Putin bags multi-billion-dollar energy deals in Bulgaria

Publish date: 21-01-2008
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Russian President Vladimir Putin wrapped up a two-day visit here Friday, heading home with a bunch of major contracts in his suitcase that will strengthen Moscow's grip on European energy markets. Of the eight different deals that were signed by Moscow and Sofia during the visit, the most important concerned the South Stream pipeline project.

That is a gas pipeline being built by Russia's Gazprom and ENI of Italy which will cross the Black Sea into Bulgaria and then split into two arms, one going northwest to Austria and the other south to Greece and then west to southern Italy. It will strengthen Moscow's grip as the leading supplier of gas to Europe and will rival EU plans for its own pipeline project, Nabucco, aimed at reducing the bloc's dependence on Russian gas.

The visit was dominated largely by economic issues, as Putin appeared to be on a last major drive for Russia's energy interests abroad before he steps down.

A contract was signed on the construction of a EUR 4 bln 2,000-megawatt nuclear power plant in the town of Belene on the Danube. The contractor, Russian company Atomstroiexport, hailed it as "an important victory that opens the way to Russian nuclear technology in Europe."

Putin's third major coup was a contract setting up a joint company for the Burgas-Alexandrupolis pipeline to channel Russian oil from the Black Sea to the Aegean. The project, which has been talked about for 14 years, is seen as an alternative to the tanker-congested Bosphorus Straits. Critics argue that the raft of different deals will only cement Bulgaria's dependence on Russian energy. Both Putin and Parvanov rejected such suggestions.

Heavy blow for Romania

Social-Democrat leader Mircea Geoana said on Saturday that the energy deals signed by Russia and Bulgaria represent a heavy blow to Romania's energy interests in the region. "We are, at the moment, caught in a trap, as regards the Russian Federation's use of energy resources," Geoana said, adding that the policies Romanian authorities have adopted in relations with Russia in the past few years have only made things worse.

Geoana added that it was unacceptable that Bulgaria signed an important contract for Russian equipment for the Belene nuclear plant. Earlier, the Social-Democrat leader had said that the South Stream project practically continues a programme to isolate Romania on the energy market, which was begun by the Russian Federation together with other countries in the region. Geoana also said that national energy strategies must be reconsidered in this context. PSD MEP Adrian Severin also criticised the South Stream project as being "outside European logics." The deal clearly shows the difference in competition practices between the European Union, in which any decision requires consensus of all 27 members, and Russia, which "moves quickly," he said. Severin added that the existence of such projects as the South Stream reduces Romania's chances to see its legitimate interests satisfied, given its participation in the Nabucco project.

Greater Romania Party leader Corneliu Vadim Tudor said that Putin's choice to sign these deals with Bulgaria is a consequence of President Traian Basescu's absurd policies. "This shouldn't have happened but we get ruled out from anywhere, from all (pipeline) routes. All pipelines avoid us," he said.

Relations between Romania and Russia have plummeted lately, amid several unresolved conflicts and especially in the context of Romania's closeness to the United States. All meetings between Putin and Basescu filed to address any thorny issues, triggering wide criticism in Romania against Basescu's policies with Russia.

In addition, Romania has recorded the highest deficit in its trade relations with Russia, as it imports oil and natural gas and exports are stalling at low values. Romanian businessmen' efforts to boost exports on the Russian market were unseccessful until now. Moreover, the price Romania pays Gazprom for gas supply is one of the highest among European countries.

Nine O'Clock

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