April 17, 2024

Lithuania Aims for Energy Independence

KIAULES NUGARA, Lithuania — The first Soviet republic to reclaim its independence was Lithuania. But more than two decades later, the energy industry of this European Union member still feels like an outpost of a creaking empire run from Moscow.

Lithuania’s president, Dalia Grybauskaite, intends to change that.

This straight-talking politician, who holds a martial arts black belt, has enthusiastically backed a deal to anchor a ship near this tiny island and put it to work processing deliveries of liquefied natural gas into fuel for Lithuanian homes and businesses. That would break the stranglehold of Gazprom, the Russian government-controlled export monopoly that now supplies all of Lithuania’s gas.

The vessel’s name? “’Independence,’ of course,” Ms. Grybauskaite said last week during an interview. She hopes the ship will process up to 60 percent of the gas Lithuania needs. “The name is absolutely proper — ideally proper,” she said briskly.

The price of natural gas in Lithuania was 15 percent higher than the European average last year, according to the European Commission. Only Bulgaria, where Gazprom has a near-monopoly, paid more. Gazprom also has an ownership stake in Lithuania’s natural gas distribution network. Part of Lithuania’s electrical infrastructure is still controlled from Moscow, too, and it is not yet possible to connect the country to the European grid.

That has led the European Commission to declare Lithuania one of the Union’s most vulnerable “energy islands.”

Unlike its neighbor Latvia, Lithuania has no natural gas storage capacity and only negligible hydropower resources. Lithuania also does not use oil shale, which provides much of the electricity for Estonia, the third Baltic member of the Union.

Lithuania used to rely on nuclear power to supply most of its electricity. However, as a condition of joining the Union in 2004, the country agreed to shut down its Chernobyl-style nuclear power station at Ignalina. The plant closed in 2009, and now Lithuania is more reliant than ever on natural gas — and Gazprom — for its energy.

Kiaules Nugara — which translates as Pig’s Back Island—is central to breaking Russia’s hold on Lithuania. The Independence is to be anchored alongside this spot of land less than a kilometer, or 0.62 mile, long that sits in the channel leading to the Port of Klaipeda, a busy cargo hub.

Klaipedos Nafta, a state-controlled oil terminal operator, is leasing the ship, formally known as a floating gas storage and regasification unit, from a Norwegian company, Hoegh, in a 10-year deal for €430 million, or $560 million. A South Korean shipyard has nearly finished building the ship. It is expected in February.

Lithuania’s decision to go ahead with the L.N.G. project irritated the European Commission, which favored an initiative that would include member states in the Baltic Sea region. But Lithuanian government was desperate to lower energy costs, revive strong economic growth and reduce an unemployment rate that last year stood at 13 percent.

Lithuania hopes to import L.N.G. at prices 5 percent to 10 percent less than what Gazprom charges for its gas. Perhaps more importantly, it will have a bargaining chip. “We will be able for the first time in our history to negotiate, because we have alternative sources,” said Rokas Masiulis, the general manager of Klaipedos Nafta.

Much remains to be done. Mr. Masiulis still must sign a contract with an L.N.G. supplier and raise another €43 million to ensure the project is up and running on time.

But Mr. Masiulis said his greatest challenge was overcoming the Lithuanian bureaucracy and fending off attempts to give the project “a shade of corruption.”

Eugenijus Gentvilas, the director general of the Port of Klaipeda until last year and now a member of the Lithuanian Parliament, said he suspected Gazprom of using its influence, albeit indirectly, to hinder the L.N.G. project. He cited several examples of delays and snarls that had hindered the development.

Article source: http://www.nytimes.com/2013/07/05/business/energy-environment/lithuania-aims-for-energy-independence.html?partner=rss&emc=rss

The Lede: Kremlin-Owned Network Hires Larry King

The Russian government’s satellite news network Russia Today, or RT, announced on Wednesday that it had hired Larry King to “host a mold-breaking political talk show” for its American channel.

A brief online trailer for the new show featuring Mr. King, 79, displayed a series of words associated with the host in the minds of his new employers — “critical thinker,” “hard-nosed,” “depth,” “intelligence,” and “suspenders” — that some of his critics might take issue with. (Readers who want to brush up on their Russian can view a copy of the trailer subtitled and dubbed into that language.)

Given that the Kremlin-owned network devotes considerable airtime to critics of the American government, and finds fault with President Vladimir Putin’s rule about as often as Fox News produces exposés on the Republican Party, the hiring of the 79-year-old American prompted a stream of mocking comments from Russian skeptics and the foreign press corps in Moscow.

While the Irish editor of the Russian network’s Web site, Ivor Cotty, mocked the mockers, and said that he was enthused about the new hire, a business news blogger based in Moscow suggested that Mr. King’s record as an interviewer of Mr. Putin did not inspire confidence.

Indeed, during an interview in New York in late 2000, Mr. King did not get very much from Mr. Putin when he asked about an embarrassing episode, the sinking of the nuclear submarine Kursk that year, which had cost 118 crew members their lives.

In fact, as Max Read recalled in a Gawker post on Mr. King’s postmodern defection, the host even said in an interview with RT in 2011 that he is something of a fan of Mr. Putin.

Asked in that interview how Mr. Putin had come to be one of the final guests on his CNN talk show in late 2010, Mr. King replied:

I got along with Mr. Putin very well. When I met him at the U.N. conference, some years ago, I didn’t know it was 10 years ago, I immediately had a good rapport with him. I liked him very much. And so we thought of who would be the best guests.

And, I don’t know if this is generally known, but he asked to come on. He said he watched the show almost all the time and he knew I was leaving and he’d like to come on. And then he invited me to come — I’m coming next May to Moscow to spend some time with him. I had a — hard to explain, I had an affinity with him. You try to get that with a lot of guests, but I really had it with him.

As I said to some friends of mine, Vladimir Putin, if he were American, would be a successful American politician. He has a quality, this has nothing to do with politics … They change a room. They have a certain magnetism. And he has “it,” whatever “it” is. He has “it.”

Later in the same interview with RT, Mr. King shared more of his first impressions of Mr. Putin, saying: “I liked him right away. The crew liked him … I loved his answer when I asked him what happened with the submarine and he just said, ‘it sunk,’ but that wonderful pause he took. I find him engaging, I liked him right away. You know there’s certain people that come into your life that you like. I liked him.”

As my colleague Ellen Barry observed in a report on Mr. Putin’s 2010 appearance on one of the last episodes of “Larry King Live” on CNN: “Mr. King, whose program is carried on CNN’s channels around the world, has long had a reputation for softball questions. So Mr. Putin’s decision to appear on the program allowed his voice to be heard both in the United States and abroad while avoiding being challenged on contentious topics like his own grip on power and the limits on human rights and free speech in Russia.”

The new talk show, which is a collaboration with the producers of Mr. King’s current program for the online network Ora.tv (a site financed by Carlos Slim Helú, the Mexican billionaire who also owns a minority stake of The New York Times) is not the host’s first work for RT. Last year he hosted a debate among third-party candidates for the American presidency that was broadcast on RT.

Although the Kremlin-owned network, which broadcasts in English, Spanish and Arabic, is promoted on the Russian foreign ministry’s Web site as a source of information alongside other official channels, a detailed news release about the new show from Ora.tv made no mention of the network’s government sponsorship at all.

Margarita Simonyan, the young editor in chief of RT, gushed about hiring Mr. King on her Twitter feed on Wednesday, and accepted congratulations from the network’s fans.

Although RT aims to present the news from a Russian perspective to viewers abroad, and so does not broadcast inside the country, the opposition activist and blogger Aleksei Navalny did retweet a series of jokes about Mr. King’s salary posted online by other bloggers. One of those jokes compared Mr. King’s wages to the money paid to a series of fading soccer stars who have recently signed lucrative contracts to play for a professional team in the troubled Russian republic of Dagestan.

Robert Mackey also remixes the news on Twitter @robertmackey.

Follow Andrew Roth on Twitter @ARothmsk.

Article source: http://thelede.blogs.nytimes.com/2013/05/29/kremlin-owned-network-hires-larry-king/?partner=rss&emc=rss

BP’s $4.2 Billion Profit Beats Forecasts

LONDON — BP reported first-quarter profit of $4.2 billion on Tuesday, after adjustment for inventory changes and one-off items, handily beating analysts’ forecasts.

Even though profit was 11 percent lower than the same quarter last year, Peter Hutton, an analyst at RBC Capital Markets in London, called the report “a very positive set of results.” Shares in BP rose more than 3 percent in London trading after the earnings announcement.

Mr. Hutton said BP had earned 30 percent more than analysts’ forecasts thanks to start-ups in Angola and Norway and better performance in Trinidad. Mr. Hutton also said costs had been lower than expected.

The chief executive, Robert W. Dudley, said in a statement that “these strong first-quarter results demonstrate the progress BP is making.”

The main disappointment in the quarter was an 18 percent year-on-year fall in production in the United States, probably reflecting the company’s continued struggles to bring back its core deepwater production in the Gulf of Mexico after the blowout disaster of 2010.

BP is a much smaller company than it was before the disaster, which killed 11 people and spilled millions of barrels of oil. Since the start of 2010, BP has sold about $65 billion in assets to pay spill costs and reshape the company. Production in the first quarter, 2.3 million barrels a day, was down about 5 percent compared with the first quarter of 2012 and roughly half the output of ExxonMobil. In 2009, BP’s production was 4 million barrels per day, comparable to Exxon Mobil’s.

The big difference comes from the sale of BP’s 50 percent stake in its Russian affiliate, TNK-BP, to Rosneft for $12.5 billion in cash and $14 billion in shares of Rosneft, which is majority owned by the Russian government. BP’s stake in Rosneft, which rose to 19.75 percent in the transaction, will bring its overall output back over three million barrels per day, the company says.

BP has begun a share buyback worth $8 billion, acquiring shares worth $834 million since Friday, the company said. Mr. Dudley, trying to create a more focused and profitable company, has also trimmed BP’s holdings extensively, even in the Gulf of Mexico.

BP said its production outside Russia would be lower in the second quarter because of maintenance work in the Gulf of Mexico and the North Sea.

BP is drilling extensively in the Gulf of Mexico to bring key properties there to optimal levels. Production has plunged at some of these because of the industrywide moratorium after the oil spill. BP announced this month that it would not go ahead with a second phase of a major Gulf of Mexico field, Mad Dog, because of industry cost inflation.

BP was unable to do the drilling that was needed to maintain production at existing fields like Thunderhorse or to develop new fields like Tiber, which the company found a few months before the blowout. More than any other company, BP is dependent on the Gulf of Mexico for high-margin oil.

BP still faces huge uncertainties over how high the damages from the spill could go. On April 17, a federal judge in New Orleans ended the first phase of a trial to determine, among other matters, whether BP or other parties were grossly negligent in the series of events that led up to the spill. The second phase, focusing on the amount of oil spilled, is to begin in September. What the judge eventually rules could make a difference of tens of billions of dollars in penalties.

In the meantime, the flow of lawsuits continues. BP says it has been among the companies named as defendants in more than 2,200 suits filed in federal and state courts since March 6.

Article source: http://www.nytimes.com/2013/05/01/business/global/bps-4-2-billion-profit-beats-forecasts.html?partner=rss&emc=rss

DealBook: Sberbank of Russia Starts $5.1 Billion Share Sale

The Moscow headquarters of the Russia's largest bank, Sberbank.Sergei Chirikov/European Pressphoto AgencyThe Moscow headquarters of the Russia’s largest bank, Sberbank.

LONDON — The Russian government announced on Monday that it would sell a 7.6 percent stake in the country’s largest lender, Sberbank, in a rights offering that could raise around $5.1 billion.

The move would be one of Russia’s largest share sales in recent years as the government aims to reduce its stakes in a number of the country’s largest companies.

Investors have long awaited the announcement of Sberbank’s rights offering, which had been hampered by volatility in global financial markets and the recent depressed performance of Russian stocks.

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Under the terms of the deal, the Russian central bank said it would sell up to 1.71 billion shares in Sberbank, and had set the price range of between 91 rubles, or $2.99, and the firm’s market price when the offering closes, according to a joint statement from Russian authorities and the bank.

At the lower end of the range, Sberbank would raise around $5.1 billion. In early afternoon trading in Moscow, the bank’s share price had fallen 1.1 percent, to 95.99 rubles.

The rights offering, which is expected to close this week, will reduce the Russian government’s holding in Sberbank to just over 50 percent. Authorities also raised around $3.3 billion by selling a 10 percent stake in another Russian bank, VTB Group, last year.

The share sale will take place in Moscow and London, with 10 percent of the rights to be offered to domestic investors and the remaining 90 percent holding offered to international clients, Sberbank said.

As part of the deal, the Russian lender said it might buy back stock worth up to 20 billion rubles at the same price as other investors.

‘‘The offerings represent an opportunity for us to further diversify Sberbank’s investor base and secure an international stock exchange listing,’’ Sberbank’s chief executive, Herman Gref, said in a statement.

Earlier this year, the Russian bank agreed to buy the Turkish lender DenizBank for around $3.5 billion as part of an expansion outside its home market.

Sberbank also has bought Volksbank International, a subsidiary of the Austrian lender Oesterreichische Volksbanken, for 505 million euros, $661 million.

Credit Suisse, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Troika Dialog, a Sberbank subsidiary, are coordinating the rights offering.

Article source: http://dealbook.nytimes.com/2012/09/17/sberbank-of-russia-launches-5-1-billion-share-sale/?partner=rss&emc=rss