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Press review: US to target Nord Stream 2’s EU creditors and Russia cracks down on US cult

Top stories in the Russian press on Thursday, July 16


Kommersant: Washington to turn up the heat on Nord Stream’s European creditors

The United States is trying to exert pressure on European creditors of the Nord Stream 2 project, threatening to impose retroactive sanctions on them. US Secretary of State Mike Pompeo demanded that Shell, Engie, Uniper, Wintershall and OMV should leave immediately or otherwise all their assets in America will be frozen. The new threats come amid Gazprom’s revved-up efforts to complete the project. However, it still remains unclear how the companies, which allocated 4.7 bln euro for Nord Stream 2 in loans, could avoid sanctions, Kommersant business daily writes.

In 2017, when Rex Tillerson headed the US State Department, he decided against imposing the Countering America's Adversaries Through Sanctions Act (CAATSA) against Nord Stream 2 because the project’s implementation had begun before this legislation was adopted. Managing Partner at Pen & Paper’s Moscow office Anton Imennov explained that Trump had empowered the Treasury Department with the right to impose CAATSA sanctions after coordination with the State Department. "Now the US has run out of the means of halting Nord Stream 2’s construction and that’s why Mike Pompeo had to immediately remove the clause on the application of Section 232 of CAATSA," the lawyer said. Therefore, "these are not new sanctions but well forgotten old ones."

Section 232 says that the sanctions target companies, which deliberately take part in building Russian energy export pipelines, provide investments or supply goods, services and technologies to the tune of over $1 mln in any single transaction or $5 mln in a 12-month period. A major blow could be dealt to five European companies sponsoring Nord Stream 2 - Shell, Engie, Uniper, Wintershall and OMV. Sources in these companies earlier said that in case of a real threat of sanctions they would be forced to leave. However, the management of all participants said that key investments in the project had been already provided.

In this situation it is unclear what the US wants from Gazprom’s partners. The application of retroactive sanctions would be an unprecedented step and in theory, these European companies could demand Gazprom return the loans and announce plans publicly to stop the implementation of Nord Stream 2. In this case, the project’s political positions will be weakened since it won’t be called European anymore, nevertheless the company still has the opportunity to complete the construction, the paper says.


Izvestia: Russia steps up fight against religious extremists

Russia has carried out a number of special operations against Jehovah's Witnesses (a US-based religious sect that is outlawed in Russia) in several regions. On July 15, one of the extremist organization’s leaders was detained in Siberia’s Tomsk Region, and ten others were arrested in Voronezh, in central Russia, over recruiting new members into the religious cult despite the ban.

One of the reasons for this intensified effort by Russian law enforcement agencies against the religious group is that its followers are known COVID-19 deniers, Roman Silantyev, who heads the human rights center at the World Russian People's Council, told Izvestia. Jehovah’s Witnesses do not only ban followers from blood transfusions, but also praise those who died because of rejecting medical assistance as heroes.

A source in law enforcement agencies told the paper that systemic work had been conducted against the sect’s followers for several years in Russia. Another source linked the beefed-up effort by Russian law enforcement agencies to the threat that the sect’s members could sabotage anti-epidemic measures.

The sect’s activity poses a threat not only to people’s health. There are serious concerns over the goals pursued by Jehovah’s Witnesses in Russia, the expert noted. "When the ban was imposed, Jehovah’s Witnesses had nearly 170,000 adult members. The organization’s cells were nearly in all regions throughout the country. The organization is subordinated to its headquarters in the United States, where the supervision center is located. This is a sort of ‘a fifth column,’" Silantyev explained.


Media: OPEC+ starts cautiously increasing production

The move to increase quotas on oil production starting in August by 2 mln barrels per day could keep oil prices at $40-$50 per barrel until the end of the year, experts interviewed by Izvestia said. The decision by the OPEC+ Ministerial Monitoring Committee to preserve the previous agreements and cut production starting in August by 7.7 mln barrels instead of 9.6 mln in July was expected. There are signs of rising oil demand on the market and that’s why cartel members, who refused to ease restrictions, could cede ground to more active players.

If OPEC+ countries had decided to keep oil cuts at previous levels, this would have created risks for some states of losing their market share, said Marcel Salikhov, President of the Institute of Energy and Finances. As a result of the OPEC+ agreements, starting from August 1 the oil volume on the market will increase by 2 mln barrels per day. According to the International Energy Agency, as far as demand for oil globally goes, the world is ready for this figure, said chief analyst at AMarkets Artem Deyev. "In fact, nothing will change, prices will remain at the previous level of $40-$50, unless there is a second wave of the pandemic," the expert told the paper.

Meanwhile, the real increase in production in August could be less because of those countries, which did not fully meet their commitments in May-June, namely Iraq, Angola, Nigeria and Kazakhstan, Kommersant business daily writes. According to Platts, they will have to cut production by 0.84 barrels per day in July-September.

Basically, OPEC+ is returning to the schedule of cuts agreed on for April and it implies gradually boosting production and that’s why this won’t be a surprise for Russian companies, Fitch expert Dmitry Marinchenko said. According to the analyst, Russia will be able to step up production in August by nearly 400,000 barrels per day. If this level remains unchanged until the end of the year, Russia’s oil output in 2020 will turn out to be 8-10% lower than in 2019. Another mystery is how the quotas will be shared among Russian companies and whether they will be able to boost production proportionally or whether someone will increase it more than others.


RBC: Armenian-Azerbaijan border conflict turns hot

The hot phase of the Armenian-Azerbaijani conflict has been raging for four days, resulting in nearly 20 casualties. Meanwhile, there is no fighting on the contact line along Nagorno-Karabakh, the traditional conflict zone between Armenia and Azerbaijan, which is located to the southeast of the new hotbed, RBC writes. The area of current conflict - the Tavush Region in Armenia and the Tovuz Region in Azerbaijan - is mountainous but densely populated. Exchanges of fire took place earlier there. The reason is that there is no official border between the two countries.

Until 2018, shooting in this region was common, but the current situation is absolutely unprecedented because its intensity could be only compared to the April 2016 war in Nagorno-Karabakh, said Leonid Nersisyan, a military expert from the Armenian Research & Development Institute (ARDI).

Azerbaijani political scientist Farchad Mammadov has a different view on the reasons behind the current escalation. According to him, the incident was provoked by Armenia in order to maintain the status quo at the Karabakh negotiations. "Azerbaijan wants to restore integrity by returning Nagorno-Karabakh. If Baku had sought conflict escalation, the shooting would have started in Nagorno-Karabakh, not on the border with Armenia," he said. Yerevan’s strategy is to create "a threat to its statehood" and make it a background for talks on the future of Nagorno-Karabakh and then torpedo them.

The current incident is the first major military clash after Nikol Pashinyan had assumed power in Armenia, the paper notes. The prospects for further escalation of the conflict depend on several factors - mass demonstrations in Baku on July 14 and Turkey’s direct support for Azerbaijan at all levels, but Russia’s efforts to stabilize the situation could outshine all others, Nersisyan said.


Izvestia: MMA sees popularity boom in Russia

Russia’s mixed martial arts (MMA) are attracting a bigger number of spectators and have made leaps and bounds over the past years. Now Russia has got not only several talented fighters but also two champions of the world’s most prestigious league - UFC. The names of Khabib Nurmagomedov and Petr Yan are familiar to every sports fan. Another champion, Zabit Magomedsharipov, is an up and coming fighter, who’s a prize-winner for the most spectacular bouts almost every night, Izvestia writes.

The MMA broadcast ratings on TV have been setting records and sometimes even outperform football and hockey. "There are two reasons here. Firstly, MMA is now perceived as professional sport," Executive Director at Russian Cagefighting Championship (RCC) Nikolai Klimenko said. "New teams emerge and there is good management. The number of promotions has increased and the product quality has improved, and sponsors have come. This certainly impacts the level of athletes. Second, if we speak about UFC, two years ago they entered our market and since then the number of UFC fighters has grown and new leaders have emerged."

The head of Russian professional team Rat Alexander Skaredin stressed that the breakthrough of MMA in Russia is the result of systemic work. "Quantity always becomes quality," the expert said. "Today, Russia is ranked third in the world for the number of professional MMA fighters after the US and Brazil."

Meanwhile, experts have different views on the prospects of MMA in Russia. According to Klimenko, one day MMA could catch up with football and hockey and this is only a matter of time. However, Skaredin believes that this is impossible because Russia’s MMA is in a no-win situation compared to football and hockey. "MMA will never become sport number one in the world and moreover in Russia, that’s why we should be just glad for our champions and hope that MMA is becoming more popular," he said.


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