Russians extend stranglehold on energy

BP cowed into sale

I warned in May of the dangers facing our energy supplies in the coming years as Russian giant Gazprom attempts to put a stranglehold on the European market. In June we note that Gazprom are eyeing Centrica, the owners of British Gas, in a possible takeover, and hidden away behind the interest in the Labour Party events was this piece of news last week revealing that Russia has cowed BP into selling it’s stake in a Siberian gas field to Gazprom.

BP’s Russian joint venture TNK-BP has agreed to sell Gazprom its majority interests in the giant Kovykta field for between $700m-$900m (£350m-£450m). Analysts said this is a fraction of what TNK-BP’s stake is worth, and that it is the latest example of the Kremlin forcing out Western energy firms. Last year Anglo-Dutch group Shell were also forced to sell a large interest to Gazprom in the Sakhalin-2 oil and gas project off Russia’s Pacific coast.

Herein lie some fairly sticky problems facing our new Prime Minister and whoever he appoints as our Foreign Secretary; these snippets of news relating to Gazprom are beginning to read like plots from a James Bond novel, but the threat to European and British interests is becoming more severe as Russia builds a gas empire which can be used to apply political and economic pressure at the turn of a valve. How we deal with British and European business and energy interests in any sort of partnership with Putin’s Russia could make or break the new PM and indeed the EU with it’s new found power of foreign diplomacy. The problems will be compounded by the Russian’s use of former German Chancellor Gerhardt Schroeder as an ambassador for Putin’s ambitions.

For the sake of our economic, and possibly cultural and political stability and security, we must ensure that a much larger proportion of our energy needs are met from sources other than natural gas and oil. We no longer have access to resources that would secure our own well being, and it would be foolhardy in the extreme to place our trust in Russian oligarchs.