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    MOSCOW, April 24 (RIA Novosti) Antarctic precedent is more dangerous than Kosovo independence/ Expanded NATO to isolate Russia - expert/Azerbaijan may become Gazprom's rival in Europe/ Gazprom's subsidiary fails to get license for Ukrainian market/ BusinessWeek to close its Russian version

    RBC Daily

    Antarctic precedent is more dangerous than Kosovo independence

    The Commission on the Limits of the Continental Shelf (CLCS) has ruled that Australia can expand its continental shelf by 2.5 million square kilometers.
    Experts say this precedent is more dangerous than Kosovo's independence and predict a re-division of the world.
    Martin Ferguson, Australia's Federal Resources and Energy Minister, said the extra area could be full of resources. "It means for a resource-rich nation such as Australia, added resource entitlements going to issues of oil and gas," he said.
    The decision gives Australia the right to survey for resources in those areas, but does not give it control over shipping or whaling.
    According to the 1959 Antarctic Treaty, "No acts or activities taking place while the present Treaty is in force shall constitute a basis for asserting, supporting or denying a claim to territorial sovereignty in Antarctica or create any rights of sovereignty in Antarctica."
    The treaty does not cover the notion of the continental shelf, which appeared only later, in the UN Convention on the Law of the Sea, and can be used to insist on sovereignty of the continental shelf adjacent to the claimant's territory.
    Australia filed a relevant request in 2004, but later backed off under pressure from the United States and Russia. In April 2005, it filed a new request, which has been under review until recently.
    Experts say the UN has made an illegitimate decision.
    Vladimir Kuchin, deputy head of the Russian Antarctic expedition, said: "The Antarctic Treaty does not recognize any claims, and the UN does not own any territory and therefore cannot approve territorial expansions."
    He said the issue of the division of Antarctica could be decided only during consultative meetings of all signatory countries.
    Political analyst Dmitry Yevstafyev said: "This precedent is much more dangerous than Kosovo's independence. I am surprised that Russian authorities have remained silent on the issue. They must declare that this is an illegal decision creating a dangerous precedent, and demand that the UN Secretary General explain the reasoning behind the decision."
    If the expansion of Australia's territory is formalized, this will disrupt the operation of international legal mechanisms, which have already been seriously affected by the proclamation of Kosovo's independence. Worse still, this will open the door to a large-scale re-division of the world. The South Pole precedent could be applied in the North Pole, which will turn the struggle for the Arctic resources into a global war, inevitably involving Russia.
    "Don't think the solution of the Arctic and Antarctic problems will take years or decades. The re-division of the world in the pole areas will develop very quickly," Yevstafyev said. "Russia must step up its efforts in the Arctic."

    Nezavisimaya Gazeta

    Expanded NATO to isolate Russia - expert

    The April 2-4 NATO summit in Bucharest did not offer a Membership Action Plan (MAP) to Georgia and Ukraine largely due to opposition by Germany and France, but pledged to review the decision in December 2008. Although the Russian media is actively discussing the possible Western threat, they have nothing to do with NATO or plans for deploying a missile defense system in Poland and the Czech Republic.
    Vladimir Dvorkin, a leading scientist at the World Economy and International Relations Institute under the Russian Academy of Sciences, said Russia could become isolated after all its neighboring countries join NATO in one form or another, and after a global missile-defense system is deployed without Moscow's involvement.
    He said this could happen if the Russian government and pro-Kremlin political experts continued to whip up war-threat hysteria instead of trying to achieve real democratization, creating modern armed forces and compromising on the missile-defense issue.
    Addressing the Bucharest summit, President Vladimir Putin commented correctly that "NATO is not a democratizer," because this role is played by MAP. Before joining NATO, all prospective member nations must meet democratic criteria of the NATO Charter.
    However, Russia does not meet most of the criteria, including civilian control over the armed forces, Dvorkin told the paper.
    He said civilian control made it much harder to embezzle huge financial flows and was the only way to implement the ambitious military reform which has been dragging on for many years and is accompanied by a massive propaganda campaign claiming its success.
    According to Dvorkin, civilian control, and independent parliament, judiciary and media are the only way to fight corruption, including that inside the defense industry, and to facilitate the development of small and medium businesses offering far better innovation projects than major Western corporations.
    He said Moscow would otherwise fail to overcome the widening technological gap between Russia and NATO.
    Apart from sending its inspectors to military facilities in Poland and the Czech Republic, Russia must insist on full-scale cooperation during every stage of developing and operating the proposed missile defense system, Dvorkin told the paper.
    He said Moscow should also exchange its few remaining sensitive technologies for Western know-how.


    Azerbaijan may become Gazprom's rival in Europe

    Baku is preparing to sign an agreement with Turkey, Greece and Italy to deliver and transport natural gas to Europe. The details of the agreement are being kept secret, but Azerbaijani Industry and Energy Minister Natik Aliyev said gas supplies to Greece should begin in 2009.
    Analysts say this would make Azerbaijan a rival to Russia's Gazprom, currently the largest gas supplier to Europe.
    Azerbaijan's Shah Deniz gas field, the largest in the country, has 42.36 trillion cubic feet of gas, which can be delivered to Greece via Turkey through the South Caucasus Pipeline from Baku to Erzurum via Tbilisi, and through the Karacabey-Komotini pipeline from Turkey to Greece.
    In 2011, when the TGI (Turkey-Greece-Italy) Interconnector pipeline, being built along the bottom of the Adriatic Sea from Stavrolimenas in Greece to Otranto in Italy, is commissioned, Azerbaijani gas will be delivered to Italy.
    Gazprom currently supplies about 30% of European gas needs (between 5.3 trillion and 5.65 trillion cu f out of the total 20.47 trillion cu f), and is annually increasing deliveries by as much as 3%.
    Ivan Andriyevsky, managing partner of 2K Audit - Business Consulting, said: "Baku plans to supply gas to Italy and Greece, where Gazprom's share is significant. Greece currently buys about 80% of its gas from the Russian company. Baku wants to take over 30% of the Greek market. Given the European trend of diversifying supply routes, the Azerbaijani gas will most likely replace Russia's. As a result, Gazprom's deliveries to Greece could fall by 30%, or 35.3 billion cu f."
    Experts believe that Gazprom's share of the Italian market will not be cut substantially.
    "Azerbaijan is ready to supply about 282.4 billion cu f of gas to Italy, which will most likely cut gas imports from Algeria and Libya. Therefore, Gazprom's supplies to Italy will not fall by more than 88.25 billion cu f," Andriyevsky said.
    Experts say that Azerbaijan's gas export plans are no threat to Gazprom in Europe.
    However, the establishment of a major energy and transport network in the Caspian region with the assistance of European and American companies (the Baku-Tbilisi-Ceyhan pipeline, Nabucco, plans for building a railroad from Baku to Kars via Akhalkalaki, and other projects) points to a weakening in Russia's position in the region.

    Nezavisimaya Gazeta

    Gazprom's subsidiary fails to get license for Ukrainian market

    Russian-Ukrainian gas talks ended in failure though neither side will publicly admit this. On the evening of April 22, Gazprom's spokesmen confirmed unofficially that the sides had actually exchanged ultimatums.
    On April 23, Valery Zemlyansky, press secretary of Ukraine's national oil and gas company Naftogaz, said that the Ukrainian delegation had already returned to Kiev and the date for further talks had not been scheduled.
    Zemlyansky claimed there had been no scandals in Moscow. According to him, Naftogaz's main task was to present Kiev's proposals on long-term cooperation with Gazprom.
    Sources close to the negotiating process say that Gazprom has set its own terms and conditions. Allegedly, the Russian side demanded that Ukraine should first repay all debts for this year's gas supplies and only then go over to a long-term strategy of cooperation.
    According to the same sources, Gazprom wanted Naftogaz's guarantee that by May 1, 2008, it would get a license for gas supplies to Ukrainian consumers for its subsidiary Gazpromsbyt-Ukraine, which has just been registered in Kiev.
    Ukraine's national commission for power sector regulation, which issues such licenses, said that the Russian company had not received the license yet and that its application could be considered this May.
    Sources at the Nezavisimaya Gazeta daily say that protection of business interests of Dmitry Firtash, co-owner of RosUkrEnergo, was also included in Gazprom's demands, though a Gazprom spokesmen deny this.
    Recently, Ukrainian Prime Minister Yulia Tymoshenko said that RosUkrEnergo had been left in the Ukrainian gas supply system at the Russian side's insistence in March. Meanwhile, Ukrainian chemical enterprises close to Firtash are beginning to experience problems. The Ukrainian state-run company obliged the country's major industrial enterprises to cancel contracts for gas supplies with them and sign new contracts with Naftogaz's subsidiary, Gas Ukraine. At the beginning of the fourth week of April, 138 companies did this, and Naftogaz warned the rest about gas cutoffs.


    BusinessWeek to close its Russian version

    Three years after the Russian version of BusinessWeek magazine went on sale in Russia, the Rodionov Publishing House has decided to close the project, saying the journal format is not popular on the domestic market.
    BusinessWeek spokesperson Patricia A. Strauss said the magazine would evaluate other projects for the Russian market. The license agreement will expire on June 30, 2008.
    Yevgeny Dodolev, publishing director of the Rodionov Publishing House's business publications group, said the BusinessWeek format had never been popular with the Russian market.
    "We have decided to close the unprofitable magazine because there is no advertising; and the project has not recouped itself," Dodolev told the paper.
    He said there were no profitable U.S. weekly magazines in Russia.
    Although our publishing house has invested over $10 million in the magazine since 2005, the project has not even reached breakeven point, Dodolev said.
    TNS Gallup AdFact managing director Ruslan Tagiyev said there were already 15 weeklies on the stagnant local market. He said BusinessWeek was among the last to enter the market and found it difficult to promote itself. The Russian team proved unable to combine the Western brand and the needs of Russian readers.
    Top managers at media companies with major assets, such as Independent Media Sanoma Magazines, Kommersant, RosBusinessConsulting, United Media, Seven Days and Media-3, said they had not interest in buying BusinessWeek's license.

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