NEW YORK, Dec. 29 (UPI) -- Gazprom tightens control of regional gas network
Russian gas giant Gazprom strengthened control over the route used to supply European gas markets after the company secured a deal with Belarus Tuesday.
Gazprom secured the deal after several failed attempts in talks with Belarusian President Alexander Lukashenko to gain control of the state-run Beltransgaz network.
In addition to hoping to increase its influence in European energy markets, Gazprom is looking to expand its production facilities as it aims to become a major global energy player.
The company is looking to target market capitalization of approximately $250 billion to $300 billion in the next five to seven years.
"Gazprom has achieved something it wanted for several years," Eugeniusz Smolar, director of the Center for International Relations in Warsaw, was quoted as saying by the International Herald Tribune.
"As Russia's main foreign policy instrument, Gazprom wanted to weaken its dependence on Belarus as a transit country, exactly what it is trying to do with Ukraine," he said.
Under the agreement, Gazprom acquired ownership of the Belarusian section of the Yamal-Europe gas network that supplies 10 percent of Russian gas to Europe.
The amount of the deal was not released by either side.
Gazprom released in a statement Belarus is expected to charge the Russian gas giant transit fees of 75 cents per 1,000 cubic meters per 1,000 kilometers, or about 620 miles, while Belarus will pay $46.68 per 1,000 cubic meters.
Brazilian electricity tender gets little interest
The Brazilian government's new electricity model attracted few private investors in a tender that successfully auctioned Dec. 16 seven of the 17 hydroelectric plants.
Private bidders said they did not participate in the auctions because the government-set maximum electricity prices for the new utilities were too low.
The country's energy regulator, Agencia Nacional de Energia Eletrica (Aneel), awarded tenders to bidders who promised to charge the lowest electricity prices for power produced at new plants.
Investors were also discouraged by stringent environmental rules necessary in order to obtain a license to construct some of the plants.
Aneel awarded Furnas Centrais Eletricas, a federally operated generator, three of the seven concessions granted, one of them in consort with a Minas Gerais state-owned utility, Cemig, and Spain's Neoenergia. Two other federally owned generators, Eletrosul and CGTEE, received two of the seven concessions, while two construction companies successfully bid for the other two.
France's Suez Energy argued the price was too low to produce a viable investment.
Private investors sought a 15 percent rate of return overall, while Furnas was willing to settle for an estimated return of 10 percent.
Repeat auctions will be held in 2006, since the concessions awarded do not produced the amount the government had envisaged. Potential investors will hope a greater rate of return.
China hopes to reduce oil dependence
China said it is committed to reducing its dependence on oil consumption in the next several years as it is embarking on an endeavor to avoid wasteful consumption and develop renewable energy as alternatives, a top Chinese official said Tuesday.
The government has vowed to place energy efficiency high on its agenda for the next several years, Vice Premier Zeng Peiyan said.
By 2020, renewable energy could account for 15 percent of national consumption, up from the current seven percent.
China's statistics illustrate a reliance on vast reserves of cheap coal to generate 67.7 percent of its energy, while oil and gas represents 22.7 percent and 2.6 percent, respectively.
Crude oil increased from 120 million in 2004 to 130 million in 2005, according to Chinese figures.
Wasteful oil usage is a major factor contributing to increasing imports, Zhou Dadi, an expert at the National Development and Reform Commission, while Gao Shixian, another NDRC expert, says China needs to refrain from developing sectors with high oil consumption.
A renewable energy law passed expected to take effect in 2006 sets policies in favor of non-fossil energy such as water, wind and solar power.
The government also issued a guiding catalogue for industrial sectors, encouraging the production of low-emission, economical cars and cars using new energy, like electricity and liquid petroleum gas.
Rosneft seeks to boost production in 2006
Russian oil company Rosneft is looking to increase oil and gas output in 2006 as it plans to attract additional funds, including funds from partner companies, to participate in auctions and tenders to acquire prospects in main regions of the company's activities.
Local media reports suggest Rosneft hopes to invest at least $4 billion to acquire new licenses in 2006, possibly in the Titov, Trebs and Val Sorokin fields in Nenets autonomous district, if the fields will be sold. Other fields are also on Rosneft's target list.
The company plans to increase output in 2006 to 80 million tons of oil, a 5.4 million ton increase from its 2005 production, the company said in a press release after a meeting of the company's board of directors, at which the company's results in 2005 were discussed.
Rosneft earlier planned to produce 75 million tons in 2005, and 81 million tons in 2006.
The release said the company plans to increase gas output in 2006 by nearly 1 billion cubic meters.
Rosneft said it fully restored well and drilling capacity at its main subsidiary Yuganskneftegaz, where production rose at the end of the year by 8.3 percent.
But the largest output growth was at Severnaya Neft with 42.8 percent and Grozneft with 11.4 percent.
Closing oil prices, Dec. 29, 3 p.m. London
Brent crude oil: $ 57.58
West Texas intermediate crude oil: $ 59.74
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