UPI Energy Watch

Naftogaz pays debt but faces bankruptcy

The European Union is paying close attention as one of its largest natural gas supplies is threatened again.

The majority of the natural gas used in Western Europe comes from Russia's Gazprom and is transported through Ukraine and its state-owned company Naftogaz, Euronews reports.

Twice, disputes over gas debts have caused Russia to cut off supplies of gas to Ukraine, impacting delivery to the rest of Europe.

Ukraine paid its debt from February's deliveries to Russia this week; however, the payment was a financial hit to Naftogaz, which is now facing bankruptcy, and the European Union is concerned.

Ukraine's Naftogaz paid its debt after Russian Prime Minister Vladimir Putin threatened to once more shut off the gas supply.

The deal that Ukrainian Prime Minister Yulia Tymoshenko signed in January to end the dispute is now under criminal investigation after she claimed it was too expensive.

ONGC is criticized for giving government discounts

Goldman Sachs, a minority stakeholder in India's state-run Oil and Natural Gas Corp., raised questions about the discounts ONGC was giving to government oil refiners.

Goldman Sachs said the discount was offered to help the government refiners make up some of their losses after selling refined fuel at artificially low prices, The Times of India reports.

Following the accusations, ONGC's shares declined by 2 percent and it lost $52 in market value on the Bombay Stock Exchange.

Goldman Sachs said the Indian government, which holds a 74 percent stake in ONGC, earned $20 billion in cash over the last six years in savings without Goldman knowing about the decisions.

"The ONGC management gives corporate governance supreme importance and follows the highest standards," ONGC chairman R.S. Sharma said.

He called the report unfounded and said supply discounts were only given on oil from fields that the government owned and that weren't bid on.

Exxon Mobil invests big despite recession

U.S.-based Exxon Mobil Corp. announced plans to invest between $25 billion and $30 billion annually over the next five years.

The goal of the added investments is to increase production and meet what is expected to be an increase in world energy demand over the long term, RTTNews reports.

"The global economy is currently experiencing a downturn, but at Exxon Mobil we are focused on the long term," said Rex Tillerson, chairman and chief executive of Exxon Mobil.

Exxon Mobil expects nine major projects to begin production in 2009, adding about 485,000 barrels per day to production.

There is a $1 billion investment planned for low-sulfur diesel production at three U.S. refineries, bringing production of low-sulfur diesel to 140,000 bpd.

Globally, Exxon Mobil plans to drill new wells in Brazil and build new petrochemical plants in China and Singapore.

The new production could bring Exxon Mobil's total to more than 4 million bpd.

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Closing oil prices, March 6, 3 p.m., London

Brent Crude oil: $43.99

West Texas Intermediate crude oil: $44.02

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(e-mail: energy@upi.com)