27 March 2013

Russia's new Middle eastern energy game

is the headline on this article from The Commentator. Written by Peter C. Glove & Michael J. Economides, it argues that many observers of Russia have got it badly wrong. While there is no doubt that Russian (read Putin's) rhetoric is pro-Assad and pro-Iran, the practice is about to get very different.

The key comes from a sentence in the middle of the article: "Russia’s economy depends on its energy revenues." And there's just been a major change in the focus of where those revenues will come from: the Russians, via the government-backed Gazprom, have just signed a 20 year deal with various Israeli and Greek Cypriot energy exploiting corporations. Further, "[T]he 20-year contract between Gazprom Marketing, Trading Switzerland and Levant LNG Marketing Corporation represents only the first step in Russia’s new Middle East energy game."

The argument is that, as noted above, "Despite the Kremlin’s apparent public support for its traditional Middle East...partners, its actions represent nothing less than a paradigm shift in the tectonic plates of regional power. More specifically, they represent an effective selling out of Russia’s backing for both Iran and Syria" The reason is very simple: there are vast natural gas reserves beneath the Eastern Med.: the original Tamar and Dalit fields hold some 9 trillion cubic feet (tcf) of gas, Israel's Leviathan field holds 25 tcf and the Levant Base as a whole something in the region of 123 tcf and 1.7 billion barrels of oil, according to the US Geological Survey.

Them's pretty big apples.

Why should that concern us here, or anywhere else, unless we have holdings in energy companies? Well, [g]iven that the Leviathan-Tamar holdings are dominated by a raft of Israeli companies...together with a 39 percent stake held by the US oil major Noble Energy...one can only surmise that critical security commitments have been made by the Kremlin to their new Israeli and US partners." Or, in slightly plainer English, Putin, et al, have promised, even if not in quite so many words and without their fingers crossed behind their backs, that their new best friends in the region can rest assured that their more interested in the cash-flow from the liquified natural gas than propping up the Ayatollahs, let alone Mahmoud the Mad.

Also, "...it sends a clear message to Turkey should the Ankara Government consider military intervention in an attempt to stop Greek Cypriot gas and oil exploration and infrastructure development. Second, for all its apparent support for Syria’s Assad regime, Russia’s energy partnership with Israel is clearly meant for the long haul..."

Maybe that's why, however reluctantly, Erdogan accepted, sort of, Netanyahu's sort of apology for the Mavi Marmara incident.

By: Brian Goldfarb


SnoopyTheGoon said...

Another way of looking at it is Putin uses relations with Israel as a stick on Syria and Iran. Then Syria and Iran to threaten Israel. A pretty neat trick.
Also, rumors are about that Russia's odd behavior over the Cypriot banking problems stems from them laundering money to Assad thru Cyprus.

SnoopyTheGoon said...

Maybe, Sennacherib, but then, if that happens, the road to Damascus is wide open to the IDF, and there are always ways to break unbreakable contracts. Especially bearing in mind that 39% US holding.

Russia only thinks it's still a major power; the US knows it's one.

SnoopyTheGoon said...

" the road to Damascus is wide open to the IDF" in reality it always has been. International relationships have a high component of perception vs. reality. It isn't so much what Russia thinks of itself as what others think of her. You are correct about "unbreakable contracts" history is littered with them. I just think that this could have a part of Putins' strategy and would be a good one if not over played.