FROM EVERY CRACK

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6

FROM EVERY CRACK

Izvestia, March 21, 2003, p. 6 EV

The problem of the shortage of oil export facilities is gradually starting to be solved. It became known on Wednesday that Prime Minister Mikhail Kasianov signed a decree that allowed to increase the carrying capacity of the Baltic Pipeline System (BPS) from the present 12 to 42 million tons of oil. But this is obviously not enough to pump through all oil supposed for export. The BPS can presently transport to 12 million tons of oil. During the construction Transneft had first planned to add 18 million tons to that, but then it discovered that extraction plans of oil companies outrun the rates of new export facilities construction. So the prime minister allowed Transneft to add 30 million tons to the BPS, “providing for further development of its capacity to 50 million tons.” Now oil companies may only hope for the government’s positive decision on the construction of the oil pipeline from Angarsk to the east (a capacity of 30-50 million tons) and the Murmansk pipeline system. The prime minister promised to decide on the first by May 01, and on the second in April.

THE ECONOMY WILL BE THROWN FIVE YEARS BACK

Trud, March 21, 2003, EV

Andrei Illarionov, economic adviser to the Russian president:

Consequences of the war in Iraq in a medium-term outlook can turn to be quite negative for the Russian economy. In a short-term outlook – three to six months from the start of the war – its consequences are most likely to be insignificant, but the situation can change later. In a medium-term outlook – to five years – the consequences can be quire unpleasant. In the course of military operations oil field in Iraq can be destroyed or damaged, as well as in neighbor countries, possibly. This will frustrate oil supplies from that region to the world market. Besides, military action can destabilize the political situation, or lead to change of the ruling regimes in a series of countries in the region, that are the biggest oil suppliers to the world market. Such events, if they take place in countries of the region, can lead to a sharp decline in oil extraction for a term to 20 years.

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