Russia’s energy drive leaves US reeling

What emerges is that if anything, Medvedev is pursuing Russia’s energy diplomacy more robustly than Putin. Soon after taking over in the Kremlin in May, Medvedev ordered the expeditious completion of the first stage of the Eastern Siberia Pacific Oil Pipeline (ESPO) by end-2009. The ESPO has a vital role in Moscow’s efforts to balance its oil export strategy between Europe and Asia-Pacific. Moscow hopes to target Asia-Pacific as the export destination for one-third of its oil exports by 2020, as compared to 3% currently.
In early July, Medvedev undertook a diplomatic tour of the Caspian region, covering Azerbaijan, Turkmenistan and Kazakhstan. In Azerbaijan’s capital Baku, he made a stunning offer that Russia was prepared to buy Azerbaijan’s entire gas output at market prices. In Ashgabat, he shored up Turkmenistan’s commitment to the modernization of the Central Asia-Center Pipeline and the construction of a new littoral Caspian pipeline.

Medvedev succeeded in prevailing over competing European and US rivals in the struggle for Turkmen gas. He further ensured that oil and gas from Turkmenistan and Kazakhstan will not bypass Russia. But what has truly incensed the Bush administration are Gazprom’s dramatic inroads into Africa.

Russian giant Gazprom, the largest extractor of natural gas in the world, has announced plans to build a pipeline across the Mediterranean to pump Libyan gas to Europe. This is the final lap of a Kremlin strategy that involves Gazprom handling the entire output of Libya’s gas, oil and liquefied natural gas (LNG) designated for export to Europe and the US.

Look at Gazprom’s terse announcement in Moscow on July 9, “The Libyan side positively evaluated Gazprom’s proposal to buy all future volumes of gas, oil and liquefied natural gas assigned for export at competitive prices.” Now, Washington gingerly allowed the re-entry into the “international community” by Muammar Gaddafi, Brotherly Leader and Guide of the Revolution in Libya, on the basis of clear understanding. Western statesmen from British Prime Minister Gordon Brown to French President Nikolas Sarkozy and former Italian premier Romano Prodi queued up to climb the window of business opportunity opened by the Bush administration. And then Putin visits Tripoli in April, less than a

month before he left office, and the two erstwhile colonels decided to jointly handle all of Libya’s energy resources.

And Gazprom seeks to buy exploration licenses in Nigeria and proposes to build a pipeline from there to Algeria, and with Algeria, Gazprom is developing a proposal on “joint” marketing of gas in Europe. US officials have gone ballistic. “The monopolistic Gazprom is behaving like a monopolist does. It tries to gain control of the market as much as possible and to stifle competition. And that’s clearly what is going on,” thundered Matthew Bryza, US deputy assistant secretary of state for Eurasian affairs. “The Kremlin wants Gazprom to be a dominant force in global energy, and the dominant force in global gas. Tying up gas resources in Central Asia and Africa is part of that,” he added. The plan is for Gazprom to dominate “in every corner of the planet”, he alleged.

Asia Times