Currencies

[Amaunet]

Russia Approves 'Gas for Goods'

Bartering can affect U.S. currency in that it bypasses the use of petro-dollars.




12.07.2004 Tuesday



Critical decisions that favor Turkey have emerged from the negotiations between Turkey and Russia that took place during Russian President Vladimir Putin's historic visit to Ankara.

The off-set system that was included in a 1984 natural gas agreement but neglected since 1994, has been made operational via negotiations between energy delegates from both countries. Energy bureaucrats convinced the Russians to guarantee signatures on exports in exchange for a $1 billion part of bought natural gas. The two nations will cooperate in order to reduce the effect of exceedingly increasing oil prices on natural gas prices to a minimum. Within this framework, Turkey will re-negotiate with Russia to curb natural gas prices starting in 2005. Russia claimed that it was not the addressee of the 1984 natural gas agreement, but that it was signed by the former Union of Soviet Socialist Republics and said Russia started to receive hot money for natural gas that it sold since 1994. Russia rejected Turkey's concerns on the issue by saying "There is no exchange practice or barter in international trade." An agreement was reached during yesterday's negotiations to allow recognition of the 1984 natural gas agreement and its operation and of the 3rd Article making barter between the two countries possible. This has paved the way first of all for Turkey to export to Russia for $1 billion. According to the agreement reached yesterday, the amount of $ 1billion, the equivalent to a portion of natural gas Turkey once purchased from Russia, will be held in Russia's Central Bank. The amount will be paid out to Turkish companies for exports to Russia.

Issues under discussion between Russia and Turkey were clarified. Important steps in building cooperation between the two nations were taken, specifically on energy. According to reports, a memorandum of understanding was signed between Botas and Gazprom in Ankara as a supplement to the Mixed Economy Protocol signed in Russia earlier. Botas and Gazprom decided to make joint investments in natural gas. Another critical element of the negotiations was the possibility to construct alternative pipelines thereby ending use of the Straits. The "Samsun-Ceyhan" pipeline project is focused on this issue. The Trans-Thrace pipeline was also a topic of discussion. The two sides also reached a consensus on joint investment in Liquefied Natural Gas (LNG). Experts working for Botas and Gazprom will cooperate on the construction of an LNG terminal in Ceyhan in the next step and Turkey's underground gas storage potential will be researched, primarily in the area beneath Lake Salina in Central Anatolia.

12.07.2004
Ramazan Solak
Ankara

http://www.zaman.com/?bl=international&alt=&trh=20041207&hn=14524



The reality is that the strength of the U.S. dollar since 1945 rests on it being the international reserve currency. Thus it assumes the role of fiat currency for global oil transactions (ie. `petro-dollar'). The U.S. prints hundreds of billions of these fiat petro-dollars, which are then used by nation states to purchase oil/energy from OPEC producers (except Iraq, to some degree Venezuela, and perhaps Iran in the near future). These petro-dollars are then re-cycled from OPEC back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, real estate, etc. In essence, global oil consumption provides a subsidy to the U.S. economy. #msg-994080

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-Am