Daily Archives: July 15, 2009

09MOSCOW1828, EXCHANGE OF AFGHAN TRANSIT AGREEMENT NOTES

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Reference ID Created Released Classification Origin
09MOSCOW1828 2009-07-15 14:02 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO8021
RR RUEHDBU RUEHIK RUEHLN RUEHPOD RUEHSK RUEHSL RUEHVK RUEHYG
DE RUEHMO #1828 1961402
ZNR UUUUU ZZH
R 151402Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4271
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC

UNCLAS MOSCOW 001828 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PARM PREL PGOV MARR MOPS MASS RS AF
 
SUBJECT: EXCHANGE OF AFGHAN TRANSIT AGREEMENT NOTES 
 
1. (SBU) On July 15 EmbOff delivered to Russian MFA North America 
Department Second Secretary Ruben Malayan the original and one copy 
of Embassy Note No. MFA/104/09, initialed on July 8, referring to 
the Afghan Transit Agreement signed on July 6.  In exchange, Malayan 
delivered to EmbOff the original and one copy of Russian MFA Note 
No. 3609/North America Department, dated July 15.  Malayan had no 
immediate comment. 
 
2. (SBU) The original of Russian MFA Note No. 3609/North America 
Department was sent under pouch No. 329195 to EUR/RUS.  The MFA Note 
was also scanned and sent via e-mail to EUR/RUS. 
 
BEYRLE

Wikileaks

09MOSCOW1827, THE GOR’S “SECRET” VISIT TO KYRGYZSTAN

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Reference ID Created Released Classification Origin
09MOSCOW1827 2009-07-15 13:03 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO7958
RR RUEHDBU RUEHIK RUEHLN RUEHPOD RUEHSK RUEHSL RUEHVK RUEHYG
DE RUEHMO #1827 1961303
ZNR UUUUU ZZH
R 151303Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4270
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RUEHZG/NATO EU COLLECTIVE
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC

UNCLAS MOSCOW 001827 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PREL PGOV MARR MCAP EINV EMIN RS KG
 
SUBJECT: THE GOR'S "SECRET" VISIT TO KYRGYZSTAN 
 
1. (SBU) Summary:  On July 7 Russian Minister of Defense Anatoliy 
Serdyukov and Deputy Prime Minister Igor Sechin made a brief, 
unannounced visit to Kyrgyzstan to discuss Russia's interest in 
opening a second Russian military base in the southern Kyrgyz city 
of Osh.  The base is expected to house Russian forces under the 
aegis of the recently created Collective Security Treaty 
Organization (CSTO) rapid reaction force.  Experts consider the base 
to be a response to the growing U.S. presence in Central Asia, and 
shared Kyrgyz and Russian concern for Islamic extremism and the 
growing regional narcotics trade.  End Summary. 
 
----------------------------------- 
A Second Russian Base in Kyrgyzstan 
----------------------------------- 
 
2. (SBU) After visiting Dushanbe, MinDef Anatoliy Serdyukov and DPM 
Sechin briefly visited Bishkek on July 7 to hold closed talks with 
Kyrgyz President Kurmanbek Bakiev and Prime Minister Igor Chunidov. 
According to press reports, they mainly discussed Russia's interest 
in opening a second Russian military base in the southern city of 
Osh.  Russia intends to use an abandoned Soviet-era military 
facility near Osh as a basis for a new military base that will 
largely house Russian air force and airborne units.  The Russian MFA 
downplayed the significance of the visit by stating that Russia had 
established basing rights in Kyrgyzstan in a 2003 agreement. 
 
--------------------------------------------- ----- 
Russia Threatened by U.S. Presence in Central Asia 
--------------------------------------------- ----- 
 
3. (SBU) Kyrgyzstan is the only country in the world that houses 
both Russian and U.S. bases; Russia already occupies the Kant Air 
Base near Bishkek.  Seeking to offset U.S. influence in Central Asia 
and assert Russian influence in Kyrgyzstan following the GOK's 
acceptance of a continued U.S. military presence in Manas, experts 
considered Russia's request for a second base in Osh to be a product 
of Russia's concern over a growing U.S. presence in the 
strategically important region bordering Afghanistan.  Experts 
further noted that an expanded Russian military presence in 
Kyrgyzstan would supplement Kyrgyzstan's weak military and help 
Russia fight against threats such as Islamic extremism and the 
growing narcotics trade. 
 
------------------------------ 
Military-Economic Quid-pro-Quo 
------------------------------ 
 
4. (SBU) During the July 7 talks it was agreed that the GOR 
(presumably Rosboronexport) would receive significant stock in a 
number of Kyrgyz defense industries, in particular, controlling 
stake in a Dastan Corporation torpedo producing factory located near 
Lake Issyk-Kul.  (Note:  in a February 2009 agreement, Moscow 
obtained a 48% controlling stake in Dastan in exchange for writing 
off Kyrgyz debt owed to Russia).  The Dastan plant is the only 
factory in the CIS that produces the VA-111 Shkval missile torpedo. 
Experts posited that the stock was given to elicit Russian favor for 
moving forward with the previously announced Russian debt 
concessions and financial credits given to Kyrgyzstan, including for 
the construction of the Kambaratinsk Hydroelectric Dam in central 
Kyrgyzstan. 
 
5. (SBU) Experts speculated that the two countries also discussed 
Russia's interest in the privatization of the Kyrgyz energy firm 
Kyrgyzgaz and possible Russian investment in the recently opened 
Kyrgyz Tash-Kumrskogo plant that produces inexpensive high-quality 
polycrystalline silicon.  The silicon plant however, is not yet 
producing at full potential; plant owners are seeking an added 
investment of USD 200 million dollars. 
 
BEYRLE

Wikileaks

09MOSCOW1825, RUSSIA’S RETURN TO AFRICA

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Reference ID Created Released Classification Origin
09MOSCOW1825 2009-07-15 11:29 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO7818
PP RUEHBZ RUEHDBU RUEHDU RUEHGI RUEHJO RUEHLN RUEHMA RUEHMR RUEHPA
RUEHPOD RUEHRN RUEHROV RUEHSK RUEHTRO RUEHVK RUEHYG
DE RUEHMO #1825/01 1961129
ZNR UUUUU ZZH
P 151129Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4268
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 001825 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL ECON ETRD EPET EMIN RS XA EG WA NI AO
SUBJECT: RUSSIA'S RETURN TO AFRICA 
 
REF A: Abuja 1171 
REF B: Windhoek 235 
 
1. (SBU) Summary: President Medvedev's June trip to Africa marked 
Russia's attempt to "return" to Africa and increase economic ties 
after a period of relative inactivity on the continent following the 
collapse of the Soviet Union.  Medvedev visited Egypt, Nigeria, 
Namibia, and Angola June 23-27, accompanied by representatives of 
Russian businesses, especially those in the energy and mining 
industries.  In Cairo, Medvedev also took on the MEPP, addressing 
the Arab League and highlighting Russia's historic friendship with 
the Muslim world. Medvedev's effort stands in contrast to his 
predecessor, Prime Minister Putin, who spent little time in Africa 
during his eight years as President.  Medvedev conceded that his 
trip may have come "too late" for Russia to gain access to the 
continent's significant natural resources.  End summary. 
 
---------------- 
It's the Economy 
---------------- 
 
2. (SBU) President Dmitry Medvedev visited Egypt, Nigeria, Namibia, 
and Angola June 23-27 on his first official trip to Africa.  The 
visit commenced Russia's "return to Africa" after almost two decades 
of inactivity following the collapse of the Soviet Union.  Medvedev 
was accompanied by a 400-person delegation that included the 
Ministers of Natural Resources, Justice, and Energy, as well as the 
heads of Rosatom, the state-owned nuclear corporation, and LUKoil. 
Medvedev commented June 27 that he believes Russian companies should 
compete with other multinational corporations in Africa, emphasizing 
that economic competition is desirable.  The purpose of the trip was 
largely to further Russia's economic ties with African states, which 
corroborates our previous reporting which noted Russia-Africa 
relations are primarily economic.  Medvedev said, however, that the 
leaders also discussed "how to position the African continent in the 
international arena." 
 
3. (SBU) On his first stop, Medvedev met with Egyptian President 
Hosni Mubarak.  The leaders agreed that negotiations on the 
Israeli-Palestinian conflict should reconvene as soon as possible. 
Medvedev said on his video blog that the two leaders also discussed 
economic cooperation, but did not specify which fields.  In Nigeria, 
his next stop, Medvedev met with President Umaru Yar'Adua, and the 
Russian delegation discussed cooperation in the oil and gas 
industry.  Medvedev said on his video blog that Russia "must play an 
active role on different continents" or risk not being a major 
player in the oil and gas industry.  The leaders signed six new 
agreements on cooperation, including in the oil and gas field (ref. 
A).  Gazprom and NNPC, Nigeria's state-run company, signed a USD 2.5 
billion deal to create the joint company NiGaz.  The firm will build 
refineries, pipelines, and gas power stations.  (Note: the firm's 
name, a combination of Nigeria and gas, has caused controversy in 
the press and in the blogosphere, for its resemblance to a racial 
epithet. End note.) 
 
4. (SBU) Medvedev met with President Hifikepunye Pohamba of Namibia 
June 25-26.  According to a presidential aide, Sergei Prikhodko, the 
leaders discussed cooperation on electricity projects because 
Namibia currently imports almost all of its electricity from South 
Africa.  The leaders signed a variety of agreements, including one 
regarding hydrocarbon exploration between Gazprom and Namcor, the 
National Petroleum Cooperation of Namibia (ref. B).  Local press 
reported that Russian businesses have shown growing interest in 
Namibia's natural resources such as diamonds, natural gas, coal, 
silver, gold, and uranium.  Russia-Namibia bilateral trade turnover 
in 2008 was $6.35 million, which Prikhodko said indicated room for 
growth.  Medvedev also invited Pohamba to visit Russia. 
 
5. (SBU) On his last stop, Medvedev met with President Jose Eduardo 
dos Santos of Angola.  The leaders discussed Russian investment in 
mining, power, transportation, telecommunications, education, 
healthcare, and military and technical cooperation projects in 
Angola.  The leaders also reportedly discussed how oil prices are 
determined in the international market and how the system could be 
improved, which was unsurprising given that Angola is currently 
chairing OPEC.  Medvedev told journalists after the meeting that 
"the oil market should not depend on the situation in one economy." 
Medvedev also invited Santos to visit Russia. 
 
-------------------------- 
In President Obama's Wake? 
-------------------------- 
 
6. (SBU) Medvedev delivered his first speech to the Arab League in 
Cairo June
 24.  Medvedev said that regional and sub-regional groups, 
such as the Arab League, BRIC, and the Shanghai Cooperation 
Organization, are increasing in importance because today's "global 
mechanisms are not in balance."  He said that he envisions "a new 
and fair world order" that, for the first time in centuries, fully 
 
MOSCOW 00001825  002 OF 002 
 
 
reflects the world's diversity. 
 
7. (SBU) Medvedev outlined Russia's policy on the 
Israeli-Palestinian conflict, calling for an end to the occupation 
of Palestinian and other Arab land.  He said that any solution must 
guarantee free access to Jerusalem's holy sites for followers of 
Islam, Christianity, and Judaism.  Medvedev spoke of longstanding 
traditions of friendship between Russia and the Arab world.  Russia 
does not need to seek friendship with the Muslim world, he said, 
because Russia and its 20 million Muslim citizens are an organic 
part of that world.  He reported that Russia's trade turnover with 
the Arab League is almost USD 10 billion, but noted that there is 
room for more cooperation in the future. 
 
8. (SBU) Local press noted that Medvedev's address to the Arab 
League took place shortly after President Obama's June 4 Cairo 
speech, but did not receive as much media attention.  RIA Novosti 
commentator Maria Appakova said that Medvedev's comment about Russia 
not needing to seek friendship with the Muslim world was a reference 
to President Obama's Cairo speech earlier that month.  Appakova said 
that Medvedev was suggesting that, unlike the U.S., Russia does not 
need to mend troublesome relations with the Muslim world. 
 
-------------- 
New Beginnings 
-------------- 
 
9. (SBU) Medvedev's four-stop visit to Africa is a departure from 
his predecessor's administration.  During his eight years as 
president, Vladimir Putin spent very little time in Africa, only 
visiting South Africa, Morocco, and Egypt.  Medvedev commented June 
27 to reporters that work with Russia's African partners should have 
begun sooner.  He conceded that his trip may have come "too late" 
for Russia to gain access to the continent's vast natural resources. 
  "Our policies here will be very friendly, but at the same time 
pragmatic," Medvedev said. 
 
------- 
Comment 
------- 
 
10. (SBU) Medvedev's comments reflect the GOR's belief that business 
is done by governments.  Russian companies, including its oil and 
gas giants, have a legitimate interest in pursuing opportunities 
abroad, while given state control and influence over many of these 
companies, they are ill-equipped to deliver substantial benefits to 
partners, even in Africa.  Other than political support from the 
GOR, Gazprom, for example, is in no position to compete with major 
western international oil and gas companies in helping Nigeria 
develop its oil and gas sector.  We are therefore not convinced that 
many of the agreements and "deals" reached on this trip will result 
in much economic benefit to either side.  Even in Africa, the most 
meaningful deals should be those that offer the best economic 
returns. 
 
BEYRLE

Wikileaks

09MOSCOW1824, RUSSIA’S RETURN TO AFRICA

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Reference ID Created Released Classification Origin
09MOSCOW1824 2009-07-15 11:22 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO7807
PP RUEHBZ RUEHDBU RUEHDU RUEHGI RUEHJO RUEHLN RUEHMA RUEHMR RUEHPA
RUEHPOD RUEHRN RUEHROV RUEHSK RUEHTRO RUEHVK RUEHYG
DE RUEHMO #1824/01 1961122
ZNR UUUUU ZZH
P 151122Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4266
RUEHZO/AFRICAN UNION COLLECTIVE
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 001824 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL ECON ETRD EPET EMIN RS XA EG WA NI AO
SUBJECT: RUSSIA'S RETURN TO AFRICA 
 
REF A: Abuja 1171 
REF B: Windhoek 235 
 
1. (SBU) Summary: President Medvedev's June trip to Africa marked 
Russia's attempt to "return" to Africa and increase economic ties 
after a period of relative inactivity on the continent following the 
collapse of the Soviet Union.  Medvedev visited Egypt, Nigeria, 
Namibia, and Angola June 23-27, accompanied by representatives of 
Russian businesses, especially those in the energy and mining 
industries.  In Cairo, Medvedev also took on the MEPP, addressing 
the Arab League and highlighting Russia's historic friendship with 
the Muslim world. Medvedev's effort stands in contrast to his 
predecessor, Prime Minister Putin, who spent little time in Africa 
during his eight years as President.  Medvedev conceded that his 
trip may have come "too late" for Russia to gain access to the 
continent's significant natural resources.  End summary. 
 
---------------- 
It's the Economy 
---------------- 
 
2. (SBU) President Dmitry Medvedev visited Egypt, Nigeria, Namibia, 
and Angola June 23-27 on his first official trip to Africa.  The 
visit commenced Russia's "return to Africa" after almost two decades 
of inactivity following the collapse of the Soviet Union.  Medvedev 
was accompanied by a 400-person delegation that included the 
Ministers of Natural Resources, Justice, and Energy, as well as the 
heads of Rosatom, the state-owned nuclear corporation, and LUKoil. 
Medvedev commented June 27 that he believes Russian companies should 
compete with other multinational corporations in Africa, emphasizing 
that economic competition is desirable.  The purpose of the trip was 
largely to further Russia's economic ties with African states, which 
corroborates our previous reporting which noted Russia-Africa 
relations are primarily economic.  Medvedev said, however, that the 
leaders also discussed "how to position the African continent in the 
international arena." 
 
3. (SBU) On his first stop, Medvedev met with Egyptian President 
Hosni Mubarak.  The leaders agreed that negotiations on the 
Israeli-Palestinian conflict should reconvene as soon as possible. 
Medvedev said on his video blog that the two leaders also discussed 
economic cooperation, but did not specify which fields.  In Nigeria, 
his next stop, Medvedev met with President Umaru Yar'Adua, and the 
Russian delegation discussed cooperation in the oil and gas 
industry.  Medvedev said on his video blog that Russia "must play an 
active role on different continents" or risk not being a major 
player in the oil and gas industry.  The leaders signed six new 
agreements on cooperation, including in the oil and gas field (ref. 
A).  Gazprom and NNPC, Nigeria's state-run company, signed a USD 2.5 
billion deal to create the joint company NiGaz.  The firm will build 
refineries, pipelines, and gas power stations.  (Note: the firm's 
name, a combination of Nigeria and gas, has caused controversy in 
the press and in the blogosphere, for its resemblance to a racial 
epithet. End note.) 
 
4. (SBU) Medvedev met with President Hifikepunye Pohamba of Namibia 
June 25-26.  According to a presidential aide, Sergei Prikhodko, the 
leaders discussed cooperation on electricity projects because 
Namibia currently imports almost all of its electricity from South 
Africa.  The leaders signed a variety of agreements, including one 
regarding hydrocarbon exploration between Gazprom and Namcor, the 
National Petroleum Cooperation of Namibia (ref. B).  Local press 
reported that Russian businesses have shown growing interest in 
Namibia's natural resources such as diamonds, natural gas, coal, 
silver, gold, and uranium.  Russia-Namibia bilateral trade turnover 
in 2008 was $6.35 million, which Prikhodko said indicated room for 
growth.  Medvedev also invited Pohamba to visit Russia. 
 
5. (SBU) On his last stop, Medvedev met with President Jose Eduardo 
dos Santos of Angola.  The leaders discussed Russian investment in 
mining, power, transportation, telecommunications, education, 
healthcare, and military and technical cooperation projects in 
Angola.  The leaders also reportedly discussed how oil prices are 
determined in the international market and how the system could be 
improved, which was unsurprising given that Angola is currently 
chairing OPEC.  Medvedev told journalists after the meeting that 
"the oil market should not depend on the situation in one economy." 
Medvedev also invited Santos to visit Russia. 
 
-------------------------- 
In President Obama's Wake? 
-------------------------- 
 
6. (SBU) Medvedev delivered his first speech to the Arab League in 
Cairo June
 24.  Medvedev said that regional and sub-regional groups, 
such as the Arab League, BRIC, and the Shanghai Cooperation 
Organization, are increasing in importance because today's "global 
mechanisms are not in balance."  He said that he envisions "a new 
and fair world order" that, for the first time in centuries, fully 
 
MOSCOW 00001824  002 OF 002 
 
 
reflects the world's diversity. 
 
7. (SBU) Medvedev outlined Russia's policy on the 
Israeli-Palestinian conflict, calling for an end to the occupation 
of Palestinian and other Arab land.  He said that any solution must 
guarantee free access to Jerusalem's holy sites for followers of 
Islam, Christianity, and Judaism.  Medvedev spoke of longstanding 
traditions of friendship between Russia and the Arab world.  Russia 
does not need to seek friendship with the Muslim world, he said, 
because Russia and its 20 million Muslim citizens are an organic 
part of that world.  He reported that Russia's trade turnover with 
the Arab League is almost USD 10 billion, but noted that there is 
room for more cooperation in the future. 
 
8. (SBU) Local press noted that Medvedev's address to the Arab 
League took place shortly after President Obama's June 4 Cairo 
speech, but did not receive as much media attention.  RIA Novosti 
commentator Maria Appakova said that Medvedev's comment about Russia 
not needing to seek friendship with the Muslim world was a reference 
to President Obama's Cairo speech earlier that month.  Appakova said 
that Medvedev was suggesting that, unlike the U.S., Russia does not 
need to mend troublesome relations with the Muslim world. 
 
-------------- 
New Beginnings 
-------------- 
 
9. (SBU) Medvedev's four-stop visit to Africa is a departure from 
his predecessor's administration.  During his eight years as 
president, Vladimir Putin spent very little time in Africa, only 
visiting South Africa, Morocco, and Egypt.  Medvedev commented June 
27 to reporters that work with Russia's African partners should have 
begun sooner.  He conceded that his trip may have come "too late" 
for Russia to gain access to the continent's vast natural resources. 
  "Our policies here will be very friendly, but at the same time 
pragmatic," Medvedev said. 
 
------- 
Comment 
------- 
 
10. (SBU) Medvedev's comments reflect the GOR's belief that business 
is done by governments.  Russian companies, including its oil and 
gas giants, have a legitimate interest in pursuing opportunities 
abroad, while given state control and influence over many of these 
companies, they are ill-equipped to deliver substantial benefits to 
partners, even in Africa.  Other than political support from the 
GOR, Gazprom, for example, is in no position to compete with major 
western international oil and gas companies in helping Nigeria 
develop its oil and gas sector.  We are therefore not convinced that 
many of the agreements and "deals" reached on this trip will result 
in much economic benefit to either side.  Even in Africa, the most 
meaningful deals should be those that offer the best economic 
returns. 
 
BEYRLE

Wikileaks

09MOSCOW1811, NEW BP RUSSIA CEO SAYS TNK-BP DOING “EXTREMELY

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09MOSCOW1811.
Reference ID Created Released Classification Origin
09MOSCOW1811 2009-07-15 07:21 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO7604
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHMO #1811/01 1960721
ZNY CCCCC ZZH
P 150721Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4258
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001811 
 
SIPDIS 
 
DEPT FOR EUR/RUS, EEB/ESC/IEC GALLOGLY AND GREENSTEIN, 
S/EEE MORNINGSTAR AND STEIN 
DOE FOR HEGBURG, EKIMOFF 
DOC FOR JBROUGHER 
NSC FOR MMCFAUL, JELLISON 
 
E.O. 12958: DECL: 07/01/2019 
TAGS: EPET ENRG ECON PREL RS
SUBJECT: NEW BP RUSSIA CEO SAYS TNK-BP DOING "EXTREMELY 
WELL", BP LOOKING FOR MORE OPPORTUNITIES IN RUSSIA 
 
REF: A. MOSCOW 1388 
     B. 08 MOSCOW 3592 
     C. 08 MOSCOW 3394 
 
Classified By: Ambassador John R. Beyrle for Reasons 1.4 (b/d) 
 
------- 
Summary 
------- 
 
1. (C) New BP Russia President Jeremy Huck told the 
Ambassador in a July 13 meeting that his first priority is to 
maintain and protect BP's investment in TNK-BP.  Huck said 
TNK-BP continues to perform "extremely well" and that despite 
some tensions, relations with AAR (its Russian partners in 
TNK-BP) have improved tremendously.  Huck's next priority is 
to expand BP's opportunities in Russia beyond the TNK-BP 
joint venture, including through projects with Rosneft, 
Lukoil, and Gazprom.  According to Huck, a deal with Gazprom 
on the sale of TNK-BP's interest in the giant Kovykta gas 
field may be resurrected as PM Putin has expressed a personal 
interest in the field.  Huck said the signals BP has received 
from the government and Gazprom, however, are that it should 
not expect any major changes soon to GOR policies in the oil 
and gas sector.  On CPC, Huck said BP has reached agreement 
on selling its remaining stake to Lukoil but that "an 
enormously complex set of consents from various parties" 
still need to be lined up.  End summary. 
 
----------------------- 
NEW BP RUSSIA PRESIDENT 
----------------------- 
 
2. (C) On July 13, the Ambassador met with BP Russia's new 
President, Jeremy Huck, who is responsible both for 
overseeing BP's shareholder interest in TNK-BP as well as for 
developing BP's broader business in Russia.  Huck previously 
worked in Russia from 1991-96 with a small U.S.-based 
independent oil and gas company, then joined BP, working in a 
variety of capacities in North America and Europe before 
returning to Russia this year.  He told the Ambassador his 
first priority here is to maintain and protect the TNK-BP 
venture and his second priority is to diversify BP's options 
in Russia more generally (ref C).  To that end, he said BP is 
focused on expanding its relationship with Rosneft in 
Sakhalin and the Arctic, working with Lukoil internationally, 
and re-engaging with Gazprom. 
 
------ 
TNK-BP 
------ 
 
3. (C) Huck described TNK-BP as performing "extremely well." 
He said this is a message that BP has not adequately 
publicized, but also agreed with the Ambassador that it is 
perhaps a message that does not need to be emphasized lest it 
draw unwanted attention to BP.  According to Huck, BP 
received between $2.5 and $3 billion in shareholder dividends 
from TNK-BP in 2008, and about $11 billion in "free cash 
flow" over the past six years.  He said TNK-BP lacks a clear 
message about what the future holds, but noted that recovery 
from the dispute is nearly complete, with almost all the 
ancillary problems of various regulatory and tax 
investigations and lawsuits resolved.  He added that the two 
sides are also about to sign a new service agreement 
(allowing BP secondees to work at TNK-BP) that was initiated 
at the request of AAR. 
 
3. (C) According to Huck, the level of engagement between BP 
and AAR is "unprecedented" and generally positive despite 
minor tensions.  He said the biggest current dispute is over 
the selection of a new CEO.  In response to the Ambassador's 
inquiry about the performance of interim CEO (and AAR 
partner) Mikhail Fridman (ref A), Huck said Fridman largely 
delegates responsibility to COO Tim Summers, and AAR partners 
and TNK-BP Executive Directors Viktor Vekselberg and German 
Khan.  In Huck's opinion, operations are "not much different 
than before."  Huck confirmed that Fridman's appointment is 
still considered temporary and his mandate as interim CEO 
would conclude at the end of 2009.  He said TNK-BP is not 
 
MOSCOW 00001811  002 OF 002 
 
 
seeking more candidates for CEO while it evaluates 
BP-nominated Pavel Skitovich and AAR-nominated Maxim Barsky 
(ref A), who Huck noted is only 35 years old.  The two have 
taken up well-defined duties within TNK-BP and are 
"scrambling" to prove themselves. 
 
4. (C) Huck said that only the eight board members 
representing BP (four) and AAR (four) would vote on the new 
CEO.  He said the "independent" TNK-BP board members, Gerhard 
Schroeder, Alexander Shokhin, and Jim Leng have been asked to 
evaluate Skitovich and Barsky to provide a non-binding 
opinion on which candidate should get the job.  Huck 
estimates each has a one-third chance of being chosen, and 
that there is a one-third chance neither will be chosen.  In 
the event neither is selecte
d, Huck said, another temporary 
arrangement with Fridman is likely.  He noted that finding a 
qualified candidate who wants the job and is acceptable to 
both sides has been very difficult. 
 
---------- 
BP-GAZPROM 
---------- 
 
6. (C) Huck explained that BP recently brought in a new CFO, 
Scott Sloan, to be directly responsible for developing a 
relationship with Gazprom and to "think about the future" of 
BP in Russia.  Given that it "cannot ignore the world's 
largest gas company," BP has now re-engaged with Gazprom, 
taking advantage of Huck's "long-time relationship" with 
Gazprom Deputy CEO Alexander Medvedev.  Huck said the 
discussions with Gazprom are "general" in nature and have not 
yet yielded any specific agreements.  Huck also cautioned 
that the signals he and BP have received from Gazprom and the 
GOR indicate that no major changes will be coming anytime 
soon to Gazprom's general business practices nor to the GOR's 
policies with regard to the energy sector.  He agreed with 
the Ambassador's suggestion that the potential energy and 
environment committee of the proposed Bi-National Commission 
could help change that. 
 
7. (C) In response to the Ambassador's question about the 
status of the long-stalled purchase by Gazprom of TNK-BP's 
stake in the giant Kovykta gas field, Huck said "the casket 
on that deal seems to have been cracked open."  He said he 
believes PM Putin has instructed Gazprom to take another look 
at Kovykta.  Huck said he thinks that two factors are at play 
with regard to Kovykta.  One, the license is out of 
compliance because the project cannot move forward under the 
current uncertainty.  This is a problem for Minister of 
Natural Resources Trutnev.  Two, for some reason, the PM is 
specifically interested in Kovykta and continues to ask about 
it, keeping it at the forefront of his subordinates' agenda. 
It is a "perceived priority" that Huck believes can be 
dangerous (i.e. that it might yield unpredictable results 
depending on how those subordinates decide to act on the PM's 
behalf). 
 
--- 
CPC 
--- 
 
8. (C) With regard to CPC, Huck said that BP is actively 
engaged with Lukoil to sell its remaining stake in the 
pipeline (ref B).  He said there is a clear plan in place and 
that BP still expects to be completely out of CPC by the end 
of the year.  However, Huck cautioned, it is also possible 
the deal will not close by then.  He explained that there 
remains an "enormously complex set of consents that need to 
be lined up," for BP to complete its exit.  Huck noted that 
the sooner BP gets the signatures it needs, the less room 
there is for further nationalistic machinations by either of 
the governments involved.  Huck said that in a recent meeting 
with Transneft head Nikolai Tokarev he was able to allay some 
tension and show that BP was acting in good faith. 
BEYRLE

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