Foreign business has forgotten about Ukraine and refuses sanctions - Newsweek
Judy Dempsey, editor-in-chief of an influential American trade publication Carnegie Europe, writes on September 8th in the article “Forget about Ukraine. Business behaves as if there are only Russia and Europe” on the pages Newsweek that European business is beginning to forget about Ukraine and includes an unofficial waiver of sanctions.
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The article is devoted to the fact that Gazprom concluded three major deals with Europe at the eastern forum in Vladivostok on September 3-5.
“Everything happened as if in the good old days,” notes Judy Dempsey, “as if even before the European Union imposed sanctions against Russia in 2014. At the Eastern Economic Forum in Vladivostok, Gazprom struck three major deals with Europe's biggest energy companies, the most important of which is the revival of a lucrative asset swap between the Russian energy giant and Wintershall, the energy division of German chemicals group BASF. The concern refused to participate in the swap agreement in December 2014 due to the geopolitical consequences of the Russian invasion of Eastern Ukraine and the annexation of Crimea."
The asset swap deal, along with other deals struck in Vladivostok, show how German and Austrian energy companies are reluctant to leave Russia. It also shows how Gazprom wants to tie the lucrative European gas market to Russia.
Under the terms of the deal between BASF and Gazprom, a subsidiary of the German concern will receive a 25% stake plus one share in the Urengoy natural gas field in Siberia, which will be developed by both companies. In return, Wintershall will transfer to Gazprom its share in the joint ownership of gas storage facilities and trading business in Germany, as well as a share in its Austrian business. Through the asset swap, “Gazprom will also receive a 50% stake in Wintershall's North Sea oil and gas exploration and production company.
Another agreement between Gazprom and a special European consortium involves the joint construction of the second Nord Stream gas pipeline along the bottom of the Baltic Sea. The consortium includes BASF, German energy company E.ON, French electricity company Engie, Austrian oil and gas firm OMV and British-Dutch Royal Shell. Gazprom will own 51% of the shares of the new company called New European Gas Pipeline AG. The other partners will have a 10% stake, with the exception of Engie, who will own 9%.
“What about the opinion of Poland, the Baltic countries, and, of course, Ukraine? – asks the American publication. “They criticized the construction of the first Nord Stream gas pipeline, which was agreed upon by then German Chancellor Gerhard Schröder in 2005. At the time, Warsaw argued that the deal increased Europe's dependence on Russian energy. But a lot has changed since 2005, and Europe is diversifying its energy supplies, spurred by the Ukrainian gas crisis in 2009...”
“These deals mean,” says Judy Dempsey, “that major energy companies in Europe want to return to their usual course of action towards Russia, despite the ongoing conflict in Ukraine and ongoing EU sanctions against Russia.” It is obvious that there is a creeping refusal of sanctions, despite the rhetoric in the media and official speeches.
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