Grease Is The Word

The Greek Reporter says GAZPROM had practically offered to buy Cyprus in exchange for letting it exploit its offshore oil and gas reserves.

Russian energy giant Gazprom has offered the Republic of Cyprus a plan in which the company will undertake the restructuring of the country’s banks in exchange for exploration rights for natural gas in Cyprus’’ exclusive economic zone, local media reported.

Representatives of the Russian company submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening, Sigma TV reported.

The proposal states that Gazprom will fund the restructuring of the country’s crippled financial institutions in exchange for substantial control over the country’s gas resources while Cyprus won’t need to take the harsh bailout package offered by the EU.


The Russian interest in Cyprus had described in Cypriot newspapers before. In 2011, the Famagusta Gazette reported: “the Russian energy giant Gazprom is reported to be interested in gaining the exploration rights for natural gas in Cyprus’ exclusive economic zone. According to Cyprus state run television, Gazprom is ready to start exploration in two offshore areas, near the Aphrodite plot, which is currently being drilled by the Texas based Nobel Energy group.”

If this report is accurate, the EU ‘bailout’ may have occurred against the background of a geopolitical bidding war between the EU and Russia. The Greek Reporter described the rejection of Russia’s offer. It also detailed Russia’s wrath.

Cypriot President Nicos Anstasiades is not willing to discuss the Russian’s offer according to Newsit who cited an anonymous source close to the President.

“The president is not going to discuss this plan because he wants a solution that will come from the EU,” said the anonymous source.

Shortly after the rejection of the Gazprom proposal, Anatoly Aksakov, the head of the Association of Regional Banks of Russia and a member of the Board of the Central Bank of Russia spoke to Interfax describing the country’s banking system as “not trustworthy” and advised Russian citizens “to withdraw their deposits from Cyprus.”

The Guardian notes that Putin has made the displeasure official, warning Cyprus that “that this decision, if taken, would be unfair, unprofessional and dangerous.”  The  Guardian also notes “the benchmark credit default swap contract for Cyprus has jumped to 768 basis points, up 113 from Friday”. If the IMF believed they could give the Russians moneymen a 10% haircut before they scoot off they forgot that other depositors were also likely to follow them.


The involvement of GAZPROM in the region was underscored by Russia’s energy deal with Israel. “A new deal by Russia’s Gazprom energy giant to market Israeli liquefied natural gas puts Moscow firmly in the burgeoning and contentious east Mediterranean energy sector, and shows that it’s again emerging as a player in the strategic region.”

With U.S. interest in the Middle East seemingly diminishing, in part because of vast shale oil and natural gas deposits that lessen dependence on Persian Gulf oil, Putin clearly has ambitions of filling the vacuum.

“The Bill Clinton-era in the geopolitics of Caspian energy, which ran through the George W. Bush presidency, imbued with a great sense of rivalry over Russia’s status as an energy powerhouse, is giving way,” said veteran Indian analyst M.K. Bhadrakumar.

“This is one of the messages to be pulled from the … 20-year deal for Israel’s Tamar offshore gas field in the Mediterranean.

“Without doubt, the Tamar deal rewrites the ABC of the geopolitics of energy security,” Bhadrakumar wrote in an Asia Times Online analysis.

“This is an important milestone for strengthening Gazprom’s position in the global LNG market” and in particular “Gazprom’s hand in the booming Asian LNG market.”

And when the Russians get to the Pacific the Boys from Chicago will be there already.  The Brookings Institution notes, in a recent article titled “Energy Security in Northeast Asia: A Pivotal Moment for the U.S.-Japan Alliance”  how Japan’s LNG requirements have taken a huge jump up after its shut down nuclear plans had to be replaced by gas fired generators.


Postponing nuclear reactor restarts have drained Japan’s national wealth considerably. It became a trade-deficit nation for the first time in more than three decades. A major factor in this development is the jump in LNG imports due to replacement of nuclear power generation by gas-fired thermal plants. Imports grew from 70 million tons from 2010 to 78.5 million tons in 2011 and 87.3 million tons in 2012 – an increase of almost 25 percent in two years. However, during the same period, the total value of LNG purchases increased by more than 70 percent … Simply put, Japan must restart nuclear reactors, and it must also introduce and enforce stricter safety regulations. …

Aside from the price issue, securing new LNG supply routes from North America is also important to ensure the safety of Japan’s seaborne hydrocarbon transportation. Currently, approximately 80 percent of crude oil and 30 percent of LNG destined for Japan cut across the East China Sea, where Sino-Japanese tension is simmering.

Shutting down nuclear reactors is proving a big business opportunity.  But what stands in the way of more LNG exports to Nippon is something called the Trans Pacific Partnership. This little known agreement is the focus of intense lobbying. Brookings says, “TPP membership for Japan would remove a potential obstacle to increase LNG exports from the lower 48 states.”  You might have guessed that Japan’s entry into this trade agreement is being blocked by Congressional Democrats, according to the Diplomat.


Thirty-five members of the House of Representatives and eight Senators wrote to President Obama on Thursday to express their opposition to Japan joining the Trans-Pacific Partnership negotiations.

All forty-three lawmakers that signed the letter are members of the president’s Democratic Party. The thirty-five House members account for just under 18 percent of the entire Democratic caucus in the House of Representatives.

“Japan’s significant, long-standing, and persistent economic barriers put in place to block our exports and support theirs have hurt American workers and businesses for decades,” the Congressional Democrats wrote in the letter, which is primarily concerned with Japan’s automobile exports hurting American car companies.

“Nowhere is the closed nature of Japan’s markets more evident than in the auto sector, where Japanese policies and practices have been carefully honed – over generations – to keep out American and other foreign cars and parts,” the lawmakers write.

The Diplomat notes drily that “America’s auto industry and labor union have traditionally been strong backers of Obama’s Democratic Party.”  Quid, meet pro quo.

The apparent narrative runs thus: the Greens have now proved nuclear power is unsafe. Hollywood believes them. Hence Japan must import vast quantities of LNG to replace the reactors. But before it can buy the LNG Japan must kowtow to Democratic Congressional special interests in order to be allowed to buy LNG from the lower 48.


I bow to you but Honorable Emperor bow to UAW

For some there’s no way to lose. For others there’s no way to win.

It’s seems all about Big Time money —  it’s a game in which poor Cypriot depositors, like the cab drivers described by the Guardian who are going to lose their pitiful savings, are just collateral damage  — just as the brain dead low information true believers are just useful fools. The real action is with Gazprom, EU special interests, Japanese industry and the Democratic unions. “No war for oil” was the battle cry of liberals for years. But things change when they’re in charge.

The Three Conjectures at Amazon Kindle for $1.99

Storming the Castle at Amazon Kindle for $3.99

No Way In at Amazon Kindle $8.95, print $9.99

Tip Jar or Subscribe or Unsubscribe


Trending on PJ Media Videos

Join the conversation as a VIP Member