Research & Insights #44

US$ 1 trillion spending on gas production worldwide this decade

According to the NGO Global Witness, the fossil fuel industry is expected to spend over a trillion US dollars worldwide over the next decade to secure natural gas supplies. US$ 223 billion is expected to be spent on developing and operating new gas extraction sites to supply Europe. The continent needs to replace Russian pipeline gas, which was its main source of supply until 2022. Oil giants Shell, TotalEnergies, ExxonMobil, Equinor and Eni are forecasted to be among the top spenders, and are likely to invest a total of US$ 144 billion in the continent’s gas supply over this period. Annual spending by the top 20 companies producing for Europe is set to rise by 75%, from US$ 60 billion in 2024 to US$ 105 billion in 2033. The analysis includes both fossil gas and gas condensate, a by-product of gas extraction used to manufacture kerosene, diesel and other fossil fuels. 

EU agrees to US$ 54 billion in new aid package for Ukraine

European Union leaders have agreed to provide a further US$ 54 billion in aid to Ukraine. This decision comes after weeks of resistance from Hungary, and against a backdrop of uncertainty about US aid. This aid from the European Union’s common budget will cover the period up to 2027, and Kyiv is due to receive the first tranche of US$ 4.8 billion (€4.5 billion) in March. To put this figure into perspective, the IMF estimates Ukraine’s financing gap at over US$ 40 billion for 2024, and the World Bank estimates Ukraine’s long-term reconstruction needs at US$ 411 billion. The aid package consists of around two-thirds in loans and one-third in grants, and is designed to stabilise the Ukrainian economy, finance reconstruction and prepare the country for future membership of the European Union.

Russia continues to import Western semiconductors

Russia imported more than US$ 1 billion of advanced US and European chips in 2023. According to classified Russian customs data obtained by Bloomberg, more than half of the semiconductors and integrated circuits imported in the first nine months of last year were manufactured by US and European companies. The vast majority of these sanctioned technologies enter Russia via re-exports from third countries, including China, Turkey and the United Arab Emirates, US media report. In total, customs data show that Russia imported US$ 1.7 billion worth of chips in the first nine months of 2023. The Kyiv School of Economics recently revealed that Russia imported US$ 8.77 billion of battlefield goods between January and October last year, down just 10% on the pre-sanction period.

Yandex owner to exit Russia in US$ 5.2 billion deal

Yandex NV has agreed to sell its Russian-based businesses, which account for over 95% of group sales, in a cash and stock deal worth Rbs 475 billion (US$ 5.2 billion). This agreement allows the “Russian Google” to remain under Russian control. The Kremlin has been negotiating for a year and a half to separate the national strategic asset from its Dutch parent company, Yandex NV. The deal calculates Yandex’s market capitalisation at US$ 10.2 billion. The sale price reflects “a mandatory discount of at least 50% to ‘fair value’, Yandex NV said. Almost 88% of Yandex’s ownership structure is currently free-float, with many Western funds among its shareholders. Yandex NV said in a statement that the deal would consist of a cash equivalent of at least 230 billion roubles and up to around 176 million Yandex NV Class A shares.

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