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The Guardian: Russia's Oil And Gas Power Putin's Ambitions

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  • eagle_wng
    Russia s oil and gas power Putin s ambitions Simon Tisdall Wednesday December 1, 2004 The Guardian Plans by the Moscow-based company Gazprom to provide 10% of
    Message 1 of 1 , Dec 1, 2004
      Russia's oil and gas power Putin's ambitions

      Simon Tisdall
      Wednesday December 1, 2004
      The Guardian

      Plans by the Moscow-based company Gazprom to provide 10% of
      Britain's natural gas requirements by 2010 underline Russia's
      growing international importance as an energy supplier. Oil and gas
      bring political and economic clout. And they are fuelling a revival
      in Russia's great-power ambitions.
      Governments in western Europe inclined to criticise President
      Vladimir Putin's interference in neighbours such as Ukraine or
      abuses in Chechnya may have second thoughts in future as their
      energy dependency grows.

      American qualms about the Kremlin's authoritarianism or its support
      for Iran may be more readily suppressed when Russia's position as
      the world's largest gas exporter and second largest oil exporter is
      factored in.

      At the launch of the UK's international energy strategy last month,
      the foreign secretary, Jack Straw, made no bones about Britain's
      vulnerability in this field.

      "As North Sea reserves are run down, we are likely to become net
      importers of gas by 2006 and of oil by 2010," Mr Straw said. "By
      2020 we will probably be importing three-quarters of our primary
      energy needs." Britain's economy, public services and security
      relied on "secure and affordable energy supplies", he said.

      What holds true for Britain holds true for its main allies. While
      Russia is 12th in the list of US oil suppliers, its output and
      proven reserves of 60bn barrels give it enormous leverage in the
      international marketplace.

      Any serious reduction of Russian exports in the fore seeable future
      would send benchmark prices, already at record levels this year, to
      fresh highs, with damaging results for US and global growth.

      Ironically, the unreliability of oil supplies from Iraq, caused by
      the US occupation, has increased American reliance on alternative
      sources such as Russia. The same applies to other big economies
      dependent on imported energy such as Japan and India.

      Russia is not the only energy exporter whose political fortunes have
      improved as a result of high demand and rising prices. Iran is
      currently building an alliance with China, having become Beijing's
      second-largest oil supplier. Tehran said this week that China has
      promised to block any punitive UN action over its nuclear programmes.

      After recent political upheavals, Venezuela, America's fourth
      biggest supplier of crude oil in 2003, is undergoing an economic
      boom. Its left-leaning president, Hugo Chávez, has raised public
      spending by 50% this year. This is taking the political heat away
      from him at home and in Washington.

      But if energy is synonymous with confidence, then Russia is the
      prime example. Mr Putin is benefiting from soaring receipts which
      have boosted Russia's foreign reserves this year to a record $112bn
      and produced a fifth consecutive budget surplus.

      This windfall places Mr Putin's moves to centralise power and expand
      state control over the industrial sector, including the oil giant
      Yukos, in a different context. From this confidence comes a growing
      expectation that Mr Putin will change the consti tution to allow him
      to stay in power, although not necessarily as president.

      After what he saw as the national humiliations of the Yeltsin era,
      Mr Putin's aim, since his election in 2000, has been to restore
      Russia's great power status.

      His claim earlier this month to be developing a world-beating
      nuclear missile system fits the bill. So, too, do Moscow's attempts
      to direct events in Ukraine, which depends largely on Russia for its
      energy supplies. Mr Putin is also using discounted sales of oil and
      gas to former Soviet republics in central Asia as a means of
      maintaining Russia's sway over its "near abroad".

      A petition signed by more than 100 international VIPs in September,
      including the former Czech president Vaclav Havel and US senator
      John McCain, accused Mr Putin of undermining Russian democracy.

      His foreign policy, it said, was characterised by "a threatening
      attitude towards Russia's neighbours" backed by "the rhetoric of
      militarism and imperialism". But empires do not run on air.

      If the petitioners' fears are justified, it may be that black gold,
      converted to red gold, is to blame.

      Guardian Unlimited © Guardian Newspapers Limited 2004
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