MOSCOW. (Sergey Kolchin, for RIA Novosti) -- Speculative demand for oil and gas in the world market, and steadily growing prices on energy carriers have compelled some energy exporting countries to enhance government influence in this key sector.
The Latin American countries were the first to act. The Bolivian and Venezuelan presidents have toughened control over the operation of foreign energy companies, causing a nervous reaction of the consumer countries. Moreover, the latter are afraid that this "state regulation syndrome" will affect Russia, and they will be much less independent in energy security.
To start with, Venezuelan President Hugo Chaves demanded that the foreign energy companies operating in his country should substantially increase their license and tax payments. That said, he offers oil at lower-than-market prices to Cuba, Argentine, and Brazil. Later on, Bolivian President Evo Morales declared his decision to nationalize the oil and gas industry. The government company Yacimientos Petroliferos Fiscales Bolivianos is expected to gain control of all transactions in the domestic energy market. It will also fix gas prices. Earlier, Ecuador passed a law, which compels oil companies to turn over to the government at least half of their profits, received from the sales of oil at a price above a certain level.
Bolivia has gone the farthest. Sick and tired of "energy charity", it has started seriously revising prices on its natural gas. Bolivia is Latin America's biggest exporter of gas. Its explored reserves are estimated at 70 billion dollars, and it is not going to sell it at reduced prices. As distinct from Venezuela with its "oil diplomacy", Bolivia is going to raise prices not only for the U.S., but also for all of its neighbors.
These steps have caused uproar not only among the consumers in South America, but also far beyond. At the session of Latin American heads of state, Brazilian President Luiz Inacio Lula da Silva and his counterpart from Argentine Nestor Kirchner have called for continued negotiations on the price of gas, and terms of foreign participation in order to avoid crisis. They believe that the situation may come to normal if private companies keep part of the resources, and will resist Bolivia's state monopolization.
The European Union is also concerned, but hopes to resolve the problem through dialogue. Spanish Repsol, French Total, British BP and British Gaz were operating in Bolivia. Spanish Minister of Industry Jose Montilla said that Bolivia's nationalization program was bad news, but no surprise. He added, that Spanish companies worked quite well in other Latin American countries.
The concern of the European oil and gas consumers over the nationalization projects is not limited to Latin America, but extends to Russia. This concern has assumed hysterical proportions in the latter case, although we do not think that there are grounds for that.
President of the European Commission Jose Manuel Barroso asked the U.S. Department of State to support Europe in the debates with Russia on the distribution of energy resources, which were gradually becoming an instrument of political pressure. Europe is particularly worried about the expansion of Gazprom, which is seen as a secret weapon of Russia's government influence on EU policy. U.S. Secretary of State Condoleezza Rice has already expressed herself against Gazprom's involvement in the building of a gas pipeline between Turkey and Greece in any capacity - either as a participant in the project, or even a future supplier of gas, which is bizarre. The main argument, which she quotes, is that the two countries may become more dependent on Russia's energy. Instead, Rice suggests that Greece and Turkey should sign a long-term contract on gas imports from Azerbaijan, which should start them in 2007. In effect, this proposal is devoid of economic sense, and directed against Gazprom's influence in the Mediterranean. If these countries want to receive Azerbaijani and Central Asian gas, they will have to spend huge funds on completing the construction of the gas pipeline.
One gets the impression that any steps by Russia and its energy companies are causing a stir in the West. The last example is the threat of Gazprom's take-over of the British gas distribution company Centrica. The coverage of the problem by the Western press is comparable with that of the Iranian nuclear program. Ordinary people and politicians are being scared with a repetition of the Ukrainian scenario in Britain.
International financial tycoon George Soros has also expressed similar complaints to Russia. He has urged Europe to bloc the public placement of shares of another Russian company - Rosneft. In his opinion, this company is an instrument of the state, and will always be used to promote Russia's political interests instead of working for the benefits of the shareholders. He said that substantial supplies of energy to Europe depend on a country, which will use its position of a monopolist for "dubious purposes" without a moment's hesitation.
But far from all business structures of Europe support the idea that Russia will start dictating its terms to its European partners by enhancing state influence in the oil and gas industry. E.ON CEO Wolf Bernotat dismissed it as nonsense, rejecting the fact that Russia ostensibly blackmails Europe with its economic levers. But Russia itself is not dramatizing its contradictions with the EU, and is striving for mutually advantageous cooperation. It is explaining to its partners that the objective consolidation of the government's positions has nothing to do with prejudicing the rights of foreign shareholders. Moreover, in this case, they will be guaranteed much better. It is enough to recall numerous conflicts of newly born Russian private oil companies and their minority shareholders.
Russia is perplexed by the Western concern over changes in its oil and gas industry. Clearly, it is hard to part with the old views, and this is why the fully logical actions of the Russian authorities are often misinterpreted. The West still believes that the Kremlin sees global energy security as security for Russia. But Moscow has repeatedly confirmed its compliance with international commitments, including the interests of investors and shareholders. Judging by all, it is not going to leave this road.
Sergey Kolchin, Ph.D. (Economy) is a leading researcher of the Institute of Economic and Political Studies of the Russian Academy of Sciences.
