Russia politics: Quick View - Putin visits Ashgabat
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- Economist Intelligence Unit
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On October 2nd the president, Vladimir Putin, met with the Gurbanguly Berdymuhkamedov, the Turkmen president. In Mr Putin's first visit to Turkmenistan in five years, the two presidents signed a mostly symbolic bilateral treaty on strategic partnership.
Although Mr Putin and Mr Berdymukhamedov both exalted the close historical partnership and common goals between their countries, relations between the two countries have deteriorated slightly since Gazprom, the Russian state-owned gas monopoly, stopped buying gas from Turkmenistan in January 2016. During Mr Putin's visit, the two countries signed multiple agreements, including agreements on co-operation in agri-business and an agreement on combating drug trafficking. The finance ministries of the two countries also signed a memorandum of understanding and co-operation.
With regard to energy issues, ties between Turkmenistan and Russia have been relatively tense over much of the past decade. From 2009 until 2015 Russia had been importing close to 10bn cu metres of Turkmen gas each year. This was a drastic reduction from the 40bn cu metres that Russia had been importing each year before 2009. In 2015 imports of Turkmen gas were cut further, to 4bn cu metres per year.
Gazprom and Turkmengaz, the Turkmen state gas company, ran into issues over a pricing dispute, and in July 2015 Gazprom filed a case in the international arbitration court in Stockholm, the Swedish capital, seeking US$5bn in retroactive payments. Gazprom is not the only Russian company to run afoul of the Turkmen government. On September 29th MTS, a Russian mobile phone operator, stated that it had been forced to suspend its mobile services in Turkmenistan after the government telecommunications regulatory agency withdrew MTS's access to use telecoms bandwidth for providing services.
It is likely that Mr Putin's visit will lead to some uptick in relations between the two countries, although the deals signed during his visit are mostly symbolic, in a show of co-operation. Russia has already asked Turkmenistan to join the OPEC oil cuts as an observer. In the long term the two countries are also likely to co-operate on developing onshore and offshore oilfields, especially in the Caspian Sea shelf.
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