The Colder War by Katusa Marin

Author:Katusa, Marin
Language: eng
Format: epub
ISBN: 9781118800072
Publisher: Wiley
Published: 2014-10-15T00:00:00+00:00

Beyond Europe and Back

Quietly—over the past decade and even more so in recent months—Russia has been ramping up natural gas exploration and production in Nigeria, Egypt, Mozambique, and especially Algeria.

Russia and Algeria have a long history of close ties. Russia was the first to recognize Algeria's independence from France in the 1960s. Algeria was one of Russia's closest allies during the Cold War. The arms trade between them remains brisk. From 2003 to 2012, Algeria spent $54 billion abroad on military supplies, with over 90 percent of the money going to Russia. Those purchases accounted for 10 percent of Russia's total arms exports and made Algeria its third-biggest customer, after only China and India.

Whether out of gratitude or not, Gazprom was the first foreign company invited to participate in Algeria's petroleum industry, in 2006. The arrangement was recently extended to 2039. Their joint venture will explore and develop more than 30 prospective hydrocarbon deposits spread over an estimated 20 percent of Algeria's territory.

So what's going on here?

It's simple. Africa is the third-largest supplier of natural gas to the European Union, and by 2015 Moscow will control nearly half of Africa's production. That will put Moscow's hand on nearly 40 percent of Europe's gas supply. Moreover, Southern European countries like Italy and Spain, which don't depend on Russian pipelines but draw much of their natural gas from North Africa, would join the list of those sensitive to nudges from Putin.

Once again, Putin is thinking long term. When the infrastructure to process Africa's output is in place, nearly all of Europe will begin sliding into deep dependence on Russian-controlled gas. With Russia to the east and Africa to the south, the European Union will sit in an energy pincer that Putin can squeeze at any time for any reason.

Putin understands that being top dog in Europe isn't enough to be top dog in a world where European economies are stagnating and Asian economies are booming. Thus, while Gazprom seeks to heighten its influence in Europe, it's moving to expand its presence in the Far East as well.

The big prize there is, of course, the voracious energy market in China. (See Figure 8.3.) And by a big margin, there is no better source for the gas China needs than Russia. Perhaps because of centuries of mistrust between Russia and China, or perhaps because of the enormous size of the mutual benefit that was waiting for the two countries to come to terms, reaching a deal was a tortured process.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.