Russian Oil Cos. Okay with Changing from Dollar to Euros

Russian oil companies are not against changing their oil contracts from dollars to euro. Lukoil Vice President Leonid Fedun said that in this would involve insignificant spending for his company. "If the government decides to do this, then we will support this initiative," he said.

"We are ready to change over to euro, if the country is included in a single visa space with Europe," Fedun said. However, he noted that the entire world carries out these contracts in dollars.

Gazexport General Director Alexander Medvedyev said that Gazprom does not have a special program to change over from dollars to euro in settlements for gas exports. Although, he said that contracts with European gas buyers are already in euro.

Meanwhile, according to representatives from the trading company SERVON, a change over from dollars to euro would create a headache for oil companies. "This would slightly complicate the procedure of price formation and the process of signing contracts with clients," he said.

In particular, he said that if Russia decides to change over to euros, the market will have to be given clear reference points regarding price formation.

"The question arises: which exchange will be taken as a reference point - London, New York, Singapore? It will also be necessary to recalculate quotes supplied by the agencies Platts and Petroleum Argus in dollars, he said.

A representative from a German delegation participating in a Russian-German summit in Yekaterinburg said that a change over to the euro is becoming more important. If all Russian oil exports, amounting to 5.7 million barrels per day, are changed over to the euro, this will create additional demand for the European currency of 144 million euros each day, the expert said.