’t supplying gas to spot markets and doesn’t favor renegotiating long-term supply contracts to add spot pricing, Ali Hached, a principal adviser to the country’s Ministry of Energy and Mines, said yesterday. Gazprom has agreed to adapt some contracts for a period after the recession cut gas demand without altering the structure of the agreements in the long-term.
Military cooperation with Algeria will also be discussed, an area where the two countries “have very noticeable movement forward,” Medvedev’s aide Prikhodko said. No new contracts will be signed during the visit.
During his visit in 2006, then President Vladimir Putin signed a multibillion arms deal with Algeria. The $7.5 billion contract which included Su-30 fighter jets and S-300 air defense systems made Algeria Russia’s second-biggest ams importer after India, said Konstantin Makiyenko, deputy head of the Center for the Analysis of Strategies and Technologies.
Makiyenko said Algeria may buy additional S-300 systems as well as frigates.
By Anna Shiryaevskaya and Lyubov Pronina
Alexeï Miller
Commentaire