Russia offers N.Korea energy deals, debt decision http://www.reuters.com/article/topNews/idUSL2365700620070323
Fri Mar 23, 2007
By Guy Faulconbridge
MOSCOW (Reuters) - Russia on Friday offered North Korea the prospect of energy deals and a possible decision on writing off $8.8 billion in Soviet-era debt as Moscow tries to keep Pyongyang in talks about its nuclear program.
Six-party talks on the nuclear program ended with no progress in Beijing on Thursday, derailed by a dispute over $25 million in bank accounts which North Korea wants to be unfrozen.
On Friday Russia hosted what used to be a regular commission with North Korea on economic cooperation after a break of more than six years. The meeting was planned before the six-party talks ran into trouble.
"The main task of the meeting was to renew all the trade and economic cooperation which was somewhat frozen over the past six years," Konstantin Pulikovsky, the Russian co-chairman of the commission, told reporters.
"We discussed cooperation in the area of energy, in the area of developing transport and machine building and also economic cooperation in the timber sector and the use of (North Korean) labor on Russian territory," he said. Russia, which shares a border with North Korea, condemned the secretive state's first nuclear test in October but has warned the United States against pushing Pyongyang into a corner over its atomic program.
Pulikovsky agreed with the head of the North Korean delegation, Foreign Trade Minister Rim Kyong-man, to answer all questions from reporters. Rim did not say a word during the 20-minute briefing.
DEBT, OIL
North Korea owes Russia about $8.8 billion in Soviet-era debt and interest, according to Russian officials, who have said an agreement could be reached soon on the debt.
"The Korean side is telling us directly and openly that in its current state, the Democratic People's Republic of Korea is unable to pay," Pulikovsky said.
"The Korean side is proposing a political decision be taken on this question ... the decision will be made by the leaders."
Russia also offered Pyongyang the prospect of resuming oil supplies, rebuilding refineries and power stations and laying a high-voltage power cable to export electricity, according to a protocol signed at the meeting and obtained by Reuters.
The document said Gazprom Neft, the oil arm of Russian state-controlled gas giant Gazprom, had expressed preliminary interest in rebuilding a refinery it called Synri and restarting oil supplies.
North Korea has two major refineries, Sungri in the Northeast and Ponghwa in the West. Sungri is the largest plant and had been getting crude from Russia.
Russian Railways would be ready to deliver the oil and help rebuild the railway line from Russia's border town of Khasan to the North Korean port of Rajin.
At talks in February with the United States, South Korea, China, Japan and Russia, Pyongyang agreed to shut its Yongbyon reactor within 60 days in return for an initial shipment of heavy fuel oil and unfreezing of some North Korean assets.
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