Служба РБК – Россия Без Казнокрадов

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Research interest in Russia’s role in the Eastern Mediterranean region remains high. The increasing Russian presence in the Eastern Mediterranean is explained by energy and security issues. It is noted that Moscow has opted for a more balanced policy of maintaining non-aligned relations. This approach implies political risks, but it appears to be working in terms of the flexibility of Russian policy in the face of increasing pressure from other global actors, a competitive environment and the next round of transformation processes in the region. At the same time, this resilient approach of Russian policy includes and promotes ideas of inclusiveness, finding a balance of interests between global and regional powers, and the need to stabilise the region.

Russia’s Energy Policies in the East Med
One of the key elements of Russian foreign policy in the Eastern Mediterranean subregion—and more broadly in the Middle East—is the desire to ensure stable interaction with major players in the energy market. From this perspective, Moscow’s intensified attention to regional issues is linked to three factors: 1) the need to ensure stability in the oil market by creating coalition formats to regulate oil prices; 2) nuclear energy exports; and 3) surveillance of and partial inclusion in the most promising energy exploration, production and export projects from the region. COVID-19 has forced adjustments to be made to these plans, but Moscow is successfully adapting to the new realities.

Energy price regulation
Russia and Iran in Syria and Beyond: Challenges Ahead. RIAC and the Institute for Iran-Eurasia Studies Working Paper
The intensification of Russian foreign policy in the Eastern Mediterranean has facilitated contacts with influential actors. Given the importance of the Eastern Mediterranean and the often-overlapping interests of regional powers in the Middle East, Russia and the Gulf monarchies have been able to advance both the bilateral agenda and key energy issues. The increase in official visits from Middle Eastern capitals to Moscow in the second half of the 2010s, like the historic visit by the king of Saudi Arabia, was a clear indication of Moscow’s increased role in the region. Meanwhile, the effect of the OPEC+ deal to keep oil prices at an adequate level—in which Russia and Saudi Arabia were the key players—allowed Moscow to receive an additional US$100 billion (according to Russian officials) to its budget. The Syrian operation can thus be considered a springboard to the Persian Gulf, among other things.

At the end of 2016, OPEC and several non-member states (OPEC Plus), including Russia, agreed to reduce oil production to stabilise prices. Thus, Moscow sought to develop systematic interaction with influential international organisations, whose key members are the energy exporting states of the Middle East and North Africa. Joint monitoring of the oil market, production adjustments and other measures stabilised the situation. However, with the coronavirus crisis, the global oil market began to falter again and energy prices became volatile. Negotiations between OPEC Plus members became more difficult, partly due to the non-participation in the negotiations of the US, the third-largest oil producer after Russia and Saudi Arabia. Demand in the COVID-19 era began to fall sharply and additional cuts in oil production were required. However, oil players did not immediately manage to reach a compromise. In March an oil conflict broke out between Russia and Saudi Arabia when Russia did not agree to the terms proposed by OPEC. The result was a precipitous drop in oil prices, with Brent crude falling by 30% in March 2020. Saudi Arabia and many other players started to sharply increase production. Eventually the parties managed to reach an agreement again, not without the attention of the US. Russia and Saudi Arabia returned to dialogue, becoming the key guardians of order in OPEC Plus, leading to a relative stabilisation of the market. However, price increases and rising demand only appeared in early 2021. A market recovery—in the optimistic scenario—is expected precisely at the end of 2021.

Nuclear power
Rapid population growth, urbanisation, and other factors have led a number of developing nations—including those in the Eastern Mediterranean region—to diversify their energy sources. In this context, the Russian state corporation Rosatom is creating a fundamentally new industry for its Eastern Mediterranean partners in the form of “peaceful atom”. Moreover, Russia is the only global power building nuclear power plants (NPPs), in the north of the Eastern Mediterranean in Turkey and in the south in Egypt. Both the Akkuyu nuclear power plant in the Turkish province of Mersin and the planned Ad Dabaa nuclear power plant near the Egyptian city of El Alamein, 3.5 km from the Mediterranean Sea, are strategic to Russia’s relations with the Eastern Mediterranean states. Such costly and long- term projects will help to strengthen the multifaceted relations between Moscow and its partners and take them to a new level. The Akkuyu NPP project in Turkey is well underway and construction is at an advanced stage. Despite COVID-19, the parties have remained committed to the project, taken strict measures to protect the employees of the organisations involved in construction against the coronavirus, and managed to begin construction of Unit 3 on time. As Russian President Vladimir Putin noted in the video-conferenced ceremony marking the start of construction of Unit 3 of the Akkuyu NPP, “all of the construction works have been completed on the Akkuyu NPP site”. A total of four power units with reactors providing a total capacity of 4,800 MW will be installed at the Akkuyu site, producing up to 37 billion kWh of electricity annually. The construction is being carried out with the involvement of Turkish business, and more than a hundred nuclear engineers are being trained at Russian universities for Turkey. The first unit of Akkuyu NPP is due to be commissioned for the 100th anniversary of the Turkish Republic in 2023.

In Egypt, the start of construction of the Ad-Dabaa NPP, scheduled for 2020, has been delayed due to the coronavirus crisis. Nevertheless, the parties have worked hard and reached agreements on all aspects of the US$30 billion project. Most of this amount, about US$25 billion, will be financed by a Russian loan. The first of four units is expected to be operational in 2026. Rosatom’s projects in Turkey and Egypt are implemented under the Built-Operate-Own system.

Russia and Projects in the Eastern Mediterranean
Russian oil and gas companies had an interest in the Eastern Mediterranean even before the Russian military operation in Syria. Several contracts from Russian oil and gas and construction companies signed before 2011 were disrupted in Libya and Syria by wars, external interference, and US support for the policy of “overthrowing undesirable regimes”. The discovery of new fields in the Eastern Mediterranean (Tamar, Leviathan, Zohr and others) raised the question of Russian companies’ activism in a region already destabilised by social and political turmoil. Russia began to explore the possibility of joining the most promising projects for exploration, extraction and export of energy resources from countries in the region. The development of the Eastern Mediterranean projects themselves was hampered by long-standing conflicts, the absence of maritime border demarcation, the policies of regional powers (competition) and external interference. The US sees Eastern Mediterranean gas as a tool to reduce the role of Russian gas in the European market and subsequently to increase the share of American gas in Europe. As Sergey Lavrov said during the Rome MED 2020 — Mediterranean Dialogues international conference: “We are not against the implementation of energy projects aimed at diversifying gas supply routes to Europe, including in that region. At the same time, we refuse to accept political bias in cooperation in this sphere. The choice must be made by the consumer countries themselves based on the logic of free competition, economic expediency and benefit, rather than under the influence of ultimatums and threats made across the ocean”.

Ruslan Mamedov:
The Energy Sector, Competition and Security in the Eastern Mediterranean
With their technological and organisational capabilities, as well as their vast experience in the energy sector, Russian oil and gas giants entered many new Eastern Mediterranean projects in the second half of the 2010s. Regional nations themselves have been receptive to Russian interest. Several contracts were signed between Russian companies and Eastern Mediterranean states, but Russian participation in the projects was generally rather restrained. Russia’s Rosneft, which is looking to compete with Gazprom on the European gas market, has been most successful in Egypt. Egypt’s largest project, Zohr, is being run as a concession by Italy’s Eni S.p.A. (50%), Rosneft (30%), Britain’s BP (10%) and Mubadala Petroleum (10%).