Gazprom: Russia's ministry of ambition

MOSCOW -- Undeterred by the global slowdown, Russia's state-run energy leviathan Gazprom has pushed ahead with an expansion masterplan of huge ambition that has raised questions over its true motives.

Gazprom chief executive Alexei Miller has warned Europe — keen to break Russia's stronghold on gas supplies — against turning the issue of energy diversification into a “fetish.”

But analysts say it is the Russian gas giant's own actions that are now bordering on the abnormal, with deals often being motivated by factors like politics or pride rather than economic sense.

“Gazprom has acquired the function of the foreign energy relations ministry,” said Mikhail Korchemkin, director of the East European Gas Analysis think tank.

Recent Gazprom deals have worried analysts that the country's largest publicly traded company has become a political vehicle whose sole purpose at times is to cripple a rival project at the expense of economic sense.

The West has long accused Russia of employing hard-knuckle tactics to pursue its energy goals at home and abroad. Former U.S. Vice President Dick Cheney in 2006 famously described Russia's energy riches as “tools for intimidation and blackmail.”

A deal in June with Azerbaijan listing Gazprom as a preferential buyer for gas from the second development phase of the country's enormous Shah Deniz offshore field was primarily aimed at thwarting Europe's Nabucco gas pipeline project Europe rather than making a profit, analysts said.

“Given Gazprom's excessive domestic production capacities, we see more politics than economics in this agreement,” Renaissance Capital investment bank said.

A recent report in the Kommersant newspaper said Russia has offered to pay Azerbaijan as much as 350 dollars per one thousand cubic meters of gas.

Gazprom also sees itself as a force to help Russia reassert its clout in Africa, another former Soviet sphere of influence.

During President Dmitry Medvedev's four-nation tour of Africa late last month, Gazprom and Nigerian National Petroleum Corporation agreed to establish a 50/50 venture that would invest at least US$2.5 billion to explore and develop some of Africa's largest oil and gas reserves.

Gazprom also said it would help fund the development of Namibia's prized Kudu gas field, the country's only commercial gas field to date.

“The logic is not quite clear,” said political commentator Yulia Latynina, who writes for the opposition Novaya Gazeta.

“If Russia is trying to establish a monopoly by buying up all the gas in the world it will only push up prices for gas for those who sell it.”

“I think it is neither politics nor economics,” said Latynina. “It's already a psychiatric issue.”

The immense power of Gazprom was underlined to millions of European consumers this winter when the Russian gas giant cut off gas supplies to several states for two weeks in a dispute with Ukraine.

But Gazprom insists its interest in such far-flung projects is only natural for a company that can boast of being the world's largest gas firm.

“We are like a whale, the fish follow us,” Boris Ivanov, a senior Gazprom official said during the visit to Nigeria.

Ivanov boasted it was the first time NNPC agreed to a joint venture where it and a foreign partner would have equal stakes.

“The decision didn't come easy. President Umaru Yar'Adua has personally helped us,” said an official familiar with the talks, adding foreign energy majors operating in Africa lobbied hard to thwart the deal.

Some observers doubted Nigeria was worth the effort, pointing to political instability and attacks by rebels on pipeline facilities. Rebels responded to the Russian deal by immediately threatening to sabotage Gazprom's operations in the country.

Despite the risks, Gazprom indicated it hopes to control gas supplies out of Nigeria to Europe. “Whoever is located on the valves is the king,” Ivanov said.

Today's Gazprom — a company which has 17 percent of the global gas market and 60 percent of the Russian market — grew out of the USSR's Gas Industry Ministry.

The Gazprom State Gas Concern was founded in 1989 as the Communist Party pursued cautious liberalization policies just before the Soviet collapse.

It was then part-privatized from 1993 in the much-criticized sale of state assets in post-Soviet Russia. The state has retained a controlling stake of 50 percent, according to the company's Web site.

Russia and China have been holding joint war games every other year since 2005. The next one is scheduled for this summer...

[2009] Russia, China plan new joint military exercises

By MARTIN SIEFF, UPI Senior News Analyst
Published: March 26, 2009

WASHINGTON, March 26 (UPI) -- The continuing tensions over Russia's refusal to sell its state-of-the-art land warfare advanced weapons systems to China hasn't interrupted the rhythm of major joint military exercises between the two major land powers on the Eurasian landmass. The latest in the regular, biennial series of exercises between the two nations has been confirmed for this summer.

The next in the now well-established series of exercises called Peace Mission 2009 will be carried out in northeastern China, the Russian Defense Ministry announced March 18, according to a report carried by the RIA Novosti news agency.

The first bilateral Peace Mission maneuvers -- described at the time as counter-terrorism exercises -- were held in Russia and the eastern Chinese province of Shandong in August 2005. As we reported at that time, they were a lot bigger than mere counter-terrorism exercises. Warships, squadrons of combat aircraft and more than 10,000 troops were involved carrying out landings against hypothetically hostile shores. The maneuvers also involved large-scale paratroops drops. The scale and nature of those exercises suggested a trial run for a possible Chinese invasion of Taiwan with Russian support. ..."

http://www.upi.com/Security_Industry/2009/03/26/Russia_China_plan_new_joint_military_exercises/UPI-25021238094858/
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Russia, China flex muscles in joint war games
August 17, 2007

CHEBARKUL, Russia (Reuters) - Russia and China staged their biggest joint exercises on Friday but denied this show of military prowess could lead to the formation of a counterweight to NATO.

"Today's exercises are another step towards strengthening the relations between our countries, a step towards strengthening international peace and security, and first and foremost, the security of our peoples," Putin said.

Fighter jets swooped overhead, commandos jumped from helicopters on to rooftops and the boom of artillery shells shook the firing range in Russia's Ural mountains as two of the largest armies in the world were put through their paces.

The exercises take place against a backdrop of mounting rivalry between the West, and Russia and China for influence over Central Asia, a strategic region that has huge oil, gas and mineral resources.

Russia's growing assertiveness is also causing jitters in the West. Putin announced at the firing range that Russia was resuming Soviet-era sorties by its strategic bomber aircraft near NATO airspace.
http://in.reuters.com/article/worldNews/idINIndia-29030120070817?pageNumber=1&virtualBrandChannel=0
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War Games: Russia, China Grow Alliance
September 23, 2005

In foreign policy it’s critical to “know thine enemy.” So American policymakers should be aware that Russia and China are inching closer to identifying a common enemy — the United States.

The two would-be superpowers held unprecedented joint military exercises Aug. 18-25. Soothingly named “Peace Mission 2005,” the drills took place on the Shandong peninsula on the Yellow Sea, and included nearly 10,000 troops. Russian long-range bombers, the army, navy, air force, marine, airborne and logistics units from both countries were also involved.

Moscow and Beijing claim the maneuvers were aimed at combating terrorism, extremism and separatism (the last a veiled reference to Taiwan), but it’s clear they were an attempt to counter-balance American military might.

Joint war games are a logical outcome of the Sino-Russian Friendship and Cooperation Treaty signed in 2001, and reflect the shared worldview and growing economic ties between the two Eastern Hemisphere giants."
http://www.heritage.org/Press/Commentary/ed092605a.cfm
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From the Sino-Russian Joint Statement of April 23, 1997:
"The two sides [China and Russia] shall, in the spirit of partnership, strive to promote the multipolarization of the world and the establishment of a new international order."
http://www.atimes.com/atimes/Central_Asia/HI29Ag01.html
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From National Public Radio (NPR):
August 29, 2006
"Venezuelan President Hugo Chavez has been visiting countries such as China, Iran and Russia as part of an effort to build a 'strategic alliance' of interests not beholden to the United States. He considers the United States his arch enemy.":
http://www.npr.org/templates/story/story.php?storyId=5729764
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Venezuela Set to Develop Nuclear Power With Russia
September 29, 2008
CARACAS, Venezuela — President Hugo Chavez said Sunday that Russia will help Venezuela develop nuclear energy — a move likely to raise U.S. concerns over increasingly close cooperation between Caracas and Moscow.
http://www.foxnews.com/story/0,2933,429441,00.html
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Venezuela's Chavez welcomes Russian warships
Nov 25, 2008
LA GUAIRA, Venezuela – Russian warships arrived off Venezuela's coast Tuesday in a show of strength aimed at the United States as Moscow seeks to expand its influence in Latin America. The deployment is the first of its kind in the Caribbean since the Cold War and was timed to coincide with President Dmitry Medvedev's visit to Caracas — the first ever by a Russian president.
http://search.yahoo.com/search?p=%22Venezuela%27s+Chavez+welcomes+Russian+warships%22&ei=UTF-8&fr=moz2

More Yahoo search results for Russia and Venezuela connections:
http://search.yahoo.com/search;_ylt=A0geu_X30pZJCJEAfCtXNyoA?p=Russia+Venezuela+bombers+tanks+arms&y=Search&fr=404_news
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From the Russian News and Information Agency:
July 27, 2006
"'I am determined to expand relations with Russia,' Chavez, known as an outspoken critic of what he calls the United States' unilateralism, told the Russian leader, adding that his determination stemmed from their shared vision of the global order.":
http://en.rian.ru/russia/20060727/51913498.html
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"the greatest geopolitical catastrophe of the [20th] century" -Russian leader Vladimir Putin on the collapse of the Soviet Union...
"World democratic opinion has yet to realize the alarming implications of President Vladimir Putin's State of the Union speech on April 25, 2005, in which he said that the collapse of the Soviet Union represented the 'greatest geopolitical catastrophe of the century.'
http://www.hooverdigest.org/053/beichman.html

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