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June 2007


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FROM TANKS TO BANKS (AND BACK AGAIN)

Jirí Komínek examines the new Russia, where energy dominance has replaced military might as the primary lever of power


Moscow is now looking beyond its traditional hunting grounds and is in the process of consolidating the world’s largest producers and exporters of natural gas in the Middle East and North Africa. We now stand at the dawn of a natural gas version of OPEC, with Russia at its head.

At a two-day conference held in Qatar in April, attended by representatives of all the leading global gas exporters, Russian energy minister Viktor Khristenko said his country is not seeking to establish an international natural gas cartel.

He added, however, that Russia would like to see a system created through which all major gas exporters would coordinate prices.

Surprisingly, all of the attendees agreed this was a good idea and voted to place Russia in charge of a new committee that will meet at least six times in 2007 to discuss what a cubic metre of natural gas should cost. Algeria’s energy and mines minister, Chakib Khelil, put it best when he spoke to Reuters on 9 April in Qatar, stating that “the creation of a gas OPEC is a long-term goal”.

President Vladimir Putin is the chief architect of Russia’s current push for energy supremacy

All this should be placed in the context of the fact that while Russia is seeking to dominate the global gas trade, the Putin regime is becoming increasingly oppressive on the home front. As opposition to the Putin administration intensifies in the face of the presidential elections scheduled for late 2008, so does the intensity of the state response, with FSB internal security service officers arresting or detaining hundreds of leading opponents as they arrive from other parts of the country to participate in illegal protests in Moscow. This begs the question: is this the new Russia, or the old one? The answer is both, with “new and improved” also meaning stronger, faster and more menacing – and less tolerant of internal dissent.

Fuelled by petro revenue, Russia is currently embarking on an ambitious and massive restructuring of its military-industrial complex and its armed forces. What this will mean in the future remains to be seen.

While Putin complains about US intentions to base a radar and missile defence system in the Czech Republic and Poland designed to intercept Iranian nuclear-tipped missiles fired at Europe, he has neglected to inform the world that Russia has similar strategic surveillance radar systems located in western Ukraine, just 45km from the Slovak border. It should be noted that Slovakia is a NATO member.

Additional radar installations are located in Belarus and near St Petersburg. Another system is located in the breakaway pseudo-state of Transnistria, whose Russian-speaking population broke away from Moldova in 1991 following a brief civil war. NATO officials have noted that the Russian radar located in Transnistria has a range of 2,000km and sees west beyond London.


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Oil, Gas & Mining

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Related Stories:
  1. In A State Of Hope

    Nigeria has an unenviable reputation for underachievement but there are signs that long-awaited government reforms are turning the country’s...

    Go to Article »

  2. Innovations

    Adjustable-focus glasses for the developing world and fuel from algae

    Go to Article »

  3. Open for Business

    Iraq is embracing independent rule, yet its success will depend largely on outside forces. Martin Chulov reports

    Go to Article »

  4. Black Gold Rush

    As troops are slowly replaced by businessmen, the battle for Iraq's oil is just beginning. Martin Chulov reports

    Go to Article »




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