A Russian Bear is Bullish for Big Oil

Climbing energy prices are a natural reaction to limited oil supplies, and are in fact necessary to “choke off demand,” the Financial Times of London reports.

Gazprom, the Russian energy giant, predicts that current market trends will drive the price of oil over $250 per barrel by 2009.

Even as costs increase, Gazprom is opening up new speculative fronts, particularly in the natural gas market.

The company is gearing up to develop the huge Shtokman natural gas field in northern Russia, in cooperation with France’s Total corporation and StatoilHydro of Norway.

Production is expected to start in 2014, and Gazprom might try to take over a U.S.-based energy company to give it an entry into the North American market.

Operations in Alaska and Texas are all under consideration, as well as in Quebec.

The Times reports that a Gazprom buy out of a U.S. company would be less controversial than the attempted takeover of Unocal by a Chinese energy corporation in 2005, because the target seems to be smaller than “a large upstream oil producer.”

Sources:

“Gazprom predicts oil will reach $250”
Financial Times (U.K.), June 9, 2008

“Gazprom seeks acquisitions for toehold in U.S.”
Financial Times (U.K.), June 9, 2008

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