Monthly Archives: June 2007

07MOSCOW3207, MOSCOW LOWERS CHAVEZ VISIT PROFILE

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Reference ID Created Released Classification Origin
07MOSCOW3207 2007-06-29 13:43 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO9617
OO RUEHDBU
DE RUEHMO #3207 1801343
ZNY CCCCC ZZH
O 291343Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1748
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 0286
RUEHCV/AMEMBASSY CARACAS PRIORITY 0232

C O N F I D E N T I A L MOSCOW 003207 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 06/29/2017 
TAGS: PREL MARR ECON RS
SUBJECT: MOSCOW LOWERS CHAVEZ VISIT PROFILE 
 
REF: MOSCOW 3139 
 
Classified By: Political M/C Alice G. Wells.  Reasons 1,4 (B/D). 
 
1.  (C) Summary.  Amid media reports that the Kremlin is 
attempting to keep a leash on the firebrand Venezuelan leader 
in the lead up to the Kennebunkport summit, Hugo Chavez held 
a low-key meeting with President Putin on June 28.  The 
tete-a-tete meeting presumably covered two important agenda 
items: arms sales and energy, but no contracts or 
deliverables were announced.  While Chavez used the opening 
of the Simon Bolivar Latin cultural Center in Moscow to 
accuse the U.S. of "imposing tyranny", he did not have an 
opportunity to address the Russian Parliament, but was 
limited to a closed session with a smaller group of lawmakers 
and a one-on-one meeting with Duma Speaker Boris Gryzlov. 
Chavez is scheduled to stop over at the Belorusian capital 
Minsk before flying to Rostov-on-Don later today.  End 
summary. 
 
---------------------- 
Kremlin Lowers Profile 
---------------------- 
 
2.  (SBU) In contrast to the abundant pre-visit press 
coverage of the Venezuelan President, both electronic and 
print media have been low-key on the actual visit, with 
little reported on the late night Putin-Chavez meeting on 
June 28.  Several daily newspapers, including Kommersant and 
Nezavisimaya Gazeta, commented that the Kremlin is taking 
steps to minimize U.S. irritation over the Venezuelan 
leader's visit. 
 
3.  (C) In contrast to the pre-visit hype on energy and arms 
contracts, the GOR has played down the prospect of 
deliverables.  Anatoliy Sokolov, Senior Counselor at the MFA 
Venezuela Desk, told us June 29 that the two presidents' 
"long" meeting at the Putin's retreat in Novo Ogaryovo last 
night went "very well," and the two leaders covered all 
bilateral issues.  While he confirmed that energy was on the 
agenda, Sokolov said the result of the tete-a-tete meeting 
would be known only next week.  Ivan Safranchuk, Chief 
Defense Analyst at the World Security Institute, recalling a 
similarly controversial visit from Syria a few years ago, 
noted that announcements of arms contracts signing could come 
well after the visit.  Vladimir Milov, Institute for Energy 
Policy, and a well-connected industry insider, confirmed that 
Putin and Chavez discussed "routine" energy issues, including 
exploration, gasification, and the Venezuela-Brazil-Argentina 
pipeline, but stressed that no breakthroughs or surprises 
related to energy policy or security occurred. 
 
--------------- 
Duma Downplayed 
--------------- 
 
4.  (U) Whether Chavez would be allowed to address the State 
Duma's plenary session sparked a public dispute among Duma 
deputies.  Rather than granting Chavez the privilege of 
addressing the plenary, the Duma Council limited Chavez's 
interaction to a one-on-one with Duma Speaker Boris Gryzlov, 
followed by a meeting with Duma deputies in a smaller hall 
which reportedly holds about 40 people.  An effort by the 
Communists to overturn the measure was soundly defeated (123 
to 210) at the ruling party's urging.  In the end, both 
meetings were closed to the press. 
 
---------------- 
Chavez Unplugged 
---------------- 
 
5.  (U) In his one unscripted event prior to meeting Putin, 
Chavez used the opening of the Simon Bolivar Center to 
denounce the U.S.'s "imperial hegemony" and to call for a 
strong Russia to "recreate" a multipolar world.  Aiming at 
portraying Venezuela as a bastion of defiance of the U.S., 
Chavez emphasized Venezuela's solidarity with the Kremlin 
leadership.  During his speech there, Chavez denied that he 
came to Moscow for weaponry contracts. 
 
------- 
Comment 
------- 
 
6.  (C) While certain groups -- in the Duma, media and public 
-- have played up Chavez's anti-U.S., pro-Russia rhetoric, 
the GOR clearly is mindful of the upcoming U.S.-Russia summit 
and attempting to keep the Venezuelan leader in check. 
RUSSELL

Wikileaks

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07MOSCOW3168, AMBASSADOR’S ROUNDTABLE WITH HUMAN RIGHTS NGOS

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Reference ID Created Released Classification Origin
07MOSCOW3168 2007-06-28 15:38 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO8585
RR RUEHDBU
DE RUEHMO #3168/01 1791538
ZNY CCCCC ZZH
R 281538Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 1698
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003168 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 06/28/2017 
TAGS: PHUM KDEM PGOV SOCI RS
SUBJECT: AMBASSADOR'S ROUNDTABLE WITH HUMAN RIGHTS NGOS 
 
Classified By: Ambassador William J. Burns.  Reason:  1.4 (d). 
 
------- 
Summary 
------- 
 
1. (C) In a June 27 discussion, five human rights NGO 
activists offered the Ambassador their advice for coping with 
an increasingly assertive President Putin.  They suggested 
that like-minded countries speak with one voice, that the 
"tools" of international organizations and agreements be used 
as appropriate, and that the West treat Putin's expressions 
of concern about developments in other countries with the 
same seriousness that they expect for their concerns about 
unsettling developments in Russia.  The participants also 
suggested that efforts be made to demonstrate the link 
between an increasingly prosperous Russia and respect for 
human rights; as, for example, in the fight against 
corruption.  End summary. 
 
------------ 
Participants 
------------ 
 
2. (SBU) The Ambassador on June 27 discussed with 
representatives of five of Russia's leading human rights 
organizations the current state of human rights in Russia, 
projected developments during the 2007 - 08 election cycle, 
and the role of the opposition in Russia's political 
calculus.  Attending the discussion were: 
 
-- Lyudmila Alekseyeva, Chairwoman, Moscow Helsinki Group 
-- Tatyana Lokshina, International Programs Coordinator, 
Demos Center 
-- Yuriy Dzhibladze, President, Center for Development of 
Democracy and Human Rights 
-- Tatyana Kasatkina, Executive Director, Memorial 
-- Aleksandr Petrov, Deputy Chairman, Human Rights Watch 
 
--------------------- 
Putin's Assertiveness 
--------------------- 
 
3. (C) All of the participants endorsed Dzhibladze's 
description of Russia as increasingly centralized and less 
democratic than it was when President Putin took office. 
Economic improvements and increased stability since the 
tumultuous Yeltsin years had not stimulated greater GOR 
self-confidence.  Instead, restrictions on the freedom of the 
media had increased, and an "external enemy," the United 
States, had been created to unify Russians and rationalize 
some of the steps taken. 
 
4. (C) Putin's increasing self-assertiveness presented a 
challenge both to the West, Dzhibladze said, and to human 
rights advocates in Russia.  It had strained U.S.-Russian 
relations, although Dzhibladze doubted that Putin wanted to 
revive the Cold War.  Domestically, Putin's assertive defense 
of Russian "sovereign democracy" had placed GOR critics in a 
difficult position, as democracy had not been rejected out of 
hand.  Dzhibladze and the other participants agreed that the 
President's assertiveness required a carefully considered 
response.  Like-minded countries should express their 
concerns about Russia with one voice, in order to avoid 
charges of partisanship, and the "tools of international 
organizations" should be used, where possible.  Putin's 
concerns about the human rights performance of other 
countries should receive a serious hearing, in order to 
legitimate expressions of concern about human rights 
developments in Russia. 
 
5. (C) The participants thought that human rights presented 
special difficulties for Putin, because he and many of his 
advisors believed that Russia could be modernized without 
undue concern for them.  Putin's belief was belied by the 
continuing inability of the GOR to address problems like 
corruption in the absence of an impartial judiciary, and the 
continuing erosion of the legitimacy of the electoral system. 
 Putin, the participants thought, did not understand that 
genuine democracy was as important to Russia's future as 
security and a booming economy. 
 
 
---------------------- 
Worrisome Developments 
in the Caucasus 
---------------------- 
 
6. (C) Alekseyeva and Lokshina worried about developments in 
Chechnya and the North Caucasus.  While kidnappings may have 
decreased in Chechnya, they were increasing in the North 
Caucasus and Dagestan, they alleged.  The new-found 
 
MOSCOW 00003168  002 OF 002 
 
 
"stability" in Chechnya was a by-product of Chechen President 
Kadyrov's willingness to terrorize whole families in order to 
blunt resistance to his rule.  It had resulted, Alekseyeva 
maintained, in the flight of younger males into the mountains 
in order to avoid being caught up in one of the government's 
frequent sweeps. 
 
------------------ 
Changes to NGO Law 
Under Discussion 
------------------ 
 
7. (C) President Putin's increasingly frequent comments about 
the allegedly negative role of foreign-funded NGOs worried 
the participants. They thought it important that the USG 
assure the GOR that it had no intention to subvert the 
regime, and to note that cross-border aid to NGOs was widely 
practiced, including by Russia, whose Ministry of Foreign 
Affairs had aid programs in the Baltic States. 
 
8. (C) The participants noted they h
ad taken up Putin's 
invitation to offer amendments to the 2006 NGO law.  Their 
proposals were currently under discussion.  There were signs 
that some of them were meeting resistance in the Ministry of 
Justice, but the proposals had found support elsewhere in the 
Russian bureaucracy.  It was difficult for the participants 
to predict when they would received a final verdict. 
Alekseyeva thought that an increasingly active Public Chamber 
was usurping the NGOs traditional territory.  Her concern did 
not seem to be shared by the others present. 
 
------- 
Comment 
------- 
 
9. (C) The participants were clearly worried about negative 
human rights trend lines.  However, the advice they offered 
for dealing with Putin, and their own discussions with the 
GOR on the NGO law, indicated that they still believed it 
possible to modify the behavior of the government, even as 
the GOR enters a period when it will be preoccupied above all 
by its own survival through the Duma and presidential 
elections. 
BURNS

Wikileaks

07MOSCOW3164, RUSSIA IPR: PIRATE WEBSITE WWW.ALLOFMP3.COM SHUT

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Reference ID Created Released Classification Origin
07MOSCOW3164 2007-06-28 14:17 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO8452
PP RUEHDBU
DE RUEHMO #3164 1791417
ZNY CCCCC ZZH
P 281417Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 1695
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 003164 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/RUS; EB/TPP/IPE 
STATE PASS USTR FOR SDONNELLY, MROHDE, LERRION, LMOLNAR 
NSC FOR TMCKIBBEN 
USDOC FOR 4231/IEP/EUR/JBROUGHER 
USDOC FOR 4231/IEP/EUR/MEDWARDS 
 
E.O. 12958: DECL: 03/30/2016 
TAGS: ETRD ECON WTO KIPR RS
SUBJECT: RUSSIA IPR: PIRATE WEBSITE WWW.ALLOFMP3.COM SHUT 
DOWN 
 
Classified By: Acting Economic M/C Laura Lochman for Reasons 1.5 (b) an 
d (d). 
 
1. (SBU) Ministry of Economic Development and Trade (MEDT) 
officials notified us by e-mail and phone June 28 that the 
pirate music website www.allofmp3.com was no longer 
operational.  According to our contacts, the site's 
operations were terminated under Article 64 of the Law on 
Communications, which provides that the GOR has the authority 
to order an Internet service provider to take down a site 
suspected of operating illegally.  Our contacts further 
explained that the site will be closed until a verdict is 
reached in the current criminal case against a former general 
manager of Media Services, operator of of www.allofmp3.com. 
 
2. (SBU) Post has verified that it is not possible to access 
the site www.allofmp3.com, while the site www.allofmp3.ru 
yields a message informing that the site is "closed for 
maintainance." 
 
3. (C) Comment: During a June 10 meeting on the margins of 
the St. Petersburg Econonomic Forum, U.S. Trade 
Representative Susan Schwab urged Minister of Economic 
Development and Trade German Gref to fulfill a GOR commitment 
under our November 2006 bilateral agreement on IPR to take 
action against websites promoting illegal distribution of 
protected content, specifically www.allofmp3.com.  She 
encouraged the GOR to do so prior to the July 2 meeting 
between Presidents Bush and Putin in Kennebunkport.  While 
MEDT officials initially expressed reservations about the 
GOR's ability to shut the site down (citing the fact that 
www.allofmp3.com's domain name is registered in the U.S.), a 
decision was obviously made to invoke the GOR's power under 
Article 64 of the Law on Communications and to instruct the 
Russian service provider to deny services to the website. 
 
4. (C) We will follow up with GOR officials regarding the 
steps taken and the current status of the criminal case 
against the former general director of www.allofmp3.com's 
operator, Media Services. 
BURNS

Wikileaks

07MOSCOW3162, RUSSIA: DEPUTY TREASURY SECRETARY KIMMITT’S

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Reference ID Created Released Classification Origin
07MOSCOW3162 2007-06-28 12:48 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO8317
OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMO #3162/01 1791248
ZNR UUUUU ZZH
O 281248Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1693
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 MOSCOW 003162 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/RUS 
TREASURY FOR WILKINSON, LEVEY, GLASER 
DEPT PASS USTR FOR DONNELLY 
DOE FOR HARBERT/EKIMOFF/PISCITELLI 
DOC FOR 4231/IEP/EUR/JBROUGHER 
NSC FOR MCKIBBEN 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ENRG EIND PREL PINR IZ KN IR RS
SUBJECT: RUSSIA: DEPUTY TREASURY SECRETARY KIMMITT'S 
MEETING WITH DFM DENISOV 
 
 
1. (U) SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET 
DISTRIBUTION. 
 
2. (SBU) SUMMARY:  In a June 22 meeting with Deputy Treasury 
Secretary Kimmitt, Russian Deputy FM Denisov expressed 
 
SIPDIS 
interest in cooperating with Iraq for the long term ("we are 
optimists") but indicated that debt relief is currently tied 
up with other bilateral and economic considerations.  On 
bilateral foreign investment, Denisov suggested the U.S. 
climate might be too restrictive (referring to CFIUS) and 
that Russia was on the right path in terms of establishing 
legal clarity for its own investment regime, even if the pace 
is not as quick as investors would like.  On North Korea, 
Denisov agreed that it was Pyongyang's turn to take "concrete 
steps."  Finally, Denisov expressed some concern over the 
growing mandate of FATF.  End Summary. 
 
3. (SBU) During their June 22 meeting, Deputy Treasury 
Secretary Kimmitt, discussing the role of Treasury, mentioned 
 
SIPDIS 
progress in our economic relationship with China and 
suggested the need for patience and principle.  In response, 
DFM Denisov suggested that if the word "China" was replaced 
with "Russia," the situation would be similar.  He explained 
that the U.S. and Russia have similar strategic goals but 
differ on the pace of actions.  He quoted Mao, saying "the 
prospects are bright, but the road is winding."  He accused 
the U.S. of "turning the key too tightly" with regard to 
restrictions on foreign investment (a claim the Deputy 
Secretary successfully refuted with statistics), and hoped 
 
SIPDIS 
that regulations would be made "clearer and more acceptable." 
 
4. (SBU) Appreciating the "imperfections" of the foreign 
investment situation in Russia, Denisov said that the system 
still needs time to mature.  He said that sometimes the 
government takes actions that "are not comfortable for us or 
our partners," but noted the trend is positive.  He stressed, 
however, that Russia welcomes U.S. investment and suggested 
that recent large inflows of U.S. and other foreign 
investment into Russia are "just the beginning."  He said 
Russia would continue working to make its actions more 
comprehensible.  He agreed with Deputy Secretary Kimmitt's 
suggestion that Russia include both the security and economic 
communities in the regulatory review process on foreign 
investment.  He also viewed positively the suggestion that 
Russian and American companies gather at some agreed upon 
forum to discuss our respective foreign investment regimes, 
once both countries had approved updated laws. 
 
5. (SBU) On Iraqi and Afghan debt relief, Denisov started by 
saying the Russian Finance Ministry has the lead, while the 
Foreign Ministry is more involved with the political aspects 
of the issue.  He said he believes a decision on Afghan debt 
relief is "very close," with about $12 billion of debt to be 
given very favorable HIPC terms.  He said debt relief for 
Iraq is still in process, and is part of a larger set of 
bilateral agenda items and of Russia's broader economic 
goals.  He referred to pressure from the business community, 
especially from Lukoil, which has a pending claim on a field 
from pre-war days.  He said many do not want to see Russia 
"give away" something without protecting its commercial 
interests in Iraq.  He suggested that Russia is dealing with 
the debt issue bilaterally because the U.S. has told Russia 
on other issues that Russia needs to deal with Iraq directly 
as a sovereign nation.  He stressed that Russia "is an 
optimist" on Iraq and wants to protect its long-term 
interests there. 
 
6. (SBU) Deputy Secretary Kimmitt pointed to China's recent 
approval of debt relief as a model of disconnecting the debt 
forgiveness issue from other considerations, and suggested 
that conversations on other issues will likely progress more 
quickly once the debt situation is set aside.  He added that 
Moscow, the only Paris Club member yet to approve debt 
relief, needs to show commitment to this issue in order to 
widen its participation in multilateral fora.  Deputy 
Secretary Kimmitt and the Ambassador both stressed the U.S. 
 
SIPDIS 
stands ready to help Russia make necessary contacts with 
Iraqi officials
 and offered to help secure the attendance of 
 
MOSCOW 00003162  002 OF 002 
 
 
Iraqi Ministers at proposed Intergovernmental Commission 
meetings. 
 
7. (SBU) Again expressing optimism about the future of Iraq 
and the availability of opportunities, Denisov reiterated 
Russia's interest in debt forgiveness, but clung to the need 
for some assurances regarding the future of Russia's 
commercial interests in Iraq.  Denisov then spoke for several 
minutes about the historical importance of Iraq to Russia, 
citing the fact that Russian-Arabic dictionaries are actually 
specific to the Iraqi dialect (he knows first hand from his 
stint as Ambassador to Egypt). 
 
8. (SBU) In response to Deputy Secretary Kimmitt's expression 
of thanks regarding the transfer of funds to North Korea, 
Denisov praised the U.S. effort as "bold." He said the ball 
is now in North Korea's court and they must allow full access 
for IAEA inspectors. 
 
9. (SBU) On Iran, Denisov lamented the lack of "finality" 
related to decisions made at the UNSC, saying the situation 
is too ambiguous.  He agreed with Deputy Secretary's "hopeful 
but skeptical" assessment of the forthcoming meeting between 
EU Foreign Policy Chief Javier Solana and Iranian nuclear 
negotiator Larijani. 
 
10. (SBU) Denisov also brought up Russia's concern with the 
widening scope of FATF, referring to the latest efforts to 
extend FATF control to WMD proliferators.  He accepted Deputy 
Secretary Kimmitt's assertion that all illicit financial 
 
SIPDIS 
transactions are a form of money laundering (the original 
purview of FATF).  He also agreed that FATF has a role to 
play in building up countries' capabilities to take financial 
actions against entities, if the political decision is made 
to do so.  He cautioned however, that new approaches and 
rules need to be carefully constructed. 
 
11. (SBU) Denisov also expressed deep concern about the 
"grave situation" in Gaza and the West Bank, saying "no one 
seems to be able to find the exit." 
 
12. (SBU) Referring to President Putin's upcoming trip to the 
U.S., Denisov also put in a plug for Russia's bid to host the 
2012 Winter Olympic games in Sochi.  He said Putin was going 
from the U.S.  to Guatemala to ask for support.  He added 
that regardless of the outcome, the government was prepared 
to invest $12 billion in the Sochi region to turn it into a 
world-class resort destination. 
 
13. (U) This cable has been cleared by Deputy Secretary 
Kimmitt. 
BURNS

Wikileaks

07MOSCOW3161, RUSSIA: EXXONMOBIL ON SAKHALIN 1

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Reference ID Created Released Classification Origin
07MOSCOW3161 2007-06-28 12:47 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO8305
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #3161/01 1791247
ZNY CCCCC ZZH
O 281247Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1691
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 4251
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003161 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/RUS 
DEPT FOR EB/ESC/IEC GALLOGLY AND GARVERICK 
DOE FOR HARBERT/EKIMOFF 
DOC FOR 4231/IEP/EUR/JBROUGHER 
NSC FOR MCKIBBEN 
 
E.O. 12958: DECL: 05/18/2017 
TAGS: EPET ENRG ECON PREL RS
SUBJECT: RUSSIA: EXXONMOBIL ON SAKHALIN 1 
 
Classified By: Econ MC Pam Quanrud for reasons 1.4 (b and d). 
 
------- 
SUMMARY 
------- 
 
1. (C)  Summary: In a June 26 meeting, ExxonMobil Russia VP 
Ed Verona (protect) told us that Exxon has agreed with China 
on "price parameters" for gas deliveries from its Sakhalin 1 
project.  Reacting to recent press reports that Gazprom may 
try to force ExxonMobil to sell its gas to Gazprom or to 
domestic markets, Verona said Exxon would consider all 
commercially acceptable offers for its gas, but that it 
firmly believes a recent law granting a gas export monopoly 
to Gazprom does not apply to Sakhalin 1.  He suggested Exxon 
would not bow to pressure to renegotiate its contract.  End 
summary. 
 
------------------------------------------ 
PSAS EXCLUDED FROM GAZPROM EXPORT MONOPOLY 
------------------------------------------ 
 
2. (C) ExxonMobil Russia VP Ed Verona told us June 26 that 
Exxon's Production Sharing Agreement (PSA) allows it to sell 
gas from its Sakhalin 1 project to whomever it wants, 
domestically or abroad.  The same legislation that gave 
Gazprom its gas export monopoly specifically excludes PSAs 
and therefore does not apply to Sakhalin 1.  Negotiations 
continue with China over proposed sales of eight billion 
cubic meters (bcm) of gas annually from Sakhalin 1, and that 
the two sides have signed a "heads of agreement" (HOA) which 
Verona described as more advanced and specific than an MOU. 
The HOA lays out "price parameters" but not specific prices. 
 
---------------------------------------- 
PIPELINE EXPORT TO CHINA MOST PROFITABLE 
---------------------------------------- 
 
3. (C) Brushing off press reports that Gazprom may try to 
force Exxon to sell its gas to Gazprom or to domestic 
markets, Verona said that Exxon would consider all 
commercially acceptable offers.  Internal Exxon analysis 
shows, however, that the current planned export route to 
China via pipeline will be the most profitable, not only for 
the company, but for the Russian government as well.  Russian 
government revenues over the life of the project would be $15 
billion higher under the current plan than if the gas were to 
be sold to Gazprom for export via the Sakhalin 2 LNG 
terminal.  Despite press reports to the contrary, Verona 
reconfirmed on June 27 that Gazprom has yet to make a formal 
proposal to Exxon. 
 
----------------------------- 
RFE CAN'T ABSORB SAKHALIN GAS 
----------------------------- 
 
4. (C) Verona disagreed with recent GOR claims that the 
Russian Far East will need 15 bcm of gas annually.  Exxon 
does not see a market for more than about 5 bcm of gas in the 
region, even under the rosy GOR scenarios involving new 
petrochemical and other "value added" industries. 
 
----------------- 
CONTRACT SANCTITY 
----------------- 
 
5. (C) Verona said ExxonMobil would stand firm against 
pressure from Gazprom or other Russian entities to 
renegotiate its Sakhalin 1 contract.   If Exxon allows itself 
to "be rolled" by Gazprom in Russia, it might invite such 
tactics elsewhere in the world.  He expressed hopes that the 
markets would impose some discipline on Russia. 
 
------- 
COMMENT 
------- 
 
6. (C) Gazprom is likely unhappy that Exxon is coming to its 
own agreement with China and that it may become a price 
setter with China.  Gazprom's test balloon, via the press, is 
unlikely to cause Exxon to yield.  The next move to watch is 
 
MOSCOW 00003161  002 OF 002 
 
 
what, if any, concrete proposal Gazprom is willing to make. 
BURNS

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07MOSCOW3160, NOPEC DEMARCHE DELIVERED TO MFA

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Reference ID Created Released Classification Origin
07MOSCOW3160 2007-06-28 12:45 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO8300
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDE RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMO #3160 1791245
ZNR UUUUU ZZH
P 281245Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 1690
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHHH/OPEC COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS MOSCOW 003160 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EUR/RUS 
DEPT FOR EB/ESC/IEC GALLOGLY AND GARVERICK 
DOE FOR HARBERT AND EKIMOFF 
DOC FOR 4231/IEP/EUR/JBROUGHER 
NSC FOR MCKIBBEN 
 
E.O. 12958: N/A 
TAGS: EPET ENRG ECON PREL RS
SUBJECT: NOPEC DEMARCHE DELIVERED TO MFA 
 
REF: SECSTATE 88197 
 
1. (U) SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET 
DISTRIBUTION. 
 
2. (U) We delivered reftel talking points to MFA Russia-US 
Bilateral Relations Head Alexander Zakharov on June 27. 
 
3. (SBU) Zakharov expressed his understanding that taxes make 
up the largest part of gasoline prices (a point we refuted), 
and suggested that consumers should perhaps be more angry at 
their own governments than at OPEC or producers.  However, he 
appreciated the importance of the actions and words of 
producers in contributing to political backlash in consumer 
countries.  He said the MFA would "write up a report" and 
pass the message on to relevant colleagues. 
 
4. (U) We plan to deliver the demarche to the Ministry of 
Industry as well, and will report any additional comments 
septel. 
BURNS

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07MOSCOW3155, RUSSIA/MOLDOVA: PUTIN-VORONIN MEETING

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Reference ID Created Released Classification Origin
07MOSCOW3155 2007-06-28 10:32 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO8153
PP RUEHDBU
DE RUEHMO #3155 1791032
ZNY CCCCC ZZH
P 281032Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 1685
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L MOSCOW 003155 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 06/28/2017 
TAGS: PREL ETRD MARR MD RS
SUBJECT: RUSSIA/MOLDOVA:  PUTIN-VORONIN MEETING 
 
 
Classified By: PolMinCouns Alice G. Wells.  Reason:  1.4 (b, d) 
 
Summary 
------- 
 
1. (C) Russian Ambassador at Large for Transnistria 
Nesterushkin June 26 gave us a brief readout of the June 22 
Putin-Voronin meeting.  The meeting focused on bilateral 
issues, making progress on wine and natural gas prices. 
Putin raised Russian concerns about new Moldovan controls on 
imports to Transnistria, and Nesterushkin used this to launch 
a criticism of Ukraine, the EU and Moldova; and to announce 
Transnistrian suspension of participation in the "5 plus 2" 
peace process.  END SUMMARY 
 
 
2. (C) Nesterushkin led off with Putin's concerns over new 
customs regulations governing imports to Transnistria. 
Nesterushkin used Putin's words to launch into criticism of a 
meeting called by Ukraine inviting the EU, Moldova and 
Transnistria -- but not Russia -- to Odessa June 20 to 
discuss the regulations.  Nesterushkin showed us an outraged 
letter he had just received from Transnistrian negotiator 
Litskai, complaining that when the Transnistrians arrived in 
Odessa they found themselves barred from the meeting. 
Litskai announced that Transnistria will not to take part in 
5 plus 2 peace negotiations until the regulations are 
repealed.  Nesterushkin said he met June 25 with EU 
negotiator Kalman Mizsei, who assured him that "everything 
will be okay," a claim Nesterushkin viewed with incredulity. 
 
3. (C) Returning to the Putin-Voronin meeting, Nesterushkin 
said that Putin ordered the return of high-quality Moldovan 
wines to the Russian market; now that the bans on 
agricultural products have been lifted, only a ban on lower 
quality wines remains.  Putin and Voronin discussed energy 
and pipelines, with Putin promising a five-year transition to 
full market pricing of natural gas.  The two agreed on wider 
exports of electricity from the generation plant on 
Transnistrian territory.  They discussed Russian investment 
in Moldova, including in renewal of the irrigation system. 
They discussed CIS reform, and Putin assured Voronin that 
there is no contradiction between good Russian-Moldovan 
relations and Moldova's aspirations for European integration. 
 
4. (C) Nesterushkin said Putin spent a long time discussing 
Kosovo with Voronin.  Putin did not frame it as a prelude to 
recognition of Transnistria.  But he stressed the need for 
dialogue between the two parties to the conflict. 
Nesterushkin said he doubted the two presidents would discuss 
anything serious "in the intervals between placing bets" at 
the upcoming horse races at Rostov-on-Don. 
 
Comment 
------- 
 
5. (C) The Transnistrian moratorium on participating in the 5 
plus 2 negotiations and Putin's stress on direct contacts 
between the two sides point to an unspoken Russian goal:  the 
"de-internationalization" of the conflict.  We are picking up 
hints that Russia wants to minimize the 5 plus 2 (in which 
the U.S., EU, Ukraine, and OSCE also participate), making it 
at most a rubber stamp for decisions reached in what amounts 
to a "1 plus 1 plus 1" format.  In those talks, Russia would 
be the "1" in the middle, playing Moldova and Transnistria 
off to reach an agreement preserving Russian interests. 
These are military:  preservation of a Russian military 
presence; political:  Moldovan "neutrality" with strong 
limits on Romanian and Ukrainian influence; and economic: 
guarantees for Russian investments in Transnistria. 
BURNS

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07MOSCOW3145, EXTRANCHECK: PRE-LICENSE CHECK: DMITROVSKY

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Reference ID Created Released Classification Origin
07MOSCOW3145 2007-06-28 08:12 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXYZ0013
PP RUEHWEB

DE RUEHMO #3145 1790812
ZNR UUUUU ZZH
P 280812Z JUN 07
FM AMEMBASSY MOSCOW
TO RUCPDOC/USDOC WASHDC PRIORITY
INFO RUEHC/SECSTATE WASHDC 1675
RUEAORC/USCBP WASHDC
RHMFIUU/HQ BICE WASHINGTON DC

UNCLAS MOSCOW 003145 
 
SIPDIS 
 
SIPDIS 
 
USDOC FOR 532/OEA/MHAMES/LRITTER 
USDOC FOR 3150/USFCS/OIO/CEENIS/MCOSTA 
 
E.O. 12958: N/A 
TAGS: BEXP ETRD ETTC RS
SUBJECT: EXTRANCHECK: PRE-LICENSE CHECK: DMITROVSKY 
ELECTRICITY NETWORK, DMITROV, RUSSIA, D373937 
 
 
1. Unauthorized disclosure of the information provided 
below is prohibited by Section 12C of the Export 
Administration Act. 
 
2. Reftel requested a Pre-license check to determine 
the legitimacy and reliability of the end-user, 
Dmitrovsky Electricity network, Dmitrov, Russia. The 
company is listed on BIS license application D373937 
as the ultimate consignee of thermal imager, model 
1100. These items are controlled for national security 
and nuclear non-proliferation reasons under ECCN 
6A003. The licensee is Mikron Infrared, Inc., 16 
Thornton Road, Oakland, NJ 07436. 
 
3. On June 22, 2007, Export Control Attache Donald 
Pearce and FSN Natalya Shipitsina conducted a pre- 
license check at the offices of Dmitrovsky Electricity 
Network (Russian abbreviation DES), 46, Kosmonavtov 
st., Dmitrov, Russia. The export control team met with 
Vladimir Petrov, Chief Engineer. 
 
4. DES is part of the Moscow Regional Electrical 
Company (Russian abbreviation MOESK), a group of 13 
affiliated power companies formed from the 
reorganization of MosEnergo.  DES was founded 40 years 
ago to provide electrical power generation and 
distribution services to the Dmitrovsky Region, 
located about 60 kilometers northwest of Moscow.  DES 
is an Open Joint Stock company, with 52% government 
ownership. DES employs 467, and maintains 32 
substations in the region as well as transmission and 
distribution lines. Currently DES is working with its 
MOESK affiliates in a major overhaul program to 
improve the regional power grid.  An investment of 
approximately 45 Billion Russian Rubles is being used 
to improve infrastructure, build and improve 
substations and distribution lines. 
 
5. The Department of Electrical Isolation will use the 
thermal imager described in reftel for preventative 
maintenance and non-destructive testing of lines and 
transformers.  Three specialists will be trained at 
the Bauman Moscow State Technical University. 
Currently all thermal imaging is done through 
contractors, which is not cost effective.  Providing 
thermal-imaging services in-house is more efficient, 
less expensive in the long run. 
 
6. The Chief of the Electrical Isolation Services 
department will be responsible for the imager, and 
will issue the unit to crews on an as-needed basis. 
The imager will be stored in a safe in the Chief's 
office at the Dmitrovsky headquarters of DES.  The 
building is on the grounds of the power station, which 
is patrolled by contract security at all times.  The 
offices are covered by a closed-circuit video security 
system as well as an off-hours electronic access 
control and alarm system. 
 
7. Recommendations: Post recommends Dmitrovsky 
Electricity network, Dmitrov, Russia, as a reliable 
recipient of sensitive U.S. origin commodities. It is 
requested that post be notified of final disposition 
of the application, and of any shipments for this 
organization in order to conduct appropriate FCS 
follow-up and statistical reporting. 
(FCS MOSCOW/SBOZEK/DPEARCE) 
BURNS

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07MOSCOW3141, AFGHANISTAN: LOW-KEY RUSSIAN PARTICIPATION IN

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Reference ID Created Released Classification Origin
07MOSCOW3141 2007-06-28 05:55 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXYZ0000
RR RUEHWEB

DE RUEHMO #3141 1790555
ZNR UUUUU ZZH
R 280555Z JUN 07 ZDK
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 1668
INFO RUEHBUL/AMEMBASSY KABUL 0455
RUEHRO/AMEMBASSY ROME 2883
RUCNDT/USMISSION USUN NEW YORK 0339

UNCLAS MOSCOW 003141 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL KJUS AF RS
SUBJECT: AFGHANISTAN:  LOW-KEY RUSSIAN PARTICIPATION IN 
ROME RULE OF LAW CONFERENCE 
 
REF: STATE 87370 
 
1.  (SBU)  We met with MFA Afghanistan Section Chief Yuriy 
Khokhlov to urge Russian participation at the Rome Rule of 
Law Conference on Afghanistan and encourage Moscow to 
contribute to the Afghan Reconstruction Trust Fund for 
justice projects.  Khokhlov said that Russian participation 
in the conference was not yet decided but Moscow was likely 
to be represented by the Russian Ambassador in Rome.  Noting 
that the Italians had already asked for higher-level 
participation, Khokhlov said it was possible Deputy Foreign 
Minister Yakovenko might attend. 
 
2.  (SBU)  Khokhlov said that Russia was not planning on 
contributing to the Trust Fund for justice projects.  While 
stressing that Russian assistance for humanitarian projects 
was likely to rise in the coming year, he said Moscow was 
skeptical about the usefulness of funding multilateral 
justice projects.  Afghanistan needed to take on greater 
ownership of its own governmental structures and build a 
justice system that was sustainable with Afghan resources. 
He was dubious that raising judges' salaries would be 
sufficient to dispel Afghan perceptions that the justice 
system was corrupt and ineffective. 
BURNS

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07MOSCOW3139, HUGO CHAVEZ RETURNS TO RUSSIA SEEKING MORE ARMS

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Reference ID Created Released Classification Origin
07MOSCOW3139 2007-06-27 15:26 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO7365
PP RUEHDBU
DE RUEHMO #3139/01 1781526
ZNY CCCCC ZZH
P 271526Z JUN 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 1665
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 0284
RUEHCV/AMEMBASSY CARACAS PRIORITY 0230

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003139 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 06/27/2017 
TAGS: PREL MARR ECON RS
SUBJECT: HUGO CHAVEZ RETURNS TO RUSSIA SEEKING MORE ARMS 
 
Classified By: Ambassador William J. Burns: 1.4 (b, d). 
 
1.  (C)  Summary:  The Ambassador expressed strong concern to 
Security Council Secretary Ivanov and Kremlin Foreign Policy 
Adviser Prikhodko over the visit of Venezuelan President 
Chavez to Moscow, June 28-30, on the eve of Putin's meeting 
with the President in Kennebunkport.  Noting that the visit 
was long-planned and not designed to send any signal, both 
Russian officials defended its basis on Russian arms exports, 
which appear to be the primary factor driving the red carpet 
protocol accorded to Chavez.  While eager to pursue 
commercial opportunities -- both in arms and energy -- GOR 
officials are realistic about Russia's influence in Latin 
America, although some see Russian activism in America's 
backyard as a counter to perceived U.S. encroachments in 
Russia's "neighborhood." Chavez's visit excites little 
comment here, where he is depicted in nostalgic terms as 
another Fidel, albeit one whose pocketbook provides a 
"pragmatic" basis for engagement.  End Summary 
 
Russia's Embarrassing Guest 
--------------------------- 
 
2.  (C)  In meetings with Russian Security Council Secretary 
Igor Ivanov and Presidential Foreign Policy Adviser Sergey 
Prikhodko, the Ambassador raised strong concerns over the 
visit of Hugo Chavez to Moscow on June 28-30 -- his fifth 
trip to Russia, and part of a broader swing through Belarus 
and Iran.  The Ambassador stressed, that on the eve of 
Putin's July 2 meeting with the President at Kennebunkport, 
the GOR was sending a negative signal through the high-level 
attention and protocol accorded to Chavez; his attendance as 
Putin's guest at the Presidential (horse racing) Cup in 
Rostov-on-Don (to which the CIS leaders and a swath of 
Russia's political elite are traditionally invited); and 
reports of another significant arms sale package, at a time 
when Chavez's policies were destabilizing the region and as 
news reports carried the Venezuelan leader's calls for 
military action against the United States. Both Ivanov and 
Prikhodko expressed regret over the timing of the visit, 
which was scheduled months earlier and was not (they claimed) 
intended as a signal to Washington. Stating that they 
understood the scrutiny that the visit would face in 
Washington and evincing no fondness for Chavez, both noted 
that Russia's arms export policy adhered to international law 
and UN resolutions. 
 
Arms Sales Top the Agenda 
------------------------- 
 
3.  (C)  The MFA declined to discuss planning for the visit, 
but local press reports speculate that the primary agenda 
item is conclusion of another arms package, with the possible 
provision of nine diesel submarines (five Project 636 and 
four Project 677 Amur subs), Tor-M1 air defense systems, 
coastal patrol aircraft, and small arms touted.  (Note: We 
have seen Venezuelan Defense Ministry statements disclaiming 
any interest in submarines.)  With USD 3.4 billion in arms 
purchases since 2005, Venezuela now ranks as one of the major 
buyers of Russian weapons, with defense experts noting that 
Russia usually does best in restricted markets.  Ivan 
Safranchuk, Chief Defense Analyst at the World Security 
Institute, told us that expanding markets, keeping production 
lines open, and lowering unit costs by achieving economies of 
scale were the primary factors in engaging with Chavez. 
Russia's goal, he maintained, was to become an "arsenal" to 
fellow BRIC members (Brazil, India, and China), and Venezuela 
was an important entree into the Western hemisphere. 
Improvements in Russian weapons systems and Rosoboronexport's 
adoption of more "American" marketing techniques, which 
allowed Russia to offer complete packages -- equipment, 
training, and parts -- were contributing to Russia's 
increased appeal.  According to MFA Disarmament Department 
Counselor Sergey Petlyakov, there are few Russian 
restrictions on trade with Caracas and he reinforced the view 
that Moscow would be willing to meet Venezuela's demands, 
which were grounded in the defense of its oil facilities and 
other economic infrastructure. 
 
4.  (C)  Director of the Latin America Institute Vladimir 
Davydov told us that the Kremlin was realistic about the 
limits of its influence in Latin America in general and 
regarded the region as peripheral to Russia's strategic 
interests.  (Putin's visit to Guatemala, following 
Kennebunkport, is to further Russia's bid for the 2014 Winter 
Olympics.)  Putin had signaled this with the closure of the 
Russian listening station at Lourdes, Cuba, in 2000.  While 
Russian parastatals and private companies were interested in 
pursuing commercial opportunities -- particularly in energy 
and arms sales -- Davydov was dismissive of some of the 
grander infrastructure projects being discussed, such as a 
 
MOSCOW 00003139  002 OF 002 
 
 
pipeline from Venezuela to Argentina.  Russia's political 
interests in Venezuela were much more circumscribed; Moscow 
appreciated Venezuelan support in international fora, but was 
not seeking to act as a counterweight to
 the U.S. through its 
ties with Chavez. 
 
Memories of Fidel 
----------------- 
 
5.  (SBU)  Russian television coverage of the upcoming visit 
tends to portray the Venezuelan strongman in nostalgic terms, 
as a plucky populist in the Fidel mold, with little attention 
paid to his human rights record at home.  His defiance of the 
U.S. plays well on Russian television, and parallels are 
drawn by some commentators between his clashes with 
Conoco-Phillips and Exxon-Mobil and Russia's sometimes 
difficult relations with Western oil companies. Clearly, the 
opportunity to exercise Russian influence in America's 
neighborhood appeals to some Russian audiences, as well. 
 
Comment 
------- 
 
6.  (C)  If Putin's body language during the fourth visit of 
Chavez to Moscow last year was any guide, there is little 
love lost for the Venezuelan leader.  However, there also is 
little public controversy over the red carpet being rolled 
out, with most officials and commentators prepared to defend 
Russia's "pragmatic" relations and commercial interests. 
BURNS

Wikileaks