Issue 9: October 2011

A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• In a somewhat surprising development for Gazprom, Turkish state-owned gas pipeline operator, Botaş, has declined to extend its contract for 6 billion cubic metres (bcm) of gas per year. The move is seen by some as an attempt by Ankara to obtain gas price discounts.
• The Polish state-owned energy company, PGNiG, has joined its European counterparts in pressing for lower gas prices from Gazprom. Warsaw wants to change the gas price formula and tie it to spot gas market prices.
• Another recent, unpleasant surprise for Gazprom was the launch of an investigation into its European partners carried out by the European Commission (EC). Officially, the EC investigation concerns the potential violation of antimonopoly legislation, although some commentators see the investigation as an attempt to strengthen the position of European consumers in their negotiations with the Russian gas giant.
• Belarus has agreed terms with Gazprom for the sale of the remaining 50 percent stake in Beltransgaz. In return, Belarus President, Alexander Lukashenko, is demanding guarantees of transit through the Belarusian pipeline network and a reduction in gas import prices to the level of internal Russian prices.
• Ukraine President, Viktor Yanukovich’s attempt to destroy his political rival, Yulia Timoshenko, is playing into Gazprom’s hands. As Brussels toughens its stance towards Kiev, Ukraine is forced to be more amenable in its negotiations with Russia, especially those over the future of Ukraine’s Gas Transit System (GTS)
• Prime Minister Vladimir Putin’s visit to China failed to produce a breakthrough in negotiations over the Altai gas pipeline and potential Russian gas deliveries to China. The price of gas exports via the Altai pipeline remains the main stumbling block, as Gazprom is currently seeking other ways of exporting gas to China, namely via the Sakhalin-Khabarovsk-Vladivostok pipeline.

• EGF Editorial  |  Published on EGF: 13.11.2011  |  Energy
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Insights into Turkish Domestic and International Politics during October 2011
Key Points:

• Turkey’s economy continues to flourish in comparison with other developed economies on its European periphery. The country gained over a million jobs and clocked an 11 percent growth rate in the first quarter of 2011 while its GDP grew by 8.8 percent.
• Germany’s Foreign Minister, Guido Westerwelle, leant his support to the Turkish accession bid to the EU, saying that the EU should be “fair to Turkey in the negotiation process.”
• Ankara continues its condemnation of Syrian violence against opposition and activist members, and according to a number of reports, is now hosting a group of former Syrian soldiers called the Free Syrian Army.
• A large earthquake in the Van province has exacerbated Kurdish-Turkish relations with claims of bias being leveled at the government for the manner of its response to the disaster in the mainly Kurdish region.
• Turkish Security Forces (TSK) continue their assault on PKK strongholds in Iraq after a devastating attack in mid-October that left 24 TSK soldiers dead. On October 28, police arrested a number of pro-Kurdish BDP Party members in and around Istanbul, including member of the intra-party constitutional commission, Buşra Ersanli.
• Azerbaijan and Turkey finally conclude a natural gas supply agreement following two years of negotiations, while BOTAS informs Gazprom that it will not renew a key existing gas supply contract with Russia.

• EGF Editorial  |  Published on EGF: 13.11.2011  |  Energy
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ISSUE #37
10/31/2011
On 27 October 2011, the European Parliament adopted a resolution on the current situation in Ukraine. The resolution sets out support for Ukraine's prospects to join the EU. READ MORE

• Gorshenin Weekly  |  Published on EGF: 02.11.2011  |  External Relations
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ISSUE #36
10/24/2011
On 20 October 2011, Ukraine and the EU announced that they had completed negotiations on setting up a free trade area (FTA). “After intensive talks, we managed to agree all the key parameters of an FTA agreement,” the Ukrainian first deputy prime minister and minister of economic development and trade, Andriy Klyuyev, said. READ MORE

• Gorshenin Weekly  |  Published on EGF: 25.10.2011  |  External Relations
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ISSUE #35
10/17/2011
On 11 October 2011, a Kiev district court sentenced the leader of the opposition Fatherland party, former Prime Minister Yuliya Tymoshenko to seven years in jail. Tymoshenko was declared guilty under Part 3, Article 365 of the Criminal Code of Ukraine, which deals with abuse of power. Additionally, she was stripped of the right to hold public office for three years. READ MORE

• Gorshenin Weekly  |  Published on EGF: 24.10.2011  |  External Relations
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ISSUE #34
10/10/2011
On 6 October 2011, the Ukrainian parliament adopted the first reading of a presidential draft law on decriminalizing economic offences. Under the draft law, perpetrators of economic offences will no longer bear criminal responsibility but instead will face administrative sanctions such as fines. READ MORE

• Gorshenin Weekly  |  Published on EGF: 23.10.2011  |  External Relations
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ISSUE #33
10/03/2011
On 11 October 2011 a Kiev district court will start to read the verdict regarding the leader of the opposition Fatherland party and former Ukrainian Prime Minister Yuliya Tymoshenko. A correspondent of the Ukrainian news and analysis website Lb.ua reported that that court debates in Tymoshenko's case were completed on 30 September 2011. It was expected that Tymoshenko would deliver a concluding speech in the court on the same day. However, the former prime minister requested her address to be rescheduled for 2 October 2011. She explained her demand by the fact that prior to her speech, the prosecutor's office and civil plaintiff had unveiled fresh “aspects that totally differ from the indictment.” READ MORE

• Gorshenin Weekly  |  Published on EGF: 22.10.2011  |  External Relations
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Russian Deputy Foreign Minister, Andrei Ivanovich Denisov, likes to see the world in a dialectical way, perceiving the linkage of its social and political developments. According to him, the present historical period, which began after the outbreak of the recent global crisis in 2009, is a time of upheavals and subsequent instability. Consequently, the role of diplomacy now is to minimize the possible negative impact of political instability taking place at the global level and to look for less conflict-ridden international relations.
READ MORE

• Andrej Kreutz  |  Published on EGF: 17.10.2011  |  External Relations
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Insights into Turkish Domestic and International Politics during September 2011
Key developments:

• Turkish Prime Minister Erdogan’s September is filled with tumultuous foreign policy issues, coalescing disputes with Israel, Cyprus and the world’s stance towards Somalia in his statement to the UN General Assembly.
• The prime minister visited Libya, Egypt and Tunisia in a quick tour of countries touched by the Arab Spring while continuing his condemnation of Syrian repression of civilians and rebuffing Iranian and Russian anger at Ankara’s participation in NATO’s missile shield.
• Kurdish-related violence seizes the country through terrorist attacks and military operations between PKK fighters and the Turkish military. BDP Kurdish Peace and Democracy Party parliamentary deputies end their boycott of the parliament in order to end the hostilities.
• The European Commission instigates raids on Gazprom subsidiaries on suspected competition violations, with many calling it a political move to garner support for Nabucco and undermine South Stream and Nord Stream.
• Energy major BP announces a planned pipeline from the Shah Deniz II field in Azerbaijan traversing Turkey, Romania, Bulgaria and Hungary.

• EGF Editorial  |  Published on EGF: 12.10.2011  |  Energy
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Issue 8: August-September 2011

A Snapshot of Key Developments in the External Relations of the Russian Gas Sector
Key points:

• Gazprom partners raided by European Commission Anti-trust Inspectors
• The dispute between Moscow and Kiev continues. Ukraine knows that it has a weak bargaining position and is in no hurry to make concessions to Russia
• Prime Minister Vladimir Putin launched the first string of Nord Stream, meaning Ukraine is now in danger of losing its status as the main transit country for Russia’s European gas exports
• Gazprom has signed roadmap with South Korea's Kogas for the construction of a pipeline from Vladivostok to South Korea
• Gazprom may suspend its project in Nigeria because of the lack of a law governing the oil and gas industry, although experts say Gazprom may have lost interest in this project because of potential difficulties in selling Nigerian gas
• Gazprom is looking to acquire two state-owned oil and gas companies in Kyrgyzstan
• The Gazprom affiliate Vemex has acquired a 51% stake in RSP Energy, marking the first time a Gazprom Group company will sell gas and electricity to Czech households
• Gazprom has signed a legally-binding agreement with its European partners on the implementation of the South Stream project, but has attracted criticism from the EU. According to Russian sources, EU Energy Commissioner, Guenther Oettinger, views South Stream as an attempt by Moscow to derail the ‘Southern Corridor’ gas supply diversification concept
• In line with new oil production projects in the region, Gazprom Neft is considering the construction of a new oil refinery near Murmansk
• Gazprom expects a doubling of the Mineral Extraction Tax by 2013.

• EGF Editorial  |  Published on EGF: 12.10.2011  |  Energy
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