By Janusz Bugajski
The privatization of Albpetrol, Albania’s state-owned energy company, must be a top priority for Tirana. Privatization with the most responsible international partner will not only enhance the country’s economic development, it will also strengthen Albania’s strategic position, promote regional security, and deepen Albania’s relations with the United States.
In privatizing Albpetrol, Tirana faces a strategic choice: entanglement in Russia’s energy web or closer ties with the U.S. Above all, the government must beware of falling into Moscow’s energy trap. Two Russian state companies, Gazprom and Rosneft, are intent on penetrating Albania’s energy industry in pursuit of regional dominance. President Vladimir Putin has made no secret of the fact that he sees the control of fossil fuels as a major tool of foreign policy to raise Russia’s geopolitical stature. Albania has now become one of Moscow’s West Balkan targets.
Energy dependence is a key component of Putin’s strategy as it locks in a country economically, corrupts the political and business elites, and undermines national independence. Russia’s energy deals are costly for targeted countries, as the goal is to promote Moscow-friendly regimes, undermine European cohesion, and curtail American influence. This strategy has been employed in Bulgaria and Serbia, with Gazprom purchasing majority shares in Serbia’s state oil and gas company NIS and seeking control over gas pipelines crossing Bulgaria. It is now being pursued toward other Balkan states.
Putin’s plans to build the South Stream gas transportation system between the Black Sea and the Adriatic and Central Europe places the Balkan peninsula at the center of Russian policy. The ownership of energy resources and infrastructure by state-controlled Russian companies is calculated to prevent the construction of alternative energy networks linking the Caspian Basin and Europe that would be independent of Moscow. The Kremlin is also campaigning against alternative energy sources such as shale gas that increase competition, diversity, and independence.
Russia intends to start construction of South Stream by the end of this year before new European Union directives regulating energy distribution by non-EU countries come into effect in March 2013. For instance, if a major Russia-Bulgaria agreement is signed before that date, it will allow Russia to determine which operators participate in South Stream.
Simultaneously, Gazprom is pushing to acquire Greece’s gas transportation systems and its dominant oil company, Hellenic Petroleum. Athens is desperate to privatize state companies in order to raise revenues. Control of the Greek energy sector would enable Gazprom to promote its own international projects and block rival initiatives. It would boost Russia’s political influence in Athens and provide a springboard for Gazprom’s expansion into the Western Balkans.
Moscow is also adept at bringing other companies into consortia where it has the decisive voice. Hence, Russia’s state oil company Rosneft is partnering with Turkey’s ȡlık Enerji to buy out Albpetrol. Similar arrangements have been made with other European companies to disguise the Kremlin’s ambitions.
Instead of succumbing to Russia’s enticements, the privatization of Albpetrol will be an invaluable opportunity to strengthen Albania’s strategic position in South East Europe and to deepen relations with Washington. U.S. policy makers are fully aware of Russia’s energy strategy and are encouraging the diversification of energy sources and infrastructure ownership across Europe. By enabling American companies to participate in Albania’s energy market through the acquisition of Albpetrol, Tirana can accomplish several economic and geostrategic objectives.
First, Albania will plug into the wider global energy market and benefit more substantially from its energy reserves. This will create jobs and infrastructure and attract other business ventures to invest in Albania. The privatization of Albpetrol will result in a significant improvement in the output and profitability of the company and reverberate positively throughout Albania’s energy industry.
Second, Albania will demonstrate that it is a responsible geopolitical player by curtailing Russia’s ambitions. It will avoid becoming a second Serbia in the Balkans, which is used as a proxy for Moscow’s interests and blocks Kosova’s economic development and international integration.
And third, Albania will raise its stature in Washington as a strategic partner whose national interests coincide with those of the U.S. This will serve to strengthen the NATO alliance and promote more intensive business connections across the Atlantic.
Ultimately, the legacy of Albanian leaders is also at stake, as the sale of Albpetrol will be recorded as a historical decision that will help determine regional and European security for many years to come. There is no rational reason to further delay the decision on the Albpetrol tender or to cast any doubts on Albania’s trans-Atlantic commitments.
