Tim Wall

Editor-in-Chief

t.wall@moscownews.ru

This week's meeting between Prime Minister Vladimir Putin and his Norwegian counterpart, Jens Stoltenberg, could be a key indicator for the Russian economy's prospects this year - or at least for the chances of attracting foreign investment.

Norway's Telenor is trying to save a 29.9 per cent stake in VimpelCom that is being seized by a Russian court to pay off a $1.7 billion lawsuit brought by a tiny shareholder in the mobile firm. Telenor accuses its main rival in VimpelCom, Alfa Group, of being behind the lawsuit, which Alfa denies.

Telenor and Alfa have been locked in a bitter dispute over VimpelCom's acquisitions in Ukraine, in a situation that is similar to that faced by TNK-BP, another company where Alfa was battling with its foreign partners, who also happened to be competitors in markets abroad.

Stoltenberg asked that Telenor and Alfa be left to resolve their dispute out of court and that Telenor's shares not be seized until legal appeals had been exhausted. But Putin declined to give such an assurance, at least in public. Instead, he said it should be resolved in Russian courts, and that "the partners could agree with each other and jointly work in third-country markets instead of putting sticks in each other's spokes."

Drawing on the experience of the TNK-BP case, when first British partner BP was pressured into giving up its key Kovykta field, and then into sharing management control in a bruising dispute last year, Putin's message appears to be crystal clear: To be a long-term partner with a Russian company, you should go along with its plans abroad, even if that means allowing that Russian firm (again Alfa, as with TNK-BP) to compete with you in other markets.

Foreign investors can argue the merits of those "rules of the game", of course, but when they are so clearly stated by the country's most powerful politician, they cannot be ignored.

While both governments are talking of negotiations between companies, the interests of both states are clear: the Norwegian state controls Telenor, while Russia's government takes a very close interest in all foreign investments as it seeks to set the country's economic direction.

There is, of course, a certain amount of brinkmanship going on here.

Stoltenberg also brought up with Putin the issue of the huge Shtokman gas field in the Arctic, where Norway's StatoilHydro is providing key technical assistance to Gazprom. As that field is central to Gazprom's expansion plans, Norway also has a few levers of its own.

So while it might look as though Telenor has no choice but to accept Alfa's solution, driving too hard a bargain with the Norwegians could damage another strategic partnership, in gas.

In the past, Russian officials may have calculated that foreign investors would keep coming, because of the draw of natural resources. But in this crisis the calculations are different.

It is clear that, to avoid both Russia and Norway losing out, some very fine judgment will be required on all sides.