Agency WPS
What the Papers Say. Part B (Russia)
June 17, 2004, Thursday

$1 BILLION FOR ISLAM KARIMOV

SOURCE: Vremya Novostei, June 17, 2004, p. 2

by Arkady Dubnov

President Vladimir Putin began his four-day Central Asian tour with a
working visit to Tashkent yesterday. Putin’s itinerary includes three
summits in a row. Today a summit of the Shanghai Cooperation
Organization (SCO) will take place in the capital of Uzbekistan,
attended by the leaders of Russia, China, Kazakhstan, Kyrgyzstan,
Tajikistan, and Uzbekistan. Hamid Karzai, head of the interim
administration of Afghanistan, is invited to the summit as well.

The summit will adopt the Provision on Observer Status for the SCO,
and experts believe that Afghanistan will be given this status in the
near future. “We will discuss how we can help Afghanistan organize
elections, suppress anti-government actions, and restore its national
economy,” Putin said.

It is apparently too early yet to talk about what the SCO can do to
help the Afghanistan administration “suppress anti-government
actions.” Karzai is highly unlikely to appeal to members of the SCO
to send armed contingents. It is clear that this is the duty of the
US-led Western coalition. Karzai was in Washington the other day and
asked the coalition to boost its military presence in Afghanistan.

Astana will come after Tashkent. Summits of the Euro-Asian Economic
Community (Russia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan)
and the CIS Collective Security Treaty Organization will take place
in the capital of Kazakhstan on June 17 and 18. President Robert
Kocharjan of Armenia will join other national leaders on June 18.

June 16 was Russian-Uzbek day in Tashkent. Two documents were signed:
a strategic partnership treaty between Russia and Uzbekistan, and a
production sharing agreement between the Russian-Uzbek consortium
headed by LUKoil and the government of Uzbekistan (the
Kandym-Khauzak-Shady gas project in Uzbekistan).

Sources in the Russian delegation say that the “strategic” treaty was
President Islam Karimov’s initiative. In other words, official Moscow
insists that it did not force itself on Tashkent as a partner, that
it was Tashkent that aspired for partnership.

Putin was extremely tactful yesterday. “President Karimov himself
participated in work on the treaty,” he said. “I never thought it
would be ready in so short a time.” It appears that this is a
framework treaty stipulating “facilitation of equal strategic
partnership” in political, military technology, economic, and
humanitarian spheres carried out on the basis of “appropriate
accords.”

One article of the treaty is particularly interesting. It states that
“signatories enable each other to use military facilities on their
territories on the basis of special accords.” It is hard to imagine
Uzbekistan in need of military bases on the territory of Russia.
Which means that it was Tashkent that pledged to enable Moscow to
make use of military facilities on the territory of Uzbekistan. This
alone may justify strategic nature of the Russian-Uzbek partnership
proclaimed in Tashkent yesterday. The remaining articles of the
treaty merely give definitions of close cooperation between the two
countries.

The agreement LUKoil President Vagit Alekperov signed in Tashkent
appears much more interesting. It means that the Russian oil company
is coming to Uzbekistan to stay – and handle natural gas there.
LUKoil will operate Uzbek gas deposits for the next 35 years,
investing up to $1 billion in them. Known gas resources on the
territory in question amount to almost 3,000 billion cubic meters,
and top annual production should reach 8.8 billion cubic meters. Gas
production is to begin in 2007.

LUKoil will sell its part of the gas to Gazprom. To accomplish that,
the company intends to build a part of a pipeline connecting the area
with the Central Asia – Center pipe running across Uzbekistan. The
Russian oil company views the Uzbek project as strategic because “it
stands for transformation of LUKoil into an oil and gas company,” to
quote Alekperov.

Putin emphasized yesterday that “it is not Russia that is investing
in Uzbekistan, it is Russian companies.” Karimov immediately parried
by saying that he as president guaranteed security of the
investments. It is common knowledge in fact that foreign companies
have a chance in Uzbekistan only with the Uzbek leader’s personal
guarantees.