Publication: Monitor Volume: 1 Issue: 113

Russia’s fuel and energy minister Yuri Shafranik declared publicly October 14 that Russia should be "satisfied," indeed "happy" with the AIOC international consortium’s October 9 decision to pump early Azeri oil through two pipelines, one via Russia and one via Georgia and Turkey. "We consider this decision as favorable to us" because it (as opposed to a decision for a Russian route only) will facilitate Russian participation in further projects in Azeri and other Caspian oilfields, Shafranik said. In an October 13 press release signed by Lukoil company president Vakhit Alekperov, the management of that giant Russian company also pronounced itself satisfied with the two-pipeline decision. Lukoil, which has a 10 percent stake in AIOC, urged that "Russia should now provide efficient transportation of the early oil, so that discussions on the transportation of future Caspian oil unconditionally choose the Russian route." The officials moreover were quoted as saying that Russia’s State Committee on Mineral Resources (Goskomnedra) had recently licensed Lukoil to prospect for oil "in the Russian section of the Caspian seabed." (8)

Shafranik and Lukoil’s assessments contrast with the Russian Foreign Ministry´s October 11 unofficial criticism of the two-pipeline decision, and its warning that cooperation on pumping the oil through the Russian pipeline system would depend on certain "conditions," including the routing of the lion’s share of Azeri and Caspian oil via Russia. Moreover, Lukoil’s Goskomnedra license as cited by the officials would undermine the Foreign Ministry´s refusal to recognize national sectors in the Caspian Sea. The dispute recalls last year’s clash over the signing of the $ 7.5 billion AIOC-Azeri oil deal: the reputedly moderate Foreign Ministry, and Andrei Kozyrev personally, fought the deal with Western companies, while the Fuel and Energy Ministry and Lukoil supported it.

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