The Putin Puzzle Revisited

Putin’s presidency is constitutionally mandated to end in 2008, when new elections will be held. But who is Putin’s Putin? He succeeded Boris Yeltsin by promising that, whatever purges he might carry out, Yeltsin and his family would be shielded. Yeltsin was old, ill and alcoholic, and Putin’s offer must have seemed one he couldn’t refuse. Putin is young and vigorous, and has no reason to put his fate in the hands of a successor or successors who wouldn’t be able to guarantee his lifelong immunity even if they wanted.
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The Kremlin’s Shell Game

President Vladimir Putin believes that a powerful, state-controlled energy sector is the key to Russia’s economic future, even if he has to strong-arm foreign investors to get it. But trampling property rights is risky. It is as likely to leave Russia an economic pariah as an energy superpower.
Read more in today's New York Times editorial...

Vladimir Putin: Turning Energy Into Power

In 2006, Putin made use of high oil prices to bolster Russia's position in the world to the strongest it has been since the cold war ended more than 15 years ago. "He's using the advantage of high oil prices to make Russia count," says Margot Light, a Russia expert at the London School of Economics.
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ConoccoPhillips To Raise Stake In Russia's LukOil to 20 Percent

US energy giant ConoccoPhillips said it plans to raise its stake in Russian peer LukOil to 20 percent by the end of this year. In a joint statement, the companies said the move is part of a strategic alliance that was announced in 2004. The companies said in the same statement that LukOil has acquired 376 Jet brand fuelling stations in Europe from ConocoPhillips.
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Russia Rises On Global Oil Demand

Russia has emerged as an unrivaled energy superpower in a world thirsty for oil and gas, but the country's recent moves to seize control of strategic parts of the energy industry have slowed growth in production and raised questions about the legal rights of investors and speed of future development, writes Patrice Hill for The Washington Times.
As the world looks increasingly to Russia to satisfy its energy needs, the International Energy Agency is raising questions about whether growth in Russian oil and gas exports will be fast enough to keep up with rising demand in Europe and commitments Russia has made to deliver oil and gas to both Europe and Asia. "Will the investments take place? Will they come on time?" asked William C. Ramsey, deputy executive director of the international agency. "These are costly projects. ... We're concerned that the investment climate now is not conducive to bringing those resources online."
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Russia's Window to the East

Today, the European Union receives a half of its imported gas and a third of imported oil from Russia, which delivers nearly all of its hydrocarbons exports to Europe. Russia's Asian neighbors, on the other hand, receive by rail only 3% of Russia's oil and no gas. This is about to change, according to RIA Novosti's Yury Alexandrov.

In late 2004, the Russian government issued a resolution on the construction of a controversial 4,000-km East Siberia - Pacific Ocean (ESPO) oil pipeline with a throughput annual capacity of 80 million tons. Out of this amount, up to 30 million tons of oil should be sent along the first leg to Daqing, the oil producing center of China, and some 50 million tons to the Pacific coast (second leg).

During President Vladimir Putin's recent official visit to China, energy giant Gazprom and China National Petroleum Corporation (CNPC) signed an agreement on the annual delivery of 30-40 billion cubic meters of gas to China after 2010, with a possibility of increasing deliveries to 60-80 billion.
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Russia to Create Giant Company to Control Oil and Gas Production at Sea Shelf

Russian daily Kommersant reported on Monday, Dec. 11, that the meeting of the Russian Security Council chaired by President Putin on Saturday developed a new strategy to give the government control of oil and gas extraction on the Russian sea shelf. The paper reported that the Russian authorities may combine state-controlled giants Gazprom, Rosneft and Zarubezhneft into a single government monopoly that would take over the shelf production.
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Russian Energy Billionaires

The United States and Russia accounted for 38 of 45 energy billionaires on this year's Forbes list of world's richest people. First on the list is Roman Abramovich, the owner of the Chelsea soccer team, who sold his stake in oil firm Sibneft to the state owned Rosneft for $13 billion. First among active oilmen is another Russian, Vagit Alekperov, the president of Lukoil.

Azerbaijan Halts Oil Transfers Through Russia

Azerbaijani Prime Minister Artur Rasulzade has announced that his country will be able to cover its energy needs starting Jan. 1, 2007 and will stop the transfer of Azeri oil through the Baku-Novorossisk pipeline. This is seen as a retaliatory measure following Gazprom's proposed increase of the price of Russian natural gas exported to Azerbaijan from $110 to $230 per 1,000 cubic meters.

On November 22, Gazprom announced new price levels for natural gas in an attempt to bring the prices it charges its ex-Soviet neighbors to European levels. These countries have previoulsy enjoyed preferential rates. This move was also seen by some as policial motivated and meant to punish its unruly neighbors, notably Georgia and Ukraine. In the case of Azerbaijan, its president Ilham Aliyev said on December 4: “It is clear that the price of $230 per 1,000 cubic meters suggested by Russia is very high for us. Therefore we have to consider different options. If need be, we should consider reducing the volume of oil being exported to Russia via the Baku-Novorossiysk pipeline in order to provide ourselves with electricity. We have no other choice because we use gas imported from Russia to produce electricity at our power plants.” Today Prime Minister Rasulzade announced Azerbaijan's intention to forgo Gazprom's deliveries and rely on its own reserves instead.

Azerbaijan's decision to not export oil through Russia via the Baku-Novorossiysk pipline is also an economic one. The transit tariff of $2.05 is exactly five times higher than on the shorter alternative route to the Black Sea, the Baku-Supsa pipeline that through Georgia.

This event marks the emergence of the first ex-Soviet country that is independent on Russian energy, notes Stratfor. Russian reaction remains to be seen, but it is unlikely that many others will follow in the near future.