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German Chancellor Angela Merkel and Russian President Vladimir Putin at the St. Petersburg International Economic Forum

WASHINGTON – Russian President Vladimir Putin, who just concluded a massive energy deal with China, has rushed back in time to attend the St. Petersburg International Economic Forum, where the participant list will determine who will get a favorable nod to invest in Russia.

U.S. sanctions have prevented most of the American companies from participating, while European economic sanctions don’t seem to have kept many European companies from the event.

The annual forum in St. Petersburg, Russia, is scheduled for Thursday through Saturday.

U.S. companies were pressured by Washington not to attend, while many European companies see the event as an opportunity for lucrative investments as Russia seeks to privatize its markets.

The French appear to be the most eager, while the Germans, conflicted over whether or not to impose stringent sanctions on Russia for taking over the Ukraine’s Crimean Peninsula, intend to have most of their firms show up after all.

Putin will be buoyant at the forum, fresh from a multi-billion dollar deal with energy-hungry China after years of negotiating to export natural gas at cut rates. The pact calls for Russia to provide natural gas to China for the next 30 years.

The agreement also represents a landmark effort by Putin to veer from Western markets and to look eastward for future energy opportunities. It will mean that Russia will lessen its dependence on a slower-growing European gas market, minimizing Europe’s ability to use energy as a political weapon.

However, Europe will continue to rely heavily on Russian natural gas for the foreseeable future. Europe depends on Russia for some 30 percent of its natural gas.

The energy deal with China, however, will give Russia an alternative revenue source to complement what its energy sector receives from Europe, which amounts to about half of Moscow’s revenue.

Under the landmark agreement with China, Russia will develop gas fields in eastern Siberia and ship some 38 billion cubic meters of gas to China’s populous northeastern part of the country. The volume could be expanded to as much as 60 billion cubic meters of gas a year, representing about one-quarter of China’s natural gas demand today. The fields and pipeline should be operational by 2020.

Russia learning who its friends are

Lauren Goodrich, an analyst with the open intelligence group Stratfor, said the St. Petersburg International Economic Forum will show that Russia remains an economic powerhouse and a good place to invest.

The forum also will identify Russia’s friends, “with everything that has been happening between the West and Russia.”

In addition, the energy deal gives China a stake in Russia as Moscow turns eastward.

“Yes, there is going to be a lot of Asian interest at the economic forum, but it is really about who from the West is still willing to be friends with Russia,” Goodrich said.

According to Goodrich, U.S. companies such as Visa, PepsiCo, ConocoPhillips and Alocoa have turned down invitations, as have Goldman Sachs and Morgan Stanley. Some of the few U.S. companies still planning to attend include the major construction firm Caterpillar and the U.S. oil services firm National Oilwell Varco.

In contrast to the U.S., the European guest list was “a mile long with so many of the largest European firms still willing to come,” Goodrich said.

One notable German exception is E.On, regarded as a major German energy conglomerate.

Goodrich said, however, that E.On’s rejection of its invitation is more symbolic.

“E.On cannot break with Russia. Germany cannot break with Russia. But they still need to show that they are not going to condone and support all of Russias’s moves, especially when it comes to what is happening in the borderlands,” Goodrich said.

“And so this is a really good place where Germany really can make a symbolic gesture. It is a little different for the American companies.”

Nevertheless, most of the European energy firms still will attend and have said they will continue to deal with Russia, according to Goodrich.

Goodrich pointed out that the absence of Visa and MasterCard represents the West’s vulnerability on the credit front, prompting Moscow to develop its own credit processing system. Russia uses Visa and MasterCard for 95 percent of its credit processing now.

“So, if there are further U.S. sanctions on Russia, Visa and MasterCard are going to be hit hard, which means that Russia is not going to have a credit processing system,” Goodrich said.

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