11:29 GMT +320 July 2018
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    Shtokman reverse

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    MOSCOW. (Dr. Igor Tomberg, for RIA Novosti) - The Russian government has again given foreign companies hope of joining the Shtokman project. However, they will be able to develop one of the world's largest gas fields only if they make "interesting proposals" to Gazprom in return.

    The Russian state-controlled monopoly wants to gain access to end gas consumers in the United States and Europe.

    Late last week Russian President Vladimir Putin announced that Western partners' proposals on the Shtokman field in the Barents Sea could be considered again. "At talks with its potential partners, Gazprom is seeking access to end consumers of natural gas in the U.S. and Europe in return for a stake in the development of Europe's largest gas field," said Putin in an interview with Mexican publisher Mario Vasquez Rana. "It has not succeeded so far, but the issue has not been dismissed finally. It can be considered again if we receive interesting proposals from foreign partners."

    The president's aide Igor Shuvalov in Washington and Industry and Energy Minister Viktor Khristenko in Moscow also spoke about the possibility and desirability of foreign companies' involvement in the Shtokman project about the same time.

    So far, foreign companies have not made any proposals that would be as interesting as Shtokman, Khristenko said. "This means that we can attract partners in a different capacity: as contractors in the project's vital elements or as participants, but in a different format and on different terms," he said. Shuvalov said that Shtokman would be developed together with foreign firms, but Gazprom would be the only license holder.

    So bargaining around Shtokman goes on. Russian officials do not conceal that access to one of the world's last fields of this scale is a political rather than financial or technical issue. Russia's seemingly tempered position on the project can turn out to be part of a bigger energy play. Arguing with Western partners on the basic principles of energy security and on ratification of the Energy Charter, Moscow uses its natural resources as a bargaining chip, demanding equal conditions in global business. Russia is willing to look for mutually acceptable decisions and to closely cooperate with Western partners, provided this cooperation is mutually beneficial, said Russian Foreign Minister Sergei Lavrov. So far this position has been rejected by Russia's partners.

    Considering Russia's new statements on Shtokman in the political context of recent months, they obviously come from assuaging contradictions with Western, especially European, partners. It is no coincidence that Russian official statements came at a time when the EU-Russia Permanent Partnership Council on Energy held its second meeting and similar views were voiced by its participants. "The European Union hopes that European companies will successfully cooperate with Gazprom in the Shtokman field development," said Andris Piebalgs, EU Energy Commissioner, on Friday. His optimism is fully in line with foreign companies' sustained interest in joining the project.

    This opportunity will appear only in exchange for significant assets in Europe and, perhaps, in the U.S. Today it is difficult to predict the format and scale of Western participation in the project. There is no longer talk of giving them a 49% stake as before. According to media reports (see Kommersant, December 11, 2006), the meeting of the Russian Security Council on December 9 discussed the government's new strategy in offshore fields development. Under the strategy, the Kremlin will set up a new state-owned company with the participation of Gazprom, Rosneft and Zarubezhneft to develop Russian shelf deposits. The outlook and the size of the future shelf monopoly can be assessed through the scale of its task. Recoverable reserves of Russian shelf exceed 100 billion tons of oil equivalent, according to the Natural Resources Ministry. In 2020-2030, offshore reserves will be the main source of hydrocarbons in Russia.

    So foreign companies are unlikely to receive any significant stakes in the Shtokman project. At best, they can hope to get gas from the field as payment for state-of-the-art production technologies. Yet even mere participation in the project is extremely valuable. It is logical to expect truly interesting proposals from Western candidates and view the current surge of interest in the project as a Christmas present from the Russian authorities in the ongoing political bargaining with the West.

    Dr. Igor Tomberg is senior research fellow at the Center for Energy Research, the Institute of World Economy and International Relations, Russian Academy of Sciences

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