MONTHLY September 2019 CONTENTS 4MOSCOW SHOULD FEEL 25ROSNEFT AND TRANSNEFT BELARUS32 MERGES OIL DISTURBED BY BOLTON’S CONTINUE TO CLASH FIRMS THAT OPERATE MISSION IN THE EAST OVER OIL QUALITY DRUZHBA PIPELINE MEDVEDEV COMES UNDER FIRE BUT U.S. WARNS SECHIN’S FIRM OVER 3 WILL NOT BE DISMISSED BY PUTIN 18 TRADING VENEZUELAN OIL MOSCOW SHOULD FEEL DISTURBED PUTIN ORDERS GAS LINK BETWEEN 4 BY BOLTON’S MISSION IN THE EAST 20 YAMAL AND CHINA PUTIN VISITED MONGOLIA: NEW ROSNEFT’S SECHIN: OIL CLUSTER IN 6 TREATY, NEW PROJECTS 21 THE ARCTIC ONLY WITH STATE AID RUSSIA’S ECONOMIC DEVELOPMENT MISSILES, BASES AND DRILLS: RUSSIA MINISTER OPTIMISTIC ABOUT CHEAPER FLEXES MILITARY MUSCLES IN THE 8 CRUDE’S IMPACT ON RUSSIAN ECONOMY 23 ARCTIC QUALITY CHECK-UPS AND ROSNEFT AND TRANSNEFT COMPENSATIONS: ROWS CONTINUE CONTINUE TO CLASH OVER OIL 9 OVER DRUZHBA FAILURE 25 QUALITY IN THE KREMLIN, VENEZUELA’S PUTIN’S ALLIED CANDIDATE WINS IN MADURO GETS RUSSIA’S FULL 11 ABKHAZIA PRESIDENTIAL VOTE 27 SUPPORT PM NETANYAHU AND ISRAELI DELEGATION PAY A PRE-ELECTION 12 VISIT TO SOCHI 28 WAYS TO KEEP PUTIN IN POWER TSENTR 2019 AND MORE: RUSSIAN PUTIN MEETS CHINA’S PARLIAMENT 14 MILITARY DRILLS REACH THEIR APEX 30 CHAIRMAN IN THE KREMLIN RUSSIAN MILITARY PERSONNEL IN GAZPROM’S RESULTS NOT AFFECTED MOZAMBIQUE: BRINGING ANOTHER 16 BY LNG EXPORT FIGURES 31 AFRICAN NATION CLOSER TO MOSCOW PUTIN’S ENVOY MEETS TALIBAN BELARUS MERGES OIL FIRMS THAT 17 AFTER U.S. TALKS COLLAPSE 32 OPERATE DRUZHBA PIPELINE www.warsawinstitute.org 2 SOURCE: KREMLIN.RU 2 September 2019 MEDVEDEV COMES UNDER FIRE BUT WILL NOT BE DISMISSED BY PUTIN More and more Russians are saying they are dissatisfied with the political activity of Prime Minister Dmitry Medvedev, as found by polls by several sociological research centers, both state and private. Admittedly, the head of the Russian government has fallen the main victim of unpopular reforms and a plummeting social climate in Russia. While he seems practically absent in foreign policy, a somewhat handy arena for propaganda successes, Medvedev is doomed to ever-growing unpopularity at home. But this is to the liking to the Kremlin, which is why it makes Medvedev safe. Russia’s prime minister has a weak supporting cast while obediently following all of Putin’s orders, also those in energy policy where oil firms close to the president, such as Rosneft and Novatek, keep enjoying further tax incentives. ixty-three percent of Russians surveyed in dissatisfied with the parliament. Putin’s ratings SAugust by the Levada Center pollster said are traditionally among the highest, with they disapproved of Prime Minister Dmitry 67 percent of respondents praising his duty Medvedev, compared to 36 percent of those performance, contrary to 31 percent of people who were rather positive about Medvedev’s who spoke negatively. Russians seem aware job performance. According to the pollster, of the fact that the president holds significant Russians’ trust in the government is slightly responsibility for the state policy, with the higher, with 44 percent being in favor, though prime minister, government and parliament there prevail negative opinions (55 percent). serving as a facade, as more and more The poll showed 60 percent of Russian being respondents (49 percent) believe that their www.warsawinstitute.org 3 country is going in the right direction. Medvedev’s dropping ratings will not boost the Forty-two percent of people think to the likeliness of his dismissal while paradoxically contrary. bolstering his chance of staying in office. The prime minister has long served as a “political The poll released by the Levada Center depicts shield” for Putin, Shoigu and Lavrov. There is a clear downward trend as for Medvedev’s no use putting him in a position of a scapego- ratings. The survey carried out in June by at, a person to be blamed for Russia’s economic the state-run VCiOM pollster found that the troubles. It is pointless to burden him with all prime minister failed to have been classified responsibility while hoping that his resignation in the top three of Russia’s most trusted po- will alleviate the already tense public mood. liticians. The survey showed that Putin was This simply will not work. Also, what influ- the most trusted politician, with 31.1 percent ences the poor assessment of Medvedev’s job of respondents pointing to him, followed by performance is the fact of not perceiving him Defense Ministry Sergei Shoigu (13.2 per- as a serious politician. The prime minister’s cent), Foreign Minister Sergey Lavrov (11.4 little fortunate image is, however, of crucial percent), LDPR leader Vladimir Zhirinovsky importance for authority reshuffles after Putin’s (8.8 percent) and Dmitry Medvedev who close term in office comes to an end. Given Medve- the rating with 7.6-percent support. It seems dev’s poor ratings and a series of mishaps that that Russia’s prime minister has fallen victim triggered both anger and laughter of his voters, to the deteriorating public mood in the coun- this is unlikely to see yet again what took place try after Vladimir Putin gave the green light back in 2008 when Putin swapped jobs with to the pension reform in the summer of 2018. Medvedev for the four years that followed. Every month sees as a slump in a social situ- ation, with the living standards gradually going down. An increase in the VAT rates has led to higher prices on many goods. 4 September 2019 MOSCOW SHOULD FEEL DISTURBED BY BOLTON’S MISSION IN THE EAST A several-day trip paid by U.S. National Security Advisor John Bolton shows Washington’s increased interest in the countries of our part of Europe. Top three topics on the agenda of Trump’s influential aide were Russia, China, and the energy industry. While on tour in Europe, Bolton visited Kiev, Chisinau, Minsk, and Warsaw. Most considerable political significance was given to his meeting with Belarusian President Alexander Lukashenko while culminating Bolton’s tour in Warsaw corroborates Poland’s crucial role in U.S. roadmap for countries between Russia and NATO. And this is all the more that the necessity of having friendly ties with Warsaw was brought upon in talks that the U.S. representatives held both with Lukashenko and Ukraine’s Zelensky. www.warsawinstitute.org 4 SOURCE: PRESIDENT.GOV.BY hile Bolton’s trips to Kiev and Chisinau on the number of U.S. diplomats allowed in Wwere not a big surprise, especially given Minsk while talks are underway to restore Washington’s cordial relations with Ukraine full-fledged diplomatic ties. All this found its and Moldova, and how important they are culmination on August 30 during Bolton’s trip for the Trump administration, his arrival in to Minsk. Minsk was of immense political significance. Minsk has not seen such a senior state official And even though it failed to bring any consi- as a national security advisor since former U.S. derable benefits, serving rather kind of a probe president Bill Clinton paid a visit to Belarus in test, attention is drawn to cordial ambiance 1994, well before Lukashenko came to power. around the visit itself. Lukashenko personally What is more, in 2008 both the United States arrived in the airport to greet Bolton, a step and Belarus recalled their ambassadors from that was followed by the president’s declara- Minsk and Washington while the United States tion of Minsk’s readiness to “renew bilateral introduced sanctions against Belarus. Recent relations.” No further details have been provi- times have yet seen a thaw in U.S.-Belarusian ded on what Bolton talked about with Luka- relations. Russia’s aggression against Ukraine shenko, but the U.S. presidential aide might seems to have become a turning point in their have put forward conditions for enhancing bilateral ties, with Belarus active engagement U.S.-Belarusian ties, with Lukashenko’s offer in peace talks and Moscow’s mounting possibly coming as a reply. It can be assumed pressure on Minsk to deepen further that high on the agenda was a long list of integration. In late 2018 Assistant Secretary of topics that went far beyond bilateral ties. There State Wess Mitchell called the sovereignty and may have popped out an idea of establishing territorial integrity of Belarus, Ukraine, and energy cooperation: earlier Minsk had expres- Moldova “a bastion protecting from Russian sed interest, albeit unofficially, to purchase neo-imperialism.” His statement was followed U.S.-sourced crude while an increase in LNG by a series of intensified meetings between export volumes to neighboring Poland opens lower-level officials. As early as in January new perspectives. Among the topics discussed 2019 Belarusian Foreign Ministry lifted a limit must have been the conflict in Ukraine’s east www.warsawinstitute.org 5 (Lukashenko was nothing against including While commenting on Bolton’s visit to Minsk, Washington into the Normandy format) and Russian pro-government media outlets depic- the question of Ukrainian-Belarusian ties as ted it as a potential threat for Russian interests. Bolton could have checked how far these two The Kremlin refrained itself from providing a countries had gone when discussing integra- broader comment, saying that the meeting was tion issues. Bolton, as for him, said that “re- nothing more than Belarus’s matter. The follo- gional issues, those related to countries that wing day, Lukashenko held a phone call with are geographically remote, but also affect the Vladimir Putin. What may be worrying from situation here.” While saying so, he might have Moscow’s point of view, though, is that Bol- meant Belarus’s relations with China and Iran.