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Gazprom

Tag Archives | Gazprom

With Europe’s Cold Winter in Mind, European Union Officials Meet to Discuss Russia

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Kremlin Photo
Kremlin Photo

Kremlin Photo

A high-level EU meeting over Russia is to be held in Brussels. Prior to the meeting, US Secretary of State John Kerry has pressed for Russia to face toughened sanctions, unless it takes concrete steps to stop armed separatists in eastern Ukraine. European leaders, also, are expected to consider imposing more economic sanctions on Russia and to sign a free-trade accord with Ukraine.

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Power Plays: The Russian-Chinese Energy Deal

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Kremlin Photo
Kremlin Photo

Kremlin Photo

The Russian-Chinese energy deal concluded on May 21 has been treated as an ominous development for various powerhouses of the West. Over the course of 30 years, the $400 billion deal will involve piping natural gas from Russia’s Far East to China. Students of the energy markets are thrilled and troubled in equal measure, seeing links in the deal venturing as far as Ukraine’s crisis, and the broader implications of global supply and consumption.

There was initial scepticism that the deal would even have any wings. For almost two decades, the countries have stuttered along the path of energy politics, attempting to carve out their respective roles. Russia wants to sell; the voracious Chinese market needs to be satisfied. Anything, provided it is at the right price, will do. Chinese hunger for gas imports is evident in the figures, which show that between 2006 and 2013, gas demand tripled from 56 billion cubic metres to 169 billion cubic metres.

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How to Rein in Putin

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Sebastian Derungs
Sebastian Derungs

Sebastian Derungs

Last week, the Obama administration yet again imposed fresh sanctions on Russia. This time it targeted seventeen Russian institutions and seven individuals, two of whom are known to be from Russian President Vladimir Putin’s inner circle. Nonetheless, many Russia-watchers believe this latest round of punitive measures fails to match the escalating rhetoric of the White House. President Obama, however, signaled that there is room to maneuver should the Putin regime fall short of the universal expectation to leave Ukraine alone. Yet, the question remains: will this sanction regime effectively deter Putin?

It does not appear promising. Rather, it can backfire and therefore put U.S. President Barack Obama in a conundrum. Vladimir V. Putin, a former KGB agent who is obsessed with reclaiming Russia’s rightful niche in the post-Soviet unipolar world, has pursued a revisionist policy since he assumed power on New Year’s Eve, 2000. As a result, Putin has been able to solidify mother Russia’s image, in the global political landscape. Syria, for example, is a latest success of team Putin’s relentless effort in this regard. At the eleventh hour, Moscow’s chief diplomat, Sergei Lavrov, tabled the proposal to get rid of Syria’s chemical weapons in order to bypass an imminent American air strike on Syrian military installations. Putin checkmated Obama’s war plan so deftly that its ripple effects soured the U.S. friendship with Saudi Arabia. The Obama administration is still trying to mend the troubled relationship with the Saudis.

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EU - Russia: Managing Thy Neighbor

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Kremlin Press Office
Kremlin Press Office

Kremlin Press Office

Did the European Union provoke Russia?

Is it possible that the EU forced Russia’s hand on the Ukraine issue? That it inadvertently provided Russia with no other choice but to react the way it did? Is it possible that the EU leadership (if any…) is not reading the signs that Russia has awakened and that the era of careless expansion into the ex-Soviet block is over? Whatever the outcome of the present turmoil, we may very well enter into a new era of foreign relations between Europe and Russia, affecting a good number of nations and potentially leading to a second Cold War type relationship.

Russia emerges from hibernation

As Russia recovers from the fall of the Soviet Union and works to find itself as a nation among nations, it has been developing a stronger sense of self and presence on the international arena. Along with Russia’s many honorable and influential titles, such as member of the G8 (now suspended) and Permanent Member of the UN Security Council (heritage of the Soviet Era), this notion that the dark days are behind them has been giving the Russian leadership an appetite for the renewal of Russian power, combined with an ambition of political re-dominance over its’ vast neighborhood and desire to be respected - or rather feared – at its’ borders.

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Russia, Ukraine, and Europe are Tied by Gas Dependency

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Gazprom
Gazprom

Gazprom

The German energy giant RWE has begun to “reverse flow” supplies of gas from Europe back to Ukraine via Poland, a process first arranged in 2012, with an agreement to deliver up to 10 billion cubic metres of gas per year. The question for the Ukrainian interim government and state-owned energy firm Naftogaz is how this gas will be delivered, how soon, and whether it will be enough. Hungary has the capacity to deliver 5.5 billion cubic metres (bcm), Poland could deliver 1.5 bcm, and Romania could potentially provide 1.8 bcm capacity, but not before 2016-17 at the earliest.

Talks between Ukraine and Slovakia have renewed in an effort to tap into its capacity to deliver 9 bcm of gas, but the Slovak government and pipeline operator, Eustream, are anxious to ensure that feeding gas back to Ukraine does not breach its contracts with Russian state-owned energy giant Gazprom. Given that Ukraine imports around half of its annual 55 bcm of gas consumption, even with these new suppliers it will remain dependent on Russian gas.

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NATO to Meet on Steps to Pressure Russia

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Russia has said the troops deployed along its border with Ukraine are taking part in military exercises

NATO foreign ministers are due to discuss ways to help Ukraine and reassure allies in Eastern Europe, at a meeting in Brussels. It is the first time ministers from the 28 member states have convened since Russia’s takeover of Crimea caused a diplomatic crisis. NATO has bolstered annual air drills being held over Baltic countries later. Meanwhile, Russia has reportedly ordered a partial withdrawal of its troops from the border with Ukraine. President Vladimir Putin told German Chancellor Angela Merkel he had ordered the move in a telephone conversation on Monday, according to the German government. Thousands of Russian soldiers are still said to be deployed along the eastern border of Ukraine.

Meanwhile, Russian energy firm Gazprom is increasing the price it charges Ukraine for gas from Tuesday. Gazprom Alexei Miller said last month that Kiev had failed to pay its bills, believed to be more than $1.5bn (£900,000).

NATO foreign ministers are expected to discuss the formal suspension of co-operation with Moscow at the Brussels meeting. In a statement, the alliance said ministers would speak to Ukrainian Foreign Minister Andriy Deshchytsia about ways to support Ukraine with its defence reforms. They are also expected to look at options including situating permanent military bases in the Baltic States to reassure members in Eastern Europe.

Russia’s actions in Ukraine have rattled nerves in Estonia, Latvia and Lithuania, which were part of the Soviet Union during the Cold War. NATO jets will take part in air patrols in the region later in a routine exercise that analysts say has taken on added significance due to the crisis. Several NATO countries, including the UK, US and France, have offered additional warplanes.

Earlier, Ukraine condemned a visit to Crimea by Russia’s Prime Minister Dmitry Medvedev and a delegation of government ministers. A foreign ministry spokesman in Kiev said the highest-level trip to the Black Sea peninsula by officials from Moscow since its annexation by Russia was a “crude violation” of international rules. Crimeans voted to leave Ukraine for Russia on 16 March, in a referendum condemned as illegal by the UN General Assembly.

Mr. Medvedev announced that he would make Crimea a special economic zone, with tax breaks and reduced bureaucracy to attract investors. He also vowed to quickly boost salaries and pensions, and to improve education, healthcare and local infrastructure.

Tensions between Russia and the West rose after the overthrow of pro-Kremlin Ukrainian President Viktor Yanukovych in February, following months of street protests. Russia’s subsequent decision to annex Crimea triggered a crisis in relations. The US and the EU have imposed sanctions on members of President Vladimir Putin’s inner circle and other officials. Russia has retaliated with its own sanctions on US politicians.

Beijing and Moscow: Pyongyang’s Silent Partners

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Photo released by KCNA news agency on March 29, 2013 shows top leader Kim Jong-Un attending an urgent meeting with top military officials

As tension mounts on the Korean Peninsula, consider the two most reluctant participants, Russia and China.

Photo released by KCNA news agency on March 29, 2013 shows top leader Kim Jong-Un attending an urgent meeting with top military officials

Russian involvement in Korean affairs can be traced back to the 19th century and China has been involved for several centuries. Both states are trapped into supporting Pyongyang for economic and diplomatic rewards. After the fall of the Soviet Union, Yeltsin gambled that the cancellation of economic aid would lead to better economic relations with the Republic of Korea. The gamble failed because China entered the void that Russian influence had once filled and consequently it partly restored its traditional suzerain relationship with Korea. Yet to gain this influence, China took over the burden of aid to Pyongyang, which now accounts for 70% of energy and regular donations of over $1m in food aid.

Without significant influence over Pyongyang, the weakest partner in the Six Party Talks, President Putin and Medvedev have both attempted to rekindle relations. This has gifted Kim Jong-Un an opportunity to take advantage of Sino-Russian competition for influence. He and his father, Kim Jong-Il, exploited this opportunity by continually refusing to settle Cold War era debt, stating that they were donations.

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Evolving Russian-Western Relations

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President Obama talks with Dmitry Medvedev in France. Pete Souza/White House

Russia has recently emerged as an important ally of the United States. Not only does the United States need Russian assistance in dealing with uncooperative states and in a supporting role in Afghanistan, but Europe is also finding Russian cooperation to be extremely useful. As the United States and NATO seek Russian assistance in several global regions, these states and institutions are recognizing that Moscow is no longer as dependent on their support as it once was.

President Obama talks with Dmitry Medvedev in France. Pete Souza/White House

However, these states and institutions are learning that relying on Russian assistance around the globe does have a price. For example, due to Russian objections, the United States canceled its land-based missile defense system in Poland and the Czech Republic, in favor of a sea-based system. Europe is paying more for natural gas from Russia, and in some cases access to natural gas is limited in the wake of payment disputes between Russia’s Gazprom and Ukraine.

Since 1945, Russia has been an important global player, due to its immense size, nuclear arsenal and permanent membership on the U.N. Security Council. While Russia endured severe growing pains following the collapse of the Soviet Union, it has since rebounded; and, in some situations, directly challenges the supremacy of the United States and NATO. Failed economic transition, along with the weight of IMF and World Bank loans, created the stage for a structural economic policy implemented in the 1990s by Boris Yeltsin, which involved the state selling off managing shares or whole industries, in order to add liquidity to the Russian economy. This policy had far-reaching ramifications. The oligarchs gobbled up nearly all state industries.

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