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Russian interests

Russian Federation has expressed its opposition to Nabucco from the start and has taken steps to undermine its implementation. The launch of the South Stream project was the best example for this. Larger in capacity and Russia’s ability to use the inconsistency in EU common energy policy to attract shareholders from the Nabucco project were important successful measures on the part of Russian Federation. Again, Azerbaijan's sense of realpolitik was clear. In spite of the considerable anti Nabucco rhetoric, Azerbaijan refused to be provoked even though the Nabucco project was labelled an anti Russian project. The Azerbaijani government did not wish to agitate its most powerful neighbour who has strong political leverage on Azerbaijan on certain issues such as Nagorno-Karabakh conflict, 2 millions of Azerbaijani immigrants in Russia etc.

Notwithstanding such leverage Azerbaijan always positively reacted to the calls for the realization of Nabucco project. That includes participation of President of the Republic of Azerbaijan in meetings of heads of governments discussing Nabucco in Hungary; meetings with the president of the EU Commission or the head of the EU Central Bank etc. However, Azerbaijan avoided being a sole actor lobbying for the Nabucco. In other words, Azerbaijan’s support for Nabucco had its own limitations vis-a-vis Russia. Taking such a position, neither lobbying for, or going against the project also helped Azerbaijan to keep its ambiguity intact.

In 2007, Russia increased the pressure, after the South Stream project was introduced. 107. The Russian Federation used all the means to undermine Nabucco pipeline. The South Stream directly competes with Nabucco since both are planning to flow Central Asian gas sources.108 Three partners (OMV, MOL and Bulgargaz) of Nabucco consortium joined to the South Stream. In this way Russia has been able to break down the political consensus on Nabucco. Moreover EU members like Germany, France and Italy also signed an agreement with the Gazprom for supporting the South Stream109 gas pipeline project.110

This fact reflects how incoherent was EU`s common energy policy regarding the support for the Nabucco project. When the South Stream was announced, in EU high policy level it was stated that the existence of two projects, Nabucco and the South Stream, should not be seen as a contradiction, however, it was also stated that the priority would be given to Nabucco project.111 Indeed use of such a language served to dismiss the Nabucco project as anti-Russian one, that in turn helped Azerbaijan time to time take bold decisions to express its support for this project. However, still Russia had its own tools to undermine the Nabucco project. Azerbaijan’s multi-vector foreign policy has its own shortcomings. On one hand Azerbaijan showed its willingness for Nabucco, and on the other hand Azerbaijan knew that it should not discomfort Russia. As a principle of multi-vector foreign policy relations with Russia had to be in check as well. In this respect, it is important to look at the developments between Azerbaijan and Russia in 2008, keeping in mind that this was an unease year for the Caucasus region as we witnessed Russian-Georgian war in August 2008.

The swift response of Russia to Georgia's attempt to take over the disputed regions of Abkhazia, South Ossetia was met with military might in August 2008. After this it is significant that Azerbaijan became less assertive in favouring regional projects that were labelled as anti-Russian.112 Azerbaijan’s level of assertiveness and position has been shifting since the beginning of the Nabucco project until the last point, when it was rendered dead.

In early July 2008 then Russian President Medvedev visited Azerbaijan and Kazakhstan, and one of the purposes of the visit was to pose uncertainties for Nabucco project and show Russian interests in it. In his visit President Medvedev emphasized Russia’s interest in importing natural gas from Azerbaijan, and indeed it was interpreted as Russia’s will to reduce the hopes for realization of Nabucco pipeline project. Many foreign policy and energy experts of Azerbaijan openly made such interpretations: “Russia is interested in importing Azerbaijani gas for several reasons, first and foremost way to prevent the possibility of pursuing the pro-Western Nabucco pipeline, which is clearly of an anti-Russian direction. If the Azerbaijani gas will go to the north, Nabucco will simply have nothing to fill”.113 Following that, in March of 2009 Azerbaijan and Russia signed a memorandum on possible future gas export from Azerbaijan to Russia.114 And then on 29 June, 2009 President Medvedev had second visit to Azerbaijan. During this visit, a contract was signed to export 500 million cubic meters gas to Russia and this amount was planned to be taken from the first phase of Shah Deniz project.115 This agreement was widely interpreted as a clear victory for Russia since it made Azerbaijan to transfer a substantial amount of natural gas from the first phase of Shah Deniz gas to Russia. Indeed, this gas was also supposed to be piped into Nabucco in the future.

However, this did not change Azerbaijan's strategy. Its long term plan is to get several countries to invest in the country, as this will strengthen its position as a country.116The negotiation over the Nabucco pipeline can be seen only in this context, and not as an isolated instance. To put it in other words, negotiations over the Nabucco pipeline are part of a grand strategy. Thus, even if one particular pipeline does not work out, Azerbaijan is always looking for other options.

The fact that this is a matter of policy is evident when one compares the gas negotiations with oil negotiations right after independence. This mirrors the way in which oil negotiations were conducted. Azerbaijan sought investment from all over the world. Thus, the British and American companies, Amoco, later BP Amoco, BP, Exxon, invested in Azerbaijan and the Norwegian company Statoil invested in Azerbaijan. Azerbaijan played its part on the Nabucco project as far as she saw any interest or backing from the other actors who were supposed to benefit from the project. For example, Azerbaijan held several discussions on Nabucco with Bulgaria who was supposed to be one of the main receivers of Azerbaijani gas through the Nabucco project. Following the gas conflict between Ukraine and Russia in early 2009, Bulgarian President Georgi Parvanov held long discussions with Azerbaijani President Ilham Aliyev in Baku.117

Even bolder step was taken on 26 January, 2009 when Azerbaijani President Ilham Aliyev joined the Nabucco summit in Hungary. Heads of states and governments of EU also took part in this summit. It is worth to note that Russia was openly opposing such a meeting. Participation of Azerbaijani President in such a meeting proves that how Azerbaijan is free from Russian political leverage when it comes to energy politics.

In general, Azerbaijan has certain high level policy priorities and one of them is the solution of the conflict over Nagorno-Karabakh and surrounding seven districts. Russia has a solid leverage over the solution of this conflict, and Azerbaijan has to take that into account in every crucial foreign policy decision not to ‘upset’ its biggest neighbour. Keeping that in mind, choosing TAP instead of Nabucco indeed in short term did not disturb Russia, because TAP project will target the different set of energy import dependent EU members than that of classic Nabucco targeted. In other words, after all Azerbaijan’s gas in amount of 10bcm will not undermine Russian supply monopoly in the Central and Eastern Europe.

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