RIYADH: Australia’s second largest independent oil and gas producer Santos has warned just a small fraction of production could be diverted to Europe if conflict breaks out between Ukraine and Russia.
The firm’s chief executive Kevin Gallagher has said most of the energy company’s production is dedicated to long term contracts with Asian countries, with only 16 percent of production being available for spot market sales.
“I’m not sure that would be enough for them,” the Financial Times reported, citing Gallagher.
Last year, Santos produced a total of 91.2 million barrels of oil equivalent, or mmboe, with 15 mmboe sold on the spot market. Estimates indicate that similar amounts will be sold on the spot market this year as well.
However, channeling such output would require government intervention or direction, both of which the chief executive has not yet received, he emphasized.
An alternative solution would include cargo swaps between Asia and Europe of supplies coming from the Middle East, he disclosed.
This comes as Russia is continuing to move troops to the Ukrainian border and will likely launch a “limited” military attack against the country, the head of the Estonian Foreign Intelligence Service said on Wednesday.
Countries worldwide are already preparing for war. Egypt will launch a new tender to import wheat next week as it prepares for possible grain market disturbance in the light of rising tensions between Ukraine and Russia