Gazprom used up all its commercial potential in talks with Turkmenistan, as I said back in August 2006. When Gazprom head Alexei Miller personally approved the deal with Turkmenbashi Saparmurat Niyazov that Russia would buy the entire export amount of Turkmen natural gas in 2006-2010, it was clear that most generous dividends were offered to Turkmenistan. Due to this one deal, the purchasing price of Central Asian gas soared from $44 per 1,000 cubic meters in early 2006 up to $100 in the year’s second half and forever. Before that ‘landmark deal’, the purchasing prices on gas in Central Asia had been growing by $5-10 per year. Now, after the deal, no country in the region will agree to lesser price.
Gazprom couldn’t help knowing it. However, those $100 became Russia’s advance payment in the political deal for ousting Ukraine from Turkmenistan’s gas market. When that deal was being signed, Gazprom’s vice president Alexander Ryazanov overseeing the CIS was absent, while members of Russian president’s staff were present. Six months ago, businessmen spoke of the evident achievements in the foreign trade policy, saying that Russia has bought everything necessary for establishing control over the export of Central Asian gas for the upcoming four years, and paid a smaller price than it had expected.
However, the tactic victory turned out to be a strategic problem. On the one hand, Gazprom cannot raise gas purchasing prices in Central Asia, because raising them would worsen Gazprom’s economy. On the other hand, new Turkmen President Gurbanguly Berdymukhammedov did not participate in the deal last summer, and thus does not (formally) owe anything to Gazprom. So, Russia had nothing to do but to raise the level of solving those issues to top state officials.
Actually, gas sector is supervised by presidents in all countries, and it happened naturally in Russia, without misunderstanding of gas companies. However, considerably higher requirements are at stake now, in the second round of talks on preserving Russia’s priority in exporting Turkmen gas after 2010, when Russia will have to compete with the E.U.. Since Berdymukhammedov is an Oriental man in the classic meaning of the word, there are no reasons to hope that he would suddenly give up bargaining with everyone, -- for Russia’s sake.
What can Russian president offer to his Turkmen counterpart? Investments. Large funds which would raise the industry of a predominantly agrarian country. This honorable mission is laid upon LUKOIL, Rusal, and MTS. Russian President Vladimir Putin has a very difficult mission. He is to prove to his new Oriental friend that these large Russian companies will be working absolutely honestly and transparently, going by different principles from those of Itera oil-and-gas company that was buying Turkmen gas cheap and supplying Belarusian tractors at a triple price in return. Apparently, the price required by Turkmenistan will be different as well.
Gazprom couldn’t help knowing it. However, those $100 became Russia’s advance payment in the political deal for ousting Ukraine from Turkmenistan’s gas market. When that deal was being signed, Gazprom’s vice president Alexander Ryazanov overseeing the CIS was absent, while members of Russian president’s staff were present. Six months ago, businessmen spoke of the evident achievements in the foreign trade policy, saying that Russia has bought everything necessary for establishing control over the export of Central Asian gas for the upcoming four years, and paid a smaller price than it had expected.
However, the tactic victory turned out to be a strategic problem. On the one hand, Gazprom cannot raise gas purchasing prices in Central Asia, because raising them would worsen Gazprom’s economy. On the other hand, new Turkmen President Gurbanguly Berdymukhammedov did not participate in the deal last summer, and thus does not (formally) owe anything to Gazprom. So, Russia had nothing to do but to raise the level of solving those issues to top state officials.Actually, gas sector is supervised by presidents in all countries, and it happened naturally in Russia, without misunderstanding of gas companies. However, considerably higher requirements are at stake now, in the second round of talks on preserving Russia’s priority in exporting Turkmen gas after 2010, when Russia will have to compete with the E.U.. Since Berdymukhammedov is an Oriental man in the classic meaning of the word, there are no reasons to hope that he would suddenly give up bargaining with everyone, -- for Russia’s sake.
What can Russian president offer to his Turkmen counterpart? Investments. Large funds which would raise the industry of a predominantly agrarian country. This honorable mission is laid upon LUKOIL, Rusal, and MTS. Russian President Vladimir Putin has a very difficult mission. He is to prove to his new Oriental friend that these large Russian companies will be working absolutely honestly and transparently, going by different principles from those of Itera oil-and-gas company that was buying Turkmen gas cheap and supplying Belarusian tractors at a triple price in return. Apparently, the price required by Turkmenistan will be different as well.
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