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Armenia Bungles Gas Negotiations with Russia: Can't Extract Concessions from 'Strategic Partner'

In any issue related to Armenia-Russia relations, the situation of Armenian government representatives is quite unfavorable.

They just don’t know how to explain, let alone justify, this or that because they cannot have any impact at all on decisions taken since everything has been left to the discretion of the Kremlin.

This reality takes on even more tragi-comic manifestations in the context of the price of Russian gas supplied to Armenia.

Prior to the March 10 meetings of the presidents of Armenia and Russia at the Kremlin, Armenian Deputy Foreign Minister Shavarsh Kocharyan announced that the Sargsyan-Putin discussions would also focus on maintain the current gas rate. Russian natural gas is delivered to Armenia at US$165 per 1,000 cubic meters. Following from the logic of Kocharyan’s statement, if the sides didn’t come to some agreement, the current rate (in place until April of this year) could also increase to the former rate of $189.

On the same day, March 10, the Armenian government adopted a decision maintain the current rate until the first quarter of 2017. This was ratified by an agreement struck with the Russians. Thus, it became apparent that the Russians were in no mood to decrease gas rates to Armenia despite the drop in international prices.

Yesterday, newly appointed Armenian Minister of Energy and Natural Resources Levon Yolyan surprised everyone when he announced that negotiations are currently underway with Russia to drop the price of Russian natural gas even more. Such an announcement creates confusion in the minds of many.

If the government has already adopted a decision to maintain the current rate, then what negotiations is Yolyan referring to?

Furthermore, if there was a possibility to lower the price, why was the government in such a rush to maintain the current price for the next year?

On the other hand, it appears that the foreign ministry (Kocharyan) has no idea as to where these negotiations are headed or what their aim is. In this context, however, there is nothing to be surprised about.

For example, the same deputy minister Kocharyan denied that a debate of experts had taken place in Tbilisi regarding a settlement of the Karabakh issue. Not only had James Warlick, the United States Co-chairmen of the OSCE Minsk Group, announced that he would be attending the discussion, but Armenian experts confirmed that they had participated at the event.

The fact that a statement on the possibility of decreasing the gas rate was made after the Sargsyan-Putin meeting leads us to assume that the new negotiations started based on the results of that meeting. However, in that case, the silence of the parties involved is more than strange. Neither before or after the meeting did Yerevan or Moscow even hint that the gas rate was a topic of discussion, or that they had reached some understanding to continue the negotiations.

The reason for these contradictions, especially ongoing uncertainties regarding the results of the talks between the two presidents, is one and the same – the unpredictability of the Russians.

In Yerevan, no one is in a rush to make any specific announcement because they are not sure if the Russians might pull out of any agreements along the way. Then too, of course it’s an embarrassment to confess that, despite the drastic drop in energy prices, they cannot obtain any concessions from their strategic partner Russia and that the gas flowing to consumers in Armenia is basically pegged at the same rate it flows to European countries.

But it’s just not the Russians who are to blame for the fact that the negotiations haven’t given any substantial results and that Moscow is taking a whimsical approach to it all.

Yerevan is responsible for doing next to nothing at all to bolster its position prior to the negotiations and, when necessary, to not providing the Russians with any options.

One week ago, Armenian Prime Minister Hovik Abrahamyan announced that he had made a proposal to the Russians to drop the gas price. Later, perhaps understanding that GazProm simply ridiculed that proposal, Abrahamyan decided to raise the issue again at a cabinet session. However, not being able or daring enough to direct his message to the actual players – the Russian government and GazProm – he directed his words to GazProm Armenia, a subsidiary of the Russian energy giant. And all he did was advise the subsidiary as to who it could raise profits if they dropped the price; as if the company didn’t know this already.

A person carrying out negotiations on such a level is not only incapable of achieving any results, any also cannot expect others to respect him. One must demand the respect of others. One can see how it’s done by looking at the example of Georgia.

GazProm presented an ultimatum to Georgia, stipulating that for the gas supplied to Armenia, Georgia would have to pay to pay in cash for transit fees. Otherwise, Russia threatened that it would ensure gas supplies to Armenia via Iran.

To extricate itself from the situation, the Georgian government, in addition to negotiations with GazProm, also started intensive negotiations with Azerbaijan and with Iran in a search for alternate gas importation routes. The negotiations conducted by Georgian Vice Prime Minister Kakha Kaladze lead to preliminary agreements with Iran, according to which Georgia would purchase 250 million cubic meters of gas yearly via Armenia. In order that Armenia’s economic blockade not be broken, Azerbaijan agreed, after three months of stubbornly refusing to do so, to supply 500 million cubic meters of gas to Georgia at a convenient price. Afterwards, GazProm was left with no other option but to agree to maintain the agreement with Georgia to pay, I gas, for the transit of gas to Armenian. In other words, utilizing the contradictions among countries in the region, Georgia achieved the best result for itself.

Armenia isn’t using any such leverage in its negotiations with Russia. In fact, Armenia has voluntarily refused to utilize the possibilities afforded by the lifting of sanctions on Iran and, in particular, its geographic and potential political advantages of importing gas from Iran and becoming a transit conduit for Iranian gas to foreign markets.

In 2013, when Armenian-Russian gas deals were being signed, giving GazProm a monopoly status in Armenia, the government tried to convince us that this fact would not restrict the importation of gas from Iran if and when needed.

Now, at issue isn’t the importation of gas from Iran, but merely using such a possibility as a card in negotiations with the Russians. But no one remembers this.

The question thus arises as to why.

If, in reality, if such deals didn’t restrict the sovereign rights of Armenia to import gas from other countries and sources, then why are the authorities in Armenia refusing to consider the issue even on a theoretical level? Why are they so irritated whenever such questions are raised?

Perhaps, the time has actually come to confess that the public in Armenia was duped and that, in reality, Armenia has placed itself in the Russian “gas chamber”.

Perhaps, the time has come to confess that it’s only due to the goodwill of Putin that this gas chamber hasn’t yet been turned on.

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Հայաստանի գազն ու էլ. էներգիան իրենց քանակով Օ - ին մոտ նշանակություն ունեն ռուսների համար, սակայն այն ՀՀ պետության, նաեւ ,,վերխուշկայի,, գլխավոր սնուցիչն է (ակնհայտ է, որ իրենց փայն ունեն), ուստի եւ հզոր լծակ է ծառայում այս կարեւոր տարածքում: Դրա համար էլ էներգիան երբեք չի կարելի էժանացնել! Եթե նույնիսկ ռուսն էժանացնի, ապա սրանք կավելացնեն, որի արդեն իսկ ականատեսն ենք: Ռուսներին այստեղ սխալ է մեղադրել՝ նրանք իրենց համար են խաղում եւ կխաղան այդպես, քանի որ դիմացինները այդ են ստիպում:

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