[A-List] Russia's Balkan energy grab

["Tony B." <tal1@xxxxxxxxx>]

US worried about Russia's Balkan energy grab

25 Jan, 2008, 2202 hrs IST, REUTERS
BELGRADE: The United States is deeply worried that Russia's energy deals 
with Bulgaria and Serbia will tighten its grip on Europe's energy supply and 
turn into a tool of political pressure, diplomatic sources say.

The two Balkan states signed up to the Kremlin backed South Stream gas 
pipeline over the last week. The 10 billion euro project is seen in the 
European Union as a rival to its Nabucco scheme, designed to ease its 
dependence on Russian energy.

On Friday Serbian leaders also signed a deal with Russia giving Moscow 
control of the Serbian oil monopoly. A confidential Serbian government 
document obtained by Reuters said Washington was considering using 
diplomatic channels to express its concern at the deal and point out the 
shortcomings.

"The US side warned about the political influence Moscow would gain by 
controlling energy resources in Serbia and the region, and expressed a 
negative assessment about the economic justification of South Stream," said 
the transcript of a high level meeting between US and Serbian officials in 
Belgrade.

"They questioned whether our party took into consideration all strategic 
effects: possible economic dependency and possibility of political control. 
They were especially concerned with Bulgaria's decision to join the deal 
with Gazprom, because it undermines attempts to diversify European gas 
supplies."

South Stream is proposed by gas export monopoly Gazprom and Italy's Eni to 
expand Russian supplies to Europe's south. Western diplomats in Sofia voiced 
the same concerns, saying the US was unhappy to see Russia cementing its 
presence in the Balkans, possibly gaining a political and strategic foothold 
as well as an economic one.

A State Department spokesman told Reuters via telephone from Washington that 
the US continued to view Nabucco as the best scheme to provide energy 
diversification in Europe. "Any new energy projection the Eurasia region 
should contribute to competitive, market-oriented environment for the 
Eurasian energy and should meet international standards of transparency," 
the spokesman said.

"For this reason, we continue to view the Nabucco project as the best option 
for achieving European energy diversification, particularly with regard to 
providing a direct route to Europe for Caspian and central Asian gas 
supplies."

Sources in Bulgaria said Washington tried to convince the government in 
Sofia to back out of the project last week, and Bulgaria's publicly stated 
reason for hesitating its wish to have 51 per cent of the pipeline on its 
soil was a cover.

It finally signed with a 50 per cent share. Washington's worries about 
transparency have been echoed by analysts who say it is partly politically 
motivated. Russia is Serbia's only ally in its bid to block independence for 
the Albanian majority Kosovo province, while the EU is likely to recognise 
the territory within months.

Bulgaria's situation is more complex: it is keen to prove its loyalty to the 
EU, which it joined in 2007 after years on the waiting list, but it remains 
dependent for almost all its gas and oil on Russia.

On Friday, the government in Sofia was on the defensive. "There were 
comments that Bulgaria had stabbed the EU in the back and had helped the 
Russian interests," Bulgarian Prime Minister Sergei Stanishev told 
parliament.




http://economictimes.indiatimes.com/News/PoliticsNation/US_worried_about_Russias_Balkan_energy_grab_/articleshow/2732573.cms


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