Baku Says Russian Arms Trade at $4 Billion

Russian President Vladimir Putin and Azeri President Ilham Aliyev at a recent meeting in Baku

BAKU (Combined Sources)—Azerbaijan said its arms trade with Russia is worth $4 billion as it boosted military spending in connection with the Nagorno-Karabakh conflict, reported Bloomberg.

“As of today, military and technical cooperation with Russia is measured at $4 billion and it tends to grow further,” Azeri President Ilham Aliyev said Tuesday after meeting with Russian President Vladimir Putin in Baku. It was the first time Azerbaijan disclosed the price of its arms deals.

Azerbaijan has increased military spending by almost 30 times to $3.7 billion in the past decade and repeatedly threatened to use force to regain control of Karabakh if peace talks fail.

At a press conference following their meeting, Putin said only a diplomatic solution would be acceptable for the Karabakh conflict.

“There is only a political solution to Karabakh conflict,” the RIA Novosti agency quoted Putin as saying.

“During the negotiations we touched upon international issues, including the Nagorno Karabakh conflict. Russia is providing active assistance to the settlement, which is possible only by political means,” added Putin.

He also stressed the need for a resolution of the existing problems in the Caspian region related to delimitation, ecological issues, for the benefit of all countries of the region.

But, Putin failed to clinch a concrete energy deal on his rare trip to Azerbaijan on Tuesday, dashing Moscow’s hopes to challenge the dominance of major Western energy companies in the former Soviet republic, reported Reuters.

Putin’s trips abroad usually yield a flurry of deals and one of his closest allies, state oil champion Rosneft’s head Igor Sechin, went to Baku last month to prepare the ground.

Russia has long tried to increase its presence in Azerbaijan, a country Europe is hoping will help it lessen its dependence on Russian gas after Moscow’s “gas wars” with Ukraine disrupted deliveries in 2006 and 2009.

But on Tuesday, Sechin signed only a vague cooperation agreement with Azeri state energy firm Socar as Putin landed in Baku for the first time in seven years.

“Under this agreement, we plan to cooperate on a number of issues including crude swap operations, a joint use of infrastructure,” Sechin told reporters without giving details.

Sources on both sides said a lot of differences needed to be removed for the companies to agree on teaming up on field development or swapping energy supplies.

“Azerbaijan is asking such a high price for its assets that Rosneft is not willing to offer,” a Russian energy source said, asking not to be named. A Socar source also said a lot of work needed to be done to iron out the differences.

Western oil companies such as BP, Statoil and Exxon Mobil have dominated the Azeri oil industry since the collapse of the Soviet Union while relations between Moscow and Baku have been mostly cool.

Ties between Moscow and Baku were strained late last year after protracted talks between the two countries failed to reach a deal over Moscow’s use of a radar station on Azeri territory.

The only Russian company with a significant presence in Azerbaijan is the privately-held Lukoil.

Russian state gas monopoly Gazprom agreed in the last decade to buy almost the entire gas output from Azerbaijan, in what was seen as a successful attempt by Russia to defend its leading position in Europe’s gas markets.

But the deal never materialized in full, and Azerbaijan and major oil companies have instead agreed to supply most of their gas through a new pipeline to Europe from 2019.

The project does not represent a major challenge to Russia’s gas dominance in Europe, although Moscow has always been keen to make sure Azerbaijan does not become a major transit route for gas from other Caspian Sea producers.

The threat has somewhat diminished since major producer Turkmenistan rerouted most of its gas to China away from Russia and the European markets.

Azerbaijan has almost a trillion cubic meters in gas reserves, according to BP data, relatively small compared to Russia’s 33 trillion cubic meters.

Last month, industry sources told Reuters Rosneft was seeking a stake in Azerbaijan’s Absheron gas project but this was not mentioned in the cooperation agreement.

SOCAR and French oil company Total each hold 40 percent in Absheron with the remainder being held by GDF Suez. Azeri officials have said Absheron will help increase Azeri gas exports in coming years.

Sources have also said Rosneft and Socar were also considering swapping Azeri oil in Europe against Russian supplies to Asia which would allow Rosneft to service its plants in Italy and Germany while Socar would supply its Asian buyers.

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15 Comments

  1. Avetis said:

    Thanks to our Cold War rejects, Captain Americas and EUrotic idiots, Aliyev is enjoying the limelight. If Yerevan is sincere in its desires to upset the Bear by moving closer to Western powers, we can all expect the repeat of October 27, 1999, or worst…

    • Sarkis said:

      For all the readers who did not understand Avetis’ very blunt and very correct statement:
      The reason that President Putin of Russia, Armenia’s only true ally which supplies Armenia with nearly free military equipment as well as technological, socio-economic, diplomatic aid, has as much to do with sending a message to Armenia as it does with energy deals with azerbaijan. Russia is angry with Armenia because, after all of the aid Armenia has received from Russia, certain political groups in Armenia as well as a segment of Armenia’s population are pushing for Armenia to sign an association agreement with Russia’s rival, the European Union. Despite the EU’s terrible economic state and beside the fact that the EU itself is in a demographic collapse (except for growth through turkish, Muslim, African and Asian immigration), some Armenians blindly look to the EU almost with a fetish-like fanaticism (ie EUrotic). Additionally, there are thousands of American-funded “Captain America’s” trying to poison Russian-Armenian relations inside Armenia and in the Diaspora by spreading lies, exaggerations, hate and Cold War style propaganda against Russia. Since Russia considers Armenia to be its natural ally and a valuable strategic partner, it will not risk losing Armenia to foreign intrigues like it lost Georgia in 2003.

      And this is why, because Armenians seem to be tilting more for the EU than Russia, a goofball like Aliyev all of a sudden finds himself in the spotlight. Luckily, Russia knows azerbaijan will always be subject to turkish influence, and Russia knows turkey =nato=rivals, so Aliyev will not be given any real game-changing support. Russia did not forget the insulting way azerbaijan refused to renew the deal for the Russian radar located in Gabala, azerbaijan.

      Still, as Avetis points out, it is a very pitiful situation that Armenians are misplaying the situation so badly in the South Caucasus. At the end of the day, Russia will keep Armenia within Russia’s orbit, no matter what it has to do.

  2. Martin said:

    Without the oil Azerbaijan would have been thrown to the wolves a long time ago. Such a stupid people sitting on such vast natural wealth. The second that oil stops pumping Europe will look the other way as they get obliterated. I am not worried at all. All that money may buy guns, but it doesn’t buy brains or the courage to use them.

  3. An Armenian said:

    How does one define “STRATEGIC PARTNERSHIP”? In this case, I am referring to the strategic partnership between Armenia and Russia. In today’s world, everybody is after expanding and protecting their own interests. Therefore, if Russia sells $4 billion worth of Arms to Armenia’s nemesis and arch enemy, then how can it try to coerce and blackmail Armenia into submission to what she wants? This trip of Putin to Azerbaijan is just one of those instances where Russia has sold out Armenia’s interests to Armenia’s enemies. There are many other instances and a couple of them very blatant and unbecoming of a strategic partner.

    1) Taking over 5 of Armenia’s strategic assets for $100 million of debt Armenia owed to Russia.
    2) Chopping off historic Armenian lands and gifting them to Armenia’s neighbors, namely Turkey, Azerbaijan and Georgia to appease them.

    The list is very long and arduous. But I think I made the point.

    • Arto2 said:

      My friend, I’d like to see what you would say if Russia completely walks away from Armenia. Would you give up your comfortable couch in LA and go fight in Kharabagh with a shovel in your hand because that’s all you’ll be left with? Do you know how many billions in weapons Russia has GIFTED to Armenia and are about to give even more by setting up high tech military industrial complexes. And you complain about 5 soviet era “strategic assets” which were outdated empty factories lying idle and not making any money. Points to consider:

      1) We need Russia more than they need us
      2) Without Russia we will be left to the good will of Europe, Turkey, US and Israel. In other words kiss your country goodbye.

      The list is actually longer and more arduous but I think I make my point.

  4. From Russia Without Love said:

    It seems “our best friend” is worried that if a war breaks out, NK will overrun all of AZ, God forbid, like was about to happen last time, thereby “our best friend” might just downgrade to “our friend” instead, and Armenia might become too strong, so we cannot have that – “we need a balance in the region” so that the oil can keep flowing to the west, and Armenia keep licking the boots of “our best friend” because it is economically shut out – right??

    My only question remains, what benefit is “our best friend” receiving from the west to be part of this scheme? It must be very lucrative for “our best friend”.

  5. Osik said:

    That’s not a real Military Spending; Oghlan, that’s a Forced Territorial TAX that you got to pay for not renewing their Caspian OIL Contract when during the disintegration of USSR; while they were Looting their own country; you managed to sign with WEST instead.
    Don’t you remember they; to punish Saakashvili; attacked Georgia and took S. Ossetia during which Bush didn’t take any action?
    Same day you got scared and thought they may punish you too by recognizing the Independence of Artsakh; therefor you dashed to North and kissed his boots.
    Isn’t that when they started to Force those Territorial Taxes on you?

  6. GeorgeMardig said:

    Doesn’t matter, for Russia $4 Billion is not an amount enough to convince betray Armenia, it is just an idiotic pressure of Aliyev on Armenia.

  7. edward demian said:

    Weaponry has a distinct nature of becoming obsolete within a decade or two. The rapid advance of electronic counter measures makes them obsolete. Also, sophisticated weaponry requires highly trained and educated staff. Azerbaijian is an illiterate society for most. Such people exist, few in numbers, and those people are likely to shun military service. Also. headlines are misleading. Dictators find it very easy to contract large purchases, and quickly milk the funds out of the contract to the point where there is hardly any weaponry delivered. It happened before. (See the Skoda affair). All the graft and the truth is revealed, but by then, the dictators are gone. That is what will happen in the future, when the Azery’s kick out the Kurdish/Armenian (see Alliev geneology) clan ruling Azerbaijian.

  8. Berge Jololian said:

    Putin’s Russia is losing control of the Caucasus and therfore is interested in war to break out.

    The US State Department’s interest in gaining access route (via Armenia, more so than unstable-Georgia) to control the Caspian sea basin (Turkmenistan, Kazakhstan) energy (oil & gas) reservers is what is driving the competion.

    The British BP (British Petroleum) investments in Azerbaijan oil & gas have reached US $35 billion. Europe depends on Russian energy supplies for more than 40% of its needs to keep Europe running. The Brits, EU and US SD would like to lift Europe’s dependency on Russian energy. Therfore, it seeking an access route via the much desirable Armenia route over the unstable-Georgia to reach the caspian Basin. The NABUCCO pipeline construction is undeway from Austria thru Turkey and on to the Caucasus.

    Putin’s Russia wants an opprtunity for war so that Armenia will retaliate by destroying BP’s oil & gas installations; thus Russia remains safe and needed by Europe for energy.

    The US SD works to weaken Armenia so that it is not able to put up resistance against Azeri aggression, while the Russians want Armenia strong enough only to destroy the West’s interests in access route.

    Neither, the US, EU or Russia care if thousands of Armenians die.

    it is le Russians arm the Azeris to capture Artsakh and destroy Armenia. The US State Department is working to weaken Armenia so as it is not able to put up a fight. The aim of the US SD is to prevent destruction of British Petroleum installations by weakening Armenia. The Russians want a war as an opportunity to destroy BP in Azerbaijan with Armenia just strong enough to be able to destroy BP’s investments. Neither, the US SD or Russia care if thousands of Armenians die as a result of war. And yes, we have a black list to worry about.

  9. Satenik said:

    These weapons will never be used I assure you. Like some Arab rich oil countries Azerbaijan is forced to buy these weapons because when arm dealers smell money, they are going to sell their products by hook or crook ..the rest they can spend in buying and building grotesque buildings in some phony countries as a future place of residence when they get ousted from their farcical power….Aliyev should take note to what happened to some tryrants only recently and think twice about his future fantasies. His days are numbered…there is a lot of disturbances taking place in that country where the police tighten their noose on people ,but there is a limit to his brutality and his so called “friends” will turn against him !

  10. Art said:

    Just another example of too much dependency on just one entity. Armenia needs to diversify its strategic partnership, and taking the path to Europe is just one way to do it. And I mean joining the European Union and not an auxiliary branch of it. NATO is another approach.

  11. bigmoustache said:

    I remember hearing some Armenians say “Russia wont allow a war between Armenia and Azerbaijan”…what fools lol

  12. Gazzo said:

    Armenia will remain in a sufficiently strong position to repel any Azri encroachment, and an act of war. Yes Russia may have sold arms to Azeries, if they had not done it, someone would have. Russia needs Armenia as a solid base for the defense of her interests. Armenia needs Russia to keep body and soul together in an area where she is surrounded by mortal enemies. The west even with their best good will can not accommodate Armenian interests in their geopolitical strategies. The west interests lie in the bolstering of Turkey and now in making Azerbaijan dependent of them through the oil wealth. The West can and will sacrifice Armenia in the altar of panturanists in their single minded pursuit of total hegemony in the area. Armenia should naturally extract maximum concessions and have the necessary latitude to act within the Ruso-Armeno partnership. If we are destined to become Russia’s shield and spearhead in the Transcaucasia and a guarantor of Russian influence, then we must be fully and adequately prepared and fit to fulfill that role. The West does not see Armenia but another hurdle to be overcome in their expansionist drive. Under the western leash, the most Armenia can aspire is to become a Turkish province . Our existence will be questioned . Russophobes and pro western forces in Armenia be forewarned, our position is an invidious one, we can nor afford the luxury of divisions and dissensions. Our survival is at stake and in today’s configuration in Transcaucasia the West, expressions to the contrary, is not a guarantor of Armenian sovereignty, nor will they ever defend our frontiers. However the West will do its utmost to recruit Armenia for the sole purpose of awarding to the Turks as a sacrificial pawn in their geopolitical designs in that area of conflict. In the end it becomes a clash of vital superpowers interests, and Armenia needs to be very careful in her choices of alliances.

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