Dec 7 (Reuters) – The first ever auction of offshore wind development rights off the coast of California entered its second day on Wednesday, with high bids topping $460 million.
The Biden administration’s sale is a major milestone in the its goal to put turbines along every U.S. coastline and a critical test of developer appetite for investment in floating wind turbines, an emerging technology necessary in locations where the ocean floor is too deep for fixed equipment.
The Interior Department’s Bureau of Ocean Energy Management (BOEM) is auctioning five lease areas equal to a combined 373,267 acres (151,056 hectares) off the state’s north and central coasts. Previous federal offshore wind auctions have all been for leases in shallower waters of the Atlantic Ocean.
After 22 rounds of bidding, high bids totaled a combined $462.1 million. Two leases off the central coast had commanded high bids of more than $100 million, with the remaining leases attracting high bids in a range of $62.7 million to $98.8 million, according to live auction results on the BOEM web site.
The identities of the bidders are not disclosed during the auction, but 43 companies had been approved to participate.
They include established offshore wind players like Avangrid Inc (AGR.N), Orsted (ORSTED.CO) and Equinor (EQNR.OL), which are all developing projects on the U.S. East Coast, as well as potential new entrants including Swedish floating wind developer Hexicon (HEXI.ST) and Macquarie (MQG.AX) unit Corio.
Reporting by Nichola Groom; Editing by Alexander Smith
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Russia says UK navy personnel helped attack Crimea
Russia does not give evidence for claim
Britain denies Russian claims
LONDON, Oct 29 (Reuters) – Russia’s defence ministry said on Saturday that British navy personnel blew up the Nord Stream gas pipelines last month, a claim that London said was false and designed to distract from Russian military failures in Ukraine.
Russia did not give evidence for its claim that a leading NATO member had sabotaged critical Russian infrastructure amid the worst crisis in relations between the West and Russia since the depths of the Cold War.
The Russian ministry said that “British specialists” from the same unit directed Ukrainian drone attacks on ships of Russian Black Sea fleet in Crimea earlier on Saturday that it said were largely repelled by Russian forces, with minor damage to a Russian minesweeper.
“According to available information, representatives of this unit of the British Navy took part in the planning, provision and implementation of a terrorist attack in the Baltic Sea on September 26 this year – blowing up the Nord Stream 1 and Nord Stream 2 gas pipelines,” the ministry said.
Britain denied the claim.
“To detract from their disastrous handling of the illegal invasion of Ukraine, the Russian Ministry of Defence is resorting to peddling false claims of an epic scale,” it said.
“This invented story, says more about arguments going on inside the Russian government than it does about the West.”
Russia has previously blamed the West for the explosions that ruptured the Russian-built Nord Stream 1 and Nord Stream 2 pipelines on the bed of the Baltic Sea.
But it had not previously given specific details of who it thinks was responsible for the damage to the pipelines, previously the largest routes for Russian gas supplies to Europe.
A sharp drop in pressure on both pipelines was registered on Sept. 26 and seismologists detected explosions, triggering a wave of speculation about sabotage to one of Russia’s most important energy corridors.
Reuters has not been able to immediately verify any of the conflicting claims about who was to blame for the damage.
PIPELINE MYSTERY
Sweden and Denmark have both concluded that four leaks on Nord Stream 1 and 2 were caused by explosions, but have not said who might be responsible. NATO Secretary-General Jens Stoltenberg has called the damage an act of sabotage.
Sweden has ordered additional investigations to be carried out into the damage done to the pipelines, the prosecutor in charge of the case said in a statement on Friday.
The Kremlin has repeatedly said allegations of Russian responsibility for the damage were “stupid” and Russian officials have said Washington had a motive as it wants to sell more liquefied natural gas (LNG) to Europe.
The United States has denied involvement.
The Nord Stream 1 and Nord Stream 2 pipelines have a joint annual capacity of 110 billion cubic metres – more than half of Russia’s normal gas exports volumes.
Sections of the 1,224-km (760-mile) long pipelines, which run from Russia to Germany, lie at a depth of around 80-110 metres.
Russia said meanwhile that Ukrainian forces attacked ships from the Black Sea Fleet in Sevastopol, the biggest city in Russian-annexed Crimea, in the early hours of Saturday.
“Nine unmanned aerial vehicles and seven autonomous marine drones were involved in the attack,” the defence ministry said.
“The preparation of this terrorist act and the training of servicemen of the Ukrainian 73rd Special Center for Naval Operations were carried out under the guidance of British specialists located in the town of Ochakiv.”
All the air drones were destroyed though minor damage was done to the minesweeper Ivan Golubets, the ministry said. Sevastopol is the headquarters of Russia’s Black Sea Fleet.
Reporting by Reuters
Editing by Guy Faulconbridge and Frances Kerry
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Company projects flat oil output this year on Russia losses
HOUSTON, Oct 28 (Reuters) – Exxon Mobil Corp (XOM.N) on Friday smashed expectations as soaring energy prices fueled a record-breaking quarterly profit, nearly matching that of tech giant Apple.
Its $19.66 billion third-quarter net profit far exceeded recently raised Wall Street forecasts as skyrocketing natural gas and high oil prices put its earnings within reach of Apple’s (AAPL.O) $20.7 billion net for the same period.
As recently as 2013, Exxon ranked as the largest publicly traded U.S. company by market value – a position now held by Apple. Exxon shares rose 3% to $110.70, a record high that gave it a market value of $461 billion.
Oil company profits have soared this year as rising demand and an undersupplied energy market collided with Western sanctions against Russia over its invasion of Ukraine. U.S. exports of gas and oil to Europe have jumped and promise to set all-time profit records for the industry.
The top U.S. oil producer reported a per-share profit of $4.68, exceeding Wall Street’s $3.89 consensus view, on a huge jump in natural gas earnings, continued high oil prices and strong fuel sales.
“Where others pulled back in the face of uncertainty and a historic slowdown, retreating and retrenching, this company moved forward, continuing to invest,” Chief Executive Darren Woods told investors. Its quarterly profits “reflect that deep commitment” as well as higher prices, he added.
Exxon led record gains among oil majors in the second quarter and has leapfrogged Shell Plc (SHEL.L) and TotalEnergies SE (TTEF.PA) with earnings almost twice as big from continued bets on fossil fuels as competitors shifted investment to renewables.
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Exxon banked $43 billion in the first nine months of this year, 19% more than in the same period of 2008, when oil prices traded at a record level of $140 per barrel.
Earnings from pumping oil and gas tripled last quarter while profit from selling motor fuels jumped tenfold compared with year-ago levels. Natural gas sales to Europe and soaring demand for diesel fuel led the company’s better-than-expected results.
“The refining businesses – both in the U.S. and international – was the star performer,” said Peter McNally, an analyst at Third Bridge.
Those rising fuel profits have renewed calls by U.S. President Joe Biden for companies to invest the windfall from this year’s energy price run-up in production rather than buy back their own shares.
Exxon will maintain its $30 billion share buyback through 2023 while increasing dividends, Chief Financial Officer Kathryn Mikells told Reuters. On Friday, it declared a fourth-quarter per-share dividend of 91 cents, up 3 cents, and will pay $15 billion to shareholders this year.
Exxon said its U.S. oil and gas production from the Permian Basin was near 560,000 barrels of oil and gas per day (boepd), a record. Production for the year will increase about 20% over 2021, said CEO Woods.
“We’re optimizing and adjusting our development plans,” he told analysts, with the full-year production gain below the 25% increase Exxon had forecast in February.
Results also were helped by an almost 100,000-boepd increase over the previous quarter in Guyana, where Exxon leads a consortium responsible for all output in the South American nation.
But its withdrawal from Russia reduced its overall production forecast for the year by about 100,000 barrels per day. Exxon said its Russian assets were expropriated.
“We are going to end up at about 3.7 million barrels a day for the full year,” Mikells said, down from a 3.8 million bpd goal set in February.
Reporting by Sabrina Valle; Editing by Ana Nicolaci da Costa, Jonathan Oatis and Marguerita Choy
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Announces plans to buy further $4 billion in shares
Profit hit by weak LNG trading and refining
LONDON, Oct 27 (Reuters) – Shell (SHEL.L) on Thursday posted a third-quarter profit of $9.45 billion, slightly below the second quarter’s record high, due to weaker refining and gas trading, and said it will sharply boost its dividend by the end of 2022 when its CEO departs.
The British oil and gas giant also extended its share repurchasing programme, announcing plans to buy $4 billion of stock over the next three months after completing $6 billion in purchases in the second quarter.
Shell said it intends to increase its dividend by 15% in the fourth quarter, when Chief Executive Officer Ben van Beurden will step down after nine years at the helm. The dividend will be paid in March 2023.
It will be the fifth time that Shell will have raised its dividend since slashing it by more than 60% in the wake of the 2020 COVID-19 pandemic.
Shell shares were up nearly 6% by 1430 GMT, compared with a 3.5% gain for the broader European energy sector (.SXEP).
Van Beurden will be succeeded by Wael Sawan, the current head of Shell’s natural gas and low-carbon division.
With a profit of $30.5 billion so far this year, Shell is well on track to exceed its record annual profit of $31 billion in 2008.
The strong earnings were likely to intensify calls in Britain and the European Union to impose further windfall taxes on energy companies as governments struggle with soaring gas and power bills.
Van Beurden said the energy industry “should be prepared and accept” that it will face higher taxes to help struggling parts of society.
Shell’s shares have gained more than 40% so far this year, lifted by soaring oil and gas prices in the wake of Russia’s invasion of Ukraine in February and amid tightening global oil and gas supplies.
French rival TotalEnergies posted a record profit in the third quarter.
[1/2] A view shows a board with the logo of Shell at the company’s fuel station in Saint Petersburg, Russia May 6, 2022. REUTERS/Anton Vaganov/File Photo
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LNG WOES
Shell’s quarterly adjusted earnings of $9.45 billion, which slightly exceeded forecasts, were hit by a sharp 38% quarterly drop in the gas and renewables division, the company’s largest.
Earnings for the second quarter were a record $11.5 billion.
The world’s largest trader of liquefied natural gas (LNG) produced 7.2 million tonnes of LNG in the period, 5% less than in the previous quarter, mainly due to ongoing strikes at its Australian Prelude facility.
Its gas trading business was hit this quarter by “supply constraints, coupled with substantial differences between paper and physical realisations in a volatile and dislocated market.”
Earnings from the refining, chemicals and oil trading division also dropped sharply by 62% in the quarter due to weaker refining margins.
Shell said it would stick to its plans to spend $23 billion to $27 billion this year.
Shell’s cash flow in the third quarter dropped sharply to $12.5 billion from $18.6 billion in the second quarter due to a large working capital outflow of $4.2 billion as a result of changes in the value of European gas inventories.
Shell’s net debt rose by around $2 billion to $46.4 billion due to lower cash flow from operations and to pay for a recent acquisition. Its debt-to-capital ratio, known as gearing, also rose above 20%.
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Reporting by Ron Bousso and Shadia Nasralla; editing by Jason Neely, Simon Cameron-Moore and Paul Simao
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Shadia Nasralla
Thomson Reuters
Writes about the intersection of corporate oil and climate policy. Has reported on politics, economics, migration, nuclear diplomacy and business from Cairo, Vienna and elsewhere.
BAKU, Oct 27 (Reuters) – Igor Sechin, chief executive of Russian oil giant Rosneft (ROSN.MM) and one of Vladimir Putin’s closest allies, on Thursday heaped praise on China’s leaders and said Taiwan would return to its “native harbour” on time.
Sechin said that decisions taken by the 20th Communist Party Congress, which cemented Xi Jinping position as the most powerful Chinese leader since Mao Zedong, would provide for a new level of development for the country.
The deepening “no limits” partnership between the rising superpower of China and the natural resources titan of Russia is one of the most intriguing geopolitical developments of recent years – and one the West is watching with anxiety.
“The position of (China’s) leadership is highly respected, which calmly and openly, without false premises, sets out its positions, even on the most difficult issues, such as the problem of Taiwan, which in this regard can be assessed as somewhat exaggerated,” Sechin told an international economic forum in Baku, previously held in Italy’s Verona.
He said U.S. attempts to create its own complex microchip industry showed that “Taiwan’s return to its native harbour” was “on schedule”.
Taiwan’s Foreign Ministry condemned the comments, saying only the island’s people could decide their future.
“Neither our government, people nor the international community can accept absurd remarks that are in China’s cortege or demean Taiwan’s sovereign status,” it said in a statement.
China claims democratically governed Taiwan as its own territory and has ramped up military and political pressure against the island over the past two years. Taipei strongly rejects Beijing’s sovereignty claims.
Russia has repeatedly warned the United States against meddling in China’s affairs while President Vladimir Putin has explicitly backed Xi over the fate of the island where the defeated Republic of China government fled in 1949 after losing the Chinese civil war to Mao’s communists.
BP’S DIVIDEND
Sechin said Rosneft had transferred $700 million in second-half 2021 dividends into special accounts for BP (BP.L), which remained Rosneft’s “shadow” shareholder despite a decision to leave the company following the start of what Moscow calls its “special military operation” in Ukraine.
BP said its position on Russia has remained unchanged.
“In February we announced our decision to exit Rosneft and our other Russian businesses – we continue to pursue that,” it said in emailed comments.
Sechin also said that Saudi Arabia’s position on the global oil market was “reasonable” and based on analysis of oil supply and demand.
The United States, he said, had tried to persuade Saudi Arabia to postpone oil output cuts as part of OPEC+.
“Today, the energy policy of the (Joe) Biden administration is solving exclusively pre-election tasks with a planning horizon of two weeks, given that the elections to the U.S. Congress are on November 8,” Sechin said.
“This includes attempts to persuade Saudi Arabia to at least postpone the announcement of this decision until the elections.”
The OPEC+ group of global leading oil producers, which includes Saudi Arabia and Russia, agreed this month to cut its combined output by 2 million barrels per day despite opposition from the United States, which wants lower fuel prices.
Saudi Arabia rejected criticism of an OPEC+ decision to cut its oil production target despite U.S. objections and said that Washington’s request to delay the cut by a month would have had negative economic consequences.
Reporting by Nailia Bagirova and Olesya Astakhova; Additional reporting by Ron Bousso and Ben Blanchard in London; Writing by Vladimir Soldatkin; Editing by Guy Faulconbridge, Nick Macfie and Mike Harrison
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Pragmatism seen trumping ideology as Hezbollah approves deal
U.S. clinched landmark compromise between Israel, Lebanon
Offshore gas would provide Lebanon with badly needed FX
BEIRUT, Oct 18 (Reuters) – (This Oct. 18 story has been corrected to clarify that Atallah is the founding director of The Policy Initiative think tank, not executive director of the Lebanese Center for Policy Studies in paragraph 14)
Before Lebanon’s government approved a U.S.-brokered deal settling a decades-long maritime boundary dispute with Israel, the powerful Hezbollah had scrutinized the final draft line by line and given a crucial nod of acceptance.
Branded a terrorist group by Washington and a sworn enemy of Israel, the Iran-backed Hezbollah was certainly nowhere near the negotiating room during U.S. shuttle diplomacy which clinched the landmark deal last week.
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But behind the scenes, the heavily armed group was being briefed on the details and expressing its views even as it threatened military action were Lebanon’s interests not secured, according to sources familiar with Hezbollah’s thinking, a Lebanese official and a Western source familiar with the process.
An unprecedented compromise between the enemy states, the deal opens the way for offshore energy exploration and defuses one source of potential conflict between Israel and Hezbollah.
Observers say the deal was all the more significant for the pragmatism shown by Hezbollah, pointing to the shifting priorities of a group set up four decades ago by Iran’s Revolutionary Guards to fight Israel.
“The Hezbollah leadership scrutinized the understanding line by line before agreeing to it,” said one of the sources familiar with the group’s thinking.
After spending much of the last decade deploying fighters and military expertise across the Middle East to help Iran’s allies, notably President Bashar al-Assad of Syria, Hezbollah’s focus is today squarely on Lebanon – a country in deep crisis.
More involved than ever in state affairs, Hezbollah has said offshore oil and gas are the only way for Lebanon to emerge from a devastating financial meltdown that has hit all Lebanese hard, including its large Shi’ite constituency.
Though Hezbollah says it does not fear war with Israel, the group has also said it does not seek one with a formidable foe which staged major invasions of Lebanon in 1978 and 1982.
Lebanon took years to rebuild from the last war in 2006 – much of the bill paid by Gulf Arabs who have since shunned Beirut because of Hezbollah’s sway. And while Tehran’s support remains strong, Western sanctions have squeezed the amount of cash Iran can send the group.
‘HAVOC’ OR PRAGMATISM
An offshore energy discovery – while not enough on its own to resolve Lebanon’s deep economic problems – would be a major boon, providing badly needed hard currency and possibly one day easing crippling blackouts.
Two Hezbollah lawmakers told Reuters the group was open to the idea of a deal as a pathway to alleviate some of Lebanon’s economic woes.
“They had to deal with it pragmatically instead of ideologically,” said Sami Atallah, founding director of The Policy Initiative think tank, describing Hezbollah’s role as critical. “They knew they had the power to cause havoc if they wanted to – but it would have come at such a high cost.”
U.S. proposals were communicated to Hezbollah’s leadership by senior Lebanese security official Abbas Ibrahim, who also met U.S. envoy Amos Hochstein, according to the Lebanese official and the Western source familiar with the process.
At one point, Hezbollah conveyed its frustration at the slow pace of the talks to Hochstein via Ibrahim, the Western source said.
Asked about Hezbollah’s role, the head of its media office Mohamed Afif said the state had carried out the negotiations and “we stood behind it”. “Our concern was for Lebanon to secure its rights to its resources,” he said.
Reuters could not immediately reach Ibrahim’s office for comment. The U.S. State Department did not respond to emailed questions on the account of Hochstein’s contacts with Ibrahim.
A senior U.S. administration official has said the negotiations were carried out with the sovereign leadership of Lebanon and did not include discussions with Hezbollah.
The urgency of Hochstein’s mission increased in June when an Israeli gas rig arrived offshore to explore in the Karish field – waters claimed by Lebanon but which Israel said were in its exclusive economic zone.
On July 2, Hezbollah sent three unarmed drones flying over the Karish field. They were intercepted by the Israeli military.
Hezbollah claimed it as a show of force and its allies in Lebanon credited the group’s military posturing with wringing concessions from Israel – a claim completely denied by Israel.
A U.S. official told Reuters Hezbollah had nearly “killed the deal with their provocative rhetoric and actions threatening war”. “No one party can – or should – claim victory.”
PEACE STILL FAR OFF
Hezbollah gave the greenlight to controversial details.
These included a tacit nod to arrangements that will lead to Israel getting a slice of revenues from the Qana prospect – which Lebanon deemed to be entirely in its waters, but which Israel said was partly in its.
The diplomatic workaround requires France’s TotalEnergies – set to carry out exploration on behalf of Lebanon – to make a separate deal with Israel by which it gets a portion of royalties, bypassing any Lebanese involvement, politician Gebran Bassil, who closely followed the talks, told Reuters.
A spokesperson from TotalEnergies said they had no comment.
French officials met Hezbollah representatives about the overall agreement, three French diplomatic sources said.
The French foreign ministry said France actively contributed to the agreement, “in particular by passing messages between the different parties, in conjunction with the American mediator”.
While the stars may have aligned to bring about this deal, peace remains a distant prospect between states at odds over numerous issues, and with Hezbollah’s influence deeply entrenched in Beirut.
But more than 16 years since the last war, the benefits brought from any gas production could help stave off another one. “Once the pipes are in the water, war becomes a long way away,” said a source familiar with Hezbollah’s thinking.
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Additional reporting by John Irish and Benjamin Mallet in Paris; and Editing by Tom Perry, Editing by William Maclean
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PARIS, Oct 18 (Reuters) – Regional train traffic in France was cut by about half on Tuesday as several unions called a nationwide strike, seeking to capitalise on anger with decades-high inflation to expand a weeks-long industrial action at oil refineries to other sectors.
There were also some disruption to schools, as the strike primarily affected the public sector.
Trade union leaders were hoping workers would be energised by the government’s decision to force some of them to go back to work at petrol depots to try and get fuel flowing again, a decision some say put in jeopardy the right to strike.
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But a survey by Elabe pollsters for BFM TV showed only 39% of the public backed Tuesday’s call for a nationwide strike, while 49% opposed it, and growing numbers opposed the strike by oil refinery workers.
The refinery workers’ strike has become one of President Emmanuel Macron’s stiffest challenges since his re-election in May.
Government spokesperson Olivier Veran said the requisition of more staff for refineries could occur during the day, as queues of motorists worried about supply disruption grow at petrol stations.
“There will be as many requisitions as deemed necessary … Blocking refineries, when we have reached an agreement on wages, this is not a normal situation,” Veran told France 2 TV.
French students block the entrance of the Lycee Montaigne high school to protest as part of a nationwide day of strike in Paris, France, October 18, 2022. REUTERS/Gonzalo Fuentes
Just under 10% of high school teachers were on strike on Tuesday, with numbers even lower in primary schools, education ministry data showed. The call for strike was most observed in vocational schools, where teachers oppose planned reforms.
On the transport front, Eurostar said it was cancelling some trains between London and Paris because of the strike.
French public railway operator SNCF said that traffic on regional connections was down 50% but that there were no major disruptions to national lines.
As tensions rise in the euro zone’s second-biggest economy, strikes have spilled over into other parts of the energy sector, including nuclear giant EDF (EDF.PA), where maintenance work crucial for Europe’s power supply will be delayed.
A representative of the FNME-CGT union on Tuesday said strikes were affecting work at nuclear power plants, including at the Penly plant.
The strikes are happening as the government is set to pass the 2023 budget using special constitutional powers that would allow it to bypass a vote in parliament, Prime Minister Elisabeth Borne said on Sunday.
Demonstrations are scheduled all over the country, with one in Paris from 1200 GMT.
Thousands of people took to the streets of Paris on Sunday to protest against soaring prices. The leader of hard-left La France Insoumise (France Unbowed) party, Jean-Luc Melenchon, marched alongside this year’s Nobel Prize winner for Literature, Annie Ernaux.
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Additional reporting by Ingrid Melander, Forrest Crellin and Juliette Jabkhiro; Editing by Angus MacSwan and Gerry Doyle
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Putin presents Turkish leader with new “gas hub” plan
Moscow seeks new corridor after damage to Baltic pipelines
Erdogan seen as key diplomatic player in Russia-Ukraine war
ASTANA, Oct 13 (Reuters) – Russian President Vladimir Putin proposed to his Turkish counterpart Tayyip Erdogan on Thursday that Moscow could export more gas via Turkey and turn it into a new supply “hub”, bidding to preserve Russia’s energy leverage over Europe.
At a meeting in Kazakhstan, Putin said Turkey offered the most reliable route to deliver gas to the European Union, and the proposed platform would allow prices to be set without politics.
Russia is looking to redirect supplies away from the Nord Stream Baltic gas pipelines, damaged in explosions last month that are still under investigation. Russia blamed the West, without providing evidence, and rejected what it called “stupid” assertions that it had sabotaged the pipelines itself.
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Putin told Erdogan the hub would be “a platform not only for supplies, but also for determining the price, because this is a very important issue”.
“Today, these prices are sky-high,” he said. “We could easily regulate [them] at a normal market level, without any political overtones.”
Erdogan did not respond in the televised portion of their meeting, but Kremlin spokesman Dmitry Peskov was quoted by the Russian news agency RIA as saying both men had ordered a rapid and detailed examination of the idea.
Russia supplied about 40% of Europe’s gas before its Feb. 24 invasion of Ukraine but had cut flows sharply even before the explosions, blaming technical problems that it said were the result of Western sanctions.
European governments rejected that explanation, accusing Moscow of using energy as a geopolitical weapon.
Russia’s President Vladimir Putin and Turkey’s President Tayyip Erdogan meet on the sidelines of the 6th summit of the Conference on Interaction and Confidence-building Measures in Asia (CICA), in Astana, Kazakhstan October 13, 2022. Sputnik/Vyacheslav Prokofyev/Pool via REUTERS
TURKISH MEDIATION
Relations with NATO member Turkey are vital to Russia at a time when the West has hit it with waves of economic sanctions, which Ankara has refrained from joining. Turkey has, however, rejected Russia’s move to annex four Ukrainian regions as a “grave violation” of international law.
Erdogan has sought to mediate between Moscow and Kyiv, and achieved a rare breakthrough in July when, together with the United Nations, he brokered an agreement allowing for the resumption of commercial Ukrainian grain exports from Black Sea ports that Russia had blockaded.
Russia has complained, however, that its own grain and fertiliser exports, while not directly targeted by Western sanctions, continue to be hampered by problems with access to foreign ports and obtaining insurance.
Erdogan told Putin: “We are determined to strengthen and continue the grain exports … and the transfer of Russian grain and fertiliser to less developed countries via Turkey.”
Russian officials had said before the meeting that they were open to hearing proposals from Turkey about hosting peace talks involving Russia and the West.
However, Peskov was quoted by RIA as saying “the topic of a Russian-Ukrainian settlement was not discussed” by the leaders.
Russian Foreign Minister Sergei Lavrov this week signalled increasing receptiveness to talks after Moscow suffered a series of military defeats. Washington dismissed his comments as “posturing”.
Ukrainian President Volodymyr Zelenskiy has ruled out talking to Putin after he proclaimed the annexation of the four Ukrainian regions and after Russia rained missiles on Ukrainian cities this week in the wake of an attack on a vital bridge between Russia and Crimea, the peninsula it seized in 2014.
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Reporting by Reuters; writing by Mark Trevelyan, Editing by Kevin Liffey
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TOKYO, Oct 9 (Reuters) – Japanese Trade Minister Yasutoshi Nishimura said on Sunday that the Sakhalin 1 oil and gas project in Russia is very important for Tokyo to ensure its diversified crude oil procurement.
The comment came after Russian President Vladimir Putin signed a decree on Friday that establishes a new operator for the project in Russia’s Far East.
Exxon Mobil Corp (XOM.N) holds a 30% operator stake in Sakhalin-1, with Russian company Rosneft (ROSN.MM), India’s ONGC Videsh (ONVI.NS) and Japan’s SODECO as partners.
Asked if Japan intends to keep its stake, Nishimura said, “From the standpoint of diversifying Japan’s crude oil import, that’s a very important project.”
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Reporting by Nobuhiro Kubo; Editing by Leslie Adler
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MOSCOW/HOUSTON, Oct 7 (Reuters) – Russian President Vladimir Putin signed a decree on Friday that establishes a new operator for the Exxon Mobil Corp-led (XOM.N) Sakhalin-1 oil and gas project in Russia’s Far East.
Putin’s move affecting Exxon’s largest investment in Russia mimics a strategy he used to seize control of other energy properties in the country.
The decree gives the Russian government authority to decide whether foreign shareholders can retain stakes in the project.
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Exxon holds a 30% operator stake in Sakhalin-1, with Russian company Rosneft (ROSN.MM), India’s ONGC Videsh (ONVI.NS) and Japan’s SODECO as partners.
Oil production at the Sakhalin-1 project fell to just 10,000 barrels per day (bpd) in July from 220,000 bpd before Russia invaded Ukraine.
NAVIGATING AN EXIT
Exxon has been trying to exit its Russia operations and transfer its role in Sakhalin-1 to a partner since March, after international sanctions imposed on Moscow.
Russia’s government and Exxon have clashed, with the oil producer threatening to take the case to international arbitration.
Exxon declined to comment on Friday’s decree.
Japan’s SODECO was not immediately available to comment, but an official of the industry ministry, which owns a 50% stake in the firm, said it was gathering information and talking with partners. Japan has stopped buying crude from Russia since June. read more
Exxon took an impairment charge of $4.6 billion in April for its Russian activities and said it was working with partners to transfer Sakhalin-1’s operation. It also reduced energy production and moved staff out of the country.
In August, Putin issued a decree that Exxon said made a secure and environmentally safe exit from Sakhalin-1 difficult. The U.S. producer then issued a “note of difference,” a legal step prior to arbitration.
Friday’s decree said the Russian government was establishing a Russian company, managed by Rosneft subsidiary Sakhalinmorneftegaz-shelf, that will own investors’ rights in Sakhalin-1.
Foreign partners will have one month after the new company is created to ask the Russian government for shares in the new entity, the decree said.
Putin used a similar strategy in a July decree to seize full control of Sakhalin-2, another gas and oil project in the Russian Far East, with Shell (SHEL.L) and Japanese companies Mitsui & Co (8031.T) and Mitsubishi Corp as partners.
Russia has approved applications by the two Japanese trading houses seeking to transfer their stakes to a new operator. read more
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Reporting by Reuters; Additional reporting by Yoshifumi Takemoto, Yuka Obayashi in Tokyo, Editing by Cynthia Osterman and Clarence Fernandez
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