WE DON’T WANT TO PLAY WITH YOU ANY MORE

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WE DON’T WANT TO PLAY WITH YOU ANY MORE

Izvestia (Moscow edition), June 24, 2003, p. 5

Gazprom’s biggest project – the Blue Stream pipeline between Russia and Turkey – has led to Russia’s natural gas exporters being held hostage by the political and economic interests of their new European partners. Turkey intends to break its commitments under the inter-governmental agreement and revise the long-term contract that runs until 2028. The Turkish government is seeking to drastically reduce the volumes of natural gas delivered from Russia, as well as paying lower prices for it, and even paying in goods and services.

Gazprom deputy CEO Yuri Komarov announced yesterday that Gazprom is holding serious negotiations with Turkey about revising previous contracts for the supply of gas along the new Blue Stream pipeline. According to an inter-governmental agreement, from July 1, 2003 Gazprom is due to start regular deliveries of gas to the Turkish market; while Turkey is committed to paying for Russian gas even in the event that the supply of gas exceeds demand in Turkey. Having pent over $3.3 billion on building the Blue Stream pipeline (most of which runs along the floor of the Black Sea), Gazprom was counting on $25 billion in revenue from Turkey over the next 25 years.

But now that revenue is in doubt, just like Gazprom’s partnership with BOTASH, the Turkish state gas company. Last week, the Turks demanded that Gazprom should halve the volume of deliveries this year (from 4 million to 2 million cubic meters), and reduce the price from $126 per thousand cubic meters first to $115, then to $75. Turkish Energy Minister Hilmi Guler stated that Gazprom should start accepting payment in goods and services; then he threatened to take Gazprom to the international arbitration court for knowingly inflating prices. After that, Gazprom broke off the negotiations; they were postponed until this week.

Indeed, the average price of Russian natural gas in Europe is $100 per thousand cubic meters. According to some sources, Gazprom is already on the verge of agreeing to cut its price to that level. However, Yuri Komarov said that Gazprom has no option but to firmly refuse to accept barter payments. Moreover, the question of reducing the volume of gas delivered remains open.

The Turks have found yet another way of putting pressure on Gazprom: they are hiding behind the European Union’s energy security requirements, according to which no more than 50% of a nation’s fuel balance should depend on any one supplier. According to Guler, if Gazprom supplies as much gas each year as specified in the inter-governmental agreement, it would exceed 50% of Turkey’s fuel balance by 2008.

Over the past 30 years, before the Blue Stream pipeline, Europe’s leading reseller of Russian natural gas was Germany. Gazprom has grown accustomed to both sides strictly adhering to the terms of all long-term contracts. But now it’s futile for Gazprom to complain about its new partners; the pipeline has been built, the money has been invested, and a compromise with Turkey will have to be found. Still, Gazprom has one remaining hope: according to some sources, the Russian government could soon intervene in this conflict.

PUTIN MEETS WITH FORMER PRESIDENTS

Izvestia, June 25, 2003, p. 3

President Vladimir Putin has attended a meeting of the Cooperation Council, an international non-government organization which brings together former prime ministers and presidents. The Moscow meeting was also attended by former German chancellor Helmut Schmidt, former Japanese prime minister Kiichi Miyazawa, and other former national leaders. Putin said: “We must work together on developing and improving the system of international law, in order to maintain it as an adequate and effective instrument for resolving current global problems.”

ST. PETERSBURG LEGISLATORS WANT MATVIENKO AS GOVERNOR

Izvestia, June 25, 2003, p. 3

A number of members of the St. Petersburg legislature are discussing setting up an initiative group to nominate Valentina Matvienko, presidential envoy for the North-Western federal district, as a candidate in the forthcoming election for governor of St. Petersburg. Legislator Vitaly Martynenko said: “Members of parliament who are willing to join the initiative group could form a new faction, or even a bloc, which would then nominate Matvienko as a candidate for governor.” The question of forming a new faction or bloc must be decided by July 3, when the parliamentary recess begins. Meanwhile, a presidential decree issued yesterday has made Matvienko a member of the Security Council.

PATRIOTS WALKING TOGETHER WITH THE COMMUNIST PARTY

Izvestia, June 25, 2003, p. 3

The leaders of a number of leftist public movements have called on the Communist Party (CPRF) to form a Communist-Agrarian-Patriot electoral bloc, with the CPRF taking the leading role. An open letter to the CPRF was released yesterday: “The popular-patriotic forces of Russia can only be united by forming a single, powerful leftist-patriotic bloc made up of three components: the Communists, the Agrarians, and other patriots.” Among the ten leftist activists who signed the letter are Sergei Glaziev, leader of the Congress of Russian Communities, and Viktor Iliukhin, leader of the Army Support Movement.

INTERNSHIPS IN OTHER REGIONS FOR CHECHNYA’S LEGISLATORS

Izvestia, June 25, 2003, p. 3

Within the framework of the Council of Legislators, the Federation Council intends to assist members of Chechnya’s State Council. Akhmar Zavgaev, Federation Council member for Chechnya, said: “Chechnya’s parliamentarians still lack sufficient experience of legislative activities. Therefore, they will serve internships in the legislatures of other Russian regions, mostly in the Southern federal district.” According to Zavgaev, the idea of helping Chechnya’s legislators has been unanimously supported by the Council of Legislators. Zavgaev also says that a special program will soon be developed to encourage ethnic Russians who lived in Chechnya before the conflict to return there. Zavgaev noted: “Appropriate conditions should be created for their return – above all, they must be provided with housing.”

LATVIA AND ESTONIA FAIL TO PROTECT THE RIGHTS OF ETHNIC MINORITIES

Izvestia, June 25, 2003, p. 3

Russia is concerned about the lack of progress by the governments of Latvia and Estonia in preventing the rights of ethnic minorities from being violated. Foreign Minister Igor Ivanov has written to his European Union counterparts about the situation of ethnic Russians in Latvia and Estonia. Of particular concern is the position of Russian-language secondary schools in Latvia; they have been ordered to use Latvian as the language of instruction from September 1, 2004. A sources in the Foreign Ministry emphasized: “Latvia has ignored a resolution issued two years ago by the Parlimentary Assembly of the Council of Europe, calling on Latvia to ratify the Council of Europe’s framework convention on protecting national minorities, and bring Latvian education laws into compliance with it.”

ALMOST HALF A MILLION RUSSIAN FAMILIES ARE LIVING IN EXTREME POVERTY

Izvestia, June 25, 2003, p. 3

Deputy Prime Minister Galina Karelova has stated: “There are 472,845 families in Russia which are living in extreme poverty.” According to the Labor and Social Development Ministry, these families include 866,000 children. Karelova also noted that 681,000 children were detained by the police last year; and most of these problem children do have parents. Citing Interior Ministry figures, Karelova said that around 50,000 children were declared wanted by the police in 2002; 47,300 of them (94%) were found, while the others remain on the wanted list.

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