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Gazprom's huge
Venezuela gas deal alarms US
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Conal Walsh Sunday August 6, 2006 The Observer Gazprom, Russia's state-controlled gas company, is
risking a diplomatic row with the United States over a mooted
multibillion-dollar pipeline investment in Venezuela.
The Russian gas giant is close to a deal on the project, according to Venezuela's firebrand President, Hugo Chavez, who has led opposition to US influence in Latin America. News of the possible tie-up follows Gazprom's recently declared interest in investing in Bolivia, another regional enemy of the US, and is the latest sign of Moscow's deteriorating relationship with Washington. It comes after the Russian President, Vladimir Putin, failed at the G8 summit in St Petersburg in July to secure American support for its entry to the World Trade Organisation. President Putin has also argued with Western countries over the growing power of Gazprom, which supplies 25 per cent of the European Union's gas and controls the vast pipeline network linking Siberia and the Caspian region with the West. A dispute over gas pricing between Gazprom and the Ukrainian government brought temporary disruption to Europe's gas supply earlier this year, and prompted US Vice-President Dick Cheney to accuse Moscow of 'intimidation and blackmail'. The US and Russia have also disagreed over human rights and Iran, and the prospect of a state-backed Russian company entering the western hemisphere is likely to jangle many nerves in Washington. On a visit to Moscow last week, Chavez told a Russian TV news programme that 'Gazprom and its technicians are studying a project for the construction of a gas pipeline from Venezuela to Argentina'. The proposed 9,000-metre pipe, championed by Chavez, aims to link Venezuela's huge natural gas reserves through Brazil to Argentina, with branches extending to Bolivia, Paraguay and Uruguay. Gazprom already has two exploration licences in Venezuela, Latin America's biggest hydrocarbons producer. But the pipeline would represent a step-change in its involvement there. In June, Gazprom revealed that it was in discussions to invest $2-3bn in Bolivia, which, alongside Venezuela and Cuba, is part of a self-declared 'Bolivarian axis' that aims to be a regional counterweight to the US. Gazprom has expressed interest in joint exploration and production projects in Bolivia, which recently announced plans to renationalise its energy industry, to the probable detriment of many Western companies with investments in the country, including Britain's BG. Gazprom, which is 51 per cent owned by the Russian government, controls around a quarter of global gas reserves but is keen to diversify abroad. The company has formed production joint ventures with Western companies within Russia, and made downstream acquisitions of its own in Europe. The company has persistently been linked with a possible bid for Centrica, Britain's largest gas distributor. Complete archives at http://www.sitbot.net/ Please let us stay on topic and be civil. OM
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