BULGARIA'S MOMENT OF TRUTH
Bulgaria is becoming the latest wishbone in the struggle between Moscow's efforts to assert its energy dominance over Europe and the West's efforts to cage that gassy bear.
The latest chapter came Thursday, Jan. 15, when U.S. Secretary of State John Kerry landed in Sofia, the Bulgarian capital, to visit the newly elected, Western-leaning government and urge Bulgaria to reduce its overwhelming dependence on Russian energy. The high-profile U.S. visit, which coincided with a similar mission by the British foreign secretary, came just as Russia raised the stakes in its energy tussle with Europe, reiterating its plans to cut Bulgaria out of its long-planned role as the entry point for a multibillion-dollar Russian natural gas pipeline to Europe by shipping gas via Turkey instead.
"No country in the world should be totally dependent for its energy supply on one other country," Kerry said after meeting Bulgarian Prime Minister Boyko Borisov. "And the United States is prepared to help Bulgaria, which has made difficult decisions in order to try to protect its energy future," he said in reference to Sofia's instrumental role in finally scuppering another Russian pipeline plan, known as South Stream.
And Kerry also frankly acknowledged the risk of Russian retaliation, whether a disruption to energy supplies or something worse, as Bulgaria wriggles out of Moscow's sphere of influence.
Bulgaria's central role in Europe's emerging energy picture stems from both its geography and its history. Located on the shores of the Black Sea, it was the nominal entry point for alternative natural gas pipeline projects between Russia and Europe meant to bypass Ukraine. While South Stream — a pet project of Putin — seems dead for now, Bulgaria is still scrambling to play a big role in regional energy politics by constructing a natural gas hub at its border with Turkey, where Russia now plans to build another multibillion-dollar pipeline.
After Kerry's trip to Sofia, the State Department hopes to dispatch its top energy official to Bulgaria to speed up what U.S. officials have long tried to do in the region: bolster Eastern Europe's energy resilience and security.
"This is a region that has been extremely vulnerable to the use of energy as a political and economic tool, and the way out of that vulnerability is to diversify its energy market," Amos Hochstein, the State Department's special envoy with the Bureau of Energy Resources, told Foreign Policy.
In the year since Russia began destabilizing Ukraine, including the annexation of the Crimean peninsula, Washington and its European allies and have redoubled their push to rein in Moscow's ability to use its massive exports of energy, especially natural gas, as a weapon to cow its neighbors. That effort has included sticks, such as tough financial sanctions on Russia, and carrots, in the form of financial and energy assistance for countries in the Kremlin's shadow.
Washington and Brussels, for instance, have offered financial assistance to Ukraine and have cheered Lithuania's progress toward energy independence, while lawmakers in the United States have repeatedly tried to jump-start U.S. energy exports to weaken Russia's hold on America's allies in Europe. (The problem there is two-fold: U.S. export terminals won't be fully operational until close to the end of the decade, and Asia is a more attractive market for natural gas.)
The battle for influence has spread from the streets of Kiev, which has thrown its lot in with Europe for now, to Bulgaria, a country literally created by Russia and one long seen as a bastion of pro-Russian sentiment inside the European Union. The scrum for diplomatic influence in Bulgaria comes as officials in Brussels and Washington continue to be alarmed by what they see as a pro-Kremlin tilt in Hungary, which like Bulgaria is a member of both the European Union and NATO.
Bulgaria's geography makes it a key energy player. And its sympathetic view of Moscow — the country's independence dates to Russia's military thumping of the Ottoman Empire in the late 19th century — makes it a potential weak link as Europe tries to present a united front against Russia for its violation of international law in Ukraine. Some Central and Eastern European countries, which have both greater trade relations with Russia and higher degrees of energy dependence, have been tepid at best in their support for EU sanctions on Russia over the past year.
The tricky part for Brussels and Washington is to match the influence that the Kremlin has traditionally had in Sofia. Borisov's previous government, which fell in 2013, backtracked on plans to develop Bulgaria's own natural gas resources due to, many Bulgarian officials say, heavy pressure from Russia, which sought to discourage rival energy supplies. Kerry on Thursday highlighted continued "Russian engagement through financial support and other things in the politics of Bulgaria." Indeed, Borisov on Thursday reiterated Bulgaria's ban on domestic shale gas exploration.
The European Union, for its part, insisted last year that Bulgaria abide by EU competition rules to block the construction of Russia's South Stream pipeline, which would have been operated by Russia and would have carried Russian gas.
But many in Sofia still yearn for the project. That's both because of genuine fears that, without an alternative pipeline, they could again suffer dramatic energy shortages such as happened when gas flows across Ukraine into southeastern Europe were interrupted in the winters of 2006 and 2009, and because of deep-pocketed Russian energy influence in the capital.
"There are some companies that benefit from the Russian gas monopoly, and they are pushing the government very hard on that gas agenda," said Julian Popov, a former Bulgarian environment minister.
Despite Russian vows that the South Stream project is dead, in large part because of Bulgarian resistance, Borisov himself asked the EU's top energy official to bring up the pipeline during energy discussions he was to have in Moscow on Jan. 14.
The thrust of Kerry's visit was to pledge U.S. support in "this time of economic and security challenge." But the Western tool kit is not overflowing with options in the near term.
"Although we put pressure on Bulgaria not to get in bed further with Russia, we do not come up with a good alternative plan," said Tim Boersma, an expert on European energy at the Brookings Institution. And that may be what's needed to counteract Moscow's long shadow in Sofia.
"Russia's influence over Bulgaria is weakening, yet its negative power and ability to destabilize the country can hardly be overestimated," Ilian Vassilev, a former Bulgarian ambassador to Russia and now an energy consultant, told FP. It's about more than just energy: If Bulgaria and the region are prized away from Europe's gas markets, he said, "this will precipitate tectonic, long-term geopolitical consequences."
And that's precisely what the United States, working hand in glove with the European Union, is trying to change. Hochstein, the U.S. energy envoy, is hoping to put the finishing touches on a plan to bolster the energy options for Bulgaria and the rest of the region.
That involves providing political and financial support for the construction of new, interconnector pipelines that will link Balkan states like Bulgaria, Romania, Serbia, and Croatia both to each other and to alternative sources of supply, such as new gas pipelines and new terminals that will be able to bring in tankers full of liquefied gas. Kerry on Thursday specifically talked up the prospects of a new spur linking Bulgaria to a liquefied gas terminal on the Greek coast.
The idea, Hochstein says, is not to push Russian gas out of that market, but to give Bulgaria and its neighbors the kind of options that could improve their security and their economies — in other words, precisely what Russia's apparently ill-fated South Stream pipeline would not have done.
"South Stream was a political pipeline, intended to continue the dependence of Europe on a single supplier for another generation," Hochstein said.
"What we're trying to do is create a functioning market that operates on international, market norms, that will allow for competition," Hochstein added. "That will affect the ability to use energy as a political tool, but also affect the price" of energy in a region that pays more for imported energy than other parts of Europe.
Europe itself has been trying to improve its energy infrastructure, in part because of painful lessons learned when Russia was able to pressure isolated countries with little recourse to get help, such as emergency gas supplies, from their neighbors. But big projects like intra-European pipelines or additional terminals for liquefied gas are often a tough sell commercially.
"That's the role of governments — to identify the gap between the public good, the national security imperative, and the market conditions," Hochstein said. "That's why the United States and the EU need to be involved in this. If the market isn't going to do it on its own, we need to encourage the market to do it."
|October, 18, 08:00:00|
|October, 17, 10:35:00|
|October, 17, 10:30:00|
|October, 17, 10:25:00|
|October, 17, 10:20:00|
|October, 17, 10:15:00|
MEOG - Judaimi highlighted that the closer cooperation between Saudi Aramco and Indian energy entities is reflected in the partnership with RRPCL and ADNOC on the Ratnagiri mega-refinery and petrochemicals complex in Maharashta this year. He noted that nearly $2 billion in material-service sourcing with Indian companies to date; and the opening of the Aramco Asia India office in 2017.
REUTERS - The United States must not determine European energy policy or decide whether Germany buys Russian gas, a top German diplomat said on Tuesday.
FT - “Total has great ambition in this country, we want to be the largest foreign oil and gas player here,” the company’s chief executive Patrick Pouyanné said on Monday at the launch of a factory outside Moscow.
PLATTS - Petrobras is to form two joint venture companies with China National Petroleum Corp. (CNPC) to complete construction of a refinery and revitalize four mature fields in the offshore Campos Basin, the state-owned Brazilian company said