Current dynamics of Russian-Turkish relations

Prime Minister Vladimir Putin and his Turkish counterpart Recep Tayyip Erdoğan held a joint news conference on the results of the talks

Recep Tayyip Erdoğan's introductory remarks:

Recep Tayyip Erdoğan (as translated): Your Excellency Mr Putin, Mr Berlusconi, esteemed journalists, ladies and gentlemen,

Mr Putin, the Prime Minister of Russia, and my friend, Mr Berlusconi, are here. I am happy to meet them in my country.

Mr Putin and I had long one-to-one negotiations today, followed by fruitful talks between delegations. This meeting is a continuation of our meeting in Sochi last month, and is part of our bilateral contacts. It gives me great satisfaction to see major progress in all fields.

Together with our professional colleagues, we have demonstrated our resolution to develop our relations and set higher standards and bigger targets. These relations are based on trust and understanding, and mutual interest, and are gaining pace. Their progress is among our foreign political priorities.

The present stage of our relations is very satisfying. Top-level contacts have promoted them since the start of the present decade.

Trade and economic contacts are certainly the vehicle of Turkish-Russian relations, whose present development we are glad to see.

Bilateral trade hit the $40 billion mark last year. Russia leads the list of our trade partners, and Turkey is No. 5 on the list of Russia's partners.

Mutual investment is increasing, and tourism is developing on a grand scale. All this indicates rapid progress of our economic relations.

Our political, economic, trade and cultural relations are acquiring a new content. Our contractors have implemented 1,152 projects in Russia to total $30 billion. As national leaders, we have discussed and settled certain technical problems of our trade and economic relations.

Mutual confidence has given us the opportunity to discuss such questions freely, and helps us settle any problems that might arise.

The Intergovernmental Commission for Trade and Economic Cooperation started its meeting yesterday. I would like to thank Mr Sechin and the experts active in its work, and the Energy Minister for his intensive preparatory efforts. They worked until midnight.

Energy is another essential theme of our meeting, and an essential part of the practical content of our trade and economic partnership, with its strategic character and resultant pivotal meaning. We hope to continue our confidential relations based on mutual understanding in the energy sphere.

We hope further joint gas, oil and nuclear energy projects will open new vistas to our partnership. We are determined to continue our teamwork, and enrich our relations with an entirely new content.

As you have heard, bilateral protocols on the development of partnership have been concluded under three headings. We are happy to report that they have been signed.

The gas protocol allows to import natural gas from Russia, and to extend an earlier contract expiring in 2011 within the gas protocol. I am referring to the construction of South Stream via our economic zone. We have given our consent to this energy project in the spirit of understanding.

The Turkish Atomic Energy Authority and Russia's Rosatom have concluded a protocol on civil use of nuclear energy, and another on information exchanges about nuclear accidents.

Apart from these bilateral agreements, Mr Putin's visit has given us an opportunity to sign a protocol on the meeting of the Intergovernmental Commission for Trade and Economic Cooperation, and a standardisation memorandum. We have also signed memoranda on food security and customs cooperation.

TUBITAK and the Federal Space Agency have signed a package on the civil use of space. A cultural exchange document has also been signed. Partners based in both countries have signed 12 documents within the frame of Mr Putin's visit. All in all, 20 documents have been signed.

As I talked to Mr Putin, we discussed burning regional problems. We are pleased to see that our stances on global and regional international issues are close to each other, in the main.

We are planning high-level intergovernmental meetings to coordinate our all-round strategic partnership. Mr Putin will arrange an annual prime-ministerial meeting in Russia at the beginning of next year. Executive agencies and ministries will meet under prime-ministerial sponsorship. Ministry representatives will meet throughout the year to see what has been done to implement our plans. So the two Governments will maintain a permanent dialogue.

We have also discussed tourism and other important matters.

We need young people who speak the Russian language, so a Turkish-Russian college and university will be established in Turkey. My friend Mr Putin has approved my proposal, and work on the project will start soon.

Ladies and gentlemen,

Mr Berlusconi, the Italian Prime Minister, joined us after fruitful talks with Mr Putin for a tripartite meeting. Italy is our friend and close energy partner. Our companies worked together on the Blue Stream project. We, the three Prime Ministers, have met in Samsun recently. We will do everything necessary now for timely construction of a gas pipeline to unite our countries.

Blue Stream partnership is excellent, and we expect enthusiasm over the project to survive. The pipeline will be extended to Israel, Syria, Lebanon and Cyprus.

I would like to use this occasion to thank Russia for its contribution to the Samsun-Ceyhan oil pipeline project, on which Turkey, Italy and Russia will work together to add another aspect to our partnership and greatly reduce the load on the Turkish straits.

Mr Putin, Mr Berlusconi, my friends,

Your visit to my country is tremendous joy to me. I want to express my enthusiasm once again now. Today's signatures will promote our countries' bright future.

Mr Putin has the floor.

Vladimir Putin's opening speech:

Good afternoon, Mr Prime Minister, ladies and gentlemen,

Today, we had meaningful and productive talks with Mr Recep Tayyip Erdoğan. We have discussed in detail our bilateral agenda, including the prospects for developing an economic partnership.

The power industry and major energy projects such as the South Stream and the Blue Stream-2 pipelines, and the construction of the first nuclear power plant in Turkey are playing a key role in upgrading cooperation in this sphere.

It is obvious today that the South Stream gas pipeline is much in demand. It is exceptionally important for energy security for all of Europe, and for developing comprehensive cooperation between Russia and Turkey.

Our talks have shown that together with Turkish leaders we can find solutions which will pave the way for new large-scale energy projects.

It is no accident that Mr Silvio Berlusconi and the representatives of major Italian companies such as ENI are present here today. They are also having a good day today because we have agreed on major joint projects. Mr Erdoğan recalled that our Italian partners took a direct part in building the Blue Stream gas pipeline from Russia to Turkey on the Black Sea floor. Now we deliver a large volume of natural gas for the Turkish economy.

Our Italian partners are also involved in both South Stream and the Samsun-Ceyhan project. We believe that this is an important project, considering the growing production of gas in both Russia and the Caspian region. The question of expanding the Caspian natural consortium has been before us for some time, and we believe that the Samsun-Ceyhan project is worth supporting and can be carried out with a concerted effort.

As for the peaceful uses of nuclear energy, the victory of the Russian-Turkish consortium at the tender for the construction of Turkey's first nuclear power plant would open up broad vistas before our two countries. Obviously, both countries are interested in the project and intend to coordinate details and proceed with construction in the near future.

Today, Mr Erdoğan clarified some requirements for the implementation of this project. We have taken all of them into account, and in the course of today's consultations, found it possible to agree with many conditions expressed in the Turkish position. We will work thoroughly on them within the framework of the document, which was signed today.

A number of other important agreements have also been reached. We have signed joint documents, including protocols on cooperation in the gas and oil spheres, and the nuclear power industry, and memorandums on peaceful space projects, standardization and conformity assessment, and control over the safety of fishing products.

I would like to add that Russian companies Inter RAO UES and Akron have adapted major documents in cooperation with their Turkish counterparts. Here, I see the heads of these companies.

It is evident that Russia and Turkey are interested in the development of a comprehensive and multi-faceted partnership, and are eager to seek a new level of bilateral relations.

This attitude inspires optimism, fully complying with the essence and quality of our trade and economic relations.

My counterpart mentioned that last year mutual trade grew to almost $40 billion. In the volume of trade Russia ranks first among Turkey's trade and economic partners, and Turkey ranks fifth on the list of Russia's partners, above the United States, Great Britain and Japan.

We are going to make every effort to maintain these positive dynamics and even boost our cooperation further with new projects despite the current adverse conditions of the global economic downturn.

Today we discussed in detail measures to restore our commodity turnover level.

We spoke a lot about our cooperation in agriculture. Turkey supplies a considerable volume of agricultural products to our market, while Russia supplied an equally large volume of grain and cereals to the Turkish market last year for the first time. The outlook for next year's export is also bright; we are planning to gain a stronger position in the Turkish market, also helping our Turkish partners fill the niches both Turkey and Russia are interested in.

We also discussed the easing of customs regulations. We have just signed a relevant agreement, but outside the framework of this document we coordinated additional steps in this respect in the course of our restricted meeting. The heads of the customs agencies are not aware of it yet, but they are going to learn about it now, and I hope they will embark on these measures immediately.

We agreed to open two more green corridors - a marine corridor and one more corridor for motor transport, expanding the list of Turkish goods supplied via this green corridor.

As a whole, we are satisfied with today's negotiations. They have been business-like and sincere, which is obviously a beneficial factor. Taking into account the volume of our trade and economic cooperation, I completely agree with Mr Prime Minister that it would be reasonable to start regular intergovernmental consultations. We agreed to hold such meetings annually, with Russia hosting the next meeting.

Thank you for your attention.

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Question: A question to both Prime Ministers. Would it be correct to say that now, after the signing of these documents, that the Turkish side backs South Stream? And can we now say that South Stream is only one part of a large stream in the energy sector? Thank you very much.

Vladimir Putin: If you could explain what exactly you mean by "a large stream in the energy sector", it would be easier for us to answer your question.

Journalist:I mean the other projects that have been discussed, including here. And perhaps some future projects have been developed, Blue Stream-2, for example, which was mentioned here. Just a little bit in more detail, if possible.

Vladimir Putin: Mr Prime Minister has already alluded to it. I can be more specific. The fundamental document, the framework within which we are currently working, is a treaty on the supply of gas to the Turkish Republic from Russia dating to, I think, 1986. It is subject to renewal. And the Turkish side is interested in increasing the volume of Russian gas supplied. We agreed that we would do that. That is the first point.

Second. We agreed that we will move to the feasibility studies and subsequently the construction of additional branches to the Blue Stream pipeline, Blue Stream-2, with subsequent export of these hydrocarbons to third countries via Turkey. The countries have already been mentioned, they are: Cyprus, Israel, Lebanon, and Syria. Thus Turkey becomes a major transit state for this part of the world. If you take into account the fact that South Stream will pass through Turkey's special economic zone, then Turkey will become an important logistical centre in the energy sector for Europe as well.

In addition, agreements have been reached on the construction in Turkey of major underground gas storage facilities. We know that each winter Turkey's economy and Turkey's consumers experience gas supply problems. Establishing these reserves and these underground storage facilities will of course boost energy stability for the growing Turkish economy.

As for nuclear energy, we have already spoken about that. I have gone into quite a lot of detail. The issue is the economic basis for the prices, the price of construction and for the electricity itself.

Our proposals today are still twice as cheap as analogous projects in, for example, the United States. We have only just done the comparison, and they are entirely competitive.

Electricity supplies to Turkey are already possible, today. And that is not the complete list, not by a long way, just the main points.

Recep Tayyip Erdoğan (as translated): I would like to answer. Briefly. I answered this question in my speech today, regarding laying the South Stream pipeline: Today we signed the relevant protocol, so that South Stream will go ahead. It will not take long. In the very near future we will undertake exploration work. And in that regard Russia will support South Stream. As for Blue Stream, my esteemed colleague has given you information about that. We will continue to cooperate similarly.

Then again, we consider the Samsun-Ceyhan pipeline to be very important. We have also agreed on that matter. We have signed the documents. You have been given the information you need by nuclear energy experts. Here, in terms of energy, there are three most important areas: supply, transit and consumption. Turkey is not a supplier, since it has no natural resources. Thus Russia is our chief supplier, and in that respect it is a strong, reliable country. Turkey is a transit country. Turkey is also an energy consumer. But Turkey also wants to become a logistical centre in terms of consumption, and the steps Turkey has taken will make that happen. As countries within this region, Turkey and Russia are taking these steps together. And this is all based on trust. That is why we are extremely pleased, extremely happy.

Question:Good afternoon. My questions are addressed to both Prime Ministers. First, the protocol on gas partnership appears to be Turkey's de facto consent to have the South Stream pipeline built along the bottom of the Black Sea in its economic zone. Have we got that right?

Second, analysts say there are not enough resources for both pipeline projects, Samsun-Ceyhan and Burgas-Alexandroupolis. Does that mean that Russian contribution to the Samsun-Ceyhan construction implies burying the Bourgas-Alexandroupolis project?

And finally, could you please summarise the talks? Which issues did the Prime Ministers of sunny Turkey and cold Russia reach agreement on, and which not? Thank you.

Vladimir Putin: I arrived here after a trip to Siberia, where it was 40 degrees. We are resting from the heat here, so we should not describe our countries as hot or cold-it all depends.

We have reached agreement on every item on the agenda. I would like to thank Mr Erdoğan and the Russian and Turkish delegations. I will be frank with you: These were hard talks. Our Turkish friends-we have many friends here, and the best of them is by my side now-they are tough negotiators.

See, they have given the floor to Russian journalists first but they have switched off simultaneous translation. I'm joking, of course. Now, back to our topic-we have agreed on everything, and come to compromises on every issue.

As for expert assessments, we know that South Stream and Nabucco are competitors, and their competition is tougher than between the Samsun-Ceyhan and Burgas-Alexandroupolis pipelines. However, even the construction of South Stream will not bury Nabucco. Both can be useful depending on principal consumers' demands. South Stream, however, is top priority for Russia.

As for the two oil pipelines, their competition is even less tough. Look at the growing Caspian oil yields or talk to our oil company managers, and you will see that there will be enough oil for both pipelines.

The more infrastructural projects we have the better because their abundance makes European energy supplies more reliable.

Recep Tayyip Erdoğan: When I talked about this issue, I also thought it was important to mention one of its aspects: South Stream and Nabucco are not mutually exclusive or competing projects. I see them as diversification. They will be sufficient to satisfy Europe's needs quite soon. They are a preventive measure. That is what the media should say about the projects. No one needs to give up their investment plans.

The issue has another aspect. Mr Putin has mentioned that; Russian research provides an explicit picture. Experts know that there are reliable supplies of raw material resources. That is the basis for the Samsun-Ceyhan project. It will be crucial from the point of transit, processing and world market demands. It also means diversification.

You know our opinion of the Ceyhan terminal. We want to make it a trans-shipment point. That is how we diversify energy supplies to make life better for future generations.

Let us give the floor to Turkish journalists now.

Question:Mr Putin, the agreement concluded between Russia and Turkey indicates a new level of bilateral relations. We see how successfully they are developing.

Will the two regions' leaders take more optimistic steps towards settling regional problems, for instance, the Cyprus and Karabakh issues?

Turkish expectations are well known. Turkey demands the end of the occupation of Karabakh and Cyprus. The United Nations' Annan Plan confirmed the justice of Turkey's action. That was a positive approach.

Will Turkey and Russia work to settle these regional problems?

Vladimir Putin: I'm sure you know Russia's position on the settlement of the Cyprus problem. We demand just settlement for the Turkish and Greek parts of the island. We support international efforts and the United Nations' plans, the Annan Plan being no exception.

We will maintain further contacts with both parts of Cyprus, with both sides. We will develop economic relations with Cyprus, including its Turkish part. We have said it so many times before. We consider it the right stance and a step towards settlement.

As for the Karabakh problem, I have talked about it many times. Now, President Dmitry Medvedev has joined the work very actively. He regularly meets with both countries' leaders and makes great positive efforts to reach settlement in Karabakh.

It is no exaggeration to describe those efforts as major and positive. Russia is interested in Karabakh settlement, and does not want any conflicts in the Caucasus, because any conflict situation impedes our contacts with a particular country.

We cannot step in for one of the conflicting parties. We can only act as guarantors of relevant processes and agreements. Such has been Russia's constant position. We will do what we can to promote agreements and compromises so that they lead to complete and final settlement.

Question:Let us go back to the energy theme. Mr Putin says agreements have been achieved on all items. Can you provide information about the nuclear plant tender? Have the parties come at complete agreement, or did you discuss new Russian proposals? Is project assessment going on or has the finish been reached?

Vladimir Putin: As I have said, Turkey has formulated its questions, demands and vision of project development. On the whole, the Russian-Turkish consortium has decided that a positive answer to these demands is possible.

Further calculations are necessary to ensure the economic feasibility of the project. We are aware of the problems with electricity and construction costs. But, I stress once again, the Russian price of nuclear-produced electricity approaches that of hydropower stations. It is something unheard-of in the world. Nuclear energy is always more expensive than hydropower-but ours is quite close to it in terms of costs.

As for the project costs, just take a look at what Westinghouse was going to build in Florida for double the cost. Exactly double.

If any extra reserves can be found, the Russian and Turkish partners to the consortium will make thorough studies before closing the issue. Anyway, the bid has been formulated, on the whole.

Recep Tayyip Erdoğan: Colleagues, thank you very much for your interest.

August 6, 2009