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AZERBAIJAN MAY HIT BACK AGAINST RUSSIA'S RENEGING ON GAS CONTRACTS
Day.az Azerbaijan
30 Dec 2006
Russia's policy on gas and electricity supplies has more to do with
political than economic considerations and is causing concern not
only among countries of the former USSR but also the European Union,
an Azerbaijani website has said. There is an increasing danger that
Russia might try to take control of all the gas pipelines of its
former states and become a monopoly, thus broadening its political
influence. Azerbaijani President Ilham Aliyev has accused Russia of
reneging on its gas contracts, but, the website suggests, Russia's
own initiatives may backfire on them if Azerbaijan decides to reduce
its oil supplies and review its policy over Russian TV channels
operating in the country. The following is the text of the report
by Emil Quliyev headlined "Russia Year in Azerbaijan has ended,
Anti-Russia Year has begun", published on the Day.az website on 30
December; subheadings have been inserted editorially:
Russia's gas policy causing concern
The year 2006 is drawing to its conclusion, but at the same time, it
is not the calendar year but the declared Russia Year in Azerbaijan
that has come to an end. But what has been happening points to the
fact that 2007 could be Anti-Russia Year. And this is exactly what
might happen not just in Azerbaijan, but in many CIS countries. The
New Year begins next week, but Russia has still not been able to reach
an arrangement, or in other words, "break down" Belarus, Georgia and
Azerbaijan over the new prices for gas supplies.
Russia's current policy in the sphere of energy supplies based
on world demands is having less than ever to do with economic
considerations. This question is becoming so topical that even the
countries of the European Union are beginning to consider taking
counter-measures over the Kremlin's policy, and the Council of Europe
is prepared to begin discussions making it inadmissible to manipulate
energy supplies for political purposes.
However, Russia itself is making every effort to try to persuade
everyone that their new gas price policy has nothing to do with
politics, and that it is exclusively out of economic considerations.
It is on record that the price of Russian gas for 2007 for most of
the republics of the former USSR is based on the average price for
all Gazprom's European contracts and also taking account of transport
costs. But the statements they are coming out will paint the opposite
picture, and the question of gas supplies is turning into a weapon
in the hands of Russian politicians who want to take the CIS under
their full control.
Relations with Belarus and Georgia
One has only to note that the rise in the price of gas for Russia's
friend Belarus is, first and foremost, connected with the fact that
they are refusing to hand over control over 50 per cent of the shares
of the Belarussian monopoly gas operator Beltransgaz to Russia's
Gazprom. Russia wants to receive shares in the Belarussian gas operator
as partial payment for gas in 2007-2010. But in the case with Georgia
there are more than enough political reasons for raising the price
for gas. Apart from the tense relations between the two countries,
Georgia, to the "surprise" of official Moscow, is refusing to give back
to Russia control over the trunk gas pipeline linking it with Armenia.
In this event Gazprom would have direct access to the "southern"
gates and would be able to supply crude to Iran or Turkey. But as far
as Armenia is concerned, apart from the fact that Russia controls
almost all the strategic facilities in this country, as well as
the electricity supply system, over 60 per cent of the Armenian
gas transportation system the HayRusgazard [ArmRosgazprom] closed
joint-stock company also belongs to Russia.
The main thing is that if the plans regarding Belarus, Georgia and
Azerbaijan go ahead, Russia would be able to take control of almost
all the gas pipelines on the territory of the former USSR and become a
monopoly in this sphere over the vast territory of the former Soviet
Union. As a result Russia could have a reliable lever of pressure on
these countries in political matters.
Russia reneges on contracts
The Kremlin might bring this lever into play at any moment to achieve
its political objectives and have no qualms about not fulfilling any of
the obligations it has undertaken. Everyone knows how easily Russia can
renege on its existing treaties and contracts. The clearest example
of this was quoted in an interview that the Azerbaijani President
Ilham Aliyev gave to the Ekho Moskvy radio station.
"A five-year contract was signed with Gazprom for a fixed price, if I
am not mistaken, of 55 or 60 dollars for 1,000 cubic metres. But last
year Gazprom cancelled this contract unilaterally. In other words,
they made it clear that they would not be supplying at this price,
but would supply at 110 dollars. We agreed, although this was a bit
odd. Still, this was an international commitment of a major company
for a five-year term.
"In 1994 we signed the contract of the century with foreign [oil]
companies, and not a comma in it was changed, although today, perhaps,
we would think twice about it given the current situation and the fact
that Azerbaijan has grown in strength. We believe that trust needs to
be gained over years but it can be lost by one false step. Clearly,
this sort of approach does not exist everywhere," the Azerbaijani
president believes.
Although during the interview Aliyev, observing political etiquette,
did not turn on Russia and say that its unilateral breach of contracts
treaties was an indication of that country's "reliability" as a
partner, in this context it seems surprising when Russia starts
complaining and then puts pressure on the CIS countries who are
altering their foreign policy priorities by turning towards the West.
There was another example ahead of the above interview with the
Azerbaijani president. Without giving any economic reasons and in
breach of the contract, Russia suspended gas supplies to Georgia
in retaliation at the arrest of its officers who were carrying out
intelligence work in that country and followed this by switching
off its electricity supplies. But the story a little earlier about
the ban on the import of Borzhomi [mineral water] and wines from a
country which changed its political priorities for objective reasons
shows clearly that these sanctions had nothing to do with economic
considerations, but were a mirror image of the political views from
the Kremlin.
And now from Georgian problems to our own. We will go on repeating
the report that apart from increasing the price for gas it has
already supplied, Russia has decided to reduce the volumes of "blue
fuel" and electricity. But why? Again, without any economic reasons
whatsoever. It is simply that Russia has not forgiven Azerbaijan for
the fact that official Baku did not betray its neighbour and strategic
partner in the South Caucasus and, by not supporting Russian sanctions
against Georgia, carried on supplying gas and electricity after the
Kremlin's aforementioned steps.
Now, as Russia is maliciously rubbing its hands, anticipating Georgia
freezing this winter and an unhappy people rebelling against their
president, they know that with the previous volumes of gas and
electricity supplies to Azerbaijan, some of it will come the way of
Georgians "loved" by Moscow.
Russia may lose markets
Well, unlike Belarus and Georgia, Azerbaijan does have an answer for
them. Quite handily Baku remembered the loss-making Baku-Novorossiysk
oil pipeline and, of course, a reduction in oil volumes through this
pipe would be a logical response. And the prospect of a refusal of
Russian gas also looks convincing. On its own initiative Russia is
faced with a loss of markets. Perhaps, from the economic standpoint,
this is not such a big loss for a country which supplies gas to such
a huge market as Europe, but from the geopolitical point of view,
the losses are considerable.
In response to such behaviour by Moscow, Baku needs little reminding
that two Russian television channels are broadcasting on national
frequencies virtually free of charge. This is an unprecedented
occurrence, you have to agree, because you will not find another
country in the world where foreign television channels broadcast
on national frequencies. It should also be noted that the Russia's
Channel One, which broadcasts to Azerbaijan, is not the original but
a poor copy of the one the Russians themselves see. In other words,
the Azerbaijani viewer is being stuffed with selected programmes
which Russian minds consider it necessary to be shown in our country.
At the same time, as a sign of gratitude, in the news broadcasts
of these channels the separatist regime on the occupied Azerbaijani
territories of Nagornyy Karabakh is referred to from time to time as
a legitimate state structure. Suffice to recall Russian TV channel
coverage of the celebrations by Armenian separatists of the so-called
holiday of the acquisition of sovereignty.
It will be recalled that at that time the Russian embassy in
Azerbaijan said that this was the internal affair of the television
channel. However, for some reason the Russian ambassador does not
regard the question of the closure of the Russian TV channels as the
internal affair of the TV channel and Azerbaijan, and immediately
comments on this from the point of view of an inter-state treaty.
TV contract with Russia may be reviewed
The Azerbaijani National Television and Radio Council has already
adopted a decision on the Russian television channels and has said
that Azerbaijani viewers will still be able to see them at least until
July. The chairman of the council, Nusiravan Maharramli, explained
that this decision was governed by a contract, according to which the
opposite side must be given six months' notice about the suspension
of broadcasting of TV channels. However, one cannot understand why
one should stick to agreements in relations with a country which does
not observe treaties and has cancelled them unilaterally.
But in any event, by its latest moves Azerbaijan has shown that its
northern neighbour is not so terrifying as it seems or seemed a few
years ago, and if this matter is approached properly the provocations
coming out of the Kremlin can be neutralized.
Day.az Azerbaijan
30 Dec 2006
Russia's policy on gas and electricity supplies has more to do with
political than economic considerations and is causing concern not
only among countries of the former USSR but also the European Union,
an Azerbaijani website has said. There is an increasing danger that
Russia might try to take control of all the gas pipelines of its
former states and become a monopoly, thus broadening its political
influence. Azerbaijani President Ilham Aliyev has accused Russia of
reneging on its gas contracts, but, the website suggests, Russia's
own initiatives may backfire on them if Azerbaijan decides to reduce
its oil supplies and review its policy over Russian TV channels
operating in the country. The following is the text of the report
by Emil Quliyev headlined "Russia Year in Azerbaijan has ended,
Anti-Russia Year has begun", published on the Day.az website on 30
December; subheadings have been inserted editorially:
Russia's gas policy causing concern
The year 2006 is drawing to its conclusion, but at the same time, it
is not the calendar year but the declared Russia Year in Azerbaijan
that has come to an end. But what has been happening points to the
fact that 2007 could be Anti-Russia Year. And this is exactly what
might happen not just in Azerbaijan, but in many CIS countries. The
New Year begins next week, but Russia has still not been able to reach
an arrangement, or in other words, "break down" Belarus, Georgia and
Azerbaijan over the new prices for gas supplies.
Russia's current policy in the sphere of energy supplies based
on world demands is having less than ever to do with economic
considerations. This question is becoming so topical that even the
countries of the European Union are beginning to consider taking
counter-measures over the Kremlin's policy, and the Council of Europe
is prepared to begin discussions making it inadmissible to manipulate
energy supplies for political purposes.
However, Russia itself is making every effort to try to persuade
everyone that their new gas price policy has nothing to do with
politics, and that it is exclusively out of economic considerations.
It is on record that the price of Russian gas for 2007 for most of
the republics of the former USSR is based on the average price for
all Gazprom's European contracts and also taking account of transport
costs. But the statements they are coming out will paint the opposite
picture, and the question of gas supplies is turning into a weapon
in the hands of Russian politicians who want to take the CIS under
their full control.
Relations with Belarus and Georgia
One has only to note that the rise in the price of gas for Russia's
friend Belarus is, first and foremost, connected with the fact that
they are refusing to hand over control over 50 per cent of the shares
of the Belarussian monopoly gas operator Beltransgaz to Russia's
Gazprom. Russia wants to receive shares in the Belarussian gas operator
as partial payment for gas in 2007-2010. But in the case with Georgia
there are more than enough political reasons for raising the price
for gas. Apart from the tense relations between the two countries,
Georgia, to the "surprise" of official Moscow, is refusing to give back
to Russia control over the trunk gas pipeline linking it with Armenia.
In this event Gazprom would have direct access to the "southern"
gates and would be able to supply crude to Iran or Turkey. But as far
as Armenia is concerned, apart from the fact that Russia controls
almost all the strategic facilities in this country, as well as
the electricity supply system, over 60 per cent of the Armenian
gas transportation system the HayRusgazard [ArmRosgazprom] closed
joint-stock company also belongs to Russia.
The main thing is that if the plans regarding Belarus, Georgia and
Azerbaijan go ahead, Russia would be able to take control of almost
all the gas pipelines on the territory of the former USSR and become a
monopoly in this sphere over the vast territory of the former Soviet
Union. As a result Russia could have a reliable lever of pressure on
these countries in political matters.
Russia reneges on contracts
The Kremlin might bring this lever into play at any moment to achieve
its political objectives and have no qualms about not fulfilling any of
the obligations it has undertaken. Everyone knows how easily Russia can
renege on its existing treaties and contracts. The clearest example
of this was quoted in an interview that the Azerbaijani President
Ilham Aliyev gave to the Ekho Moskvy radio station.
"A five-year contract was signed with Gazprom for a fixed price, if I
am not mistaken, of 55 or 60 dollars for 1,000 cubic metres. But last
year Gazprom cancelled this contract unilaterally. In other words,
they made it clear that they would not be supplying at this price,
but would supply at 110 dollars. We agreed, although this was a bit
odd. Still, this was an international commitment of a major company
for a five-year term.
"In 1994 we signed the contract of the century with foreign [oil]
companies, and not a comma in it was changed, although today, perhaps,
we would think twice about it given the current situation and the fact
that Azerbaijan has grown in strength. We believe that trust needs to
be gained over years but it can be lost by one false step. Clearly,
this sort of approach does not exist everywhere," the Azerbaijani
president believes.
Although during the interview Aliyev, observing political etiquette,
did not turn on Russia and say that its unilateral breach of contracts
treaties was an indication of that country's "reliability" as a
partner, in this context it seems surprising when Russia starts
complaining and then puts pressure on the CIS countries who are
altering their foreign policy priorities by turning towards the West.
There was another example ahead of the above interview with the
Azerbaijani president. Without giving any economic reasons and in
breach of the contract, Russia suspended gas supplies to Georgia
in retaliation at the arrest of its officers who were carrying out
intelligence work in that country and followed this by switching
off its electricity supplies. But the story a little earlier about
the ban on the import of Borzhomi [mineral water] and wines from a
country which changed its political priorities for objective reasons
shows clearly that these sanctions had nothing to do with economic
considerations, but were a mirror image of the political views from
the Kremlin.
And now from Georgian problems to our own. We will go on repeating
the report that apart from increasing the price for gas it has
already supplied, Russia has decided to reduce the volumes of "blue
fuel" and electricity. But why? Again, without any economic reasons
whatsoever. It is simply that Russia has not forgiven Azerbaijan for
the fact that official Baku did not betray its neighbour and strategic
partner in the South Caucasus and, by not supporting Russian sanctions
against Georgia, carried on supplying gas and electricity after the
Kremlin's aforementioned steps.
Now, as Russia is maliciously rubbing its hands, anticipating Georgia
freezing this winter and an unhappy people rebelling against their
president, they know that with the previous volumes of gas and
electricity supplies to Azerbaijan, some of it will come the way of
Georgians "loved" by Moscow.
Russia may lose markets
Well, unlike Belarus and Georgia, Azerbaijan does have an answer for
them. Quite handily Baku remembered the loss-making Baku-Novorossiysk
oil pipeline and, of course, a reduction in oil volumes through this
pipe would be a logical response. And the prospect of a refusal of
Russian gas also looks convincing. On its own initiative Russia is
faced with a loss of markets. Perhaps, from the economic standpoint,
this is not such a big loss for a country which supplies gas to such
a huge market as Europe, but from the geopolitical point of view,
the losses are considerable.
In response to such behaviour by Moscow, Baku needs little reminding
that two Russian television channels are broadcasting on national
frequencies virtually free of charge. This is an unprecedented
occurrence, you have to agree, because you will not find another
country in the world where foreign television channels broadcast
on national frequencies. It should also be noted that the Russia's
Channel One, which broadcasts to Azerbaijan, is not the original but
a poor copy of the one the Russians themselves see. In other words,
the Azerbaijani viewer is being stuffed with selected programmes
which Russian minds consider it necessary to be shown in our country.
At the same time, as a sign of gratitude, in the news broadcasts
of these channels the separatist regime on the occupied Azerbaijani
territories of Nagornyy Karabakh is referred to from time to time as
a legitimate state structure. Suffice to recall Russian TV channel
coverage of the celebrations by Armenian separatists of the so-called
holiday of the acquisition of sovereignty.
It will be recalled that at that time the Russian embassy in
Azerbaijan said that this was the internal affair of the television
channel. However, for some reason the Russian ambassador does not
regard the question of the closure of the Russian TV channels as the
internal affair of the TV channel and Azerbaijan, and immediately
comments on this from the point of view of an inter-state treaty.
TV contract with Russia may be reviewed
The Azerbaijani National Television and Radio Council has already
adopted a decision on the Russian television channels and has said
that Azerbaijani viewers will still be able to see them at least until
July. The chairman of the council, Nusiravan Maharramli, explained
that this decision was governed by a contract, according to which the
opposite side must be given six months' notice about the suspension
of broadcasting of TV channels. However, one cannot understand why
one should stick to agreements in relations with a country which does
not observe treaties and has cancelled them unilaterally.
But in any event, by its latest moves Azerbaijan has shown that its
northern neighbour is not so terrifying as it seems or seemed a few
years ago, and if this matter is approached properly the provocations
coming out of the Kremlin can be neutralized.