Russia's Gazprom and Nigeria Agree to a Major Gas-Related Joint Venture

Gazprom, the Russian owned gas giant, and the government of Nigeria have agreed to set up a joint venture to develop the west African country's enormous gas reserves.

According to a story yesterday in the Financial Times ("Gazprom's $2.5 Billion Gas Deal With Nigeria Raises European Concerns"), Gazprom will invest up to $2.5 billion in exploration and development projects.   Russian President Dmitry Medvedev said Russia hopes that the two nations will become "major energy partners."

You can imagine that this caused eyebrows to rise all over the European Union, which has had difficult relations regarding energy issues with the Russians over the past several winters.  The EU, whether it likes it or not, depends on free flowing gas from Russia to power its industries and warm its homes.  The last couple of winters, the Russians have either threatened to or actually turned off the gas spigots in their on-going spats with the Ukraine. Some of the gas involved was bound for the EU, and Brussels has not be thrilled about this.

This week's announcement of the Gazprom-Nigeria tie-up was characterized this way in the FT report:

"Gazprom's action to secure a foothold in Nigeria, where western groups have led the development of the oil industry for half a century, has given rise to concerns in Europe that Moscow is seeking to gain control of Nigerian reserves to tighten its grip on the European Union's gas supplies."

Now surely Moscow wouldn't be thinking the same thing, could they?  Of course they are.

There is also word that Gazprom is interested in helping fund at least part of the proposed trans-Saharan pipeline that would transport gas from Nigeria to Europe.

Curious, isn't it, that the EU seems rather subdued these days about Russia's so-called human rights violations.  A little concern about gas for the winter has a way of putting a damper on the EU's human rights campaigns.

And one more comment about Gazprom: Nigeria isn't the only place where the Russian giant is involved.  They have their fingers in many places in the world including Bolivia, Venezuela, and even the UK (where they operate a carbon trading firm).  We will be hearing more about Gazprom, particularly as the price of gas increases and they have even more money to invest.