UKRAINE WRAP | Ukraine says Gazprom-booked transit capacity rises to 42.06 mcm for July 28

July 27 2022 - 21:30

Ukraine says Gazprom-booked transit capacity rises to 42.06 mcm for July 28

 Ukraine's gas transit system operator said in its latest update on Wednesday that transit capacity booked by Russian state gas company Gazprom rose to 42.06 million cubic metres for July 28.

Earlier, Gazprom had booked capacity of 10.00 mcm via the Sudzha entry point for July 28, which was a sharp cut from the 42.20 mcm booked on July 27.

-Reuters

July 27 2022 - 18:42

Schlumberger says has $400m worth unpaid bills against Russian assets

Top oilfield service provider Schlumberger said on Wednesday its net assets in Russia were worth about $1 billion and had $400 million in unpaid bills as of June 30.

In March, Schlumberger decided to immediately suspend new investment and technology deployment to its Russia operation, after the country's invasion of Ukraine.

-Reuters

July 27 2022 - 17:29

Farmers harvest wheat in southern Ukraine as smoke rises nearby

In the wheat fields of Russian-occupied southern Ukraine, dark grey smoke drifts into the sky from a fire burning nearby as farmers gather the harvest at the height of the season.

Reuters filmed the scene in the village of Muzykivka in Kherson region, which is partly controlled by Russian forces.

Reuters was unable to establish the source of the fire, but a Russian-installed local official said farmers work under constant threat of shelling and resulting blazes as Russian and Ukrainian forces exchange fire daily.

"Every day we can hear missiles both coming in and going out," said Yuri Turulev, head of the Russian-installed administration of the nearby small town of Chornobaivka, close to Kherson airport.

A neighbouring farm, Zorya Motornogo, saw a third of its crop burnt due to shelling, Turulev said. Farmers go to the fields "at their own risk as there is a possibility of shelling ... There are areas closer to the Mykolaiv region where it is impossible to harvest", he added. Farmers are trying to harvest what remains of their fields, but there is a lack of staff as "the entire working-age population has left", he said, and many combiner harvesters were damaged.

The Ukrainian agriculture ministry declined to comment for this story.

Ukraine has accused Russia of stealing grain from territories that Russia has seized since President Vladimir Putin sent his army into the country. Moscow denies this.

Ukraine, a major grain exporter, has been unable to ship its cereals via the Black Sea because of a Russian blockade of its ports. The two countries signed agreements in Istanbul last week aimed at resuming shipments to help stave off a global food crisis. But Turulev said the grain being harvested in his region would be kept for "domestic use".

Reuters

July 27 2022 - 15:55

Russian can't be relied on to allow Ukrainian grain exports: Polish PM

Russia cannot be trusted to honour an agreement to allow the export of Ukrainian grain from Odesa, the Polish prime minister said on Wednesday, after Moscow launcehed a missile strike on the Black Sea port. "The day after the signing [of the agreement], the Russian armed forces ... attacked Odesa," Mateusz Morawiecki told a news conference. "It follows that such agreements cannot be considered fully credible, because unfortunately that is what Russia is like." – Reuters

July 27 2022 - 15:48

Italy minister signals late winter crunch if Russia halts gas

Italy would face a potential gas supply crunch at the end of the coming winter if Russia were to totally halt supplies, ecological transition minister Roberto Cingolani said on Wednesday. Cingolani said the current pattern of supplies would allow the country to be able to fill its gas storage network to 90% of capacity by October. Assuming Russian gas supplies stopped completely at the beginning of winter, storage would be sufficient until February, he told a news conference. – Reuters

July 27 2022 - 15:45

Turkey: Sweden has yet to extradite suspects it seeks after Nato accord

Sweden and Finland have yet to extradite suspects Turkey seeks over terrorism-related charges despite signing an accord to lift Ankara's veto to its Nato membership last month, Turkish Foreign Minister Mevlut Cavusoglu said on Wednesday.

The two Nordic countries applied for Nato membership in response to Russia's invasion of Ukraine, but were faced with opposition from Turkey which accused them of imposing arms embargoes on Ankara and supporting groups it deems terrorists.

While Turkey has not set a firm deadline, it has said it expects the suspects to be extradited as soon as possible and that it was monitoring the situation closely.

"Sweden maintains an ongoing dialogue with Turkey and Finland on the trilateral agreement which Sweden is following and will carry out in full in accordance with Swedish and international law," a spokesperson at Sweden's foreign ministry said in an emailed comment.

The three countries signed an accord to lift Ankara's veto in exchange for counter-terrorism promises, but Turkey has said it will block the membership bids if the pledges are not kept. It has sought the extradition of 73 people from Sweden and a dozen others from Finland.

Turkey's foreign ministry summoned the Swedish charges d'affaires in Ankara to convey its "strong reaction" to what it called "terrorist propaganda" during a Kurdish group's protest in Stockholm, diplomatic sources said at the weekend.

Officials from Turkey, Finland and Sweden will meet in August to evaluate the progress in meeting Ankara's demands. While Turkey holds off with its ratification for the two countries' membership bids, 18 of Nato's 30 members have already approved Sweden's application to join the alliance.

Reuters

July 27 2022 - 13:15

Fate of Ukraine's second biggest power plant in balance after Russian advance

The fate of Ukraine's second biggest power plant hung in the balance after Russian-backed forces claimed to have captured it intact, but Kyiv did not confirm its seizure, saying only that fighting was underway nearby.

If confirmed, the seizure of the Soviet-era coal-fired Vuhlehirsk power plant in eastern Ukraine would be Moscow's first strategic gain in more than three weeks in what it calls its "special military operation".

Russian and Russian-backed forces have been struggling to make meaningful progress on the ground since their capture in early July of the eastern Ukrainian city of Lysychansk. They have been repeatedly pushed back by fierce Ukrainian resistance to what Kyiv and the West regard as an imperialist Russian land grab in a pro-Western neighbour that Moscow dominated until the Soviet Union's 1991 break-up.

Unverified footage posted on social media appeared to show fighters from Russia's Wagner private military company posing in front of the Vuhlehirsk power plant, which some Russian state media — citing Russian-backed officials — reported separately had been stormed. One of the Wagner fighters in front of the plant showed his watch to the camera — the time on it was 1001 local and gave the date as July 26.

Reuters could not immediately verify the veracity of the video or whether the plant had switched to Russian control or not.

The same unverified footage showed that working parts of the Soviet-era power plant, which is perched on the shore of a huge reservoir, appeared to be undamaged.

Ukraine did not confirm the power plant's capture and only said that "hostilities" were underway in two nearby areas. It said on Monday that "enemy units" had made some gains around the facility.

British military intelligence said on Wednesday that Wagner fighters had probably succeeded in making tactical advances in the Donbas region of eastern Ukraine around the power plant and the nearby village of Novoluhanske.

It said some Ukrainian forces had probably withdrawn from the area.

Pavlo Kyrylenko, governor of Ukraine's Donetsk province that forms part of the Donbas, said at least one person had been killed by a Russian strike on a hotel in the town of Bakhmut, which is north of the power plant and a target which Russian forces have said they want to capture.

"According to preliminary information, there are dead and wounded; a rescue operation is underway," Kyrylenko wrote on Facebook. The local emergency service said a toll of one dead and four wounded had been confirmed so far.

Russian forces meanwhile suffered a setback in southern Ukraine's Kherson region after Ukrainian forces struck an important bridge straddling the Dnipro river with what a Russian-appointed local administrator said were US-supplied high mobility artillery rocket systems (HIMARS).

The Antonivskyi bridge is the city of Kherson's sole span across the river and Kirill Stremousov, deputy head of the Russian-appointed city administration, told Russia's RIA news agency it had been closed to traffic after the strike. He said Russia was ready to compensate for it being taken out of action with pontoon bridges and ferries.

Ukraine has spoken of launching a major counter-offensive in the south of the country to try to retake cities such as Kherson. Rendering the bridge unusable for Russian forces is seen by Western military analysts as something that would make it much harder for Moscow's forces to operate smooth supply lines and defend land they have seized since Feb. 24.

Stremousov, the Russian-appointed official, denied the fate of the bridge would determine the course of the war in any way.

Footage posted on social media showed at least six large holes in its surface.

Ukrainian presidential adviser Mykhailo Podolyak quipped on Twitter that the Antonivskyi bridge was good at intercepting Ukrainian missiles. "You cannot escape the reality," he wrote.  "The Russian occupiers should learn how to swim across the Dnipro River. Or should leave Kherson while it is still possible. There may not be a third warning." 

Reuters 

July 27 2022 - 12:14

First hurdle for Ukraine grain deal is clearing stuck ships

Now that Ukraine’s grain-export deal has been signed, all eyes are on clearing a major obstacle: freeing the scores of ships stuck there since February. As many as 100 vessels carrying grain and agricultural products were trapped in Ukrainian ports when Russia’s invasion began, and seeing them sail would mark a first step in revitalizing seaborne trade.

But even with a deal, traders say freight for new sales is difficult to nail down, with risks to insurers and shippers still lingering. Liberating the stuck ships would start to establish a standard on how the new corridors operate, said Ilya Medvenko, finance director at Barens Group, a private investment firm involved in Ukrainian agriculture trade.

The United Nations expects the first to move within a few days, and an adviser to global insurers proposed a mechanism that might help cover the trade. For some ship owners, “one of the ways is to operate without a particular insurance, but even those are waiting to see when the precedent will be set and vessels start leaving the port area,” Medvenko said in an interview.

“Only then, they’ll establish the freight price and go from there.” Ukraine, Russia Reach Deal to Unblock Grain Stranded by WarWheat and corn futures in Chicago extended gains Tuesday as traders wait to see how far the deal goes toward restoring Ukrainian grain shipments. Attacks by Russian forces on the port of Odesa over the weekend also cast doubt on how quickly sales can resume.

In response to the pact, the Joint War Committee, which advises global insurers on riskier areas for shipping, invited underwriters to participate in what it called a “special market facility” to support grain shipments.

The JWC works with both Lloyd’s of London and other London-based insurers. A joint coordination center set up in Istanbul as part of the deal should publish details on the procedures for shipping soon, the UN said Monday.

Ukraine’s government has published a call for ships willing to take part in grain-export caravans from the three ports involved in the deal: Odesa, Chornomorsk and Pivdennyi. Until there’s more clarity, shippers remain in limbo. For example, a vessel at Chornomorsk port with wheat loaded for Egypt is still waiting to be cleared to sail and for further details about the process for departing, according to traders who asked not to be identified.

Insurance companies are prepared to cover Ukrainian grain vessels only if escorts are provided and a strategy for combating sea mines is in place, analysis firm UkrAgroConsult said in a note.

The monthly export capacity of the ports in the deal is 3.5 million tons, it said.  “We need to see fresh vessels going in to get a confirmation if the market is ready to trade anything from Ukrainian ports,” Andrey Sizov, head of consultant SovEcon, said in a note.

Bloomberg

July 27 2022 - 11:30

Macron is trying to push back against Russian influence in Africa

French President Emmanuel Macron is ready to step up support to African countries facing food and security concerns in a bid to stem Russia’s growing sway in the region.

Macron is visiting Cameroon, Benin and Guinea Bissau this week while Russian Foreign Minister Sergei Lavrov tours other countries in the continent as Russia seeks to strengthen its relations in African following its invasion of Ukraine.

Macron said in Cameroon’s capital Yaounde on Tuesday that Russia’s blockade of Ukrainian ports and attacks on grain warehouses have disrupted the global food supply and triggered shortages in Africa. He promoted his so-called FARM initiative with which France and allies pledge to help developing countries boost their own agricultural capacity.

“We will not relinquish the security of the African continent,” Macron said. His remarks were a response to Russia’s narrative, which Lavrov reiterated a few days earlier on a stop in Egypt.

Lavrov said food shortages and inflation are a consequence of “illegal Western sanctions.” African countries have largely refrained from criticizing Russia’s invasion of Ukraine.

Macron also pledged to revamp France’s military commitment to African security even as French soldiers leave Mali, pushed out by the junta in power there in favor of forces from Russia’s Wagner mercenary group. French troops entered Mali in 2013 to stop al Qaeda-linked militants from advancing toward the capital, Bamako.

They ended up staying as violence spilled across borders in the Sahel region.

Macron, who will be in Benin on Wednesday, said France’s renewed engagement will extend beyond the Sahel, to the Gulf of Guinea and “countries which now have to face terrorist groups which are expanding and shaking up the whole region.” 

Still, France’s military presence in Mali and other African countries has faced local protests and accusations, partly fueled by Russian allegations that it is perpetuating another form of colonial rule.

While Russia’s government denies having ties with the Wagner group, it stresses that security failures by Western countries in Africa prompt governments to seek alternative partners.

Moscow’s penetration in the region was on show during Lavrov’s visit. President Abdel-Fattah El-Sisi gave him a warm welcome in Cairo, singling out Russian-owned Rosatom’s construction of Egypt’s first nuclear plant as a prime example of bilateral cooperation.

Lavrov also met with Ugandan President Yoweri Museveni, who praised Russia as a partner in the struggle against colonialism going back a century. Museveni publicly requested Russian assistance to develop East Africa’s first nuclear power plant.

Bloomberg 

July 27 2022 - 10:56

Ukraine’s Naftogaz to offer new deal for bondholders ‘urgently’

Ukrainian state-run energy company NJSC Naftogaz Ukrainy will “urgently” present a new plan to delay debt payments after missing a final deadline on a foreign bond.

“Naftogaz is working with all interested parties to get bondholders’ approval,” the company said Wednesday in an emailed statement. “The process should include joint actions by the cabinet and other state companies to offer similar terms for delaying payments on Eurobonds.”

A grace period for Naftogaz to redeem $335m of international bonds expired on Tuesday as the government blocked the payment. Bondholders rejected a restructuring proposal put forward earlier this month.

Naftogaz missed the deadline as the government itself is seeking a two-year pause on its own foreign bond payments. While creditors are inclined to grant the sovereign relief, holders of Naftogaz’s bonds say its balance sheet is sufficiently robust to let it pay and argue that the request for a delay has come too late to hold proper talks. 

Naftogaz said earlier that it had always planned to continue servicing its foreign debts, despite Russia’s ongoing invasion. According to its Chief Executive Officer Yuriy Vitrenko, those efforts were derailed earlier this month after the government suddenly demanded that the company increase its stock of natural gas for the winter season to 19 billion cubic meters, and pushed it to negotiate a two-year bond payment delay.

Bloomberg 

July 27 2022 - 10:38

Ukraine buries young soldier who planned to marry

Ukrainian soldier Mykola Zabavchuk planned to marry his girlfriend when he next returned home from the war against Russia, but never made it back.

Zabavchuk, who was 25, and two other soldiers were buried in the western Ukrainian city of Lviv on Tuesday after being killed in action.

"He was a very good boyfriend, a sincere one. He loved and took care of me very much. He was very devoted to me and to his friends," his fiancee Oleksandra told Reuters at the funeral.

"Before his departure, he proposed. We planned a wedding after the rotation. It was not destined (to come true)."

July 27 2022 - 09:24

Russian firm Wagner made tactical advances in Donbas - UK intelligence

Russian private military firm Wagner has likely made tactical advances in the Donbas region of eastern Ukraine, British military intelligence said on Wednesday.

The advances were made around the Vuhlehirska Power Plant and the nearby village of Novoluhanske, the Ministry of Defence said on Twitter, adding that some Ukrainian forces have likely withdrawn from the area.

Reuters 

July 27 2022 - 09:00

Gas shortage in Germany still avoidable, says regulator

Germany's gas regulator said on Wednesday a gas shortage was still avoidable, even as Russian supplies through the Nord Stream 1 pipeline into Germany are set to halve, but warned industry and consumers would have to work harder to save gas.

State-controlled Russian giant Gazprom has said flows will fall to 33 million cubic metres per day, a fifth of the normal capacity, from Wednesday because it needed to halt the operation of a gas turbine at a compressor station on instructions from an industry watchdog.

Requests for Russian natural gas flows through Nord Stream 1 into Germany nearly halved from 8 a.m (0600 GMT) on Wednesday, data from the pipeline operator showed.

Nominations were at 14,423,764 kilowatt hours an hour (kWh/h) for 0800-0900 CET (0600-0700 GMT) onwards, down from levels above 27,000,000 kWh/h previously.

Klaus Mueller, head of Germany's Bundesnetzagentur regulator, said the country, which is heavily reliant on Russian supply, could still avoid a gas shortage that would require it to trigger the next phase of an emergency plan that would prompt rationing.

But he said it would require efforts by both industry and consumers to reduce gas usage.

"The crucial thing is to save gas," Mueller said. "I would like to hear less complaints but reports (from industries saying) we as a sector are contributing to this," he told broadcaster Deutschlandfunk.

The European Union has repeatedly accused Russia of resorting to energy blackmail but the Kremlin says shortfalls in supply have been caused by maintenance issues and the impact of Western sanctions.

Reuters 

July 27 2022 - 08:00

Bridge closed in Russia-held Kherson after HIMARS shelling - reports

Authorities in the Russian-controlled Ukrainian city of Kherson have closed the city's only bridge across the Dnieper river after it came under fire from US-supplied high mobility artillery rocket systems (HIMARS), according to Interfax and TASS reports on Wednesday.

The Antonovsky bridge has been closed for civilians but its structural integrity has not suffered from the shelling, Kirill Stremousov, deputy head of the Russian-appointed city administration, told Interfax.

Separately, TASS quoted the official saying that HIMARS had targeted the bridge.A Ukrainian counteroffensive to recapture the southern region from Russia could potentially benefit from the destruction of the bridge. 

Reuters 

July 27 2022 - 07:00

'It's an opportunity for Nasa': Russia announces ISS withdrawal

Russia's new space chief announced his country plans to withdraw from the International Space Station after 2024. Former astronaut Garrett Reisman says it's an opportunity for Nasa.

July 27 2022 - 06:00

Yellen discusses price cap on Russian oil with UK's Zahawi - US Treasury

US Treasury Secretary Janet Yellen highlighted a proposed price cap on Russian oil on a phone call with British Finance Minister Nadhim Zahawi on Tuesday, a move to reduce the impact of the war in Ukraine on global energy prices.

Both discussed the need to continue to accelerate budgetary support for Ukraine, and opportunities to build on sanctions imposed on Russia, the US Treasury Department said in a statement.

Reuters