Oil capital

Vladimir Putin wants to trade Russian energy resources in Moscow

The Kremlin has prepared another energy surprise for its G8 partners. In his message to the Federal Assembly, Vladimir Putin announced his intention to organize exchange trading in hydrocarbons in Russia. “The ruble should become a more universal means of international payments and should gradually expand its zone of influence. For the same purposes, it is necessary to organize on the territory of Russia exchange trading in oil, gas, and other goods, trading in rubles. Our goods are traded on world markets. Why not here?” - the president argued.

The topic of creating an oil and gas exchange in Russia has been discussed for years. But the president was no longer talking about the local task of developing market mechanisms in pricing oil and petroleum products on the domestic market, but about the task of raising the status of Moscow to one of the global centers for shaping the world oil market. And the free convertibility of the ruble, which Mr. Putin mentioned, is only one aspect of this mega-project. The main goal, apparently, is to change the current pricing system on the world market for Russian Urals oil, within the framework of which oil exporters from Russia lose 5-6 billion dollars a year. Under the current system of customs taxation of oil sales abroad, all this money would have to replenish the country's stabilization fund.

In fact, the head of state only gave a public political go-ahead for the implementation of this idea. And, as has happened more than once, including in the issue of Urals pricing, the implementation of the will voiced at the highest level depends entirely on the perseverance of the relevant departments, as well as the readiness of the oil industry to change the model of export activity. As one official familiar with the situation put it, “This idea has been in the air for a long time, but for many years it has not come out of its gaseous state.” However, this time it looks as if the hydrocarbon exchange project is very close to the practical stage. A few days before the president’s speech, in the interval between the May holidays (the traditional time of non-working atmosphere in ministries), the Ministry of Economic Development hastily created an interdepartmental working group under the leadership of Deputy Minister Kirill Androsov to create an oil exchange.

And at the end of April, co-owner of Alfa Group Alexey Kuzmichev, together with the New York Mercantile Exchange (NYMEX), presented a project to create such a platform in Moscow. In his comments accompanying this event, Mr. Kuzmichev clearly hinted at the presence of support from the state, which is interested in receiving additional income from the sale of oil. He also expressed confidence that by the end of the year all the necessary regulatory, bureaucratic and organizational work will be done, and the project will begin to operate at the beginning of 2007.

The fact that Gref’s department chose to “anticipate” the president’s order indicates that a corresponding task was set in advance for officials. And the deputy head of the Federal Service for Financial Markets, Vladislav Streltsov, told Vremya Novostey that the Federal Financial Markets Service “is working on legislative protection of transactions in the derivatives market by introducing appropriate amendments to the Civil Code and other instructive documents.” “Currently, a developed derivatives market has developed in Russia,” the official believes. - And it may well give impetus to the development of the commodity market, which has excellent prospects. The future of this market depends entirely on the desire and active support for the development of this new segment for Russia on the part of the manufacturers themselves, the state, as well as market participants.”

Today, the price of Russian Urals oil is determined not during exchange trading, but by the discounting method in relation to the American Brent brand. At the same time, the discount itself is determined not by the ratio of supply and demand, but by the results of a survey of leading oil agencies. And the higher the price of oil, the greater the “discount” that buyers of Russian oil receive under long-term contracts. For example, yesterday on the London Stock Exchange a barrel of Urals was $5.5 cheaper than a similar volume of Brent. As a result, this discount ends up in the profits of refineries receiving oil from Russia, since refined products are sold at normal market prices.

As a source familiar with the progress of negotiations between Mr. Kuzmichev’s structures and NYMEX told Vremya Novostey, the parties have already agreed to introduce the Urals listing on this exchange. The second step was to create a platform in Moscow that would allow trading of export oil in the Russian capital. After the speech of the country's president, the concept will apparently change slightly. Priority will be given to the creation of a Russian stock exchange and the listing of Urals in rubles.

The mechanism itself for “transferring” part of the export volumes to the exchange platform in Moscow has not yet been fully developed. If we discuss hypothetical scenarios, they can be divided into soft and hard. In the first case, we will be talking about new volumes of oil that are only planned to be exported along new export corridors. A more stringent one (and more likely, given the Kremlin’s aggressive energy policy) involves negotiations with existing buyers on the sale of part of the volume through an exchange, and not under a direct contract. The easiest way to apply this scheme is when discussing additional client needs, extending or increasing contractual obligations of Russian companies. One way or another, attempts to implement this strategy will encounter fierce resistance from oil buyers and political structures in these countries.

Large private oil companies interviewed by Vremya Novostei showed a reserved willingness to discuss the project. A TNK-BP representative said that his company supports the initiative to create an oil exchange. “But at the same time, it is necessary to respect the principle of independence of the site from individual sellers and buyers, as well as to ensure free and equal access to the market infrastructure,” he said. “We can only welcome the development of market mechanisms in oil trading,” LUKOIL said. “But until a specific scheme for the operation of the exchange has been proposed, it is difficult to discuss its prospects for the company.” Rosneft emphasized that they support the initiative of the head of state and are ready to assist the new project. Previously, it was the large players who had established sales systems and almost completely divided among themselves the spheres of interest in the domestic oil and petroleum products market that were the main “gravediggers” of the idea of ​​an oil exchange.

As for the organization of exchange trading in gas in Russia, in this case the president hardly had export volumes in mind (the system of long-term contracts for gas supplies to Europe is now under too much pressure to subject it to additional overloads). At the same time, lobbyists hastened to take advantage of Vladimir Putin’s words for an experiment to sell up to 5 billion cubic meters of Gazprom gas at free prices using exchange technologies.

Gazprom, in particular, issued a special statement where it accused the departments of unjustifiably delaying the project (the corresponding government resolution is undergoing another round of approvals in ministries and departments) and called on the state to abandon the “dictation on the gas market.” Meanwhile, the basis of the controversy surrounding the experiment remains Gazprom’s desire to carry it out under its full control, which is unacceptable for other participants in the “project” - independent producers and potential gas buyers.

Natalya ROMANOVA, Alexey GRIVACHS