Автор: Yuri Shevtsov, director of the European Studies Center at European Humanities University, Minsk
The year of 1999 is remarkable for many of its events. However, we take the liberty to state that several events, which remained beyond the scope of public attention, are of greater importance than the war in Yugoslavia or Chechnya. Among these practically indiscernible, but very important events, the transformation of the Russian fuel and energy complex (FEC) takes an important place. The changes became obvious in the first half of 1999.
It seems that only now the whole structure of the post-Soviet FEC is beginning to acquire some stable form, which is unlikely to change in the next 10-15 years. Since gas and oil industries are of paramount importance to the economy of new Russia, we can guess that stability acquired by the FEC will lead to political stabilization in this huge country, though it will be based on a new configuration of political forces. It is natural that transformations of the Russian FEC influence domestic and foreign policy of Belarus. But what are these new transformations in the FEC about? What consequences will Belarus and other neighboring countries face as a result?
First of all, Lukoil, the biggest Russian oil company, bought out another oil company, KomiTEK, in spring 1999. In addition, Lukoil has control over Arkhangelskgeologodobycha, a company in the Timan-Pechora region, which owns big oil fields. Thus, Lukoil has taken leading positions in the Timan-Pechora oil province.
Its main rival in the region is Yukos, the company which has failed to break the boundaries of the Priobsk Oil field situated to the east of the Timan-Pechora oil province. Even from a purely geographic point of view, Yukos and its development projects found themselves dependent on decisions of Lukoil to direct oil flows from the Timan-Pechora region to Europe.
Lukoil's breakthrough into the Timan-Pechora area has lead to the company's consolidation of control over all Russian projects in the most perspective oil region of the Russian Federation. Lukoil has turned into a most attractive partner for Western oil companies that are interested in the Russian oil market. The control over the Timan-Pechora region is enhanced by the company's leading positions in the Caspian region. Lukoil controls prospect oil fields in the northern part of the Caspian Sea. Besides, Lukoil is actively exploring oil fields in the Caspian Sea region, situated on the territory of Kazakhstan and Azerbaijan.
Consolidation of control over the Timan-Pechora region has allowed Lukoil to become the major Russian player in any projects connected with Russian oil supply to Europe. The strategic position of Lukoil in the Russian oil sector reminds one of the position of Gazprom in the Russian gas sector. Today Lukoil is the only oil company in Russia that pursues a coordinated policy towards European consumers of Russian Caspian oil within the most important for the EU projects. Since the breakup of the oil industry of Russia into several vertically-integrated oil companies, it is the first organizational structure that is capable of pursuing a relatively stable strategic policy targeting European consumers of Russian oil.
The new strategic position of Lukoil immediately stirred up the activity of developers in the Timan-Pechora region, northern territories, Priobsk oil field, and oil and gas fields situated on the sea bed of the Barents Sea. Oil companies' active exploration of the Russian North is implemented in accordance with the schedule of northern fields exploration, announced during the 1994 meeting of EU heads of states in Crete. Let us point out two main directions of the oil companies' activities: intensification of lobbying in the Russian Duma in order to speed up the decision on the inclusion of northern oil fields into the agreement on the sharing of products and concentration of efforts in order to accelerate transportation development projects, necessary to deliver northern oil to Europe.
Oil companies' lobbying in the Russian Duma coincided with a new jump in oil prices and with the beginning of a long-lasting presidential campaign. The addition of the northern oil fields to the agreement on the sharing of products permits to create stable financial and political environment for a political group in Moscow, which will win the presidential elections. In autumn 1999, the lobbying in the Russian Duma lead to an epochal event in the history of the Russian oil sector: in its third reading, Duma passed draft laws on the exploration of Priob oil deposits and the North Territory
project on the terms of product sharing. At the time of the publication Duma is likely to make some progress in the "northern direction".
Some strategic and, probably, geopolitical reference points of Russia after the presidential elections can be forecast even today. These forecasts are based on the transportation projects that were announced by Lukoil in 1999.
The Baltic Pipeline was chosen to be the main direction of the northern oil delivery to Europe. The direction was chosen following the consolidation of Lukoil's control over Timan-Pechora. There was an idea to direct all northern oil through Ventspils or through Belarus via the Druzhba pipeline. There was also an idea to build two new oil ports near St. Petersburg with capacity of 60 million tons or to build an oil terminal in Varandey at the Barents Sea.
Each of these projects has advantages and disadvantages. The implementation of each project will definitely bring about strategic and geopolitical changes in Russia. To put it simply, Russia's orientation to pump northern oil through Belarus (through the Druzhba pipeline or through Ventspils) strengthens Russia's ties with Europe, consolidates the European Union, and transforms Central Europe into Russia's ally inside the EU. Naturally, the use of continental pipelines strengthens the position of Belarusian leadership on the Russian domestic political front.
The construction of a large sea terminal at the Barents Sea will benefit primarily the USA. If Russian oil is sea-lifted to Europe around Scandinavia, the USA will gain essential strategic and military control over the supply of Russian oil. This would result in a situation similar to that in the Persian Gulf where steady delivery of hydrocarbon products to Europe is dependent upon direct presence of US Navy and diplomacy.
The sea terminal at the Barents Sea also creates prerequisites for the growth of separatism in the North of Russia. The Republic of Komi already set a precedence of such separatism in the beginning of the 90-s. The Komi Republic passed several legal acts contradictory to the Russian federal legislation. Today, separatism in the northern parts of Russia is impossible due to their inability to bypass continental Russia in transporting raw materials to consumers and due to the problem with the winter delivery of vital supplies to the region. The emergence of the oil terminal at the Barents Sea will make it possible to ease the problem of winter deliveries, while the transformation the oil terminal into the main avenue of Russian oil exports will inevitably lead to an outburst of exotic autonomous projects in the north of Russia.
The peculiarity of the situation is that it is impossible to explore northern oil fields without active participation of western oil companies. In this region, the West is represented mainly by American companies. Therefore, the building of the sea terminal at the Barents Sea will be to the detriment of continental pipelines and will not only foster separatism in the region but will also boost US influence in the region.
The orientation of the Baltic Pipeline towards St. Petersburg and the building of two new oil ports on the Baltics could be considered a kind of compromise. However, many questions arise as far as the economic expediency of the St. Petersburg direction of the Baltic Pipeline and the building of two new oil terminals are concerned.
The emergence of large amounts of northern oil in Europe in close proximity to oil pipelines crossing Belarus cannot but lead to the modernization of the Druzhba pipeline. I would like to remind you that in Central Europe, the modernization of pipelines in the countries joining the EU, including portions of the Druzhba pipeline, is part of the maintenance scheme inside the EU.
An additional stimulus for the modernization of the Druzhba pipeline in the Belarusian direction could become the need to pump huge volumes of the Kazakh oil. Let us remember that Kazakhstan announced its plans to increase oil output to 100 million tons per year by 2010. Kazakh exports could make up more than 80 million tons of oil. A portion of Kazakh oil will inevitably pass through the Druzhba pipeline.
Under certain circumstances, the Belarusian direction could be more advantageous than the St. Petersburg one. This may cause the "freezing" of the investments made into the construction of new environmentally hazardous ports at the Baltic Sea. Besides, turning St. Petersburg into a region of strong American influence, as a counterbalance to Moscow, will not add to political stability inside Russia.
The arrival of Lukoil to the Russian North stimulated both the idea of erecting a sea-terminal with initial capacity of 30 million tons of oil per year in Varandey and the idea of building a Baltic Pipeline oriented toward St. Petersburg's ports. Lukoil has declared the St. Petersburg Baltic Pipeline to be its top priority.
In other words, the coming of Lukoil in the northern regions of Russia is primarily in the interest of the USA. Intensification of competition between the European Union and the USA for control over strategically important resources in Russia is quite probable.
Developments in the Russian North can be considered as a big but not fatal defeat not only of European diplomacy but also of Belarusian diplomacy in the east. The St. Petersburg region is progressively developing into a Russian communication- center alternative to Belarus. In addition to two oil ports in St. Petersburg, construction of three ports for other commodities is also considered. There are other plans to build an oil pipeline from Yamal Peninsula to Germany.
Naturally, Belarus and other European countries would prefer Russian resources to be directed to Europe
through the continent. The development of the St. Petersburg communication hub will weaken pro-Russian sympathies in Belarus and will put to doubt the stability of the Russian-Belarusian Union.
However, transformations in the Russian FEC are effected not just by predominantly Russian domestic processes. The driving force behind the "perestroika" of the Russian oil sector might well be outside Russia. It is interesting that Russian transformations have become conspicuous only after the consolidation of western oil corporations was completed in 1997-98.
Moreover, in many cases western oil companies did not find it necessary to conceal that their operations on the territory of the former USSR were caused by purely internal processes brought about by the change of strategy of unified oil companies. In this connection, the statement of the British Petroleum Amoco p.l.c. (ВР Аmoco), set up in 1998, regarding its intention to cut back its operations in the European part of the former Soviet Union and to move to the region of the Caspian Sea and Siberia - Far East is quite crucial.
During the whole 1999, ВР Аmoco was trying to carry out its new policy. The efforts associated with the implementation of this new line became most obvious during the hassle around the oil company Sidanco, run mainly by ВР Amoco managers. Simultaneously, the ВР Amoco has drastically decreased its activity in Latvia and in the region of the Priobsk oil field. In addition, in 1999 the traditional Russian partner of ВР Amoco, the oil company Yukos, yielded to pressure exerted by Lukoil. It was only in October 1999 that BP Amoco tried to meddle in the conflict between Lukoil and the Lithuanian government regarding the privatization of the Lithuanian FEC. It offered Lithuania its services on more favorable terms than Lukoil did.
The reason for ВР Аmoco's behavior lies on the surface. In April 1999, this company declared its intent to merge with its traditional rival in the struggle over access to resources of the Russian North and Caspian Sea region - the American company Arco. Arco, in its turn, is a strategic partner of Lukoil.
In 1997 Arco and Lukoil signed an agreement on strategic cooperation, whereas Arco made an obligation to invest $1 billion in joint projects with Lukoil. This became the biggest agreement the kind between a Russian oil company and its western partner. At the same time, Amoco did not render adequate support to its Russian partner Yukos.
We cannot rule out the possibility that this is the reason why Lukoil has won the struggle for the Russian North despite the fact that Yukos has a longer experience of working in the North and that exploration of the Priobsk oil field by Amoco and Yukos seemed to be a practically settled issue. In the end of 1999 ВР-Аmoco took several actions in the Caspian Sea region that benefited Arco.
The situation in the Russian FEC became transparent on April 1, 1999. On that day, Arco and ВР Amoco declared about their intent to gradually merge. After that, they openly began the process of consolidation encouraged by the US government.
The aim of the two companies is to create the biggest oil corporation in the world. On April 1, September 1, 1999, and on December 2, 1999, these companies signed big intermediary agreements confirming their decision to merge. Both companies joined their efforts to optimize their activities in the region of the North Sea, Alaska, and in the Mexican Gulf.
The situation in the Russian FEC in 1999 is also consistent with the two companies' merger. Both companies agreed upon their spheres of interests in order to avoid unnecessary competition and to get ready for a large-scale exploration of Russian oil fields in the near future.
However, the unified company or a milder alliance of BP Amoco-Arco will be responsible not only for the supply of the European Union with Russian and Caspian oil. The economic centralization taking place in this corporation is bound to increase Western influence on Russia and on post-Soviet territories in general.
In 1999 all changes in the Russian FEC were the consequence of integration processes within western oil corporations. Russia and all post-Soviet territories have factually found themselves in the sphere of influence of one newly formed global force - BP Amoco-Arco. Today this force is finishing its internal consolidation and it is getting ready for an active exploration of Russian and Caspian resources in the interests of the developed Western countries.
Time of post-Soviet political chaos is probably running up. Extremely powerful political and economic forces of the West are beginning to operate on the territory of the former Soviet Union. Such forces did not exist before.
However, the emergence of such giant as BP Amoco-Arco does not necessarily mean that peace and order will be established in the region. Engrossed in the process of unification, Europe is unlikely to passively watch the appearance of an American monopoly that controls main European sources of oil. It is likely that after an outburst of struggle between the dollar and the euro we will witness various political games between the EU and the USA on the territory of Russia and the Caspian region.
We cannot exclude the possibility that the modernization of the Druzhba pipeline, as a counterbalance to sea projects of Americans, may become one of the important elements of Europe's play in the East. Anyway, Belarus, due to its crucial importance for the Russian oil exports, is not likely stay uninvolved into these economic and political storms.
Опубликовано 09 июня 2016 года
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