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A Massive Gas Deal in Baku, 'Economic War' on the Russian-Lithuanian Border

Plus, Kazakhstan's opposition takes a blow, and Croatia's health care workers strike. by By S. Adam Cardais, Erik N. Nelson, and Alexander Silady 20 September 2013

1. Azerbaijan, BP-led group strike massive gas deal


A consortium of European energy companies led by BP has struck a deal with Azerbaijan to extract natural gas from a Caspian Sea field and export it to Europe, in what one BP executive called "one of the biggest gas deals in the history of the oil and gas industry."


The agreement envisions sending 16 billion cubic meters each year from the Shah Deniz field "through more than 3,500 kilometers (2,175 miles) of pipelines through Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania, and under the Adriatic Sea to Italy," according to a BP statement.


That list of countries will likely disappoint Brussels, the Financial Times writes, as EU officials had eyed Azerbaijani gas as a possible alternative for Eastern European countries that are at the mercy of Russian energy giant Gazprom for most or all of their gas supplies.


The EU had backed a pipeline route that would have run through Bulgaria, Romania, and Hungary to Austria.


Eighty percent of the Shah Deniz gas is destined for Italy, and slightly less than 10 percent each for Bulgaria and Greece.


The consortium's members say Eastern Europe is not off the table, though except for Bulgaria the region is not part of the deal.


“We are confident [Eastern European and Balkan states] will be a source of demand in the future, but we are not actively engaged in any negotiations at the moment,” said Al Cook, a BP official in the Shah Deniz project, according to the Financial Times.


The move comes a month after Russian President Vladimir Putin visited Azerbaijan in a bid for closer ties, Voice of America notes. Russia is eager to channel the hydrocarbons of the Caucasus and Central Asia through a network of pipelines that it controls, and this deal will be a major blow to those ambitions.


2. Leading Kazakhstani opposition figure calls it quits


Azat (Free) party head Bolat Abilov says he is leaving politics in a potentially fatal blow to Kazakhstan's weak opposition.


One of the last remaining prominent opposition leaders in Kazakhstan, Abilov announced the "difficult" decision on Facebook 19 September without specifying a reason, Radio Free Europe reports. The 56-year-old business magnate said he will focus on media projects, including films.


Bulat Abilov
A former ally to President Nursultan Nazarbaev, Abilov joined the opposition in 2000. Azat was allied with the OSDP, a social democratic party until a nasty falling out earlier this year, notes.


Combined with that alliance's collapse, Abilov's political departure means that "Kazakhstan now has no genuine, functioning opposition parties to take on the difficult job of holding President Nursultan Nazarbaev to account," the website argues.


While the opposition has always struggled in Kazakhstan, among the world's most repressive regimes, it played at least a partial role on the political stage until December 2011, when 15 people died in clashes with security forces in the western town of Zhanaozen. Afterward, the regime cracked down on dissent, blaming Alga, then the strongest opposition party, for fomenting the violence.


Astana shut Alga down along with several media outlets, leaving the now defunct OSDP-Azat coalition as Kazakhstan's only remaining opposition force, according to


3. Lithuania accuses Moscow of 'economic war'


Russia has launched an "economic war" against Lithuania through trade restrictions and petro-politics, Prime Minister Algirdas Butkevicius said 19 September, Bloomberg reports.


Last week, Russia imposed new checks on its border with Lithuania, forcing truckers to wait up to a week to cross, and guards are reportedly harassing Lithuanian-registered cars. At the same time, Vilnius is negotiating its natural gas supply contract with Russian-energy giant Gazprom, which, as Lithuania's sole supplier charges the country considerably more than Western European customers despite its proximity.


Dalia Grybauskaite
While the Gazprom talks aren't public, Lithuanian President Dalia Grybauskaite told local media 19 September that Gazprom won't consider reducing prices and wants Vilnius to "do things that can't be done," according to Bloomberg.


Also speaking to local media, Butkevicius said, "This could almost be considered a sort of economic war."


The European Union has told Moscow to back off. Regarding the new border checks, a spokesman for EU Trade Commissioner Karel De Gucht said "we expect the Russian authorities to immediately lift such unjustified restrictions," Reuters reports.


Moscow is also pressuring Ukraine, Moldova, and other Eastern European countries by, for instance, blocking trade in an effort to keep a grip on its back yard. Russia wants Ukraine, especially, to join its Eurasian Customs Union, rather than signing new free-trade agreements with Brussels at a November summit as planned following approval by Ukraine's government this week.


4. Croatian doctors, nurses strike over benefit cuts


Angry over benefit cuts amid Croatia's economic woes, thousands of health care workers didn't show up for work 18 September, AFP reports.


Roughly 46,000 doctors and nurses – or most Croatian health care workers – stayed home in the country's first doctors' strike since 2005. Primary and emergency care physicians did not participate in the protest, AFP reports.


The health care workers went on strike after the government rejected their demands to reinstate canceled benefits regarding overtime and on-call pay, the Associated Press reports. The Health Ministry said the country's budget deficit is too high to accommodate their demands, according to the AFP.


Mired in recession, Croatia is trying to trim public sector spending to revitalize the economy. Doctors there earn roughly 60 percent more than the average wage, according to AFP.


5. Classical composer was straight, but lonely, Russian official argues


Although a new movie about the life of composer Pyotr Tchaikovsky is expected to come out in the near future, the composer is not.


At least not in the biopic, which is being made with Russian government funding and is carefully avoiding the composer’s well-established homosexuality, the Guardian reports.


Now Russia’s culture minister, Vladimir Medinsky, claims there was no evidence that the composer was gay, backing up the film’s screenwriter, Yuri Arabov, who insists Tchaikovsky was “a person without a family who was stuck with the opinion that he supposedly loves men,” the Guardian writes.


The apparent squeamishness about a famous Russian being gay is being attributed to a desire to avoid violating the recent Russian law banning promotion of "non-traditional" lifestyles among minors.


Oddly enough, Medinsky’s boss, Russian President Vladimir Putin, conceded recently to the Associated Press that Tchaikovsky might have been gay.


"They say that Pyotr Ilyich Tchaikovsky was a homosexual,” Putin said. “Truth be told, we don't love him because of that, but he was a great musician, and we all love his music. So what?"


And Konstantin Rotikov, who has written a history of gay St. Petersburg, said the composer’s sexuality is a “historical fact” and was never in doubt, the Guardian writes.


"In the case of Tchaikovsky, his homosexuality is so well-documented by his own writings and the writings of others that it is simply ludicrous to suggest otherwise," he said.

S. Adam Cardais and Erik N. Nelson are TOL contributing editors. Alexander Silady is a TOL editorial intern.
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