Monday, December 22, 2008

Russia in Latin America

So the Russian pitch to Argentine president Kirchner is that Russia is in a position to help develop the energy infrastructure of South America. Gazprom can help develop Bolivia's natural gas reserves and Bolivia, Venezuela and Argentina can work with Russia to construct a continental gas pipeline. Russia also would offer to develop the nuclear power industry in the region to assist in electricity production.

This all fits with an overall Russian strategy of wanting not only to develop and market Eurasian energy but to become a global middleman for energy in general.

The plans are ambitious; whether they move to the execution stage, however, remains to be seen.

Don't forget they have also promised Daniel Ortega about $20 billion to build an alternative to the Panama Canal as a thank-you for recognizing South Ossetia and Abkhazia - an act of the diplomacy that Belarus and Venezuela both declined (Hamas is in though).

The size and scope of the energy projects Russia is discussing in Latin America are impossibly Shtakanovite (the Hugoducto?). Gazprom didn't even have enough liquidity to finish their seizure of BP's stake in Kovykta.

Eurasian energy, on the other hand, is vitally to cover declining production at Russia's gas fields, and provide a lever of security and influence to Europe.
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