Author: Kanayan Tamar

ITAR-TASS, Russia
November 8, 2012 Thursday 11:50 PM GMT+4

Armenia, Iran begin construction of hydropower plant on Arax river

YEREVAN November 8

Armenia’s President Serzh Sargsyan on Thursday attended a ceremony of
laying down the foundation stone of a new hydropower plant, which this
country is building together with Iran on the Arax river forming a
natural border between them.

The plant will have a design capacitance of 130 megawatt and the
output capacity of 800 million kilowatt/hours of electricity a year,
Armenia’s Minister of Energy and Natural Resources Armen Movsessian
said.

His Iranian counterpart, Majid Namjoo-Motlagh praised the project
saying: “Diplomacy through the utilization of water resources and
hydro technologies will give an opportunity to bring peace, stability
and prosperity to the region.”

Yerevan and Teheran plan using an original pattern of financing and
subsequent operation of the hydropower plant. Bilateral agreements
suggest the Iranian private company Tavan AbAraz, which is acting as
an investor, has the power to search for the sources of financing
independently and to resolve all the problems pertaining to
organization.

Electricity produced at the plant will be supplied to Iran over a
period of fifteen years by a high-voltage transmission line that will
also be built by Tavan AbAraz. The Iranian government has agreed to
purchase electricity from the investor during the entire period of
recoupment.

Upon the completion of the fifteen years, the Arax plant will be
handed over to Armenia’s ownership free of charge. The
electromechanical equipment and hydroengineering facilities the plant
will have gotten by that time will be supposed to have a service life
resource for another thirty years.

Politkom.ru, Russia
Nov 7 2012

The Oil and Gas Factor in the Karabakh Conflict: New Trends

by Sergey Minasyan, candidate of historical sciences and head of the
Caucasus Institute Department of Political Studies, Yerevan, Armenia

[Translated from Russian]

At a government meeting on 10 October 2012 Azerbaijani President Ilham
Aliyev was sharply critical of the Azerbaijan International Operating
Company (AIOC) headed by British Petroleum – the operator for the
development of the main Azerbaijani oilfield, Azeri-Chirag-Guneshli
(ACG). In the Azerbaijani president’s words, because of crude mistakes
made by the consortium in recent years oil production from this field
has started to decline sharply, as a result of which Azerbaijan has
suffered a revenue shortfall of more than $8 billion. Oil production
in the Azerbaijani sector of the Caspian is declining for the second
year in succession already (beginning in 2010), but this is the first
time that the top leadership of Azerbaijan has reacted so sharply to
this trend. It looks as if this factor will have quite a serious
impact not only on the financial and economic situation and the
prospects for political stability in Azerbaijan but also, in the more
or less foreseeable future, on the policy that official Baku is
pursuing in the Karabakh conflict.

It is no secret that right now Azerbaijan’s main financial-economic
and also, to some extent, geopolitical resource in implementing its
policy in the Karabakh conflict is specifically its significant
revenues from the production of Caspian fossil fuels (oil and gas).
They give the Azerbaijan military-political leadership hope of
achieving a fundamental advantage in the military-technical sphere and
the stepping up of the arms race, of funding major regional projects
in circumvention of Armenia, of carrying out investments or even overt
corrupt financial injections in third countries, and of taking other
steps having the objective of achieving a self-beneficial change to
the processes surrounding the Karabakh conflict and compelling the
Armenian side to make unilateral concessions. Simultaneously the oil
factor also increases Azerbaijan’s geopolitical significance in
regional and even world players’ calculations.

Overall assessments of Azerbaijani reserves of oil and gas on the
Caspian continental shelf vary depending on the political leanings of
researchers, and it is very hard to get an objective idea of
Azerbaijan’s real fossil fuel potential. In any event it has to be
noted that the reserves of oil and gas in the Azerbaijani waters of
the Caspian are extremely significant, although not unlimited.
However, Azerbaijan’s policy, which is based on oil and gas revenues,
is encountering a number of serious problems.

First, oil and gas are not a guarantee of either stable economic
growth or the political development of exporting countries,
particularly if these countries have only little experience of state
building and are taking their first steps along the road of democratic
transition and the formation of institutions of civil society. It is
no coincidence that there is even the term “the oil curse,” which
characterizes pretty accurately the extent of the economic, social,
and political problems and difficulties that arise when a country is
swamped by a flood of money from the sale of natural resources. These
problems are the dark side of the facade of oil exporting countries’
economic well-being. In history there have been dozens of examples of
countries in whose fate an insidious and even fatal role has been
played by the availability of rich natural resources (primarily oil
and gas) – from Nigeria to Mexico, and from the Habsburgs’ Spanish
Empire (in that case it was cheap silver from mines in the Spanish
colonies in America) to the USSR. The Azerbaijani economy’s excessive
dependence on revenues from the sale of energy resources (which,
according to various assessments, account directly or indirectly for
85 per cent of budget revenues and 92 per cent of exports) represents
a very serious and chronic threat to the country’s stable
socioeconomic and political development.

On the other hand, by now it is becoming clear that the volumes of
their own oil and gas previously announced by the Azerbaijani
leadership were significantly exaggerated. According to calculations
by a number of experts, the main developer of fossil fuels in
Azerbaijani waters of the Caspian – AIOC – has evidently already
reached its peak production from the main oilfield,
Azeri-Chirag-Guneshli. And this happens not in 2013-2015, as the
Azerbaijani Government had previously announced (which was not
disputed by AIOC’s principal operator – the British company British
Petroleum), but as early as 2010. Currently oil production in
Azerbaijan (allowing for the Azerbaijan State Oil Company SOCAR’s
reserves) will decline gradually by approximately 10 per cent a year
from maximum levels of production in excess of 50 million tonnes of
oil in 2010 (and around 45 million tonnes in 2011) right down to an
annual production level of approximately 20 million tonnes by as early
as 2018-2019. AIOC is planning some stabilization of the decline in
oil production by commissioning the new West Chirag platform in this
same ACG field towards late 2013 or early 2014, but it will have an
active operating life of only 4-5 years and will only make it possible
to maintain a minimal level of industrial development at this field by
2020.

Naturally, Azerbaijan also has the potential to definitely increase
its opportunities for producing energy resources after the
commissioning of the second stage of its main gas field, Shah Deniz.
But the unenviable fate of the widely hyped Nabucco gas pipeline
(which was previously seen as the main infrastructure project for
delivering Azerbaijani gas to the European market) shows that the
advertised reserves of gas in Azerbaijan were also significantly
overstated. The potential revenues from exporting gas from this field
will in no way be able to offset the declining revenues from the
country’s exports of its oil.

Even by the most optimistic estimates, in the event that second-phase
industrial development begins at Shah Deniz, Azerbaijan’s gas exports
from this field may total no more than 8-10 billion cubic meters a
year. Factoring in the theoretically maximum possible price for gas,
the revenue from developing this gas field may total no more than $4
billion a year, which does not compare with the current levels of
revenue from Azerbaijan’s oil imports (approximately $15-20 billion a
year). We would remind you that currently the maximum market price for
gas exported by Azerbaijan is paid by Gazprom – something like
$220-240 per 1,000 cubic meters, whereas Azerbaijan supplies gas to
Turkey in Georgia for a significantly lower price.

That said, it is necessary to take into account the fact by 2017, when
deliveries of gas from the second phase of Shah Deniz are scheduled to
happen (it is not ruled out that the project will not even have been
completed by then), the situation on the gas market may have altered
significantly and, as a result, the price of Azerbaijani gas will be
significantly lower. For example, in the words of Turkish Energy and
Natural Resources Minister Taner Yildiz, the Turkish energy company
BOTAS intends to abandon the principle of “Take or Pay” in purchases
of gas from the first phase of the Shah Deniz gas field, which gave
the Azerbaijani side more beneficial terms, by as early as 2013-2014.
In addition, new volumes of liquefied and shale gas may have appeared
on the European market by 2017, which could also lead to a global
reduction in prices on the general gas prices market.

Thus, although in the next few years the oil and gas factor will
retain its role as the main financial and geopolitical resource
supporting Azerbaijan’s implementation of its policy in the Karabakh
conflict, nevertheless the potential and significance of this factor
will gradually decline. Naturally this cannot fail to have an impact
on official Baku’s approaches in the Karabakh conflict – approaches
whose parameters, by all appearances, may be subjected to significant
adjustments.

[Translated from Russian]

ANC PROPOSES PROSPEROUS ARMENIA JOIN TALKS

Vestnik Kavkaza
Nov 9 2012
Russia

The Armenian National Congress (ANC) proposed the Prosperous Armenia
Party (PAP) hold joint consultations for the upcoming presidential
polls to discuss a program of real mechanisms and consolidation of
public and political forces.

The talks will include a full switch to the proportional electoral
system, transformations to a system of fulfilling public demands,
joint vote of censure against parliamentary mechanisms, rallying of
mass protests and passing of a joint program against illegal economic
monopoly and corruption.

Armenian President Serzh Sargsyan called the switch to parliamentary
governance too hasty and believes that CIS states, especially the
South Caucasus ones, were unprepared for that. Moreover, the idea
will need too many constitutional amendments.

ARMENIAN AMBASSADOR MEETS WITH NEWLY APPOINTED GEORGIAN FM

Vestnik Kavkaza
Nov 9 2012
Russia

Armenian Ambassador to Georgia Hovhannes Manukyan met on Friday
with newly appointed Georgia’s Foreign Minister Maia Panjikidze,
News.am reports.

Ambassador Manukyan congratulated the Minister on her appointment
conveying congratulatory address of Armenian Foreign Minister Edward
Nalbandian and an invitation to visit Armenia which was accepted by
Maia Panjikidze.

The sides exchanged views on key issues regarding Armenia-Georgia
relations. They discussed the format of mutual visits and reached
arrangements on further cooperation.

ARMENIAN PRESIDENT: “AZERBAIJAN IS WAITING FOR AN OCCASION TO START A CONFLICT”

MediaMax
Nov 9 2012
Armenia

Yerevan, November 9. /Mediamax/. Armenian President Serzh Sargsyan
thinks that “Azerbaijan is waiting for an occasion to start a
conflict”.

Serzh Sargsyan said this in an interview to The Wall Street Journal,
Mediamax reports.

“I am confident such a mistake would harm the people of Nagorno
Karabakh and Armenia but that most harm would come to the people
of Azerbaijan. We won’t stand aside when the population of Nagorno
Karabakh is going to be destroyed,” the President noted.

Speaking about the hatred against Armenians cultivated in Azerbaijan,
Serzh Sargsyan said that “it is easier to create such an atmosphere,
to encourage hate speech, rather than deal with the consequences of
that atmosphere and turn the tide back.”

President Sargsyan also pointed out that international engagement in
the region was vital to help reduce tensions between Azerbaijan and
Armenia. “If we had been living in an isolated region where there was
no international impact, war would have already begun,” the President
of Armenia said.

CAVERS ‘CAVING’ IN ARMENIA

Community | November 8, 2012 1:26 pm

Members of a US caving expedition to Armenia. From left to right:
James Wilson, Greg Chavdarian, Chuck Chavdarian, Seda Chavdarian and
Steven Johnson.

By Alice Nigoghosian

Special to the Mirror-Spectator

SOUTHFIELD, Mich. – On October 12, Dr. Charles Chavdarian, a native
Detroiter whose family was originally from Keghi, provided an
enlightening talk and slide presentation about the caves and caving
exploration in Armenia, at a program sponsored by the Tekeyan Cultural
Association, at the Armenian General Benevolent Union (AGBU)Alex and
Marie Manoogian School.

Chavdarian became intrigued with the subject while traveling in the
south of France in 1992, and after reading The Scientific Traveler
– a book about prehistoric cave paintings. Following this trip, he
became interested in caves throughout the US and Canada, learning
about them through the National Speleological Society and a local
caving club in the San Francisco Bay Area and by visiting various
national parks. He learned how to explore caves in a proper and safe
manner from his newfound colleagues.

The deepest caves in the world are located in the countries of
Georgia and Mexico. As a result, he believed that there would also
be significant caves in Armenia.

Chavdarian decided he wanted to do something for Armenia – and this
led to his organizing the first official US caving expedition to visit
and photograph caves in the Vayots Dzor province of Armenia in 2007.

The initial trip involved his fam- ily – his wife, Seda, a professor
of French at UC-Berkeley, and son, Greg, who is a geologist – and
also his caving colleagues, Steven Johnson and James Wilson – all
from the Bay Area.

Chavdarian has been to Armenia three times – in 2007, 2010 and 2011
– to continue to explore and photograph the natural, wild caves and
also to visit and photograph church caves and cave villages.

In addition to Vayots Dzor, his travels have taken him to Syunik
and Lori provinces, and to Nagorno-Karabagh. The initial, and
most significant caving expe- dition in 2007 was supported with a
National Speleological Society (NSS) grant in the US and organized
with assistance from AdvenTour in Yerevan.

The first trip included a visit to four caves, including Arjeri (Bear)
Cave, Mozrovi Cave, Karmir (Red) Cave and Mageli Cave. Mozrovi Cave
includes about 300 meters of known passage and is noted for its
multi-colored limestone formations. Arjeri Cave – at 2.3 miles of
passage with many types of formations – is the largest of Armenia’s
caves and included many challenges for the group such as walking
through narrow passageways, crawling, climbing up and down and using
hand lines. Karmir Cave was at the highest elevation of the caves
that were explored – nearly 7000 feet. A visit to Mageli Cave, with
1.1 miles of cave passage, found the cavers in the midst of a huge
bat colony, narrow squeezes, climbs, crawls and even tall, long
passageways. The team visited Geghard, a man-made cave monastery
carved out of a side of a mountain. Known by St. Gregory as the
“Monastery of the Spear,” a visit to this site resulted in a deep-
er understanding and appreciation for our ancestors’ devotion to
Christianity, and the importance of geography for the survival of
the people and their edifices.

The team also visited Jerovank, a water church cave, located at the
end of a narrow, pic- turesque canyon in Vayors Dzor near the village
of Arpi.

In fact, it was while traveling through rugged, mountainous Armenia,
that Chavdarian soon realized the difficulty of getting around,
and came to understand why churches were placed everywhere. True
to Armenian hospitality, when the expedition set up campsites, the
near- by villagers would bring them food throughout their stay in a
given area.

Chavdarian’s slides helped to educate all as he identified various
types of beautiful cave for- mations that are part of living caves,
including bacon strips, pipe organs, stalagmites, stalac- tites,
coral, draperies and flowstone -all com- posed of limestone. The
caves in Armenia are also multi-colored, due to both mineralization
and organic matter leaching into the solubilized limestone and then
depositing in the caves resulting in colored cave formations. The mag-
nitude of colors in the Armenian caves, which are quite stunning, are,
in fact, rarely encoun- tered to this degree in caves around the world.

Armenian caving colleagues, led representatives of the foundation into
two caves, including Mozrovi Cave, and later developed a management
plan for that cave.

Chavdarian acknowledged the assistance of several cave guides and
experienced cave explorers during his trips to Armenia, including Vrezh
Nazaryan, Samvel Shahinyan and Smbat Armenia and the exploration of
Armenian caves a successful and safe one.

Who knows? Perhaps in the future, if a commercial cave is created in
Armenia, group tours of the cave may result in providing an additional
source of pride in Armenia’s natural resources.

A brief question-and-answer period followed Chavdarian’s professional
presentation.

KARABAGH ISSUE ON WORLD AGENDA
By Edmond Y. Azadian

Opinion | November 8, 2012 12:14 pm

While the foreign ministers of Armenia and Azerbaijan continue
meeting and Organization for Security and Cooperation in Europe (OSCE)
representatives continue visiting the region, the Karabagh conflict
is still far from being resolved.

It is fairly obvious that the parties involved in the negotiations
have a vested interest in keeping the issue unresolved, so that it
may be used as bargaining power in order to wield pressure on Armenia
and Azerbaijan.

People in Karabagh have held a referendum to declare independence,
which no country has recognized yet. Armenia is in a precarious
situation and should Yerevan recognize Karabagh’s independence, it
will risk war with Azerbaijan. Since Armenia has not yet recognized
Karabagh’s independence, it cannot ask nor expect other countries to
recognize it.

Cynicism is rampant in international politics. Russia waged a war
against Georgia and recognized the independence of South Ossetia and
Abkhazia, ignoring Western calls for the principles of territorial
integrity. Similarly, Europe and the United States forcibly partitioned
the former Yugoslavia to grant independence to Kosovo.

Since the collapse of the Soviet Union, many minorities have broken
away from the main countries to attain independence. For example,
East Timor was emancipated from Indonesian rule, and more recently
Southern Sudan became a new country. The issue of territorial integrity
was not raised in any of those cases, certainly not loudly enough to
stop the process.

When the issue comes to Karabagh, however, territorial integrity
becomes a sacrosanct principle and statesmen who are not embarrassed
to apply double standards, go to great lengths to explain that
Karabagh is a “different” case and that each case has political
parameters different from the others. But, in essence, these
arguments are falsehoods created to mask the duplicity of cynical
parties. Even Russia upholds the principle of the “square” wheel
(equating the principle of territorial integrity with the right to
self-determination).

Thus, since Armenia cannot recognize Karabagh’s independence and Russia
does not wish to offend Azerbaijan, the issue remains at a stalemate.

Western countries are eager to preserve Azerbaijan’s territorial
integrity, albeit on false promises; additionally it is the Western
powers’ declared policy to break up Iran and to attach its northern
region to the Republic of Azerbaijan.

Time is against Armenia as Azerbaijan is being armed at a rapid pace
and the partition of Iran looms on the horizon.

The Armenian Diaspora, with its limited resources, can make a
difference and the case in point of Australia proves it. Indeed,
heartening news came from Australia’s premiere province, New South

Wales, whose Parliament has just adopted a resolution recognizing
the right of self-determination for the people of Karabagh. New South
Wales is the largest province with a population of 7,273,000 out of
Australia’s 21 million – one third of the country.

This move may not result in recognition by Australia’s federal
government, but it is a significant first step. More than 40 states
in the US have individually recognized the Armenian Genocide, which
has not amounted yet to the recognition by the federal government.

It is believed that Uruguay may follow suit; it was one of the first
countries to have recognized the Armenian Genocide.

Armenians settled in Australia beginning in the 19th century. The
60,000-strong Armenian community is mostly in Sidney (New South Wales)
and Melbourne.

The recent tour of Armenia’s Foreign Minister Eduard Nalbandian
in Central and South American countries may yield some political
dividends, especially in generating some movement on the Karabagh
issue.

It is an interesting coincidence that while the New South Wales
parliament was voting to uphold Karabagh’s right to self-determination,
the Baku government announced that it was recognizing Southern
Sudan’s independence, thus placing on the back burner the principle
of territorial integrity which constituted the center- piece of that
country’s foreign policy.

Baku, citing this principle, had even refused to recognize Kosovo’s
independence despite some prodding from Washington.

Victory in Australia may reflect only minor progress, but any pos-
itive move by diaspora forces will complement and serve as an exten-
sion of Armenia’s foreign policy.

Credit is due to the Armenian National Committee (ANC) of Australia
for pushing through the resolution in the New South Wales Parliament,
as other Armenian political parties are either virtually nonexistent
or are ineffective there.

Some people have given up hope that political activism would pay off,
but Australia seems to disprove that pessimism. Also, the victory
achieved in the French Parliament, through the cooperation of combined
political forces, is another example that there is light at the end
of the tunnel, although President Francois Hollande has to keep his
pledge assuring the passage of the resolution criminalizing the denial
of the Armenian Genocide in France.

ANCA remains the major force in the US, lobbying to influence
legislation as the Armenian Assembly is bogged down in lawsuits with
Gerard Cafesjian. They both seem to be determined to destroy all
hopes of completing the Genocide Museum in Washington by the year
2015. This is a historic watershed when Armenians may be engaged in
self-flagellation, while the Turks celebrate our failure.

Meanwhile, although we have scored a minor victory in Australia,
its significance and impact is greater, as it places the Karabagh
issue on the world political agenda.

VANADZOR – KHIMPROM TO RESUME FERTILIZER PRODUCTION IN 2013

YEREVAN, November 8. / ARKA /. Vanadzor-Khimprom chemical plant
in the Armenian city of Vanadzor will eventually resume production
of fertilizers next year, Gagik Minasian, chairman of a parliament
committee on financial and budget issues, said today. Earlier Grisha
Baghyan, the first deputy agriculture minister, said the plant would
resume production in September.

The plant is expected to produce in the first phase only carbamide
nitrogenous fertilizers with 46-percent content of nitrogen and
ammonium sulfate with 20-to-25-percent content of nitrogen and later
will also start producing phosphorous fertilizers. Initially, the
plant will produce 15 tons of fertilizers a year, and later production
volumes will be enlarged. Only local raw materials will be used for
producing fertilizers.

According to Armenian agriculture ministry, Armenia consumes annually
up to 40,000 tons of fertilizers.

The Vanadzor chemical plant resumed operating in 2005 after it stood
dysfunctional for long years. The plant belongs to Russia’s Roding
Limited International registered in the Great Britain. Its output in
2011 amounted to 700 million drams – 2.5-times year-on-year growth
($1 – 408.56 drams). -0-

IT IS IMPOSSIBLE TO IMAGINE A MORE “SOCIAL” BUDGET THAN THE ONE ARTSAKH HAS

Thursday, 08 November 2012 11:46

During his meeting with the students of Artsakh State University
NKR Prime Minister Ara Haroutyunyan announced that 5 years later the
minimum-wage in Karabakh will amount to 65 thousand drams.

Whether it will conform to the minimum cost of the consumer basket
or not is hard to say as according to the Prime Minister the price on
part of the consumer goods is defined outside the borders of Artsakh
and Armenia.

As he assures during the latest years the government managed to
control the cost of the minimum consumer basket which even decreased
as compared to the previous year, in May, 2011, it constituted 34
thousand drams, while now it is only 28 thousand, though it has
increased by 7 thousand drams as compared with the year of 2008.

The point is to facilitate the social problems in the country due to
the economic growth. “The correlation of the minimum wage and the
gross domestic product is quite a positive one yet this points to
shaky economy,” Ara Haroutyunyan noted. The economic growth, as he
assures, will enable to increase the minimum wage to even a greater
amount than it has been planned.

“If there are no outer economic impacts the predicted index of the
economic growth will secure an increase of the minimum wage and
pensions,” the Prime Minister noted.

According to Ara Haroutyunyan it is impossible to imagine a more
“social” budget than that of Artsakh. “The state budget of the NKR
forms 50% of the GDP. Salaries and pensions constitute 60% of the
state budget. No other country, in accordance with the resources
it possesses, realizes similar social programmes. Among the CIS
countries the NKR is the second after the Ukraine”. As the Prime
Minister reported according to many economists the adopted policy is
wrong and a greater attention must be paid to investments but Artsakh
manages to preserve the appropriate volume of social allocations since
in parallel with them the economy of the country grows in high rates
and the corresponding volume of investments is secured.

COMMERCIAL BANKS TO HAVE NEW CREDIT CONTRACTS IN “NASDAQ OMX ARMENIA”

YEREVAN, NOVEMBER 8, ARMENPRESS: Today NASDAQ OMX Armenia announced
launch of new credit contracts market. As reports Armenpress, the
director of NASDAQ OMX Armenia Konstantin Saroyan has noted that this
is another step towards expanding their offering to the market with
the aim to pioneer development of new financial instruments. He has
also noted that now they support trading and clearing in equities,
corporate and government bonds, foreign exchange, repo contracts,
overnight credit resources and credit contracts.

“Credit contracts market has a unique setup that combines anonymous
automatch trading and centralized collateral management. Thanks to our
development team now we are ready to offer this brand new product to
the market” Karen Zakaryan, Deputy CEO and project manager for credit
markets said.

>From now on credit contracts with maturity of 7 days will be traded
in the market. Later in 2013 credit contracts with longer and shorter
maturities will be introduced to provide market participants with
wide range of money market instruments, currently including also
overnight credit resources traded since April 2010. The new instrument
is expected to create one of the largest markets operated by NASDAQ
OMX Armenia. Along with overnight credit resources, it provides
opportunities for more efficient and flexible asset management,
as well as contributes to fair and transparent pricing of credit
instruments in the market.

NASDAQ OMX Armenia was founded in 2001. The inventor of the electronic
exchange, The NASDAQ OMX Group, Inc., fuels economies and provides
transformative technologies for the entire lifecycle of a trade – from
risk management to trade to surveillance to clearing. In the U.S. and
Europe, it owns and operates 23 markets, 3 clearinghouses and 5 central
securities depositories supporting equities, options, fixed income,
derivatives, commodities, futures and structured products. In January
2008, Nordic exchange operator OMX Group acquired 100% of shares of
the Armenian Stock Exchange (Armex) and the Central Depository of
Armenia (CDA).