VOG 2005 New Thread

Hectorp agreed.

The west have long said Gazprom must increase its pricing at home and stop subsidising its home market so can't really say anything about this dispute whether seemimgly unfair or not to the Ukrainians.

Gazprom is now a major company to compete with the biggest majors in the world. It can't do this if it continues to subsidise or sell cheap gas - even to Ukraine who want to become part of the west market economy.

Gazprom are pilloried if they put prices up or if they don't. This is something the west themselves have been saying for ages that Gazprom/Russia must do - free market. OK so it's a two edged sword to Ukraine, but i guess this is the first step and other countries that are alligned to Russia will eventually have their prices steadily increased at some stage after this 'test'.

Most of the western countries have sufficient gas supplies in storage for at least 3 months and by that time we are hitting the spring when demand would slip back anyway coming into the milder weather. I think Gazprom/Russia has timed this well so that there will be no impact on the west. Gazprom and for that matter Russia will not want to damage it's image as being unreliable and they will know this.

I see this as short term and is something that is ultimately beneficial as Gazprom is being shown to get prices up at home meaning ultimately that VOG do benefit much greater when they eventually come to sell the gas - which at the least must be a year away yet. Irrespective of that, the hunt for, and eventual production of highly valuable and much in demand condensate, from West Med will add to the s/p performance including the imminent oil production from Kemerkol in Kahzakstan.