Dmitry Kozak, the deputy head of Russia’s Presidential Administration, hosted negotiations in Moscow on October 7 and October 21–22, with Moldovan delegations headed both times by Deputy Prime Minister Vladislav Kulminski. Neither of them specializes in energy or any economic matters. Each of them is responsible for negotiations on the Transnistria conflict, says an opinion article by Vladimir Socor, a senior fellow of the Jamestown Foundation.
According to Moldovan insiders, Kozak did make a number of specific proposals regarding Transnistria on October 7 informally, not in writing but verbally for plausible deniability. On October 13, according to Chisinau insiders, Kozak’s office followed up, asking Chisinau whether it could offer a concept for a sustainable resolution of the Transnistria conflict.
However, Russia’s main targets in the current European gas crisis are: 1) Ukraine (to eliminate that country’s gas transit route to Europe or, alternatively, compel Ukraine to accept Russia’s terms of gas transit and gas trade), and 2) Germany (to lock it into structural dependence on Russian gas and other forms of business generated by the gas sector). Moldova is merely a collateral target and target of opportunity for Russia.
The Kremlin demands more concessions for further monthly contracts in November and December, to be followed by an annual contract if Moldova accepts those conditions.
The Russians offer a 25 percent discount from the dizzying spot market prices, on a number of conditions. One of them is for the Moldovan government to take responsibility for Moldovagaz’s company debts to Gazprom, turning those into Moldovan state debts, again for gas received in right-bank Moldova. Another one is for Moldova to commit to repaying those debts within the next three years; and also for Chisinau to accept yet another postponement of “unbundling” Moldovagaz, as the European Union’s Third Energy Legislation Package requires, into independent companies for gas procurement, transportation and distribution. Gazprom takes the position that the unbundling would affect Gazprom’s assets in Moldova, given that Gazprom holds 50 percent plus one share in Moldovagaz.
Moldovan compliance with those conditions would open the way to negotiations for a multi-year supply contract with Gazprom.
According to Chisinau insiders, the Russian side further proposed holding trilateral discussions among Russia, Moldova and the European Union about the impact of the EU-Moldova Deep and Comprehensive Free Trade Area (DCFTA) upon Moldova’s bilateral trade with Russia. The Russian government aims to adjust that DCFTA in line with Russian commercial interests, but also (and perhaps mainly) to set a precedent for Russian interference with the EU-Ukraine and EU-Georgia DCFTAs.
The Kremlin and Gazprom, however, seldom mention Transnistria’s debt for Russian gas consumed there. That debt is at least ten times larger than right-bank Moldova’s. It amounts to $7.4 billion, according to Moldovagaz; or “approximately $8 billion,” according to Gazprom. Transnistria’s leadership from time to time confirms the growing multi-billion arrears, promising to hold talks about reimbursement at some unspecified future time. Gazprom never seriously attempted to collect Transnistrian debts in the last 15 years. With such laxness, Gazprom defrauds its own shareholders. The Kremlin is thereby using Gazprom to subsidize Transnistria and keep it afloat.
For their part, the Moldovan officials stated Chisinau’s basic positions during the negotiating rounds as follows: 1) Gazprom’s proposals—both economic and extra-economic ones—run counter to the interests of Moldova’s citizens, hence negotiations must continue toward a mutually acceptable outcome. 2) This Moldovan government does not recognize the $700 million dollar debt to Gazprom, because it is far from clear who calculated it and how. Moldova demands an independent professional audit (with both Chisinau’s and Gazprom’s participation), with a view to calculating any debt correctly and restructuring it. 3) Chisinau aims to switch from short-term to longer-term contracts (one year to three years) and from spot-market gas prices back to indexing the gas price to the basket of crude oil and oil derivatives. An option also exists to use the oil basket price indexation for gas supplies in the first and fourth quarters of the year (the heating season) and a gas price corridor in the second and third quarters, similar to that in Gazprom’s contracts with a number of European countries.
Apparently, Chisinau has understood that sending its negotiator on the Transnistria conflict to discuss natural gas supplies with Russia’s negotiator on the Transnistria conflict—or to combine the two tracks into one process—is inappropriate and risky. Chisinau must keep those two tracks separate from each other. Moldova’s top officials handling the gas crisis—especially Prime Minister Gavrilita and Deputy Prime Minister and Infrastructure Minister Andrei Spinu—display a reassuring sang froid and poise in this situation, concluded Vladimir Socor.
