러시아ㆍ유라시아

In early October BP and Azerbaijan concluded a long-discussed deal, granting both partners a 50 percent share to develop the Shafag-Asiman gas site for 30 years in Azerbaijan’s sector of the Caspian Sea. This field is about 1,100 square kilometers in size and has never been explored before. The field holds an estimated 17,000 billion cubic meters (BCM) of gas and that size would put it on a par with the Shah Deniz field where BP has a 25.5 percent share. This deal has importance for both partners beyond the sheer size and fact of its announcement.

BACKGROUND: In the wake of BP’s disaster in the Gulf of Mexico, speculation has been rife that it would have to sell its holdings in Azerbaijan and in other places to meet its obligations to compensate people and businesses injured by the oil spill there. In July, BP had even announced it was borrowing US$ 2 billion from the Azeri-Chirag-Guneshli field off the coast of Azerbaijan and US$ 3 billion from Angolan operations to fund those obligations. Altogether, BP was seeking about US$ 30 billion from global asset sales to meet its obligations in the Gulf.

This development naturally attracted Moscow’s attention. The company it formed with BP where it has a majority stake, TNK-BP, is still seeking to buy BP holdings in Vietnam and Venezuela, that it believes will come up for sale. But during the summer and early fall, Moscow made clear its intention to buy up BP’s Azerbaijani holdings as well.  Stories appeared in the Azerbaijani press that BP was selling its shares, leading BP not just to deny those reports but also to say, correctly as it turned out, that it was expanding its operations in Azerbaijan. These reports of projected BP sales also projected that Russian companies like Lukoil might buy part or all of BP’s shares.

At the same time, Russian energy figures like Igor Sechin, head of Rosneft, began to show support for BP during its troubles and to befriend the company. Indeed, Russia welcomed BP’s former CEO, Tony Hayward, onto the Board of TNK-BP, allowing BP to explore the Arctic waters off Russia’s coast, and refrained from criticizing BP during the whole time that its well in the Gulf of Mexico was spewing black gold into the Gulf and the U.S. Gulf coast. While this is a far cry from the rapacious tactics Moscow has previously pursued against Hayward and BP, repeatedly squeezing BP projects and trying to seize control of them, Moscow’s motives for riding to BP’s rescue are easily explainable.

First, BP remains vulnerable to Russian pressure. BP’s Russian assets make up 840,000 barrels/day of oil, almost one-third of BP’s global output and more than the 665,000 barrels/day it pumps in the United States. TNK also netted BP US$ 1.7 billion in 2009 for its share of dividends and allows BP to claim vast reserves of oil on its books. BP has also on occasion been very helpful to Russia: for example, it agreed in 2007 to facilitate Gazprom’s efforts to make foreign acquisitions well before other majors and governments acquiesced in doing so. In return, Gazprom was supposed to help BP in its Russia business, buying back a major Siberian gas field that was in danger of having its license revoked due to the usual predatory tactics of the Russian government. In return for helping Gazprom obtain a foreign asset, Gazprom would then sell back 25 percent of the field to BP.

IMPLICATIONS: What Moscow now wants is quite simple and clear. To cover its expected costs in the Gulf, approximately US$ 32.2 billion, BP must sell some of its assets abroad. Russia clearly wants those assets whether they are in Russia or elsewhere. For example, TNK-BP is in talks with BP to buy fields in Venezuela and Vietnam, places where Russia is already deeply invested. Indeed, BP offered Russia those assets before showing them to others, no doubt to gain Moscow’s favor.

But desirable as these acquisitions might be, Russia’s ambitions for BP assets do not end in those countries. Moscow clearly wants BP’s assets in the Caspian Basin. But BP has not offered to sell any of those to Lukoil, Russia’s premier oil company. In the past, Russia’s predatory government and energy giants have precipitated the bankruptcy of one major BP project and threats to its holdings in the Caspian. So while the velvet glove is currently on offer, inside it there is still an iron fist. Moscow also continues to seek to exclude foreigners from the Caspian basin and maintain the greatest possible monopoly over those countries’ energy exports. Although Central Asian gas and oil pipelines to China have broken any chance for a full Russian monopoly on Caspian energy, this has not deterred Moscow from attempting to exploit every opportunity to drive out foreign competitors. Russia seeks to eliminate the de facto independence of Caspian energy producers by controlling either the pipelines they must use or the prices they receive for their product. Second, it seeks to eliminate their economic independence by preventing them from turning to alternative buyers, producers, or funding sources like China or BP who can develop their energy holdings, help build alternative pipelines for them, and find other markets for their product.

In Moscow’s perspective, BP’s high costs and liabilities due to the oil spill in the Gulf of Mexico provide Russia with just such an opportunity. Moscow quickly offered to buy up BP’s Caspian holdings just as it has similarly offered to buy up Azerbaijan’s gas exports. In fact, both initiatives occurred in tandem. Moscow only partly succeeded in getting Azerbaijan to double its relatively low gas exports to Russia from 1 to 2 BCM, but that was all.

Azerbaijan perfectly understands the game and it replied by diversifying its options, concluding the AGRI pipeline deal with Georgia, Romania and Hungary to transmit liquefied natural gas (LNG) to Europe through this Interconnector pipeline, and further opening up the Baku-Ceyhan pipeline to Central Asian oil. It has also striven to improve ties with Turkmenistan so that it would feel encouraged to ship its gas and oil through Azerbaijani pipelines. In other words, Baku has continued to seek the diversification of its options, as it has been doing since 1993-94.

CONCLUSIONS: The new deal between BP and Baku allows Azerbaijan to continue its diversification policy and further enhance its already growing status in the energy business. It also relieves pressure on Azerbaijan to develop its gas reserves exclusively for Russia’s benefit and expands Azerbaijan’s standing as a gas producer. The size of the new field is quite large and it will enable Azerbaijan to meet its commitments to Moscow, its AGRI partners, and potentially to other European consumers if the Nabucco pipeline gets off the ground. For BP, this marks its first new deal since the disaster in the Gulf and its return to the fray, suggesting as well that it may not need to throw itself on Moscow’s not so tender mercies in regard to Russia’s willingness to buy up BP’s Azerbaijani or other holdings. Thus Russia’s ability to dominate the energy business in and around Azerbaijan has been checked for the moment. The opening up of this new field also justifies continued work to build substantial gas pipelines from the Caspian to Europe such as the Nabucco pipeline, as it now appears that Azerbaijan will be able to contribute the required amount of gas to this pipeline should it come to fruition. In other words, this deal suggests that the questions hitherto raised about Azerbaijan’s willingness and capabilities to support Nabucco are going to be answered affirmatively and that the pipeline has justification based on regional supplies.

Finally, this deal may have ramifications beyond Azerbaijan as it may convince or at least help nudge Kazakhstan and Turkmenistan to believe in the validity of Nabucco and that they can take part in it without undue fear for the security of their contribution. And at the other side of that project, this deal not only shows that BP is back in the game, but also that Nabucco deserves more active support from Europe – it can realize its promise since the gas supplies needed to make it a worthwhile investment may truly be available by the time it is supposed to open in 2015.