Russia extends military presence in Armenia

* Russian base on Armenia’s western border with Turkey

* Russia balancing between foes Armenia and Azerbaijan

By Denis Dyomkin

YEREVAN, Aug 20 (BestGrowthStock) – Russia extended its lease on
Friday on a military base in the former Soviet republic of
Armenia until 2044, strengthening its presence in the South
Caucasus energy transit region.

The deal, signed in Yerevan during a visit by President
Dmitry Medvedev, extends a 1995 lease on the Gyumri base on
Armenia’s closed western border with NATO-member Turkey, home to
several thousand Russian soldiers who patrol the frontier.

Armenian officials have praised the deal as a guarantee of
Russian backing in the event of new conflict with neighbouring
Azerbaijan over the rebel mountain region of Nagorno-Karabakh.

The extension is in line with Russian policy of maintaining
its influence in the South Caucasus, a volatile region
criss-crossed by pipelines skirting Armenia and carrying Central
Asian and Caspian oil and gas to Europe.

The original lease ran for 25 years.

Russia also has troops in two breakaway regions of
neighbouring Georgia, where it is building up bases in the wake
of a five-day war over rebel South Ossetia in 2008.

Ethnic Armenians in Nagorno-Karabakh, backed by Armenia,
threw off Azeri rule with the collapse of the Soviet Union in a
war that killed an estimated 30,000 people. A ceasefire was
agreed in 1994 but a peace deal has never been reached.

Asked about the possibility of Azerbaijan carrying out a
frequently voiced threat to take back the enclave, Medvedev said
Russia was continuing in its role as mediator.

But in a reference to the Georgia war, in which Moscow says
it was forced to respond to Georgian aggression, he added, “We
went through some difficult events in 2008 and we would not like
such events to be repeated.”

“It is the task of Russia as the largest state in the region
… the most powerful state, to secure peace and order.”

BALANCING ACT

Russia, he said, has “allied obligations” towards Armenia as
fellow members of the Collective Security Treaty Organisation
(CSTO), a Russian-led security alliance of ex-Soviet republics
that does not include Azerbaijan.

Azerbaijan, host to oil majors including BP (BP.L: ),
ExxonMobil (XOM.N: ) and Chevron (CVX.N: ), has invested heavily in
building up its armed forces on the back of oil sales.

Russia has been careful to seek a balance between the foes
in recent years, closely courting Azerbaijan for its energy
reserves in the Caspian Sea.

Unconfirmed Russian media reports this month suggested
Moscow had sold sophisticated S-300 anti-aircraft missile
systems to Azerbaijan, unnerving Armenia.

Military analysts say such a purchase was more likely linked
to Azeri unease over retaliation from neighbouring Iran in the
event of an Israeli or U.S. strike on its nuclear facilities.

Russia and Armenia also signed an agreement on Friday on
Russian participation in construction of a nuclear reactor at an
estimated cost of up to $5 billion.

The reactor is to be built at Armenia’s existing
Russian-operated, Soviet-era nuclear plant, which provides
around 40 percent of the country’s electricity.

Some in the Armenian opposition have objected to what they
say is Moscow’s growing hold over the landlocked country of 3.2
million people, which is heavily dependent on investment and
remittances coming from Russia.
(Additional reporting by Steve Gutterman in Moscow; Writing by
Matt Robinson in Tbilisi; Editing by Maria Golovnina)

Russia extends military presence in Armenia