RusEnergy

10–30–2006 RBC News – Russian Economy Minister German Gref is convinced that Russia’s new export blend crude oil REBCO futures contract has a great future. “The market has received REBCO very positively,” Gref told reporters on Monday. First REBCO deals have already been made, according to the Economy Minister. Any new brand needs time for promotion and recognition, Gref said commenting on the slow reaction of the market to REBCO. He said the Economy Ministry expected this, and that so far “everything goes to plan.” The Russian Export Blend Crude Oil (REBCO) futures contract was launched by the New York Mercantile Exchange (NYMEX) on 20 October 2006.The contract features physical delivery of REBCO on a free-on-board (FOB) basis at the Russian port of Primorsk on the Baltic Sea. The contract size will be 1,000 barrels denominated in US dollars per barrel. The last day of trading will be three business days before the 15th calendar day before the first day of the delivery month. NYMEX will list the contract for 72 consecutive months beginning with the January 2007 contract. Experts say REBCO is set to replace Urals contracts, tied to the price of Brent crude oil. REBCO’s price is calculated based on the market conditions. Given the growing demand for energy and high oil prices, shifting to REBCO will allow Russian companies to boost their profits, which means higher tax revenues. According to Deputy Economy Minister Kirill Androsov, moving to the new oil pricing mechanism will increase budget revenues by about $3 billion a year.