Analysts frown upon Gazprom expansion

MOSCOW – Undeterred by the global slowdown, Russia’s state-run energy leviathan Gazprom has pushed ahead with an expansion masterplan of huge ambition, including Namibia, that has raised questions over its true motives.

Gazprom chief executive Alexei Miller has warned Europe – keen to break Russia’s stronghold on gas supplies – against turning the issue of energy diversification into a ‘fetish’.But analysts say it is the Russian gas giant’s own actions that are now bordering on the abnormal, with deals often being motivated by factors like politics or pride rather than economic sense. ‘Gazprom has acquired the function of the foreign energy relations ministry,’ said Mikhail Korchemkin, director of the East European Gas Analysis think tank.’Like the ministry, it’s being driven by factors other than profit.’Recent Gazprom deals have worried analysts that the country’s largest publicly traded company has become a political vehicle whose sole purpose at times is to cripple a rival project at the expense of economic sense. The West has long accused Russia of employing hard-knuckle tactics to pursue its energy goals at home and abroad. Former US Vice President Dick Cheney in 2006 famously described Russia’s energy riches as ‘tools for intimidation and blackmail.’A deal in June with Azerbaijan listing Gazprom as a preferential buyer for gas from the second development phase of the country’s enormous Shah Deniz offshore field was primarily aimed at thwarting Europe’s Nabucco gas pipeline project rather than making a profit, analysts said.’Given Gazprom’s excessive domestic production capacities, we see more politics than economics in this agreement,’ Renaissance Capital investment bank said. A recent report in the Kommersant newspaper said Russia has offered to pay Azerbaijan as much as US$350 per one thousand cubic metres of gas.Gazprom also sees itself as a force to help Russia reassert its clout in Africa, another former Soviet sphere of influence. During President Dmitry Medvedev’s four-nation tour of Africa late last month, Gazprom and Nigerian National Petroleum Corporation agreed to establish a 50/50 venture that would invest at least US$2,5 billion to explore and develop some of Africa’s largest oil and gas reserves. Gazprom also said it would help fund the development of Namibia’s prized Kudu gas field, the country fs only commercial gas field to date. ‘The logic is not quite clear,’ said political commentator Yulia Latynina, who writes for the opposition Novaya Gazeta. -Nampa-AFP