Afghan President Karzai visits Russia to boost bilateral ties; Russian companies to explore oil and gas in Jordan; Russia-Belarus continue to spar over oil prices
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  • Afghan President Hamid Karzai who was on his second trip to Russia within six months, has invited Russia to rebuild Soviet-era facilities in Afghanistan. At a press conference with Russian President Medvedev, the two leaders issued a joint declaration in which Russia expressed its readiness to participate in "priority economic projects" in Afghanistan, some even dating back to the Soviet era. They also discussed trade cooperation, security, cultural issues and the pressing matter of countering international drug trafficking. The projects include the Salang Tunnel in the Hindu Kush mountains, hydroelectric power facilities in Kabul and Baglan provinces, a customs terminal and a university in Kabul. The declaration expressed support for Russian involvement in a proposed gas pipeline from Turkmenistan to India via Afghanistan and Pakistan. Meanwhile reports noted that Russia will also hold talks with the United States next month on plans for the sale of 21 Mi-17 helicopters for use in Afghanistan.1

    Reports noted that the Russian Energy Minister has signed an agreement with his Jordanian counterpart which allows Russian oil and gas companies to explore the reserves of Jordan. The agreement allows for direct investment in exploration projects and the formation of ventures with private local companies to look for oil and gas in the Arab country. The accord also allows Russians to participate in projects for power generation, shale oil and renewable energy.2

    In another development, according to reports, Russia and Belarus have not been able to reach an agreement over the price of oil shipments to Belarus. However, even though shipments to Belarus have been stopped, oil transit to Europe via Belarus has not been suspended. The major bone of contention is the decision of the Belarusian government to raise the price for transit of Russian oil via its territory from February 1, 2011. The price would be increased up to $45 per ton. This is still cheaper than Venezuelan oil, the price of which is too high because of the transportation problem. However, the new price considerably exceeds the costs of Russian companies for transit via the Republic.

    It would be worth noting that Belarus usually consumes 6.8 million tons of oil a year and processes 13.5 million more tons to sell this amount afterwards and derive huge profit from the proceeds. The country would send petroleum products to the energy guzzling markets of Western countries. Moscow has refused to sponsor the fuel business of its neighbour with duty-free oil. However, in an apparent thawing of relationship between the two sides, Russian Prime Minister Putin has promised Belarus that it still stood a chance of earning close to 4 billion US$ in subsidies and also Russian support in the construction of a US $6 billion nuclear power plant that is designed to meet 27% of the electricity consumption in Belarus.3

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