Moscow is haggling with Baku ahead of the presidential election

Vladimir Putin visited Baku on 13 August. This was the first visit by the Russian president in 7 years. He was accompanied by six ministers (including the ministers of defence and energy) and the heads of Russia’s largest energy corporations: LUKoil and Rosneft. Putin visited Azerbaijan two months ahead of the presidential election there, which is scheduled for 9 October. The most important effect of the visit was the framework co-operation agreement signed by Rosneft and the Azeri energy company SOCAR. The document envisages a wide range of co-operation, including joint exploration, production and the sale of energy resources, the exchange of assets and the joint use of infrastructure.

 

 

Commentary

• Putin’s visit was preceded by several months of increasing Russian pressure on Azerbaijan (for example, Russia had been suggesting it could back the Azeri opposition, one sign of which was the establishment of a new organisation of the Azeri diaspora in Moscow, the so-called “Billionaires’ Union”, whose members include both billionaires originating from Azerbaijan and the Azeri opposition’s common candidate for president, Rustam Ibragimbekov) and was used to hint that Russia’s support for President Ilham Aliyev was conditional. The Kremlin is not interested in changing the existing political system in Baku but in weakening Aliyev’s position at home and strengthening its influence in Azerbaijan to the detriment of Azerbaijan’s contacts with the West.

• The deal between Rosneft and SOCAR indicates that Russia, in exchange for refraining from complicating the situation surrounding the presidential election in Azerbaijan, expects access to participation in key Azeri energy projects, above all the initiatives which are part of the EU-promoted Southern Gas Corridor (the gas pipelines: Baku–Tbilisi–Erzurum, the Trans-Anatolian TANAP and the Trans-Adriatic TAP, as well as the Shah Deniz and Absheron gas fields). The fact that Azerbaijan rejected the gas pipeline project promoted by the EU, the “Nabucco West”, in June this year suggests that Baku is already avoiding direct confrontation with Moscow. Nor can it be ruled out that Moscow expects that part of the announced energy co-operation initiatives will be finalised already before the upcoming election, and is making its stance on the election dependent on this. In the longer term, the Kremlin is interested in Azerbaijan’s participation in the integration projects it has been pushing through: the Customs Union and the Eurasian Union; thus reducing the West’s influence in Azerbaijan.

• The upcoming presidential election, given the relatively strong socio-political tension in Azerbaijan (expressed through numerous protests in Ismayilli and Baku at the beginning of this year) and the mobilisation of the opposition, are quite a challenge for the government. While the idea that Aliyev could lose the election is an extremely unlikely scenario, the way the election is held and the potential post-election protests will trigger disapproval of the government’s actions from the West. Thus the legitimacy of Ilham Aliyev at home will be undermined, and Azerbaijan will become more susceptible to pressure from Russia. The geopolitical situation is unfavourable for Azerbaijan (e.g. the fact that the team of President Saakashvili, who are clearly willing to co-operate with Azerbaijan, have lost power; and less and less significance is being given to the Caucasus in US policy) and this will further contribute to this susceptibility.