The Bear is on the Rise : Resurgent Russia

#2
Russian Draft Security Strategy 2020

http://www.arrse.co.uk/cpgn2/Forums/viewtopic/p=2350639.html#2350639

Combined with -

Serbia’s Oil Industry: a Christmas Gift to Gazprom

On December 24, 2008, the Serbian government ceded control over Serbia’s Oil Industry (Naftna Industrija Srbije, NIS) to Russian Gazprom’s oil subsidiary, Gazprom Neft. Motivated to a large extent politically and negotiated poorly by Belgrade, the cession amounts to a Christmas gift for Gazprom and the Kremlin. Russia’s sequential presidents, Vladimir Putin (now prime minister) and Dmitry Medvedev (as Gazprom chairman earlier in 2008), were personally involved in the two phases of the negotiations and witnessed respectively the signing of the agreements in Moscow (Interfax, December 24; see EDM, December 15, 2008, January 28).

Belgrade chose Gazprom Neft without holding an international tender for the sale of 51 percent of NIS shares; and it agreed to sell that controlling stake for a mere €400 million ($537 million), even after the international consultants Deloitte & Touche had valued NIS at €2.2 billion ($2.95 billion)last September. By privileging Gazprom over other potential international partners, Belgrade implicitly rewarded Russia for continuing to oppose international recognition of Kosovo; and by selling the controlling stake in NIS at a deeply undervalued price, the Serb government expected Gazprom to reciprocate the favor by building a section of the South Stream gas transportation project in Serbian territory.

Moscow pocketed those concessions but decided at the last moment to break the linkage between the NIS sale and the South Stream project. Moscow’s decision contravenes the January 2008 Russian-Serbian intergovernmental agreement as well as the Serbian parliament’s September 2008 ratification of that agreement. Both sets of documents treated NIS and South Stream as inseparable aspects of the transaction. Indeed, the Russian side had insisted all along that NIS be thrown into the package with the gas project, in effect as a palm-greaser for Gazprom to include Serbia in South Stream. The Serb president and government have now ended up ceding control of NIS for a fraction of its value, without any assurance that Gazprom would or could proceed with South Stream.

Under the contract signed on Christmas Eve, Gazprom Neft will pay €400 million ($537 million) in cash up-front and invest another €547 million ($721 million) in NIS by 2012. To implement that investment program the Russian company will seek a €500 million ($671 million) loan. The agreement’s previous versions had stipulated an outright investment by Gazprom Neft, not a loan. This change reflects Gazprom’s deteriorating financial situation and introduces a further element of uncertainty for Serbia. The contract leaves open the issue of operating rights and management control over NIS. Gazprom Neft seeks full control, while the Serbs would prefer joint control (BETA, December 18; Radio B 92, December 23, 24; Interfax, December 24; Platts Oilgram, December 29).

The Serb government approved the NIS contract at a hurriedly arranged telephone conference call the day prior to the signing, with little time to read its details, let alone debate the documents. The issue had been decided politically in mid-December when President Boris Tadic and a majority of government members coalesced to remove the critics of the agreement from the negotiating team.

NIS is Serbia’s largest economic entity in terms of business turnover. It includes the refineries at Pancevo and Novi Sad, with a combined processing capacity of 6.5 million tons of crude oil annually (currently operating at an annual rate of 4 million tons), which meets the internal demand for oil products. Both refineries require modernization and ecological cleanup measures. NIS also includes an oil supply pipeline entering Serbia from Croatia, a fuel distribution network that holds a 72 percent market share in Serbia, and a modest oil extraction operation on Serbian territory. NIS assets are mainly located in Vojvodina province, the leadership of which openly favored partners from the European Union for privatization of NIS (Vecernje Novosti, December 15).

Tadic and Medvedev witnessed the signing of the contract in Moscow by Serbian Energy Minister Petar Skundric and Gazprom Neft CEO Aleksandr Dyukov. At the same time, Gazprom and Srbija Gas signed nonbinding agreements on the possible construction of a section of the South Stream gas pipeline in Serbian territory as well as modernization and enlargement of the Banatski Dvor gas storage site in northwestern Serbia. Each of the two projects is to be implemented, owned, and operated by a joint venture of Gazprom and Srbija Gas, with the Russian side holding 51 percent and the Serb side 49 percent of the shares in each project.

Final decisions on whether to go ahead are to be made during the first half of 2009. Clearly the decisions will be up to Gazprom. How Serbia could finance its share of the investment seems far from certain. Meanwhile, Gazprom has announced that it needs until the end of 2009 to prepare an economic and technical feasibility study for the overall South Stream project. An investment program would only be drawn up afterward for the overall project (Interfax, December 30). Thus, the prospect for implementing South Stream in general, including a possible Serbian section, seems to be receding due to Russia’s anticipated production shortfalls and Gazprom’s growing financial problems.
Might change that Arabic application to Russki.. :D
 
#5
Current economical and financial crisis affected Russia very seriously Rouble weakened toward Dollar and Euro (about 20%). Oil prices are low.

Resurgent Russia? Rather still not very rich country with a lot of problems.
 
#7
Can't help but wonder why we can't get along with Ivan. In fact, I can't really see why russia isn't in the EU. Being friends with Brasil, India and China isn't a bad idea either. The US is going to get more and more isolated in this century. I don't see why we have to go along too.
 
#8
KGB_resident said:
Current economical and financial crisis affected Russia very seriously Rouble weakened toward Dollar and Euro (about 20%). Oil prices are low.

Resurgent Russia? Rather still not very rich country with a lot of problems.
Never mind that Sergey - go and have aword with Putin and tell him to switch the gas back on as I am currently imagining I am back on Ops as I am washing in a cold basin of water :D

However back on thread. The Russians have been changing their Force structures for several years now e.g. the use of Kontratkniki gradually replacing conscripts etc and this is simply the latest move and update.

Oh Sergey BTW - Веселое рождество к вам и вашей семье. :D
 
#10
Bee_Gee. said:
GENFORCE Handbooks anyone?
GENFOR is no more than a very basic introduction to the concepts, developed to be easy to learn to allow training to focus on the teaching points rather than the content. We'd need a lot more than that if we're serious.

Mmmmmm operational art .....
 
#11
:lol: So do you think the Tsar Putin will play games with Norway and Canada over the Arctic and its resources? Will be interesting to see how Russia stakes its claim.
 
#12
ostvic said:
:lol: So do you think the Tsar Putin will play games with Norway and Canada over the Arctic and its resources? Will be interesting to see how Russia stakes its claim.
I'll be even more interested to see how Putin and Medvedev plan to pay for any of these alleged planned shenanigans. Their pain point is around $72 a barrel for LSC - below that, no dinero.

Worth reflecting that the current deployments - Petr Velikij in the Caribbean and the carrier, whatever it's called this year, the Kuznetsov, is it, to Turkey, coupled with making good after the Georgian intervention, have pretty well stuffed the Russian armed forces for the next few months.

I know there's a natural tendency to try and "paint the devil on the wall" as they probably say in Denmark, but, actually, the Cold War ain't coming back. Putin is quite explicit that Russia is part of the world economic system and sees itself as a European power. He and Medvedev will do things which they see as advantageous for the Russian national interest; hell, I'd be delighted if the British government did likewise.
 
#13
Glad_its_all_over said:
ostvic said:
:lol: So do you think the Tsar Putin will play games with Norway and Canada over the Arctic and its resources? Will be interesting to see how Russia stakes its claim.
I'll be even more interested to see how Putin and Medvedev plan to pay for any of these alleged planned shenanigans. Their pain point is around $72 a barrel for LSC - below that, no dinero.

Worth reflecting that the current deployments - Petr Velikij in the Caribbean and the carrier, whatever it's called this year, the Kuznetsov, is it, to Turkey, coupled with making good after the Georgian intervention, have pretty well stuffed the Russian armed forces for the next few months.

I know there's a natural tendency to try and "paint the devil on the wall" as they probably say in Denmark, but, actually, the Cold War ain't coming back. Putin is quite explicit that Russia is part of the world economic system and sees itself as a European power. He and Medvedev will do things which they see as advantageous for the Russian national interest; hell, I'd be delighted if the British government did likewise.
I'd echo the above, and go on to say that I would assess Russia's focus being very firmly on the near abroad. Anything they do outside that appears to be calculated to give them freedom to operate nearer home. If they can get away with it they'd love to extend the window of opportunity that opened when the US committed to Iraq. But economic woes and natural caution may well win out here. However, I think they will die in a ditch over Ukraine.

Indeed, I think Tsar Putin is a good model for this. We're not facing the Soviet Union any more, we're facing something far closer to pre-1917 Russia.
 
#14
Russia has been very lucky with its oil. As soon as the US cracks biofuels and breaks free of fossil fuels then Russia's economic leverage will weaken, as will the attractiveness of the Middle East. In the mean time there is economic warfare with the global economy and the price of a barrel of oil. Putin needs to be careful.
 
#15
PoisonDwarf said:
Russia has been very lucky with its oil. As soon as the US cracks biofuels and breaks free of fossil fuels then Russia's economic leverage will weaken, as will the attractiveness of the Middle East. In the mean time there is economic warfare with the global economy and the price of a barrel of oil. Putin needs to be careful.
The UN says Russia's population will decline from 147 million now to around 105 million in 2050. The whole place is a time-bomb. And you can't support aggressive policies with that kind of population with half a billion Europeans and 1.2 billion Chinese on your border, together with 300 million Americans over the horizon.
 
#16
Combat indicators, let's check them off shall we...

Military Reform :thumleft:
Arms Procurement :thumleft:
Naval manouveres :thumleft:
Stockpiling of foreign currency reserves and gold bullion :thumleft:
Territorial claims and promises of expansion :thumleft:
Strong political rhetoric :thumleft:
Low level military skirmishes :thumleft:

Like my friend here would say....



Can you guess what it is yet? :D
 
#17
One_of_the_strange said:
Glad_its_all_over said:
ostvic said:
:lol: So do you think the Tsar Putin will play games with Norway and Canada over the Arctic and its resources? Will be interesting to see how Russia stakes its claim.
I'll be even more interested to see how Putin and Medvedev plan to pay for any of these alleged planned shenanigans. Their pain point is around $72 a barrel for LSC - below that, no dinero.

Worth reflecting that the current deployments - Petr Velikij in the Caribbean and the carrier, whatever it's called this year, the Kuznetsov, is it, to Turkey, coupled with making good after the Georgian intervention, have pretty well stuffed the Russian armed forces for the next few months.

I know there's a natural tendency to try and "paint the devil on the wall" as they probably say in Denmark, but, actually, the Cold War ain't coming back. Putin is quite explicit that Russia is part of the world economic system and sees itself as a European power. He and Medvedev will do things which they see as advantageous for the Russian national interest; hell, I'd be delighted if the British government did likewise.
I'd echo the above, and go on to say that I would assess Russia's focus being very firmly on the near abroad. Anything they do outside that appears to be calculated to give them freedom to operate nearer home. If they can get away with it they'd love to extend the window of opportunity that opened when the US committed to Iraq. But economic woes and natural caution may well win out here. However, I think they will die in a ditch over Ukraine.

Indeed, I think Tsar Putin is a good model for this. We're not facing the Soviet Union any more, we're facing something far closer to pre-1917 Russia.
The focus is on the near abroad, the rich mineral deposits in the Arctic being very near.Russia has warned Canada and Norway about its "rights" in the Arctic.

I wonder how much of a slow down if any there will be in procurement for and modernization of the Russian armed forces.

Of course there is no chance of Russia disengaging from the world economy but I think Putin is looking to make Russia a true rival to the US once again. Not because of some misguided political philosophy but because of Russian pride.

Totally agree with your sentiments regarding the British Government.
 
#18
I wonder how much of a slow down if any there will be in procurement for and modernization of the Russian armed forces.
There is none whatsoever. The Russians are currently undergoing a massive reform of the Armed Services and purchasing foreign equipment to fill the gaps identified by the Georgian War. Primarily buying Israeli ISTAR.

Moving away from Combined Arms Battalions and focusin on deployable Bde's.
 
#19
Dontdreamit said:
I wonder how much of a slow down if any there will be in procurement for and modernization of the Russian armed forces.
There is none whatsoever. The Russians are currently undergoing a massive reform of the Armed Services and purchasing foreign equipment to fill the gaps identified by the Georgian War. Primarily buying Israeli ISTAR.

Moving away from Combined Arms Battalions and focusin on deployable Bde's.
Yes the Russians are keen to buy Hermes UAV's. Looking to plug the gaps found during the Georgian set up oops operation. Though with Russian revenue affected and reduced will Tsar Putin say bollocks to everything else and keep spending on the military?

I thought it was more a move away from Division's to Brigades? Quicker to deploy and easier to man and re-equip. Would certainly like to read about the lessons learned by the Russians. Suppose I will just have to watch how the Russian army changes.
 
#20
The Russians are certainly talking about a restructure of their armed forces and a move to kontraktniki-manned and deployable brigades from the old partially-manned Army/Division structure makes huge sense from their perspective - and from ours, frankly, as it gives them the ability to project force into the near abroad (which is firmly in their area of strategic interest and arguably not in ours, exempt Kazakhstan and Azerbaijdzhan) but doesn't give them a mass-effect steamroller.

Of course, this stuff is really expensive to do and they also have a massive programme of infrastructure replacement they really also ought to be getting on with, as well as an economy heading for the toilet and a massive demographic catastrophe looming inside the next ten years. Me, I'd be relaxed and encourage the West to show them a bit of respect and try to correct some of the horribly damaging legacy of the appalling way we treated them during the El'tsinshchina. They're here, they're a force to be reckoned with, they're not going to be any sort of a threat to us in the near or medium term, what, do we actually want to find some new enemies, now?