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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Scoobah who wrote (4491)	10/12/2001 5:50:33 AM
From: Scoobah	Read Replies (1) \| Respond to of 281500

Russia Poised to Dominate European Energy October 11, 2001 Summary Gazprom, the world's largest natural gas firm, began production at the Zapolyarnoye field in western Siberia on Oct. 5 and also began deliveries to the Netherlands. These two events signal a shift in the balance of power between Europe and Russia. Europe now has no choice but to invest in Russia's natural gas industry to keep its own economies functioning. Analysis Russian natural gas giant Gazprom began deliveries on Oct. 5 to a new customer: Gasunie, a Dutch natural gas firm. On the same day, Gazprom also began production at Zapolyarnoye, a massive new field measuring 3.2 trillion cubic meters in western Siberia. These two events will allow Russia to engage in a flurry of new infrastructure development and make Gazprom a much more attractive investment partner for global energy firms. The events also mark a sea change in the region's energy politics. Russia has proven it can arrest the decline of its natural gas industry, and the Netherlands has indicated that the bulk of Europe's future energy supplies will be Russian in origin. This will lead to more joint partnerships between Russia and Western -- especially European -- energy companies. Gazprom's New Lease on Life Gazprom's tapping of Zapolyarnoye should help solve many of the company's problems. Gazprom is Russia's top taxpayer, supplying about one-quarter of all federal receipts. But Russian oil companies are beginning to delve into the natural gas market, depriving Gazprom of income at a time when it is still under strict orders to supply Russia with a gas at rates one-fifth to one-fourteenth of world market rates, according to CEO Alexei Miller. That, combined with endemic corruption and asset-stripping, has prevented Gazprom from tapping many new fields during the past decade. stratfor.com