THE GREAT ENERGY GAME

On 5 August, Russian Prime Minister Vladimir Putin paid a visit to Turkey which had been carefully prepared and widely broadcast. It was Putin's ninth meeting with Turkey's Prime Minister Recep Tayyip Erdogan, which indicates the high level of relations existing between the two countries. In 2008 alone, mutual trade turnover grew by a record 50 per cent, to reach 37 billion dollars. As a result, Russia became Turkey's main trading partner, and Turkey - Russia's fifth leading partner in trade. However, because of the global economic crisis, current trade turnover has fallen by almost half in 2009. Turkey buys up to a quarter of all its oil and more than half of its natural gas from Russia. In turn, large Turkish engineering and construction companies are implementing investment projects in Russia worth several billion dollars, while 2.5 million Russian tourists visit the seaside resorts of Antalya, Bodrum etc. every year.

For understandable reasons, the talks' agenda focused primarily on economic issues, but they were of such magnitude that their political component speaks for itself. In total, during Putin's visit to Turkey, 15 intergovernmental agreements and 7 specific protocols were signed, which, according to Erdogan, raise the relationship between Moscow and Ankara to the level of strategic cooperation, primarily in the field of energy.

The documents signed provide for the building of four power plant units, each of 1,000 megawatts, by 2012 in the Mediterranean city of Mersin by a consortium of the Russian companies Atomstroyeksport and Inter RAO YeES and Turkey's Park Teknik. Russia will participate in the Samsun-Ceyhan oil pipeline project. Also, a very important and, in practical terms, feasible decision was made to lay a second branch of the Blue Stream pipeline. This will supply Russian gas not only to Turkey but, later, to Israel, Syria, Libya and Cyprus. It was decided to extend the agreement, which expires in 2011, for the delivery of Russian gas to Turkey from the westerly direction. In addition, agreement was reached on balancing the bilateral turnover of trade and diversifying its structure. Agreements were also signed on cooperation in the export of products of animal husbandry and crop production from Turkey to Russia, to address problems faced by Turkish goods at Russian customs and on cooperation in the humanitarian sector.

 These are all important issues but, for Russia, Ankara's agreement to lay a Russian gas pipeline along the Black Sea floor within the South Stream project, and in the Turkish economic zone, is of greater significance. The Turkish government has authorized only the carrying out of exploration work along the projected pipeline for a period up to 1 November 2009. The final "go-ahead" for construction, if a satisfactory response is given to Turkish concerns (ecology etc.) will be granted by 1 November 2010.

As we see, "the battle of the pipelines", with Turkey at its epicentre, continues. It will ultimately depend on this country which of the competing projects - Russia's South Stream or the US and EU-backed Nabucco - will be realized. According to observers, just a month ago Ankara organized a summit of heads of the states which are major participants in Nabucco (project participants signed an agreement on the commencement of implementation). And now Turkey has given prior consent to exploration within the framework of the rival Russian project.

 This was done apparently in exchange for Russia's participation in the Samsun-Ceyhan oil pipeline project, but this was not the only reason. Ankara is demonstrating to the EU that it has options in the "great energy game" and, therefore, Turkey's interests, both in gas projects and in the issue of EU membership, should not be neglected.

The meeting between Putin and Erdogan in Ankara was joined suddenly by Italian Prime Minister Silvio Berlusconi - it is possible that he played a significant role in the successful completion of difficult Russian-Turkish talks on a whole range of energy issues. Indeed, apart from the fact that Italy, through its major companies such as Eni and others, is involved in almost all the pipeline projects being implemented by Turkey and Russia in the region, the aforesaid leaders have long-standing, informal friendly relations.

Speeches by Vladimir Putin and Recep Tayyip Erdogan at the signing ceremony of the agreements and protocols, as well as their responses to questions, showed that the views of Moscow and Ankara are close or coincident on a variety of international issues. How far Russia will go to meet Ankara's wishes was clear from Vladimir Putin's statement that Moscow is ready to build economic relations with the unrecognized Turkish Republic of Northern Cyprus, despite opposition from Greece and Cyprus. Is this statement an invitation to Ankara to establish economic relations with Abkhazia and South Ossetia? Presumably, yes, especially as the influential Circassian diaspora in Turkey is lobbying for this, especially with regard to Abkhazia.

Although not explicitly stated, it is clear that in the course of negotiations the situation in the South Caucasus could not be ignored. Indeed, Putin's visit to Turkey took place on the anniversary of the five-day Russo-Georgian war, while analysts and politicians were actively discussing in the media a possible repeat of last year's scenario. Obtaining Turkish consent is completely out of the question, but the positions of the countries may be close on the question of deterring Saakashvili and maintaining the status quo in the region.

As for a settlement of the Armenian-Azerbaijani conflict, the Russian prime minister expressed Moscow's interest in promoting such a settlement and stressed President Medvedev's readiness to continue efforts in this direction at the highest level. Baku is expecting a large delegation of Turkish generals, who may inform the Azerbaijani political and military leadership both about the risks of war in the region and the current situation concerning the growing tensions surrounding Iran's nuclear programme.

 The intensive political dialogue and strengthening economic ties between Russia and Turkey are evident. But to speak of full partnership between those powers would, in my opinion, be an exaggeration. Of course, it is much easier to build relations on a pragmatic basis with new Russia, which, unlike the Soviet Union, is not so possessed by the ideas and ideology of territorial expansion, as we can see. However, we cannot forget that Moscow and Ankara are competing for influence in the South Caucasus and Central Asia. So relations between Russia and Turkey will continue to be a kind of combination of controlled geopolitical rivalry on the one hand, and large-scale economic cooperation, bordering on interdependence on the other. This will give impetus to the search for solutions to existing regional problems which do not damage mutually beneficial economic relations. 

Vladimir Putin's visit and the developing Russian-Turkish partnership were observed without much enthusiasm in Tbilisi and with unconcealed concern and antipathy in Yerevan. In fact, these two countries base their foreign policies and part of their economic policies on the exploitation of contradictions and rivalries between the West and Russia, and Turkey and Russia. They have learned to deftly extract the dividends. If the contradictions weaken, the value of these "outposts" and "beacons of democracy", respectively, decreases.

Azerbaijan has a different attitude towards the deepening of Turkish-Russian cooperation. This may reduce the degree of rivalry in the region and improve the environment in which it will be easier to promote the settlement of longstanding conflicts, especially the Karabakh conflict. As a country that has significant natural and financial resources and an advantageous geographical location, Azerbaijan has much to offer both Turkey and Russia. We need peace, cooperation and normal competition, based on economic attractiveness and effectiveness, to implement our own large-scale projects.

With regard to Russian gas projects, on which agreement was reached during Putin's visit to Turkey, they are not an obstacle to Azerbaijan's plans, especially as there is some distance between intention and implementation. A direct consequence might be the fact that Ankara, with the agreement reached with Moscow, requests more advantageous prices for gas supplied to Turkey from the Sah Daniz field. But business is business and the desire of each party to profit is easy to understand. All the more so as we have also insured ourselves with a tentative agreement with Gazprom on a mutually acceptable formula for the price and purchase of gas from the second phase of Sah Daniz, reached during President Medvedev's recent visit to Azerbaijan. In general, the deepening of Turkish-Russian cooperation enables us to look to the future with great optimism.