Hello EP, <<save the strategic ones like ... Yukos, PetroChina, ... BP, CNOOC ... etc>>
you remember that I had very accurately and early enough suspected that China will take a chunk of Yukos when Stratfor was mouthing off about the evils of Putin's doings
Message 20570381
<<The Chinese are officially denying that they are interested in buying the core / heart of Yukos ... We know what official denials mean, do we not?>>
... and ...
achamchen.com <<October 15th, 2004 ... If I didn’t know better, I would say China may bid for Yukos of Russia ...>>
I now am guessing that a major gas company's asian assets will be up for grabs soon enough.
BTW, I also remember I poo-pooed Stratfor's read on the Russian-Japan pipeline end-game, mentioning thepossibility of diversion (cannot locate post) and now ... vindication, in the inteim ... the only funny thing left would be if / when Japan folds and announces financing for what in effect is a Russo-Sina pipe, so as to be able to taste the oil as it dribbles out of the end of the pipe terminus on the Pacific Coast.
Stratfor, by colouring their analysis with their political views makes for an easy mark.
stratfor.com
Russia: New Pipelines to Bypass U.S. Allies
Sep 08, 2005
Summary
Russian President Vladimir Putin and German Chancellor Gerhard Schroeder finalized an agreement Sept. 8 to build a new gas pipeline underneath the Baltic Sea, bypassing the current energy network. Russia's construction plans for a natural gas line to Germany and an oil line to China are possible warning lights of a change in Russia's position toward the United States and its allies. Russia's willingness to bear its part of the cost of these projects could serve as an indicator of whether it is prepared to break openly with Washington.
Analysis
Russian President Vladimir Putin and German Chancellor Gerhard Schroeder finalized an agreement Sept. 8 to build a new gas pipeline underneath the Baltic Sea -- bypassing the current energy network, which transits Poland. The plan, along with another pipeline project to supply oil to China, suggests that Russia is on the brink of displaying a shift in its attitude toward the United States and its allies.
Under the agreement with Germany, Russian natural gas company Gazprom will build a pipeline from Russia directly to Germany via the Baltic Sea. Russia's decision to bypass Poland and the Baltic states represents a political choice. Currently, gas travels along the Yamal-Europe line through Poland, allowing Poland to collect transit fees of up to 14 billion cubic meters of natural gas. On average, Western European EU states depend on Russia for about 25 percent of their natural gas, whereas Poland depends on Russia for about 75 percent. This new pipeline would allow Russia to suspend its plans on building a second Yamal line that would cross Poland as well, denying Poland potential transit fees. This threat gives Russia a strong lever with which to push Poland around, should Warsaw go too far with its present anti-Russian stance.
Moscow probably thinks that a line that avoids transit fees would allow Russia a larger say in Eastern European developments. When completed, the Baltic line -- with roughly 75 percent of the capacity of the Yamal line -- would also deprive Poland of political clout because Warsaw would no longer have the power to disrupt the flow of gas to the core EU markets effectively. For their part, Eastern European states fear this move will result in a re-emergence of Russian influence in the region -- something most of them remember all too well.
Meanwhile, the decision to prioritize a pipeline to China over a pipeline to Japan may negatively impact Russo-Japanese relations. These have been strained for a long time, due to an unresolved territorial dispute over the southern Kuril Islands, an archipelago stretching between Russia's Kamchatka Peninsula and the northern Japanese island of Hokkaido. Tokyo, which greatly needs a major supply alternative to risky Middle Eastern oil, may come to accept -- albeit grudgingly -- that the second branch of this eastern Russian pipeline will eventually reach Japan. But as a nation almost entirely dependent on imported oil, Japan may be forced to reconsider other potential energy sources in the region, which possibly could lead to more direct confrontations with China.
A pipeline first built to China would reinforce a budding Sino-Russian strategic alliance, potentially straining Moscow's relations with Washington -- but it would limit Russian access to Japanese and other East Asian markets for years. From Beijing's perspective, while a direct Russia-China connection would not eliminate China's dependency on Middle Eastern oil, it would permit greater Chinese economic growth by partially alleviating the harm that an energy crisis or U.S. military intervention in China might inflict.
These two projects represent more than multibillion-dollar ventures -- and given that they are in Russia's national interest, Moscow will likely be picking up much of the tab. German companies E.ON Ruhrgas and Wintershall, a BASF subsidiary, likely will pay for only about half of the Baltic Sea pipeline because they will own only 49 percent of the pipeline; and the Chinese, for their part, are known for trying to get others to pay for their pipeline and energy projects.
For Russia, these pipelines mark a fundamental shift in its position toward Washington and its allies, such as Japan and Poland. The United States and its allies will watch Russia's next move to determine just how far Putin will go to challenge the West. So far, Moscow has challenged Washington indirectly, by aiding U.S. rivals or trying to block the initiatives of U.S. President George W. Bush -- such as the Iraq war -- while maintaining a working relationship with the Bush Administration. If China, Germany and Russia get these pipelines built, Moscow will gain stronger economic and geopolitical footing -- which in turn might help Moscow make a decision it has so far shied away from despite the U.S.-led geopolitical offensive into the former Soviet Union: the decision to challenge Washington directly. But since the pipelines' construction will take a few years, it appears that Moscow, at least under Putin, will take its time.
Copyright 2005 Strategic Forecasting Inc. All rights reserved.
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