The Rise of the Russian Empire: Russo-Armenian Relations

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Another interesting and quite surprising development was reported, this time involving a deal between Gazprom and Austria. The invasion of Europe by Moscow seems to be in full swing. Are these energy deals Moscow's Barbarossa campaign? Is Gazprom their Blitzkrieg? With this significant breakthrough, Moscow has practically taken control over the entire energy distribution networks in south eastern Europe and has penetrated deep into central Europe. Having reached contractual agreements with Romania in early 2006, in order for Moscow to complete their European invasion of sorts Hungary needs to be incorporated into Gazprom's grand plan as well. So, I guess next stop for Gazprom will be Budapest. Let's wait and see, reports suggest Hungary may want to take advantage of their newly found pivotal role in European geopolitics. The extreme alarm and panic that these developments must be causing for western special interests cannot be emphasized enough. I think that a majority of the population in Europe don't realize just how much of a control Moscow has been gradually acquiring over their energy markets and thus their economy, their standard of living. I now see that Moscow has learned their 20th century lesson quite well - money is more powerful than weapons.

Armenian

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Gazprom Gets 50% Stake in Austrian Hub

Gazprom will take a 50 percent stake in OMV's Central European gas hub in Austria, giving it greater access to the continent's customers. An agreement was signed Friday between OMV and Gazprom, which already supplies gas to the hub, Alexander Medvedev, Gazprom deputy chief executive said in a statement. "We are once again demonstrating the tremendous contribution Gazprom is making in securing Europe's natural gas supply," Medvedev said. Gazprom, which supplies one-quarter of Europe's gas, wants greater access to Western Europe's retail and distribution networks. OMV's Baumgarten gas hub, which Medvedev pledged to make continental Europe's largest, would become the terminus for two rival pipelines through southeast Europe, one planned by OMV, the other by Gazprom. "Whichever channel this gas takes to get to Europe, Gazprom clearly wants the infrastructure that will get it closer to the customer," said Steven Dashevsky, co-head of equities at Moscow-based UniCredit Aton. The facility last year handled 17.8 billion cubic meters of gas and is Europe's third-largest gas, according to OMV. The OMV-led Nabucco link is intended to diversify European supplies by tapping into gas from the Caspian region via a pipeline from Turkey through southeast Europe. South Stream, a joint Gazprom-Eni project, is designed to travel under the Black Sea from Russia to Bulgaria, where one of its branches will take a route similar to Nabucco's.

Source: http://www.themoscowtimes.com/storie...01/28/043.html

Serbia, Austria Signed onto South Stream

Gazprom CEO Alexey Miller still needs Hungary
on board to put South Stream on line.

Russia and Serbia have reached an agreement that will guarantee Gazprom an easy time in that country. It will buy into the state Naftna Industrija Srbije (NIS) cheaply and thus have an advantage in access to the Serbian portion of the coming South Stream Gas Pipeline, which Gazprom is implementing with Italian partner Eni. Gazprom has also received Austria's support, and half of one of Europe's largest gas markets with it. Now all Gazprom needs is Hungary.

An interstate agreement on cooperation in gas and oil was signed on Friday during the visit of Serbian President Boris Tadic and Prime Minister Vojislav Kostunica to Russia. The agreement will be in force for 30 years, at which time it will be automatically renewed for five years unless one side breaks it off. Russian President Vladimir Putin reported that, in addition to that agreement, an agreement was signed on the purchase by Gazprom of 51 percent (4,158,040 shares) in NIS by the end of the year for €400 million.

Under the interstate agreement, a gas pipeline with a capacity of no less than 10 billion cu. m. per year will be built across Serbia and an underground gas reservoir will be built. They will become part of the South Stream system. NIS, which produces 1 million tons of oil and refines 7 million tons per year, will be modernized. Gazprom will invest €500 million in NIS by 2012. Gazprom will have control of 78 percent of the Serbian retail market for petroleum products after the deal is completed. Russian business as a whole will control over 90 percent of that market, since LUKOIL is already the second largest presence there. NIS was estimated to be worth €1.9 billion at the end of last year.

Source: http://www.kommersant.com/p846202/na...gas_pipelines/

Gazprom winning pipeline war with EU

Gazprom has come a step closer to controlling the entire European gas supply chain after buying a 50% stake in a pivotal storage and transit route. The half share in the Central European Gas Hub was sold by Austria’s OMV Group, which also leads the Nabucco pipeline project. It's financed by the EU to rival Gazprom's South Stream. OMV now refuses to rule out Gazprom taking a share in Nabucco as well. The Austrian hub is playing a high-stakes game with Gazprom. OMV will get the three billion cubic meters of gas it wants to overtake Belgium within two years as the continent’s biggest trading platform. A leaked transcript shows the U.S. is so worried about Gazprom’s power it held a top-level meeting to warn top Serb officials against Friday’s sale of their oil monopoly to Russia. The U.S. side questioned whether Serbia took into consideration possible economic dependency and political control. They were especially concerned with Bulgaria’s decision to join Gazprom, because it undermines attempts to diversify European gas supplies.

By contrast the very existence of the U.S.’s rival Nabucco pipeline is in doubt. Gazprom chief Aleksey Miller claims Nabucco has “no resources, and no gas reserves either”. Nabucco operator OMV claimed it did have a future, but admitted that may now lie with Gazprom. OMV cheif executive Dr. Wolfgang Ruttenstorfer says there are huge quantities of gas available to Europe from both the Middle East and teh Caspian area. “As soon as the South Stream project is developed as far as the Nabucco project, it will be very natural that the two projects are discussed and if there are any synergies - we are not against using any of them,” Ruttenstorfer said. Gazprom says Nabucco is not that attractive at the moment, but hinted it could step in with supplies if offered the right terms.

“We have been in discussion in respect of if it has sense to join Nabucco for Russia, maybe for Nabucco it has sense, but we still don’t see any sense for us, but we will continue this discussion,” Aleksandr Medvedev, deputy CEO of Gazprom said. Chief strategist at Uralsib Bank Chris Weafer says the current situation is a pipeline war, and it looks set to get even worse for Gazprom’s opponents. On Saturday Qatar’s Energy Minister Abdullah Al-Attiyah revealed the world’s leading gas-producing nations will meet in Moscow in June to discuss an Opec-style cartel.

Source: http://www.russiatoday.ru/business/news/20170

Gazprom Adds Romania to Gas Corridor

Gazprom’s Gazexport has sealed contracts with three gas companies of Romania - Romgaz, Transgaz and Conef. The contracts will provide to Gazprom the long-term access to gas shipping facilities of Romania, allowing it to step up gas deliveries to Turkey and start gas export to Israel. In addition, Gazprom will increase gas deliveries to Alro Slatina aluminum plant with no intermediary services of Germany.

“We have made long-term contracts for gas deliveries with our Romanian partners, Conef, Romgaz and Transgaz,” Alexander Medvedev, deputy chairman of Gazprom management committee, told reporters in Bucharest Friday. The news conference was held to shed light on Medvedev’s talks with Theodor Stolojan, economic advisor to Romanian president, and Ioan-Codrut Seres, minister of economy and commerce of Romania. Seres said Gazprom clinched a deal with Romgaz to set up a venture and construct an underground facility of gas storage with capacity of 2 bcm. The contract that Gazexport concluded with Transgaz spells out gas transit terms via Romania. Gazprom will not only construct a storage facility but also deliver gas to Romanian market and to markets outside of Romania, Seres specified.

Russia has been shipping gas to Romania since 1979. For Gazprom, Romania is a vital transit country for shipping gas to Turkey, the third biggest consumer of Russia’s gas. Moreover, via Romania, Bulgaria and Turkey, Gazprom may reach the states of the Middle East and launch gas deliveries to Israel. Another achievement of Gazexport is preliminary agreement of Romanian gas trader, Conef SA, to enter into a long-term contract for between 40 bcm and 50 bcm of Russia’s gas to be delivered to Marco Groupe from 2010 to 2030.

Source: http://www.kommersant.com/p673134/r_..._Gas_Corridor/

Gazprom sews up the Balkans

Russian Energy Minister Viktor Khristenko (right) shakes hands with
his Serbian counterpart Alexandar Popovic after signing documents
in the Kremlin in Moscow, January 25, 2008.

If you needed another example of the confusion in the EU’s energy policy, events in the past week provided it. In the space of just a few days Russia signed contracts that will create an energy satellite state on the EU’s periphery, put oil exports from the Caspian under total control of Moscow, develop a natural gas hub in central Europe, and probably kill off the Nabucco pipeline project.

Friends, countrymen... give me your energy sector

The Commission has for more than two years been working to prevent Gazprom from spreading undue influence over the EU’s energy markets, seeing the company and its political masters as a threat to energy security. It has begged member states and companies to “speak with one voice” to Gazprom. The Commission’s president, Jose Manuel Barroso, and its energy chief, Andris Piebalgs, have repeatedly warned Europeans of the dangerous imbalance in the energy relationship with Russia. So you’d expect that Commission to have been watching developments in Serbia, Bulgaria and Austria – the scenes of Gazprom’s latest triumphs – with some foreboding. Not really. Instead, Wednesday saw the Commission release yet another set of unrealistic targets for the EU’s battle against carbon emissions.

Fighting climate change is necessary. And Brussels is right to claim world leadership by giving member states the world’s toughest targets. And if the continent were to increase its use of renewables to the minimum 20% target set by Brussels, it would also be taking lasting steps towards energy security. However, the realist will note a few problems with Wednesday’s announcement. First, the proposals will be watered down after lobbying from member states and their big polluters – so don’t trust the headline targets. Second, many of the recommendations are the same as those made in September 2007. And those made in January 2007. And those made in EU documents from 2006. And so on. That might be the way decisions get made (or not) in Brussels – but it should hardly convince anyone that action will match rhetoric. Look at where all the talk, since the mid-1990s, of liberalised energy markets has got the EU.

Third, while Brussels was talking this week, Russian Energy Inc was in action. The upshot of a summit in Bulgaria last Friday and a meeting in Moscow yesterday was to give Russia control over oil exports from Kazakhstan and Gazprom supremacy in the Balkans. Russia, Bulgaria and Greece agreed in Sofia to take the Burgas-Alexandroupolis oil pipeline project forward. This link will eventually ship up to 800,000 barrels a day of oil from the Bulgarian Black Sea coast to the Greek Aegean. Russian firms – Gazprom Neft, Rosneft and Transneft – will own 51% of it. While the pipeline will be a useful by-pass for the congested Bosporus – at present the only real export route for crude passing through the Black Sea – in reality, Burgas-Alexandroupolis is an extension of a Russian-controlled pipeline system in the Caspian region.

Russia controls the pipelines that export the bulk of crude produced in the Caspian to the Black Sea. Lots more oil will soon come on stream, especially from Kazakh Caspian fields like Tengiz and Kashagan. But Moscow has told Astana that it will only expand its export pipelines if Kazakh companies guarantee that they will rent capacity of Burgas-Alexandroupolis. Astana has agreed. That guarantees the profitability of the new Balkan pipeline and at the same time gives Russia control over Kazakh exports. It also nixes plans by the Baltic States and Warsaw to break their dependence on Russian oil by importing Caspian crude through a pipeline linking Odessa, in Ukraine, with Gdansk and Plock, in Poland.

The Burgas-Alexandroupolis project hasn’t received the same kind of headlines as Gazprom’s gas projects in Europe. That’s a pity, because it is a masterstroke for Russian strategic interests – at a time when Europe’s politicians mistakenly believe that they have increased the EU’s influence in Central Asia. Meanwhile, another big European idea – the Nabucco pipeline –ought finally to be sent to the dustbin of history. It has always symbolised Europe’s inaction, especially when contrasted with the swift progress of the Gazprom/Eni South Stream project. The latest developments add another few cubic metres of hopelessness to Nabucco’s cause.

[...]

Source: http://www.speroforum.com/site/article.asp?id=13999

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Criticism of Donald Tusk's "Russia first" tactic

Prime Minister Donald Tusk of Poland goes to Moscow on 8 February for political discussions. But when it comes to visiting Ukraine, there is no date set, two months after Tusk's inauguration. Leopold Unger criticises the new Polish government for putting Russia ahead of Ukraine. "There is talk in Warsaw that the Prime Minister has tactical and political reasons for putting off his trip to Kiev. Don't do everything at once, first win the battle in Moscow, according to the ' Russia first' strategy. This seems like a correct assessment. It is well known that Putin does not like Poland's closeness to Kiev. But how will Poland react if other countries ? such as Germany - also adopt the 'Russia first' motto?"

Source: http://europe.courrierinternational....=POLITICS&pi=0

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Estonia Bans Travel for Kremlin Youth Group

Like many Russians, Mariana B. Skvortsova planned to spend her winter vacation traveling abroad. Yet, as she tried to cross from Russia into Finland this month, border guards refused her entry. Ms. Skvortsova, a leader in the Kremlin-backed youth group, Nashi, was among hundreds of young people who unleashed furious protests after the former Soviet republic of Estonia moved a monument to World War II-era Soviet soldiers from the center of Tallinn, its capital, to the city’s outskirts last April. Now, tiny Estonia has quietly struck back. It has caused a bit of an uproar here by putting the Nashi protesters on an immigration blacklist, preventing them from traveling not only to Estonia but also, because of its recent entry into the European Union border-free zone, to most of Europe as well.

A spokeswoman for the Estonian Embassy in Moscow confirmed the ban, but was not authorized to say how many people it applied to or for how long. The move has rankled Nashi, which has charged the European Union with reneging on democratic principles that European officials often accuse Russia of violating. “They are not admitting activists who are voicing their civic positions,” Ms. Skvortsova, 21, said Tuesday. She was flanked by about 300 comrades dressed in World War II Soviet infantry uniforms, standing in protest across from the European Commission’s office in Moscow. “If we don’t tell them today, ‘Guys, let’s deal with one another respectfully,’ then tomorrow we will not be known as Russians, but as some kind of lower-class people,” she said.

Her sentiment echoed those of Russian officials, including President Vladimir V. Putin, who have frequently accused the West of applying double standards, criticizing Russia for a lack of civic freedoms while ignoring similar abuses in Europe and the United States. Still, despite the flood of anti-Western statements from Kremlin officials in recent years, Russians continue to pour over once-closed borders to ski the Alps and tan in Mediterranean resorts. The number of Russians traveling to Western Europe for vacations increased between 30 percent and 40 percent in the first nine months of 2007, according to the Russian Federal Tourism Agency.

For now, however, many Nashi members will have to make other travel plans, an inconvenience that has done little to stifle the group’s often jingoistic public language. “Let them forbid us entry into the European Union,” Nikita Borovikov, Nashi’s leader, told his followers on Tuesday. “We will not give up the memory of our ancestors, nor will we give up our history and, thanks to this, thanks to the unity of the whole country, together we will make Russia a global leader of the 21st century.”

Source: http://www.nytimes.com/2008/01/30/wo...html?ref=world

[Illuminator]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russian soldiers getting new uniforms:






courtesy of Pravda.ru Portuguese Edition

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Fashion wars: Russian Army unveils new sexy uniform

Soldiers in Russia will soon be looking sexier and sleeker, thanks to the talent of a top fashion designer. Valentin Yudashkin, whose clothes adorn catwalks across the world, is helping to design a modern uniform for the Russian Armed Forces. The Ministry of Defence thinks its time to upgrade the uniform to something trendier. “The uniform hasn’t been changed since 1994. But now we need greater variety and better design for the regions,” army general Vladimir Isakov said. Well for Russian soldiers the time has come to hang up the furry hat and replace it with one pointier and sleeker. Jacket pockets are out, and shiny tassels are in. The regulation olive colour is so 2007, and now its all about aquamarine and little white gloves. “The uniforms are modern, light and elegant, and, as I see it, very Russian. Young recruits should be at the cutting edge, they shouldn’t be deprived of anything and must be fashionable,” designer Valentin Yudashkin explained. Now Yudashkin’s new uniforms will be rolled out to the regions and tested, because while they might have the flair they must also withstand some hefty wear and tear.

Source: http://www.russiatoday.ru/news/news/20198

Dressed to kill: the Russian forces are back in fashion, 19th-century style

Russia’s armed forces will not only be stronger in future. They will also be better dressed. A couture collection of new military uniforms has been shown to President Putin by Valentin Yudashkin, the country’s famous clothing designer, at a fashion parade in the Defence Ministry headquarters. Chisel-jawed servicemen and leggy female models stood to attention in chic fur collars, stylish peaked caps and goldembroidered tunics as Mr Putin, the Commander-in-Chief, examined the dashing new look on Monday. He remained impassive while Mr Yudashkin and Vladimir Isakov, the Deputy Defence Minister, explained the finer details of the uniforms, but was said later to have approved the designs for general introduction. The uniforms will get their first public display in Red Square on May 9 in a parade marking the Soviet Union’s victory over Nazi Germany in the Second World War. Controversially, Mr Putin is also reviving the Soviet-era practice of parading tanks and nuclear missiles on the square past Lenin’s tomb. Fashion commentators said that the uniforms revived some of the glamour of Russia’s imperial tradition in combination with its recent Soviet history. Izvestia newspaper said that the designs recalled the Hussar style of 19th-century Russia. The Soviet Red Star, which Mr Putin restored in 2002 along with the former Soviet anthem, has been replaced by the imperial double-headed eagle. The defence ministry spent Ł2 million to commission the designs of new uniforms for the army, navy and air force. Full-scale production is expected to begin this year, at an estimated cost of about Ł300 million.

Source: http://www.timesonline.co.uk/tol/new...cle3272873.ece

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russia Creates a $32 Billion Sovereign Wealth Fund

Russia has split its oil proceeds into two funds and cleared the way for one to invest in foreign stocks and bonds, officials said Thursday. But actual investments are not expected to begin until fall at the earliest. The move sets up an investment pool with $32 billion, rivaling big American hedge funds and offering another sign of the dizzying wealth these days of oil-producing countries like Russia. Officials here are already moving to address possible concerns from regulators in the United States and Europe about a government entity investing on the stock exchanges with such large resources.

A deputy finance minister, Dmitry V. Pankin, offered assurances in an interview Thursday that the new fund would serve purely economic goals. “What are they worried about, foreign investment coming to their country?” Mr. Pankin said of critics in Western countries. “They should not worry, they should hope.” Over four years of rising crude oil prices, Russia accumulated $157 billion in its oil proceeds fund, one of 40 or so sovereign wealth funds worldwide with a total of $2.5 trillion under management. One of the new funds, now called the Reserve Fund, will retain the initial purpose of insuring the Russian budget against a steep fall in oil prices. It will hold $125 billion and be maintained at a size roughly 10 percent of Russia’s gross domestic product, as it is now. The other, the Fund for National Well-Being, with $32 billion, is intended to buoy the pension system as the Russian population ages and the share of those working shrinks. Under a law passed last spring, the new fund can be invested in foreign stocks and bonds.

Yet at least until September, Mr. Pankin said, the finance ministry will retain the money in a central bank account that pays interest at a rate equivalent to the returns of foreign government bonds — the same conservative investment the government chooses for the Reserve Fund. “The law allows us wider possibilities for investment,” Mr. Pankin said. “But for now, we don’t use these possibilities.” A more aggressive investment strategy is being held up, he said, by a lack of agreement within the government on the fund’s investment horizon — when the money will be withdrawn for use in the budget. By September, he said, the cabinet can be expected to approve a strategy, opening the door for possible overseas investments.

Russia’s old fund had returns of 10.75 percent in dollar terms based on the interest rates paid by the nation’s central bank, mirroring returns on American and European government bonds. The new fund represents about 7 percent of Russia’s total gold and hard-currency reserves, and it forms a large and concentrated pool of capital. A deputy American Treasury secretary, Robert M. Kimmitt, wrote in the January/February issue of Foreign Affairs that sovereign wealth funds should be welcomed to the United States as stable long-term investors that help increase stock prices and reduce volatility. He noted risks, including the possibility that foreign intelligence agencies would provide nonpublic information to the managers of such funds to assist their investing decisions.

Russian investing has already encountered criticism in European Union countries. The state-owned natural gas monopoly Gazprom is buying gas pipelines and storage facilities in Europe; officials there have suggested that the company was operating from foreign policy motives rather than economic ones when it shut off gas to Ukraine in 2006 after the election of a pro-Western government. Gazprom said it was a purely commercial matter. Mr. Pankin said the finance ministry had not yet decided whether it would hire an outside fund manager. That has not stopped banks from making proposals, he said. A manager will be chosen only when the fund begins investing in corporate debt and securities, he said, as the ministry does not need assistance in buying government bonds.

Source: http://www.nytimes.com/2008/02/01/bu...l?ref=business

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russia: An Energy Superpower?

As Vladimir Putin nears the end of his second term as Russian president, it is clear that energy exports have become a major component of a resurgent Russia's foreign policy. According to the conventional wisdom, Russia's vast resources make it a superpower to be reckoned with. Not only is it a major supplier of natural gas to the states of the former Soviet Union, it sells oil and natural gas to Europe and it has made new contract commitments for both oil and gas to China. Additionally, as the January 2006 cut-off of gas to Ukraine, the January 2007 oil and gas cut-off to Belarus, and Gazprom's threat (again) to Ukraine in the wake of the September 2007 parliamentary elections indicate, Russia is willing to use its resources for political purposes.

The conventional wisdom continues that none of this is surprising. Putin acceded to the Russian presidency resolved to restore Russia's superpower status and to use energy to that end. The Russian Federation's Energy Strategy, dated August 28, 2003, formally states that Russia's natural resources should be a fundamental element in Moscow's diplomacy and that Russia's position in global energy markets should be strengthened. In his own dissertation, Putin argued that the energy sector should be guided by the state and used to promote Russia's national interests. And, the rector of the Mining Institute in which Putin wrote his dissertation and currently one of his energy advisors wrote: "In the specific circumstances the world finds itself in today, the most important resources are hydrocarbons ... They're the main instruments in our hands -- particularly Putin's -- and our strongest argument in geopolitics."

Yet, the conventional wisdom is at best only partially accurate. When Putin and other Russian officials refer to Russia as an energy superpower, they seem to mean a country that possesses a bounty of energy and will use its resources to ensure Moscow's influence on the world's stage. In contrast, the true picture of Russia's energy resources and the attempted politicization of their uses is far more nuanced and complex. Russia's energy policies -- resource and infrastructure development and its use of the energy weapon thus far -- raise major questions about Russia's energy superpower status.

Energy Blackmail



The January 2006 cut-off of natural gas supplies to Ukraine made headlines. The reporting indicated that Russia was using energy to punish Kyiv for its 2004 Orange Revolution and that Gazprom, the state-owned natural gas company, wanted to gain control of Ukraine's pipeline infrastructure. Energy has been a contentious issue between Moscow and Kyiv since the Soviet collapse, but in December 2005, Gazprom escalated tensions when it demanded that Ukraine pay world market rates for its gas. The government in Kyiv asked for a phased-in rate hike, but Russia instead cut off gas to Ukraine, resulting in serious downstream disruptions. Under intense international pressure, a deal was quickly made: A shadowy intermediary, RusUkrEnergo, would purchase 17 billion cubic meters of gas from Gazprom, at $230 per thousand cubic meters, blend it with cheaper gas from Turkmenistan, and sell it at a guaranteed price of $95 per thousand cubic meters. Steady price increases have occurred since then.

The January 2007 stoppages to Belarus began with Gazprom demanding a steep price increase, with steady rises thereafter to world market rates; in addition, Gazprom demanded 50 percent ownership of Belarus's gas pipeline network. As for oil, Russia initiated export duties on oil sold to Belarus. (Prior to January 2007, Russian oil had been piped to Belarus duty free; however, Belarus garnered huge profits by selling refined products to Europe.) Belarus retaliated by charging Russia an export fee and reducing the amount of oil flowing to Poland. Russia then blocked all oil exports. Again under international pressure, oil flowed freely within days. In both cases, Russia appeared to have made short term gains: most obviously, Gazprom won the price wars. Moreover, many claim that Russia seemingly influenced the outcome of the March 2006 Ukrainian parliamentary elections in which Viktor Yanukovich, the loser during the Orange Revolution, became prime minister. In Belarus, Minsk was forced to recognize Moscow's claim to a large share of the profits from the sale of refined products and to agree to a debt-for-equity swap of part of its pipeline system. What makes the Belarus case so interesting is that Moscow was clearly willing both to risk another disruption of supplies to Western Europe and to endure damage to its prestige in order to gain major control over Belarus.

Beyond the former Soviet states, the two crises highlighted European vulnerabilities to supply disruptions and raised the possibility that Russia might use its resources to influence European policies. Soviet/Russian supply to Europe began in the 1970s and has continued virtually without disruption until two years ago. Currently, 43 percent of European energy consumption is oil, while only 24 percent is gas. Yet, gas utilization will rise as Europe limits it use of coal. Christian Cleutinx, director of the EU-Russia Energy Dialogue, estimates that EU's gas requirements will increase by 2020 to approximately 200 million metric tons/year. Of that, 75 percent will be imported, mostly from Russia. Table 1 indicates the current European dependence. In addition to increasing its European market share, Gazprom has sought downstream infrastructure investment opportunities in Europe. Concerned, the European Union is looking both to limit the ability of non-EU companies to purchase distribution and refining assets in its territory and to force Russia/Gazprom to open the latter's pipelines to outsiders. In an effort to enhance competitiveness, recent draft regulations mandate separating resources from transmission infrastructure. The proposed rules have strong implications for Gazprom, which could not own controlling stakes in distribution networks and would have to offer reciprocal access to its domestic pipelines.

[...]

How Much Does Russia Have?



Even if Russia were to increase energy, particularly gas, supplies to Europe and successfully complete new oil and gas infrastructure to China, the question remains: can Russia meet all of its export commitments? Most experts estimate that Russia has 60 billion barrels of proven oil reserves, largely located in western Siberia. In the initial post-Soviet period, oil production fell precipitously, but output has steadily increased -- during 2005-2006, Russia became the second-largest producer of oil after Saudi Arabia. As exports have grown, Russian domestic consumption of oil has declined. Recent data indicate that Russia exports approximately 4 million barrels per day; of that, almost 1.3 million barrels per day are piped through the Druzhba Pipeline, which traverses Belarus and Ukraine. Due to the multiple crises with these two former Soviet republics, Russia is currently building additional pipelines to bypass Belarus, Ukraine, and the Baltic states, and is considering other projects that would eliminate the need to ship oil from Novorossiisk through the Bosphorus to Europe. Despite these significant plans to increase export capacity, it is estimated that many mature fields are post-peak and that future production will grow at only between 1.5 to 2.5 percent, derived in large measure from new projects in Sakhalin.

Russia holds the world's largest reserves of natural gas, approximately 1680 trillion cubic feet, and it is also the largest exporter. Lacking liquefaction technology, Russia exports all of its natural gas through pressurized pipelines. Production has remained relatively flat overall, increasing by only 1-2 percent per year; moreover, Gazprom has invested little in new fields and its three largest fields, which produce 70 percent of output, have suffered annual decreased production. Company officials are hopeful that new fields, such as the recently acquired stake in Sakhalin II and the Shtokman fields, will bolster production.

Thus far the discussion has not centered on domestic consumption and supplies, which are crucial factors in judging Russia's ability to meet its forward contracts. Currently, more than half of Russia's energy consumption is gas; however, domestic gas prices are effectively subsidized. The government acknowledges that prices will increase, but Putin has declared that even at peak they will equal no more than two-thirds of international prices. Low prices do not promote conservation: in 2006, experts estimated that by 2010 domestic gas consumption would rise by 24 billion cubic meters (bcm), or by 6-7 percent per year. Herman Gref, minister of economic development, predicted likely domestic shortages of 5-6 bcm. In comments on October 31, 2006, he noted that "Russia is encountering some real restrictions on economic growth due to a shortage of energy resources." These forecasts were seconded by ministry predictions that output would grow by only 0.9 percent in 2007 and 0.6 percent in 2008.

Estimates vary regarding the extent of Gazprom's gas deficit, but most analysts agree that Gazprom will need both to develop new fields and to import gas from Central Asia in order to meet its contractual obligations. With regard to new fields, the story of the Shtokman fields is illustrative. The fields hold 3.7 trillion cubic meters of gas, but the location north of the Arctic Circle renders them technologically challenging. A year ago, Gazprom withdrew the international tender for the fields, opting instead to develop them by itself. At the time, the decision seemed congruent with other actions to ensure state ownership of energy resources, but it also indicated that Gazprom had decided to rely on new pipelines instead of liquefaction technology. Gazprom apparently rethought its position and in July 2007 reopened the tender, ultimately awarding 25 percent to the French company, Total, and more recently an additional 24 percent to Norway's StatoilHydro. According to Russian press accounts, these new agreements represent open acknowledgment that Gazprom lacked the ability and technological know-how to develop the fields on its own. It can also be seen as recognition that export via new pipelines, instead of in liquid form, would limit the market for the gas from Shtokman.

Russia has been aggressive in trying to lock up long-term Central Asian commitments -- especially from Turkmenistan. For the moment, Russia and Gazprom control Turkmenistan's exports, mostly through Soviet era pipelines, and Turkmenistan will export about 2.1 to 2.5 billion cubic feet to Gazprom in 2007. In May 2007, it seemed that Gazprom and Russia had secured their goal: the new Turkmen president, Gurbanguly Berdymukhammedov, along with his Kazakh and Russian counterparts, announced a new gas pipeline along the Caspian coast to connect with the Gazprom grid. And in mid-October, at a Caspian Sea summit, Russia made a bid to limit the abilities of the other Caspian littoral states to export via non-Russian pipelines.

Gazprom's plan, however, may be delayed, if not thwarted, by the apparent determination of the new Turkmen government to explore export options. President Berdymukhammedov postponed until mid-December the final agreement for the Caspian coastal pipeline. The deal, championed personally by Putin, was signed only after Gazporm agreed to a thirty percent increase in the price it was willing to pay for Turkmen gas. Nevertheless, despite the new tripartite arrangement, other choices remain possible. Prior to the October 2007 Caspian summit in Teheran, the British minister of state for energy, Malcolm Wicks, traveled to Turkmenistan to explore new energy agreements and Berdymukhammedov visited the U.S. and held meetings with several Western energy company officials. The Turkmen president has announced renewed interest in the U.S.-proposed trans-Caspian gas pipeline, a project rejected by the mercurial late President Saparmurat Niyazov, and is moving forward on a deal with China for the construction of a pipeline east. Interviews in October in Ashgabat, the capital, suggest that the Turkmen government will announce a significant deal with a major Western energy company in the near future. In mid-November, the Times of London leaked a report that the U.K. and Turkmenistan had signed what one official called a "protocol of intentions" to allow British companies to operate in the Turkmen energy sector. Although the size of Turkmenistan's reserves is uncertain, it seems increasingly probable that there will be less gas available for Gazprom in the future.

Is Russia an Energy Superpower?



That Russia is destined to remain a major energy supplier to its immediate neighbors and to the rest of the world is not at issue. What is an issue, however, is whether Russia's resource development strategy is adequate to meet future demand. As argued, Russia has not invested in refurbishing gas infrastructure and seems to be relying on new finds such as Sakhalin and Shtokman to bolster supplies. Yet work on Shtokman has not begun. It is also clear that Turkmenistan is no longer willing to be a source of cheap gas for Gazprom. There is also the question of whether the networks of supply will be solely commercial or whether these ties will be politicized. As states such as Armenia and Moldova have succumbed to Gazprom's pressures, there are signs that other states are moving cautiously to develop non-Russian options. In January 2007, Gazprom demanded huge price increases from Azerbaijan and Georgia. Azerbaijan, which used to import Russian gas despite its own vast resources, declined a Gazprom price increase and sped up the development of its own infrastructure. It also cut oil exports via the Russian-owned pipeline to Novorossiisk. Simultaneously, an agreement among Georgia, Azerbaijan, and Turkey gave Georgia additional gas from the Shah Deniz field in order to make up for the shortfall. Other gas-rich states also seem ready to assist Georgia. At a March 2007 meeting between Georgian President Mikhail Saakashvili and his Kazakh counterpart, Nursultan Nazarbaev, it was announced that Kazakhstan was considering building a refinery in Georgia.

[...]

Source: http://www.alternet.org/audits/75413/?page=entire

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russia sends bombers, fighters to Atlantic, Arctic

Russia sent fighters and long-range bombers to the Arctic and North Atlantic on Friday to take part in manoeuvres demonstrating revival of some of the military power and reach it lost with the collapse of the Soviet Union. Vladimir Putin, set to hand the presidency to a chosen successor after an election that will gauge his own popularity, tapped feelings of national humiliation in rebuilding forces left to decay in the 1990s. The navy had lost the global role it had grown to in the 1970s, aircraft and ships lacked fuel. The air force said more than 40 aircraft would take part in the manoeuvres, which follow similar exercises by warships and bombers last month off the Atlantic coast of France and Spain. "Air force pilots will carry out practice in the areas involving reconnaissance, missile-bombing attacks on a navy attack force of a hypothetical enemy, air-to-air combat and refuelling and patrolling," an air force spokesman said. The bomber group included two Tupolev Tu-160 strategic bombers, codenamed "Blackjack" by NATO, two turbo-prop Tu-95 "Bear" strategic bombers, and eight Tu-22 "Blinder" bombers. MiG-31 and Su-27 fighters were also sent to the region. Putin, who plans to draw on his popularity and retain influence after the election, has renewed long-range bomber missions and approved an upgrade of nuclear forces he said was needed after NATO built up forces close to Russia's borders.

SPECULATION

But some key economic leaders, including Finance Minister Alexei Kudrin, have questioned Russia's assertive foreign policy. That has sparked speculation that there is a dispute at the top levels of the Kremlin about Russia's sabre rattling as Putin's chosen successor, Dmitry Medvedev, moves towards almost certain electoral victory. Medvedev, a 42-year-old former lawyer who is board chairman at gas giant Gazprom, has made few references to foreign policy and seems more confident dealing with economics and trade. Analysts say Medvedev faces a tough challenge to find compromise with hardliners inside the Kremlin who wanted Putin to back a different candidate for the presidency. Medvedev, a first deputy prime minister, last month called for a revival of the navy to boost international respect for Russia, but he complained that reform of the navy had taken longer than envisaged. Russian military spending in absolute terms is substantially lower than that of China, Britain or France and less than a tenth of the United States.

Source: http://in.reuters.com/article/worldN...31720220080201

[Armenian]

Re: The Rise of the Russian Empire: Russo-Armenian Relations

Russia sees baby boom in 2007

The health and social development minister said Friday that in 2007 Russia had the highest number of births since 1991. “Russia has not seen such a baby boom for 15 years, the highest number of births since 1991,” Tatyana Golikova said, adding that 1.6 million babies were born last year, up 122,750 against 2006. The official praised presidential maternity incentives approved last year, including higher payments for mothers of children under 18 months, benefits for unemployed mothers and payouts of about $9,500 for the birth of two or more children, so called baby-money. Demographic issues are widely seen as one of the main threats facing modern Russia since the market reforms and economic hardship of the 1990s. Many experts are concerned that Russia will be hit be a demographic crisis in the near future. According to United Nations predictions, Russia’s population, currently at about 142 million, could fall by 30 percent by the middle of the century.

Source: http://www.kansascity.com/659/story/471840.html

Russians, Busy Making Shrouds, Are Asked to Make Babies

PRESIDENT VLADIMIR V. PUTIN drew from the Soviet past on Wednesday when he championed the role of motherhood in preventing Russia from becoming a state short of citizens. Russia's population is shrinking, and demographers warn that it is within a generation of plummeting. If the most pessimistic models hold, the decline could make the country a vast, underpopulated state within four or five decades, a country with too few healthy people for a competitive work force or a capable army.

Russian life, for the peasantry and the proletariat alike, has always been unforgiving. And in a speech reminiscent of Soviet pledges of the state helping the masses so that the masses might help the state, Mr. Putin chose the familiar Soviet solution of encouraging stalwart reproduction, telling his obedient Parliament to enact programs of financial incentives to women to have more children. The Kremlin-friendly news media here, a place that often feels like the land of the family with a single child, crowed in approval. The president had spoken: Here is the money, he had essentially said; Russian mothers, fulfill your role. Beneath the enthusiasm was a question Mr. Putin did not address. Will cash incentives work? The data would say: Not quite. There is little doubt that for Russia to be a power through the 21st century its demographic trends must be reversed. There also seems to be no question that Russian mothers, short of feats of fertility unseen in the industrialized world, cannot save Russia alone. "You have to do this in a variety of ways," said Dr. Murray Feshbach, a demographer who studies the Russian population and its health.

The problems can be found in the numbers. Russia has roughly 143 million people, and the population drops an average of 700,000 each year, largely because of the wide gap between the number of those born and the number who die. More babies will help. But as the population shrinks, Dr. Feshbach said, it risks an accelerating collapse that fertility itself cannot reverse. This is in part because the low birthrate is more than two decades old, and the number of women ages 20 to 29, the most fecund segment of the population, has already fallen to 12 million, he said. In the next several years, women that age will fall to eight million or fewer — a small contingent to bear the next generation. And as analysts at the World Bank and the United Nations have pointed out, the threat to the population is not just low birthrates but high death rates.

The Russian people are deeply unhealthy, so much so that there is no demographic group in the industrial world as ailing and prone to fatal injury as the Russian male, whose average age at death is about 59. Abysmal mortality trends separate Russia from other industrial nations that offer incentives to stimulate population growth, including Japan and Australia. Moreover, pernicious infections have entered the population since Soviet times, making the country a growing reservoir of people recently infected with tuberculosis, H.I.V. and hepatitis C. Many of these infections have not yet turned into high rates of disease, but public health authorities say that as the incubation periods run their course over the next several years, their effects on national health will be evident.

Tuberculosis is already at epidemic levels, and an expected surge in AIDS cases and hepatitis complications could, by the most dire models, kill more than half a million people a year in a generation or two. There are signs that Russia is waking to the problems. Last month, the Kremlin pushed through a roughly twentyfold increase in its paltry financing for AIDS prevention, diagnosis and treatment — a sign of an understanding of the severity of the problem, said Dmitry Rechnov, a deputy director of AIDS Foundation East West, a private organization here. "If we keep on this track, there can be a number of positive developments," he said.

Still, the Kremlin's attention to public health has been uneven, and expected increases in mortality related to infectious disease would push up a death rate already driven above norms in industrial nations by high rates of heart disease, cancer, alcoholism, accidents, violence and suicide. The potential consequences are clear. In a report released last year, the World Bank warned that if Russia did not adopt comprehensive public health programs, it risked a shrinking work force, destabilized families, strains on national security and a drain on the gross domestic product. And not everyone agrees that cash incentives, which are not part of a comprehensive health program, will even achieve what the Kremlin hopes — more healthy and productive children.

If Mr. Putin's proposals pass, as they almost certainly will, then next year mothers will receive bonuses worth about $9,000 for giving birth, as well as a graduating scale of monthly cash allowances for infants and subsidies for day care. Many women said in interviews that they welcomed the plans. With low salaries, tiny, crowded apartments and rising costs of living, they at last saw a president offering relief, however small. Let the baby boom begin, one said. "Many women will start having children," said Katya Druzhchenko, 19, a student who hopes to have three. "Right now if you think about the economic situation for young women, it is just totally impossible." But Dr. Ivan Safranchuk, a middle-class father of two and director of the Moscow office of the World Security Institute, an international think tank, said money-for-motherhood incentives would not work.

Russian parents, he said, opt for few children not just because of financial worries but because infrastructure — parks, schools, hospitals, entertainment centers, transportation — is strained. He pointed to surging rates of car ownership to make a point. "The message of the president, that people cannot afford kids, is not true," he said. "Look at the rate of new cars in the country, especially of imported cars. All of these people can afford to give birth to kids, but they do not." This is also because attitudes have become unwelcome to child-rearing, he said. "When you go to a restaurant or a social setting, the whole social infrastructure is unfriendly to your kids." Dr. Safranchuk suggested that Russia ought not offer cash incentives, but tax breaks. There are no child deductions on personal income taxes, except a small one for education costs.

Rather than create a well-raised new generation, he said, the subsidies could encourage the poorest and least-educated women to have children, while having little influence on the family decisions in the middle class. Mr. Putin, he said, "has created a system which converts oil and gas into money; now he is creating a system that converts money into nothing, or that converts money into problems." Mr. Putin did not go as far as past Kremlin leaders, like Stalin, who encouraged women to repopulate a nation thinned by repression and war by offering Medals of Maternal Glory to mothers who brought forth seven, eight or nine children. The medals bore the words Mother-Heroine. Even were Mr. Putin to do so, the numbers suggest, without shifts in attitudes and widespread improvements, the traffic at maternity wards will remain slower than the Russians' rush to the grave.

Source: http://www.nytimes.com/2006/05/14/we...=1&oref=slogin

[crusader1492]

Re: The Rise of the Russian Empire: Russo-Armenian Relations



In related news about Armenia:

BIRTH RATE INCREASED

Panorama.am
20:47 31/01/2008

The national statistical service summed up the data on birth rate and
death rate in 2007. Compared with the last year the birth rate was
increased by 2507 in 2006. The information is provided to Panorama.am
by Karine Kuyumdjyan of the statistical service center.

She added that the birth rate was particularly high in Yerevan.

According to her the highest birth rate in regions was registered in
Kotayk: 33 thousands 91 birth and then in Lori: 3182 birth.

The death rate is much lower than in 2006. The death rate decreased
from 27 thousands 2002 cases to 27 thousands 4. She also said that
the highest death rate was registered in Lori: 2919 cases, and
Gegharkunik: 1791.