INTERVIEW: We're ready for talks with Ukraine given an understanding of content - Novak
MOSCOW. Aug 28 (Interfax) - U.S. and EU sanctions have forced Russia to seek new opportunities for projects to export energy resources given the fact that the country does not intend to artificially reduce oil production in order to boost prices.
Energy Minister Alexander Novak spoke with Interfax about the development of relations with partners and the status of the negotiation process with Ukraine.
Q: The whole world is waiting with bated breath for the looming return of Iranian oil to the market. Do you think Iran will be a competitor for Russia on the oil market after sanctions are lifted?
A: The return of Iran as a full-fledged player on the world oil market will certainly intensify competition and could have a certain correcting impact on current prices. At the same time, I assume that Iran as a major oil exporter and OPEC member is interested in stability and predictability of the global market and its actions will not lead to serious shocks which we have had quite enough of lately.
Q: Is the possibility of Russian companies resuming participation in Iranian projects being discussed? Can Russia expect preferred terms?
A: Over the years of the forced idling, Russian and Iranian cooperation built up significant reserves. Over this time our countries' worked jointly on capabilities to rapidly expand cooperation in the event of the removal of restrictions.
At the corporate level, discussions continued about the South Pars and Anaran projects, in which respectively Gazprom and Lukoil were involved, as well as, for example, the Azar and Shangule fields with the participation of Gazprom Neft .
Working conditions, including in Iran, are governed by the internal laws of the country, and their details are subject to inter-corporate negotiations. As far as I know, right now Iran is looking at the possibility of improving the regulatory framework in the oil and gas industry towards liberalization.
Q: Saudi Arabia supported Russia's position on preventing artificial growth of oil prices. Is it possible to say that the countries have reached agreement not only on this issue, but are also prepared to begin broader cooperation?
A: In June, at the St. Petersburg Economic Forum, I met with my Saudi colleague. We signed a program of cooperation between the ministries in the area of oil and gas, the goal of which is to create conditions for the successful implementation of existing and launch of new joint energy projects. In addition, there are plans to share information and analytical data on the situation on world oil markets.
A specially formed working group will determine specific projects, as well as the whole range of Russian-Saudi oil and gas cooperation. We plan to arrange the first meeting on the eve of the meeting of the Russian-Saudi intergovernmental commission, tentatively in October this year.
Q: The situation in Greece is having a significant impact on the global economy. Is Russia prepared to help Greece by directly supplying oil and oil products?
A: Our cooperation with our Greek partners in the area of energy continues to develop successfully. Russia intends to continue to supply energy resources to Greece as it has done in the past. We're one of the biggest exporters of oil to Greece and a major exporter of oil products and gas. Shipments are made by economic entities on mutually beneficial terms. The decision of whether to increase supplies lies within the scope of commercial agreements. On our part, we welcome companies' efforts to reach agreements to increase supplies of oil and oil products to Greece.
Q: One of the Russian energy export projects being discussed recently is the Turkish Stream gas pipeline. But its implementation appears to have stalled. When do you think the situation in Turkey will make it possible to raise the issue of signing an intergovernmental agreement?
A: It has worked out that the talks with our Turkish partners are taking place concurrently with the election cycle in Turkey. Understandably, a change in the government and the subsequent elections create certain organizational complications there.
Russia is ready to sign an intergovernmental agreement on the first line of the Turkish Stream gas pipeline. We expect that this will occur as quickly as possible. Everything will depend on the Turkish side. We sent them our draft agreement and are waiting for a response to our proposal. The Turks are studying the draft.
We are ready to sign the intergovernmental agreement in the shortest possible timeframe. Definitely, if the signing of the intergovernmental agreement is moved back, the project implementation schedule will also be moved back.
Q: What are the options for subsequently connecting this gas pipeline to European systems?
A: At present Gazprom, with the participation of the Energy Ministry, is working on considering possible options for laying Turkish Stream after the gas arrives at the Greek border. We are prepared to evaluate what is proposed to us, ready to evaluate both the required capacity and financing. We are also open to other potential proposals. But all of this will be done with due regard for progress on Turkish Stream.
Q: Last week there was a report that Turkey had sent Russia a draft agreement for the first line of Turkish Stream. Did the Energy Ministry get this document?
A: No. The document mentioned was sent to us several months ago. This is an old document that we received a long time ago, in response to which we then proposed our draft, which was sent to the Turkish side. We haven't received a reply so far.
We are ready for negotiations at any time. We wrote them a letter, attached the draft intergovernmental agreement, offered to hold negotiations at a time and place of their choosing. We're waiting for a response.
Q: Gazprom Neft's purchase of Serbia's NIS took place within the context of the implementation of the intergovernmental agreement on the South Stream gas pipeline project. In light of the fact that Russia has abandoned this project, is Serbia seeking to change the agreement on NIS, particularly in regard to tax preferences?
A: The 2008 agreement on cooperation between the Russian and Serbian governments in the oil and gas sector does not stipulate any alteration in NIS functioning in the event the South Stream project is halted. In that connection, there are no grounds for Serbia to initiate amendments to the agreement on NIS.
The existing intergovernmental agreement with Serbia does not contain any provision stipulating compensatory mechanisms. Issues concerning economic entities and their mutual commitments (assumed in developing the intergovernmental agreement) will be resolved at the corporate level within the framework of existing agreements.
Q: What gas pipeline project are Russia and India discussing working on together?
A: An intergovernmental program to expand cooperation in the oil and gas sector, which provides for the creation of a joint working group to study the possibility of a hydrocarbon pipeline system connecting Russia and India, was signed in December 2014 in New Delhi, during an official visit by the Russian president. At present, its Russian and Indian parts have been formed, the issue of holding the first meeting is being worked out. There are also plans to consider the prospect of building a gas pipeline from Russia to India at the working group meeting.
Q: How is Russia's work with the Gas Exporting Countries Forum going? What problems are there in the work of this organization? What can be proposed to optimize the organization's work?
A: A new stage of development began for the Gas Exporting Countries Forum in January 2014. A representative of Iran, Mohammad Hossein Adeli assumed the post of GECF secretary general. A new era is always characterized by changes. The new secretary general was not an exception in this matter, carrying out a major reorganization in the Forum that involved the formation of a new secretariat structure.
Cooperation with the new secretary general, as well as partners in the Forum in these conditions is proceeding exclusively in a constructive format. The main objective is to form a new secretariat as soon as possible and staff it with qualified personnel. Russia is participating most actively in this process.
The last two years can, without exaggeration, be called the years of Iran in GECF. In addition to the post of secretary general, Iran received the right to hold the third summit of the heads of state and government of GECF member countries, which will be held in Tehran in November. Russia, as the host of the previous summit, is providing all possible support to Iran in the process of preparing the event.
One of the main challenges facing the organization at this stage of its development is the preparation of a strategy for the long-term development of GECF, which will have to determine the Forum's priorities in the medium- and long-term future, including in the area of cooperation with gas consuming countries and the international energy community. There are plans to formulate the main premises of the strategy for the summit in Iran. Russia is making a substantial contribution in the process of working on the document.
In the current economic and political conditions, the consolidation of key gas producers at one platform and the joining of their efforts to overcome the signs of crisis on the global energy market are especially important and relevant. I'm confident that a significant and successful future awaits GECF and that GECF member countries will make every effort to achieve it as quickly as possible.
Q: Trilateral negotiations between Russia, the EU and Ukraine on gas supplies might be held at the end of September. What is the outlook for them?
A: We are ready for talks when there will be an understanding of their substantive content. As the previous trilateral consultations showed, our Ukrainian partners were not ready for any documents for fixing the parties' obligations. If something changes this time, then we will be ready to look at such draft documents as we receive them.
Q: Is Russia prepared to allow for the possibility of granting discounts on gas for Ukraine for a longer period than one quarter?
A: The size of the discount, for technical reasons, cannot be fixed for a longer period than a quarter without clear corresponding obligations from the Ukrainian side, for example on the volume of purchases of Russian gas. Otherwise, this is a one-way street. The current discount is in effect until September 30. The size of the discount for the fourth quarter and beyond has not been discussed yet.
Q: Have you discussed the sanctions against Russia with the heads of leading international companies? Are they willing to cooperate in negotiations to lift them?
A: Russia has repeatedly stated its disagreement with the policy of sanctions, considering them to be absolutely illegal and a negative influence not only on the Russian, but also the global economy as a whole. President Vladimir Putin has repeatedly said that sanctions against Russia are not a reason to worry. In private conversations, representatives of big international business call for the speedy lifting of sanctions and restoration of disrupted economic ties. Sanctions will not alter Russia's independent course, but Moscow will be forced to make the appropriate conclusions from the sanctions policy of the West.
