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In The Focus

Russian Foreign Policy:
Foreign politics of the week 18.07 - 24.07.05

Meeting of RF president Vladimir Putin and Turkish prime minister Regep Erdogan in Sochi was about searching for new horizons of interstate relations. The count was traditionally made on power engineering and VTS, moreover energy plans exceed the frames of bilateral relations.

It is interesting that Turkey is not loyal to Russia in energy branch actively diversifying the sources of supplies, including at the expense of damaging Russian interests. Ankara is one of the main participants of the project of oil pipeline Baku-Tbilisi-Jeikhan (Turkish port Jeikhan is planned as a transit point for deliveries of Azerbaijani and Kazakh oil to European markets). Its opening took place at the end of March this year. Ankara also is one of the main participants of gas pipeline Baku-Tbilisi-Erzurum (BTE), which building is planned to finish in 2006.

Despite energy contradictions mentioned above, negotiations in Sochi were, in many respects, about strengthening of energy cooperation. First of all, the question is about increase of efficiency of “Blue stream”. Moscow’s stake on “Blue stream”, serving to the only customer, was mistakable. The Turkish side does not buy gas in planned volumes, because forecasts of consumption were not justified because of financial crisis in Turkey in 2000.

Meanwhile, plans of the Russian government are extremely large-scale: not only to keep running “Blue stream” at full capacity, but also to build new gas and oil pipelines at the territory of Turkey, including with access to the markets of the third countries, in particular, to Iraq (also electric energy plans to be supplied there).

Besides, the Russian president said that Russia was ready to build large underground gas stores at the territory of Turkey, to enter to gas distribution nets during privatization, to use building gas pipelines in Turkey and to participate in building of new ones to provide transit of Russian energy resources also to Southern Europe.

With the help of Turkey Moscow counts to realize economically profitable projects, moreover, previous attempt to enter to the Turkish energy market failed (failure of Russian “Tatneft” participating in privatization of Turkish oil-processing asserts). Despite failures, Russia is ready to invest considerable means to the Turkish economy, and the Russian president consequently lobbies interests of Russian companies.

In particular, “Alfa-Group” is ready to invest 3 bln. dollars to the Turkish enterprises producing the newest communication systems.

At negotiations with Erdogan Putin considered it was necessary to remind to the Turkish side of necessary guarantees for “Alfa”. Besides, according to the Russian president, hundreds of million dollars of Russian investments will be put to metallurgical enterprises, electric power engineering and other branches of the Turkish economy in the near future, in case of establishment of favourable regime for Russian investments. Entering to the Turkish market is, at some extent, a “forced” step for Russia. As European markets remain close for Russians, they try to realize economic expansion to the south, where chances for success are higher.

The sides, in particular, agreed on participation of Russian producers, in particular, “Kamov” firm, in new tender on sale of helicopter technique to Turkey. Moreover, Putin, as a typically western head, personally lobbied economic interests of his country.

New tender will have to be announced at the beginning of next year. Russia intends to present modification of fight helicopter Ka-50 “Black shark” adapted according to demands of internal forces of Turkey. According to preliminary data, this time the tender will be limited with purchase of 30-50 fight helicopters at total cost up to 1.5 bln. dol.

 

Under conditions of aggravation of inter-elite conflicts in Ukraine, Moscow’s means of pressure on the Ukrainian elite seems to be evident. Parliamentary elections are coming and there are evidences that Moscow is ready to cooperate with ex-candidate for presidential position Yanukovich, who at present is in opposition to the present authority.

On July16 “Yedinaya Rossiya” and the Ukrainian Party of Regions signed an agreement on cooperation. According to the agreement, “Edinorrossy” will consult ex-prime minister Viktor Yanukovich and his supporters for three years. They agreed to share “the experience of organizational and party building, control and revision work, propaganda and publishing activity, studying, participation in elections, etc. the agreement will be in force for three years and then it will be automatically prolonged, if it satisfies both sides.

To all appearance, the Party of Regions counts to incline to its side more pro-Russian voters due to cooperation with pro-Kremlin party. In its turn, Moscow intends to take revenge for the defeat in presidential campaign.

Moreover, an evident means of pressure – gas means – is not fully used by the Russian government. At first site, an agreement between “Gazprom” and “Neftegaz of Ukraine”, signed one of these days, will put the dispute on Russian gas loss from Ukrainian gas underground store to an end.

“Gazprom” and “Naftogaz” agreed to regard 2.55 bln. cubic metres of gas from 7.8 bln. cubic meters as a payment for services of transit of the Russian enterprise. Also “Gazprom” got firm guarantees of increase of its gas transit through the territory of Ukraine. This year it will be increased in 8 bln. cubic metres to 116.5 bln. cubic metres, and in 2006 – in 11.5 bln. cubic metres. Due to it, “Gazprom” hopes to exceed the plan on gas export.

The rest 5.25 bln.c.m. of gas were rearranged as a debt of Naftogas to intermediary company RosUkrEnergo. Then RosUkrEnergo will re-sell this gas to GazExport that will deliver it into Europe. Export re-sale proceeds of 5.25 bln.c.m. of gas into Europe will constitute from $800 mln. till $1 bln. The coordinated scheme is profitable to Gazprom, above all, by the fact that the monopolist could not only “rescue” its gas out of Gas-Stocks of Ukraine but to take hold of the pressure mechanisms upon Ukrainian colleagues, having secured itself from possible refusal to provide gas.

 The question is that the company RosUkrEnergo (joint venture of Gazprombank and Austrian Raiffeisen Investment) is an operator on Turkmenian gas delivery into Ukraine. That is why in case if Naftogaz is not able to provide Gazprom with agreed 5.25 c.m. of gas, the concern will  “pump up” this volume out of Turkmenian-Ukrainian gas, since the Russian as well as Central Asian gas runs via united gas-transporting system controlled by Gazprom.

As a result, considering plans on gas transit growth through Ukraine, gas balance deficiency of the country nominally boils down to 1.25 bln.c.m., however, in Minpromenergo of Ukraine they claim that “gap” in the gas balance is worth about 5 bln.c.m. In this conditions, the lost 7.8 bln.c.m. of gas are most likely not in the gas stock of Ukraine, and that means that the conflict has not been drained yet and in the nearest future Russian may face the problem of non sanctioned gas withdrawal again.

On the whole, there are a lot of unclear aspects in the gas argument. Though the Russian gas transit via Ukrainian territory will be increased by 8 bln.c.m. in 2005 in comparison with earlier expected volumes, it is evident that transit is to be increased exactly by that quantity of cubic meters that it was lost for.

 

As it is known, Byelorussia was officially announced the next target of the “color revolution” at the post-soviet space. Diplomatic conflict between Poland and Byelorussia connected with mutual diplomats’ renvoi reflects the Warsaw intention to help GUUAM and, thus, the West in the scenario of power change in Byelorussia. Belarussian president seems to be obviously nervous that increases chances for success of the “color revolutions” agents.

Moscow seems to be expecting using “pre-revolutionary” situation in its own interests in hope to get maximum benefits from the Belarussian leader for this support. As it is known, within the last years Minsk made all its best to drag out the integration process of Russian and Byelorussia at the Russian terms, especially being resistant to the common currency. As to the version of Minsk, the emissive center must be set up at the parity terms: both in Moscow as well as in Minsk; moreover, Russia has to pay to Byelorussia compensation of $2.7-3 bln. for its refusal from own currency.

Moscow is currently trying to connect two processes – integration within the frames of the Allied State and resistance to the “color revolution” threat in Byelorussia. In this connection, the visit of Belarussian leader into Russia is not without a reason. Superficial agenda and secret preparation to the visit were called to disguise genuine goals of the Lukashenko’s visit.


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