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Russia aims to corner energy market: U.S. official

ROME (Reuters) - Russia aims to extend its control over energy deliveries to the West and it is important that European countries push forward on efforts to diversify routes for oil and gas supplies, a senior U.S. official said on Monday.

Russia's President Dmitry Medvedev attends a Security Council session in the Kremlin in Moscow September 6, 2008. REUTERS/Sergei Chirikov/Pool

As Vice President Dick Cheney visited Italy to seek support for Georgia after its brief war with Russia, the official, said: “The fact is Russia has worked hard to try to corner the market, so to speak, and is working to foreclose options to transit for those energy products across Russia.

“They want everything to come out through Russia and a lot of us think it’s more important that there be diverse means of gaining access to those resources,” he said, speaking on condition of anonymity.

“No one country ought to be able to totally dominate those deliveries.”

Italy was the last stop on a weeklong trip for Cheney that began with Azerbaijan, Georgia and Ukraine to reinforce U.S. support for the former Soviet states after the conflict between Tbilisi and Moscow.

The crisis erupted in early August when Georgia tried to retake the breakaway region of South Ossetia and Russia responded with overwhelming force. Cheney, in a weekend speech in Cernobbio, Italy, called Moscow’s actions “brutality against a neighbor”.

In those remarks, he also accused Russia, the world’s second largest oil producer, of using “energy as a tool of force and manipulation” in Central Asia, the Caucasus and elsewhere by threatening to interrupt the flow of oil or natural gas.

NABUCCO PROJECT

Europe and the United States are concerned about transit routes for oil and gas through eastern European countries which are seen as alternatives to Russian supplies.

“We think diversity of supply is important,” the U.S. official told reporters traveling with Cheney.

Azerbaijan and Georgia are links in a Western-backed energy corridor that bypasses Russia, which the West fears could be in jeopardy following Moscow’s military actions on Georgia.

In discussions with private sector representatives and public officials, “there were concerns expressed that one of the things that happened as a result of the Russian military operations in Georgia was to raise questions about the security of that trans-Georgian corridor for moving Caspian energy resources out to the West,” the U.S. official said.

Europe is interested in finding ways to move forward with projects like the Nabucco pipeline project, the official said of a U.S.- and EU-backed project that would take Azeri gas to Europe through Georgia and Turkey. But concern about instability in the Caucasus has been scaring off investors.

Europe also wants to ensure that the Baku-Tbilisi-Ceyhan pipeline, which ships 850,000 barrels per day of high quality Azeri crude from the Caspian to the Mediterranean, remains open and functioning, the U.S. official said.

Editing by Ralph Boulton

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