15 Oktober 2009

Russia Hopes to Enter Brunei Arms Market

15 Oktober 2009

Kamov Ka-52 Alligator (photo : Pravda)

On Thursday, Hassanal Bolkiah, the sultan of Brunei, will hold talks with Russian President Dmitry Medvedev in Moscow.

Russia hopes to gain access to Brunei's oil and gas sector, with analysts pointing to various problems that may affect Russia's military-technical cooperation with the sultanate.

Sultan Bolkiah, who arrived in Russia on October 11, watched a Kamov Ka-52 Hokum-B attack helicopter in action at Chkalovsky airfield near Moscow. Moreover, the Brunei delegation visited a commando-training center at its request, and was shown specialized small firearms and assessed commando methods during special operations.

Moscow hopes that the Ka-52 helicopter will help it to enter the Brunei arms market, currently divided between the United States, Britain and France. Three helicopter squadrons forming the mainstay of the Brunei air force have to be overhauled.

Russia could also sell Tor M1 (SA-15 Gauntlet) and Buk M-1 (SA-11 Gadfly, SA-17 Grizzly) surface-to-air missile (SAM) systems, as well as missile boats and commando equipment, to Brunei under cheaper contracts.

On Wednesday, a source in the Kremlin said "the current priority task is to expand quantitative and qualitative parameters of Russia-Brunei trade." Moscow wants to swell the bilateral trade turnover to $50-75 million, an ambitious goal, because Russia-Brunei trade barely exceeded $800,000 in 2008, an all-time high. Trade turnover in 2009 is unlikely to reach $200,000.

Brunei has tense relations with regional neighbors who receive large quantities of Russian weaponry. Although military deliveries to tiny Brunei will hardly scare Malaysia and the People's Republic of China, they could negatively influence Moscow's contacts with Kuala Lumpur and Beijing.

Bilateral cooperation in the oil and gas sphere could become far more profitable. Brunei's oil and gas industry is fully controlled by Brunei Shell Petroleum, a joint venture owned in equal shares by the Brunei government and the Royal Dutch Shell group of companies.

Analysts say Brunei could deplete its explored oil deposits within 15-20 years, and that local gas deposits will eventually suffer the same fate. Moscow wants to take advantage of the sultanate's problems to invest in the national oil and gas sector and to start prospecting for hydrocarbon deposits on the ocean shelf.


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