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#27 - JRL 2007-16 - JRL Home
Date: Fri, 19 Jan 2007
From: "Andrei Liakhov" <andrei.liakhov@nortonrose.com>
Subject: RE: 2007-#14-Johnson's Russia List/ Straus [re: Oil and Gas, FSU]

Response to Ira Straus

Russia's so called price wars with the transit countries is primarily the result of its undertaking to charge all consumers of its gas the same prices which was made during the WTO accession talks in the summer of 2003. Since the talks began in 1997 unification of the gas pricing policy was the key demand by EU and US WTO negotiations. Russia has agreed to raise prices charged for its hydrocarbons supplied to the ex-Soviet Republics within three years starting from 2004. Mr.Gref warned EU and US WTO negotiators of the possible political fall out in August 2003. Moscow declared its goal of raising gas and oil prices to its immediate neighbours in spring 2004, but everyone chose to ignore this particular statement.

In the summer of 2005 in anticipation of the cuts of gas supplies to Ukraine Gazprom and Ruhgas installed gas meters at Kosice and Beregdaroc pumping stations in Slovakia to ensure better control over Naftogas compliance with its transit obligations.

If Russia may be accused of anything - it's of its scrupulous compliance with its WTO accession obligations. Everyone involved in the process knew and understood perfectly well the reasons for the gas and oil price hikes in the CIS. These had nothing to do with the so called "energy security" but everything to do with Russia's accession to WTO. It remains on consciousness of people like Senator Lugar, Senator McLain, and various other people with separate political agendas why they have attempted to use this situation to create a new enemy and return the world to the neo-Cold War days.