Six months later, however, the challenge from shale gas to Gazprom’s European energy dominance looks to be waning.
In a further blow to Poland’s hopes of breaking free from dependence on Russian imports, ExxonMobil this week pulled out of Polish shale gas exploration after disappointing flow rates from test wells.
The fact that Exxon - which never was an important actor in Poland - is pulling out, has no major significance for Poland. Many other companies are still continuing with their exploration efforts, and the latest reports by e.g. San Leon Energy look promising.
But even if Polish shale gas would be of smaller importance than previously thought, the larger picture of shale gas must be causing panic in the Gazprom boardrooms - and in the Kremlin:
The natural-gas boom reshaping America is rocking Russia, where state producer OAO Gazprom (GAZP) is slow to react and at risk of becoming the world’s biggest loser from the new technology to drill shale rock.
The U.S. no longer needs Russia’s gas, leaving President Vladimir Putin fighting to salvage Gazprom’s $20 billion Shtokman project in the Arctic. China, the biggest energy consumer, is exploring its own shale reserves and hesitating to accept a pipeline from Russia. Gazprom’s shipments fell about 14 percent so far in 2012, and the stock has lost 9.6 percent.
Should Gazprom founder, Russia could follow. With most of its contract prices pegged to oil, which has fallen about 15 percent this year, its profit outlook weakened.
Read the entire article here
The likely scenario is not that Russia could founder but that it - and with it Putin - will founder. That is what is making Putin so nervous, because his dictatorial grip on power is totally dependent on easy money from European customers paying far too much for Russian gas.
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