BUCHAREST, Romania (Dow Jones)-A top American diplomat said
Wednesday that U.S. President Barack Obama wants closer cooperation
with Russia on energy issues in the Caspian and Black Sea regions,
highlighting a clear break from the Bush Administration's diplomacy
in these key energy corridors.
"I hope and think we will make more progress with Russia. We
would like to see more engagement with Russia" on various energy
issues, including the building of new natural gas pipeline routes
in this region, U.S. Special Envoy for Eurasian Energy affairs
Richard Morningstar told energy executives and diplomats at a
conference here.
Morningstar's comments come just over a week after Obama
scrapped plans hatched under the Bush White House for a U.S.
missile-defense system that had angered Russia because of its
proposed location in Poland and the Czech Republic.
They also come days after a flurry of oil chief executives,
including Jim Mulva of Texas-based ConocoPhillips (COP), met with
Russian Prime Minister Vladimir Putin and Alexei Miller, head of
the country's natural gas giant OAO Gazprom (OGZPY), over possible
development plans for Russia's giant Yamal natural gas field in
northern Siberia.
The U.S., under both Obama and Bush, has backed a European drive
to diversify the region's natural gas supply away from Russia after
the country deliberately cut off gas to Ukraine on a handful of
occasions the past few years following contract disputes. The move
pinched supply to customers in other parts of Europe, which gets
most of its Russian gas through pipelines that snake through
Ukraine.
The European Union has put its weight behind the proposed
Nabucco pipeline project that would bring gas to the continent from
the Caspian and Central Asia and, possibly, the Middle East.
Russia, which has opposed Nabucco and sees it as a competitive
threat, has sought to bypass Ukraine with a handful of other
proposed projects, including the so-called South Stream gas
pipeline; this pipeline would bring Russian gas across the Black
Sea to Europe.
Morningstar said the Obama Administration didn't necessarily
oppose the South Stream project but thought it was in all parties'
interest that the proposed pipeline was commercially viable,
something some analysts have questioned. He reiterated U.S. support
for Nabucco. The Bush Administration had opposed South Stream.
But he also admonished Russia to move away from using its energy
resources as a political weapon and to align the country's energy
industry more on a market basis.
"Russia will continue to be a major player in this region for
the foreseeable future and it's in our interest for Russia to
increase its oil and gas production, but that is not inconsistent
with encouraging competition and diversification of pipeline
routes," Morningstar said.
-By Spencer Swartz, Dow Jones Newswires; +44 207 842 9357;
spencer.swartz@dowjones.com