Strategic Projects (II)

JEKATERINBURG Berlin urges Moscow's integration into German world power ambitions particularly in regard to energy policies. A German-Russian ,,strategic partnership"intends to reduce the influence of western states and corporations in providing the EU states with natural gas which will become increasingly significant in the future. In the meantime, the German energy corporations, which already control large parts of the European energy supply, are further increasing their leading role.

,,Strategic (energy supply) projects"were the focus of the German-Russian summit in Jekaterinburg. 1)Eon and the Russian provider, Unified Energy Systems of Russia, agreed to long term cooperation in the Russian electrical power industry and intend to cooperate in the construction of power plants. The preparation of a new gas pipeline project from Russia through the Baltic Sea to Germany, is to pressure and tendentiously exclude the transit countries Ukraine and Poland through which the transport had originally been planned but which are considered unruly and susceptible to pressures from Washington. Moreover, the Eon AG of Duesseldorf, which became Germany's largest energy corporation after taking over Ruhrgas, plans an extensive expansion in the Russian energy market. As a countermove the involvement of the corporation in the USA is to be reduced.

World competition

The Russian energy reserves, considered among the largest of the world are, at the moment, the object of fierce competition by the western states and energy corporations. The USA which is the world's largest energy consumer, is negotiating with the Russian natural gas producer Gazprom about cooperation with American energy corporations; this would include the development of gas deposits in the North of Russia. The US corporations Exxon-Mobil and Chevron Texaco are already active in Russia, they hold shares in significant oil and gas production projects and want to procure 25 percent of the shares of Russia's largest natural gas corporation, Yukos-Sibneft. The British oil corporation, British Petroleum, has taken over 25 percent of the shares of the Russian natural gas company, Slavneft, and plans a development project for gas in East Siberia; Royal Dutch/Shell Group seeks, together with the Japanese corporations Mitsui and Mitsubishi, to enter into the development of natural gas in Russian Sachalin.

Euro instead of dollars

The German Eon has an eye on Gazprom, the largest producer of natural gas in the world, in which the subsidiary Ruhrgas participates already. In order to be able to expand its influence, the German corporation demands that the Russian market for natural gas reform, that trade with Gazprom shares be liberalized and that the price for energy, which had been kept low for socio-political reasons, be raised. Through the EU commission, considerable pressure is exerted on Moscow to give up state control over the semi-state Gazprom and the net of pipelines and to authorize access to western corporations. Since Gazprom contributes one fourth of the Russian state income and its export sales constitute 20 percent of the state's currency receipts, Russian President Putin has until now refused to accede. On another issue he is more accommodating: Russia may possibly settle future oil exports in Euro instead of exclusively in dollars. Such a measure could shift the balance of the two most important global currencies and reduce the significance of the dollar, under pressure already for some time, considerably.

German leadership

In the meantime the German corporations are continuing with their expansion and are extending their leadership role in providing energy in Europe. Eon implemented the takeover of the Czech regional providers JME and JCE and plans further takeovers in Poland and Slovakia where the governments now will sell off the whole energy industry. Holding shares already, Eon and Ruhrgas, plan to participate in the privatization of the two largest energy distributors and energy producers of Lithuania. Ruhrgas, together with Gazprom, is already majority share holder of Lithuanian gas company. Eon, already the largest energy provider and the second largest provider of natural gas for Great Britain, in addition, wants to take over the net carrier and competitor Midlands Electricity. Finally, BASF-Oil- and gas subsidiary Wintershall will soon be the first foreign enterprise to develop natural gas in Romania. 2)

German market: Insulated

The western states and corporations have been attempting to counteract this German superiority with an entry into the German energy market but until now without success. The German corporations, which advocate liberalization of markets internationally, have efficiently insulated their home market.

1) See also earlier article Strategic Projects
2) See also earlier article BASF: Access to the largest energy reserves of the world

Sources:
Eon Energie plant Zukaeufe in Osteuropa; Handelsblatt 24.08.2003
BP festigt Position in Russland; Die Welt 30.08.2003
US-Oelriesen konkurrieren um Einstieg bei Yukos; Die Welt 16.09.2003
US-Unternehmen bieten Gasprom Kooperation in Gasgeschaeften; www.russlandintern.de 25.09.2003
Eon und Ruhrgas planen Zukauf bei Stromversorgern in Litauen; Financial Times Deutschland 29.09.2003
E.ON mit Mehrheitsbeteiligungen im tschechischen Strommarkt; www.eon-ag.com 30.09.2003
Romgaz/Wintershall: Gemeinsame Erdgasfoerderung vereinbart; www.technikwissen.de 01.10.2003
Eon nimmt britischen Netzbetreiber ins Visier; Handelsblatt 06.10.2003
Energieriesen bringen sich in Stellung. Konzerne draengen verstaerkt auf den deutschen Gas-Markt; Berliner Zeitung 06.10.2003
E.ON und russische UES vereinbaren Strom-Kooperation; vwd 09.10.2003
Putin schliesst russische Oel-Verkaeufe in Euro nicht aus; www.boerse-online.de 09.10.2003
Politik ums liebe Erdgas. Putin sieht Erdgas als Staatsdomaene; Neue Zuercher Zeitung 10.10.2003
Eon plant Gross-Einstieg auf russischem Energiemarkt; Berliner Zeitung 13.10.03
Russland wird als Erdgaslieferant noch wichtiger. Eon will Partnerschaft mit Gazprom ausbauen; Die Welt 14.10.2003


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