Gas fuels new cold war in the Arctic

The waters in that part of the Arctic Circle used to be the scene of cat-and-mouse games between Nato and Soviet submarines. Now it is being eyed enviously by the old superpower rivals because technological advances are making lucrative oil and gas exploitation possible for the first time.

Russia holds most of the cards and Moscow is already being accused of playing politics. It has just postponed the announcement of the names of foreign partners to join them, with Norway, in the extraction of gas from Barents Sea, amid suspicions that, as the world’s largest gas producer, it is prepared to flex its muscles over the contracts because of increasingly chilly relations with Washington.

Arctic reserves are estimated at 3,600 billion cubic metres, more than Russia’s existing known reserves, which stand at 3,169 billion cubic metres.

The Russian oil giant, Gazprom, will take the lead in the Arctic, and is run by Putin’s close ally, Alexei Miller.

Analysts say the latest delay could signal a threat to shut out the American oil companies in reaction to criticisms from US Vice President Dick Cheney, who warned last month that Moscow was playing power politics with its natural resources, and added that there must be no attempt to turn oil and gas into tools of intimidation or blackmail.

“If relations between Russia and the US were not rocky, Gazprom could have shared a slice of Shtokman for political reasons, but Cheney’s comments made these chances very slim,” says Sergei Glazer from Vostok Nafta, a Swedish investment company specialising in Russian oil interests. “Short-lived political interests will unfortunately prevail over longer-term and more important issues of stability of energy supplies from Russia to the world.”

Scotsman