Minister of National Guard inaugurates Riyadh Global Medical Biotechnology Summit 2024    Prince Faisal meets Palestinian PM, Lebanese FM in Riyadh    GASTAT: Non-oil activities rise 5% in September    Health practitioners arrested for posting indecent videos on social media    'Art of the Kingdom': First traveling exhibition of contemporary Saudi art launched in Rio de Janeiro    Putin signs law ratifying strategic partnership treaty with North Korea    Israeli airstrikes in southern Lebanon kill 12 paramedics and civil defense volunteers    At least 42 Palestinians, including 15 children, killed in Israeli airstrikes on northern Gaza    COP29 to begin in Baku, focusing on climate finance and solutions to escalating challenges    France to deploy 4,000 police officers for UEFA Nations League match against Israel    4-member gang transporting illegals busted in Riyadh    Ghaznawi: 1,800 hotel rooms and 9,000 housing units to be made available in Historic Jeddah    Month-long "Wonderland" festival to begin in Jeddah on Monday    Al Nassr edges past Al Riyadh with Mane's goal to move up to third    Al Ahli continues strong form with 2-0 win over Al Raed in Saudi Pro League    Saudi Pro League: Al Qadsiah extend positive run with 2-0 win over Al Fayha    Riyadh Season 2024 draws 4 million visitors in less than a month    Three charged in connection with Liam Payne's death    Dubai Design Week launches its 10th edition, celebrating creativity and innovation    HRT does not impact life expectancy — UK health body    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Rattled Caspian energy investors likely to sit tight
Published in The Saudi Gazette on 15 - 08 - 2008

CONFLICT in Georgia has shaken but is unlikely to scare off investors in the region, drawn by its energy resources and vital oil and gas links to the West.
Analysts agree that while the dispute has had a limited impact on the price of oil and gas, investors will be more nervous about investing in the Caspian region, questioning its reputation as means of reducing exposure to Russia.
“Situations like this lead to a general sense of instability and so I think investors will have to weigh-up chances of continuing problems in the region going forward,” Jeffrey Woodruff, Senior Director in Energy, Utilities and Regulation at Fitch Ratings said.
Fitch downgraded Georgia to B+ with a negative outlook last week when Georgia launched an offensive against separatists in the breakaway region of South Ossetia.
“You wonder how much transportation risk has been mitigated or reduced by building infrastructure through more volatile regions, but it's too early to make that assessment just yet,” Woodruff added.
Fighting in Georgia has skirted dangerously close to major oil and gas pipelines that provide a valued alternative to Russian supplies.
Two major pipelines feed gas and oil to Europe from the Caspian Sea, which was seen as a relatively secure supply route enabling Europe to reduce its dependence on Russian energy.
On Tuesday BP closed the Baku-Supsa gas pipeline which leads to the Georgian port of Supsa because of the conflict.
Earlier last week the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which runs close to Georgia's capital Tbilisi towards the Turkish port of Ceyhan, was shut down because of an explosion unrelated to the Georgia conflict for which Kurdish separatists claimed responsibility.
A gas pipeline from Baku, through Tbilisi, leads to the port of Sukhumi in Georgia's other separatist region Abkhazia, where Russia sent troops on Monday.
The closure of the BTC pipeline places further pressure on Georgia's energy infrastructure and flow of Caspian oil and gas to markets in Europe.
“(The conflict) should give second thoughts about seeing any region as the safe haven or the magic bullet type solution to energy security,” Clifford Gaddy, a senior fellow at Brookings said.
Harden resolve?
But some investors argue the conflict will have no effect at all on investments and say earlier clashes between Russia and separatist regions have not stopped them.
One drew a comparison with Chechnya, although, unlike Georgia, it is not a major energy transit route.
“If you look at the long war in Chechnya that Russia had, again it had no measurable impact on the domestic growth scenario,” said George Nianias, chairman of Denholm Hall Capital Markets, which invests in private Russian companies.
“And that was a long and a bad and a protracted war. I don't really see this having any impact ... Investors will look at it, digest it, and if they see that event has no impact on their investments, they won't divest,” Nianias added.
The Georgian conflict is a reminder to European countries, which draw energy from the Caspian, that Russia will always have an interest in controlling pipelines transiting its border countries.
It may also concern the Nabucco consortium which, with the backing of the EU, plans to build a new pipeline, to draw gas from the Caspian and the Middle East by 2013.
“One likely result is that the events will harden the resolve of those governments and companies who seek to bypass Russia in extracting Caspian resources,” an analyst at a US-based assistance organization with offices in Georgia and Russia said.
“The Russian military actions in Georgia will likely have a profound affect on relations between Russia and all the former soviet states, particularly Ukraine, which like Georgia aspires to join NATO,” he added. – Reuters __


Clic here to read the story from its source.