Russian state officials are confident that the world will be told during George W. Bush's visit that the US Department of Trade is going to officially recognize Russia as a country with a free-market economy in the near future. This mostly symbolic gesture has been expected for a long time now. No one expects from the summit any progress in other matters of trade, including terms for Russia's membership of the World Trade Organization.
The Americans will unleash an effective PR effect on Russia and the world during the visit. According to our sources, Exxon is going to announce today that a shipyard in Komsomolsk-on-Amur will get a $150 million contract for construction of an Orlan oil rig. In this way, Washington will prove that the declaration on energy dialogue to be signed by Putin and Bush is anything but an empty document.
"The declaration will mention that the United States sees Russia as a reliable and stable guarantor of oil deliveries," says Aleksei Turbin, an adviser to Energy Minister Igor Yusufov. This wording is a slightly veiled threat to OPEC, traditional suppliers of oil to the American market. Russia has a substantial potential in the market, UN Undersecretary of State Alan Larson told the Vedomosti. "American investments in the Russian energy sector will be discussed" to realize this potential.
American finances will help the Angarsk - Nakhodka pipeline, a Transneft project. It may be implemented by 2008. The oil Europe does not need may take this route to the Far East ports and pumped into tankers. Up to 50 million tons of oil every year may thus be sent to the United States.
"Getting oil from Murmansk or Sakhalin is only a shade more expensive than from the Persian Gulf," says a source from the presidential administration. "From all points of view, deliveries to the United States are quite possible and will benefit Russian companies."
But when the American talk about investments, they do not mean assistance to Russian oil companies in settling in the American market. The want to discuss investments on the condition of end products split. These investments are made by American companies, like Exxon, within the framework of Sakhalin-1 project.
Specialists of the US Department of Trade say that energy dialogue and proper legal work on production sharing agreements are two most promising directions of cooperation with Russia in the near future.
The Americans have serious complaints about taxation in Russia. Investments are blocked by the article of the Tax Code on taxation for production sharing agreements, which has never come into effect. The Cabinet's bill has been collecting dust in the Duma since November.
Signing of the treaty on reducing nuclear arsenals will be one of the central events of the summit. Experts do not say that the treaty will trouble the Americans much, but during the visit we will hear of the colossal sums Russia may get for implementation of the treaty.
Japanese government sources say that Bush approached his G-7 colleagues with the proposal that each of them allocate $10 billion for Russia's nuclear disarmament on the condition that the United States allocated the same sum. Specialists do not think that the initiative will be proclaimed during the Russian-US summit. It will probably be put forth during the G-7 meeting in Canada this June.
It remains to be seen how the funding will be offered: in the form of writing off Soviet debts to the Paris Club of creditor nations, or in cash, and so on. In any case, huge sums will probably be restricted somewhat. According to Ivan Safranchuk, an expert with the Washington Defense Information Center, "assistance will be unlikely on this scale, and actually it will not even be needed if Russia plans to retain its nuclear potential." Safranchuk says that only 40% of the sums allocated to Russia by the Nunn-Lugar program in the 1990s actually made it to Russia. The rest was spent by the Americans themselves.
While offering Russia a carrot in the form of the promised billions, Washington will demand suspension of cooperation with Iran (including the almost completed nuclear power plant in Bushir).