EU expanding investments in Central Asian energy to offset ending imports from Russia

RUSSIA / FSU POLITICS - In Brief 09 Jun 2024 by Alex Teddy

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On June 5 MVM (a Hungarian energy conglomerate) said it was going to purchase a 5% stake in the Shah Deniz gas field in the Caspian Sea. It produces over 29 billion cubic meters (bcm). The stake should mean that Hungary receives 1.5 bcm per annum. Hungary also signed a 15 year gas deal with Russia in 2021. In 2024 Hungary is due to buy 50 bcm of natural gas from Azerbaijan. Hungary has cordial relations with Azerbaijan. Hungary is an observer in the Organization of Turkic States, of which Azerbaijan is a member. Hungary has behaved more amicably with Russia than any other EU state. The deputy foreign minister of Hungary was in St Petersburg, Russia, for the international economic forum. Despite sanctions on Russia, several EU countries have companies that continue to invest in oil and gas in Russia. The sanctions are not absolute.  In 2023 the EU bought 43 bcm of gas from Russia. That was only 15% of the European Union's gas. 45% of the EU's gas came from Russia in 2021. The EU aims to end all purchases of Russian oil and gas in 2027 but it is unlikely that this will be achieved. An attempt to institute a total ban would probably be vetoed by Hungary or Slovakia. Spain and Belgium are particularly dependent on Russian liquefied natural gas. The United Kingdom (not an EU country) has severe sanctions on Russia. However, it still buys Russian oil that has been refined in China and India. 70% of Kazakhstan's oil is exported to the EU. As the EU weans itself off Russian energy this will become even more vital for the EU. Shell, Total and ENI are some of the major EU companies in the Kazakh oil and gas sector. British Gas is there, too. Clearly Russia is unhappy about this ...