Zee Beam News

July 30, 2008 - International Herald Tribune by Judy Dempsey - BERLIN: Russia has further reduced its oil deliveries to the Czech Republic, bringing total July cutbacks to 50 percent, senior Czech officials said Wednesday, a disruption that is again calling into question Russia's reliability as an energy supplier to Central and Eastern Europe. Supplies were reduced about 40 percent early in the month. A further cut in the past few days reduced the flow to half its pre-July level, officials said. Russia's oil pipeline monopoly, Transneft, has declined to give any indication of when full operations will resume through the Druzhba, or Friendship, Pipeline, said the Czech officials, who included Vaclav Bartuska, ambassador at large for energy security. Bartuska said that if Russia was eager to promote itself as a reliable supplier of energy to European customers, the way it was treating the Czech Republic could damage its reputation. "The fact that we are not being told the real reasons for the disruption and expect reductions to be increased by more than 50 percent for the month of August shows the lack of transparency in the way the system works," he said. The Czech Republic is unique among the countries of Eastern and Central Europe in its ability to cope with cutbacks of oil from Russia because it diversified its sources during the early 1990s. But it still relies on Russia for much of its natural gas. Other countries in the region that import significant amounts of both oil and natural gas from Russia, with the oil coming through the Druzhba Pipeline, are particularly concerned that Russia may gradually shift oil exports to the Baltic Pipeline system, which feeds Northern Europe. This would mean that most East European countries would have to pay more for oil because shipment fees would be higher. Transneft cut supplies in early July, a day after Secretary of State Condoleezza Rice signed an accord with her Czech counterpart to deploy part of the Pentagon's antiballistic missile shield on Czech territory. Russia denied then that the decision to cut supplies from a contracted July volume of 500,000 tons to 300,000 tons had been in retaliation for the signing. Mikhail Barkov, Transneft vice president, said there were "technical and commercial reasons," adding that two Russian producer companies, Bashneft and Tatneft, considered it more profitable to process the crude oil in Russia before exporting it. Russia tried to improve its reputation as a reliable exporter last year after it came under strong criticism for cutting oil supplies to Belarus, affecting supplies to Germany and several East European countries. Chancellor Angela Merkel of Germany told Vladimir Putin, Russia's president at the time, that Russia must tell any directly affected countries before making cutbacks so that they could at least make alternative arrangements. Moscow agreed at the time to establish an early warning mechanism to notify the European Commission, the executive arm of the European Union, of cuts. In the case of the Czech Republic, the European Commission said Wednesday that Russia had not activated the warning mechanism. When asked why not, a commission spokesman replied that the Czech Republic was coping and that, in any case, the issue between the two countries was being resolved. When pressed to give a more detailed reason as to why Russia had not told the commission, he replied that the mechanism "was not yet in place." He explained that the Russians had not yet agreed to nominate officials who would notify the commission in case of disruptions of exports.