Inter RAO dropping Novatek for Rosneft

As reported in Russian business daily Kommersant on 1 November 2012,  Inter RAO has decided to stop using Novatek as its gas supplier for its power requirements. At present the state-controlled diversified energy company (incorporating power and heat generation, electricity supply, international energy trading businesses), which is also the monopoly importer and exporter of electricity in Russia, accounts for 25 per cent of demand for gas in the power sector and also accounts for 30 per cent of Novatek’s gas sales.

Effective 2016 it will replace Novatek with another state-controlled company – Rosneft, signing an unprecedented 25-year contract with the oil and gas company, which could be worth more than RUB 2.5 trillion!

So Rosneft is not only taking control of the oil market through its acquisition of TNK-BP – it is also assuming centre stage on the gas market in Russia (outside of Gazprom), and squeezing out independent gas producer Novatek (albeit partly owned by Gazprom).

So contrary to the government’s declarations, the state sector keeps getting bigger.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: