With the acceleration of globalization processes, the world is not becoming simpler, but rather more complicated and tougher. An unbiased observer can see how the sovereignty of individual countries has been destroyed by those hiding behind the slogans of freedom, democracy, and an open society, and sometimes even through the use of force, and also how the policy of protectionism and government intervention in the economy is strengthened under vibrant rhetoric about the freedom to trade with and invest in various countries around the world. Oil and gas interests are also clearly present in many conflicts, foreign policy moves, and diplomatic maneuvering.
Russia strongly rejects accusations from the West that it is using raw materials as a tool of foreign policy pressure. No one can cite a single example of Russia using its natural resources to apply pressure in its foreign policy.
The Russian president and members of various levels of government have stated on several occasions that Russia is not planning to use oil and gas as a political weapon, or to allocate its oil and gas revenue for strategic investments with the aim of taking over any branches of foreign economies. Allegations that Russia has of late been conducting an aggressive energy policy in the global arena have no grounds whatsoever. Global energy security not only implies security of supplies, but also security of demand. This point was noted in the concluding documents of the G8 Summit in St. Petersburg in 2006, which means that this principle is shared by leading industrial powers.
Russia is fully accountable for its ability and responsibility to strictly fulfill its obligations to deliver energy resources to Europe, as well as for the need to reliably guarantee such supplies. Russia is a dependable partner for the entire international community when it comes to addressing global problems, including mutually beneficial cooperation in all areas: security, science, energy, and the climate. Our country is interested in participating very actively in global and regional integration processes; cooperating closely in trade, economics, and investment; and promoting advanced technologies and implementing them in everyday life. All of these activities are in keeping with Russia’s strategic goals.
It should be recognized clearly that the international development plans of Russian companies are based on generating business revenue and not on any expansionist political aspirations. They seek to ensure that investors get the biggest return on their company investments in a market environment where competition is very high. When Russian companies have to deal with a “policy of containment,” in most cases this means that there is often a hidden desire to subject them to improper laws or unfair market competition. Fears in the EU that the dependence of Western nations on Russian energy supplies is growing too rapidly are entirely unfounded, since Gazprom, LUKOIL, and other Russian companies build relations with their European partners on market principles based on mutually beneficial interdependence. Hence they seek to ensure the same degree of reliable security for crude hydrocarbon supplies to both Western countries and all EU nations. It must be understood that, given the falling production in Western Siberia, the logic of globalization processes suggests that if Russian companies do not start actively investing funds in new oil production regions and implementing projects abroad, Russia’s role and influence in ensuring global energy security could decline substantially.
Russia is interested in strengthening global energy security in every way possible, particularly in Europe, and a variety of options for transporting crude hydrocarbons could be of practical value. It is clear that the transportation infrastructure for supplying energy resources to Europe must be expanded. Problems with European energy security can only be effectively resolved if the balance of interests between consumers and producers of energy are considered, along with the interests of transit countries. Therefore, the efforts of all parties interested in such a resolution should be directed towards finding this balance.
As for the problem of diversifying energy supplies to Europe, which has become a hot topic in the EU, it is Russia that is currently working on a practical solution. It is our country that is diversifying oil and gas transit routes to Europe by implementing international projects such as the construction of the Burgas–Alexandropol oil pipeline and the extended South Stream and Nord Stream gas pipelines.
The creation of these new transit routes considerably increases energy security in the EU, strengthens stability, and presents new opportunities for delivery of supplies to European consumers. In addition, the expansion of transportation infrastructure in one country does not mean that Russia’s cooperation with other transit nations will be reduced or phased out in any way.
It should not be forgotten that there was a serious battle among European nations to host the new transportation capacity being built by Russia. Indeed, the presence of such facilities on the territory of any country undoubtedly raises its political and economic importance and generates budget revenue, among other things.
On January 18, 2008, Russia, Bulgaria, and Greece signed a trilateral agreement on the creation of an international company to build the Burgas–Alexandropol oil pipeline. Russia’s Burgas–Alexandropol Pipeline Consortium LLC (comprised of Transneft, Rosneft, and Gazprom Neft) owns 51% of this new company. Greece’s 24.5% stake in the company is divided among a consortium comprising Hellenic Petroleum and Thraki (23.5%) and the Greek government (1%), while the other 24.5% is owned by the Bulgarian design company Burgas–Alexandropol BG, which, in turn, is owned by the corporations Tekhnoeksportstroy and Bulgargaz. Agreements between these companies stipulate that the Bulgarian and Greek governments must provide a favorable tax regime for the international company, while Russia, for its part, pledges to fill the new pipeline with oil. The 177-mile Burgas–Alexandropol pipeline will run through Greece and Bulgaria, and will significantly reduce the volume of crude transported by oil tankers through the congested straits of the Bosporus and Dardanelles. The tentative cost of the project is about €1 billion. The pipeline will be able to handle 17 million tons of crude per year in Phase One, 26 million tons in Phase Two, and 39 million tons in Phase Three, with the possibility of eventually boosting this amount to 55 million tons annually. Experts say the project has a clear economic logic and meets the pressing needs of European nations in accordance with their long-term demand for oil.
Greek Development Minister Christos Folias said that the Burgas–Alexandropol oil pipeline will be highly beneficial to the citizens of Russia, Greece, and Bulgaria in addition to their EU partners. He stressed that “a new era has begun for the three participating countries—an era of economic cooperation, common political strategy, and good neighborly relations.... Hard work is still being done to realize the dream belonging to the people we represent.... The citizens of our countries—in addition to our partners in the European Union—will ultimately be the ones to benefit from these major joint efforts.”
The joint implementation, with Russian companies, of energy projects for natural gas transportation is also of paramount importance in ensuring Europe’s energy security. It is now obvious that existing pipelines do not have sufficient capacity to handle the new volumes of Russian gas. A framework agreement was signed in 2005 to build the Nord Stream gas pipeline. The shareholders in the project’s operating company, Nord Stream AG, are Gazprom (51%), Germany’s Wintershall Holding and E.ON Ruhrgas (20% each), and the Dutch company N.V. Nederlandse Gasunie (9%). This gas pipeline will create a completely new route for transporting natural gas, which will not only significantly raise the reliability of fulfilling long-term contracts, but will also diversify gas supplies from Russia to Europe. The entire route of the Nord Stream pipeline was designed so as not to pass through sites at which chemical weapons from World War II are stored. A portion of the proposed pipeline runs along the bottom of the Baltic Sea, and in addition to avoiding chemical weapon storage facilities, the route avoids environmentally sensitive zones, military sites, important navigational routes, and other special areas that are used for economic or recreational purposes. At present, a detailed evaluation of the pipeline’s impact on the environment is being compiled prior to the start of construction. The pipeline will be built to the strictest environmental standards, which will ensure the ecosystem of the Baltic Sea is not disturbed. Nord Stream will connect the Russian shore near the city of Vyborg with the German shore near Greifswald. The underwater segment will be about 745 miles long. Construction began on the 570-mile land segment in Russia in December 2005, and construction of the first offshore segment of the pipeline began on April 9, 2010. President Medvedev, German Chancellor Angela Merkel, Dutch Prime Minister Jan Peter Balkenende, and other government officials took part in the ceremony marking the start of construction outside Vyborg. During his speech, Medvedev stressed: “Nord Stream is a key link in ensuring global and European energy security. It is an extremely important and system-wide project in the Russia-EU energy dialogue, as clearly evidenced by its special status as a Trans-European Energy Network.” The project’s status as a Trans-European Energy Network dates from December 2000, when the European Commission made the designation, which was reconfirmed in 2006, recognizing Nord Stream as a key project for creating an important cross-border transportation capacity to ensure Europe’s sustainable development and energy security.