Russia: Government Launches Investigation of Leading Oil and Gas Companies

Oil inspectors working for the Russian government have begun to investigate “major Russian oil firms” on suspicion of market rigging and price fixing. The inquiry was announced as officials in Moscow begin to suspect that key Russian energy firms have leveraged their status as significant economic players to drive up the price of oil across the nation. Bashneft, Lukoil and Rosneft are all under investigation, with energy giant Gazprom exempt from the proceedings.

The Russian oil industry has been singled out by US and EU sanctions imposed following Russia’s intervention in the Ukrainian Crimea and in eastern Ukraine. The impact of sanctions, while expected to be significant, will likely not be felt in the short-term. Nonetheless, they are expected to exacerbate existing economic issues caused by overdependence on oil and gas. This dependence has had the effect of negatively impacting the Russian economy, which is expected to recess in Q1 of 2015. In light of the hardships surrounding the Russian energy sector, Russia’s Federal Anti-Monopoly Service (FAS) has been vigilant in attempting to identify firms that seek to forego the impact of falling hydrocarbons prices, substantiating these suspicions in a statement made earlier this week.

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News Briefs:

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  • The European Commission held a conference yesterday in Brussels in order to discuss and encourage greater use of renewable energy in Central Asia. The conference convened representatives from Kazakhstan, Tajikistan and Uzbekistan, all of whom spoke of efforts to encourage the use of wind, solar and hydroelectric power in lieu of fossil fuels in their respective countries.
  • Radio Free Asia reports on the impact factory pollutants have had on China’s once-fertile Xinjiang province. The factories were hastily constructed by the influx of ethnic Han Chinese immigrants who were encouraged to relocate to the traditionally Turkic region, and have operated despite myriad please from the Uyghurs, the traditional inhabitants of the region, to close them down. The impact has been that the region’s cities are now heavily polluted, “choked in smog,” and once fertile grounds used to grow wheat, grain and cotton have been irreparably harmed.
  • Azeri and Russian scientists are jointly investigating environmental concerns surrounding the Caspian Sea. Pollution, as well as issues provoked by the laying of submarine gas and oil pipelines, will also be investigated by the team of researchers. Analysis of the Caspian is expected to demonstrate the effects of climate change on the regions surrounding the Caspian, as well as peripheral effects such as migration and demographic problems that the environmental impact of the Caspian has contributed to.
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