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In Germany, Another Domino Falls to Gazprom

Yesterday the International Herald Tribune reported that the German firm Wintershall, the energy division of BASF (and trojan horse for Russia to penetrate German foreign policy, thanks to Chancellor Schroeder), has announced a raft of investment projects with Gazprom totalling €3.5 billion. A significant chunk of this money will go toward the much disputed North European Gas Pipeline project, as well as €800 million in natural gas exploration and production joint ventures with Gazprom.

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Reinier Zwitserloot, chairman of Wintershall, Kremlin owned and operated

And in Wintershall’s Reinier Zaitserloot, Gazprom has found another European spokesman in the crass mold of Gerhard Schroeder. This troubling, but not entirely surprising, development underscores the fact that there is virtually no end to the impunity with which Western companies are racing to the bottom of corporate ethics – scrambling to make a buck in Russia no matter what damage their conduct is causing. In a month that has seen both ENI and BP sink to new lows, Wintershall came out to show it could go even lower. The problem here is that in an obscene dialectic of opportunism and blindness to long-term interests, Western companies are continuing to signal that protection of private property is not a core value in respect foreign direct investment in Russia – and that’s something that will come back to hurt all of us, inside and outside of the country. (Stay tuned for an upcoming extended blog article analysing the links between energy companies and foreign policy, otherwise called Putin Privatization and Public Policy Formation). pipeline_bear.jpg Here is Zaitserloot exercising his newly appointed duties as Kremlin energy policy apologist:

Despite concerns that President Vladimir Putin of Russia has used energy as a political instrument against some of its neighbors, Zwitserloot strongly defended Gazprom, calling it a reliable partner which Europe needed. “There can be no supply without Russia,” he said. “Of course, one can criticize Russia. But we should not measure it with a different yardstick than we use for other suppliers. One thing is clear. Those who fear energy dependency on Russia should not look to Iran of all places.” Europe buys a quarter of its natural gas from Russia. Germany buys more than 35 percent from Russia. Zwitserloot said the dependency was not one-way. “Russia also delivers more than 60 percent of its exported natural gas in one direction. And in Europe, Germany is Russia’s most important trading partner. Unfortunately, this is all too often forgotten,” he said. … When asked if he had any concerns about the Russian authorities’ own record of property rights when it recently reduced the stakes held by foreign companies, including Shell, in companies in Russia, Zwitserloot said that Wintershall always had an excellent relationship with Russia.