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Press review: Russia boosts ties with Cuba and how Moscow’s Kiev sanctions impact trade

Top stories in the Russian press on Friday, November 2
Cuban President Miguel Diaz-Canel Bermudez Alexander Shcherbak/TASS
Cuban President Miguel Diaz-Canel Bermudez
© Alexander Shcherbak/TASS


Kommersant: How Russia’s countersanctions against Ukraine impact trade

Moscow's sanctions against Ukraine would not only freeze the assets of those targeted, but would also hit bilateral trade. Kommersant wrote. The Russian titanium corporation VSMPO-Avisma and consumers of railway wheels in Russia may suffer. The newspaper wrote. Sources told Kommersant that new people can either be added to the list or some names on it could be crossed out. Meanwhile, Ukraine reacted to the Russian measures calmly, the newspaper added.

Source in the government told Kommersant that Moscow's sanctions list was a tit-for-tat response to similar restrictions imposed by Ukraine against Russia. It is based on proposals from various ministries and departments and "outlines a wide range of key politicians and businessmen, as always happens in such cases, and we must take into account that the list is subject to change, there may be exceptions and additions."

The sanctions also hit bilateral trade. A source in the government told the newspaper, that these sanctions prohibit financial transactions by Russian residents with people on the list, and attempts to bypass restrictions would have to be thwarted by banks involved in transactions. At the same time, the Ministry of Industry and Trade told Kommersant that certain people might receive temporary waivers for certain operations "if it is necessary to ensure the interests of Russian companies". According to a Kommersant's source in the government, so far there have been no such appeals from Russian companies.

In addition, the state-owned United Mining and Chemical Company and its Volnogorsky GOK, the main supplier of ilmenite for Russian titanium producer VSMPO-Avisma, were included in the sanctions list. Still, co-owner and CEO of VSMPO-Avisma Mikhail Voevodin told Kommersant that the company still does not see any direct obstacles to its operations.

On November 1, Russian Prime Minister Dmitry Medvedev signed a government decree introducing special economic measures against 322 Ukrainian citizens and 68 companies.


Nezavisimaya Gazeta: Russia looking to boost military cooperation with Cuba

Cuban President Miguel Diaz-Canel Bermudez arrived in Moscow. According to official sources, the focus of Russian-Cuban talks, to be held on November 2, and at the highest level, is to develop Cuba’s economic and defense cooperation with Russia. Head of the (lower house) State Duma's Defense Committee Vladimir Shamanov earlier said that the parties could discuss Russia's military presence in Cuba. According to Nezavisimaya Gazeta, this might hint at Washington's possible pullout from the Intermediate-Range Nuclear Forces Treaty (INF Treaty).

Relations between Moscow and Havana began to intensify to a large extent thanks to the US' ongoing sanctions, which were imposed against Cuba in the 1960s, the newspaper wrote.

Military expert, Lieutenant Colonel Alexander Ovchinnikov told Nezavisimaya Gazeta, "the deepening of cooperation between Moscow and Havana is an expected occurrence. Moreover, Russia has a geopolitical interest here, connected with the possible exit of the United States from the INF Treaty. However, Moscow is unlikely to deploy any large military bases in Cuba, as well as missiles aimed at the United States. " Ovchinnikov noted that in order to strengthen military ties with Havana, Russia needs to offer Cuba effective economic programs. However, these projects cannot be implemented very quickly.

Military expert Colonel Shamil Gareyev is confident that Russian President Vladimir Putin will find ways to "interest his Cuban counterpart in forging diverse contacts with the Russian Federation." These contacts, of course, will also concern the military sphere, he told Nezavisimaya Gazeta. Gareyev admits that reconnaissance and radio-technical units may appear again in Cuba, which will act in Havana's defense interests and in the military interests of Russia.


Kommersant: Azerbaijan to prolong contract with Gazprom

Baku would like to extend its current contract for purchasing Russian gas until 2020, since it is due to expire at the end of November. According to Vice-President of SOCAR Elshad Nasirov, the company is ready to buy up to 1 bln cubic meters per year from Gazprom. Since the beginning of the 2000s, Azerbaijan has been actively developing gas production for export to Georgia and Turkey, but in 2017, it faced a deficit and was forced to return to buying supplies from Gazprom, Kommersant wrote. According to the expectations of SOCAR and experts, in 2020 Baku will refuse imports due to increased production, but these plans may be hampered by the growth of demand in Azerbaijan and Georgia.

The amount of gas to be purchased will be determined by commercial interests - up to 1 bln cubic meters per year. According to Kommersant’s sources, the cost of Russian gas for SOCAR is too high to sell profitably on the domestic market, so the company will use this gas for exports to Georgia.

Tbilisi could have taken these volumes directly from Gazprom, but a large import contract, discussed in 2017, was declared undesirable by Georgia for political reasons. Now Tbilisi is buying only small amounts of Russian gas to cover winter consumption peaks.

SOCAR plans that starting from 2020, the need for imports will evaporate due to the growth of the company's production. Therefore, the industry expert says that up until 2030, Azerbaijan would not need imports. However, Kommersant notes that this estimate is based on a rather conservative growth forecast for the country’s domestic demand. In 2020, it is expected to reach 12 bln cubic meters, which is even lower than in 2017 (12.7 bln cubic meters). Meanwhile, in 2012-2017, gas demand in Azerbaijan increased by 20%, and in Georgia - by 38%, to 2.5 bln cubic meters.


Vedomosti: Rosneft might invite ExxonMobil on board $19-bln Far East project

Over the next couple of years, Rosneft will be looking for a partner to carry out the Far East Petrochemical Company (FEPCO) project. According to Vedomosti, ExxonMobil might become this partner. Russia began negotiations with the company about participating in new oil and gas projects, despite Washington’s looming new sanctions. Two sources close to the participants in Exxon-Rosneft talks told Vedomosti that the Russian oil producer is considering, among other things, the possibility of constructing the project in the Far East under a partnership with ExxonMobil. Two high-ranking officials confirmed the information.

One option is to give ExxonMobil an over 50% stake in the project’s construction in exchange for proportionate investments, the two sources told the newspaper. "If ExxonMobil becomes the owner" of more than a 50% stake here, they noted that it would mean, "that the project will belong to the American company, and Rosneft will be a minority shareholder in it. So this can shield the project company from US sanctions," one of the sources told Vedomosti.

Rosneft and ExxonMobil have been in talks for some time, a person close to one of the parties informed Vedomosti, adding that the American oil company is not the only potential partner. Negotiations have been going on "at least since the beginning of the year," an investment banker, an official and a source close to one of the parties to the negotiations told Vedomosti. Two of them told the newspaper that at the beginning of the year Rosneft had been looking into a partnership with China’s Sinopec. However, the current state of the negotiations remains unclear.

The latest estimates of FEPCO construction costs have reached 1.3 trillion rubles ($19.82 bln), two sources told Vedomosti. At present, Rosneft refuted the information received by Vedomosti from anonymous sources, and representative from ExxonMobil did not provide any comments.


Izvestia: Finnish MP believes Helsinki may lose neutrality by joining NATO exercises

Finland’s large-scale participation in NATO military exercises could lead to Helsinki losing its neutrality, Markus Mustajarvi, member of the Finnish parliament, and member of the defense committee told Izvestia. The lawmaker harshly criticized Helsinki’s policy, stating that NATO’s exercises in Norway is an aggressive demonstration of power, and Finland’s participation it in threatens its security.

According to him, it is already difficult to say that Finland is only a partner of the alliance. As part of US hegemonic policy, these exercises are an aggressive demonstration of power, and will inevitably lead to increased tensions in the north, he stressed. Finland does not need a policy of confrontation, but peaceful coexistence, Mustajarvi said, adding that he believes through such military exercises, Washington wants to alter Finland’s foreign defense policy.

The Finnish MP also noted that he did not support the government’s desire to aggravate relations with Moscow. Finland and Russia have many common interests in the north and Finland’s participation in these exercises could have a negative impact on economic and other cooperation with Russia, the politician concluded.

Finland, like neighboring Sweden, since the founding of NATO in 1949 adhered to a policy of neutrality and did not join the alliance. However, despite its status as an observer, Finland participates in numerous NATO military drills. The Trident Juncture exercises are being held from October 29 to November 7. In terms of the number of vehicles and the number of military personnel involved, these exercises have already become the largest in history since the end of the Cold War.


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