Is Central Europe too dependent on Russian energy?

With the Visegrad countries - Poland, Hungary, the Czech Republic and Slovakia, importing most of their crude oil and natural gas requirements from Russia, is Central Europe too dependent on Russian energy?

During the past decade, the Visegrad countries have diversified their energy supplies to reduce this dependence by connecting national oil and natural gas networks to Western Europe. But Western Europe is also a big buyer of energy from Russia. Manouchehr Takin, an analyst at the Centre for Global Energy studies in London, says as time goes on Central Europe will have more alternatives...

"There are other suppliers to Europe and there would be negotiations and in effect competition between North African suppliers of gas, which already are major suppliers and Russia as well as resources in Norway that are being developed. So, it is not only a monopoly or a great leverage. The Russians could, in theory, exert greater pressure but I doubt it because these negotiations would be at the same time that the European purchasers are having negotiations with others."

Are you concerned about the way that Yukos was re-nationalised, that a company that was probably Russia's most transparent company was rolled over and now has been put back in state hands?

"I do share that concern. It is the view of many people in the oil and gas industry internationally and of all the publications that one reads. But from the Russian side, they have a more nationalistic view and that really is supported by the general population. But we do think the recent announcements in the last month, that foreign ownership of these Russian companies should be less than fifty percent, are a limitation of the free market...but they have a legitimate concern as a sovereign state."

What about countries of Central Europe, which might be overly dependent on Russian gas? Should they be thinking about alternatives?

"I think a diversified source of supply would be costly. Countries that are neighbours of Russia and are next to the pipeline system coming from Russia would find it very costly. But the more Europe comes together and has a network of energy in the same way that it has a network for electricity, the more they will be able to feed into each other and overall could have a diversity of supply.

"At present, the central and eastern European countries are very much dependent [on Russian oil]. This is not a bad thing, it is the reality of business, and gradually with the free market and the European Union expanding and having the strength they would have a stronger negotiating power to work on the next phase of the deals that they make with the Russians."