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Oil Politics -Trans-Siberian Pipeline

In: Historical Events

Submitted By shilpa87
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Trans –Siberian Pipeline:

The Urengoy–Pomary–Uzhgorod pipeline (also known as the West-Siberian Pipeline, or Trans-Siberian Pipeline) is one of Russia's main natural gas export pipelines, partially owned and operated by Ukraine. The pipeline was constructed in 1982-1984. It created the transcontinental gas transportation system Western Siberia-Western Europe.
Controversies surrounding the pipeline
The erstwhile Soviet’s plans to build the pipeline were considered a threat to the balance of energy trade in Europe, and were strongly opposed by the Reagan administration. The United States prevented U.S. companies from selling supplies to the Soviets for the pipeline, as part of what was also retribution against the Soviets for their policies towards Poland.
America's Western European allies, however, refused to bow to U.S. pressure to boycott the pipeline, insisting that contracts already signed between the Soviets and European companies needed to be honoured. This led to several European companies being sanctioned by the U.S. Government. Reagan reportedly said "Well, they can have their damned pipeline, but not with American equipment and not with American technology." The efforts by the U.S. pressure to prevent the construction of the pipeline, and its export embargo of supplies for the pipeline (1980–1984) constituted one of the most severe transatlantic crises of the Cold War.
Russia-Ukraine gas dispute
The Russia–Ukraine gas disputes refer to a number of disputes between Ukrainian oil and gas company Naftogaz Ukrainy and Russian gas supplier Gazprom over natural gas supplies, prices, and debts. These disputes have grown beyond simple business disputes into transnational political issues—involving political leaders from several countries—that threaten natural gas supplies in numerous European countries dependent on natural gas imports from Russian suppliers, which are transported through Ukraine. A number of issues that keep emerging as a result of this dispute are: whether Ukraine is using the supplies for its domestic consumption? Are Ukraine's actions being orchestrated by the United States?
Whether Russia is exerting pressure on Ukrainian politicians or attempting to subvert EU and NATO expansions to include Ukraine?
A serious dispute began in March 2005 over the price of natural gas supplied and the cost of transit. During this conflict, Russia claimed Ukraine was not paying for gas, but diverting it intended to be exported to the EU from the pipelines. Ukrainian officials at first denied the accusation, but later Naftogaz admitted that natural gas intended for other European countries was retained and used for domestic needs. The dispute reached a crescendo on January 1, 2006, when Russia cut off all gas supplies passing through Ukrainian territory. On January 4, 2006, a preliminary agreement between Russia and Ukraine was achieved, and the supply was restored. The situation calmed until October 2007 when new disputes began over Ukrainian gas debts. This led to reduction of gas supplies in March 2008. During the last months of 2008, relations once again became tense when Ukraine and Russia could not agree on the debts owed by Ukraine.
Mikhail Khodorkovsky: A victim of Oil Politics?
In 2004, Mikhail Khodorkovsky was the wealthiest man in Russia and one of the richest people in the world, ranked 16th on Forbes list of billionaire.
Khodorkovsky had worked his way up the Communist apparatus during the Soviet years, and began several businesses during the era of glasnost and perestroika. After the dissolution of the Soviet Union, he accumulated wealth through the development of Siberian oil fields as the head of Yukos, one of the largest Russian companies to emerge from the privatization of state assets during the 1990s.His riches to rags story truly symbolizes the brutal nature of Oil Politics.
Putin- Khodorkovsky Tussel
In April 2003, Khodorkovsky announced that his business enterprise, called Yukos would merge with Sibneft, creating an oil company with reserves equal to those of Western petroleum multinationals. Khodorkovsky had been reported to be negotiating with ExxonMobil and ChevronTexaco about them taking a large stake in Yukos. Sibneft was created in 1995, at the suggestion of Boris Berezovsky, comprising some of the most valuable assets of a state-owned oil company. In a controversial auction process, Berezovsky acquired 50% of the company at what most agree was a very low price.
When Berezovsky had a confrontation with Putin, and felt compelled to leave Russia for London (where he was granted asylum) he assigned his shares in Sibneft to Roman Abramovich. Abramovich subsequently agreed to the merger.
With 19.5 billion barrels (3 km³) of oil and gas, the merged entity would have owned the second-largest oil and gas reserves in the world after ExxonMobil and would have been the fourth largest in the world in terms of production, pumping 2.3 million barrels (370,000 m³) of crude a day. However, the merger had been recalled by the shareholders of Sibneft after the arrest of Khodorkovsky, during the Vladimir Putin’s reign.
Thus, Vladimir Putin shrewdly tried to regain the power that Russia’s had lost to some extent during Yeltsin’s reign.

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