Posted on 10/03/2008 9:14:35 PM PDT by Tailgunner Joe
Russia and Germany on Thursday moved to restore close bilateral relations after tensions in the Georgia conflict by endorsing a significant gas exploration deal between two of the countries’ key energy players.
Angela Merkel, German chancellor, speaking after talks in St Petersburg with Russian president Dmitry Medvedev, said there had not been a “chill” in relations with Moscow, although she did repeat that Russia’s August incursion into two Georgian enclaves had been “unacceptable”.
Mr Medvedev, who in August said that Russia was “not afraid of a new cold war” over Georgia, was conciliatory, saying: “In my view, nothing dramatic happened, quite the contrary. The flow of events we are seeing now shows that we are capable of agreeing on different issues even while the international situation is very complicated as a result of the Caucasian crisis.”
In the gas deal signed on Thursday, Eon, the German energy giant, agreed with Gazprom, the Russian gas monopoly, to acquire a stake in one of the world’s largest gas fields. After four years of hard-fought negotiations Eon will receive an almost 25 per cent stake in Yuzhno Russkoye, a Siberian field, and in return will give up almost half of its 6.5 per cent stake in Gazprom.
Eon’s acquisition will see it join BASF, the German chemical company, which has already secured a stake in the Yuzhno field via its energy arm Wintershall.
Significantly, the deal saw Gazprom drop demands for participation in distribution assets in Germany – a cornerstone of Russia’s call for reciprocity in granting direct access for European companies to its vast energy reserves.
Dr Jens Schreiber, Eon spokesman, told the FT: “There was also a political will (in Moscow) to see this deal done. The Russian government wanted to give a signal that foreign investors are welcome.”
”Russia can’t allow relations with Europe to freeze,” said Valery Nesterov, energy analyst at Troika Dialog, the Moscow investment bank. Mr Nesterov said Russia hoped granting Eon access to Yuzhno Russkoye would help break through mounting opposition in Germany to the Nord Stream pipeline, a controversial project to pump Russian gas under the Baltic Sea to Germany that BASF and Eon are developing in conjunction with Gazprom. Yuzhno Russkoye is the main field that will supply the pipeline.
The gas deal sees Eon return a 3 per cent stake to Gazprom at a time when the stake is bound to climb in value after Gazprom’s market capitalisation has been halved to $175bn (€122bn, £97bn) since May. “Gazprom will probably be able to sell this on with a significant profit in future,” Mr Nesterov said.
Eon sees the Yuzhno deal as an important step in expanding its footprint in the valuable Russian gas market, Europe’s biggest supplier.
Russia stressed last month that good relations with Germany were central to its foreign relations. Sergei Lavrov, foreign minister, said in a speech: “Russian-German reconciliation is one of the major factors in the construction of new Europe. And we will allow no one to drive a wedge between our peoples.”
That headline had me flashing back to an earlier agreement...
ping for later
later..but alarming.
...being a part I.G. Farben from 1933 until 1945, BASF maintained close relations with the Nazi regime, actually providing for its survival. The active policy of its huge capital investment made during the war, in restoration of the German economy has provided immunity to such BASF`s managers as Carl Wurster who was responsible for the manufacture of “Zyklon-B” gas. Starting from the fifties the firm actively subsidized the most promising young representatives of the German political elite. Helmut Kohl, the Chancellor of Germany and the leader of the Christian Democrat Union (CDU) was born and grew up in the city of Ludwigshafen where BASF headquarters are located. Being an employee of the firm in his youth, and subsequently, as a CDU activist, he received solid financial support from his former employers to develop his political career. Kohl`s successor – Chancellor Gerhard Schröder, representative of the Social Democrats, also established close mutual relations with BASF`s management. - Schroeder - Putin Pact: Germany and Russia Divide Europe Again
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