Friday, January 19, 2007. Issue 3578. Page 8.
By Robert Skidelsky
Russia’s temporary halt to oil supplies through the pipeline crossing Belarus earlier this month was the latest in a sequence of public relations disasters for the Kremlin. The West’s romance with President Vladimir Putin’s Russia ended with the Yukos affair and since then Russia has generally gotten bad press, even when it had a good case. The Sakhalin-2 affair is a good example.
Early in December, Royal Dutch Shell announced that it had sold Gazprom a majority stake in the project to develop the Sakhalin gas field. In its Dec. 8 edition, The Economist magazine accused the Russian state of using “minor environmental infringements” to force Shell and its partners to sell out to Gazprom at the moment when they stood ready to receive a “flood of revenues.” Such “loutish” behavior was incompatible with Russia’s claim to be a reliable energy partner. The Russian case for action, based on the impact of Shell’s cost overruns on the expected revenue of the Russian state, was simply ignored.