RUSSIA MONITOR MONTHLY 07/2019
Contents
Sechin’s Tax Privileges At Risk: Is Putin Changing His Mind?
Putin’s latest decision has called into question Igor Sechin’s new oil projects that so far enjoyed substantial support from the state. The Kremlin’s move is surprising because until now, Putin expected that the government fulfill almost all of Sechin’s tax demands.
Moscow Protests: Putin Listened to Siloviki
In just a few days, a local row over the upcoming elections for the Moscow City Duma became what was called Russia’s most important political problem. But contrary to what some commentators believe, this recent turmoil does not act to the detriment of the regime. Much indicates that Russia’s authorities seem to have sought to escalate the Moscow crisis, or at least such was an intention of those who opt for a tightening course in domestic policy.
Weakest Link of Russian Armed Forces
Speaking at Russia’s Navy Day festivities, Russian President Vladimir Putin said nothing new: he stressed his country’s military power and declared further buildup. Attending the main celebrations in St. Petersburg, the Russian leader received the parade of warships. Large-class festivities were also held in other main ports in the country. But this overly optimistic image of Russian naval forces does not correspond with the reality. Russia’s navy shares its fate with other types of the state’s armed forces.
Macron-Putin Meeting: Russia Gains More Friends in EU
Bilateral ties between Paris and Moscow are now getting stronger than ever. The June meeting between French and Russian heads of government will be soon followed by a high-level visit to France by a Russian leader. French President Emmanuel Macron said that he will receive Vladimir Putin for talks at the Fort de Brégançon summer residency on August 19, a few days before hosting the G7 heads of state meeting in the French city of Biarritz.
Gazprom’s TurkStream Faces Delay On Bulgarian Section
Russia is now playing a strategy of constructing two energy pipelines – Nord Stream 2 in the north and Turkish Stream in the south – to bypass Ukraine while exporting gas supplies to the West. The pipeline was set to become operational after Russian-Ukraine gas transit deal expired in early 2020. But Bulgaria’s section of the natural gas pipeline extension into Europe may not kick off as initially scheduled, while Gazprom has recently encountered a major problem in the south, specifically in the Balkans.
Gas and Espionage: A Scar on Russia-Austria Ties
Austria has issued international arrest warrant for a Russian man named Igor Zaitsev. He is believed to be linked to the case against a retired Austrian military officer who was identified as a suspect who spied for Russia. Austria has ordered an arrest of a man to whom it referred as Russian military intelligence officer.
Novatek Seals Arctic LNG 2 Deal with Partners and Subcontractor
Russia’s largest private natural gas extractor and liquefied natural gas (LNG) producer Novatek has entrusted a new subcontractor with building gas liquefaction facilities for Arctic LNG 2, its second LNG project to be developed in the Arctic. The Russian company inked a $7.6 billion deal with TechnipFMC, a global leader in subsea, onshore/offshore, and surface projects.
Transneft Drags Its Feet Over Paying Druzhba Oil Compensation
Russia played on time before holding talks on compensating all losses incurred by crude recipients for contaminated oil flows injected into the Druzhba pipeline system. This reaction probably stems from a Russian internal clash between the country’s largest oil producer Rosneft and oil pipeline monopoly Transneft. The latter has recently made a unilateral decision to define the maximum compensation for tainted crude supplies.
Gazprom’s “Golden Thursday” on the Stock Market
For the second time in less than two months, Gazprom recorded a remarkable leap in value in one trading session. On July 25, the company’s shares on the Moscow Stock Exchange increased by 6 percent in a few hours, reaching nearly 300 billion roubles. This time, investors rushed to purchase Gazprom’s securities alarmed by speculation that unknown investors could buy a block of shares from subsidiaries of the concern.
Russia’s Transneft and Rosneft Embroiled Again in “Crude Wars”
A row over the reasons for the Druzhba pipeline contamination crisis gave rise to an open conflict between Russia’s biggest crude producer and the country’s oil pipeline monopoly. But what was initially seen as nothing more than just leveling mutual accusations has gone beyond a typical business quarrel between two large firms.
Russia’s Warmer Ties with Germany
German exports to Russia are still growing while the construction of the Nord Stream 2 energy pipeline is advancing despite joint efforts made by its opponents. Participants of the Petersburg Dialogue forum therefore have good reasons to be pleased with the outcomes of the meeting. Russian-German top-level political ties are becoming better and better, as proved by the first meeting since the annexation of Crimea held between Russia’s and Germany’s foreign ministers at the sidelines of the Russian-German forum.
Kremlin’s Election Intrigue Takes Off Before Ukrainian Parliamentary Vote
In the final stretch to the upcoming parliamentary runoff in Ukraine, the Kremlin has boosted its activities, as exemplified by the meeting with the leader of Ukraine’s pro-Russian opposition party, developing a fast-track passport procedure in Donbas or a tough stance on releasing the Ukrainian seamen. By doing so, Moscow hopes to make a powerful pro-Russian camp enter a new Verkhovna Rada.
“Druzhba Effect”: Lower Oil Output Will Hit Russia’s GDP
Russian oil production collapsed in early July, dragged by decreasing output from Rosneft, the country’s largest crude producer. And this stems from the firm’s limited exports capabilities following the Druzhba pipeline contamination crisis, resulting in both from equipment failure and a restrictive policy pursued by the Russian state-owned oil pipeline operator Transneft.
Russia After 2024: Chancellor Putin Seems an Unlike Scenario
Shortly after Vladimir Putin took the oath of office for his next term as Russian president, many speculated what the Kremlin’s host would be able to do in a bid to remain in power after his two consecutive terms expire in 2024. Under one of many theories that have recently resonated in the media, Putin could serve as a prime minister, however enjoying greater powers, a shift possible thanks to changing election rules.
Druzhba Pipeline Failure: Belarus Assesses Losses, More Suspects Are Coming Up
A few weeks have passed since a major failure of the Druzhba oil pipeline and there is still no answer to the three key issues. First of all, the system has not yet been fully cleaned up. Secondly, Russia has still not decided to compensate foreign recipients for all losses incurred. And thirdly, investigators are probing into who is to be blamed for and, while new suspects are coming up, this does not answer the question whose fault it was.
INF Treaty Collapse Is Russia’s Fault
Moscow denied accusations of being to blame for the collapse of the Treaty on the Elimination of the Intermediate-Range and Shorter-Range Missiles, commonly referred to as INF. Europe’s security ahead of the U.S. planned withdrawal from the Treaty on August 2 was part of the official agenda of the latest NATO-Russian Council meeting.
Morales’s Visit to Moscow: Bolivia Drifts Closer to Russia
Russian authorities keep solidifying their influence in Latin America. Naturally, their priority is to help save the Maduro regime in Venezuela, but Moscow also seeks to back Cuba and Nicaragua. And now Bolivia is facing an opportunity to rise in importance. Bolivian President Evo Morales will visit the Kremlin on July 11 to sign strategic partnership agreements between his country and Russia.
Is Turexit Possible? Ankara’s New S-400s Is NATO’s Problem
Ankara’s determination to acquire Russian-made missile systems will enrage both its NATO peers and the U.S. But Erdogan hopes U.S. President will block Washington’s sanctions on Ankara. Yet this does not change the fact that outfitting the Turkish army with S-400 air defense missiles poses a threat to the security of the entire Alliance.
Warsaw Institute
