Biggest Winner In Afghan War - Russia?
By David Ignatius
Op-Ed Indian-Express.com
12-30-1
In a world where power flows from the barrel of oil, Russia is set to be the
global capital of energy...
As the dust begins to settle in Afghanistan, it's increasingly clear that
the big winner in terms of post-September 11 energy politics is Russia,
which now rivals Saudi Arabia as the world's dominant energy producer.
Since oil and politics tend to flow in the same direction, the rise of
Russia's oil industry will have major strategic impact. It will transform
global business too, as Russian oil companies such as Lukoil and Yukos join
the likes of Exxon-Mobil and BP among the ''super-majors''.
The Afghanistan war will give Russia control over the oil flowing out of
Central Asia, according to energy experts. That's the practical price
Russian President Vladimir Putin can exact for supporting George W. Bush
after September 11. The output from the two big Central Asian producers,
Azerbaijan and Kakazkhstan, could total roughly 3 million barrels per day by
2010. Russian companies may also be the dominant players in Iraq, regardless
of who's in power there.
That would add another 6 million barrels per day of potential production
under Moscow's loose control. Then add Russia's own production, which now
totals more than 7 million barrels per day, and it's obvious that Moscow is
on its way to becoming the next Houston - the global capital of energy.
Russia would have a degree of control over about 16 million barrels per day,
roughly double the current production of Saudi Arabia. And those totals
don't include natural gas, where Russia is already the dominant producer, by
far.
Russia's emerging dominance of the energy industry is a theme of a recent
study by the Petroleum Finance Co, a Washington consulting firm. Their
analysts note that when you combine Russia's proven oil and gas reserves, it
is already the world's leading energy nation, with about 15 per cent more
proven reserves than Saudi Arabia. ''The US need for Russian cooperation
means Moscow will gain most in the new strategic environment,'' argues a
Petroleum Finance analysis of ''winners'' and ''losers'' in the
post-September 11 world.
Russia's political hegemony in Central Asia will be strengthened, according
to the study, as will its control over regional pipelines and other export
routes. The big change will come as Russian oil companies change from
sluggish state-owned giants into dynamic modern companies. "The Russians
have realised you can make more money by real capitalism than by stealing",
notes J. Robinson West, chairman of Petroleum Finance. Already, Lukoil is
planning to list its shares on the New York Stock Exchange - which will
force the company to meet tough US accounting standards.
''The Russian companies are going to play a major role,'' agrees Walid
Khadduri, the editor of Middle East Economic Survey, an authoritative
newsletter on the industry.
Another energy winner in the post-September 11 world is Iran, according to
both Petroleum Finance and Khadduri. Like the Russians, the Iranians were
important - if invisible - allies in America's war in Afghanistan. And
they're likely to be rewarded. ''Wasington has been forced to recognise
Iran's strategic interests in the Middle East and Central Asia,'' explains
the Petroleum Finance study, ''but Russia's ascendance in Central Asia will
limit Iran's political and economic gains.''
Iran's biggest problem in capitalising on its new status is its political
dual personality. It has a moderate president and a young population so
restless it's holding pro-American riots after soccer games. But Iran's
mullahs and secret police are clinging to power, and they may hold the
nation's oil industry hostage.
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