MOSCOW, April 15 (RIA Novosti) Heading United Russia will give Putin equal power with Medvedev / Russia faces tough competition on Libyan arms market / NATO strains relations between Ukraine and Russia / EU achieves first success in gas supply talks from Central Asia / Uzbekistan could push Gazprom out of China's gas market / Gazprom gets Chayanda field without tender
Gazeta.ru, Nezavisimaya Gazeta
Heading United Russia will give Putin equal power with Medvedev
The pro-Kremlin United Russia party has approved amendments to its charter to allow Vladimir Putin to become its chairman irrespective of post and party membership. Party members and experts believe Putin will most likely accept the offer.
Dmitry Badovsky, director of the Research Institute of Social Systems, said: "It would be strange if the post, which has been created with him in mind, remained vacant. The offer would not have been made if there was even a slim probability of Putin rejecting it."
Olga Kryshtanovskaya, director of the Institute of Applied Politics, said Putin would stabilize the power tandem by accepting United Russia's offer.
"The Russian system of power will become partisan, and Putin as the party's chairman will control the parliamentary majority in the two federal houses and in regional legislatures, as well as other bodies of power, such as the Audit Chamber, the Prosecutor General's Office and the Central Bank. This will create a parity between [president-elect Dmitry] Medvedev and Putin," Kryshtanovskaya said.
According to Badovsky, "Putin has shown that he will remain one of the top politicians, and possibly the main public politician in Russia. As prime minister, he will control the government, which is to implement Concept 2020. As party leader, he will interact with society."
Nikolai Petrov, program chair of Russian Domestic Politics and Political Institutions at the Carnegie Moscow Center, said the United Russia party would advance to a new level if Putin accepts the post of its leader.
"If Putin accepts the offer made by the mediocre United Russia functionaries and becomes a formal member of the party, this will initiate major change in Russia's political system. It will shift the drive from the Kremlin to the prime minister, and allow the [United Russia] party to become a real force."
Vedomosti
Russia faces tough competition on Libyan arms market
Russian President Vladimir Putin will make a previously unannounced visit to Libya on Wednesday and Thursday at the invitation of the Libyan leader, Muammar Qaddafi, the Kremlin said in a statement Monday.
However, the sides could fail to sign several major arms contracts because Russia's Deputy Finance Minister Sergei Storchak who had been involved in negotiating the deal was arrested in November 2007.
A source in the Defense Ministry told the paper that Libya was to have received 12 up-to-date Su-35 Flanker multi-role fighters, now being tested in Russia, and Tor-M2E surface-to-air missile (SAM) systems under the $3 billion contracts. Moscow also plans to sell ammunition and components for Soviet-era weapons and to provide post-warranty support.
A source in the aviation industry said the deal would be closed soon, but that Moscow and Tripoli would only initial most of the contracts because the issue of Libya's Soviet debts, estimated at $3.5 billion in early 2006, has not been settled yet.
In the 1990s, Libya alleged that Russia owed it money.
Prior to the declaration of the 1992 UN sanctions in retaliation for the 1988 Lockerbie bombing in Scotland, Libya transferred an advance payment worth several hundred million dollars to Russia, but failed to receive any weapons, a defense-industry official told the paper.
A source in the Finance Ministry said both sides remained divided on the debt issue, while another claimed that a regular round of talks would be held this week.
A source in the government said Finance Minister Alexei Kudrin and Anatoly Isaikin, CEO of Rosoboronexport, the main state arms exporter, would also go to Libya, and that the sides would be able to settle debt issues and sign arms contracts.
Political analyst Arnaud Dubien said Russia would vie with France that is planning to sell 18 Rafale multi-role combat fighters worth 2.5 billion euros, but that the talks between Paris and Tripoli were experiencing difficulties.
He said Qaddafi would inevitably look for other suppliers.
Konstantin Makiyenko, deputy director of the Moscow-based Center for Analysis of Strategies and Technologies, said Paris considered it vitally important to sell Rafale aircraft to Libya after many setbacks, and that Russia must brace itself for tough competition on the local arms market.
Nezavisimaya Gazeta
NATO strains relations between Ukraine and Russia
The decisions over membership for Ukraine and Georgia made at NATO's Bucharest summit have put Russia on the spot. Any move by Moscow in response to the bloc's eastward expansion plays into the hands of radicals on the post-Soviet space wishing to get rid of its guardianship. The bloc's leaders are only playing into their hands, writes Mikhail Pogrebinsky, director of the Center for Political and Conflict Studies in Kiev.
If Russia makes no protest against attempts to involve Ukraine in NATO, pro-NATO Ukrainians say: see nothing is preventing us from becoming a member of this prestigious club, Russia is not against it and is itself actively cooperating with the bloc. But if Russia makes loud noises, especially in the form that could be interpreted as threats, the pro-NATO activists feel even happier -Ukraine should rush headlong, not just stroll quietly, towards NATO because Russia, they say, is threatening Kiev.
This always happens when a resolution to an unpleasant issue is postponed. What stopped Russia five years ago (Putin already entrenched himself and Kiev was receiving gas at $50 per 1,000 cubic meters) from adopting an articulate policy towards Ukraine? From proposing attractive integration initiatives to its elite?
Even then it was clear that the ruling Ukrainian elite was not in a position to withstand a pro-NATO lobby from inside and pressure from outside without external support. That was the first time that Ukraine adopted a law on basic foreign and domestic policy and formulated its strategic goal - membership of the European Union and NATO. And although the wording was softened ("... provided good-neighborly relations and strategic partnership with Russia are maintained ...") the crux of the matter remained and was confirmed by all the Ukrainian authorities' ensuing moves.
The NATO members all pretended that the notorious "letter of three" (from the president, the prime minister and the parliamentary speaker of Ukraine) was sufficient grounds to confirm that Ukraine wanted to join NATO. The Poles and the Baltic states persuaded the Germans and French (and another eight NATO countries) to put in writing during the summit that Ukraine would become a NATO member in time.
It is now in the interests of the "Orange" movement to stir up relations with Russia, step up the fight against the Russian language, history, etc. Since the Bucharest turndown, every pretext for aggravating relations with Russia - real or imaginary - will be used to the full.
As is always the case in such circumstances, the radicals in Moscow and the Ukrainian nationalists play on the same side. The sharper the words uttered in Moscow, the greater the joy felt by Russia-haters in Kiev and Lvov.
Kommersant
EU achieves first success in gas supply talks from Central Asia
Turkmenistan has agreed to reserve 10 billion cu m of gas for the European Union from 2009. This gas has already been promised to Russia and China. Even if Europeans sign agreements on these supplies, it will be extremely difficult to transport this gas to the EU. Europe is seeking to achieve similar agreements with Uzbekistan and Kazakhstan to reduce its energy dependence on Russia.
The EU annually imports 300 billion cu m of gas, with Turkmenistan to provide slightly over 3% of this amount.
The issue of gas transportation to Europe has not been decided yet. Russia refuses to provide transit services. "All Central Asia's transport capacities have been contracted until 2010 for our gas purchases," press secretary of Russian gas giant Gazprom, Sergei Kupriyanov, said to Kommersant.
If the EU-Turkmen accords are backed up by long-term agreements, Turkmenistan may become a resource base for the future Nabucco gas pipeline, the EU's alternative to the Russian South Stream pipeline project.
The problem that remains is Turkmenistan's total gas supply volumes. In 2007, it sold about 40 billion cu m of gas to Gazprom, used 10 billion for domestic consumption, and supplied about the same amount to Iran. Its gas output plan for this year is 80 billion cu m, but formerly the republic's annual gas production has not exceeded 65 billion cu m of gas a year. Meanwhile, under a framework agreement with China, Turkmenistan must annually supply 30 billion cu m of gas to Beijing from 2009. Gazprom even hopes to increase its contracted gas volumes - the monopoly has a contract with Turkmenistan for supplies of 60 billion cu m of gas a year.
According to unofficial information, gas for the EU will be taken from the Chinese contracts. A source in Turkmengaz, Turkmenistan's state gas concern, said the idea of an agreement with the EU emerged after unproductive negotiations with China. "China is trying to dictate our prices being, like Russia, a monopoly buyer. We wanted to sell gas to China for $195 per 1,000 cu m. But if Russia agrees to a gradual rise in prices, China will refuse to buy gas at prices exceeding $100 per 1,000 cu m. If we sign an agreement with the EU, we will be able to demonstrate to China that we also use world prices," the source said.
In Gazprom's opinion, the European Union's policy has already led to a rise in Central Asian gas prices for Ukraine from $130 per 1,000 cu m in 2007 to $179.5 in 2008; according to forecasts, they may rise to $240 in 2009. Maxim Shein of Brokercreditservice projects the average price of gas supplied to European consumers under long-term contracts at $360 per 1,000 cu m by the end of this year; Gazprom's forecast is $354.
Gazeta
Uzbekistan could push Gazprom out of China's gas market
Russian energy giant Gazprom, which is steadily developing relations with China, may be spending time and effort in vain.
It was announced yesterday that Uzbekistan and China had set up the Asia Trans Gas joint venture to build a pipeline to deliver gas from Turkmenistan and Uzbekistan to China. Experts believe that this project may squeeze Gazprom out of China's gas market.
Uzbekistan's national oil and gas company Uzbekneftegaz and the China National Petroleum Corporation (CNPC) plan to approve the new pipeline's route by the end of this week. The size and sources of investments are to be determined by June 1, but the first tenders for equipment and subcontracting will be announced within weeks.
The Uzbek pipeline section will be incorporated into a global energy project, the Asian Gas Pipeline, which is to link China with Turkmenistan, Uzbekistan and Kazakhstan. It is estimated at $6.7 billion.
Russia expected to deliver as much as 70 billion cu m of gas to China by 2020, or up to 70% of China's gas imports. China plans to produce 100 billion cu m of gas out of the 200 billion cu m it will need in 2020.
Gas is to be delivered through the western, Altai, pipeline (30 billion cu m) and the eastern pipeline (38 billion cu m). Gazprom planned to start building the Altai pipeline in 2008 and make the first deliveries in 2011-2012.
However, the sides cannot come to terms on the price. China is ready to buy Russian gas at $100 per 1,000 cubic meters, which Gazprom views as ridiculous, because gas will cost much more in Russia by 2012.
A compromise is not guaranteed, because gas supplies are an important, but not a crucial issue for China. The country has considerable coal reserves and latent hydro resources, and is developing generating capacities that will not depend on gas imports.
On the other hand, in the next five to 10 years China will have to gradually increase gas imports. Russia must act now, or other suppliers, notably Central Asian countries, will fill the gap. By drawing out talks with China, Gazprom has lost the initiative, experts say.
Kommersant
Gazprom gets Chayanda field without tender
Russia's Natural Resources and Industry and Energy Ministries have found a way of letting Gazprom develop the Chayanda oil and gas condensate deposit in the Republic of Sakha (Yakutia) without a tender. The gas giant will pay at least 8-10 billion rubles ($340.3-$425.4 million) for the license, which incidentally will not even compensate the government's initial expenses for the geological survey. But it was the only compromise possible: otherwise, the field would have ended up in Gazprom's hands anyway, just like Kovykta before it, only accompanied by a high-profile scandal.
Gazprom insisted on getting the E&P license as soon as possible in order to begin additional exploration which could take up to 3 years. The monopoly said it was essential for putting Chayanda on stream in 2016, as scheduled by the Eastern gas program.
The deposit's reserves are estimated at 1.26 trillion cu m, with proven reserves amounting to a mere 380 billion cu m. The Chayanda field, along with 30 other oil and gas bearing areas, was included in the federal strategic reserve in late November.
Artyom Konchin, an analyst with the UniCredit brokerage, said there was no sense in holding a tender, because there would have been no other competitor in any case. "If anyone else but Gazprom had won the tender, we would be facing a second Kovykta now," he said referring to the problems which forced Russian-British oil venture TNK-BP to sell majority control in the project to Gazprom.
The expert said that the 10 billion rubles Gazprom will pay would hardly even compensate for the government's investment in the prospecting of the field. Konchin also estimated the field's proven resources at $500 million - $1 billion according to the market value.
Vitaly Kryukov, an analyst at the Kapital investment group, believes that Gazprom would have been the only one to bid, because "any sensible operator would realize that only a monopoly can afford such huge investment without privileges."
Kryukov estimated the cost of additional exploration, building a gas chemical plant to process helium and constructing the relevant infrastructure in place (local pipelines, underground storage tanks, roads, etc.) at $8-$10 billion. He believes that only Gazprom can afford to invest this much.
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