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Russia: Chechen Oil Agreement May Be Completed Today

Moscow, 5 June 1997 (RFE/RL) -- Russian and Chechen officials say a key agreement on moving oil from the Caspian sea through Chechnya may be signed in Moscow this week.

Russia's First Deputy Prime Minister Boris Nemtsov, who also is fuel and energy minister, told the commercial NTV television that decisions on repairs and modifications to a 150 kilometer pipeline, the Chechen part of a line running from the Caspian to the Black Sea, will be made soon, possibly today. Nemtsov made the comment yesterday after meeting with Chechen First Deputy Prime Minister Movlaldi Udugov.

The Russian deputy security council secretary, Boris Berezovsky, a businessman with vast oil and media interests, participated in the talks. He was one of the negotiators of the peace treaty signed by President Boris Yeltsin and Chechen President Aslan Maskhadov last month.

Neither side would give details of yesterday's talks. Udugov said that a number of agreements remained to be concluded. He said consultations would continue if President Maskhadov approved agreements reached so far.

The approvals seem to have come. The head of Chechnya's Southern Oil Company Yunko left Grozny this morning for Moscow to join Udugov in continuing the talks. And Igor Ignatev, Russian Security Council press secretary, said that an essential agreement on Chechnya's financial share of the oil transport is likely to be signed today or tomorrow.

The unresolved question of Chechnya's political status remains a significant issue. Chechnya considers itself an independent state. Russia insists that it remains part of Russia. The Chechen pipeline segment is operated by Russia's monopoly pipeline company, Transneft. At least until the peace treaty signed in May, Chechen leaders claimed the segment belonged to Chechnya. The Chechen negotiator, Udugov, said yesterday the Chechen position is that Chechnya and Russia should be considered equal partners. Ugudov also said that Chechnya would guarantee the security of thue Chechen segment.

The Chechens seek to be independent partners in the trans-Chechen route because they then could charge for oil that transits their territory rather than abide by the Russian tariff, which equals two and seven-tenths dollars per barrel. Interfax news agency quotes Ugudov as saying that a compromise on this issue is possible.

Both sides have high stakes in the discussions.

Maskhadov is eager to demonstrate that his administration can deal effectively with Moscow. He was elected president last January, defeating Shamil Basayev, a Chechen war field commander. His campaign promised economic stability, but the promised public works and back wages have not yet appeared. Two days ago, after talks with Russian Security Council Secretary Ivan Rybkin, Udugov said he and Rybkin had worked out a financial aid deal. Russian regions and some former Soviet Republics will provide reconstruction materials to Chechnya. They will be compensated by reductions of their debts to Russia.

Security Council Secretary Berezovsky has said publicly and repeatedly that Moscow must preserve the present Chcechen leadership. Deputy Prime Minister Nemtsov said recently that the pipeline is strategically important for Russia in that it will strengthen its position in the Caucasus.

The transport westward of crude oil from Azerbaijan's rich oil fields offshore in the Caspian Sea is controlled by an international consortium of 12 oil companies under AIOC, the Azerbaijan International Operating Company. The Russian route through Chechnya is one of two chosen by the consortium for moving early oil from Azerbaijan. The second runs west through Georgia to the Black Sea port of Supsa. A decision five to ten years from now on routing full production may be based on the success of the early oil movements, which are expected to start early next year or sooner.