While the energy world seems to be waiting, rather nervously and impatiently on OPEC’s next move at it next meeting in Vienna on Feb. 1 — Russia seems to be slowly but surely consolidates, somewhat sheepishly, its grip on gas supplies and routes to energy starved Europe — outmaneuvering in the process the bid(s) to lessen the control of Moscow on supply routes.
In his almost last major push on the global energy chess board, before stepping down as Russia’s president, the former spy master, made sure that long-delayed energy agreements with Bulgaria are inked.
The agreements were announced after intensive last-minute talks between the officials of the two states and came about “thanks to the personal intervention of President Putin,” Bulgarian Prime Minister Sergey Stanishev was later quoted as saying. Despite skepticism in many quarters, Bulgaria and Russia thus agreed to build the 10 billion euros ($14.7 billion) South Stream pipeline to carry Russian gas to Europe, giving Moscow an even greater say — and control — on European energy supplies. This has remained the prime objective — almost an obsession with the current Russian strongman.
The South Stream pipeline, to be built by Russia’s Gazprom and ENI of Italy, will first cross the Black Sea into Bulgaria and then split into two arms, one going northwest to Austria and the other south to Greece and then west to southern Italy. The pipeline will have the capacity to pump 30 billion cubic meters (one trillion cubic feet) per annum.
Premier Stanishev said that both sides had agreed to a stake of 50 percent each in the company that will operate the stretch of the South Stream pipeline running through Bulgarian territory.
South Stream rivals EU plans for its own pipeline project, Nabucco, which intended to transport Central Asian gas from the Caspian basin to Europe bypassing Russia. Bulgaria, which receives almost all of its oil and gas from Russia, had earlier pledged support for the rival European Union flagship Nabucco pipeline too. This pipeline aimed to diversify Europe’s energy sources by bypassing Russia and feeding gas from the Caspian basin.
Sofia’s talks with the EU on the Nabucco have however, been reported to be stalled recently and with the signing of the South Stream agreement, Russia seems to have definitely made a crucial headway in the Russian direction. Although even after signing the deal with Moscow, Bulgaria is insisting that given its strategic position, it has all the intentions to participate in the EU sponsored project too, as it stands to pocket hefty transit fees for the transportation of gas through its territory.
In the meantime the Russian giant Gazprom has also announced a deal with Serbia on the takeover of its state-controlled oil monopoly NIS.
Earlier this week, Serbian media had reported Belgrade was hesitating to give Gazprom full control of NIS and felt the offer made was not attractive enough. Gazprom had offered 400 million euros for 51 percent of NIS.
It has also promised to invest 500 million euros in the company and ensure passage via Serbia of the South Stream pipeline. However, availing of the presence of the President, Gazprom crossed this hurdle too. During the trip, Russian company Atomstroyexport reportedly also inked a four-billion-euro ($5.9 billion) contract to build a new nuclear plant at Belene on the Danube. And then after 14 years of talks, the two countries also finally decided to set up a joint company for building the Burgas-Alexandrupolis pipeline to channel Russian oil from the Black Sea to the Aegean, a vital alternative route bypassing the tanker-congested Bosphorus Straits.
While the Bulgarian government was trying to portray these accords as exceptional, government critics in Sofia have accused the government of becoming a pawn in Moscow’s game for greater power and control on gas supply routes to Europe.
Hundreds of Bulgarians hence protested last Friday, while the Russian President was there, against Russia’s energy policy, which they feared would make their country completely dependent on Russian oil and gas sources.
While the world is keeping fingers crossed on the future global energy scenario, President Putin seems to be having the last hurrah. His reign, if and when it comes to an end, would continue to be remembered as the one in which he used the Russian energy riches to re-establish and rehabilitate Moscow in the global power equation. Hats off to Putin — the former KGB spymaster. How deftly he has used his energy riches to rekindle hopes of the revival of the old Soviet era glory among the common Russians. And his last stroke in Sofia was a master one too one has to concede.