MOSCOW, March 6 (RIA Novosti) Medvedev to be given presidential privileges / South Ossetia, Abkhazia launch new independence bid / Uzbekistan doesn't want to remain Russia's junior partner / Russian-Ukrainian gas war ends, Gazprom's foreign policy fails /
Europe threatened by CIS gas wars / Britain's BP fails to find oil on Sakhalin
Kommersant
Medvedev to be given presidential privileges
On March 3, President Vladimir Putin signed an unprecedented decree stipulating that Dmitry Medvedev, who won the presidential election the day before, will be considered "the newly elected President of the Russian Federation who has not assumed office" until his inauguration on May 7.
Russia has no mechanism for handing over presidential powers, because incumbent presidents (Boris Yeltsin and Vladimir Putin) retained their powers in 1996 and 2004 and acting president Putin became incumbent president in 2000.
Putin's decree says the Presidential Executive Office will "ensure the operation of the newly elected President of the Russian Federation who has not assumed office," while the Federal Guards Service will provide him with "protection until the official announcement of his election to the post of president" and with an official residence.
According to business daily Kommersant, Prime Minister Viktor Zubkov will today move from his office on the fifth floor of the government building to the office on the third floor that has been assigned to Putin. The president has visited it only a few times.
The fifth floor, where the prime minister's office is located, will be closed down for repairs that should "take into account the requirements of the new prime minister."
The move has provoked the rumor that Putin will move his office to the government building on March 11, although the government has refused to confirm the planned move officially.
Nezavisimaya Gazeta
South Ossetia, Abkhazia launch new independence bid
Parliament of South Ossetia, a self-proclaimed republic in Georgia, filed requests yesterday with the UN secretary general, the Russian president, and the heads of state of the EU and the CIS, asking them to recognize the republic's independence.
Sergei Bagapsh, the president of Abkhazia, another self-proclaimed republic, told Nezavisimaya Gazeta that Abkhazian lawmakers were preparing a similar appeal.
Bagapsh said both South Ossetia and Abkhazia had made their requests in the run-up to the Russian parliamentary hearings on self-proclaimed republics slated for March 13 and 14.
South Ossetia's appeal says that the request to recognize the republic's independence is based on any nation's right to self-determination and the legal justification based on the current realities.
"The Kosovo precedent was another convincing proof that the settlement of a regional conflict should not always be based on the territorial integrity principle," it says.
Incidentally, neither South Ossetia nor Abkhazia are under any illusions over the Kremlin's immediate recognition of their independence.
Bagapsh said "Russia is unlikely to recognize [Abkhazia's independence] right away, but we shall wait and see how it will go."
South Ossetia's President Eduard Kokoity echoed this view, adding that both South Ossetia and Abkhazia counted on Russia's support as well as on other friendly countries. They said they had a whole list of friends but refused to make it public yet.
Meanwhile, according to Bagapsh, Abkhazia has developed a program, a Key to the Future, which contains the conditions for resuming dialogue between Sukhumi and Tbilisi. First and foremost, they want Georgia to apologize for the war it waged that inflicted $13 billion damage to Abkhazia, and to recognize its independence into the bargain.
Sukhumi has a simple explanation for the rigid stance: if Kosovo could afford it and met with understanding of the international community, why others can't? All of the self-proclaimed states within the CIS are now building their "recognition policies" on "the Balkan parallel."
Nezavisimaya Gazeta has information that the leaders of Abkhazia, South Ossetia and Transdnestr plan to meet soon to develop coordinated tactics and strategy on their fight for independence.
Gazeta.ru
Uzbekistan doesn't want to remain Russia's junior partner
Uzbekistan, which is Russia's partner in a military alliance, has unexpectedly allowed the United States to use its military bases. However, experts say there are no reasons to fear a new NATO advance to Russia's borders.
The Central Asian republic quarreled with Washington after the West criticized President Islam Karimov for ordering troops to shoot into crowds of protesters in Andijan in May 2005. Germany was then the only Western country allowed to maintain its military presence in Uzbekistan.
Karimov ordered the Americans to leave their base in Khanabad near Karshi, hoping to develop closer relations with the Kremlin. Russia immediately rose to the occasion, saying it would protect Uzbekistan and signed a strategic partnership agreement with it.
But Karimov, like a true Eastern ruler, did not intend to remain Moscow's junior partner for long and hoped to make up with the West. Relations between the United States and Uzbekistan have become much warmer in the past six months, as Washington needs Uzbek bases to continue operations in Afghanistan and in view of a potential strike against Iran.
In short, pragmatism has taken the upper hand over a desire to spread democracy.
Uzbekistan has allowed Americans to use the Termez facility, a transit base for airlifts to Afghanistan, on certain conditions.
NATO hailed the news and experts say the decision was expected.
Alexei Malashenko, a member of the scientific council at the Carnegie Moscow Center, said: "Karimov's blunder in Andijan has been forgiven after capital punishment was banned, the main opponent pardoned, and human rights given some leeway. Karimov is pursuing a multi-directional foreign policy. He maintains good relations with Moscow, which will not protest against the resumption of Uzbekistan's ties with the United States."
Political analyst Alexei Vlasov said: "Moscow will protest if Uzbekistan's cooperation with the United States becomes truly large-scale. As yet it has no reason to worry."
Daniil Kislov, director of the Central Asian Information Center, said: "Americans, who need Uzbekistan as a gas partner, will try to come to terms with the Karimov regime unofficially and will close their eyes to human rights violations. Uzbekistan is ready to cooperate with anyone who brings money, because it lacks funds."
Kommersant
Russian-Ukrainian gas war ends, Gazprom's foreign policy fails
Faced with the threat of its European contracts being broken, gas giant Gazprom has lifted restrictions on Russian gas supplies to Ukraine without any conditions set. In fact, this is the first failure in Gazprom's foreign policy. So far, the monopoly's tough measures in talks with CIS countries have inevitably ended with gas buyers' concessions.
The Russian company has agreed that Ukraine will pay $179.5 per 1,000 cubic meters for gas received this year. Gazprom still hopes to receive concessions from Kiev. However, the talks have not yet brought any results, while Ukraine has demonstrated unusual toughness in this situation. Moreover, Ukraine is not in a hurry to resume talks with Gazprom: according to a Kommersant source at the Russian Fuel and Energy Ministry, Ukraine's representatives will arrive in Moscow only at the beginning of next week.
Another source familiar with the results of the talks on March 5 explained that the subject of Russian gas supplies to Ukraine at $320 per 1,000 cubic meters this year has not been closed yet and its discussion will continue. However, according to the source, the main theme of the talks will be the establishment of two joint ventures for gas sales on the Ukrainian domestic market.
Analysts are not surprised that the conflict has lost steam so soon.
Denis Borisov of the Solid investment company thinks that the armistice is largely due to Russia and Ukraine's unwillingness to spoil their relations with Europe.
"Gazprom does not want to lose its reputation of a reliable supplier, while Prime Minister Yulia Tymoshenko has always been a pro-western politician who would not wish to spoil relations with the EU," the analyst said. In his opinion, Ukraine can, as a result, rely only on purchases of cheap Central Asian gas this year.
Valery Nesterov of Troika Dialog agrees that the crisis could not last long. At the same time, he believes that the Russian-Ukrainian talks are not likely to bring quick results because Ukraine has as many instruments of pressure as Gazprom has.
Nezavisimaya Gazeta
Europe threatened by CIS gas wars
In the next few years, the European Union will get less natural gas from Russia and the CIS. Every time Moscow tries to suspend gas supplies to Ukraine and Belarus, to raise gas prices, to collect debts and to accomplish other political and economic objectives in both countries, Kiev and Minsk start siphoning off gas earmarked for Europe.
Mutual payments and settlements will be disrupted if Russia carries out its plan to charge world-level gas prices for Ukraine and Belarus, raising them by 50% and 150%, respectively, by 2011. This will inevitably lead to other intra-CIS gas wars and cause gas shortages in Europe.
Although Russia is still alternately cutting off gas deliveries to Ukraine and Belarus, both countries could be deprived of gas after the introduction of world-level prices.
The projected Nord Stream and Blue Stream pipelines are unlikely to eliminate gas transit risks because both pipelines will only be commissioned in 2011-2013 and will annually pump a total of 90 billion cubic meters of gas.
At the same time, Russia annually exports 150 billion cubic meters of gas to Europe and eventually plans to control 25% of the regional market.
The unpredictable gas export policy of Turkmenistan, a Central Asian republic and a vital partner of energy giant Gazprom, also gives reason for concern. In December 2007, Ashgabat started pumping less gas to Russia and Ukraine and also stopped gas exports to Iran.
Staring with 2009, Gazprom could receive less Turkmen gas after an alternative pipeline with a capacity of 30 billion cubic meters links Turkmenistan with China.
This is a serious problem because Gazprom is unable to expand annual gas output by more than 1-2%.
All the EU can do is wait for Russia to develop new major deposits, including the Shtokman gas condensate deposit in the Barents Sea that will be commissioned in the next five to seven years, or to look for alternative suppliers outside the CIS.
However, Norway is depleting its gas deposits, and Algeria also has a limited gas export potential.
Persian Gulf countries, which are the only alternative, require additional gas liquefaction plants and gas tanker terminals. Another option is Iran, which has the world's second largest gas deposits after Russia. However, the EU will have to mend relations with Tehran and to build the required infrastructure if it wants to get more gas.
Vedomosti
Britain's BP fails to find oil on Sakhalin
British oil major BP has announced that it found no oil on the Sakhalin shelf last year. However, despite the loss of over $100 million, the company is not going to withdraw from the project.
In its annual report for 2007 published on March 5, BP said that it had not discovered the presence of hydrocarbons in the two exploration wells drilled last year on the West-Shmidtovsky block (Sakhalin-IV project). The company had to write off its expense on unsuccessful drilling operations amounting to $103 million.
However, BP will not give up the Sakhalin projects. According to the report, the BP program for this year provides for the repeated processing of seismic research data on the West-Shmidtovsky block and also for seismic studies on the Kaigansko-Vasyukansky block.
BP is not planning any drilling operations in 2008. According to the company's Russian spokesman Vladimir Buyanov, this year's planned budget amounts "to tens of millions of dollars."
The operator of the Sakhalin-IV and Sakhalin-V projects is the joint venture Elvarineftegaz, in which Russian state-controlled oil major Rosneft holds 51% and BP 49% of the shares. Under an agreement between the partners, BP finances exploration work.
Rosneft's official spokesman refused to comment on the situation surrounding the Sakhalin-IV and Sakhalin-V projects, but Rosneft's president Sergei Bodganchikov said at the Krasnoyarsk forum in mid-February that BP was not planning to withdraw from these projects.
According to him, work is being done in keeping with the initial plan, which is regularly adjusted.
"We will not drill new wells this year because not all wells drilled last year were productive," Bogdanchikov said.
Vitaly Kryukov, an analyst at the Kapital investment group, said that dry wells had been drilled only on two out of ten sections planned for drilling. He thinks there is hope that the remaining sections will be productive, for three out of six drilled wells produced oil.
"The Russian side will not incur any losses anyway because under the agreement between the partners BP has assumed all geological exploration risks," Kryukov said in conclusion.
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