Pipeliners

06-05-2009 - Upstream OnLine - UK oil major BP yesterday called on Russia to remove investment barriers to increase energy production and voiced support for a new gas pipeline under the Baltic. "There is wide agreement today that protectionism in all forms, be it in trade or in inward investment, is short sighted and is not a remedy in times of economic distress," BP's Chief Executive Toni Hayward was reported as saying on The Guardian at Russia's Economic Forum. "These barriers will slow down overall investment in the sector. Russia's oil production has recently started to decline and the demand for Russia's gas potentially also outstrips available supply," said Hayward. "The threat is that, in an attempt to shelter domestic producers and employment from international competition, first the government starts to erect trade barriers, subsides to tariffs. "Next, other countries retaliate and before we know it we are spiraling out of control - this very process brought the global economy to its knees in the 1930s," said Hayward. Russia says its joint project with German and Dutch companies to build a pipeline under the Baltic Sea would help boost security as it would cut Moscow's reliance on transit states like Ukraine. Previous disputes between Russia and Ukraine have led to cuts across Europe and prompted many European politicians to call for the reliance on Russian gas to be reduced. But the Baltic Sea project was delayed due to ecological concerns in Baltic states. "One concrete example of this (Russia-EU energy partnership) is the Nord Stream pipeline," said Hayward in his first public support of the project. BP is not part of Nord Stream, which involves Russia's Gazprom, Germany's E.ON, BASF and Dutch Gasunie. "This critical linkage between Russian gas producers and European energy consumers will enhance energy security and ensure freer flows of gas to European markets. It is a real physical manifestation of greater economic integration between Russia and Europe," said Hayward. BP has a bumpy history of relations with Russian authorities and its partners in the TNK-BP joint venture.