Publication: Monitor Volume: 3 Issue: 161

Russian and Chechen officials met in Djohar-gala on August 28-29 to discuss oil transit through Chechen territory. To the existing four agreements (on transportation of oil, restoration of the Chechen sector of the pipeline, filling it with oil, and security) a fifth and important one was added — concerning transit charges. At first, the Chechen side demanded a unit charge of $6.60 for transporting oil through its territory, while Moscow offered 43 cents. (Izvestia, August 30) A sum of $4.27 was eventually agreed upon. Russian first deputy minister of fuel and energy Sergei Kirienko insisted, however, that only 43 cents of this would be for transit and the rest would be a subsidy for restoring enterprises destroyed during the war. Russia is stressing this point since it does not want to encourage Dagestan and Ingushetia to try to raise the rates they charge for oil transiting their territories. (Nezavisimaya gazeta, August 30)

In addition, Moscow will pay about $2 million to repair the pipeline, fill it at no charge with oil at a value of around $4 million, and pay for the pipeline to be guarded. All this adds up to an additional $10 million. Russia appears to have made significant concessions to achieve the treaty with Chechnya in an attempt to meet the October deadline for the first transshipment of oil. Moscow is aware that it faces competition from Georgia and Turkey, and seems convinced that the international consortium will ship the bulk of Caspian Sea oil along the route which manages to transport the "early" oil most smoothly and with fewest problems. (Itogi magazine, August 26) Moscow’s efforts notwithstanding, obstacles remain and the final signing of the packet of agreements between Moscow and Djohar-gala, originally scheduled for September 1, has not yet taken place.

… As Russia Threatens to Bypass Chechnya.