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The New York Times: Putin tries to quell concern over business maneuvers

By Ariane Bernard
Published: September 24, 2006
 
PARIS France, Germany and Russia met during the weekend, discussing a number of contentious business topics as Russia tried to quiet European unease over its investment in the European aerospace consortium EADS and play down recent problems with Western oil companies operating in Russia.
 
President Vladimir Putin of Russia met with President Jacques Chirac of France in bilateral meetings on Friday evening, and Chancellor Angela Merkel of Germany joined the two on Saturday for talks at a castle north of Paris.
 
“Concerning the acquisition of a 5 percent stake, I can appease you all by telling you it is not at all the sign of an aggressive behavior on the part of Russian partners,” Putin said Saturday. “We will not use this stake to change in any way the institutional situation of EADS.”
 
Earlier this month, a Russian state- controlled bank bought a 5.02 percent stake in EADS, the parent company of Airbus, and Russian officials indicated then that the government hoped to increase its stake. But EADS and Thierry Breton, the French finance minister, subsequently rebuffed speculation that Russia might gain a position on the board of the European consortium.
 
The Russian government is also squabbling with the French oil giant Total over the Kharyaga oil field in Northern Russia, with the authorities indicating that Total may lose its license, although Putin told reporters in Paris on Friday that “the rumors” about Total losing its license in Kharyaga “were greatly exaggerated.”
 
An Élysée Palace spokesman indicated that Putin’s reassurances were considered solid guarantees for France’s investments in Russia.
 
Dissent has grown in recent months between the Russian authorities and Western oil companies, among them Royal Dutch Shell and Texas-based ExxonMobil, as Russia is disputing some of its production-sharing agreements that were entered in the early 1990s at a time when oil prices were low and Russia lacked the investment capability to exploit its resources on its own.
 
On Friday, Russia announced that it had granted a license to the Russian group Rosneft to exploit an oil field adjacent to ExxonMobil’s Sakhalin-1 site in Eastern Russia, despite Exxon’s filing for the field on the basis that the company considered that it fell within its licensed area. Putin did not publicly address the disagreements over Exxon’s claims or Shell’s recently losing a license to carry out work at the Sakhalin-2 site.
 
Instead, Putin reassured Western countries that he appreciated the co-dependent nature of energy suppliers and consumers. He also indicated that it was “very much a possibility” that some oil resources be redirected to Europe.
 
Merkel insisted on the need for “reliable partners,” between Europe and Russia, in energy matters. The European Union has sought without success since 2000 to install an energy charter treaty on energy with Russia, an arrangement that would open its market and ensure stability in fossil fuel supplies to Europe.
 
Putin also announced that he had signed on Friday two “memoranda of understanding,” which act as blueprints for potential contracts, representing more than $10 billion.
 
One of the agreements, entered between the Russian Transportation Ministry and the French construction giant Vinci, concerns plans for a highway between Moscow and St. Petersburg. The other memorandum, between the Russian and French transportation ministries, look at possible cooperation on railroad, transportation and infrastructure in Russia, the Élysée said.
 
In addition to business matters, the three countries discussed current diplomatic issues, and Putin said on Saturday that Russia was ready to send “a small deployment of Russian military engineers” to Lebanon.
 
 PARIS France, Germany and Russia met during the weekend, discussing a number of contentious business topics as Russia tried to quiet European unease over its investment in the European aerospace consortium EADS and play down recent problems with Western oil companies operating in Russia.
 
President Vladimir Putin of Russia met with President Jacques Chirac of France in bilateral meetings on Friday evening, and Chancellor Angela Merkel of Germany joined the two on Saturday for talks at a castle north of Paris.
 
“Concerning the acquisition of a
5 percent stake, I can appease you all by telling you it is not at all the sign of an aggressive behavior on the part of Russian partners,” Putin said Saturday. “We will not use this stake to change in any way the institutional situation of EADS.”
 
Earlier this month, a Russian state- controlled bank bought a 5.02 percent stake in EADS, the parent company of Airbus, and Russian officials indicated then that the government hoped to increase its stake. But EADS and Thierry Breton, the French finance minister, subsequently rebuffed speculation that Russia might gain a position on the board of the European consortium.
 
The Russian government is also squabbling with the French oil giant Total over the Kharyaga oil field in Northern Russia, with the authorities indicating that Total may lose its license, although Putin told reporters in Paris on Friday that “the rumors” about Total losing its license in Kharyaga “were greatly exaggerated.”
 
An Élysée Palace spokesman indicated that Putin’s reassurances were considered solid guarantees for France’s investments in Russia.
 
Dissent has grown in recent months between the Russian authorities and Western oil companies, among them Royal Dutch Shell and Texas-based ExxonMobil, as Russia is disputing some of its production-sharing agreements that were entered in the early 1990s at a time when oil prices were low and Russia lacked the investment capability to exploit its resources on its own.
 
On Friday, Russia announced that it had granted a license to the Russian group Rosneft to exploit an oil field adjacent to ExxonMobil’s Sakhalin-1 site in Eastern Russia, despite Exxon’s filing for the field on the basis that the company considered that it fell within its licensed area. Putin did not publicly address the disagreements over Exxon’s claims or Shell’s recently losing a license to carry out work at the Sakhalin-2 site.
 
Instead, Putin reassured Western countries that he appreciated the co-dependent nature of energy suppliers and consumers. He also indicated that it was “very much a possibility” that some oil resources be redirected to Europe.
 
Merkel insisted on the need for “reliable partners,” between Europe and Russia, in energy matters. The European Union has sought without success since 2000 to install an energy charter treaty on energy with Russia, an arrangement that would open its market and ensure stability in fossil fuel supplies to Europe.
 
Putin also announced that he had signed on Friday two “memoranda of understanding,” which act as blueprints for potential contracts, representing more than $10 billion.
 
One of the agreements, entered between the Russian Transportation Ministry and the French construction giant Vinci, concerns plans for a highway between Moscow and St. Petersburg. The other memorandum, between the Russian and French transportation ministries, look at possible cooperation on railroad, transportation and infrastructure in Russia, the Élysée said.
 
In addition to business matters, the three countries discussed current diplomatic issues, and Putin said on Saturday that Russia was ready to send “a small deployment of Russian military engineers” to Lebanon. 

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