Ukraine crisis accelerates Russia-China energy cooperation
By Germain Moyon 12 hours ago
Russia aims to boost its economic ties with China, particularly in the energy sector, in the face of Western sanctions over Ukraine but this could prove a high-risk strategy.
On Monday, far from the fighting in Ukraine and the threat of fresh Western sanctions, President Vladimir Putin launched what is hailed as "the biggest construction project in the world" in Eastern Siberia.
The 4,000-kilometre (2,500-mile) "Power of Siberia" pipeline will connect Yakutia's gas fields with the Sea of Japan (East Sea) and also with the Chinese border.
From 2018, the Power of Siberia will for the first time allow Moscow to supply China with natural gas through a pipeline under a contract worth $400 billion over 30 years.
Ending 10 years of difficult negotiations with Beijing, the signing of the contract in May was a major success for Putin, whose annexation of Ukraine's Crimea peninsula and support for other Ukrainian separatist movements have led to the worst East-West standoff since the Cold War.
At loggerheads with the West, Moscow is seeking to refocus its gas and oil exports from Europe -- its main energy market -- towards Asia, and is diligently building an energy alliance with Beijing.
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Gazprom CEO Alexei Miller (left), Vladimir Putin (2nd left) and China's Vice Premier Zhang Gaoli …
The shift suits China, which needs additional energy supplies to cover its growing domestic consumption.
Europe, shaken by the recent gas dispute between Moscow and Kiev, has also redoubled its resolve to reduce dependence on Russian fossil fuels.
- Record oil to Asia -
Russian gas giant Gazprom's Chinese contract will "provide a launch pad for the company's full-scale diversification into the Asia-Pacific region at a time when it is facing sales pressure in Europe", the Russian branch of Moody's Investors Service noted this week in a report.
But Moody's also warned of "challenges" to the eastward turn, "as China's ability to put pressure on prices and the sheer scale of the required investments could weigh on the future profitability of Russia's oil and gas sector".
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An employee tightens a valve at the Bilche-Volytsko-Uherske underground gas storage facility, the la …
The value of the Russia-China gas contract is being kept confidential, but according to some leaks it was below Gazprom's expectations, while the required investments amount to tens of billions of dollars.
Russia has been more successful in carving out a niche in Asia's oil market -- thanks to a mega contract that the Russian state oil company, Rosneft, signed in 2013 with Beijing.
In mid-August the Wall Street Journal estimated that a record 30 percent of Russian oil exports had gone to Asia since the beginning of the year.
Russia's Energy Minister Alexander Novak said this week that its oil exports to Asia could eventually double, adding that Moscow was in talks with Asian companies willing to invest in liquefied natural gas (LNG) projects in Russia's Far East.
- On Beijing's terms -
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Employees look at a pipeline at the new East Poltava gas booster compressor station not far from Ukr …
The China National Petroleum Corporation (CNPC) is expanding its Russia presence -- it holds 20 percent in an LNG project planned for the Arctic Yamal peninsula by Russia's Novatek Group and France's Total -- and is working with Rosneft on oil deposits in East Siberia.
This week Putin offered China a stake in the huge Vankor oil field -- considered one of the most valuable in east Siberia.
"If concluded, this deal would represent a major change," the Eurasia Group consulting firm said in a report on Wednesday.
"Rosneft's decision to offer China a stake in the mega Vankor oil field in East Siberia signals that Moscow's bargaining position has been further weakened by (Western) sanctions and that it needs the capital infusion."
The United States sanctions hit Rosneft hard -- forcing the company led by Putin's close ally Igor Sechin to request a bailout from the state to pay off a debt that exceeds $30 billion -- while Brussels restricted Russia's access to some technology aimed at the energy industry.
Russia's oil production -- with hydrocarbons the main source of state revenues -- is running out of steam at the moment and projects needed to revive it require huge investment.
As a result Moscow has little choice but to boost cooperation with China.
But "what Kremlin presents as a strategic partnership is simply a means for China to diversify its supplies", forcing Russia to accept Beijing's terms, Russia's Vedomosti business daily wrote this week.
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US lines up Russia sanctions, opposes Crimea secession
JULIAN KAMAU Sep 04, 2014
Washington, U.S.A: The United States on Thursday imposed visa bans and set the stage for wider sanctions against Russia, warning any move to split the Crimean peninsula from Ukraine would break international law.
President Barack Obama spoke to Russian President Vladimir Putin to explain the measures, which he said were in response to Russia's "violation of Ukraine's sovereignty and territorial integrity." Obama further stiffened the US response to Russia's incursion into Ukraine as his Secretary of State John Kerry worked in Europe for a diplomatic way out of the worst East-West crisis in decades.
The visa ban targets Russians and Ukrainians blamed for threatening the sovereignty or territorial integrity of Ukraine, where pro-Moscow president Viktor Yanukovych was ousted after mass protests last month. - Pressuring Putin - They were also merely a first step. Obama also signed an executive order paving the way for economic sanctions against individuals or entities in Russia.
"These decisions continue our efforts to impose a cost on Russia and those responsible for the situation in Crimea," said Obama. "And they also give us the flexibility to adjust our response going forward based on Russia's actions." In practice, the sanctions may offer a way to crank up pressure on Putin by restricting the assets or movement of senior figures around the Russian president. Those stripped of their visas would be informed, US officials said, refusing to make the list public. But State Department spokeswoman Jen Psaki suggested Putin was not on it.
"Taking a step like that against a head of state is -- would be a significant step, and it is not what we are leading with here in this process," she said. Obama also rejected a bid by the Crimean parliament to join Russia -- a move seen as a way for Putin to cement control over the region. "The proposed referendum on the future of Crimea would violate the Ukrainian constitution and violate international law," he said. "In 2014, we are well beyond the days when borders can be redrawn over the heads of democratic leaders."
Pro-Moscow officials on the Crimean peninsula announced on Thursday they would hold a referendum on March 16 on whether to join the Russian Federation. But Washington says only the people of Ukraine could make decisions about their borders. Now Watch: Bangla Kiosk 10.03.2014: Who owns lupita?
"You can't have a situation in which the legitimate government of the country is excluded from decision-making about different parts of that country. That is clearly a violation of international law," a senior official said. The White House said the Putin call lasted for an hour. "President Obama indicated that there is a way to resolve the situation diplomatically, which addresses the interests of Russia, the people of Ukraine, and the international community," a White House statement said. In Moscow, the Kremlin said Putin had told Obama that relations between the two countries "should not be sacrificed due to disagreements over individual -- albeit extremely significant -- international problems."
Obama has worked over the last week to build a united front among the United States and its allies on Ukraine, and the US sanctions coincided with new European pressure on Putin. US officials stressed however that, despite the deployment of Russian troops into southern Ukraine's Crimea peninsula, Washington had not seen any military moves into mainland eastern Ukraine.
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Photographer: Andrey Rudakov/Bloomberg
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EU Completes Plan to Broaden Economic Sanctions on Russia
Photographer: Andrey Rudakov/Bloomberg Russian President Vladimir Putin.
European Union diplomats approved the EU's broadest sanctions yet against Russia, highlighting doubts that a cease-fire in Ukraine will hold.
Hours after the Ukrainian government agreed with pro-Russian separatists to stop fighting as of 6 p.m. local time yesterday, EU ambassadors in Brussels drew up the 28-nation bloc's second package of economic penalties against Russia over its encroachment in Ukraine. Provisions include barring some Russian state-owned defense and energy companies from raising capital in the EU, according to a European official who spoke on the usual condition of anonymity.
The extra penalties still need the formal endorsement of EU national governments. They plan to give their approval on Sept. 8. The measures would then normally be published in the EU Official Journal on Sept. 9.
"A cease-fire, yes, good news; a peace plan would be better news, but the sanctions go ahead," British Prime Minister David Cameron told reporters yesterday at a North Atlantic Treaty Organization summit in Newport, Wales. The measures could be removed "if proper milestones are reached," he said.
Crimea Annexation
The EU is ramping up penalties against Russia in coordination with the U.S., part of a trans-Atlantic push to force Russian President Vladimir Putin to cease support for the rebels in eastern Ukraine. Putin's backing for Ukrainian separatists and his annexation of Crimea have jolted the security order in Europe.
EU leaders called on Aug. 30 for further penalties against Russia to be drafted within a week after Ukrainian President Petro Poroshenko said his country was being invaded by troops and tanks. The agreed cease-fire in Ukraine raises the prospect of a lasting truce that would be the biggest breakthrough yet to end a conflict that has killed more than 2,600 people and soured Russia's relations with its former Cold War foes.
"We have to look to see if this cease-fire is valid, we'll have to see whether Russian troops are withdrawing from where they are, whether there are buffer zones, and other things," German Chancellor Angela Merkel told reporters in Wales.
Oil Equipment
In an initial set of economic sanctions imposed in late July, the EU barred five state-owned Russian banks from selling shares or bonds in Europe; restricted the export of equipment to modernize the oil industry; prohibited new contracts to sell arms to Russia; and banned the export of machinery, electronics and other civilian products with military uses -- so-called dual-use goods -- to military users.
Those measures prompted Russia to ban imports of EU farm goods, a step that has cut off about 5 billion euros ($6.5 billion) of annual trade and left the bloc scrambling to aid its producers. In a statement today, the Russian government signaled it would take further retaliatory action should the extra EU sanctions be enacted.
"In the case that they are introduced, a reaction from our side will undoubtedly follow," the Foreign Ministry said in a statement in Moscow.
The new EU package shortens to 30 days from 90 days the threshold for the maturity of debt whose sale in the bloc by the targeted Russian businesses is banned; prohibits European banks from offering syndicated loans to sanctioned Russian companies; expands the restrictions on dual-use goods and widens the curbs on technologies for the oil industry, according to the European official who spoke anonymously.
Asset Freezes
The EU is also due to expand a blacklist of people and companies subject to asset freezes in Europe. That's because EU leaders a week ago, in addition to calling for more economic penalties against Russia, asked for proposals to blacklist people and institutions "dealing with" separatist groups in the Donbass region of eastern Ukraine.
The new package "will increase the effectiveness of the measures already in place," EU President Herman Van Rompuy said in an e-mailed statement after the agreement among diplomats. "It will also reinforce the principle that EU sanctions are directed at promoting a change of course in Russia's actions in Ukraine."
Full details of the tougher EU sanctions will be disclosed when the decisions are published in the Official Journal. The economic penalties would normally take effect the day after publication, while the blacklist decisions would enter into force the same day.
To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net
To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Dan Weeks, Zahra Hankir
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Russian Journalist: 'Convincing Evidence' Moscow Sent Fighters To Ukraine
The Huffington Post | By Charlotte Alfred
Posted: 09/06/2014 1:10 pm EDT Updated: 09/06/2014 1:59 pm EDT
Every week, The WorldPost asks an expert to shed light on a topic driving headlines around the world. Today, we turn to Russia's involvement in the crisis in Ukraine.
Finally good news out of Ukraine. After five months of fighting between government troops and pro-Russian separatists in the east of the country, Russian Journalist: 'Convincing Evidence' Troops Fought In Ukraine of both parties reached an agreement on Friday to end hostilities and negotiate a permanent settlement .
Looming large over the negotiations was the question of Russian involvement in the conflict and western leaders' accusations that Moscow had systematically worked to deepen the Ukrainian crisis.
The extent of Russia's involvement in separatist violence in past months has been fiercely contested. Russia denies it has had any hand at all in the violence, while Ukraine and its Western allies accuse Moscow of having sent thousands of troops and military equipment across the border.
To better understand reports of a Russian presence in east Ukraine, The WorldPost turned to Elena Racheva, a special correspondent for Russia's Novaya Gazeta opposition newspaper. Racheva says that she has found "convincing" evidence that Russian troops have been sent to fight in Ukraine.
Who are the main groups fighting the government in east Ukraine?
I had the chance to talk to some of the rebels in the Russian town of Donetsk [not to be confused with the Ukrainian town of Donetsk]. About three-quarters of them were originally from Ukraine's Donetsk and Luhansk regions and a quarter of them were Russian citizens . Many of the rebels from both of these groups had fought in the Russian wars in Chechnya or Afghanistan. They wanted to fight again. They had blindly trusted Russian media and repeated Russian TV stories about Ukrainian forces using phosphorus bombs and children being crucified.
Relatives of Russian soldiers told me that while soldiers were occasionally sent on short-term missions inside Ukraine in July, the situation started to change at the beginning of August, when the Ukrainian army was able to push back the separatist rebels. Russia then started sending in larger regiments and military equipment , although without any identifying markings or license plates. I have no idea what the current proportion of Ukrainian separatist volunteers to Russian troops is. No journalist does.
Does this mean that Russia is actually sending forces to Ukraine?
Some soldiers were going voluntarily in June and July. Their relatives told me that army chiefs offered them big salaries to retire from the military and go to Ukraine as "volunteers" without official documents , although only a small number of soldiers agreed to do this.
The situation changed later on, and soldiers are now forced to go. Usually it works like this -- the regiment is sent to the Russian-Ukrainian border for "training" and after a while they get the order to go into Ukraine. I know of at least one case when soldiers who refused were threatened with prosecution.
Sometimes the soldiers aren't even told where are they going. For example, the uncle of one seriously wounded paratrooper told me that on Aug. 3, his nephew was told they were being deployed from Ulyanovsk in central Russia to Chebarkul in the east. After a few hours they realized they weren't going east at all, but west towards Ukraine. He didn't jump out of the car and didn't refuse to go into Ukraine, but I doubt he could be considered a volunteer.
What evidence is there that Russian troops are fighting in Ukraine?
The evidence is simple but convincing -- soldiers who have been killed, wounded or captured. I personally talked to the relatives of paratroopers from the 331st regiment of Russia's 98th Guards Airborne Division, who were killed and captured about 20 km [about 12 miles] inside Ukraine. I also spoke to the family of a soldier from the 31st Air Assault Brigade from Ulyanovsk who lost his leg in a fight in Ukraine, and the mother of a soldier from Division 2777 based in Chechnya, who died near the Ukrainian town of Snizhne. Russian officials admitted that troops had been captured, but President Vladimir Putin said they got lost while patrolling the border.
How is this being covered in the Russian media?
Quite poorly. There are not many free media outlets that dare to write about such things. State media only publishes the official version of the events. They tell their audience that Russia is not fighting in Ukraine, that soldiers captured there got lost on the border and that those who were killed have not died because they won't admit these men ever existed.
The independent media do try to present all the evidence they can find. For example, one small regional newspaper called Pskovskaya Guberniya reported on the secret funeral of two paratroopers from the town of Pskov who had been killed in Ukraine. This local newspaper with three staff writers became the first media outlet to prove Russian casualties in this war. The newspaper's website went down within a few hours of publishing the story because of the huge traffic. A few days later the newspaper's publisher Lev Shlosberg was beaten up near his house. He's still in the hospital with a broken nose and serious concussion. He says the attack was revenge for their reporting.
How have Russians reacted to reports of their troops fighting in Ukraine?
Russian society is terribly split. After I reported on the death of a 20-year-old Russian lance sergeant in Ukraine hundreds of people contacted his mother on social media. One-third offered condolences, one-third accused her of lying, and another third, mostly Ukrainians, said he deserved to die for fighting in Ukraine. She was hysterical and I felt terrible -- neither of us expected that level of hatred. Each third reveals something about Russia's reaction. Some people, like myself, feel a mixture of shame, horror, anger, regret and remorse. Some feel pure hatred towards the troops. And others just trust state media and don't believe its happening at all. I'm afraid the last group is the biggest. But as more and more evidence that Russia is involved in this war comes out, people are beginning the painful process of accepting this. It will not be easy, and it will take us some time to move from denial to understanding, acceptance and regret.
This interview has been edited and condensed for clarity.
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Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com
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