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15 November 2010
 In the beginning of November, another round of the negotiations between the Russian authorities and Gűnther Oettinger, the European Commissioner for Energy, was held in Moscow on the background of significant European events. The European Commission submitted an updated energy strategy until 2020 to the European Parliament.
The Principal Analyst of the Moscow International Energy Forum «Russian Fuel and Energy Complex in the XXI Century» Alexander Epishov commented on the results of the meeting of Gűnther Oettinger, the European Commissioner for Energy, and the Russian Vice-Premier Igor Sechin as follows:
– In April 2010, Gűnther Oettinger came to Russia for the first time to hold negotiations with the Russian authorities on the prospects of Russian – EU energy relations development. Then he met with the Gazprom Company Head A. Miller, took the floor at a plenary discussion at the Moscow International Energy Forum (MIEF) «Russian Fuel and Energy Complex in the XXI Century»; within this Forum, he held negotiations with the Minister of Energy of the Russian Federation S. Shmatko; he also attended the official opening of the sea sector of the Nord Stream gas pipe line.
Russia became the first country outside the EU to be visited by the new European Commissioner. This fact became a sort of confirmation that the European Union adequately treated Russia as a key strategic partner in the European energy safety securing. The G. Oettinger’s address at MIEF-2010 was exceptionally positive; every line of the speech underlined importance of the energy industry relations with Russia, and the European Union’s readiness to discuss the current international energy complex problem with due account for new approaches.
Six months have passed since then; it is quite enough to turn the intentions to real projects and agreements. Russia and Poland has signed an agreement on gas export and transit conditions for the period until 2022. Bulgaria and Russia have reached an agreement on the South Stream Project. Once again Turkmenia has confirmed its commitment to settlement of the Caspian issues only with the participation of all the Caspian-bordering states and their opinions considered; it actually means that an underwater gas pipe line of the East-West direction through the Caspian Sea can not be constructed without Russia’s consent.
In terms of geopolitics and geostrategics, the Russia’s position on the EU energy market seems to be forcible and quite strong. Though, on the European market, Russia bears serious risks and significant uncertainties too.
First, the new European Union energy legislation considerably weakens the stand of Russian companies, first of all Gazprom. It is obvious that while the Gazprom’s corporate structure and monopoly positions on the market remain as it is, the company’s participation in the EU syndication market will be impossible.
Second, the recent changes of the global market of gas and all its components (liquefied natural gas, gas from unconventional sources, spot market, etc.), in certain degree, undermine the established system of long-term contracts.
Third, the European gas market having endured the crisis compression is rising slower than Gazprom would like.
Fourth, the Nabucco gas pipe line is of higher-priority status for the European Union. Even though its raw base raises numerous questions: it is obvious that the Azerbaijanian gas will be transferred to Europe without passing the Russian territory; the same situation will probably occur with the Iraq gas. Turkmenian participation in this project can not be excluded either – gas can be transferred through the Caspian Sea in the form of liquefied natural gas.
Finally, the higher rank international executives tend to propose distinguishing between gas – and petroleum product pricing. The consequences of such an action development for Russia are the topic of a separate analysis and comment.
Thus, as usual for big-time politics, – and everyone clearly sees that the energy industry is a key issue of the big-politics agenda – the situation is complex and contradictory. The most conflicting issue is the Third Energy Package; and it is unclear yet how Russia and EU will cope with the consequences of its adoption.
Turning back to the last G.Oettinger's visit, one can state that today the lack of strategic compromise between Russia and the European Union in the energy sphere is inconvenient for both parties. It is also clear that EU can not but take account of the current realities: the task of provision of Europe with energy resources may be solved only with Russian participation (and mutually profitable at that).
That is why the European Commission attempts to balance on the edge of the existing contradictions. On one hand, EU is promoting the clearly-politically-charged new energy legislation and supporting the clearly-commercially-inefficient Nabucco Project. On the other hand, it is making compliment towards the Russian Fuel and Energy Complex, giving out new promises to support development of the Russian energy projects in Europe, inviting Russia to contribute to development of «EU Energy Road Map until 2050».
It would be very desirable if the complex political situation in EU would finally become pragmatic. In the new global world, a policy can not be effective unless backed up by an efficient economy.
It is the moment of truth coming for the European Comission: either it really transfers the nature of its relations with Russia from the political domain to the economic one with real mutual profit for both parties; or the snowball of problems and contradictions will grow and threaten the European energy safety indeed.
On the photo: European Commissioner on Energy G.Oettinger
Translated from Russian into English by Literra translation bureau
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