Press review: Russian oil unharmed by Iraqi protest and US meddles in Ukraine gas transit / News / News agency Inforos
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Press review: Russian oil unharmed by Iraqi protest and US meddles in Ukraine gas transit

Press review: Russian oil unharmed by Iraqi protest and US meddles in Ukraine gas transit

Top stories in the Russian press on Tuesday, October 8, prepared by TASS

Izvestia: Russian companies in Iraq unscathed by protests

Russian oil companies in Iraq have nothing to fear, the protests in Baghdad and some cities in the south will not impact their operations, diplomatic sources told Izvestia.

"Russian companies continue to work as usual, no problems have arisen because of the protest movement," one source informed the paper. "Perhaps, this is due to the fact that a wave of protests took place in large cities, such as Baghdad, Nasiriyah and Basra, while Russia’s oil interests are concentrated mainly in the northern fields."

Another individual likewise assured that the protests had not affected the work of Russian firms. Gazpromneft confirmed this information to reporters, stressing that the company had been present in Iraq since 2010, and its work had not stopped for a single day.

During his meeting with visiting Russian Foreign Minister Sergey Lavrov, Iraq’s top diplomat Mohamed Ali Alhakim highlighted the prospects for eliminating visas for Russian businesspeople in order to boost the flow of investment into the country.

A wave of anti-government protests broke out on October 1, when Baghdad residents gathered for a rally demanding jobs and an end to corruption. Police used tear gas and rubber bullets against the demonstrators.

"The organizers of the protests posted calls on Facebook and Twitter, and people reacted immediately coming to Tahrir Square," a local reporter told Izvestia.

"Rumor has it that hired snipers shot at people on Tahrir [Square] and the Republican Bridge, so that someone could benefit from destabilizing the situation," he stressed.

According to the reporter, Shia clerics such as the leader of the Saairun party, Muqtada al-Sadr, are under suspicion. He supports the protesters verbally, but his ultimate goal is to oust the prime minister and his cabinet, the journalist believes.

Vedomosti: Russian authorities admit risk of falling demand for oil

A slowdown in the growth of global oil demand can eventually result in a drop in consumption, the Russian Energy Ministry admitted for the first time ever in its amended draft known as Russia’s Energy Strategy until 2035, Vedomosti writes citing the document, which the government has been working on since 2015.

According to one of the paper’s informed sources, this forecast is based on "various scenarios" for the development of the global oil industry.

"The accuracy of that forecast will largely depend on the pace of development of alternative energy and electrically propelled vehicles," the paper quotes BCS analyst Kirill Tachennikov as saying. "Even if the sales of electrically propelled vehicles double every year, their share in the global car fleet will remain less than 15% in 2030," he noted. In addition, there are industries that continue to grow rapidly without using alternative energy sources, specifically, aviation and high-sea shipping, he said, adding that supply likewise affected the price. "While the peak of demand is ahead, the peak of supply has probably past," he said.

"Competition between oil and natural gas in electricity generation will intensify, that will limit both the demand for coal and the demand for oil," Senior Director at Fitch Ratings Dmitry Marinchenko warned. The largest oil producers in the Middle East like Saudi Arabia, the UAE and Kuwait, plan to increase LNG purchases and produce more natural gas to maximize oil exports, the expert stressed, adding that low LNG prices would accelerate that transition.

"From the viewpoint of the full cycle of costs, Russian oil projects look very good, taking a back seat only to the Middle East due to longer transportation. Operating costs and capital expenditure per 1 barrel of overall production do not exceed $15-20," Marinchenko pointed out.

Nezavisimaya Gazeta: US seeks to control transit of Russian gas to Europe

The domestic political feud in the United States has been shedding light on many secrets related to Ukraine’s gas sector, Nezavisimaya Gazeta writes. The Associated Press reported on Sunday that several businessmen supporting the Republican Party sought to "install new management at the top of Ukraine’s massive state gas company." They also planned to "then steer lucrative contracts to companies controlled by Trump allies," the report said citing some sources.

The Americans keep talking about the dangers of Russian gas for Europe, at the same time promoting their own LNG. US Energy Secretary Rick Perry earlier said that the construction of the Nord Stream 2 pipeline would strengthen Russia’s influence on Europe’s foreign policy.

Meanwhile, Kiev is expected to receive the first batch of US LNG in early November, which is far more expensive than European or Russian sources. However, due to the fact that the contract on gas transit between Russia’s Gazprom and Naftogaz will expire in December 2019, and the fate of the new agreement is still unknown, prices in the European market can rise significantly, and the Americans will stand to gain from that.

"Ukraine is largely under the external control of the United States, and few people can reject that," Stanislav Mitrakhovich, an expert at the National Energy Security Fund, told the paper. "The promotion of loyal personnel or proteges to key Ukrainian companies or government agencies by the Americans has been regular practice for many years," he stressed. The Americans thus have an opportunity to diversify risks in a hypothetical case of disloyal behavior of individual Ukrainian players, the expert explained.

Ukraine is under the powerful influence of the Americans who are all for expanding their clout, Director of the National Energy Institute Sergei Pravosudov stressed to Nezavisimaya Gazeta. "After all, we are talking about $3 bln that Gazprom pays for transit. So there is no reason why the Americans should not try to line their pockets on that substantial sum of money. In actual fact, the US has no business interests there. It is not an active market participant. The Americans do not buy anything there, and LNG sales are insignificant. They are more interested in sowing chaos. As for signing the transit agreement, some compromise will be found anyway, and the Americans will not be able to prevent that," he said.

Izvestia: Russia to propose amendments to CoE’s sanctions mechanism

Russia is hammering out proposals to counter a French initiative, which seeks to punish any country for violating the Council of Europe’s (CoE) norms, a source in the Russian Permanent Mission to the organization informed Izvestia.

"We are working on our proposals. Currently, there is no specific draft mechanism," the source said.

According to the French proposal, the procedure can be launched by any of the Council’s three institutions - the Committee of Ministers, the Parliamentary Assembly or the secretary general. If there is no progress in solving the problem, the Committee of Ministers can expel a country that violated the organizations’ rules from the Council of Europe.

Experts note though that given the current contradictions, when the CoE is just beginning to pull out of the crisis, the proposed mechanism could exacerbate the difficulties and will not be conducive to cooperation.

According to Mark Entin, Head of the European Law Department at MGIMO University, the French initiative is the result of a not very successful agreement between Moscow and European states on Russia’s return to PACE. The possibilities for its reform have been deliberately limited, the expert stressed.

"Russian diplomacy is now faced with a rather difficult but explicable task: to ensure that the ideas of cooperation and mutual solutions to problems prevail in that mechanism," he told the paper.

One of the key problems is that 28 out of 47 seats in the Council of Europe are controlled by EU member-countries, which share a consolidated stance and represent the majority in the Council of Europe. According to Entin, Russia needs to obtain guarantees from those countries that the proposed procedure will be implemented honestly and will be based on the principle of equality.

Nezavisimaya Gazeta: Turkey gambling on a Cyprus-style scenario in Syria

The White House has said that US troops will no longer be in close proximity to those areas, which the Turkish command plans to seize under its control. For his part, Turkish President Recep Tayyip Erdogan stated that that his country’s armed forces were determined to launch an offensive, Nezavisimaya Gazeta writes.

The Kurds promised to respond to Turkey’s new military operation with an "all-out war." Farhat Patiyev, member of the Kurdish National Congress, confirmed to the paper that Syrian Kurdistan had no choice but to go on the defensive. He noted that Turkey was taking revenge on the Kurds for the defeat of the Islamic State (IS, terror group, outlawed in Russia), because it had far-reaching plans with its help. The Kurdish official was confident that Ankara was trying to revive the IS project.

According to Patiyev, this is a repetition of the Cypriot scenario, when Cyprus was divided into the Turkish Republic of Northern Cyprus and Cyprus proper. In this case, the issue at hand is the creation of a potential Turkish Republic of Northern Syria, he stressed.

However, far from all experts agree that Turkey’s military operation in northeastern Syria is imminent. "I believe this is a de-escalation scenario. The Americans withdrew from the area, which they patrolled with the Turkish Armed Forces three times," Russian International Affairs Council (RIAC) expert Anton Mardasov told the paper.

"Apparently, it will be controlled by the opposition made up of units, in which the area’s locals will make up the majority. They have been trained in the Aleppo province for a long time. It is not improbable that the Turks will advance further later on, but also under a similar scenario," he said.

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