Moscow-Baku: cooperation after the elections

By Vestnik Kavkaza

In Russia, the discussion of the results of the October 9 presidential elections in Azerbaijan continues. The key question is how the re-election of Ilham Aliyev will influence the Russian-Azerbaijani cooperation, particularly in the energy sector.

Assessing the course of the elections, Director General of the Institute of Caspian Cooperation Sergei Mikheyev said: “In the former Soviet Union, and not only in the post-Soviet countries, elections are often held in a situation of internal opposition struggle or in a situation of external pressure, and sometimes both conditions are present. In Azerbaijan, there was a completely unique situation: first, in the country we see a consolidated position of the elite about the candidate; in fact, we see an extremely weak opposition - it is partly controllable or simply is not capable of doing anything; finally, we see really strong support from the population, which is associated with a simple thing – the funds generated from oil and gas production are invested in the actual development of the country”.

As for the external situation, according to Mikheyev, here we can see” quite a rare balanced attitude towards Azerbaijan of major foreign players during this election. As for the West, everything is clear: Azerbaijan participates in the project of the Southern Energy Corridor, which is primarily lobbied by the Americans, for the delivery of Caspian oil and gas, and probably, in the future, of Central Asian oil and gas, to the West. Therefore, the Americans and Europeans, at least at this stage, do not have any radical questions for Baku. It is clear that the Americans and the Europeans accept the result of this election”.

Commenting on Tehran’s position, the political scientist said that “Iran took a neutral stance on the elections, especially as the new president, Rouhani, shows a more flexible approach in all directions, and I think that the same approach would be used in dealing with Baku. Here is the unique situation of internal consolidation and an external loyal attitude of all major centers of power which gave such predictable results”.

Speaking about the Russian position, Mikheyev said that “President Putin’s visit on the eve of the election was completely unambiguous – Russia supports President Ilham Aliyev in this election. I think that Baku also has to appreciate that. No other presidents met with Mr. Aliyev on the eve of the elections, and this, in my opinion, shows how Moscow is serious about this issue. Putin met with Aliyev, and that meant a simple thing: we appreciate Baku’s balanced policy, we support Mr. Aliyev in this election and we are ready to further develop mutually-beneficial relations after the election. I am absolutely sure that such a position of Russia has had a stabilizing effect on the course of the election… During the visit of Putin a number of agreements were signed. These agreements, I think in the near future, would set the direction of our development. These are energy, high technology and humanitarian cooperation. Russia is interested in normal mutually-beneficial partnership relations with Azerbaijan. We understand the importance of Azerbaijan on our southern borders, on the one hand. On the other hand, Azerbaijan has to realize that it is really important to maintain a normal, peaceful, constructive relationship for its own successful development”.

Political analyst Stanislav Pritchin told about the energy cooperation between Moscow and Baku, in particular, between Rosneft and SOCAR. According to him, “Rosneft's interest in cooperating with SOCAR in the future will not be limited to the use of the infrastructure and extensive supply network of products which exist in SOCAR. We still need to talk about the fact that SOCAR is probably the leader of the former Soviet Union in terms of technology for the development of offshore fields”.

This experience was acquired by SOCAR due to due to many years of cooperation with BP and independent operating time that is present, the expert said recalling that the company itself is developing several large fields in the Caspian Sea.

“Rosneft is the largest Russian company which will primarily develop Arctic resources, but, unfortunately, to date, the company has no independent capacity or independent technology for the development of offshore resources, and therefore, I believe that the cooperation with SOCAR is one of the promising areas, particularly in the field of underwater drilling and development of subsea fields”, Pritchin said.

“If we talk about economic cooperation, some time ago there was information that the Oil Fund of Azerbaijan in the framework of risk diversification is investing its resources in development projects in Russia, which is also an indication that for the Azerbaijan Oil Fund, which accumulates the main profit from the production of oil and gas, the Russian economy is quite interesting and stable, from the point of view of Baku, in diversifying their financial risks”, he said.

Also, Pritchin focused on the fact that, if we make a brief analysis of bilateral trade, it should be noted that, against the background of the growth of bilateral trade, Russia's exports to Azerbaijan are, above all, highly-processed goods. “They are less prone to some economic crises. For Russia this is very important. If we abstract from oil exports, Russia is Azerbaijan's main trading partner, according to this indicator, if we talk about purely commercial non-commodity transactions. In this regard, I think there are some prospects for cooperation”, the expert said.

“High dynamics of cooperation are observed in the military-technical sphere. Here we see mutual interest, resources, independent weapons programs and cooperation with the Russian military-industrial complex, which is one of the most dynamic sectors of our economy. We can assume that this is also one of the areas for future cooperation”, Pritchin said.