ECONOMY

Putin’s energy priorities

The visit to Greece, in early October, by Russian Prime Minister Mikhail Fradkov, along with Energy Minister Viktor Khristenko, just a month after the visit by Russian President Vladimir Putin, was a confirmation of Greece’s importance in the Kremlin’s eyes as it pursues its new energy policy. The incident earlier in the year, when Russian natural gas monopoly Gazprom cut off the supply to Ukraine, citing differences over the price, clearly shows that Russia’s new energy policy aims at strengthening its global influence by using its huge oil and gas reserves to its advantage. Having prevailed over the oligarchs and put order to the market and the country’s external relations, Putin made control of the energy flows his priority and the prime means by which he intends to lift the economy. He has largely succeeded: The payment of the old Soviet debt ($23 billion), the improvement of the economy, obvious to even the casual visitor, and the investment of nearly $40 billion by state-controlled Russian firms in European and US companies are proof of that. Sometimes by cajoling, others by threatening, Putin has managed to take control of earnings from Russian oil and gas exports. At present, Russia’s oil production, at 9.6 million barrels per day, has surpassed Saudi Arabia’s (9.1 million bpd), with most of it exported, while natural gas production exceeds 600 billion cubic meters annually (a quarter of world production) and Russia’s gas reserves, at 50 trillion m3, are the world’s largest. «It is not difficult for someone who follows Russian developments to decode Putin’s thinking,» says a Moscow-based Greece businessman. «He fervently believes in Russia’s economic and social renewal and regaining its international standing, not through its military might anymore but through its economic and trade independence.» But what is Greece’s place on his agenda? The obvious and immediate goal is to pursue the long-stalled Burgas-Alexandroupolis oil pipeline. Putin is determined to put pressure on participating Russian oil companies to guarantee the amount of oil (35-40 million tons per year) that will pass through the pipeline. This pipeline is of some political importance to the Kremlin, since it does not want any further strengthening of Turkey’s position as a transit country. (1) C.N. Stambolis contributed this article to the Greek edition of Kathimerini.