The Gazprom nation - Russland und die Abhängigkeit Europas

[Benjamin]

THE ROVING EYE
The Gazprom nation
By Pepe Escobar

May 26, 2006

Whatever the results of the EU-Russia summit this Thursday in the Black Sea resort of Sochi, there seems to be one clear winner: the Gazprom nation - Russia.

With the United States - the European Union's No 1 trade partner and North Atlantic Treaty Organization (NATO) ally - mired in the Iraq quagmire and the EU with an ongoing constitutional crisis, Russia is exceptionally positioned to have its way in the negotiations leading to the post-2007 "Strategic Partnership Treaty" between the EU and Russia.

Former leader Mikhail Gorbachev, in an opinion piece published on Wednesday by the Rossiyskaya Gazeta daily, admits "this will not be an easy conversation". He stresses the EU's huge internal contradiction "between two approaches to economic development, the 'Anglo-Saxon' one, based on unrestricted market freedom and maximization of profits, and the socially oriented [one] embraced above all by Germany and France. The admission to the EU of new members, many of whom prefer the former model, has changed the balance of forces, and so far a synthesis of the two approaches has been an elusive goal."

Gorbachev also denounces stinging criticism of Russia according to which the country "is inherently incapable of assimilating democratic principles and procedures, of creating a civil society and renouncing 'imperial ambitions', so Europe and Russia cannot follow the same path. A new version of deterrence policy has been proposed. What is behind such policy? I think it is the desire to keep Russia in a 'semi-strangled' state for as long as possible."

Ultimately, though, Gorbachev remains optimistic: "The mutual benefits from an intensified interaction between the EU and Russia are obvious." The devil, of course, will be in the details, lost in translation to myriad languages and with the EU without a common foreign policy.

The key talks will start as part of the broad, President Vladimir Putin-suggested, energy-security agenda of the Group of Eight summit in St Petersburg in July. The G8 summit will in essence address the extremely sensitive question of the new, post-Cold War global balance of power. But as Russian analyst Sergei Karaganov recently warned, energy security is also "a powerful catalyst" for replaying the Cold War .

Blue gold's pipeline power

Natural gas, "blue gold" in industry lingo, has become, in an emerging multipolar world, the prime source of intractable conflict and a formidable political and diplomatic weapon in the hands of such states as Russia, Iran, Venezuela and Bolivia.

Gas, unlike oil , complies with the constraints on carbon emissions defined by the Kyoto Protocol. It is even more abundant than oil; proven reserves, with existing technology, may last as many as 70 years, compared with 40 or so for oil. According to the International Energy Agency (IEA), gas will be consumed in a faster progression (2.3% annually) than oil (1.6%), carbon (1.5%) or nuclear power (0.4%).

But there's a catch: for this to happen, says the IEA, the industry would need global investments totaling at least US$100 billion a year.

Before the January Russian-Ukrainian crisis, there had not been a geopolitical gas war. Now we've entered the era of pipeline power, where geopolitical turmoil is intimately linked to gas-pipeline routes, as in the Northern European Gas Pipeline, the Russian-German project under the Baltic Sea (bypassing Baltic states and Poland); the pipeline from Siberia prioritizing either China or Japan; and the pipeline from Venezuela to Argentina via Brazil, bypassing Bolivia.

Geopolitical turmoil is also linked to pipeline routes in the making, as in the Arctic, which pits the US against Canada, Russia against Norway (in the Barents Sea) and Denmark (in Greenland) against Canada. According to the US Geological Survey, 25% of the world's gas reserves still to be discovered lie in the Arctic.

French, Belgian and Spanish diplomats in Brussels tell Asia Times Online the key strategic challenge facing the EU nowadays is its dependence on Russian gas; for the 10 newest EU members it almost reaches 100%. The key to the 153,800 kilometers of the Russian pipeline network is in the hands of the Kremlin. The Russian state is thus afforded the luxury of musing on how to reinvest Russian petrodollars when, according to analyst Alexander Blokhin, 95% of the profits beyond $27 a barrel go to the Kremlin.

For Russian EU Ambassador Vladimir Chizhov, "much of the tension in the energy sphere is artificial". He also insists that the EU and Russia "share a common position" on Iran (prevention of nuclear proliferation, by diplomacy). He may be only partly right on both counts.

GUAM is in the house
GUUAM (the acronym for Georgia, Uzbekistan, Ukraine, Azerbaijan and Moldova) was founded in 1997 ostensibly to "favor economic multilateral cooperation", but really as a regional military alliance, under the benign protection of NATO, strategically placed right on the path of the Caspian Sea's energy wealth.

In other words, it was an anti-Moscow club. Now the alliance is only named GUAM; Uzbekistan, under the brutal Islam Karimov, decided to leave last year and reinforce ties with Moscow.

This week, significantly right before the EU-Russia summit, the presidents of Georgia, Ukraine, Azerbaijan and Moldova got together again in Kiev. This led the Russian daily Nezavissimaia Gazeta inevitably to denounce the formation of "a new international organization whose goals are entry into NATO and adherence to European structures" - nothing strange considering that the "GUM" (Georgia, Ukraine and Moldova) in GUAM openly accuse Russia of supporting separatist movements and are still reeling from Russia imposing commercial restrictions on milk and meat imports from Ukraine, wine from both Georgia and Moldova, and mineral water from Georgia.

The message from Moscow seems to be unmistakable: if you want to join the EU and NATO, you will have to suffer. Off the record, EU diplomats - especially those from Eastern Europe - share an unshakable consensus: Russia always uses trade as a political weapon against pro-EU countries.

The Azerbaijani daily Azerkalo went straight to the point as far as GUAM is concerned, defining it as "an anti-Russian club". In this new scenario, where everyone's goal seems to become a member not only of NATO but of the EU as well, Kiev has become a de facto "alternative integration center" harboring GUAM's headquarters. As the Russian daily Kommersant put it, GUAM is looking for "an alternative to Gazprom", the Russian energy giant.

The alternative is even more pressing with the completion next year of another key node of Pipelineistan - the Baku-Tbilisi-Erzurum (BTE) gasoduct, which runs parallel to the oil Baku-Tbilisi-Ceyhan (BTC) pipeline reaching Turkey and European markets. The important question in this dossier is whether Azerbaijan will remain part of GUAM. Once again, in this respect the EU's - plus the United States' - wishes are pitted against Russia's.

The meaning of 'energy security'
Putin, as the undisputed czar of the global gas club - seconded by Iran's Mahmud Ahmadinejad, Venezuela's Hugo Chavez and Bolivia's Evo Morales - may afford to compare the US to "comrade wolf [who] knows whom to eat, eats without listening, and [is] clearly not going to listen to anyone". Chavez, for his part, may compare the US to "Count Dracula before sucking blood".

With high gas and oil prices, the Kremlin does not have to waste time discussing democracy and human rights with the West. What matters are $170 billion in foreign reserves - and rising - a huge budget surplus, and 7% annual gross domestic product (GDP) growth.

According to Arnaud Dubien, Russian specialist at the French Institute of International and Strategic Relations, "this allows the Russian government to finance many programs of very strong social impact, benefiting categories of the Russian population which suffered heavily during the transition" .

No wonder "energy security" is Putin's mantra as Russia - the world's top gas producer and second-biggest oil producer - presides over the G8.

At a recent "Geopolitics of Energy Security" seminar in Brussels, organized by the European Enterprise Institute, Russia was inevitably the star of the show. Russians asked, "What does it really mean when the EU talks of 'diversification of energy supply'?"

The Russians see it basically as a way of putting pressure on Russia, leading to a loss of traditional Russian exports. The Europeans for their part worry about the use of gas as a political weapon, plus the lack of transparency and the "undemocratic processes" in the Russian gas and electricity sectors.

Both parties agreed "there needs to be real political and technical dialogue in order to tackle the truly important issues". The Russians agreed that "democracy and human rights are in the Russian constitution" - thus Russia doesn't need to negotiate, but to implement.

And they all agreed that Russia and the EU "should create a non-discriminatory energy support agreement, including a fair regime for access to the Central Asian energy supply". This agreement, said European diplomats, could be implemented within the next three to five years.

It's going to be an extremely tricky affair. The EU is actively trying to explore deals with Central Asia - with both Kazakhstan and Turkmenistan - and also with Iran, bypassing Russia via the South Caucasus and the Caspian Sea. The key project in this Pipelineistan node is the proposed trans-Caspian gasoduct - which would in effect break Russia's monopoly on transit of Central Asian gas.

In the new "Great Game" among Russia, China and the US in Central Asia, Washington privileges close allies Azerbaijan and Kazakhstan - which are also courted by the EU.

The Europeans stressed other crucial points for the complex EU-Russia relationship to work. There must be "open and frank discussions, not political niceties". And the EU must consider nuclear energy as an alternative. Touching on an issue addressed by a recent Asia Times Online story (Iran impasse: Make gas, not bombs, May 9), EU experts stressed that according to EU forecasts and figures from the Russian Energy Strategy, the incremental offer from Russia could only cover 25% of the EU's energy needs, so it was imperative that the EU diversified .

In sum: the Europeans believe that "progress is possible despite the changing political and economic climate"; pressure for Russia to reform "will come from within, not from the G8"; and the debate "already exists inside Russia's political elite". Among the intractable problems ahead is the fact that the Russians never ratified the European Energy Charter, which they signed in the mid-1990s.

Brussels diplomats argue that if the Russians really followed the charter they would need to finish off Gazprom's monopoly, reschedule internal energy prices and give more guarantees to foreign investors. According to Russian Finance Minister Alexei Kudrin, the charter will be ratified. But he has been careful enough not to set a date.

[Benjamin]

Fortsetzung des Artikels, Quelle: http://www.atimes.com/atimes/Central_Asia/HE26Ag01.html

Trillion-dollar baby Gazprom

In April, Gazprom knocked back Microsoft as the world's third-largest company by market value. Microsoft was valued at about $246 billion, Gazprom at $270 billion. Already the world's biggest natural-gas company by output and reserves (16% of the total), and with its shares more than tripling in the past 12 months, Gazprom is on the way to displacing Irving, Texas-based ExxonMobil Corp as the world's biggest company, now valued at $381 billion. General Electric is currently the second-biggest at $358 billion.

Gazprom employs 330,000 people and supplies more than 8% of Russia's GDP. It is currently controlled 51% by the Russian state. Since 2001, Gazprom's executive director has been Alexei Miller, who is extremely close to Putin.

Gazprom had a gas output of 547.2 billion cubic meters in 2005. This is equivalent to 9.42 million barrels of oil a day, or the daily extraction output in Saudi Arabia, the world's biggest oil supplier. Gazprom's market value may soon reach as much as $1 trillion, according to its deputy chief executive Dmitri Medvedev, who also happens to be very close to the Kremlin.

Putin's gas chess is always masterful. The president may occasionally threaten the EU that the Russians will go find some other, less demanding customers in case the EU decides to look for less problematic suppliers. But he may also reassure the EU - via German Chancellor Angela Merkel - that a Ukrainian scenario such as January's will never repeat itself (80% of Russia's exports to Europe transit via Ukraine).

Since the 1960s, Russia has been a trusted European supplier - responsible for 50% of the EU's gas imports and 25% of consumption (for oil, Russia supplies 30% and assures 26% of the EU's consumption, as well as more than 30% of the uranium for Europe's nuclear plants).

Gazprom is actively investing in Western distributors and wants to become a global gas giant under vertical integration, selling gas to everyone and his neighbor. What Gazprom wants is to control the whole chain - from production to the final consumer in Europe. What the EU wants is for Gazprom to bring gas to the EU's external borders, where the gas will be bought by EU partners who will then distribute it inside Europe. This would mean the end of long-term Gazprom contracts with European energy giants - a no-no for Putin.

Igor Chubalov, one of Putin's guides ahead of the G8 meeting in St Petersburg in July, is fond of stressing the difference between the strategy of an independent corporation and state policies - even if the Europeans cannot manage to spot the difference. Basically what Chubalov was saying ahead of the recent Putin-Merkel meeting was "We invest in distribution, you invest in production." The word in Brussels is that this was former German chancellor Gerhard Schroeder's idea.

Schroeder is the head of the supervisory board of the consortium building the $4.8 billion Northern European Gas Pipeline, the Russian-German gasoduct under the Baltic Sea. He's reportedly being paid hundreds of thousands of dollars a year for the privilege. Other members of the board include Gazprom's big boss Miller (51% of shares) and officials from Germany's energy giants E.ON and BASF (24.5% each).

So Moscow and Berlin have already created a de facto energy alliance between E.ON and BASF and Gazprom. The inevitable result was that eyebrows were raised across the EU - because the 25-member union still does not have a common energy policy. Poland, for instance, has been bypassed by the gasoduct. So for Polish diplomats, the gasoduct is nothing other than "political blackmail".

When Gazprom's boss Miller hints in public, more than once, that trouble with the EU will mean more Russian exports to China, Eastern European diplomats once again cry in unison, "political blackmail" .

In practice, it boils down to Gazprom wanting to buy more gasoducts and distribution companies in Europe, such as British Centrica. And once again the really fascinating question regards the double standards employed by the developed world. Putin, after meeting with Merkel, in essence said that when European companies go to Russia, it's a matter of investment and globalization, but when it happens the other way around, it's a question of Russian companies expanding into Europe.

The new Saudi Arabia
Problems on the European front? No problem. Russia can always go east. And the Europeans know it.

Russia could not be presiding over the G8 at a more delicate moment. The US imperial drive remains defined by the control of sources of energy. To counteract it, Russia wants to invest in a strategic energy partnership with the EU. But the Russians also recognize that the future of global development is in Asia.

Both China and India are employing alternative strategies to the neo-liberal US model. So now Russia is presented with a very auspicious confluence of factors: its own fabulous energy reserves; energy dependence in Europe; and larger-than-life Asian interest in these reserves.

Russia is actually in search of a Euro-Asian equilibrium. As Natalia Narotchnitskaia, vice president of the Russian parliament's Commission of Foreign Affairs, put it, Russia now boasts "energy independence, military power, high level of education, a complete cycle of scientific research, no overpopulation, a huge territory, and a modest level of consumption". She added, "The only country in the world to meet all these criteria is Russia."

On practical terms, for Narotchnitskaia, this should translate into more investment to explore Eastern Siberia and the Russian Far East. And no dreams of integration either with the EU or with NATO. She's in favor of a true "independent historical project".

Energy security, she said, means "a geo-economy which would lift us from demographic decline, reinforce the country and seduce our neighbors, especially those in Central Asia". In other words, a real national project.

For the moment, the facts on the ground tell the story. Gazprom bought Baltic refineries. Gazprom bought majority stakes in distribution companies in Georgia and Belarus. Schroeder presides over the board of the Russian-German gasoduct under the Baltic Sea, controlled 51% by Gazprom. Putin convinces Russians nostalgic for empires past that Putinism is the best nationalism.

Russia fashions a G8 meeting under its terms - exploiting both the US quagmire in Iraq and the EU's dependence on Russian gas. Thus the Gazprom nation is shaping up as the new Saudi Arabia: indispensable to the West, but certainly not integrated with it.

[Benjamin]

THE ROVING EYE
Iran impasse: Make gas, not bombs
By Pepe Escobar
May 9, 2006
Quelle: http://www.atimes.com/atimes/Middle_East/HE09Ak02.html

Iranian Supreme Leader Ayatollah Ali Khamenei has ruled - and expressly told Revolutionary Guard commanders - that nuclear weapons are against Islam, and cannot be used in war even for self-defense. For all practical purposes - and with International Atomic Energy Agency confirmation - Tehran is pursuing a civilian nuclear program. Virtually the whole country is behind the theocratic nationalist regime in this effort.

Moreover, the regime knows that both China and Russia will oppose any excessive action by the administration of US President George W Bush. Foreign Minister Manouchehr Mottaki said recently that both countries had "officially" informed Iran about "their opposition to sanctions and a military attack".

On Sunday, Iran's parliament threatened to force the government to withdraw its agreement to allow unannounced inspections of its nuclear facilities under the nuclear Non-Proliferation Treaty (NPT). The move follows pressure from Washington and its allies for a binding United Nation Security Council resolution demanding that Tehran suspend its uranium-enrichment program.

The United States is behind attempts by Britain and France to draw up a UN resolution that would declare Iran in violation of international law if it does not suspend uranium enrichment. They want to invoke Chapter 7 of the UN Charter that would authorize economic sanctions or even military action. Russia and China, the other two permanent Security Council members, oppose such action.

Iran has important links with Moscow. The Russian-Iranian contract for the construction of the Bushehr nuclear power plant was signed in 1995. Their geopolitical concerns in the Caucasus and Central Asia - to fight both US influence and Sunni fundamentalism - coincide. Iran is a preferential client of Russian weapons - including anti-aircraft systems capable of protecting Iran's nuclear installations from US strikes.

The Iranian regime does not take Bush's "regime change" rhetoric seriously (see What's really happening in Tehran, April 26). But even if there were a military attack, the regime is sure it would make Washington pay a very heavy price - in Iraq, Palestine and the oil markets.

Western accusations aside, most observers assert that Iran would not be able to manufacture a nuclear weapon for at least the next five years. But the Revolutionary Guards, which are in operational charge of the nuclear program, may believe Iran could approach this development without incurring excessive risk. They, but not necessarily the theocratic leadership, may be convinced that only as a nuclear-weapons state will they be able to counter a US attack.

Is there a way out of this fatalistic scenario? Yes, there is.

The way out would depend on Iran's theocratic nationalism reaching an agreement among the factions vying for power in Tehran. In essence, there has to be a consensus that for the national interest, Iran does not need a nuclear bomb; what it needs is to export its wealth of natural gas. And no customer would be happier to buy it than Europe.

Enno Harks, a senior fellow on energy and resources at the German Institute for International and Security Affairs, and Friedmann Muller, head of the research group Global Issues at the same institute, were both in Tehran recently for an energy conference. Their studies and conclusions are important to understanding what's at stake in the convoluted relationship between the European Union and Iran and how ostracizing and sanctioning Iran may turn out to be yet another case of the EU shooting itself in the foot.

Muller emphasizes that 10 of the current 25 EU member states depend on Russia for more than 50% of their total natural-gas supplies, and five of them for 100%. France, Germany and Italy import between 25% and 50% each. Muller is doing nothing but echoing a fierce ongoing debate in Brussels on whether the EU's dependence on Russian gas is desirable and sustainable - in terms of security as well as politically.

Harks points out how Europe today is by far the world's biggest natural-gas import market - and will remain so at least until 2030. According to projections by the International Energy Agency, by 2030 North America will import just less than 200 billion cubic meters of gas a year, China/India some 85 billion cubic meters and Europe more than 530 billion cubic meters. "Europe thus amounts to almost double the two regions added together," said Harks.

Muller notes how Russia is fiercely pushing a so-called Eurasian Natural Gas Alliance, "the purpose of which is to channel as large a portion of natural-gas supply as possible via the post-Soviet pipeline network and thus to monopolize the European natural-gas market".

Harks said that "according to the optimistic scenario in the Russian energy strategy to 2020, gas exports to Western Europe will rise by only approximately 30 billion cubic meters over the period". And even these projections are not assured because they involve the successful development and financing of at least one of two giant northern Russian fields.

Then there's the intractable problem of Russia's grip on Central Asian gas. As Harks explains it, "Long-term gas-supply contracts between Russia and Turkmenistan at far below market price give Russia some leeway concerning their own production decline and export contracts. But at the same time, they will delay domestic gas-market reform - a situation that will seriously constrain necessary investment in Russia and reduce its export potential to Europe."

In short, Russia by itself will not solve Europe's gas thirst, especially because Russia also wants to export heavily to both China and Japan.

So Europe will have to find the gas it needs somewhere else - North Africa and the Caribbean, for instance. But most of all it will need Iran. Iran holds 15% of total world proven gas reserves - positioned only behind Russia. It is much closer to Europe than the West Siberian gas fields, and eventually it could share a border with the EU itself (should Turkey be accepted as a member).

Iran and Qatar hold the second- and third-largest reserves in the world. This means that in tandem they have more natural gas than Russia. For the moment, as a practical matter, they do not export to Europe. There are no pipelines - at least none yet; and liquefied natural gas (LNG) has to be transported by long sea routes or aboard expensive small tankers.

Muller is adamant; natural-gas production is cheaper in Iran, Turkmenistan, Azerbaijan and even North Africa (in other countries apart from Algeria) than in Western Siberia. As Muller explained, "The excessive infrastructure linking Siberia to Europe is a product of the Cold War. After the dissolution of the Soviet Union, this argument no longer carries any weight."

The smoking (gas) gun
Harks is convinced Iran is the best solution for Europe's energy problem, diversifying supply sources that up until now have in essence been Russia (65% of imports) and Algeria (25% of imports). Together, Russia and Algeria hold barely 30% of the worlds's natural-gas reserves - "while around 80% of reserves are located within a 4,000-kilometer radius of Central Europe", said Muller.

The Holy Grail is a branch of "Pipelineistan" from Iran to Europe: the Nabucco Gas Pipeline Project, sponsored by an Austrian company, OMV (which is a small European player in the business), and tentatively scheduled to start operating in 2011. What is needed above all is "greater political will on both the Iranian and European sides", said Muller. An enlarged Nabucco pipeline could transport not only Iranian but also Azerbaijani, Turkmen and even Qatari gas to Europe.

Harks warns that such an approach would "contradict long-term US containment policy on one side and Russia's inherent dreams of a Central Asian gas alliance on the other". But it could be a win-win situation for both Europe and Iran. Brussels has to act fast - otherwise China will spare no effort to get all that gas for its own gargantuan needs. And Tehran has to act fast - otherwise the Bush administration's war logic may prevail.

[Benjamin]

THE ROVING EYE
In the heart of Pipelineistan
By Pepe Escobar
Mar 17, 2006
http://www.atimes.com/atimes/Middle_East/HC17Ak03.html

TEHRAN - Iranian Foreign Minister Manouchehr Mottaki may have captured all the headlines when he announced that Iran would not use the oil weapon in the event it was slapped with sanctions by the UN Security Council. But in the world of Pipelineistan, the nuclear row waged by the US, the EU-3 (Britain, France and Germany), the United Nations and Iran is just a detail.

The heart of Pipelineistan itself has been transposed to Tehran for the International Conference on Energy and Security: Asian Vision, organized by the Institute of International Energy Studies and the Institute for Political and International Studies. There could not be a better place to meet and discuss oil-and-gas geopolitics with an array of scholars and executives from Iran, China, Pakistan, India, Russia, Egypt, Indonesia, Georgia, Venezuela and Germany.

And their overall message is unmistakable: the interdependence of Asia and "Persian Gulf geo-ecopolitics", as an Iranian analyst put it, is now total; the nuclear row should be solved diplomatically in the next few months; and Asian integration has everything to gain from Pipelineistan linking the Persian Gulf, Central Asia, South Asia and China.

It's a gas, gas, gas
The heart of Iran's gas strategy lies in the gigantic South Pars field, responsible in itself for 50% of Iran's and 8% of the world's natural-gas reserves. South Pars is strategically located between Bushehr to the west (where Russia is helping Iran to build its first civilian nuclear power station) and the Persian Gulf port of Bandar Abbas to the east.

According to Gholamreza Manouchehrie, chief executive officer of PetroPars Co, South Pars at its full capacity could deliver 28 billion cubic feet of gas a day. But not all of its 19 blocks have been negotiated for exploration. Iranian participation stands at 60%. Join ventures are common; for instance, the liquefied natural gas (LNG) operation is shared at 50% each by the state-owned National Iranian Oil Co (NIOC) and TotalFinaElf.

But much more foreign investment is needed. "We are 10 years behind Qatar," said Manouchehrie, referring to the neighboring gas emirate. "There is cooperation between our experts, but it's still not enough. But we will catch up with them in production by 2012."

South Pars' enormous strategic importance is that its production will be exported to Asian countries - after the construction of a pipeline to the Pakistani border and then to India, pumping 150 million cubic meters of gas a day. As for North Pars, it's an independent field, 100 kilometers to the north, and geared for domestic consumption.

Manouchehrie said that "this pipeline controversy has been going on for 10 years. Now it's a compelling geo-economic reality. China also wants to be a beneficiary." Most agree that the pipeline should be finished as soon as possible. For Asia, it's the most feasible and the most cost-effective.

Welcome to IPIL
High-level negotiations between India and Iran started on Tuesday in Tehran. According to Seyyed Alavi, an Iranian oil executive, a final agreement between the three countries (Iran, Pakistan and India) will be reached "by June or July".

The tentative schedule is for the pipeline to be concluded in five years and three months. Pakistan needs to build 1,000km of 48-inch pipeline, plus the infrastructure, and India needs to build 600km.

Farshad Tehrani, an Iranian oil executive based in Norway, is in favor of the project being called the Iran-Pakistan-India pipeline (IPIL), a joint venture with a cross-section of ownership. Tehrani finds many reasons for India and Pakistan to switch from oil to gas: they reduce their oil imports; they opt for cleaner fuel; they save foreign currency.

For Iran, it's also inevitably about geo-economic power: "Iran is the only country in the world with more than 15 neighbors. Iran wants to be a true regional power - we are in West Asia after all. Besides, all our neighbors can swap gas with Iran as well," said Tehrani.

Maqsud Hassan Nuri, a senior research fellow at Islamabad Policy Research Institute, agrees with all the benefits. But he preferred to single out President George W Bush's recent visit to South Asia, where once again it was clear that "the US does not want stable relations between Iran and India and Pakistan".

The Pakistani perspective - shared by Pakistani oil executives in Tehran - is that the ongoing nuclear row could be solved within the International Atomic Energy Agency (IAEA), and not the UN Security Council, which is this week deliberating moves to reprimand Tehran over its nuclear program.

The Pakistanis agree that Iran is a factor of stability in the region. They also agree with Iranian and Egyptian executives that the current standoff won't be frozen in time - just as it did not between India and Pakistan regarding their dispute over Kashmir.

As Tehrani, the Iranian oil executive, put it, "In the subsequent months there will be some kind of arrangement whereby the West is satisfied and Iran's legitimate rights will be respected." Nuri added a conditionality: "Nuclear weapons take care of the strategic ego, they don't solve our economic problems. Forty percent of South Asia still lives below the poverty line."

Rafiullah Azmi from the Institute of Islamic Studies in New Delhi stressed that IPIL would reach way beyond South Asia, offering a vital link among the Persian Gulf, Central Asia, South Asia and China, and thus "it goes against the geopolitical game of the US in the Persian Gulf".

So basically why is Washington so much against it? "The Americans feel it will help Iran; it will set dangerous precedents for other countries to buy gas from Iran; and it will cement friendly ties between Iran, India and Pakistan," said Azmi.

Tehrani said that "it goes back to [former US president] Bill Clinton, when he said that you're free to buy energy from anywhere, as long as it's not from Iran".

Azmi stressed that India was creating "a multitude of options" for its energy needs - from nuclear to gas. Nuclear power in 2010 will attend to no more than 10% of India's requirements. He recalled what Prime Minister Manmohan Singh recently told the Indian parliament: "We are not part of any push towards regime change in the region." Azmi is convinced "geo-economics will triumph over geopolitics".

No tapping
The Trans-Afghan Pipeline (TAP) has disappeared from view - obliterated by the Taliban resurgence - but the project remains in the cards, although the realistic prospects are grim, according to Seyed Shah Bukhari of the Institute of Strategic Studies in Islamabad.

An agreement among Turkmenistan, Afghanistan and Pakistan was signed last month. India is an observer. The US is very much in favor. But besides the chaos in Afghanistan, it is the reliability of Turkmenistan that is in question.

Turkmenistan has signed multiple contracts, especially with Russia and Ukraine, but there's no guarantee it will be able to supply all of its customers. Bukhari stressed that both India and Pakistan may need more than two pipelines for their needs. That would mean IPIL, TAP and another US$2.7 billion project from Qatar via Oman to Pakistan and then India.

Tamine Adeebfar, an analyst at the Caspian Energy Politics in Brussels, expected the Middle East to supply energy to East Asia for nearly a century. There's total interdependence now, but everything "needs to be anticipated and planned now". This is dawning on the Iranians.

Iranian oil executives Alavi and Tehrani make two important points - both of them related to the urgency of foreign and local direct investment in its gas industry. Iran still cannot compete with Russia in exporting gas to Europe - one of its priorities for the 21st century. And incredible as it may seem, Iran still imports gas from Turkmenistan - even though it holds the second-largest gas reserves in the world.

Ahmed al-Najar, of Al-Ahram Institute for Strategic and Political Studies in Cairo, prefers to puncture the myth that oil prices are related to the Organization of Petroleum Exporting Countries. World demand for oil grew from 76.6 million barrels a day in 2004 to 83.3 million in 2005. In China, it grew from 4.7 million barrels a day in 2001 to 6.7 million in 2005. But in the US it grew only from 24 million barrels a day in 2001 to 25.6 million in 2005.

So the growth in demand is basically from Asia. Al-Najar said that "supply now exceeds demand by 2 million barrels a day. There's plenty of oil, all the time." So who's profiting? "Big oil companies. They receive from 25-40% of what they discover. This is related to the American oil strategy, which is biased towards the American oil companies."

Vulnerable China
The interdependence of the Persian Gulf and Asia anyway is more than enshrined. World demand for natural gas will triple from now to 2020. By 2025, Asia will import 80% of its total oil needs, and 80% of this total will be from the Gulf.

Chinese executives such as Liu Guochen of Sinochem Corp, based in Amman, admit that China imports energy from unstable areas, and is worried about US hegemony over the flow of energy resources.

So China is frantically diversifying, said Iranian scholar Masoud khavan-Kazemi of Razi University, "in its investments, pursuing territorial claims and building up strategic oil reserves". He foresees Asia facing "great imbalances"; the potential for conflict in the Persian Gulf, Russia, Central Asia and the Caspian; insecurity suffered by China, India and Japan in relation to the US presence in Asia; and the Chinese sense of vulnerability as China and the US are de facto strategic rivals.

Akhavan-Kazemi pointed out that the US was pursuing three key objectives. The first two may be shared by many Asians: guaranteeing the energy flows from Asia to international markets; and trying to stop Russian hegemony. But a crucial factor - which the Russians are keen to point out - is that Iran, India and Pakistan are now observers at the Shanghai Cooperation Organization (SCO). And "the SCO would be able to protect pipelines going in all directions", said a Russian oil executive.

As for the third US objective - preventing Iran from exporting its gas - definitely it is not shared by anyone. Akhavan-Kazemi emphasized that "despite the American military hegemony in the Persian Gulf, its political hegemony is in doubt".

In the corridors of the conference, most of the oil and gas executives and scholars agreed that the way the game is played today in Pipelineistan, everything is politicized.

"When Bush tells India, 'You don't need to import gas from Iran,' that's totally illogical," said a Georgian scholar based in Bologna. "The [alleged Iranian] bomb is a pretext," said an Iranian oil executive based in London. "The Americans don't want Iran to develop, and that's equally true of China and Venezuela. We need to talk about security through knowledge."

Pipelineistan actors are actively discussing the possibility of limited US strikes against, for instance, the Bushehr plant, as was implied by a recent belligerent statement of the US ambassador to the UN, John Bolton.

But the general consensus is that an agreement of sorts will be reached in the next few months - with no UN sanctions against Iran. Asia does not want an Iran battered by the West; Iran, after all, is part of West Asia.

Manochehr Mohammadi, Iran's deputy foreign minister, may have spoken for all of Asia when he said, "Any sanctions will badly reflect more on our immediate neighbors than on ourselves."

[Benjamin]

China's energy insecurity and Iran's crisis
By Kaveh L Afrasiabi
Feb 10, 2006
http://www.atimes.com/atimes/Middle_East/HB10Ak01.html

British Prime Minister Tony Blair has gone on record stating that the fear of soaring energy prices should not deter the international community from imposing comprehensive sanctions on Iran over its nuclear program.

That is easier said than done, especially when looking at the dire economic and non-economic consequences of the current Iranian crisis for China, Iran's energy partner.

In fact, the China-Iran connection transcends energy and covers a whole spectrum of economic activities - dam-building, steel mills, ship-building, transport and dozens of other projects. At present, more than 100 Chinese firms are involved in Iran, also cooperating to develop ports, jetties, airports in six cities, mine-development projects and, of course, oil and gas. Trade between the two countries in 2005 hit a new record of US$9.5 billion, compared with $7.5 billion in 2004.

The world's media are nowadays awash with news of China's energy dependency on Iran weighing heavy on its policy considerations in light of the possible showdown at the United Nations Security Council next month over Iran's nuclear program and suspicions that it might want to develop a nuclear weapon - something Tehran vigorously denies.

China currently gets 13.6% of its oil imports from Iran. Beijing is also in the process of importing Iranian natural gas. China's plan is to become a comprehensive participant in exploration, drilling, petrochemicals, pipelines and other upstream and downstream services related to Iran's oil and gas industries (see China rocks the geopolitical boat, November 6, 2004).

As the Organization of Petroleum Exporting Countries' second-largest oil supplier, with a unique location straddling two main energy hubs, the Caspian Sea and the Persian Gulf, invoking the notion of an "energy Silk Road" to China, Iran is a natural partner for China and its booming economy's increasing appetite for foreign oil. China's total energy consumption in 2004 was about 2.3 times that in 1980.

China's plans with Iran are both short-term and long-term; the latter includes a plan to secure a 386-kilometer pipeline connecting Iranian oil with another pipeline from Kazakhstan to China.

China's demand for a stable Iranian - and Persian Gulf - supply of oil and gas is critical for its rapidly growing economy. As the world's second-largest oil consumer in the world after the United States, China has been a net oil importer since 2003; its dependence on foreign oil reached 40% in 2004. According to the Energy Information Agency, China alone accounted for one-third of global oil-demand growth during the period 2001-04. Still, its total oil imports accounted only for 6.6% of the total global oil trade in 2004.

According to experts, China's growing hunger for oil has been driven mainly by three factors: the increasing demand for personal mobility and good transport; a growing chemical industry that relies on petroleum products as feedstock; and using diesel-fired power generators as short-term solutions to provide needed electricity on-site when there is a national or regional electricity shortage.

In the United States, there is considerable concern over a future US-China collision over energy. Last December, Joseph Lieberman, a high-ranking Democratic senator, raised the specter of military conflict between the two countries by stating: "We are heading towards two-thirds [reliance of] each country on ... foreign oil. Let's recognize this problem before it becomes an intense competition which can actually lead to military conflict."

Last year, because of strong objections by the US Congress, China's $18 billion bid for a share of the US energy pie, that is, its quest to procure Unocal, the ninth-largest US oil company, was frustrated. That episode has brought into sharp focus the potential zero-sum energy game between the US and China.

What worries China in this game is its heavy reliance on foreign intermediaries to transport most of its oil from the Middle East (where China obtained 45% of its imported oil in 2004) and Africa (which contributed to 29% of China's oil imports) to its ports, and its lack of navy capacity to protect oil cargoes on the high sea and patrol the Malacca Strait, through which four-fifths of its oil imports pass.

To compensate for its sources of energy security, China has engaged in a spirited energy diversification, production-sharing and other creative oil contracts around the world, as well as beefing up its military power projections by, among other things, developing Gwadar Port in Pakistan's Balochistan province at the mouth of the Persian Gulf, some 400km from the Strait of Hormuz, at the estimated cost of $1.16 billion.

Moreover, recently China consented to Iran's accession to the Shanghai Cooperation Organization as an observer, thus adding to the geostrategic dimension of its energy-led cooperation with Iran. Simultaneously, China's cooperation with other Persian Gulf countries - Kuwait, Qatar, the United Arab Emirates and Saudi Arabia - has increased dramatically recently. According to one China watcher penning in a recent issue of the Washington Quarterly, increased China-Saudi cooperation could translate into a weakening of the oil kingdom's US dependency.

Conspicuously absent in the various commentaries on China and the Middle East is any serious consideration of what is actually loudly talked about in Tehran these days, that is, China's potential to contribute to regional security arrangements.

Implications of the nuclear crisis for China
Given China's veto power in the Security Council, it has a major determining role in influencing the shape and outcome of the international "proto-crisis" over Iran's nuclear program.

China's decision to vote against Iran at the UN's International Atomic Energy Agency (IAEA) meeting this month - resulting in Iran's referral to the Security Council - did not come as a big surprise to Tehran, since for more than two years top Chinese officials have been visiting Iran and in no unmistakable tone conveying the message that China would not sacrifice its huge trade interests with the West, the US in particular, over Iran.

Branding itself as a "force for peace", China has been working overtime to prevent the situation from deteriorating to the point of UN sanctions threatening the wellspring of its imported energy.

In the light of Iran's rejection of the IAEA move and threats of punitive UN measures against it, China must calculate the various unhappy scenarios involving serious disruption in the Iranian oil supply, not to mention the lesser threat of a more comprehensive disruption in oil flows from the Persian Gulf as a whole in a military scenario. It must factor those risks into its present options of how to behave at the Security Council when the matter arises next month, after the IAEA has presented its latest report on Iran to the UN.

Even a medium-intensity crisis recycling the present danger of escalation is harmful to China's economic interests and investments in Iran and the Persian Gulf, as it translates into higher energy prices and costlier premiums on insurance for oil and gas shipments to China. Fearing diplomatic isolation and a backlash should it exercise its veto in the face of a seemingly global consensus on the threats of Iranian nuclear proliferation, China might be willing to abstain at the Security Council, but likely as a result of a substantive quid pro quo with the US and Europe.

In turn, this raises the important question of what the US and Europe can put on the table that would possibly appease China. Certainly not much on the energy front, at least not directly. Indirectly, however, the US could push for Chinese participation in Iraqi oil or, similarly, a more meaningful China-Saudi cooperation. Yet it is doubtful that China would be content with such initiatives in the light of continuing instability in Iraq impeding its oil industry and the United States' own weariness of undue Chinese closeness to Saudi Arabia.

Hence the US might turn to alternative trade incentives, perhaps even an India-style promise of civil nuclear cooperation, since China is keen on a major push with several new nuclear reactors. But the nub of the problem is that with every move or initiative there are certain flip-sides that may, in fact, trump the original purpose - for example, how the India-US nuclear agreement has been sold in the US Congress as a sop toward deterring China. A similar deal with China for the sake of garnering its vote against Iran only complicates the United States' Asian and subcontinent strategy.

Nor should we be oblivious to the negative ramification on US-Russia relations, given that the old power competition between Moscow and Beijing has not altogether disappeared, irrespective of their recent joint military exercises and other contacts.

Clearly, the US can sweeten the pot with several related concessions, such as selling state-of-the-art coal-gasification material to China, leaning on Europe to ease some of its restrictions on China trade. But again, the million-dollar question is whether or not the sum of such incentives suffices to bring China on board for sanctions on Iran.

Perhaps not, which is why US policy has quickly veered in the military direction, as a timely prop in its current bargaining with China and Russia over Iran, the assumption being that these two Iran allies will go for sanctions as a lesser evil compared to outright military confrontation.

To their credit, both Moscow and Beijing have recognized the perils to their interests by the United States' scripted strategy against Iran, simultaneously warning the US not to threaten Iran. After all, Iran is not the poor, and strategically unimportant, former Yugoslavia, and the stakes are too high to let the US impose its will unilaterally.

Nonetheless, the United States' drive to deprive Iran of nuclear-weapons potential is not easily reversible and, henceforth, China's policymakers must include in their calculations the worst-case scenario imperiling their energy ties to Iran (at least for a while).

Since China has scanty strategic oil reserves of about 30 days, the "nightmare scenario" itself is a powerful motivating force for China to play crisis-prevention, and yet, since it has limited influence on Iran and the other players in this dangerous crisis, it must also consider the option of sacrificing some of its shared interests with the US for the sake of safeguarding its cherished energy stakes in the Middle East.

The latter form important facets of China's long-term ambitions as a global superpower. The real danger of deflating those ambitions by a deft US policy that would deny China one of its most important regional allies is unmistakable.

Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press) and co-author of "Negotiating Iran's Nuclear Populism", The Brown Journal of World Affairs, Volume XII, Issue 2, Summer 2005, with Mustafa Kibaroglu.

[Benjamin]

Russian energy model challenges OPEC
By John Helmer
Jul 18, 2006


MOSCOW - In the Russian folk tradition, Dyed Moroz (Grandfather Frost, equivalent to Santa Claus) doesn't give children their presents because they have been well behaved all year. Instead, he responds to those who shout the loudest to catch his attention.

That may have been the reason for the headline, after South African Deputy Foreign Minister Aziz Pahad's briefing last week, that South Africa intended to "talk tough" at the Group of Eight summit that ran from Saturday through Monday in St Petersburg.

Pahad suggested that President Thabo Mbeki, who was attending as a member of the five "outreach" countries - South Africa, India, China, Brazil and Mexico - would demand that Russia and the other G8 members do more to maintain an Africa priority in global development policy.

Mbeki was invited by the Kremlin as a representative of the developing states, while Africa as a region was represented by the head of the Africa Union, Republic of Congo President Denis Sassou-Nguesso.

Pahad also suggested that Mbeki should thump the G8 table for the lack of implementation, over the past year, of the group's promises to increase financial aid to Africa, improve the terms of trade for African exports, and support universal access to treatment for AIDS and the human immunodeficiency virus (HIV) that causes it.

Mbeki has not had much success in catching President Vladimir Putin's attention at their earlier meetings. But Putin is now scheduling his first visit to Africa in September. Although the visit has been postponed several times before, September 5 has already been fixed for Putin's arrival in South Africa. Angola is also on the itinerary, but the other African stops are still uncertain; Morocco is a possibility. The first African visit of a Russian head of government in almost half a century will be the opportunity for Russia to address Mbeki's Africa-wide agenda.

In the lead-up to the St Petersburg summit, and at this weekend's meetings, Russia presented a revolutionary agenda that leaders of the developing states in Africa and Asia should have every reason to support. This is a new Russian scheme for supplying, consuming and pricing energy - principally oil and gas, but also coal and uranium - to the world.

Because this is meant to supersede the traditional arrangement for supplying and pricing crude oil through the Organization of Petroleum Exporting States, those who benefit most from OPEC, led by the United States, have orchestrated a drumbeat of criticism of the Russian model, calling it an unreliable source of energy, and attacking Putin for using energy exports as a political weapon.

Media coverage of the G8 summit agenda, especially the "energy security" priority Russia has introduced, reflects this fight. The media have been (and will continue to be) a weapon for both sides. From the Russian point of view, however, the new energy-supply model is not negotiable.

The emergence of this new strategy has been swift, but clumsy. Countries, international corporations, and their public relations and media networks, which supported the OPEC model for Russia in the past - those, for example, who backed such Russian oligarchs as Boris Berezovsky and Mikhail Khodorkovsky, and who currently oppose Gazprom and Rosneft - are hostile to the new Russian energy strategy because, if it succeeds, it neutralizes the chances of long-term regime change inside the Kremlin.

The G8 and other meetings are regarded by the Russian side as opportunities for such countries to change their minds, and redefine their interests.

The OPEC model has been limited to crude oil; the Russian model aims at covering supply of both crude oil and natural gas. The OPEC model has been limited to regulating supply and price, according to the swing-producer mechanism. Until now, this role has been played by Saudi Arabia, with its global lead in crude-oil reserves, and in its flexible capacity to lift, pump to port, and ship.
The Russian model aims to supplant the Saudis, emphasizing Russia's global lead in gas reserves and in barrel of oil equivalent (boe). Already, Russia exceeds Saudi Arabia as the largest producer in boe terms (13.3 million boe per day, compared with 10 million boe/d for Saudi Arabia); the largest exporter in boe terms (18.7% of global hydrocarbon exports); and the largest reserve base (16.3% of world hydrocarbon reserves boe).

From the Russian perspective, the Saudi role and OPEC model have benefited the United States, which can pressure Saudi Arabia into opening the spigot to deal with supply emergencies; the US also pressures other oil producers, such as Libya, Iraq, Iran, Venezuela, and Indonesia, by military methods, diplomacy, and economic sanctions. In the Russian alternative, the US will be far less influential, and have fewer levers, commercial or military, to effect pressure on the energy suppliers. Russian arms and defense-industry partnerships are on offer to relatively weak, intervention-prone energy producers in Africa and Latin America to offset US pressure.

In the OPEC model, the benchmark is Brent crude, priced in US dollars. In the Russian model, the discount and disadvantage between the Brent and Urals benchmarks will be reduced, and pricing will evolve toward a currency basket, including the ruble.

In the OPEC model, suppliers hold much of their cash and government securities in US-controlled institutions. In the Russian model, cash is held in the form of a currency basket; conversion from cash is sought into non-US assets, particularly in the European market.

In the OPEC model, investment in new energy reserves should be open to, and may be controlled by, US corporations. In the Russian model, strategic reserves should be controlled by national companies, state-controlled champions, or joint ventures in which Russian interests are in the majority.

In the US-backed OPEC model, national suppliers depend on US-controlled market intermediaries, traders, pipeline and shipping companies, and retail distributors for access to markets and point of sale. In the Russian model, in exchange for access to Russian energy supplies, there will be Russian state-controlled champions in energy transportation. Russian state-controlled corporations will also have investments and influence over trade and market retail networks.

The Russian model also extends to energy-convertible coal, uranium, and other mineral resources. Through negotiations for Russian accession to the World Trade Organization (WTO), the US, Australia, Canada and other resource-exporting states have sought to gain unlimited access to search and development of Russian minable resources. The Russian model rejects this, and instead assigns priority and equity control of domestic resources to national resource companies. The model proposes tradeoffs and partnerships in resource exploitation in third countries, especially the developing states.

The US-backed OPEC model assigns international priority to the Arab states. The Russian model assigns priority to the Central Asian alliance, including China, India, and Iran; secondarily to Latin America (Venezuela, Brazil); and ultimately Africa.

On this fundamental choice between the Russian and OPEC models, Russia is waiting to hear where South Africa stands. One thing is clear - South Africa's dependence on OPEC for its crude-oil imports has been growing. In 1996, 75% of South Africa's oil imports came from the Persian Gulf states, led by Iran. In 2003 - the latest year for which figures are available - this had grown to 78%. Saudi Arabia has also jumped ahead of Iran as the leading supplier. Nigeria is the leading African supplier of oil to South Africa, with 16% of total in 2003. Imports from Russia are possible, but have been negligible so far.

Putin told Mbeki and his other guests that Russia is offering a role (short of control) in upstream development of Russian energy resources. In exchange, he wants to agree on a reciprocal role for Russian state companies elsewhere, including the regional economic blocs that are represented at the G8 table - China, India, South America, and Africa. This framework creates a mutual interdependency to protect the energy partnerships that are formed from unilateral pressures or attacks of the US type - economic, political, or military.

The security of Russian energy supply is thus to be contrasted with the unreliability of US behavior. In the short term, this Russian strategy also enables Russian companies to secure the capital and technology they need for high-cost, high-risk projects in difficult terrain. Reciprocally, the strategy offers access to stable supply and pricing of oil and gas to consumer countries, including diversion of energy transportation away from military pressure at chokepoints - for example, the Strait of Hormuz, through which most oil tankers sail en route to Asia and South Africa. In America's wars with Iraq, and its threatened attack on Iran, oil consumers are dependent on the US Navy to keep the Hormuz waterway open. They are obliged to pay for this protection through the premium US oil companies charge for delivery risk.

India was the first to buy into the new Russian model, purchasing a minority shareholding in the first of the Sakhalin Island offshore oilfields to come onstream. This does not supply crude oil directly from Russia - a short-term Indian priority that the government in New Delhi is also pursuing. China followed India with different tactics, first by funding the proposed East Siberian Oil Pipeline, which will assure direct oil deliveries to Daqing; and most recently, by buying into Rosneft's public share flotation. By contrast, the United States' two most dependent allies in Asia - South Korea and Japan - have been left behind, their proposals for direct oil and gas pipelines rejected, and their supply positions limited to the right to long-term purchase contracts at benchmark market prices.

For Asian oil-search companies, as for South Africa's state energy company PetroSA, the Russian model offers many opportunities. This is urgent in the South African case, because PetroSA's domestic reserves of gas to fuel the Mossel Bay gas-to-liquid plant are running out. "By 2009 or 2010 we must have decided what to do. We will either close, move somewhere else, convert to an ordinary refinery or find another gas field," PetroSA's chief executive Sipho Mkhize said recently. At present, roughly 10% of South Africa's petroleum consumption comes from conversion of gas to liquids, while another 40% comes from conversion from coal.

PetroSA executives are regular visitors to Moscow, but they are reluctant to say what they have in mind for their energy partnership with Russia. The first sign of this was announced in April, when PetroSA took a 10% stake in a Namibian oil-and-gas-exploration venture, alongside the Russian company Sintezneftegaz. There is considerable potential for joint ventures with the Russians in Angola, where LUKoil, Russia's largest oil producer and exporter, is negotiating concessions; and in other African countries where PetroSA is also active; these include Equatorial Guinea, Nigeria, Gabon, Sudan, Mozambique and Algeria.

Other Russian oil-exploration moves in Africa include Zarubezhneft's payment last year for an offshore concession from the Nigerian government (linked to the release of a dozen Russian mariners held hostage by corrupt officials in Lagos for two years).

From the Russian perspective, the scope for the energy partnership with the developing states is limited only by the imagination; or by countervailing US or European pressures, as rivals for the Russian model seek to maintain their traditional, colonial-era ties. Oil is not the only battlefield. African companies have considered in the past, and could revive interest again, in partnering the Gazprom group, Russia's largest enterprise, in the bidding for resource development and pipeline projects in sub-Saharan Africa. Expansion of a South African partnership with Alrosa, the primary state-controlled Russian mining company in Africa, was under negotiation in talks this month.

Also, Russian interest has been expressed in partnering South African companies such as Sasol in the development of coal-to-fuel conversion in coal-rich regions of Russia. And sources in the Russian uranium sector suggest there is the possibility of partnership between South African suppliers of uranium and Russian builders of nuclear reactors for power-plant projects in third countries.

To the G8 summiteers, Putin has issued a challenge, which ought to be familiar to all Asia and African leaders. "If we go back 100 years," Putin told a French television interviewer, "and look through the newspapers, we see what arguments the colonial powers of that time advanced to justify their expansion into Africa and Asia. They cited arguments such as playing a civilizing role, the particular role of the white man, the need to civilize 'primitive peoples'. We all know what consequences this had."

Putin was responding to attacks on the Kremlin for not being democratic enough, according to the US model. But the Russian energy model is a counterattack that is much broader in scope, and more fundamental. It is an invitation for the resource-rich developing states to join in the challenge to colonial-style relationships in the global energy market.

John Helmer has been a Moscow-based correspondent since 1989, specializing in the coverage of Russian business.

(Copyright 2006 Asia Times Online Ltd. http://www.atimes.com/atimes/Central_Asia/HG18Ag01.html

[Benjamin]

Russia spins global energy spider's web
By W Joseph Stroupe
Aug 25, 2006
http://www.atimes.com/atimes/Global_.../HH25Dj01.html



The vast bulk of the world's oil, gas and strategic minerals resources either is coming under or is already under the control of authoritarian, or less-than-democratic, or leftist, or otherwise radical regimes either with a decidedly anti-Western political stance and ideology or pointedly decreased sensitivities to strategic US interests.

It is difficult to name more than a handful of resource-rich states that are liberal democracies and that are still significantly aligned with the West. Only Canada and Mexico come immediately to mind, and even Canada is increasingly embracing China and the East in the sphere of strategic energy deals and agreements.

Even those resource-rich regimes that are considered to be the most moderate of the globe's producing states are far less closely aligned geopolitically with the US than they were previously.

Saudi Arabia, for example, continues its "Look East" policy of diversifying its markets away from the US. It has concluded a range of important deals in the energy sector with China and India and is steadily moving into closer geopolitical alignment with the rising East.

A number of other key Middle Eastern regimes are following suit. By and large Latin America is doing the same, as are Africa and Central Asia. Almost none of the world's oil and gas producers wants to be inordinately dependent on the US market any longer. Additionally, the steady rise of the powerful economies of Asia beckons oil and gas producers toward such lucrative markets that are politically cost-free, meaning they do not attach political demands and seek to interfere in the domestic affairs of the producing regimes, as does the US.

In virtually all cases, the interests of the West and of its multinational oil companies and big Western financial institutions are being minimized and/or pushed out as the global trend of nationalization, by one means or another, of the oil-and-gas sector picks up speed.

That is occurring in Russia, which has now surpassed Saudi Arabia as the world's largest exporter of oil, in Central Asia, the Middle East and in Latin America. Within virtually all such regimes the lines of separation between the top levels of political leadership and the directorship of key corporations and industries are not only blurred but are being obliterated. The multinational oil companies of the West are being marginalized as a direct result.

That is the case in Russia, where in many key areas of industry corporate directors are intimately tied to President Vladimir Putin, having formed a close association with him long before he became president, and many even hold key positions as upper-level Kremlin officials, or as government ministers. Not merely coincidentally, the key corporations the directors of which are so closely allied with Putin are often resources-based and are also those that are state-controlled businesses, with the Russian state holding controlling (51% or more) interests.

To varying yet alarming degrees, the resource-rich regimes around the globe are copying the Russian model. Resources-based corporate states with a profound political affinity for one another and a simultaneous collective disdain and even a hatred for US-led unipolar dominance are proliferating around the globe.

Resource-rich Russia's mounting global leverage with the world's other producing states and with the powerhouse economies of the East, and its profound political affinity with such producers and key consumer states, far outweighs the influence of the Organization of Petroleum Exporting Countries (OPEC).

How so? Russia is crossing the membership boundaries of OPEC to court its most powerful members and to conclude with them joint-venture agreements of huge consequence and importance for the future of global oil and gas exploration and production. The West is rapidly being pushed out of such ventures, or is being forced to take radical reductions in the size of its stakes, and is being left out entirely in many new ventures.

Instead, the world's producing regimes are increasingly entering key joint ventures between themselves and in very close cooperation with the powerhouse economies of the rising East, such as China. We are witnessing not merely the formation of some new oil-and-gas cartel with Russia at its center, but rather the formation of something that includes both producers and the key consumer states of the East in an ever more cohesive de facto confederation. This is dedicated to the achievement of strategic energy security for those within its clearly defined circle.
In the process, OPEC itself, as an entity, is being undermined and marginalized. Simultaneously, the West is being forcibly cast from the proverbial frying pan into the fire as something far more powerful, compelling and all-encompassing than OPEC is coalescing.

The ominous rise around the globe of the resources-based corporate state is accelerating. The implications for the West are enormous, yet such implications are only beginning to be understood. As noted above, such states are concluding rapidly increased numbers of strategic agreements among themselves for the joint exploration and production of oil and gas, and with the rapidly rising powerhouse economies of the East, such as China and India, for the private long-term supply of oil and gas.

The creation of such private pools of oil and gas for the consumption only by specific economic powers in the East and select economies of the West is also a new development that carries with it profound implications for the West.

In essence, the circle defining international energy security is now being drawn. Inside the circle are those producer and consumer states whose political and geopolitical affinity for each other is the result of no mere chance occurrence and whose energy-security interests are being strategically served and addressed on both sides of the producer/consumer equation.

Some of the economies of the West, such as Germany, are being included within the developing circle. Outside the circle are those economies of the West that are to be left out of the growing international energy-security arrangements currently being constructed, as alluded to above. Interestingly, and as a profound new development, it isn't the United States that defines the path and scope of the circle. Instead, it is Russia and its strategic partners who are defining it.

Because Russia's leaders adroitly positioned the Russian Federation to capitalize massively on global energy developments, it is the state that inherited the unique ability to shape global developments as they unfold. Russia is shaping important developments among the world's key producing and consuming powers. They are being shaped contrary to the strategic interests of the United States, as noted above. The US is also shaping developments, foolishly handing Russia and the East ever more global leverage. By incessant strategic blunders, the US has isolated itself internationally and fanned the fires of global anti-Americanism, which increasingly engulf the very regions where its own resources-based strategic interests lie.

An entire array of fundamental global developments as respect strategic resources is quite literally changing the landscape of the traditional global energy order. With regard to energy and energy security, a new global order is emerging. The US-backed liberal, open global oil market order is beset by an accelerating proliferation of private, state-to-state long-term agreements and contracts concluded within the circle Russia and its partners are defining.

This is creating increasing numbers of private pools of oil and gas dedicated only to serving the energy-security interests of the circle of private participants. Along the way, Russia's export monopoly of the oil and gas that still flows outside the circle to the West continues to grow, further ensuring its mounting global leverage.

Rather than being merely unrelated and random events, global developments in the energy and geopolitical spheres over the past seven years form a distinct pattern that bespeaks the execution of a developing strategy of a Russian reacquisition of global power, but in concert with its strategic partners, at the incalculable expense of the West in general and of the US in particular.

Contrary to the assumptions of conventional wisdom, the US hasn't any longer the global leverage to shape unfolding developments in its favor. Russia is rapidly acquiring such leverage, and it is expertly plying that leverage against US vulnerabilities in the energy sphere.

W Joseph Stroupe is editor of Global Events Magazine online at www.GeoStrategyMap.com. He has authored a new book on the implications of ongoing energy geopolitics titled Russian Rubicon - Impending Checkmate of the West.

[Goldfisch]

Russisches Gas zu einem Preis zwischen 200 - 300 USD ist annehmbar für Europa
13:53 | 31/ 10/ 2006




MOSKAU, 31.Oktober (RIA Novosti). Ein Preis zwischen 200 - 300 USD pro 1000 Kubikmeter russischen Erdgases sei für Europa annehmbar, erklärte der Leiter der Internationalen Energie-Agentur (IEA), William Ramsay, am Dienstag in Moskau auf dem Forum des "Moskauer Energiedialogs".

Derzeit liegt der Durchschnittspreis für russisches Gas in Europa bei 250 USD pro 1000 Kubikmeter.

Ramsay merkte an, dass in Russland zurzeit sehr viele neue Rohstoff-Lagerstätten ausgebeutet werden. Gleichzeitig bezweifelte er, dass genügend Geld in die Erschließung investiert werden kann. "Heute stimuliert der Investitionsmarkt (Russlands) nicht dazu", begründete Ramsay. Er stellte fest, dass seinen Beobachtungen zufolge in Russland erst ein Anwachsen der Ölförderung zu verzeichnen war, dann jedoch wegen des Jukos-Falls eine Senkung der Förderung. "Aber danach stellte sich wieder ein Wachstum ein und die Hauptrolle dabei spielte Rosneft."

Ramsay betonte, dass die europäischen Staaten die Gesetzgebung im Bereich der Energiesicherheit zusammen mit Russland diskutieren müssen.