MOSCOW, October 20 (RIA Novosti) Qaddafi to discuss tank and missile purchases in Moscow / Kremlin looks for new ways to strengthen influence abroad / Russia sends calming message to Ukraine and the West / Gazprom likely to save money on South Stream offshore leg / Construction of Bulgaria-Greece pipeline postponed / TNK-BP ready to pay $2 billion to operate oil deposit in Libya/
Vedomosti
Qaddafi to discuss tank and missile purchases in Moscow
A source in the Russian Foreign Ministry said Libyan leader, Colonel Muammar Qaddafi, was due to visit Moscow on October 31, for the first time since 1985.
Analysts said Qaddafi's visit would facilitate major arms sale contracts.
A Kremlin official said Dmitry Medvedev planned to receive Qaddafi in late 2008, and that the date for the visit was now being coordinated through diplomatic channels.
In April 2008, outgoing President Vladimir Putin visited Tripoli, facilitating a breakthrough in Russian-Libyan relations. Tripoli's $4.6 billion Russian debts were written off in exchange for new contracts with Moscow, including an ambitious 2.2 billion euro contract to build the 554-km (350-mile) Sirt - Benghazi railroad.
Moreover, energy giant Gazprom, the Libyan National Oil Company (NOC) and the Libya Africa Investment Portfolio signed framework memorandums on implementing projects in Libya and other African nations.
Moscow and Tripoli may also sign arms sale contracts worth over $2 billion.
A source in Russian Technologies, an emerging industrial behemoth with assets in many sectors, from defense to automotive and civil aviation, said Qaddafi's visit could facilitate major bilateral deals, and that both sides were discussing the sale of 16 Sukhoi Su-30 Flanker fighters, T-90 main battle tanks, Tor-M2E surface-to-air missile (SAM) systems and components for previously delivered equipment.
Although Qaddafi is unpredictable, his visit could promote previously charted projects, Yevgeny Satanovsky, president of the Institute of Middle East Studies, told the paper.
Satanovsky said Qaddafi was a one-man government and parliament, and that anyone wishing to effectively cooperate with Libya had to contact him.
It is hardly surprising that British, Italian and French leaders visited the oil-rich Libya after the lifting of sanctions, Satanovsky told the paper.
France has signed a memorandum on selling 18 Dassault Rafale fighters worth 2.2 billion euros to Libya, Konstantin Makiyenko, deputy director of the Center for Analysis of Strategies and Technologies, said.
He said the deal had not been closed yet, and that Russian warplanes also had good chances.
Makiyenko said the Russian aircraft were cheaper and lacked Western-style "safety catches" preventing their use by recipient countries.
Kommersant
Kremlin looks for new ways to strengthen influence abroad
Late last week, Russian President Dmitry Medvedev appointed Farit Mukhametshin, Russia's ambassador to Uzbekistan, head of the new Federal Agency for the CIS - Compatriots and International Cultural Cooperation.
Mukhametshin must set the new structure going very rapidly to promote Russia's interests abroad, mostly in the former Soviet countries.
The agency has not even started working, but the Kremlin is already considering changing its tasks to focus on military cooperation.
Initially, the Kremlin wanted the agency to strengthen Russia's influence in the former Soviet republics. However, it became clear last month that the ambitions of the Russian authorities are much wider.
Medvedev issued a decree renaming the agency to include concern for compatriots and cultural cooperation among its goals. It will take over the functions of the Russian Centre for International Scientific and Cultural Cooperation (Roszarubezhcenter) and its numerous offices and cultural centers all over the world, including in the former Soviet republics.
The new agency will therefore have a broad network of offices abroad, not unlike the United States Agency for International Development (USAID), which has offices in nearly 100 countries, including all the CIS republics, and has long become an instrument for spreading Washington's political influence.
Business daily Kommersant's sources in the presidential administration said the August war with Georgia played the key role in revising the new agency's political tasks.
"Since last August, we have been looking at our relations with the former Soviet republics differently. We will review our cooperation [with them] and have started doing this in such organizations as the CSTO, where we will focus on the military aspect," a source in the Kremlin said. "We plan to do the same in the CIS, which called for a more clear description of the new agency's functions."
The CSTO is a regional security group comprising Russia, Kazakhstan, Armenia, Belarus, Kyrgyzstan, Uzbekistan and Tajikistan.
Nezavisimaya Gazeta
Russia sends calming message to Ukraine and the West
Deputy Prime Minister Sergei Ivanov almost disavowed all the harsh statements Russian officials have been making on the Crimea and Sevastopol lately, in a televised interview with BBC.
Ivanov, who is responsible for the Russian defense industry, said he could easily imagine a Black Sea Fleet based outside of Sevastopol. Analysts say it was a signal to Ukraine and the West that the Kremlin has found a new approach to the problem of the Black Sea Fleet base, as well as an attempt to rectify Russia's international image, blotted by the Caucasus war.
As defense minister, Ivanov used to let slip things that were taken as deviation from the official position, but later appeared to have been feeling out the environment ahead of changes in the Kremlin's policy. His latest statement, therefore, may signify a change in official sentiment regarding the lease of Sevastopol.
"Russia is not going to solve the Sevastopol/Crimea problem by force. And it doesn't want Ukrainian politicians to use anti-Russian rhetoric in their upcoming election campaigns," Pavel Zolotarev, deputy director of the U.S. and Canada Institute, said, commenting on the former defense minister's statements.
Interestingly, Moscow cut its tough rhetoric about the status of the Crimea and Sevastopol, as the Ukrainian election campaign reached full swing. Moscow is apparently waiting for a change in Ukrain's top echelons. Perhaps it could reach a good deal and extend the lease with the next president. On the other hand, Moscow is equally prepared for a refusal.
Mikhail Pogrebinsky, director of the Center for Political and Conflict Studies in Kiev, said Ivanov's statement sent a message to Ukraine and to the West. According to him, the West now expected some assurance from Moscow that Abkhazia and South Ossetia wouldn't happen again, this time in Ukraine.
"Although officials in Moscow have stated their recognition of Ukraine's current borders, there are political forces inside Ukraine who keep exploiting the Crimean issue for provocation purposes, thus deliberately creating a discouraging environment for Russia's Black Sea Fleet," Pogrebinsky explained.
He said Ivanov's statement was perfectly on time, and would contribute to the improvement of Russian-Ukrainian relations.
Kommersant
Gazprom likely to save money on South Stream offshore leg
Romania may replace Bulgaria on the Gazprom-led South Stream gas pipeline project from Russia to Italy. Gazprom CEO Alexei Miller met with heads of two Romanian companies, Transgaz and Romgaz, late last week. Some sources said the talks focused on Romania's plan to sign up to the project, replacing Bulgaria.
Gazprom's desire to alter the planned pipeline's route is evidence of serous problems arising in the implementation of the project.
Shortly after the Russian-Georgian conflict over South Ossetia, the EU decided to focus efforts on the Nabucco project, an alternative route to ship Caspian oil and gas to Europe bypassing Russia.
Under an earlier intergovernmental agreement, the pipeline was to cross the Black Sea on the way from Russia to Bulgaria. The 560 mile offshore section would have cost $10 billion.
Gazprom was planning to build two legs of the planned pipeline, with one leg going to southern Italy through the Adriatic Sea, while the other one would go to Austria via Serbia and Hungary.
Basic agreements were reached with Sofia, Budapest and Belgrade last year. But in each case there were some hitches that prevented the implementation of the agreements. Bulgaria insisted on ownership rights for its part of the pipeline, while Gazprom wanted it to be Russian property.
Gazprom had similar hitches with Serbia and Hungary. It is clear, however, that lack of compliance of the East European governments was not the key predicament. The problem is the EU's general weariness of dealing with Russia, Gazprom in particular.
European leaders unanimously agreed to diversify energy sources at the latest EU summit on September 1 which discussed the consequences of the South Ossetian-Georgian conflict. One of their first decisions was to focus on Nabucco, South Stream's rival project.
Both Romanian Transgaz and Bulgarian Bulgargaz are Nabucco shareholders. Therefore, the talks with Romania will probably be aimed at persuading Bucharest or Sofia to choose South Stream over Nabucco.
A source in the Energy Ministry confirmed that Gazprom was looking at a possibility of Bulgaria replaced with Romania, but did not elaborate. Romania was initially discussed as an alternative to Serbia. However, Russia and Serbia have recently removed all legal obstacles over the north leg of South Stream.
Still, analysts think rerouting South Stream to Romania will be economically efficient. "The way to Romania across the Black Sea is 60 miles shorter than to Bulgaria, which means the offshore pipeline will be 12% cheaper," said Mikhail Korchemkin, director of the East European Gas Analysis consultancy.
Vremya Novostei
Construction of Bulgaria-Greece pipeline postponed
Asen Gagauzov, Bulgaria's minister of regional development and public works, said the construction of the Burgas-Alexandroupolis oil pipeline had been put off until October 2009 and its commissioning until 2011.
This is the latest of the pipeline projects that involve Russia to be affected.
Gagauzov did not explain why the decision had been made, but said the financial crisis was not among the reasons.
Russian oil pipeline monopoly Transneft, Gazprom Neft, the oil unit of energy giant Gazprom, and Rosneft, Russia's largest state-owned crude producer, refused to comment on the Bulgarian minister's statement.
Analysts say the pipeline has been postponed because the shareholders of the Caspian Pipeline Consortium (CPC), which should supply oil to the Burgas-Alexandroupolis project, cannot agree on doubling the CPC pipeline's capacity.
The construction of the 285-km (177-mile) pipeline across Bulgaria and Greece, bypassing the clogged Turkish straits, should have started before the end of 2008 or early in 2009. Its initial annual capacity of 35 million metric tons (257.25 million bbl) was to be subsequently increased to 50 million tons.
The $1 billion project has no financial problems, Gagauzov said, adding that the global crisis should not stop the project from getting loans worth $600-$900 million.
"Russia said it was prepared to provide the funds if no other creditor would," the Bulgarian minister said. "However, we would like to borrow money from banks."
Valery Nesterov, an analyst at the Troika Dialog investment company, said: "There could be different reasons for postponing the project. For example, the U.S., which doesn't want the pipeline to be built, has increased pressure on Greece and Bulgaria."
He said the CPC shareholders failed to agree on increasing the capacity of the Tengiz-Novorossiisk pipeline last week. Its capacity should be increased by 35 million metric tons, designed for pumping through the Burgas-Alexandroupolis pipeline.
The consortium owners cannot sign a memorandum because of the unyielding stance of BP, which is firmly against financing the expansion with the concern's own funds, unlike other shareholders.
"The expansion of the CPC pipeline's capacity has been postponed for approximately a year," Nesterov said. "This may put off the commissioning of the Burgas-Alexandroupolis pipeline, which is to receive the CPC oil. Besides, several other pipeline projects, namely the BPS-2 Baltic pipeline system and South Stream, have also been suspended."
RBC Daily
TNK-BP ready to pay $2 billion to operate oil deposit in Libya
Now that a shareholder conflict between its Russian and British partners is settled, TNK-BP is free to compete with BP in international projects. It has emerged that the company is negotiating with Libya's National Oil Corporation (NOC) the development of one of the country's largest oil fields - Sarir. But the wisdom of investing between $1 billion and $7 billion in Libya needs to be approved by a new TNK-BP executive director, as well as by the company's board of directors.
The recoverable reserves still remaining in Sarir are estimated at 330 to 600 million metric tons of oil. The current field operator is Arabian Gulf Oil Company - a 100% subsidiary of the NOC.
In the early stages, it is planned to conclude a service contract for TNK-BP to draw up a feasibility proposal to increase output by better development techniques. TNK-BP then expects to sign a production sharing agreement with the NOC to become the project operator. By using the technology for reactivating depleted wells, the company hopes to increase yields in Sarir to 22 million metric tons a year, almost double the current figure.
With a preliminary estimate of project investments at $5-7 billion for the next five years, the TNK-BP bonus for joining the project as an operator may be as high as $1-2 billion. What is more, a TNK-BP manager said that despite the financial crisis, neither the company's shareholders, nor its leadership plan to forego a role in the project. A meeting held in the middle of last week, which also discussed M&A projects outside Russia, indicated that the company would continue to run oil and gas projects in Venezuela and Libya.
BP did not earlier approve TNK-BP's participation in some international projects, partly because it considered investments in these regions as risky, and partly because it feared competition. This was one of the causes of the shareholder conflict between the AAR consortium of Russian shareholders and BP.
BP has been active in Libya since May of last year. The British company has a $900 million contract with the NOC, which includes the right to prospect for oil and gas over an area of 54 sq km in Libya and the right to develop newly discovered fields.
RIA Novosti is not responsible for the content of outside sources.
