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Neftegaz.RU: Energy Ministers From 11 Countries Say Russian Energy Policy Raises Risks for Europe

Eleven energy ministers warned of rising political and commercial risks to Europe’s energy markets as President Vladimir Putin issued a warning to “unconscientious” investors, Agence France Presse reported on Thursday.

“The ministers note the recent developments in energy markets and the ever increasing potential risks of a political and commercial nature,” the 11 Black Sea-region ministers said.

“The reliability of access to energy (is) subject at this stage to challenges and threats of both a short-term and long-term nature,” they said in a statement.

The warnings after a two-day summit of the Black Sea Economic Co-operation organisation (BSEC) came shortly after Russia rattled energy investors by threatening to shut down the world’s largest private oil and gas project.

Russia last week withdrew a crucial environmental permit for the $20bn (15.8bn-euro) Sakhalin-2 project in the Russian far east, citing environmental violations by the foreign companies running the project.

Putin added a further warning yesterday, saying that the government would take action against companies that were too slow in developing their projects.

“I expect the (natural resources) ministry and the government as a whole to take such decisions, including toward companies that work unconscientiously or do not fulfill licence agreements,” he said at a meeting with the minister for natural resources in the southern Russian city of Sochi.

Russian officials also hammered foreign firms developing Sakhalin-2 at a separate energy industry conference in Sakhalin yesterday.

The warnings from the 11 energy ministers seemed to reflect conflicting interests in the Black Sea region, which Russian Energy Minister called an “indispensable” energy bridge between Europe and Asia.

The region’s clearest conflict has been between Russia and its Western neighbor Ukraine, which have had tense energy relations since Russia cut gas to Ukraine on January 1 during a price dispute.

Khristenko’s Ukrainian counterpart Yury Boiko was kept from the Sochi summit by tense talks in Moscow on a new gas supply contract.

Analysts have said that Russia’s ultimate goal is gaining control over Ukraine’s gas transport infrastructure, while Khristenko said that “achieving predictability” was Russia’s main motivation.

“The worst sort of predictability is better than the best unpredictability,” the minister said at a news conference.

The Black Sea ministers also faced conflicts over competing pipeline projects, such as Russia’s plans to expand its Blue Stream gas pipeline through Turkey to Israel and possibly Europe, which would rival the planned Nabucco pipeline.

The planned Nabucco pipeline would bring natural gas from Iran and Turkmenistan to European markets without crossing Russian territory.

Khristenko insisted that the Russian-Turkish Blue Stream gas pipeline had “proved its effectiveness both in financial terms and in terms of securing regional energy security.”

Russia and Turkey have clashed over Blue Stream since the pipeline came online in 2003, however, and delivery volumes have been growing at a slow pace amid price disputes and lower demand projections from Turkey.

The BSEC, which Russia is hosting this year, was formed in 1992 to co-ordinate the economic interests of Black Sea-region states such as Russia, Turkey and Ukraine. The group is one of several regional organisations embracing countries bordering the sea, and holds numerous annual ministerial meetings to coordinate the group’s economic policies.

Russia directs 30% of its gas exports to BSEC members.

The group’s main members are Russia, Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Serbia, Montenegro, Turkey and Ukraine.

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