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Putin threatens to bar America from promised Shtokman gas

Publish date: September 25, 2006

In what analysts are calling a move to pressure the United States, Russian President Vladimir Putin has threatened that Russia will not ship natural gas from the hotly-sought resources of the Shtokman gas and oil field as earlier expect, but will give it to Germany instead, Russian news agencies reported Monday.

Analysts say Putin’s announcement could seriously back-fire and irreparably damage relations with the United States, which has been rubbing its hands for Shtokman field gas since Russia first promised it to Washington. The Shtokman field, off Russia’s Arctic coast, is considered to be one of the most oil- and gas-rich areas in the world, with a total of 3.6 million cubic metres of gas.

In talks with French President Jacques Chirac and German Chancellor Angela Merkel, Putin said that Russian gas giant Gazprom, which owns the leasing rights to drill the as yet to be developed field, was reviewing the possibility of diverting gas resources Putin promised Washington to Germany. Merkel is said to have approched Putin about securing the Shtokman gas that Moscow had long earmarked for the United States.

“If today we are delivering 55 billion cubic metres of gas on the whole to Germany, then we could deliver (an additional) 25 to 45 million cubic metres from just one area of the Shtokman field,” said Putin during the talks, according to Gazeta.ru. Putin said gas reserves from Shtokman will hold for 50 to 70 years and will “create a stable situation in economics and energy for Europe as a whole and Germany in particular.”

But experts say that Putin’s words were not for the benefit of Europe, but rather a move to put pressure on America, on whom Russia’s long-coveted entrance into the World Trade Organization (WTO) hinges.

“Now a situation is arising in which – judging by what is happening surrounding the Shtokman field – Russia wants to play (the Shotkman) field as its trump card in talks with America about entering the WTO,” said Dmitry Mangilyev, an analyst with the IK Prospekt brokerage firm in Moscow to Gazeta.ru.

“Now everything hangs on the US decision on Russia and the WTO, so accordingly (Russia) is going to make decisions about US access to and distribution of Shtokman gas resources.”

Political analysts, however, view the situation differently. According to RAN Institute of Geography analyst Dmitry Oreshkin, Russia’s is currently leading an isolationist policy that could lead to more serious consequences.

“The Russian elite misses talking in a commanding voice,” Oreshkin told Gazeta.ru. “Russia is demonstrating its preparedness to lead the dialogue on energy supply from the position of an energy super-power.”

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