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PUTIN CALLS MEETING ON ENERGY CRISIS WITH BELARUS. President Vladimir Putin met with top Russian officials on January 9 to discuss the ongoing energy dispute with Belarus and to prepare for talks with a Belarusian delegation that is already in Moscow, news.ru reported. RIA Novosti reported on January 9 that talks aimed at resolving the dispute could begin the same day. Semyon Vainshtok, who heads the pipeline monopoly Transneft, said on January 8 that his company recently shut off the flow of oil to Europe via the Druzhba pipeline transiting Belarus because the Belarusian authorities have begun siphoning off oil in the context of the tit-for-tat dispute, Russian news agencies reported (see "RFE/RL Newsline," January 3 and 8, 2007, and Part II). He and Deputy Trade and Economic Development Minister Andrei Sharonov both blamed the Belarusian side for presenting Russia with what Sharonov called "unavoidable circumstances" that pose a "threat to the fulfillment of international contracts between Russian companies and companies in Western Europe and Eastern Europe." In addition to Germany, Poland, the Czech Republic, and Ukraine, Slovakia and Hungary have also reported that their oil shipments from Russia have "stopped completely," news.ru noted on January 9. The affected countries have oil reserves of at least 70 days. On January 8, Sharonov said on Ekho Moskvy radio that "it looks like we are heading into a trade war." On January 9, Mikhail Margelov, who chairs the Federation Council's Foreign Affairs Committee, said that Belarus's recent decision to impose customs duties on Russian oil transiting Belarusian territory amounted to the "declaration of a trade war on Moscow," RIA Novosti reported. PM
In 2006, Gazprom came under fire internationally for its tactics of bumping up the prices Russia's neighbors must pay for gas. Recently, a number of articles in the Russian press have echoed that criticism, arguing that Gazprom's tactics have damaged Russia.
On December 25, 2006, the "Kommersant" daily attacked the gas monopoly, claiming that by abandoning the sale of cheap gas to the CIS countries in 2006, Gazprom weakened Russia's position in the post-Soviet space. All it did, the article argued, was strengthen the position of the gas monopoly.
Writing in "Rossiiskaya gazeta" on January 2, Sergei Karaganov, head of the Council for Foreign and Defense Policy think tank, said: "The unexpectedly rapid increase in Russia's international weight frightened many people, partly because we succumbed to the temptation to grow giddy with success and sometimes acted arrogantly.... In this context, mistakes have to be paid for particularly dearly. The manner in which we shut off the gas to Ukraine, which tapped into the European sense of political weakness and energy vulnerability, provoked a disproportionate reaction."
Sustained international and domestic criticism of Gazprom (and the Kremlin) could force the gas giant into changing its tactics. Some Western financial firms, such as Bear Stearns, are already advising clients to sell their Russian shares for fear of political instability in the country.
Considering that almost 40 percent of the Russian stock market consists of shares in Gazprom and the state oil monopoly Rosneft, any suggestion that they might find themselves in trouble in 2007 is sure to rattle investors. Other factors could also lead to Gazprom taking a softer approach in 2007.
The presidential election on February 11 in Turkmenistan could bring a measure of change. Gazprom and Ukrainian energy companies are carefully following developments there, waiting to see if the new regime will continue with the gas deals approved by late Turkmen President Saparmurat Niyazov.
After Russia, Turkmenistan is the second-largest exporter of natural gas in the CIS. In recent years, Turkmenistan has supplied Ukraine with much of its gas needs, although Ashgabat is now exporting most of its excess gas to Russia.
Industry experts have criticized Turkmenistan's gas deals for being opaque. If Turkmenistan can be persuaded to increase transparency in its energy sector, then Gazprom and Ukraine could be forced to renegotiate their deals and a new round of competition for Turkmen gas would ensue.
In the case of Azerbaijan, Gazprom might have fewer cards left to play. Faced with a steep price hike, Azerbaijan announced that it will not buy any Russian gas in 2007. Baku has increased domestic gas production in order to cover its needs.
And in the longer term, planned pipelines, for instance the Trans-Caspian gas pipeline, would bring Caspian -- and most likely Central Asian -- gas to markets, bypassing Russia.
But it's unclear whether a weakened hand will mean Gazprom will listen to its critics. There is the real possibility that the Kremlin will remain intransigent, believing that strong-arm tactics have worked to Russia's benefit -- and will continue to do so.
BELARUS'S PIPELINE OPERATOR BLAMES RUSSIA FOR DISRUPTION IN OIL DELIVERY. Alyaksey Kastsyuchenka, director-general of the Homyeltransnafta Druzhba oil-pipeline enterprise, said on January 8 that the company has nothing to do with the disruption of oil headed westward across Belarus, Belapan reported. "We flatly deny media reports that oil pumping toward Unecha-Mazyr-Adamovo and Unecha-Mazyr-Brody was stopped by the decision of the Belarusian side," Kastsyuchenka said, adding that the Russian side has halted the pumping of oil destined for Poland, Germany, and Ukraine on three occasions. "After the last stop in oil pumping, between January 7 and 8, we repeatedly sent official notifications to the Bryansk-based Druzhba trunk-pipeline company about our readiness to pump oil in all directions," Kastsyuchenka said. "If there is consent from the Russian side, we are ready to urgently resume oil pumping in accordance with the established technology and rules," he said. Kastsyuchenka on January 8 told reporters that the Homyeltransnafta Druzhba oil pipeline is prepared to resume pumping oil and that the Russian side is aware of this, Belapan reported. "It is only now that the Russian side has proposed to us that the matter should be considered," Kastsyuchenka said. "We will be considering it in the short term," he added. AM
UKRAINIAN OPPOSITION WILL HELP TO OVERRIDE PRESIDENTIAL VETO. The Yuliya Tymoshenko bloc (BYuT), the opposition caucus in the Verkhovna Rada, has adopted a decision to join the ruling "anticrisis coalition" in order to override President Viktor Yushchenko's veto on the prolongation of the moratorium on land sales, "Ukrayinska pravda" reported on January 9. Yushchenko vetoed the bill (see "RFE/RL Newsline," January 5, 2007) on the basis that the continued ban on land sales would only lead to increased corruption as Ukrainian farmland is redistributed. BYuT member Ivan Kyrylenko, who announced the decision, said that the caucus is not opposed to land sales, but first of all it intends to support "the civilized land market." AM