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The Non-Russian Energy Sectors of the Former USSR

Within ten years, energy relationships within the former USSR and between the former USSR and the West are likely to be very different from those that exist today. The Georgia conflict is bound to play a significant role in these changes, vindicating (at least for the moment) Russia's long-standing contention that energy projects which exclude it in Eurasia are provocative, unviable and unsafe. But broader factors make longer-term trends uncertain. In newly independent states, the energy sector still reflects Soviet administrative legacies and non-market patterns of dependency on the Russian Federation. Whether these sectors are engaged primarily in the production of hydrocarbons (e.g. Kazkakhstan, Turkmenistan) or refining and transport (Ukraine), global energy markets, supply constraints, competition to develop new resources, political aspirations and national security imperatives are making the status quo increasingly untenable.

In this sphere more than any other, the forces that seek to diminish dependency have been hindered by institutional incapacity and state incompetence, political opportunism, venality, judicial 'defencelessness' and 'shadow' structures of ownership, not to say Russian state policy. For how long will this malign configuration of forces last? How will change and resistance to change influence the investment climate, energy supplies, political relationships and regional stability? Does the West seek to influence this dynamic, or simply avoid surprises? How different will our approach need to be? What new relationships will we need to develop, and what aspects of current policy will need to change?

Over the next two years, this project will examine:

  • The factors that will shape Russia's energy policy in its immediate neighbourhood (inter alia, contractual obligations to Europe, rising consumer demand in Russia, geopolitical ambitions and apprehensions)
  • National energy strategies in Eurasia
  • The 'virtual' and real structures of ownership and regulation of energy sectors and the role of intermediate structures (e.g. RusUkrEnergo and Itera)
  • The investment climate (conditions of entry, property rights, contract enforcement)
  • The constituencies supporting 'reform' and the type of reform supported (markets, transparency and judicial integrity versus state control and protection of 'strategic sectors')
  • The feasibility of new transport projects (e.g. Trans-Caspian, Odessa-Brody-Plock, etc)
  • The role of the EU and other external actors (e.g. Turkey)
  • Recommendations for enhancing Western influence.

Further Information

For more information about this project contact:

Alex Nice, Programme Administrator
Tel: +44 (0)20 7314 3627

More information about Chatham House work on energy issues can be found on the Energy, Environment and Development project pages >>