Kudrin Vowed to Pump Crude via Exchange
At the G20 finance ministers and central bank governors meeting held this weekend in China, Russia’s Finance Minister vowed to increase crude export and fix prices on New York and Budapest exchanges.
According to Kudrin, the market methods are not adequately applied to set Urals prices today, as they are generally determined by interrogating experts. “New York and Budapest stock exchanges will determine market quotes for Urals,” the minister said. “The respective agreement has been reached; elaboration of final procedures for implementing this decision is underway.” Apparently, this statement of the minister stems not only from the attempt to make crude deals transparent for G20 or G7. In summer, President Vladimir Putin drew attention to the price gap between Russia’s Urals and North American Brent and committed the Cabinet to raise Urals prices. Therefore, Russia’s top officials might have reasoned that selling crude via New York and Budapest would work out the problem. For instance, a month earlier, exactly this task was top priority of Fradkov’s visit to Budapest, when the prime minister confirmed plans to improve quality of Russia’s crude shipped to Europe.
To add to improving the quality and raising the prices, Kudrin pledged in China to widen export deliveries. “On average, Russia will increase daily shipment of crude by 220,000 barrels to the world market in 2005,” Kudrin said, adding the respective projects to attain this purpose are currently implemented. Sakhalin-1 alone, where the foreign interest stands at 80 percent, will account for 240,000-barrel increase in daily crude output by late 2006 vs. today's growth of 45,000 barrels, Kudrin specified. Investment in crude widened by around 34 percent in the first seven months of this year. The government’s investing in geological survey will more than double in 2006, Kudrin promised.
by
www.kommersant.com
All the Article in Russian as of Oct. 17, 2005
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