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tv   Russian Involvement in the Middle East - Energy Relations with Gulf States  CSPAN  August 8, 2018 8:00am-8:57am EDT

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first of whom is my very old
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friend doctor theodore. in november what was then the american association of slavic studies annual meeting and will never forget one of the leading soviet expert of the day told us all in a general session that gorbachev was still in control, he was just about to pull the plug on yeltsin and all his opponents. have occurred much from them since then. [laughing] but i have heard from the a graphic and he's had a long and distinguished career and working on russia in the middle east often in the middle east. he's currently at gulf state analytics in washington and you will see him all over town next speaker is rauf mammadov who has
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worked with an oil company. currently as, use senior fellow for energy policy at the very prestigious middle east institute. so today's battle on energy gambits, russia, saudi arabia and the united arab emirates. we talked last time about how, stephen talked about how rush likes to export conflicts and it certainly does. i think though like everyone else this conflict between saudi arabia, uae, bahrain and egypt on one end and qatar on the other, it's a strange one that russia generally wants to be on good terms with both sides because, in fact, there is a lot of money involved and the russians have become rather depend upon that. why don't we start with
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202-748-8200 will speak for about ten minutes. thanks. >> thank you very much mark, thank you very much for attending, thank you very much to the jamestown foundation for making this possible. i want to take the next ten minutes to talk about what i i said russia's financial tactics in the region but how is also related to the crisis all in ten minutes. but the main point here that i want main points are that russian tactics at least financial in the region have been ongoing since about 2007, this is been a developing policy by the russian state to get more involved financially within the gulf states and the route the wider middle east region. i call this a north-south corridor door development between moscow and the gulf states. this concept of north-south
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corridor has been picked up by the gulf states, particularly -- the use it in their policymaking documents and so on in terms of developing this north-south relationship closer. throughout the past decade or so we have seen the creation of all kinds of different vehicles, if you will, that help promote financial ties between russia and the middle east states. i just want to draw your attention to, i made in my paper from last year and i now have pinned on my twitter, the point is a following, that russia's moral vision, moral vision involving spiritual sovereignty, great natural wealth in strategic minerals and energy is moscow's relationship with china and the rest of the far east
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appeals to arab authorities and businessmen. and that is occurring right now. that appeal of what russia represents as a future leader of this duration space of the north-south corridor is something that arab businessmen are very interested in, arab policymakers are very interested in as well as how that advertise with the triangulation between moscow-china and the lower gulf states. having said that, the tools or the vehicles that use interacting between russia and the middle east states take a couple of different forms. the first of course our state owned companies, particularly those that are involved in, let's say, port construction like dp world. we are seeing dp world getting
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more involved in projects in the caspian. the ability for these types of state-owned companies are involved in logistics to work with russian is growing your russia, on the other hand, is using its sovereign wealth fund, direct fund come to make deals with other sovereign wealth funds which is another type of financial vehicle to make deals with those sovereign wealth funds in the gulf state. now, there's been a lot of talk about sovereign wealth funds and their activities between russia and the gulf states, but let's face facts here first and foremost. every sovereign wealth fund is different. it's like a thumb print. they are all structured differently. they all of different types of goals and ways in which they want to make revenue and when vc investments and emerging markets and so one. but the point here is with the
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sovereign wealth fund between russia -- the political, the political cost, if you will, or the political revenue that you receive from these types of investments. the qatar crisis accelerated the development and speed of these sovereign wealth funds between russia and the gulf states and now the interact in terms of political favors. i can go off on this later but the best example is the cutter e investment authority and its investment in russia now that has paid off in terms of potential political favors in the rest of the region and particularly in syria. this is a game that is ongoing now. besides the swiss and the state-owned companies, you other
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in the region beginning stand that. we just had the creation of the egyptian sovereign wealth fund. where is the egyptian sovereign wealth fund going to get its start up capital from, given egypt's poor economy? you might want to ask the folks in abu dhabi about where that money may come from. the point being is that egypt as an emerging sovereign wealth fund type state, its first real client is going to be what can they do with russia. so it's within the sovereign wealth fund arena that they're able to do business. now, as part of this short presentation here, there's an impact on for the united states clearly and the impact on the united states has to deal with the fact that our gulf allies are doing business with russian companies that are under sanction, whether it's under this swiss format or whether
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it's under the state company vehicle format. so we need to ask ourselves a major question of whether sanctions should be put forward or the notion of sanctions put forward against gulf allies or arab allies who are doing business with russian entities such as -- export wh with offics in the region itself. should those offices continue to function in the region if we are trying to achieve a particular goals the middle east and particularly in the gulf and particularly with the qatar crisis in trying to resolve that? or does it go to big issue such as what's happening with jerusalem and the future of iran? this is all in a mixed together in terms of monies. i'd like to also say here that the implication of what russia is doing to avoid sanction is
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important here in the gulf context because what russia has done is set up the russian export center in the middle east, particularly in the gulf, to function as an intermediary between gulf states and exports so the client in the gulf can receive their goodies without having to deal with a sanction situation. so russia is very cleverly setting up new entities in order to stay ahead of the sanctions raised. this phenomenon needs to be watched very closely and who is in charge of this russian export center project is -- [inaudible] something for some of you that will make the picture more complete. finally, i'd like to say here that currency and purchasing of currency continues to be a tactic used by russian to being
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hearts and minds in the region. under minton in moscow is goznak, a premier purchaser. the russians print this currently not only for themselves but for other states around the world, and in particular the russians in the region have printed currency for syria, yemen and libya. the presence of this currency is a type of soft power and it is something we need to recognize more and more as russia begins to print currency in war zones but as russia begins to use the gulf is what i call a lily pad in the sense to get deeper into africa which we will talk later today. this idea of printing currency
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is a signal of the depth of russia within of the parts of the region and other continents. overall, this whole area finance between russia and the gulf, and on to africa represents a gigantic gray zone in our understanding. this research here i feel has provided a means in which to look at these issues, both quantitative and qualitative methods, and to look for remedies that can be used to help the u.s. government make policy in the near term. thank you very much. >> thank you, rauf. >> i'll be -- can anyone hear me? first of all, thank you james telegraphing on this team since the beginning of the project. i'll be glad to share my research with the audience.
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the speaker has already mentioned the narrative of the russians, the perpetuating notion that the world has to be multi-powered and russia has to be one part of it. energy diplomacy plays an important role in that overarching strategy. russia is heavily dependent on exports of unfinished goods. almost half of its export come some energy and 36% of budget may become some energy and support it in the best interest of russia to promote the multi-powered world, and at the same time become clear that will influence the project, the processes that are happening around the world. the gulf region in this regard
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becomes a perfect objective for the energy diplomacy of russia. first of all, almost half of the world oil and gas reserves is located there. goals and bigger middle east region, all these important navigation routes go through there and we've seen from recent example that was mentioned here that the harvest straight is looking, together almost 30% of the oil and gas go through these straits. the other reason why gulf is important is because russian companies were subject to sanctions from the u.s. and the west, i mean europe. and, therefore, needed to find new sources of funding for its activities. gulf seemed like a perfect target for that.
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another reason russian look into and tap into the gulf was actually defined new markets to sell their gas. it might sound ironic but demand for the gas in the middle east is substantial, and for instance, russia is trying to woo saudi arabia to by its lng from arctic, whereas qatar is next-door and using that, the conflict between qatar and saudi arabia, using that tactical divide and rule, actually they attended the commencement ceremony for the arctic lng where putin told them directly by our guest so we can sell more oil. because saudi arabia is burning oil from most of its electricity. another reason why russia is interested in golf was actually
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to work with the gulf countries who are major exporters, two of the largest exporters are located there. to work with them together to stabilize oil prices and then increasing the oil prices. there have been, these states have been petro states, both russia, russia's not a petro state that the gulf countries have been there. why was it comply with russia successful in tapping into the market come in building these relations? i think there is a regional reason for this and also macro economic processes that happen simultaneously at the same time. first of all, the chaos that was created after the vacuum that was created after the arab
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spring and united states didn't interfere in the region that much, following the new conflicts in the region have greater of vacuum and russia felt the right time to interfere and to become a player in the region. but the more important process happen and there are two processes actually. the first was the oil prices plummeted in 2015, but what's interesting, it happened at the same time with yes, and the west applied sanctions to russia. so as russia is constantly in a state of paranoia, being encroached, a were saying, they were hinting that the united states was behind the price plummeting, directly by
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intelligence offices. so they understood that if they don't make a deal with gulf states or major exporters, prices will go even further down and it will come what happened to the soviets in the '80s will happen to the current regime as well. so that kind of paranoia drew them closer to go. but the way into the gulf was the power vacuum created by non-interventionist strategy of the united states. that facilitated the interest in the market. one of the biggest successes that they achieve was the establishment of the oil prices to the russia opec deal which seen for energy experts seemed incredible. no one expected that happen is first of all, they are members of the opec are, there are some
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members of opec are in constant permit confrontation such as iran and saudi arabia. no one expected them to get along and to come up with a solution or a deal. well, russia managed to play interlocutor between these two powers and actually convinced iran that russia was, to have the deal. we have do for almost two years and actually with three separate deals because every time these countries come together it's a weird group of petro states that are driven by the notion that we have to stabilize these prices because if we don't, these regimes for these countries will basically fail. but at the same time they are conflicting each other. there's qatar whose conflicting with saudi arabia, iran and also many others as well.
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russia's goal, played an important role to bring this country together and achieve this devolution as result the oil prices have increased from $44, average $44 in 2016, and now we are sitting in the mid-'70s. just to put in perspective, in 2017 the average rices were around $64, and according to russian energy minister, russia has gained additional $36 billion for the ten dollars price increase. just to put in context can their overall exports were equal to $200 billion, and just another example, according to russian, rush has spent over pointers in syria. you can see a contributed to their budget and ascended them
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to implement their strategy in the region. the most important objects they've achieved was signing bilateral deals with, as ted mentioned with the qatar investment authority, the uae sovereign world fund and many other, other deals which took place as result of first ever saudi arabia came to russia as well as -- overall, this cooperation is very nascent and is very vulnerable, but so far russia has been successful in achieving those objectives that they put in front of them, and
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in terms of the opec, in terms of opec deal that we have now, however you want to call it, i see the prospects of the deal less and less, i am less optimistic about it because we have almost 2.5 million barrels of non-opec oil, mainly from the united states in north america coming to the market. and as more oil comes especially from non-opec countries come to the market, the relations, the cohesiveness of the cartel becomes strained. it will have more pressure on it when, it's and the biggest deal. no one knows what the caps are, regulates these caps. you know, the country take advantage of the situation in venezuela, in libya, in nigeria are actually in canada where
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there were destructions in the oil supply, increased the caps as much as possible and reap the benefits. but united states has be very careful by monitoring business buzz within saudi arabia and russia because as we remember this year and saudi arabia, crown prince, leader, ruler of saudi arabia actually made a statement in visiting the united states saying that they want to institutionalize relations with russia for ten or 15 years. we don't know what's going on between saudi arabia and russia. are they really planning, but anticipation of it has already come has to raise eyebrows in washington, d.c. because russia's overall tactic is often to create interdependencies with europe, with any state that our allies
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to the united states and then create, use the interdependence to undermine united states positions last positions in the world. therefore, it would be important to create this challenge with saudi arabia and other gulf states to prevent any escalation that could happen in the movies because it could be disruptive for markets. at the same time to try to resolve the crisis between qatar and saudi arabia because russia is clearly using this as their divide and rule tactic to begin to pull these countries out of the orbit of the united states. most importantly, to supply more and more oil and gas to the market from the united states to facilitate that process because more liquidity in the market will contribute to free market forces and will decrease as i mentioned before the impact of
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cartels such as opec to oil and gas prices. >> great. thank you. thank you very much. now, i'm going to use privilege of the church as the first questions. don't you hate it when people do that? i do, but only when i'm sitting there. not when i'm sitting here. so i will go ahead. rauf, in particular there's a couple think you mentioned. you talk about putin encouraging the saudis to buy russian lng. my question here is, why don't the saudi simply by their own gas? they have an awful lot of the is this simply question something happening temporarily or is this sort of like a demonstration sale, such as when i think that there been some russian and american deals that have been demonstration sales more than harbingers of things to come. are the saudi is really going to
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buy russian lng or can they just playing developed their own? secondly, you talk about this russian role with regard to mediating between opec partners. of course opec has had this problem long before this cooperation has begin with russia's i think they must have other mechanisms. i guess my question to you is, has the saudi-russian cooperation on oil prices essentially replaced opec? the analogy i would like to think of is, back in the 1950s when the u.s., vortexes controlled oil market it was a texas royal commission of that set the prices. louisiana and oklahoma automatically set the same prices, and since the cartel was horse. are we seeing something similar saudi arabia and russia set the price and the rest of opec more or less have to take it away that louisiana and oklahoma did
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back in? those are my question for you. >> let me start with the second one. i think yes, saudi arabia and russia are the leaders of the cartel and they dictate the conditions. in the first deal, iran was, russia played as intermediary between saudi arabia and iran. in the last deal which happen in june saudi arabia energy minister and iranian energy minister negotiated between themselves. but overall i think yes, saudi arabia and russia are the dominant in the opec, which actually diminishes the importance of the cartel itself, becomes idle i think or redundant. but yes, they do the dictating. then the question was why would iranians agree with the saudi arabians? because they don't have any other option. they want prices to be more than
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65, $70, especially given the upcoming sanctions. it's in their best interest as well. what we should seem right after the deal went trump started pressuring saudi arabia and there was response and saudi arabia that they are ready to cooperate with the united states to supply more oil to the market, it makes the deal seem redundant because there was an agreement that was made on june 22 and then a couple days later the united states interferes and saudi arabia agrees to break the deal. these guys are showing opec is becoming less and less important, but the fact is that for the last two years and probably for the next for the first at the 419, this deal is in place -- first half of 2019, using to regulate it by joint mechanisms, commission they have
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within opec, and opec within opec. basically that into the recitation is controlled by saudi arabia and russia. they call the shots in the joint mechanism commission they have which regulates the caps, although there were no caps. to the point i think opec is becoming less and less important. as for saudi arabia gas imports from russia concerns, for support which is a proposition, a proposal. it was a political statement made by putin. there were still response to it by saudi arabia, but saudi arabia has this aggressive state program called vision 2030 which claims to decrease the dependence on oil power generations. it makes sense for them to
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develop -- developing test takes 17 or eight years by the time they launch the program or develop field, it would take probably ten years or less than that. if they need the substrate guess they can cite a short-term agreement with russia. but having said that, uae is another major producer of oil and we know whatever the oil is produced there is always gas. it comes together. actually gas is used to produce oil, or vice versa. uae imported gas from the united states and there have been talks between united states energy secretary who visited saudi arabia and other gulf states to sign this long-term deal, and we've heard that the deal between europe, the trade or between europe and the united states, there was lng item in it. it. we don't know what exactly that was or will be effective, but it
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shows that saudi arabia is interested in importing the gas and the option such as united states a russia company think that's where we are going out. >> maybe they're just flirting, i don't know. ted, i wanted to ask you, this qatar crisis, to what extent is it an opportunity or a problem for russia? i want to specifically talk about how i think it was a few weeks ago, what we saw was, well, last year the saudi indicated they are willing to buy the s-400 air defense missile system from russia, then more recently regard that qatar is interested in buying this, and, of course, russians interested in selling both. and the saudi response was furious that if qatar did this, then they were going to build a
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motor something on qatar. they're going to take all kinds of, you know, qatar was going to suffer if they bought and s-400. but there was no threat major russia, and the russians sort of indicated that they're going to sell to whomever they wanted to. i'm just interested, in other words, that if this russian-qatar deal goes through how does that affect saudi russian relations? as steve was talking last time, iran which doesn't have much choice. russia, saudi arabia does and it strikes me that if, in fact, we do see an arms relationship develop between russia and qatar, that the saudis and the uae object to come and, in fact, this is going to push them more toward the united states. but i like to hear what you think about this. >> thank you, mark, very much for your question. later this afternoon w we're gog to have another panel. there's still room here, that
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will talk more specifically about the s-400 issue. however, you brought up some very interesting points within the question, which is really about the qatar crisis and whether it presents an opportunity or a problem for russia. i think steve said earlier today that the qatar crisis provides an opportunity for russia because of the way moscow conflict multiple sides on the issue. and i have seen this crisis, if you will, from that particular perspective. when you start looking at how qatar has behaved with putin, for example, with the amir going to moscow to meet with putin and so on versus the visits the king of saudi arabia, mohamed bin salman or even the crown prince,
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you see all these leaders going to putin to pay some kind homage to him because putin is seen by these arab leaders as the referee for the future of the region. in this respect we see for them putin represents a certain amount of offset, if you will, that he has this power. having said that, when it comes to weapons systems and sales, but on the sell side and also and other financial areas of interplay, that's around the qatar crisis is how much of this money that we are hearing about is just optics, or is it real money moving back and forth? we see all kinds of agreements inside in the wake of the qatar crisis when it erupted last year
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of deals that are going back and forth between russia and these countries. they are m.o.a.s and m.o.u.s. but with really no money switching hands. so we need to look at the metrics of this money and really what's changing hands and what's in the public realm for purchases of weapon systems or so one, versus those that fall maybe in a gray zone. a gray zone that is not to cut those transactions, those transactions that can occur from this subsidiary at these sovereign wealth funds for state funds that go through moscow that pay for other goodies they go to other countries in the region. one example that always give is how uae, because of even for the qatar crisis, but now because of the qatar crisis in this gray zone, a subsidiary of one of the
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sovereign wealth funds and the uae gives money, take her to egypt. this is one of those payoffs. this is a metric technique used it is gray. so it needs to be a greater exploration area to tally it up. this is my answer to you. >> very good. the floor now really is open for questions. when i call upon you i hope, unlike me, you would be brief in your questions. wait for the mic and identify yourself as well. steve. >> this question is for both ted and rauf. we heard a lot the last few days
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whether russia has a $50 billion energy energy deal with iran going. my question to you is, how real is it because moscow said no after iran said the was a deal. the already deals on the table or in practice. so is there a $50 billion do with iran in the works for russia, and does china play a role in that? >> well, yeah, there were numbers ranging from $25 billion russian sources potential deals to $50 billion statement made by rouhani. the facts are separate things. the only contract for oil and gas contracts signed between russian and the iranian national oil company was $500 million enhanced oil recovery project.
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it's not greenfield will recall, start from zero scratch and develop the field. it's an enhanced oil recovery. decides that there has been m.o.u.s and m.o.i.s between castro to build a pipeline to connect to pakistan ned. there has been other m.o.u.s signed between the parties but -- gazprom. i haven't noticed any actual development projects going on in terms of the oil and gas. having said that, there is a chance that they could participate in the gas field. russian companies have been flirting with the idea, but russia doesn't have that $50 billion, the fifth set aside and they can invest -- you know,
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that kind of money, even 5 billion is very important for russian economy at the moment. i think you are just exaggerated and used for political purposes as professor katz mentioned. it's just flirting. >> the way that i look at the announcement of this deal and its optics, it's more of the cabbie if anything, as part of the emerging horserace in the region if you will for the redistribution of sources and connections. and as we see, as occurred in the first panel about what's happening in syria, again, this regulation if you will is occurring between russia, iran and the gulf itself but over the future of a rant and where it's going to sit as the gulf states and the trump administration
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push harder to make sure that the old order in iran begins to evaporate. this is part of that horserace right now, in my opinion, and you can see how this division is being driven by the cleavage of that was formed in the wake of the qatar crisis in terms of new economic outreach by qatar has shifted round the geoeconomics of the region. i think russia's deal here with iran is part of were qatar sits in the future but we'll have to see how this unfolds in the coming weeks and months because a discussion of setting up -- not the mill is that association but arab nato which is an old idea and is being resurrected again. this is also part of the
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restructuring of the security architecture in the region. i hope that answers your question. >> i like to add, this occasion which they remains announced that is going to be a big russian deal in the russians sort of negated that not necessarily so, this is the first time this is heaven. it happened several times in the past. our brains have announced a deal with russia. the russians have said is ideal. the iranians have felt terribly embarrassed. gentleman right here. >> will ted, you mentioned egyptian sovereign fund and you mentioned the source, but what is egypt want to achieve with the sovereign fund? >> thank you very much for your
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question. the egyptian sovereign wealth fund which i mentioned is relatively new and being stood up now, is meant to do duplicate a lovely activity of its gulf brothers if you will. -- a lot of activity. this is what we've seen the last few years particularly after morrissey was kicked out, is that the gulf model of development, economic development and so on was used as a template, if you will, to be moved over to cairo, and we saw a lot of deals that were being signed for the reconstruction, the new cairo if you look at the entry of a uae real estate company to build new cairo as a capital much like a steiner versus -- thank you, that there would this new
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capital and egypt sovereign wealth fund represents this new egypt in terms of the way that egypt could be able to portray itself as a sovereign country with a sovereign wealth fund in which it could invest for the future. the problem with egyptian projects, naturally, is they take a very long time to get off the ground and because of corruption within the system, the likelihood of egyptian sovereign wealth fund operating like me of the wealth funds make it off to a very bad start. another part of the sovereign wealth fund, in theory, is to be able to work with egypt's emerging gas industry, if you will, or the further growth of that industry, particularly with the field. i think this is all tied together and in that sense the egyptian sovereign wealth fund
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which is to be bring in revenues related to sales will help build for a better future for egypt and its citizens, but the problem is it's got to get off the ground first. has to be extremely transparent in its activity. these days because of the focus on transparency in many of these other organizations and how they spend their money. thank you. >> next question, please. a little nearsighted so if you could hold your hand up. right there on the left. >> thank you all for your analysis. it's very interesting candace, senior fellow with new america. this question is actually for ted karasik. i wanted to see if you could unpack a little bit more the
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suggestion or the insight you had around the effectiveness of the sanctions. so far u.s. sanctions on russia for strategy many russians individual and corporate have adapted in terms of seeking out workarounds not only in the gulf but elsewhere. obviously it's tempting to talk about the russian state as a monolith, but clearly we have to understand the state of industries have their own individual leaders and interests, and i wonder if you could unpack some of those individual interests how they might lift domestically in moscow as well as how that pertains to relationships between particular state owned corporations, sort of in the region. >> for the next hour obligating you a lecture on this.
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[laughing] >> thank you very much for your question. this is a really, it's an excellent question that you ask, as someone who lives in the uae for ten years and i saw a lot of sanctions busting i many different countries. i can assure you that there's been a trajectory of lessons learned by countries like russia and iran about how to evade sanctions. this is much like something were going to talk about later today as the evolution of air defense. there's an evolution in all of these capabilities to escape what the west is trying to impose or achieve. in terms of the russian and iranian sanctions busting, if you will, i think it's important to recognize how both countries use what i would call fifth or
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six degrees of separation of know your customer, or kyc. ky c. it is within these networks that these two countries, and the corporate entities that go out and try to set up companies but the use them as fronts and these fronts usually a fifth or sixth degrees of separation of individual. iranian front companies in the uae or in the gulf that are fronts for irgc are usually done by indian nationals because they are the easiest to recruit for this type of front. the russians on the other hand, have a slightly different system for this. they don't actually try to hide it. they just do it. so when he goes back to your question about sanctions busting and so on and groups within
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russia, i would have to argue that those that are tied 30 to the energy industry are the ones that profit the most. it's the people's like the truce chaff he was looking at these types of issues in terms of security and what needs to be done to achieve russia's national strategy calls in the region itself. another person that i mentioned is -- both father and son are deeply involved, and that right there gauge an indicator of who in moscow when it comes to sanctions and sanctions busting may be at an advantage here. it is within that context that they know best how to bust sanctions. so i see them as being the ones
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that succeed in sanctions busting in moscow, but with more fascinating is what gulf allies, if you will, how they can vary from that o were not have they tried to achieve their political goals throughout the region. i hope that last point was clear. thank you. >> about the monolithic nature of russian system, as far as the energy concerns, one of the largest companies in russia is not sanctions, is gazprom. but there is a struggle between gazprom head and -- on acquiring right on breaking the monolith of export gas from russia. russia -- as ted nugent who has
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been pushing hard for quite a long time and i think one of the successes he has gained was that putin has been using it as a main vehicle for its energy diplomacy in the middle these or special in the gulf. all the deals made were made either -- or affiliated companies but there are other minor companies that have been involved as well. putin is understand that there's a confrontation but as long as it doesn't, doesn't go against the national strategy for strategy goal of russia, keeps them contain within the competition like controlled competition between these two large companies, not to have any negative impact on their success. >> i just want, there's another
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financial factor, if you will, or commodity that we really need to start paying attention to. this might come out more in the pmc discussion, but there's a real move by both russia and the middle east about strategic minerals. strategic mineral drive right now my russia and the gulf states is something that brings them together into cooperation, and this is why it's so important to pay attention to where these groups are coordinating their future strategies in terms of markets, emerging markets and so on. the targeting of africa which will talk about later is part of this, and i think it's important to remember that both moscow and the gulf states and some of the north african states are working in concert together to leapfrog
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further into africa and that strategic mineral angle comes into play and we could probably bring in north korea, too, but we'll leave that for another discussion. >> i think we have time for one last question. yes, please. just wait for the mic, please. >> sort of question, sort of the comment, the relationship between moscow and egypt right now, they're going to be building a nuclear power plant possibly in two years and they cracked a deal, 85-15 for russia providing financing for this, and meanwhile china has also made a deal with egypt for their power grid as part of this energy diplomacy like you're saying. and then on the other side of
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the arabian sea we have of course saudi arabia and russia is already spending -- sending oil through israel. that's been ongoing for a while, so the diplomas in these areas i only see above the fray of politics, like oil and gas one set of rules, politics another. so i was wondering if you could comment on that? >> i didn't mention that, that's the state-owned nuclear company of russia, controls almost 40% of the market right now. it is been very active in building relations with the gulf states. for instance, the company is building nuclear power generation in uae but. [speaking russian] re-signed a contract to supply
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fuel to uae and there in the short list of companies which are involved in the bidding for saudi arabian power generation. as an energy case putin has consulted all the power in energy, and military experts, and think now he's using them as a tool to implement its goals. same goes for egypt as well. rosatom is the shareholder. by the way, they just sold a percentage of their shares. that is a cooperation cookoff go between russia and the gulf states, and wherever russian interests do not conflict with the gulf interest in other parts of the world, especially in north africa, they cooperate. but whenever they don't enter or the don't see as a physical
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enteinterlake algerian market or american market, they stay apart. they're very active in libya and egypt. it's over all the same tactics have been deployed in every part of the world by using consolidated power, by using the state-owned companies. >> okay. one question i had, i don't even expect an answer, i think this is such an interesting question, this question of russia's energy relationships and economic relationships more broadly with the gulf states, clearly one that deserves a lot more research. but to what extent are we seeing, you know, is russian essentially the one that's in control or is deriving advantages, or, in fact, are we seeing cofactors do with russia what the event here and elsewhere? and that is in mesh their
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partners in a set of economic relationships that bind those partners to the gulf? in other words, the gulf feared russia's involvement with iran, they have now created not just national level and send is but personal incentives for an awful lot of important russians to take gulf interest into account. it strikes me that this is something that gulf diplomacy, economic policy has been very successfully. well, we've reached the time and we do need to keep the skills i would like to close our panel now and thank our speakers very, very much. resume at 1:00. [applause] [inaudible conversations]

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