Turkey and Russia: stronger partners in regional energy security, business (1)

by

MEHMET ÖĞÜTÇÜ & DANILA BOCHKAREV*

How can an eight-hour prime ministerial visit possibly transform the basic tenets of the relationship between Turkey and Russia? This is what happened during the short visit to Ankara on Aug. 6, 2009, by Russian Prime Minister Vladimir Putin.

 

Turkish Prime Minister Recep Tayyip Erdoğan 

and counterparts Vladimir Putin (R) of Russia 

and Silvio Berlusconi (L) of Italy shake hands 

following a signing ceremony in Ankara on Aug. 6.

The crystal-clear message from Russia to Turkey was, “We will make it worth your while to do business with Russia.” Hence, this visit has generated a series of unprecedented commercial and energy contracts worth $40 billion that will support Turkey's drive to become a regional hub for fuel transshipments while helping Moscow maintain its monopoly on natural gas shipments from Asia to Europe. Italy's Prime Minister, Silvio Berlusconi, also joined Putin and Turkish Prime Minister Recep Tayyip Erdoğan at the signing ceremony as Eni is a key partner in the equation for the Blue Stream, South Stream and Samsun-Ceyhan projects.

Seizing the opportunity created by Ankara's growing frustration with the European Union, Putin traveled to Turkey with his basket of tempting strategic and economic proposals immediately after a similar Nabucco agreement mission in July 2009 by his EU opponents.

 

Some commentators argue that the visit has served as a reminder of how much more effective the Kremlin's energy policy has been simply by offering more business and more supply to go through Turkey, while the United States and Europe have been relatively indifferent to Turkey's priorities and concerns. There are heightened fears in several capitals about Turkey becoming too cozy with Moscow at the expense of overriding some Western energy and strategic interests, with possible security ramifications in the long run.

 

A smart engagement strategy to keep Turkey plugged into the West's preferential energy strategy will therefore require a careful understanding of this country's interests. So far that is not what we have seen.

 

A key transit/terminal hub of both oil and gas to the heavy consumer nations of Europe, Turkey is a nexus of multiple important pipeline projects and provides access to the Bosporus Strait and the eastern Mediterranean via the Ceyhan terminal. The country is geographically located in close proximity to 71.8 percent of the world's proven gas reserves and 72.7 percent of oil reserves from Russia, the Caspian region and the Gulf and has thus become the “Silk Road of the 21st century."

 

No longer marginalized and becoming increasingly self-confident, Turkey views itself as an unparalleled regional leader (by virtue of its $750 billion economy, largest military, huge cultural hinterland, unique geography and vibrant, young population full of entrepreneurs), and recognizes both the limitations of Russia's ability to bully such a vital country as well as the tremendous opportunity to advance its interests.

 

The country feels confident it can deal with the challenges and opportunities presented by Russia's power. Indeed, Moscow figures prominently in almost all of Turkey's energy designs and geopolitical calculus.

 

In other words, it would be a mistake to think that Turkey is simply awaiting its turn to be moved in the US-EU-Russia grand chess game. It is playing a game of its very own.

 

From historic enmity to ‘strategic’ partnership

 

Once the worst of enemies, involved in 12 wars in three centuries, Turkey and Russia have suddenly become the best of friends, forging strong bonds to advance their own economic and geopolitical interests in Eurasia and often turning a blind eye to the concerns expressed by Brussels and Washington.

 

It is becoming increasingly evident that Moscow matters to Turks more than ever. Russia has become Turkey's biggest economic partner, replacing Germany -- trade between the two countries reached $38 billion in 2008, an eightfold increase in eight years, and is expected to reach the $100 billion mark in the next four years. Turkish construction firms are omnipresent all over Russia. Millions of Russian tourists flock to Turkish resorts every year -- 3 million last year. There are tens of thousands of intermarriages.

 

Russia has traditionally been the biggest regional player, having controlled the Central Asia/Caspian region for many centuries. However, its traditional dominance is being challenged by China and other new actors. Therefore, Russia tries to foster new partnerships, as in the case of Turkey, to regain some of the influence it has lost.

 

This is not to say that the potential for competition and lingering disputes between Russia and Turkey have totally disappeared. Some top military officials in Turkey consider an increased Russian military presence, including Russia-controlled Commonwealth of Independent States (CIS) peacekeeping forces in the South Caucasus, as a source of potential threat. Russia also has its own sensitivities, including Chechnya.

 

Nevertheless, both countries have learned how to play a positive sum game and are increasingly aware of the mutually beneficial opportunities that bind them. Moscow tends to see Turkey as an emergent, strong player in Eurasia, with which it can cooperate and team up when necessary in its preferred multipolar system.

 

The two countries' growing closeness is probably helped by the similarities between Putin and Erdoğan: Both come from humble origins; both seem ready to bury historical enmities; and both are seen as strong leaders, firmly entrenched in power for years to come. “If there is the touch of a Czar in Putin, there is a Sultan in Erdoğan,” said Himli Toros in an article on the Russian-Turkish relationship.

 

Energy breakthrough for broader regional cooperation

 

Turkey, conscious of its critically important role as a corridor for energy, has been flexing its muscles, indicating its growing assertiveness and autonomy as a regional power to be reckoned with. This is happening at a time when Turkey's accession process is faltering in the face of opposition from several EU countries. Ties with Washington are yet to be reconsolidated after a painful Bush era of insensitivities towards Turkey's vital interests.

 

 Russia's energy engagement with Turkey is based on several pillars supporting an overall “win-win” strategy. The Kremlin tries to capitalize on its energy “weapon” as a source of comparative advantage in the global system, trying (successfully or unsuccessfully) to combine the maximum efficiency of a private management with state control of the “critical industries.”

 

Therefore, Russia is seeking control over the three major elements of the "energy chain" -- production, transit and processing/distribution -- by supporting the international expansion of Russian energy companies (i.e., the acquisition of assets and the control of existing and prospective energy resources) and alliance with other energy producing and transit states, but also with the national oil companies (NOC) and international oil companies (IOC). It also supports Russian companies' access to the downstream markets (and mid-stream facilities) of the energy consuming countries.

 

In the second part of this article we will look at the recent Turkish-Russian energy deals within the aforementioned context.

 

*Mehmet Öğütçü is a Mülkiye, London School of Economics and Collège d'Europe graduate, a former Turkish diplomat and a senior Organization for Economic Cooperation and Development (OECD) staffer. He is currently an executive of a major multinational corporation. Danila Bochkarev is an associate for energy security project at the EastWest Institute. The views expressed here are those of the authors and are not necessarily shared by the organizations with which they are associated.

07.09.2009

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