Streetwise Professor

May 17, 2007

Good for Thee, But Not For Me

Filed under: Energy,Russia — The Professor @ 9:10 am

While reading Vladimir Socor’s dispiriting account of Putin’s successes in Turkmenistan and Kazakhstan, I came across this:

During the summit, Putin underscored with satisfaction that Russian companies will receive production-sharing agreements (PSAs) in Turkmenistan. This seems ironic as the Kremlin is now refusing to sign PSAs with Western energy companies in Russia and is tearing up existing PSAs.

Ironic, indeed. Ironic doesn’t quite do justice to this. Chutzpah doesn’t even do it justice. In their attempts to justify expropriations (e.g., Sakhalin II), the Russians whine that production sharing agreements were foisted upon a desperate and helpless Russia; that they were an example of western economic imperialism; that they are fundamentally unfair and unjust.

But when the shoe is on the other foot, the Russians do their best Emily Litella imitation. “Never Mind.” Or maybe they just agree with Emerson that a foolish consistency is the hobgoblin of little minds. Or maybe they are truly consistent in their belief that PSAs are an unfair, imperialistic instrument that the strong use to exploit the weak, but it just so happens in this case that the Russians are strong, and are not in the least bit troubled by moral qualms in exploiting that strength.

Apropos my remarks last night, this is the kind of thing that should give the US and an EU some leverage in the region. If the Russia-Turkmenistan PSAs are truly tilted in favor of the Russians, there should be an opportunity to trump their offer with a more favorable arrangement. How ’bout it, folks?

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