Russia - WikiLeaks
Russia 091020
Basic Political Developments
• Reuters: PRESS DIGEST - Russia - Oct 20
• RIA: Russia's Medvedev to focus on oil, gas issues in Belgrade
• Reuters: Medvedev to tackle loan, energy deals in Serbia
• Bloomberg: Medvedev’s Serbian Loan May Re-Establish Russia’s Balkan Sway
• Blic.rs: Belgrade center for spreading of Russian influence
• Emportal: Russia and Serbia strengthen ties
• Blic.rs: Red Star close in on Gazprom Neft sponsorship deal - Red Star football club and Russian company Gazprom Neft are in negotiations about a sponsorship deal, but no definitive agreement has been reached
• Emportal: The 8th meeting of the Intergovernmental Serbian-Russian Committee held in Belgrade
• B92: Shoigu: Cooperation could be even better - Russian Emergency Situations Minister Sergey Shoigu says that cooperation between Serbia and Russia has made progress, but still has room for improvement.
• Emportal: Russian-Serbian business forum held in Belgrade
• : How pipeline may serve to spread Kremlin's influence - Russia is using oil and gas to lubricate and leverage its burgeoning relationship with Serbia
• : Berlusconi to discuss pipelines at Putin party - Italian prime minister Silvio Berlusconi is due to attend a private birthday party for Russian prime minister Vladimir Putin on Wednesday on the shores of Lake Valdai, south of St Petersburg, with Russia’s controversial plans to build two more gas pipelines to Europe expected to be high on the agenda.
• RBC: Tajik president to arrive in Moscow - President of Tajikistan Emomali Rahmon will pay an official visit to Russia on October 22-23, 2009. The visit will be arranged at the invitation of Russian President Dmitry Medvedev.
• Prime-Tass: Oct 29: Ecuador President Rafael Correa to visit Russia
• RIA: U.S. says talks are intensive with Moscow on arms reduction pact
• Russia Today: “To count weapons, more inspections needed” - Russia and the US prepare a new Strategic Arms Reduction Treaty to replace the one expiring in December. To count the weapons, more inspections than in the past will follow, said anti-nuclear activist Joseph Cirincione.
• : Lowering the alert levels in U.S. and Russia
• : Rusal float could be a risky exercise for Paris bourse - France and Russia have always had close economic ties. This remains the case under President Nicolas Sarkozy. He is even considering selling sensitive French naval equipment to Moscow in what could constitute the most important transfer of military equipment to Russia by a Nato member state.
• Business Standard: Krishna to attend IRIGC session in Moscow today
• PTI: Krishna to arrive in Moscow today, to attend IRIGC session
• : S M Krishna To Meet His Russian & Chinese Counterparts In Bangalore On Oct 27 - External Affairs Minister S.M. Krishna will hold talks with Sergei Lavrov of Russia and Yang Jiechi of Chinain Bangalore on Oct 27 for the fifth stand-alone trilateral meeting of the three countries.
• Times of India: Visa issue hits Russians too
• Steel Guru: Russia may set up second nuclear power plant in West Bengal
• Today.az: Interconnection of Azerbaijani, Iranian and Russian energy systems is under a design stage: Azerenergy chief
• Defensenews: Libya To Buy Russian Fighter Jets For $1B: Report
• UPI: Libya eyes new Russian jet fighters
• People’s Daily Online: Trade between China, Russia down 34.9% in first nine months
• : Russia may impose an anti-dumping tariff on China's steel pipe
• World Bulletin: Turkey, Russia, Italy sign deals for Samsun Ceyhan pipeline project
• Barentsobserver: Russian Arctic strategy to be presented this year
• Barentsobserver: No place for military blocs - Russia’s Foreign Minister, Sergey Lavrov, told the audience at the Murmansk International Economic Forum that there are no problems in the Arctic calling for military solutions.
• Barentsobserver: Russia wants international cooperation on Northern Sea Route
• Barentsobserver: Improved water pollution monitoring of the Arctic - A number of polar meteorological stations in the Nenets Autonomous Okrug have recently got new equipment and new buildings. This will contribute to a mayor improvement on water pollution monitoring in the Barents Sea, White Sea and Kara Sea.
• : Large-Scale Anti-Terrorist Exercise In South Russia In October - Nurgaliyev said participants in the exercise on October 31 will prevent a mock terrorist attack during a major sporting event.
• Turmenistan.ru: Turkmen president receives Russian interior minister
• Turmenistan.ru: Ministers of Internal Affairs of Turkmenistan and Russia sign protocol on cooperation for 2010-2011
• RIA: Police officer, 2 militants killed in Chechnya shooting
• Itar-Tass: Wanted militant killed in Chechnya
• Interfax: Militants carry on propaganda of Wahhabism and ideologically prepare suicide bombers in the North Caucasus – prosecutor
• Russia Today: Boys to the right, girls to the left! - There are growing calls in Russia's southern republic of Dagestan to separate boys and girls at school. Some in the predominantly Muslim area want single-sex education, but school authorities strongly oppose the idea.
• Interfax: Stringer of Interfax-Religion website assaulted in Moscow
• RIA: Swine flu cases in Russia total over 920 - top sanitary official
• RIA: Number of swine flu cases in Russia's Krasnoyarsk rises to 70
• PSA Blog: The US-Russia-Ukraine Triangle
• Businessneweurope: TRUTH & BEAUTY: Uncovering what Russia really thinks - a new report by the pan-European think-tank the European Council on Foreign Relations (ECFR), entitled "What Does Russia Think?", seems almost revolutionary in its attempt to understand current Russian political institutions and attitudes as the logical outgrowth of Russians' experience over the past two decades.
• Russia Profile: Gone with the Crunch - Russians Hit by the Credit Crunch Spend Their Holidays at the Dacha, Do not Eat Out, and have Replaced Caviar with Pasta
• Georgian Daily: Basargin Admits Moscow Lacks a Strategy for Dealing with Company Towns
• St. Petrsburg Times: Putin Cartoon to Air on 2x2 Next Spring
• The Moscow News: Yaponchik’s death to provoke gang war
• The Moscow Times: Communist Group Sues OSCE for $40 Trillion
National Economic Trends
• Bloomberg: Russian Recession Ended With Third-Quarter Growth, Kudrin Says
• Reuters: Russia cbank moves rbl intervention level-dealers
• Reuters: UPDATE 1-Russia rouble sets fresh highs, free float eyed
• Bloomberg: Russia Planned Asset Sales to Outshine Peers, East Capital Says
• Bloomberg: Russia Needs $65 Billion in Debt Sales, Capital Economics Says
• RenCap: CBR official suggests limitations on foreign borrowings
• Businessneweurope: Russia's crisis was corporate
Business, Energy or Environmental regulations or discussions
• RBC: Banks may lose licenses if interest rates remain high
• Bloomberg: Russia Leads Advance in Emerging Markets on JPMorgan Upgrade
• Citi: Russian Aluminium to list on Euronext?
• RIA: Volkswagen launches full-cycle production in Russia's Kaluga
• Bloomberg: AvtoVAZ Says Seeking Creditor Protection Is Option (Update4)
• WSJ: AvtoVAZ Plans Bond Issue
• : Russia to auction poultry import quotas 20 Oct 2009
• EasyBourse: Russia's MTS Raises '09 Capex Forecast To $1.8 Billion – Interfax
• Steel Guru: TMK Q3 pipe shipments up by 15pct over Q2 due to demand
• Oil and Gas Eurasia: Wartsila Opens New Service Center in Russia
• Bloomberg: Rostelecom’s Kolpakov Cuts 2009 Sales Forecast, Kommersant Says
• Telegraph.co.uk: Russians position for nanotech future - RUSSIAN pledges to spend billions in public funds to develop its nanotechnology industry are being treated cautiously by leading British technology companies.
• NewsRoom Finland: Finnish hauliers pay up to EUR 20,000 a year in bribes at Russian border –Report
Activity in the Oil and Gas sector (including regulatory)
• Politiken.dk: Denmark OK’s Russian Baltic pipeline
• RIA: Turkey approves Black Sea exploration for South Stream
• Itar-Tass: Turkey allows Russia to begin South Stream work in its economic zone
• RIA: Turkish oil pipeline project to involve three Russian companies
• RIA: Russia's No.2 gas producer Novatek to raise output by 44%
• Upstreamonline: Novatek boosts flow from Arctic field
• Alfa: First glimpses of LUKoil's upcoming 10-year strategy
• RBC: Lukoil chief rebukes possible gasoline station chain's divestment
• The Moscow Times: Alekperov: Oil Firms Belong in Retail
• UralSib: Rospan may double TNK-BP's gas production
Gazprom
• Kyiv Post: Eni chief says South Stream construction could begin late 2010
• RBC: Gazprom Neft secures $500m loan
• Moscow News: Waiting for Shtokman
• OfficialWire: Gazprom, France Talk South Stream
• PGNiG 'close to' extra gas agreement with Gazprom
• Armenia negotiates with Russia on gas price drop
• Reuters: Gazprom meets Turkmen leader, no word on gas flow
• The St. Petersburg Times: Gazprombank Plays Down $529M Losses
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Full Text Articles
Basic Political Developments
Reuters: PRESS DIGEST - Russia - Oct 20
Tue Oct 20, 2009 3:42am EDT
MOSCOW, Oct 20 (Reuters) - The following are some of the leading stories in Russia's newspapers on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy.
KOMMERSANT
kommersant.ru
- Management of carmaker Avtovaz (AVAZ.MM: Quote, Profile, Research, Stock Buzz) said debts amount to 62 billion roubles ($2.12 billion) and the firm needs restructuring to avoid bankruptcy, the paper says.
- Bank deposits have grown by 15 percent in the first nine months of 2009 compared to a 14.2 percent growth in the same period of 2008, the daily reports.
- Demand for gas has fallen by 15.6 percent in September, the paper writes, citing Gazprom's (GAZP.MM: Quote, Profile, Research, Stock Buzz) deputy chief executive.
- The paper runs an interview with the new director general of long-distance telecom provider Rostelecom (ROS.N: Quote, Profile, Research, Stock Buzz), whose shares went up 35.8 percent in the last two days.
VEDOMOSTI
vedomosti.ru
- Russian President Dmitry Medvedev will meet a business lobby group on Wednesday to discuss his state of the nation address and ways out of the crisis, the daily says.
- A St. Petersburg court ordered the founder and general director of bankrupt insurance company to pay 27.6 million roubles ($940,400) to its creditors, the paper writes.
- Russia's economy will recover in the next three years and will face another recession in 2013, the paper writes, citing a Renaissance Capital strategy forecast.
- The paper runs an interview with the president of VTB Capital investment bank, Yuri Solovyov.
NEZAVISIMAYA GAZETA
ng.ru
- The Social and Health Development Ministry reports a slowdown in the pace of unemployment growth, while state statistics record mass job cuts in Russia's regions, the paper says.
GAZETA
gzt.ru
- Mortgage rates have grown by 0.1 percent in August, the paper writes, citing Central bank data.
TRUD
trud.ru
- The head doctor in a Siberian regional hospital has ordered ambulances to ignore requests from people over 70 in order to save money on petrol, the paper writes.
RIA: Russia's Medvedev to focus on oil, gas issues in Belgrade
01:0920/10/2009
MOSCOW, October 20 (RIA Novosti) - Russian President Dmitry Medvedev will focus on the implementation of joint Russian-Serbian energy projects during his official visit to Belgrade on Tuesday.
Medvedev's trip to Serbia, during which he will attend celebrations marking the 65th anniversary of the liberation of Belgrade from Nazi forces, is the first visit to the country by a Russian head of state since Vladimir Putin visited in 2001.
A source in the Kremlin said that "the emphasis [of the visit] will be laid on the implementation of major projects in the sphere of trade and economic cooperation," particularly in the sphere of oil and gas cooperation.
Last week, Russian energy giant Gazprom and Serbia's state gas company initialed an agreement to set up a joint venture to develop a Serbian underground gas depot. The agreement was part of a bilateral governmental deal on cooperation in the oil and gas sector sealed between the two countries in 2008.
Construction of the underground gas depot at Banatski Dvor started in 2005. The gas storage facility will have a capacity of 0.8-1 billion cubic meters. It will be connected to the proposed 25 billion-euro ($36.5 billion) South Stream gas pipeline, intended to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries, bypassing Ukraine.
The construction of the Banatski Dvor depot is a stage of gas production at a worn-out field which used to have reserves of 3.3bcm.
Moscow also supports Belgrade's view that Kosovo, which unilaterally declared its independence in February 2008, is an indivisible part of Serbia.
Reuters: Medvedev to tackle loan, energy deals in Serbia
Tue Oct 20, 2009 10:38am IST
* Medvedev to discuss 1 billion euro loan for Serbia
* Serbia wants to become Russia's partner in energy deals
By Aleksandar Vasovic
BELGRADE, Oct 20 (Reuters) - Russian President Dmitry Medvedev visits Serbia on Tuesday with Belgrade seeking terms for a 1 billion euro loan and hoping to strike further energy deals with its traditional ally.
Russia and Serbia share a common Orthodox Christian and Slavic heritage, but the Kremlin has driven hard bargains in recent energy deals with Belgrade and bilateral trade has tumbled so far this year.
Serbia asked Russia for the 1 billion euro ($1.5 billion) loan in July to help curb a wide budget deficit, and aims to find out how much it will cost during Medvedev's visit, which includes talks with President Boris Tadic.
"We will explore major joint projects during the upcoming talks -- projects in the energy sector, in the sphere of transport and cultural, humanitarian and scientific cooperation," Medvedev said in an interview published by Serbia's Vecenje Novosti daily on Monday.
"We will have to work more not only to strengthen the foundations of our cooperation but to unleash its rich potential," he said, according to a Russian transcript of his interview supplied by the Kremlin.
Belgrade needs to keep its budget deficit down under a deal with the International Monetary Fund to ease the effects of the global financial crisis. It wants to use 350 million euros to help cover the deficit, with the rest earmarked for spending on railways and motorways.
Serbia has attracted almost $12 billion in foreign direct investments since 2003, but Russia's contribution has been modest, with the country ranking 19th in the list of investors.
Bilateral trade totalled $4.04 billion in 2008, but it fell 47 percent in the first eight months of the year, according to Russian government data. Russian exports to Serbia made up 86 percent of 2008 bilateral trade turnover.
"The two presidents will discuss all the details of the Russian loan, which will serve as a boost to Serbia's macroeconomic stability and infrastructure," Serbian Deputy Prime Minister Bozidar Djelic told a business forum in Belgrade.
Serbia wanted to become Moscow's partner in energy deals, he told a joint Serbian-Russian forum, but gave no details.
Medvedev led a Russian delegation to sign a major energy deal with Serbia last year when he was a deputy prime minister.
Under the deal, Russia's Gazprom (GAZP.MM: Quote, Profile, Research) said it would develop an arm of the South Stream gas pipeline, allowing Russia to bypass Ukraine via Turkey, Bulgaria and Serbia.
Russia opposed last year's independence of Kosovo, Serbia's former southern province. However, Medvedev's visit is likely to focus more on economic issues than politics. (Reporting by Aleksandar Vasovic; Editing by David Stamp)
Bloomberg: Medvedev’s Serbian Loan May Re-Establish Russia’s Balkan Sway
Oct. 20 (Bloomberg) -- President Dmitry Medvedev may offer Serbia a 1 billion-euro ($1.5 billion) loan at talks in Belgrade today as Russia seeks to reestablish some influence after losing allies and clout elsewhere in the region.
Medvedev, the first Kremlin leader to visit Serbia since its independence in 2006, is scheduled to meet his counterpart Boris Tadic. The Russian president will also pay homage to Soviet soldiers who died in the liberation of Belgrade from the Nazis 65 years ago.
“This is Medvedev coming to hear Serbs tell him ‘thank you,” said Vladimir Gligorov, a Balkans specialist at the Vienna Institute for International Economic Studies. “This visit could be a milestone in many respects -- historically, politically and economically.”
Russia has seen Cold War allies such as Poland and Bulgaria join NATO and the European Union and the world’s biggest energy producer is now seeking to build new relationships. Natural-gas exporter OAO Gazprom last year bought 51 percent of Serbian state oil company, Naftna Industrija Srbije, and pledged to lay an arm of its South Stream pipeline through the country.
Serbia is the successor state to Yugoslavia, which broke up into seven independent countries after a series of conflicts in the 1990s. Yugoslavia, though socialist, had cool relations with the Soviet Union and maintained close contacts with the West.
More Than Money
Serbia owes Russia more than money, Gligorov said, recalling Russian support for the Serb cause in the breakaway republics of Yugoslavia, including most recently Kosovo.
“There’ll be an attempt by Russia for Serbia to give up any thought of NATO membership,” Gligorov said. The North Atlantic Treaty Organization bombed Serbia in 1999 over then- President Slobodan Milosevic’s treatment of Kosovo Albanians.
Tadic, who won re-election against a nationalist challenger last year, has supported integration into the EU and NATO.
The European Commission on Oct. 14 hailed the pro-EU government in Serbia.
Serbia, which hasn’t given up its claim on Kosovo, has forged a pro-EU consensus, though it continues to be delayed by its failure to arrest two of the most-wanted war-crimes suspects from the 1990s, the commission said in its annual review of enlargement.
“The government has proven stable and has demonstrated a high degree of consensus on EU integration as a strategic priority,” the commission said.
Medvedev and Tadic will discuss the loan, Serbian Deputy Prime Minister Bozidar Djelic said at a business forum in Belgrade yesterday.
“The Russian proposal will serve as a boost to Serbia’s macroeconomic stability and the development of infrastructure, primarily railways,” he said.
Yesterday, the Bank of Moscow also gave a 100 million-euro loan to Gazprom-controlled NIS.
“This is not a gift,” said Gligorov. “It’s not free in terms of interests, equity or political conditionalities.”
To contact the reporters on this story: Aleksandra Nenadovic in Belgrade at anenadovic@; Lucian Kim in Belgrade at lkim3@
Last Updated: October 19, 2009 19:00 EDT
Medvedev’s visit strengthens relations between Russia and Serbia
Blic.rs: Belgrade center for spreading of Russian influence
Author: Tamara Spaić - Tanja Trikić | 20.10.2009 - 08:24
Today’s visit by the President of the Russian Federation Dmitri Medvedev to Belgrade shall mark in the first place energy positioning of Russia in the West Balkans and Serbia as a regional center from which Russia shall spread its influence.
Opinions about advantages of such partnership for Serbia are equally divided as they were when Serbia President Boris Tadic signed in Moscow the energy agreement and vary from entering energy dependence to support to Belgrade’s leading position in the region.
The opinion at Serbia Government is that the economic side of Medvedev’s visit at this moment is more important than the political one but that political message on firm strategic partnership between the two countries should not be minimized either.
Russia’s chief interest concerns the energy. Namely Russia would to branch its gas pipeline through Serbia towards the whole Balkans and further towards Europe.
‘From political side Belgrade is expecting from Moscow to confirm its stance on Kosovo in order to put end to all speculations about Moscow’s trading with this issue. Belgrade also sees Moscow as important source of favorable credits that shall help Serbia to overcome the actual economic crisis’, a source from Serbia Government told ‘Blic’.
Konstantin Nikiforov, Director of the Institute for Slavic Studies of the Russian Academy of Science is of the opinion that Dmitri Medvedev’s visit to Belgrade may strengthen Serbia’s chances to become a regional energy center that Russia would rely on in the future.
He also does not exclude possibility that Serbia gets certain place in the new system of collective security being presently elaborated by Medvedev.
Serbia is also interesting to Russia as future EU member, i.e. as another bridge between Moscow and Brussels.
‘Serbia’s joining the EU shall not represent any danger for Russia, on the contrary, it shall be of benefit for Russia. We shall be the best friend of Russia in the EU. That shall be of help in all aspects of relations between the two countries’, Serbia President Boris Tadic said yesterday in his interview with ‘News 24’ television.
According to his words Serbia is satisfied with the way in which ‘Gazpromnjeft’ is carrying modernization of ‘NIS’.
The economic side of the visit does not end with the energy deal. Numerous delegation that shall arrive with President Medvedev shall also try to agree about participation by Russian companies in construction of Belgrade metro, Prokop railway station and numerous other infrastructural projects in Serbia. The sides shall also discuss increase of foreign trade exchange.
Vladimir Gligorov, associate of the Vienna Institute for international economic studies claims that the obligations of Serbia arising from this partnership shall be far larger than benefits.
Serbia Prime Minister Mirko Cvetkovic said yesterday in talks with the Russian Minister for extraordinary situations Sergey Shoigy that ‘Serbia and Russia have good and close relations’ and pointed out that ‘visit by the President Dmitri Medvedev has exceptional significance for improvement of bilateral relations’.
Minister Shoigy said that ‘it is exceptionally important for the relations between Serbia and the Russian Federation that all main projects agreed at the latest session of the Russian-Serbian Commettee in Moscow have been finalized’.
Emportal: Russia and Serbia strengthen ties
20. October 2009. | 06:43
Source: EMportal
Dmitry Medvedev said his visit to Belgrade would become the first visit by a Russian president after Serbia returned on the international scene as a sovereign state. The implementation of joint energy, transport, cultural, humanitarian and scientific projects is high on the agenda of the talks. In a word, the two parties are set on exerting every effort to cement bilateral ties and build a long-lasting cooperation.
President Medvedev said prior to his visit to Belgrade on Tuesday that Russia and Serbia have long-lasting traditions, similar purposes and same interests.
President Medvedev described the forthcoming visit as aimed at strengthening bilateral cooperation and said it is timed for the 65th anniversary of the liberation of Belgrade from Nazi forces, an event he qualified as common historical memory and a common pride for our fathers, who showed remarkable heroism in defeating the Nazis.
Dmitry Medvedev said his visit to Belgrade would become the first visit by a Russian president after Serbia returned on the international scene as a sovereign state. The implementation of joint energy, transport, cultural, humanitarian and scientific projects is high on the agenda of the talks. In a word, the two parties are set on exerting every effort to cement bilateral ties and build a long-lasting cooperation.
Russia plans to grant Serbia a one-billion-euro loan in connection with the difficulties it suffered in the wake of NATO aggression and the global economic crisis. Boris Shmelev, an expert with the Institute of Economy of the Russian Academy of Science, comments.
By granting such a loan, he says, Russia shows a lot of political interest in strengthening ties with Serbia. It should enhance Russia’s positions in Serbia and in the Balkans.
President Medvedev has reiterated Russia’s support on Kosovo saying that to draw a line on Kosovo is impossible without Serbia. Russia, he said, will move step by step to prove that there is an alternative to arbitrariness and unilateral decisions.
Russian President Dmitry Medvedev has granted an interview to the Serbian news media in the run-up to his visit to Belgrade on Tuesday, October 20th.
According to the Russian leader, in Serbia he plans to take up a number of major joint projects, specifically energy, transport, cultural-humanitarian and scientific-technological projects. Mevedev said that this would prove the first visit by a Russian president to Serbia after it emerged on the international scene as an independent sovereign state. The Russian leader pointed out that the visit was timed for the 65th anniversary of the Serbian capital’s liberation from the Nazi invaders.
This is a development of paramount importance since it is imbued with common historical memory and common pride for the courage of our fathers and grandfathers who defeated Nazism, Dmitry Medvedev said.
On the situation in Kosovo the Russian leader said no one has the right to claim that the problem of Kosovo is settled until Serbia has had its final say. On February 17th the Albanian authorities of Kosovo, assisted by the Untied States and the European Union’s leading nations, unilaterally proclaimed independence from Serbia. Dmitry Medvedev feels that one should step-by-step prove that there still exists an alternative to legal arbitrariness.
According to him, the issue will remain open despite all efforts of the Kosovo independence supporters to present the process as irreversible. Russia is engaged in a Kosovo conflict settlement in keeping with the formula it has long since agreed with Belgrade, namely Belgrade comes up with an initiative, while Moscow offers its consistent support, Dmitry Medvedev underlined.
When talking with Serbian journalists the Russian leader shared his views on prospects for the Russian economy. He feels Russia will make real-term progress in economic updating in the next 5 to 10 years. Dmitry Medvedev pointed out that in recent years Russia has been making moves to improve its business and investment climate.
The Russian Government has recently determined five top priorities that the President is in immediate control of. These are energy efficiency, nuclear technologies, the pharmaceutical and medical industries, modern-day information technologies, space exploration and telecommunications.
Dmitry Medvedev says the demographic problem is also one of major importance. He reiterated the government would honour its social pledges despite the world financial crisis. The Russian leader pointed out that Russia adopted this country’s demographic policy concept until the year 2025. The government, he said, would follow it unfailingly.
In his interview Dmitry Medvedev has also put forward a number of considerations concerning major world problems, such as reforming the United Nations and relations with the United States.
On the United Nations Medvedev feels that a reform of the agency is long overdue, but warns that this should not become an end in itself. The UN should be reformed by agreement with a maximally possible number of member-states. The Russian leader emphasized the importance of the UN for the world community. He said reforming does not amount to revising the UN basic principles and should only seek the adapting of the organization to the new realities, to boost its efficiency.
The Russian leader feels the US Administration is prepared to accept multi-track diplomacy and is aware that world domination by one power is inadmissible. This, Dmitry Medvedev feels, will serve to consolidate international security and cooperation. This is of special importance now that the world is living through a fundamental transformation. It has grown obvious that a unilateral move strategy destabilizes the international situation, provokes tension and the arms race, he says.
In this context Moscow is bending every effort to draft and be ready to sign by this December a new treaty with the United States to replace the Strategic Arms Reduction Treaty, or START, which expires early this December. Talks are under way in Geneva to draft a new, legally binding Russian-US agreement on reducing and limiting the two sides’ strategic offensive weapons. The parties to the talks proceed from the assumption that nuclear weapons cannot be actually used but should help guarantee security across the world.
Medvedev emphasized that in this matter Moscow seeks to retain the minimum nuclear arsenals required to guarantee the national security of Russia and Russia’s allies.
Red-whites in search of main financier
Blic.rs: Red Star close in on Gazprom Neft sponsorship deal
Author: b. markovic | 20.10.2009 - 08:19
Red Star football club and Russian company Gazprom Neft are in negotiations about a sponsorship deal, but no definitive agreement has been reached. As Blic understands from sources from both sides, there are some hindering factors impeding the process.
- “At present we are not at liberty to discuss anything on the matter. The public will be informed by the end of the week,” Gazprom Neft press agent informed us from the oil company’s Moscow headquarters.
Red Star president Vladan Lukic fails to give any precise confirmation on the negotiations process.
- “It is really too early to say who our chief sponsor will be. We’ve had talks with several companies for a while now – with some of them we are making progress, no deals have been reached. One thing is for sure – it will be a big company – fitting for Red Star’s name and repute. At this time we will not be revealing any details. Once the negotiations are completed, the public will be duly notified,” said Lukic.
Zarko Zecevic, the former Partizan general secretary currently employed as adviser at YugoRosGaz, a Gazprom middleman company, remained unforthcoming on the matter.
- “Are you calling to ask about Gazprom Neft and Red Star? I have no idea about who is negotiating with whom,” Zecevic said for Blic.
Red Star’s negotiations with the Russian company have been brought into connection with recent public statements by club president Lukic, during the promotion of Agrobanka – one of the major financiers of the club.
Gazprom Neft is the oil arm of Gazprom – the world’s largest extractor of natural gas – the company which has shit sponsorship deals with football clubs Zenit Saint Petersburg and Schalke 04. The latter club is said to be under contract with Gazprom which will ensure as much as $125m for the Germans over the period of five years.
Emportal: The 8th meeting of the Intergovernmental Serbian-Russian Committee held in Belgrade
20. October 2009. | 07:11
Source: Tanjug
Serbian First Deputy Prime Minister and Minister of the Interior Ivica Dacic and Russian Minister for Emergency Situations Sergei Shoigu said last evening that there is great scope for improving economic cooperation between Serbia and Russia.
Serbian First Deputy Prime Minister and Minister of the Interior Ivica Dacic and Russian Minister for Emergency Situations Sergei Shoigu said last evening that there is great scope for improving economic cooperation between Serbia and Russia.
Dacic and Shoigu held a joint press conference after the eighth meeting of the Intergovernmental Serbian-Russian Committee for Trade, Economic and Scientific Cooperation, at which a cooperation protocol was signed. They stated that main areas specified for cooperation are infrastructure, science and technology and culture.
Dacic stressed that the Russian side is willing to allow Serbian building companies to take part in the construction of facilities for the Sochi Winter Olympics in 2014.
He said that the Russians are also ready to invest in Serbia through loans.
Dacic said that it will soon be confirmed which projects are in question and for what purpose the funds will be used, adding that it was jointly concluded that there is great scope for economic cooperation and both sides are ready to make this possible by signing various agreements.
He said that the Serbian government has formed an expert group consisting of various ministry representatives who will examine together with their Russian counterparts the issue of loan arrangements for infrastructure projects.
He stressed that Serbia is interested in Russian investments in road and railway corridors and for the reconstruction of the railway system.
He said that the aim is to increase trade with Russia in the upcoming years, adding that he is pleased with the work of the Intergovernmental Committee and that a lot has been achieved since its seventh session which was held in Moscow, in November last year.
He said that the free trade agreement with Russia is not being utilized fully by Serbia.
He said that visa restrictions for travel to Russia have been removed for Serbian citizens and that Russia has recently begun the renovation of the Djerdap hydro electric power plant as part of a debt clearing arrangement with Serbia.
He said that on October 20, an agreement will be signed between the Serbian Interior Ministry and the Russian Emergency Ministry concerning cooperation in emergency situations, according to which regional humanitarian offices for urgent response to emergencies will be opened in Nis.
Shoigu said that regardless of the problems caused by the economic crisis the Intergovernmental Committee has done valuable work.
He said that work has been done on new agreements concerning science, education, culture and emergency situations.
We can look forward with hope to tomorrow’s day when Russian President Dmitry Medvedev will arrive in Belgrade, said Shoigu, adding that Russia and Serbia have close friendly ties.
B92: Shoigu: Cooperation could be even better
20 October 2009 | 09:37 | Source: Beta, Tanjug
BELGRADE -- Russian Emergency Situations Minister Sergey Shoigu says that cooperation between Serbia and Russia has made progress, but still has room for improvement.
Shoigu and Serbian Interior Minister Ivica Dačić headed a meeting of an inter-governmental Serbo-Russian committee for trade, economic and scientific cooperation.
After signing a protocol on cooperation, Shoigu told journalists that, in the last year, despite the economic crisis, significant work had been done in both countries.
He said that in addition to the completion of old projects, new plans had been discussed today related to the economy, trade, infrastructure and other sectors.
Dačić and Shoigu said that an agreement would be signed on cooperation in emergency situations, which would include the creation of a regional humanitarian center in Niš.
Dačić said that the Russian side was prepared to participate in infrastructural projects in Serbia, and to help the state budget financially.
The interior minister said that the last year had seen the implementation and ratification of the energy agreement, further development in political relations, adding that the crowning achievement of cooperation between the countries was Tuesday’s visit to Belgrade by Russian President Dmitry Medvedev.
He noted that the inter-governmental committee had last met in November 2008, which marked significant progress in bilateral cooperation.
Emportal: Russian-Serbian business forum held in Belgrade
20. October 2009. | 06:55 [pic]07:09
Source: EMportal, Beta, Tanjug
Author: Nikos D. A. Arvanites
Russia has invested approximately USD1 billion in Serbia over the past five years, whereas Serbian investment in the Russian market totaled around USD400 million, according to participants in the Serbian-Russian Business Forum, held in Belgrade.
Russia has invested approximately USD1 billion in Serbia over the past five years, whereas Serbian investment in the Russian market totaled around USD400 million, according to participants in the Serbian-Russian Business Forum, held in Belgrade.
The head of the Serbian Business Council for Cooperation with Russia, Nikola Pavicic, said that the biggest Serbian investors in Russia are private companies Sintelon and Hemofarm, while Russian investors in Serbia are both state-owned and private.
He said that Russia is the right country for Serbian investment, adding that Serbian exports will increase if Serbian companies are founded in the Russian market.
President of the Russian Business Council for Cooperation with Serbia Vadim Nikolayevich Vorobyov said there is more room for improvement in the cooperation between Serbia and Russia.
"Serbia is Russia's most important partner in the Western Balkans and Russia is Serbia's main foreign trading partner," Vorobyov said and added that Russian companies are looking to invest in Serbia.
President of the Business Council for Cooperation with Serbia and vice president of Lukoil Vadim Vorobyov said that Serbia is the most important partner of Russia in the Balkans.
Vorobyov said that Russia has invested almost RSD 1 billion in the Serbian economy in the past five years. He recalled that in 2003, Lukoil purchased Beopetrol, Gazprom privatised NIS, and Gazprom and the Serbian gas company Srbijagas reached an agreement on the construction of a 400 km section of the Southern Stream gas pipeline.
Vorobyov said that Serbian companies also started investing in Russia to the value of $100 million and added that in these times of crisis, special attention should be paid to the development of small and medium-sized enterprises.
At the meeting of the Russian-Serbian business forum Djelic said that Serbia’s accession to the EU will undoubtedly lead to increased interest from both Russian and European companies in investing in Serbia.
Serbia and Russia’s mutual political support is almost taken for granted, Djelic said, adding that Serbia is very grateful for Russia’s principled support to its sovereignty and territorial integrity.
Djelic recalled that Russia was Serbia’s largest foreign trade partner in 2008, with a trade volume of € 2.75 billion.
The Deputy Prime Minister stressed that with its investment in NIS, Russia has become the largest individual investor in Serbia in 2009.
Cooperation in the energy sector resulted in a clear strategic partnership through the joint company NIS and a series of joint infrastructure projects, such as construction of the underground storage facility Banatski Dvor, the Southern Stream gas pipe line and the reconstruction of the Djerdap hydro electric power plant, the Deputy Prime Minister explained.
Serbian Deputy Prime Minister Bozidar Djelic said that the Business Forum will clarify certain elements of the duty-free agreement between the two countries, particularly regarding the possibility of Serbian medicine exports to Russia, while Russian companies will highlight the obstacles they have been encountering over the past few years.
In the first eight months of 2009, foreign trade between Serbia and Russia amounted to some USD1.5 billion, nearly two-fold lower than in the same period last year. Serbia registered a USD1.1 billion deficit in trade with Russia, primarily due to the global economic crisis.
The Agreement on Cooperation between the Business Council for Cooperation with Serbia and the Business Council for Cooperation with Russia has been inked by their respective Presidents, V.N. Vorobiev and Nikola Pavičić, at a session of the Business Council held at the Serbian Chamber of Commerce.
According to Mihailo Vesović, Vice-President of the Serbian Chamber of Commerce, the session of the Business Council of Serbia and Russia, organised at the Serbian Chamber of Commerce today, prior to a meeting of the Combined Committee of the two countries and one day before the arrival of Russian President Medvedev to Belgrade, is aimed a articulating interests of the two business communities. On the part of Serbia, the Council has gathered the best companies which Serbia has, highlighted Vesović.
Tuesday, October 20, 2009
: How pipeline may serve to spread Kremlin's influence
ANALYSIS: Russia is using oil and gas to lubricate and leverage its burgeoning relationship with Serbia, writes DAN McLAUGHLIN
DMITRY MEDVEDEV’S arrival today in Belgrade, as the first Russian president to visit Serbia, will send a strong message to the West that the Kremlin is determined to hold on to its main ally in the Balkans, even as the region makes a concerted push towards EU and Nato membership.
The talk will be of ancient alliances and unbreakable Slavic bonds, but the substance of Medvedev’s visit will deliver vital emergency cash and long-term investment prospects to Serbia and strengthen Russia’s position in a Moscow-friendly enclave surrounded by pro-western states.
Top Russian officials say Medvedev will deliver a €1 billion loan to his cash-strapped hosts, who need the money to cover their expected 2010 budget deficit and finance much-needed infrastructure projects.
Serbian ministers have suggested the loan will be offered on more favourable terms than a €3 billion aid package already agreed with the International Monetary Fund, which helped stabilise the country’s economy but also committed the government to a tight spending plan. The cash injection could also see Russian companies take key roles in projects to build a metro system in Belgrade and a ring-road around it and deepen their involvement in Serbia’s energy industry by investing in a new gas-fuelled power station and a €200 million improvement of heating plants in the Serbian capital.
As the most persuasive tools in Russia’s foreign policy armoury, oil and gas are central to its burgeoning relationship with Serbia.
When Medvedev visited Belgrade as a deputy prime minister in February 2008, it was to set the seal on a landmark agreement that saw the Serb government sell the state oil monopoly, known by the acronym Nis, to Kremlin-controlled gas behemoth Gazprom.
The deal went through despite howls of protest from some Serb politicians, including liberal economy minister Mladjan Dinkic, who called the €400 million that Gazprom paid for perhaps Serbia’s finest industrial asset “humiliating”.
The Russian company, of which Medvedev was once chairman, also agreed to invest €500 million in Nis over the next few years, but that did not stop critics calling the deal – which did not go to international tender – a blatant quid pro quo for Moscow’s support over Kosovo.
The Kremlin stood firmly behind Belgrade in its ultimately fruitless effort to prevent Kosovo declaring independence and being recognised by most major countries, blocking all western gambits in the United Nations Security Council.
Moscow successfully parlayed Serb gratitude into strategic reward, securing not only Nis at a knockdown price but swiftly tying Serbia into the South Stream gas pipeline project that is Russia’s direct rival to the EU’s Nabucco scheme.
Both are intended to bring gas from central Asia across the Black Sea to the Balkans, then feed it north into the heart of the EU, but while Nabucco is aimed at reducing the bloc’s dependence on Russian energy, South Stream would only increase it. Advocates of the project, which includes construction of a big gas storage site in Serbia, say it will make the country a major energy hub in southeastern Europe and provide it with much-needed revenue from gas transit fees.
For Belgrade, the plan is part of a delicate balancing act which it hopes will allow Serbia to maintain and develop its close political and economic links with Russia, while still attracting US and EU investment and moving towards its stated goal of EU membership.
During Medvedev’s visit and beyond, Russia and Serbia appear poised to maintain a two- track strategy, co-ordinating political opposition to Kosovo’s independence while deepening their business links. As something of a sweetener on the eve of the president’s arrival, the Bank of Moscow – which opened a Serbian branch last year – gave Nis a €100 million loan.
“Despite the efforts of protectors of Kosovo’s independence, they will not succeed in presenting it as an irreversible process and in closing that issue,” Medvedev said in an interview with a Belgrade newspaper.
Russia will support Serbia when the International Court of Justice holds a December session on Kosovo’s independence, while its officials will expect a favourable hearing in Belgrade today when, in Medvedev’s words, they discuss “plans for the realisation of big joint projects”.
By coincidence or not, Medvedev will land in Belgrade on an intriguing day for the wider region.
In Bosnia, senior EU and US officials will try to persuade local Serb leaders to accept painful reforms that would help the country move out of a damaging political impasse and towards EU and Nato membership. Russia has already said it will not support any solution that is opposed by the Bosnian Serbs.
In Poland, meanwhile, US vice president Joe Biden will arrive today at the start of a trip that will also take in the Czech Republic and Romania this week.
As Biden strives to reassure central Europe that it will not be frozen out by the new White House administration’s drive to “reset” relations with Russia, Medvedev will seek to ensure that Moscow’s ties with a key ally at the heart of the Balkans cannot be undone by Washington or Brussels.
Dan McLaughlin is based in Budapest and reports on central and eastern Europe for The Irish Times
: Berlusconi to discuss pipelines at Putin party
By Guy Dinmore in Rome
Published: October 20 2009 02:53 | Last updated: October 20 2009 02:53
Italian prime minister Silvio Berlusconi is due to attend a private birthday party for Russian prime minister Vladimir Putin on Wednesday on the shores of Lake Valdai, south of St Petersburg, with Russia’s controversial plans to build two more gas pipelines to Europe expected to be high on the agenda.
Franco Frattini, Italian foreign minister, confirmed on Monday that Mr Berlusconi was expected to fly to St Petersburg. He said he did not have a guest list or details of Mr Putin’s birthday celebrations.
However, Il Giornale, a newspaper owned by the Berlusconi family, reported that the two prime ministers would discuss geopolitics and energy. It compared the occasion to a meeting in 2007 that was also attended by Gerhard Schröder, former German chancellor and now chairman of the shareholders’ committee of the Nord Stream gas pipeline project, as well as Jacques Chirac, former French president.
Mr Schröder is also expected to attend the private event marking Mr Putin’s 57th birthday which was on October 7, Il Giornale reported. Mr Schröder was not available for comment. Mr Putin’s office also declined to comment.
Nord Stream would link Russia to Germany under the Baltic. It could start pumping gas at the end of 2011 but its construction depends on the co-operation of countries with territorial waters along the route.
South Stream – a joint venture between Russia’s Gazprom and Italy’s Eni – would pipe Russian gas under the Black Sea to Bulgaria and on to central and southern Europe.
Mr Berlusconi was in Sofia last week to discuss South Stream with Boyko Borissov, Bulgaria’s newly elected prime minister.
Mr Frattini said Italy had addressed US concerns over South Stream during a visit this month by Claudio Scajola, economic development minister. He added that Italy was actively diversifying its purchases.
Separately in Milan on Monday, Eni and Turkey’s Calik signed an accord to build a 550km pipeline linking Turkey’s Black Sea and Mediterranean coasts. Igor Sechin, Russian deputy prime minister, was reported as saying that Russia was ready to feed the pipeline.
Additional reporting by Chris Bryant in Berlin and Isabel Gorst in Moscow
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RBC: Tajik president to arrive in Moscow
RBC, 20.10.2009, Moscow 10:55:53.President of Tajikistan Emomali Rahmon will pay an official visit to Russia on October 22-23, 2009. The visit will be arranged at the invitation of Russian President Dmitry Medvedev.
Prime-Tass: Oct 29: Ecuador President Rafael Correa to visit Russia
RIA: U.S. says talks are intensive with Moscow on arms reduction pact
03:4520/10/2009
WASHINGTON, October 20 (RIA Novosti) - The United States and Russia are currently in an active phase of drafting a new pact to replace the Strategic Arms Reduction Treaty (START 1), a spokesman for the U.S. Department of State said.
START 1, signed in 1991 and due to expire on December 5, is the bilateral basis for Moscow and Washington's nuclear disarmament and the two countries began another round of talks on the issue in Geneva on Monday.
"We have very intensive negotiations going on. We do not want to negotiate in public. We are taking the tasking from our two presidents very seriously, the Russian side and the American side," Ian Kelly told the daily press briefing in Washington.
Russian President Dmitry Medvedev and his U.S. counterpart Barack Obama agreed in July in Moscow on the outline of a deal to replace START 1, including cutting their countries' nuclear arsenals to 1,500-1,675 operational warheads and delivery vehicles to 500-1,000.
The drafting of the new pact was one of the key themes of talks held in Moscow during last week's visit of U.S. Secretary of State Hillary Clinton, and the negotiating teams worked on specific language during meetings in Geneva earlier this month.
The Russian delegation in Geneva this week is headed by Anatoly Antonov, director of the Foreign Ministry's Department of Security and Disarmament, while the U.S. team of negotiators is led by Assistant Secretary of State Rose Gottemoeller.
The START 1 treaty obliges Russia and the U.S. to reduce nuclear warheads to 6,000 and their delivery vehicles to 1,600 each. In 2002, a follow-up agreement on strategic offensive arms reduction was concluded in Moscow. The document, known as the Moscow Treaty, envisioned cuts to 1,700-2,200 warheads by December 2012.
Russia Today: “To count weapons, more inspections needed”
20 October, 2009, 00:48
Russia and the US prepare a new Strategic Arms Reduction Treaty to replace the one expiring in December. To count the weapons, more inspections than in the past will follow, said anti-nuclear activist Joseph Cirincione.
Moscow is ready to cut its nuclear arsenal to a third of its size, President Dmitry Medvedev told a Serbian newspaper. He noted he hopes a new treaty will be signed before the current one expires.
Both American and Russian officials are expecting the December deadline to be met, according to Cirincione, President of the Ploughshares Fund
“I’ve talked to negotiators in both Russia and the US, and both have said they’ve been told by their presidents to deliver a treaty by December 5,” he said. “I think the deadline will be hit.”
He believes the countries are going to cut the weapons dramatically:
“President Medvedev was talking about a 30 percent cut – I think it’s easy for us to do,” he said. “There are some difficult issues still to be resolved, like how to exactly count the weapons, potential for uploading, putting the weapons back on, but I think they can be worked out with patience and perseverance on both sides.”
It’s been reported earlier that American officials may go over to Russia to check on the arsenal, and then Russian officials may come to the US.
“We’ll have to do that in order to really count the weapons – not just looking at them from satellite photos and seeing how many silos there are,” Cirincione said. “To really count the weapons, you have to have intrusive inspections, more than we had in the past.”
: Lowering the alert levels in U.S. and Russia
By Walter Pincus
Tuesday, October 20, 2009 The high alert levels for U.S. and Russian strategic nuclear forces are more political statements carried over from the Cold War than military necessities for the 21st century, according to a multinational study released last week.
The two nations "could examine how measures to reduce operational readiness can accompany the bilateral arms control process" as part of the current negotiations over renewal of the Strategic Arms Limitation Treaty, according to the study by the EastWest Institute, a nonprofit think tank. The study, "Reframing Nuclear De-Alert: Decreasing the Operational Readiness of U.S. and Russian Nuclear Arsenals," was supported by the governments of Switzerland and New Zealand governments.
The study reminds readers that the United States "keeps roughly 1,000 nuclear warheads on alert" atop 450 Minuteman III land-based intercontinental ballistic missiles (ICBMs) and on the submarine-launched ballistic missiles (SLBMs) aboard as many as four Trident subs patrolling in different parts of the world.
Russia "retains approximately 1,200 warheads on alert," according to the study, with most on ICBMs, although Moscow's few operational strategic subs could launch missiles from home ports and hit U.S. targets.
The study says political leadership in Washington and Moscow must take the lead on the issue, since the countries' military organizations that maintain the weapons cannot be expected to change institutionalized security objectives and operational principles on their own.
The Russians have been hesitant, according to the study, because "de-alerting appeared to be part of a set of well-coordinated measures to divest Russia of its nuclear deterrent." U.S. stress during the Bush administration on high-precision conventional weapons "only strengthened this view." The study concludes in part that de-alerting "is not possible without a regular dialogue on security issues and on strategic arms control."
The study does a good job of trying to move the debate away from the old fear of nuclear forces being on a "hair-trigger alert." It quotes Air Force Chief of Staff Gen. Norton A. Schwartz as saying, "There is rigorous discipline and process involved, and it is anything but hair trigger." The president must be briefed, make his decision to authorize a launch and have that transmitted to the National Military Command Center, which sends authorization codes to launch crews made up of two officers. The officers must confirm the authenticity of the message and together begin the launch sequence.
That system, according to the study, is "more like a revolver tucked away in its holster with its safety catch on than a gun cocked and ready to fire."
A Russian expert described his country's system as being in " 'zero launch' mode": It cannot be launched at even designated targets without approval from officials in Moscow, and when any order is given three officers must act together.
One enlightening section of the study points out how other nuclear-armed states handle operational status. China keeps an estimated 30 strategic systems on high alert, according to the study. It identified 12 as liquid-fueled ICBMs with two-megaton warheads "ready to launch in approximately 30 minutes," and 18 solid-fueled ICBMs "in silos on a 20-minute alert."
France has eliminated its land-based nuclear missiles, keeping the weapons on its submarines in the " 'lowest possible' level consistent with the maintenance of the credibility of its deterrent." England, which has eliminated its bomber- and land-based nuclear forces, keeps its Trident subs untargeted and "on several days' notice to fire."
India, which subscribes to a no-first-use doctrine, reportedly keeps its warheads separate from its delivery systems, as does Pakistan. When it comes to Israel, which does not acknowledge the reported 200 nuclear bombs and missiles in its arsenal, the study said, "not enough is known . . . to warrant an assessment."
The study lays out what it calls the "undesirable side effects" of some de-alerting proposals, primarily the removal of warheads from delivery systems. That approach, it said, would make de-alerted weapons "in storage . . . an attractive target for a first strike, including with conventional weapons." It also "may provoke a dangerous reconstitution race" at times of crisis.
Hans Kristensen of the Federation of American Scientists, who first mentioned the EastWest Institute study on his Secrecy News Web site, said de-alerting is among the issues being analyzed in the Pentagon's Nuclear Posture Review. When completed by the end of this year and approved by the White House, the review will set out the administration's strategic nuclear policies, including the appropriate alert levels.
: Rusal float could be a risky exercise for Paris bourse
By Paul Betts
Published: October 19 2009 19:32 | Last updated: October 19 2009 19:32
France and Russia have always had close economic ties. This remains the case under President Nicolas Sarkozy. He is even considering selling sensitive French naval equipment to Moscow in what could constitute the most important transfer of military equipment to Russia by a Nato member state.
Now it seems that Paris may be preparing to welcome one of Russian prime minister Vladimir Putin’s favourite oligarchs, Oleg Deripaska. He is considering floating Rusal – the leading Russian aluminium group he controls – on the Paris stock exchange.
But tempting as it may be for Paris to snatch such a big flotation from London, this could nonetheless turn out to be a risky exercise. It would be the first time a big Russian company has listed on the bourse, but Paris should perhaps first ask why Mr Deripaska is not going straight to London – long the natural harbour for large commodities groups seeking funds on the market.
Could it have anything to do with his problems in the UK, where he is facing legal action, including a suit in the high court from a former partner in Rusal claiming massive compensation? Clearly, the uncertainty surrounding a case that could potentially cost Rusal up to $4bn is not the best way to interest London’s investment community – even though Mr Deripaska vigorously insists that the case has no merit.
So the Russian businessman appears to believe his chances for the long overdue listing of the aluminium group might be better in Hong Kong and Paris. Rusal originally hoped to be listed three years ago but the financial crisis got in the way. With stock markets recovering around the world and renewed investor appetite for equities, the Russian group is angling for dual Hong Kong and Paris listings to help it, among other things, reduce its heavy debt burden.
The Hong Kong listing also appears designed to attract Chinese and Asian institutional investors and sovereign wealth funds given Rusal’s expectations of playing a prime role in supplying China’s voracious demand for aluminium. A simultaneous listing in Paris would allow Rusal’s new shares to be traded in euros as well as around the clock.
In January, Rusal said that investors in Hong Kong were “more hungry” for Russian shares than were those in London, and it cited diplomatic tensions between London and Moscow as another factor behind the move.
While a Paris listing may make good sense for Rusal and its controlling Russian shareholder, it is less obvious how Paris would benefit. There may well be some political gains for France, not least for the French banks that are heavily exposed to Rusal. A flotation would eventually give them a comfortable financial exit.
However, for the French financial regulator, the AMF, the decision is not going to be easy at a time when the public mood in France remains deeply suspicious of the financial system. It may be tempting to have the first big Russian company listing in Paris at a time when the French capital is trying to rival London as a financial centre.
For the biggest question will inevitably be whether Paris and its financial regulator have been as rigorous in vetting Rusal as London would have been. The only way to respond to these questions may be to demand a higher degree of transparency from the Russians than normal – particularly given the uncertainty over the London court case.
Nuclear friction
The Belgian government has issued an ultimatum to GDF-Suez, the Franco-Belgian energy group that is also the country’s biggest electricity utility, to agree by Thursday to pay a charge of €500m for operating nuclear power stations in the country.
Last year GDF-Suez paid a nuclear levy of €250m in Belgium but at the same time it challenged the charge in the country’s constitutional court. This year it was asked to pay a similar levy for operating nuclear plants and to make an additional €250m contribution to Belgium’s renewable energy fund in exchange for the government agreeing to extend the life of three old nuclear reactors for another 10 years.
Gerard Mestrallet, the utility’s normally mild-mannered chairman, said that he was no longer willing to pay this levy, sparking a political storm in Brussels. In so doing, Mr Mestrallet may have either been very clever or rather rash.
Clever if the end result is a financial compromise that is both in the interest of his group and pleases the politicians: the opposite if it ends up making life even more difficult for his company to operate in its Belgian home market. european.view@
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Business Standard: Krishna to attend IRIGC session in Moscow today
Vinay Shukla/PTI / Moscow October 20, 2009, 11:26 IST
External Affairs Minister S M Krishna will arrive here today on a two-day visit during which he will co-chair a session of Indo-Russian Intergovernmental Commission (IRIGC) to discuss ways to further consolidate the bilateral strategic partnership.
Krishna and Russian Deputy Prime Minister Sergei Sobyanin will chair the 15th session of IRIGC meet tomorrow which will review the progress made by the two countries in bilateral cooperation in trade, economic, cultural, scientific and technical spheres.
Prime Minister Vladimir Putin recently appointed his trusted ally Sobyanin as the new co-chairman of IRIGC, sending a strong signal to New Delhi about willingness to revamp the economic ties with India, which have so far remained the weakest link in bilateral strategic partnership.
The session will also look at the status of Russia's commitment to the full implementation of the joint declaration on strengthening and enhancing economic, scientific and technological cooperation signed during the then President Putin's visit to India in 2000.
On the eve of Krishna's visit, Indian Ambassador Prabhat Shukla said the Indo-Russian bilateral trade has registered a 15 per cent growth and the two nations are confidently moving towards achieving the target of $10 billion by 2010.
At present the bilateral trade stands at $7 billion.
Shukla noted that many of the old bottlenecks in bilateral trade like banking and transport infrastructure have been removed.
There are two Indian banks operating in Russia - Commercial bank of India - a joint venture of State Bank of India and Canara Bank and ICICI Bank, while state-owned Russian VTB Bank has a subsidiary in New Delhi.
Russia's largest retail bank Sberbank has got the license for India operations and another Gazprombank has applied for it.
The shipping time for containers from India to Russian ports has dropped from 45-50 days in the past to 20-30 days.
PTI: Krishna to arrive in Moscow today, to attend IRIGC session
STAFF WRITER 11:17 HRS IST
Vinay Shukla
Moscow, Oct 20 (PTI) External Affairs Minister S M Krishna will arrive here today on a two-day visit during which he will co-chair a session of Indo-Russian Intergovernmental Commission (IRIGC) to discuss ways to further consolidate the bilateral strategic partnership.
Krishna and Russian Deputy Prime Minister Sergei Sobyanin will chair the 15th session of IRIGC meet tomorrow which will review the progress made by the two countries in bilateral cooperation in trade, economic, cultural, scientific and technical spheres.
Prime Minister Vladimir Putin recently appointed his trusted ally Sobyanin as the new co-chairman of IRIGC, sending a strong signal to New Delhi about willingness to revamp the economic ties with India, which have so far remained the weakest link in bilateral strategic partnership.
: S M Krishna To Meet His Russian & Chinese Counterparts In Bangalore On Oct 27
Last Updated: 2009-10-20T11:20:15+05:30
The Indian and Chinese foreign ministers will meet in Bangalore for discussing on aspects related to bring the India-China back on track. India – China relation has been experiencing a strain since the Arunachal Pradesh issues sparked off.
External Affairs Minister S.M. Krishna will hold talks with Sergei Lavrov of Russia and Yang Jiechi of Chinain Bangalore on Oct 27 for the fifth stand-alone trilateral meeting of the three countries.
The meeting will be discussing aspects related to the boosting the cooperation between India, Russia and China as well as on other international issues, including terrorism, climate change and UN reforms.
But more focus will be on the meeting between Indian and Chinese foreign ministers as this will discuss issues related to border dispute, trade and Arunachal. The issues related to issuance of separate visas for Indian passport holders from Jammu & Kashmir will also be discussed.
Times of India: Visa issue hits Russians too
Indrani Bagchi, TNN 19 October 2009, 09:23pm IST
|NEW DELHI: A fallout of the misuse of business visas by Chinese workers may affect some defence and nuclear projects by Russian |
|companies in |
India, prompting the government to expedite the process of a visa regime review. The Russian government, suddenly hit by the prospective exodus of its people from India has held a couple of meetings with the foreign ministry to sort out the imminent mess.
The matter will now be raised by Russian foreign minister Sergei Lavrov when he meets foreign minister SM Krishna in Moscow later this week.
By October 31, the Indian government has given marching orders to those who are employed here on business visas. This will affect some 25,000 Chinese workers, and some 700-1,000 Russians, Americans, Germans, British, all of whom are working in India by circumventing India's lazy visa systems.
The Chinese government was alerted in March to the fact that most of their workers were the semi-skilled variety who should never have come on business visas. Most countries, being well aware of India's all-bark-no-bite regime, did little. The problem was then seen to be much bigger. And now the government has finally struck.
The home and foreign ministries are now working overtime to find a solution before crucial projects in India's infrastructure, defence and nuclear sectors grind to a standstill. The laws will not be changed, but officials indicated that a mix of efficiency and smart issuances might tide over the problem for the time being. Basically, it means highly skilled workers will get quicker employment visas while semi-skilled workers may no longer be allowed in.
Of course, none of this would have come to light if a group of Chinese workers did not get into a fight with Indian locals in Jharkhand. That prompted a Parliament question and a search that opened a can of worms.
At the heart of the problem is the fact that issuing norms for an Indian employment visa were drafted in the days when India had virtually no contact with the world. These visas took almost a year in coming, which was ok then, because few people wanted to come her to work.
But in the 21st century, an Indian work visa took exactly the same time, though India's economy had undergone a massive transformation. But India remained unfriendly to foreign skilled workers which India needs, desperately.
Moreoevr, as an immigration official explained, a work visa has a limit of six months and requires constant monitoring by the employer. "Business visas are easier to get and can be issued for up to one year and can be extended by another six months," said the official. This meant projects that had to be executed quickly saw officials -- even on the Indian side -- circumventing the rules to issue business visas instead of work visas.
Steel Guru: Russia may set up second nuclear power plant in West Bengal
Tuesday, 20 Oct 2009
BL reported that Russia is likely to get land in West Bengal for a second nuclear power project in the country.
Official sources said the Haripur site in West Bengal has been earmarked for Russian participation and could house up to eight Russian `VVER'-series reactor units. A second site could give a head start for the Russians in the Indian nuclear market.
The Russians are already in advanced stages of commissioning the first phase of the Koodankulam project in Tamil Nadu that consists of two "VVER-1000" units of 1,000 MW each. These are being built with assistance from Russian State owned firm Atomstroyexport which would be involved in the construction of new units as well.
So far the French have been allocated the Jaitapur site in Maharashtra for Areva "EPR" reactors. The Americans are still waiting in the wings, though the Union Government has indicated its willingness to earmark two sites to US reactor manufacturers.
India had earlier conveyed its readiness to expand its nuclear engagement with Russia beyond the Koodankulam site. Both sides commenced preliminary discussions on the construction of Russian design reactors on a new site during delegation level talks between the Atomic Energy Commission Chairman, Dr Anil Kakodkar and Mr Sergei Kiriyenko chief of Rosatom earlier last month. Both sides also reaffirmed their resolve to finalize contracts for the second phase of the Koodankulam project and commence construction of the proposed third and fourth units at the site.
The Department of Atomic Energy Site Selection Committee has approved a few sites for new nuclear power plants. These include Mithirvirdi in Gujarat, Kowadi in Andhra Pradesh, Pati Sonapur in Orissa, Haripur in West Bengal and Jaitapur in Maharashtra. Of these, two coastal sites Mithirvirdi in the Saurashtra region of Gujarat and Kowadi in Andhra Pradesh have been tentatively earmarked for US reactor firms.
For its second phase of the Koodankulam project, Russia had, late last year, offered a sweetener in the form of a 30% discount on the USD 2 billion price tag for each of its new nuclear reactors under discussions for sale to India. Besides, the Russians also deputed their nuclear fuel firm, TVEL Corporation to deliver uranium not just to the Russian built stations, but for existing heavy water units in the country as well including the Tarapur station.
India, on the other hand had promised the Russians an increased role in the sector.
(Sourced from Business Line)
Today.az: Interconnection of Azerbaijani, Iranian and Russian energy systems is under a design stage: Azerenergy chief
20 October 2009 [12:42] - Today.Az
Overhaul of 500 kV electricity transmission line between Azerbaijan and Georgia will complete in 2010-2011, head of Azerenergy Etibar Pirverdiyev said on Oct. 20.
"At present, there is a 330 KV transmission line between the two countries, which does not ensure export-import operations sufficiently," said Pirverdiyev.
He said a number of projects should be implemented in the territory of Georgia, after which it will be possible to export electricity produced in Azerbaijan to Turkey.
Pirverdiyev said the process of interconnection of energy systems of Azerbaijan, Iran and Russia is under a design stage.
"The issue of a united power system among the three countries is technically difficult. It is not difficult to create a system with Iran. The difficult is a united power system of the three countries," he said.
Electricity transmission system in Russia - in the territory of Dagestan is weak, there is only one 330 KV power transmission line.
At present, the energy exchange between Azerbaijan and Russia continues.
"The surplus is on the side of Azerbaijan," said the head of Azerenergy.
He said the construction of the electricity transmission lines between Azerbaijan and Iran should finish soon.
Defensenews: Libya To Buy Russian Fighter Jets For $1B: Report
By AGENCE FRANCE-PRESSE
Published: 19 Oct 2009 08:23
MOSCOW - Libya is planning to buy more than 20 Russian fighter jets in a billion-dollar arms deal with Moscow, the Interfax news agency reported Oct. 19, citing a military-diplomatic source.
"Libya is planning to buy 12 to 15 Su-35 multipurpose fighters, four Su-30s and six Yak-130 combat training planes from Russia," the unnamed source was quoted as saying.
The contracts could be signed at the end of this year or the beginning of 2010 and would have a total value of about $1 billion (670 million euros), he said.
"Many of the contracts are already fairly well worked out from a technical viewpoint and are practically ready for signing. The financial aspects still need to be resolved," the source told Interfax.
A spokesman for Rosoboronexport, the state-owned arms exporter that oversees Russia's foreign arms sales, could not be reached for comment Oct. 19.
Libya, a longtime pariah state that has moved to rejoin the international community in recent years, was reported to be discussing arms deals with Russia when Libyan leader Moamer Kadhafi visited Moscow late last year.
Much of the North African state's arsenal was purchased from the Soviet Union in the last years of the Cold War.
Earlier this month a Russian MiG-23 fighter jet crashed during an air show in a suburb of the Libyan capital Tripoli, killing the two-man crew and injuring several people on the ground.
The air show had been meant to showcase Russian fighter jets for possible customers in North Africa.
UPI: Libya eyes new Russian jet fighters
Published: Oct. 19, 2009 at 7:57 PM
TRIPOLI, Libya, Oct. 19 (UPI) -- Russia's Interfax news agency says Libya is considering a deal to purchase at least 20 Russian fighter jets as part of a $1 billion weapons contract.
"Libya is planning to buy 12 to 15 Su-35 multipurpose fighters, four Su-30s and six Yak-130 combat training planes from Russia," Interfax said citing an unnamed military source on Monday.
The source suggested that lucrative deals could be sealed "by the end of the year of the beginning of 2010." The contract is estimated at $1 billion, according to the military source.
The Su-35 features state-of-the-art avionics and a special radar, capable of detecting targets at a greater range, tracking up to 30 targets, and simultaneously engaging eight targets.
The aircraft's "super-maneuverability," as experts put it, is a result of a new powerful thrust vector control engine.
In establishing air superiority and attack on any air-, ground-, and sea-based targets in any conditions by day and night, the aircraft is capable of carrying a combat load of up to 8 tons of guided and unguided air weapons. It is attached to 12 external stations.
"Many of the contracts are already fairly well worked out from a technical viewpoint and are practically ready for signing," the unnamed source told Interfax.
"The financial aspects still need to be resolved."
A longtime outcast, Libya has made strong moves in recent years to rejoin the international community.
Late last year, for example, Libyan leader Moammar Gadhafi visited Moscow for talks on oil, natural gas and potential arms deals.
The visit suggested that Gadhafi, a onetime pariah, was maneuvering to play Russia and the United States against each other for commercial and political favors.
Experts concede that Gadhafi has been trying to mend ties with the United States and other Western governments after renouncing terrorism and efforts to build weapons of mass destruction.
His trip to Russia, in fact, showed that he had not closed the door on former Eastern Bloc allies, experts argue.
Much of the North African state's arsenal was purchased from the Soviet Union in the last years of the Cold War.
Earlier this month a Russian MiG-23 fighter jet crashed during an air show in a suburb of the Libyan capital Tripoli, killing the two-man crew and injuring several people on the ground.
The air show had been meant to showcase Russian fighter jets for potential buyers in North Africa.
People’s Daily Online: Trade between China, Russia down 34.9% in first nine months
10:48, October 20, 2009
Trade between China and Russia in the first three quarters topped $28.04 billion, down 34.9 percent from the same period last year, said a report from the General Administration of Customs of China Monday.
Chinese exports to Russia in the first nine months stood at $12.01 billion, down 48.9 percent year-on-year, and imports stood at $16.03 billion, down 17.9 percent year-on-year.
Trade between the two countries topped $4.07 billion in September, down 25.8 percent from the same period last year, but up 19.9 percent from August.
Chinese exports last month stood at $1.77 billion, down 45.6 percent year-on-year, and imports stood at $2.3 billion, up 3.2 percent year-on-year.
"The month-on-month trade increase in September indicates trade between China and Russia has finished an adjustment period and is ready for recovery," said Zheng Yuesheng, director of the administration's Department of Statistics.
Trade between China and Russia topped $56.83 billion in 2008, up 18 percent from the previous year, according to the administration.
Source:Xinhua
: Russia may impose an anti-dumping tariff on China's steel pipe
Published: 19 Oct 2009 18:51:19 PST
October 19 MetalBiz--Last week, Russian Economic Development and Trade Ministry proposed to impose a 29.4% of punitive tariff on the steel pipe imported from China. Putin has not yet signed the draft, so the draft has no legal effect and Russia is still negotiating with Chinese side.
According to the report from Asia Times in Hongkong on October 14, Russian Economic Development and Trade Ministry located in Moscow, announced a report up to 33 pages, said that they have carried out an investigation on China's three manufacturers and the imported steel pipe from China as long as 10 months.
Russian Economic Development and Trade Ministry draw a conclusion that the market share of China's steel pipe increased to 14% in 2008 from the 8.9% in 2007, up 53% in the same period last year. The pressure from China's products on Russia forced the latter's manufactures to adjust the sales of steel pipe from foreign countries.
Russian Economic Development and Trade Ministry suggested that the bottom line of the anti-dumping duties is to impose a 29.4% of anti-dumping tax as long as 5 years so that China's products can't compete with the local manufactures. Now, the aforesaid suggestion has been submitted to prime minister and whether to sign the draft, Putin should need to take the views of other department into consideration.
World Bulletin: Turkey, Russia, Italy sign deals for Samsun Ceyhan pipeline project
Samsun Ceyhan pipeline project aims to provide an alternative route for Russia and Kazakhstan's oil.
Tuesday, 20 October 2009 08:13
Turkey, Russia and Italy issued a joint declaration in Milan Monday, announcing their official support to the Samsun Ceyhan pipeline project, which aims to reduce increasing traffic on the Bosphorus and the Dardanelles Straits in Istanbul and to provide an alternative route for Russia and Kazakhstan's oil.
"This project, will enhance relations between the three nations, ensure energy security, and help protect the environment," said the declaration which also confirmed the integration of Russian companies to the project, in line with the agreements signed between Turkey and Russia in Ankara on August 6.
During the meeting, Italian energy company Eni and Turkish company Calik Energy --which hold 50 percent shares of the Trans Anatolian Pipeline Company (Tapco), the contractor of the project-- signed a MoU with Russian companies Transneft and Rosneft.
Turkish Energy Minister Taner Yildiz told reporters at the joint press conference held after the meeting that around 160 million tons of oil was transported though the Turkish straits annually noting that the Samsun Ceyhan pipeline project would reduce this by 50 million tons.
Italian Economic Development Minister Claudio Scajola said they were ready to support all energy projects that also looked out for the ecological balance.
The 550-km long (340 miles) pipeline is expected to cost $1.5 billion and will ship an initial 1 million barrels per day between Black Sea oil terminal in Samsun and Mediterranean oil terminal in Ceyhan, Turkey, with plans to raise the capacity to 1.5 million bpd.
Barentsobserver: Russian Arctic strategy to be presented this year
2009-10-19
The Russian Ministry of Regional Development will present a new strategy for the development of the Russian Arctic zone before the end of the year.
Regional Development Minister Viktor Basargin in a conference today confirmed that the strategy will be presented to government before the end of the year. The document has already been discussed by the Security Council, as well as a number of Russian federal subjects, Regnum reports.
The strategy will include the Russian Arctic zone, an area which first of all includes Russian Arctic land territories. A total of eight federal subjects will be included in the strategy. However, the strategy also includes plans for the development of the Russian shelf, Regnum writes.
As BarentsObserver previously reported, the Russian Security Council in March this year presented a new strategy called “Principles for Russian politics in the Arctic in the period to 2020 and in a further perspective”. That document outlines a high focus on oil and gas developments, as well as an enhanced military presence in the Arctic.
Barentsobserver: No place for military blocs
2009-10-19
Russia’s Foreign Minister, Sergey Lavrov, told the audience at the Murmansk International Economic Forum that there are no problems in the Arctic calling for military solutions.
Therefore it cannot be justified to have the presence in the Arctic of military-political alliances, Lavrov said, reports The Voice of Russia. Lavrov was speaking to the audience of the Economical Forum in Murmansk last Thursday together with the Foreign Ministers of Norway, Sweden and Finland.
New issues pertaining to climate change and the development of new technologies should bring the Arctic states closer together, Lavrov said describing as “unfair and counterproductive” efforts to ratchet up tensions and portray the Arctic as a potential conflict zone, The Voice of Russia.
Barentsobserver: Russia wants international cooperation on Northern Sea Route
2009-10-20
Russia is prepared to develop international cooperation on exploration of the Northern Sea Route, said Artur Chilingarov in a meeting with the Norwegian Barents Secretariat. A representation office can be located in Kirkenes.
- As the Russian President’s special representative on international cooperation in the Arctic I can officially declare that we are open for cooperation on exploration of the Northern Sea Route, the famous Russian Polar researcher and State Duma deputy said.
Artur Chilingarov is one of the most active spokespersons for further development of the Northern Sea Route with all its possibilities for transport from west to east. He was the initiator for the creation of a non-commercial partnership for coordinated exploration of the sea route, a function that the state used to have in the Soviet period.
Representatives from the Norwegian Barents Secretariat met with Chilingarov in Murmansk in connection with the Murmansk Economic Forum. The secretariat is currently working for the establishment of a Northern Sea Route representation office in Kirkenes.
A meeting with the President of the Norwegian Shipowners’ Association Elisabeth Grieg is planned in Kirkenes in November. Head of the Barents Secretariat Rune Rafaelsen invited Russian shipping companies to this meeting to discuss international cooperation on the sea route, which will become more and more important as the ice gets thinner and the passage opens up for transport without icebreaker support.
Head of the Russian company Sovfrakht Dmitry Purim promised to invite the Head of the Russian Shipowners’ Association to the meeting in Kirkenes.
Barentsobserver: Improved water pollution monitoring of the Arctic
2009-10-09
A number of polar meteorological stations in the Nenets Autonomous Okrug have recently got new equipment and new buildings. This will contribute to a mayor improvement on water pollution monitoring in the Barents Sea, White Sea and Kara Sea.
The new equipment has improved research on several different fields in the area. Like research on heavy metals salts, sampling of lichens for research of air pollutants accumulation, results of climate changes and dynamic processes in oceans and seas and inspection of the meteorological stations.
The equipment was delivered as a combined expedition with the research ship “Mikhail Somov” of the Rosgidromet. First TV channel was also working on the boat during the finished expedition. The expedition realized scientific program within the International Polar Year, the State program for the environmental control and monitoring, researches and experimental development works of the Rosgidromet.
During the expedition the researchers carried out the water sampling. In addition the visual observations of sea surface and ice pollution, geomorphologic description of sea costs, physiographic description of coastal zone were made. Also materials about history of Arctic research were collected during the trip.
The Nenets office of the Norwegian Barents Secretariat has contributed to this article
October 20, 2009 13:46 PM
: Large-Scale Anti-Terrorist Exercise In South Russia In October
ASHGABAT, Oct 20 (Bernama) -- A large-scale anti-terrorist exercise will be held in Russia's southern Krasnodar Territory at the end of October, Russian Interior Minister Rashid Nurgaliyev told reporters on Monday.
Quoting Nurgaliyev, who is in Ashgabat on a working trip, Russian news agency, Itar-Tass, said the Interior Ministry will organise the exercise.
Nurgaliyev said participants in the exercise on October 31 will prevent a mock terrorist attack during a major sporting event.
"At a meeting with the Turkmen interior minister earlier Monday I invited his representatives to take part in the upcoming exercise as observers," the minister added.
-- BERNAMA
19.10.09 19:10
| |Turmenistan.ru: Turkmen president receives Russian interior minister |
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On October 19, President Gurbanguly Berdimuhamedov received Minister of Internal Affairs of Russia Rashid Nurgaliyev, who is in Turkmenistan on a working visit.
"The meeting was very constructive. The president of Turkmenistan is interested in problems of law enforcement agencies, and feels their concerns," Rashid Nurgaliyev said after the meeting, ITAR-TASS reported "We have discussed at length issues related to the fight against transnational organized crime, drug trafficking, cybercrime and illegal migration."
According to the Russian minister, issues of training and retraining of staff were also touched on at the meeting with the Turkmen leader. Rashid Nurgaliyev shared with President Gurbanguly Berdimuhamedov his impressions of the visit to an automated motordrome, where candidates pass driving examinations, as well as the duty unit of the Turkmen Ministry of Internal Affairs, ITAR-TASS said.
19.10.09 19:26
| |Turmenistan.ru: Ministers of Internal Affairs of Turkmenistan and Russia sign protocol on cooperation for 2010-2011 |
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Minister of Internal Affairs of Turkmenistan Isgender Mulikov and his Russian counterpart Rashid Nurgaliyev, who arrived in Ashgabat on a working visit, signed a Protocol on Cooperation between the two ministries for 2010-2011. The document envisages strengthening cooperation in several areas, including combating transnational crime, illegal migration, international terrorism, ITAR-TASS reported. In addition, the protocol provides for conducting joint investigation and search operations and prevention activities, as well as joint work as part of active criminal cases.
"Today, we have common threats, and they are global in nature, and therefore we have to fight them together," Rashid Nurgaliyev said after the talks. He noted that "there is a relevant legal basis in place." The Russian minister expressed hope that the protocol will give new impetus to cooperation between the law enforcement agencies of Russia and Turkmenistan. According to him, it is also necessary to intensify the exchange of information between the two ministries.
It is also reported that the Interior Minister of Russia invited his Turkmen counterpart to take part in several events to be held in Russia such as the anti-terrorist exercises in Krasnodar region late October and the First International Ministerial Conference on Road Safety "Act Now" to be held November in Moscow 19-20.
RIA: Police officer, 2 militants killed in Chechnya shooting
09:4220/10/2009
MOSCOW, October 20 (RIA Novosti) - A police officer and two suspected militants have been killed in a shootout in Chechnya's capital, police in the southern Russian republic said on Tuesday.
The skirmish broke out on Monday when police tried to detain two gunmen in Grozny. The gunmen opened fire, killing an OMON special police officer. One of the attackers was killed when police returned fire, while the other fled the scene. He was later tracked down and shot when he tried to throw a grenade at police.
Chechnya, which saw two brutal separatist wars in the late 1990s and early 2000s, has been swept by a fresh wave of violence recently. Shootouts and attacks on troops, police and other officials have been reported daily. The neighboring, mainly Muslim, regions of Russia have also been plagued by instability.
Also on Monday, gunmen opened fire at the house of a police official in Chechnya's Urus-Martan district, southwest of Grozny, and planted an explosive device in front of the building.
The officer discovered the homemade bomb and called bomb disposal experts.
Itar-Tass: Wanted militant killed in Chechnya
20.10.2009, 10.40
GROZNY, October 20 (Itar-Tass) -- A militant who escaped on Monday during the holding of a special operation, in which one OMON commando was killed and another was injured, was destroyed in Chechnya, ITAR-TASS learnt at the law enforcement bodies of Chechnya on Tuesday.
On Monday, crash police of the Main Department of the Interior Ministry for the Southern Federal District, OMON commandos of the republican Interior Ministry and officers of the Criminal Investigation Department were conducting a special operation to detain wanted militants in the Lenin district of Grozny. “One of militants wounded from a Makarov pistol a deputy commander, police captain, of the OMON company and the commander, police junior lieutenant, of an OMON section who died of wounds,” a law enforcers said.
The attacker was killed in return fire, however, another militant managed to escape. “Officers of an investigation group found a Makarov pistol, two grenades and over 20 cartridges at the site of the incident,” the law enforcer said.
A little bit later, the militant was spotted. “He was killed at the moment when he was trying to throw a grenade at police officers. The homemade grenade was seized,” the law enforcer said.
19 October 2009, 15:24
Interfax: Militants carry on propaganda of Wahhabism and ideologically prepare suicide bombers in the North Caucasus – prosecutor
Moscow, October 19, Interfax - The Russian Prosecutor General's Office reports an increased number of attacks on police officers in the North Caucasus.
"Chechnya, Dagestan and Ingushetia are the biggest problems in southern Russia. The rate of attacks on law enforcers grows steadily," Deputy Prosecutor General Ivan Sydoruk said at the Federation Council Legal and Court Affairs Committee.
Militants carry on propaganda "of the extremely aggressive religious trend - Wahhabism - and ideologically prepare suicide bombers," he said.
A total of 192 people, including policemen, were killed, 484 were wounded and 425 extremist crimes were perpetrated in the republics in the first nine months of the year. More than 230 members of illegal armed units were killed and a number of terrorist acts were prevented in January-September 2009.
More than 2.5 tonnes of explosives were seized and over 260 arms caches were liquidated in the same period.
Russia Today: Boys to the right, girls to the left!
20 October, 2009, 10:16
There are growing calls in Russia's southern republic of Dagestan to separate boys and girls at school. Some in the predominantly Muslim area want single-sex education, but school authorities strongly oppose the idea.
Magomed Omarov’s daughters might soon quit going to school, as their father objects to the girls studying in the same class as boys.
“Separate education means a better quality of instruction,” Magomed is convinced.
“If the state doesn’t change anything, I won’t leave them in the school. I will have to find an opportunity to teach them at home or in private schools,” he says.
The girls, too, seem eager to be rid of their male classmates.
With an overwhelming Muslim majority, the debate is raging in this southern Russian republic over the need for separate schools for boys and girls.
The spiritual authorities of Dagestan insist that when studying together, boys and girls cannot entirely focus on their classes.
“It’s not so they can flirt that we send them in to higher education. We want them to get educated,” one spiritual official asserted.
Meanwhile, deputy school director Irina Dzhanakaeva doesn’t see any harm if the kids study together, as it teaches them how to communicate.
“I would like my grandchildren to go to a mixed school where boys and girls study together and everybody gets each other’s support. A boy should always defend a girl and a girl should help a boy,” Irina says.
Besides, the teacher says, even if introduced, the separate schools would entail additional expenditure. “We will need new methods of instruction and that means more expenses,” she says.
While those opposing the idea of separate education are disputing with the religious authorities, it seems some of the locals have already made their choice. The capital city, Makhachkala, may be mostly secular when it comes to education, but in the mountainous regions surrounding the city a number of closed private schools have appeared, where girls and boys don’t mix.
20 October 2009, 10:01
Interfax: Stringer of Interfax-Religion website assaulted in Moscow
Moscow, October 20, Interfax - Olga Gumanova, a stringer of the Interfax-Religion website, was beaten by an unidentified assailant in Moscow last Sunday.
Gumanova was attacked by a man at the entrance to her building whilst returning home in north Moscow on Sunday evening. He knocked her down and started kicking her in the head and arm. The attacker ran off after passers-by came to help the woman after hearing her screams for help.
Nothing was stolen during the attack even though the reporter even was wearing expensive jewelry and had money and a communicator in her handbag.
Doctors at the Sklifosofsky First Aid Clinic on Monday recorded numerous bruises on her head and left hand. Gumanova plans to lodge a complaint to police about the incident.
Gumanova is currently investigating the situation at the shelter in Bogolyubovo convent in the Vladimir Region where several girls recently fled. After expressing her views about the shelter in her blog she received several threats from anonymous users.
RIA: Swine flu cases in Russia total over 920 - top sanitary official
01:4620/10/2009
MOSCOW, October 20 (RIA Novosti) - The number of people diagnosed with swine flu in Russia has risen to 927, Russia's top sanitary official said.
On October 15, there were 807 confirmed cases of swine flu in Russia. No one has died in Russia of the virus.
"A total of 927 cases have been officially confirmed across Russia, with 557 cases diagnosed among people who traveled abroad," Gennady Onishchenko said.
A number of schools have been temporarily closed in the country over swine flu fears.
On Monday Russian Prime Minister Vladimir Putin signed a resolution to allocate 4 billion rubles ($136 million) to buy swine flu vaccines
According to the latest report from the World Health Organization, 399,232 cases of swine flu have been confirmed throughout the world and 4,735 people have died from the virus as of October 11.
RIA: Number of swine flu cases in Russia's Krasnoyarsk rises to 70
09:1220/10/2009
KRASNOYARSK, October 20 (RIA Novosti) - The number of people confirmed as having the H1N1 virus, commonly known as swine flu, in the Siberian city of Krasnoyarsk has grown to 70, Russian consumer watchdog Rospotrebnadzor said Tuesday.
"As of today, 70 people are in hospital - 64 cadets and six students of a civil engineering college - with the A/H1N1 influenza diagnosis confirmed. Another 42 have a provisional diagnosis. Overall, there are 112 people in the hospital today," a spokeswoman said.
Russia's top sanitary official said Monday the number of people diagnosed with swine flu in Russia totaled 927. On October 15, there were 807 confirmed cases of swine flu in Russia. No one has died in Russia of the virus.
A number of schools have been temporarily closed in the country over swine flu fears, including every school in Chita, the capital of the Transbaikal Region, where 17 new cases of the H1N1 virus were confirmed on Monday. Of 108 total cases registered in the region, 66 patients have recovered.
The Chita schools will be closed for two weeks.
Russian Prime Minister Vladimir Putin signed an order on Monday allocating 4 billion rubles ($136 million) for the purchase of swine flu vaccines.
According to the latest report from the World Health Organization, close to 400,000 cases of swine flu have been confirmed throughout the world and over 4,700 people have died from the virus.
PSA Blog: The US-Russia-Ukraine Triangle
by Matthew Rojansky | October 19th, 2009
With the possible exception of Georgia-US-Russia, no US relationship in the former Soviet region is more fraught today than the US-Russia-Ukraine triangle. At a time when Washington and Moscow have variously committed to a relationship reset, a new operating system, and a rerun of the Clinton-Yeltsin strategic partnership, it is disappointing how little substance has followed rhetoric. Meanwhile, Central and Eastern Europe are still reeling from the US Administration’s abrupt and ill-timed reversal on missile defense deployment, and Team Obama is eager for opportunities to demonstrate its commitment to the new Europe, which received no shortage of love from the Bush Administration.
Enter the prospect of US-Ukraine cooperation on missile defense. According to Ukraine’s Ambassador to the US, the two countries have begun working discussions on sharing data from Ukrainian radar for use with a revised US-led missile defense system in Southeastern Europe. The Ukrainians may be overreaching here, trying to manufacture a moment of decision that the US Administration prefers to avoid, however there is no doubt that missile defense cooperation with Central and Eastern Europe remains very much on the table, even after the Bush plan was scrapped last month. And while the Obama Administration insists any radar-interceptor system is still intended primarily to defend against a rogue missile launch by Iran, Moscow has renewed its objection that missile defense based in former Warsaw Pact territory is a threat to its nuclear deterrent, an absolute red line for an ex-superpower whose conventional forces are not up to the task of defending its sprawling borders.
All of this makes perfect sense in the context of an increasingly zero sum US-Russian relationship: If the possibility of US-Ukraine missile defense cooperation reassures Kiev (and Warsaw and Prague) that the US is still fully engaged in the region, it should be no surprise that Russia is as upset over this as it was over the Bush Administration’s plans for a Polish and the Czech system–perhaps more so because some of the radars at issue are in Crimea, a Russian majority region of Ukraine where Moscow could exploit ethnic tension to empower a pro-Russian separatist movement. Ironically, during the month between Obama’s cancellation of the original missile defense plan and now, Moscow had refused to acknowledge the importance of the US concession, latching onto the system’s technical shortcomings to dismiss it as destined for failure from the outset. In turn, Congressional hawks have argued that Russia’s offer to cut its deployed nuclear arsenal by about a quarter is hollow, since most of those weapons are unreliable antiques.
The bigger picture: If it can’t have close ties with both Russia and the West, Ukraine’s best bet is security through NATO membership, and prosperity through EU membership. Both are threatened by Russia’s plans to build the Nord Stream pipeline, which will cut Ukraine out of the gas trade, and Moscow’s ambition to control a sphere of influence, which will, at a minimum, extend to borderlands with large Russian populations. The Ukrainian Presidential election in January will reshuffle Kiev’s cast of players, but is unlikely to effect a permanent reorientation toward Moscow over Brussels and Washington. For the US, opening a dialogue on potential cooperation with Ukraine signals that the missile defense reversal in September was not the beginning of the end of US engagement in the region.
Businessneweurope: TRUTH & BEAUTY: Uncovering what Russia really thinks
Eric Kraus in Moscow
October 20, 2009
Western thinking as regards the political development of post-Soviet Russia has reliably proved to be self-serving almost to the point of absurdity. Thus, a new report by the pan-European think-tank the European Council on Foreign Relations (ECFR), entitled "What Does Russia Think?", seems almost revolutionary in its attempt to understand current Russian political institutions and attitudes as the logical outgrowth of Russians' experience over the past two decades.
As the authors note, "Victors feel no curiosity." With the end of the Cold War, it was widely assumed that Russia would simply draw a line through its unique historical and cultural experience, behaving as a defeated power aspiring to join the Western alliance – that final, triumphant synthesis of the Marxist thesis and the Capitalist antithesis which was briefly destined to mark "The End of History."
This convenient view was based upon a fundamental misconception – the West had become so deeply enamoured of its own paradigm as to assume that its specific value system (liberal democracy, free markets, globalization, US military preponderance) was not only universal and uncontestable, but also self-evidently shared by the rest of mankind, Russia included. In this context, the ECFR report is deeply refreshing – an effort to understand not just what Russians should think, but what they do think.
The book is comprised of two sections – a relatively brief introductory essay by authors Ivan Krastev, Mark Leonard and Andrew Wilson, offering a pragmatic explanation of the enduring popularity of the political system created by Vladimir Putin, and of the Russian people's somewhat jaded views of the West, followed by a series of 10 papers by Russian thinkers, not all of whom manage to escape the national propensity towards the enthusiastic splitting of semantic hairs. We shall thus concentrate on the introductory essay.
Sovereign democracy
The authors note that, far from being dead and buried, the struggle to redefine a political ideology for modern Russia has taken on a new vibrancy following the ideological stagnation of the late Yeltsin years. Discarding the caricatured vision retailed in the Western press of a Russian political debate confined to an unequal struggle between Kremlin apologists and pro-Western liberals, they note that the new Russian political regime is a reaction to the twin failures of Soviet communism, and of the anarchy of the late Yeltsin years with its attempt to transpose Western political and economic models to a country totally lacking in the institutions and historical experience from which these models arose.
The concept of "sovereign democracy" is presented as a reflection of Russia's quest not to join the West, but to free itself from the West – an attempt to define a specifically Russian ideology allowing Russia to position herself not so much in opposition to any block or great power, but rather in terms of her own vital interests. Western models will necessarily form a vital part of the final mix, however any attempt to impose them wholesale would prove hugely unpopular. Along these lines, while noting the existence of President Dmitry Medvedev and Putin camps, they acknowledge some ambiguity about whether Medvedev himself belongs to the "Medvedev camp," ie. any conflict involves the ambitions of their respective staffs, rather than of the men themselves.
Having abandoned any further claim to great power status, Russia's primary foreign policy goal is presented as being an attempt to counter the Americano-centric unipolar political model at any cost, seeking to establish its sphere of influence (or at least, to prevent others from establishing theirs) in Central and Eastern Europe and Central Asia. Unfortunately, given the ambient obsession with the triumphant West, the authors fail to give serious consideration to what is likely to be the main driver for Russian foreign policy over the next decade in an increasingly Sino-centric world, the Eastern policy, ie. the role of the Shanghai Cooperation organization as a major forum for regional cooperation and Russo-Chinese relations in general.
Drafted by political scientists rather than by economists, the ECFR report is somewhat weaker on financial issues. Those participants discussing the issue tend to attribute the Russian economic crisis to the collapse in commodity prices and/or the lack of economic diversification. While these issues are indeed significant for long-term economic development, they were largely irrelevant to the genesis of the crisis, essentially a function of Russia's growing integration with Western financial markets combined with a weak and fragmented domestic financial system. It was due to overwhelming dependency upon foreign capital flows in the absence of a properly functioning banking system that left the Russian economy dangerously exposed to exogenous crises. This dysfunctionality has not yet been properly addressed.
Furthermore, there is the assumption of "an inherent tension between the objectives of state-building and the objectives of economic development" – implying a somewhat controversial assumption that one were possible without the other. More fundamentally, the inherent superiority of the neo-liberal model over any statist system is taken for granted, this despite the available evidence which shows that, at least for emerging markets, the mixed model as applied by China et al has been by far the most successful of those now being promoted on the global ideological marketplace.
Eric Kraus is the author of the "Truth and Beauty" column
October 19, 2009
Russia Profile: Gone with the Crunch
By Svetlana Kononova
Special to Russia Profile
Russians Hit by the Credit Crunch Spend Their Holidays at the Dacha, Do not Eat Out, and have Replaced Caviar with Pasta
The financial crisis has had a profound impact on Russians’ lifestyle. Previously known as a high-spending hedonist, the average Russian consumer has slashed his spending on luxuries and even on basic items such as food. And although businessmen are seeing green shoots of recovery, analysts warn that the new austerity is here to stay for the foreseeable future.
According to a survey conducted in September by the independent pollster the Levada Center, 62 percent of Russians say the credit crunch has affected their everyday life. Thirty-nine percent of respondents believe Russia is already going through hard times, and 33 percent opine that the country will face hard times in the nearest future.
Data from the state-owned All Russian Public Opinion Research Center (VTsIOM) shows the same trends. Forty-one percent of respondents complained of falling income and inflation, according to a recent poll. Eighty-three percent said they had cut down on expenses, and 88 percent of those living in big cities and 78 percent of those in small towns and villages said they have changed their consumption habits. “I used to spend up to 2,000 rubles daily on nothing before the crunch,” wrote a blogger who goes by the nickname of Zeev. “I used to buy useless magazines, CDs, books. I used to spend a fortune for business lunches. But now I have limited my daily expenses to 60 rubles. I bring a home-cooked meal for lunch when I am working in the office and I download new films from the Internet at home to entertain myself. I only buy cheap food in the Ashan supermarket.”
Analysts believe the credit crunch has strongly affected Russians’ consumption patterns.
“During the period of impressive economic development, Russian people were continually affected by the conspicuous consumption of premium goods,” said Vitaliy Vladykin, a research analyst for Central and Eastern Europe at Euromonitor International. “However, people were forced to reduce their expenses and review their consumption patterns because of growing unemployment and decreasing incomes and confidence.”
Little by little, people began to switch from premium brands to products from economy and standard price segments, according to Vladykin.
The second trend is import replacement. Imported goods are rapidly losing ground to domestically produced rivals due to the devaluation of the ruble. Recent research conducted by Euromonitor International found that 72 percent of consumers in Russia buy food produced by local manufacturers daily or several times a week. This is one of the highest rates in the world, matched only in China. In the United States and the EU countries, no more than 30 to 40 percent of people prefer local food.
Moreover, Russians have been forced to change their food preferences. According to a survey conducted by Profi Online Research, consumers are trying to reduce their expenses by cutting back on delicacies. About half of respondents said they now buy caviar and sweets much more rarely that they used to. But they have started to buy more cheap pastas and ready-made meals.
Food purchases still make up the bulk of Russians’ expenses, with the average Russian spending a quarter of his budget on food and drinks. And although analysts expect food expenses to decrease to some 22 percent of the consumer goods basket in 2010, it would remain the largest part of a family’s budget. “Russian consumers show two new patterns now,” said Valeria Yerina, a spokesperson for Profi Online Research. “Firstly, they are looking for the shops where staple goods are cheaper than in other shops and supermarkets. Secondly, they tend to buy less frequently.”
The second trend is a significant characteristic of a recent situation on the clothes market in Russia. Forty percent of consumers have started to buy fewer clothes and seven percent have stopped buying clothes at all, according to recent surveys. “Before the crunch, the average shopper could buy three evening dresses just because she liked them,” said Andrew Shmounk, who owns a fashion boutique in Moscow, “but now people tend to buy only the clothes they really need.”
“Some customers stopped making purchases at all, and other clients limited their budget,” he added. However, Shmounk also believes the situation has begun to improve in recent months. Clothes sales are growing one again, he said, albeit slowly.
This trend might be explained by Russian female mentality, since it is always extremely important to look your best. Russia leads the world in the number of consumers who are prepared to spend their disposable income on clothes, according to an online poll conducted in 28 countries by the Nielsen Research Company.
But it is holiday spending that has been affected most by the credit crunch. According to a recent VTsIOM poll, 39 percent of respondents could not afford to go anywhere on holiday in 2009. Another 26 percent said they spent a holiday at home “to do housework or home improvement.” Fifteen percent of respondents spent their vacation at a dacha, and nine percent visited relatives in other Russian towns and villages. Only three percent of Russians could afford to spend their holidays abroad this summer. Forty-one percent of people who could not afford to travel anywhere said they were not happy with their holiday.
Additionally, Russians limited their spending on evenings out. “More than half of Russians go out less often than they used to, according to our research. This pattern has affected business in clubs, restaurants, theatres and cinemas,” Yerina said.
And most analysts agree: the new “post-crunch” consumption patterns will continue for the foreseeable future, even if incomes do increase.
Georgian Daily: Basargin Admits Moscow Lacks a Strategy for Dealing with Company Towns
October 19, 2009
Paul Goble
Viktor Basargin, Russia’s minister of regional development, said today that “it is too soon to speak” about a Moscow strategy for dealing with the country’s more than 400 company towns like Pikalevo, although he did say that resettling their residents to new locations was “an extreme measure” that would cost more than helping them in other ways.
The minister was speaking to a St. Petersburg forum on “Strategic Planning in the Regions and Cities of Russia,” and during his remarks, he suggested Moscow should seek to solve the problems of each on an individual basis, although Basargin did indicate that finding additional sources of investment for these cities was important.
Another speaker, Galina Izotova, the first deputy chairman of the Duma Committee on Federation Affairs and Regional Policy, indicated that the Russian parliament is pursuing that individual approach. At present, she said, there are two draft bills under consideration to deal with two of these company towns (rosbalt.ru/2009/10/19/681389.html).
No one would deny that each of these single-company towns presents unique aspects, but this one-company-town-at-a-time approach seems certain to take so long to implement that situations in some of these places are likely to deteriorate and even become explosive long before any help from Moscow can arrive.
On Friday, “Kommersant” called attention to that possibility in an unusual kind of company town – Shatalovo, a military settlement in Smolensk oblast whose “workers” have threatened to stage “a new Pikalevo” if Moscow does not agree to leave their aviation intelligence unit where it is (kommersant.ru/doc.aspx?DocsID=1238033&NodesID=7).
Members of the unit, which has been stationed there since 1959 and which is famous for its involvement with the Mig-25 detachments that conducted military reconnaissance over Israel in 1973, said in an open letter to President Dmitry Medvedev that if he does not countermand Defense Minister Anatoly Serdyukov’s order to move them, they will block a major highway.
After threatening all year to convene a general assembly of the military settlement, more than 1,000 Shatalov residents did so, and many of them spoke contemptuously of those officers who had had been willing to follow orders and begin the move. “At first only officers will go to Voronezh,” a speaker said. But “a woman’s voice broke him off and said ‘And prostitutes!’”
Given such statements and the threat that the military personnel might block the highway, both civilian officials and military commanders showed up to try to prevent the assembly from organizing itself and carrying out its threats. But the situation remains tense: officers who had already gone to the new place returned and told their comrades that conditions were bad.
Moreover, under the defense ministry’s relocation order, only about 1,000 of the 4,000 people in Shatalovo will move to Voronezh. The remainder, consisting of civilian specialists, including military retirees who have been working at the Shatalovo base, will be left behind and without any real chance of employment.
Nikolay Frolov, Federation Council member from Smolensk, said that “if the military doesn’t need the site, then it must be used in the civilian economy.” But he acknowledged that he did not have any ideas in this direction, although he said “serious people in Moscow” with whom he had spoken “have promised to think about that.”
Meanwhile, Nikolay Palaloga, the chairman of the Shatalovo Veterans Committee, warned his fellow residents that they should think before taking any dramatic actions and “remember the experience of Bloody Sunday [in 1905]” given that “the number of interior ministry troops is five times greater than the number of military personnel there.”
Despite that warning, the Shatalovo assembly unanimously adopted the letter which promised Moscow “a new Pikalevo” if the authorities did not help them out and said that the policies of the Russian defense ministry and high command are leading “not only to a loss in defense capability but to a distrust in the powers that be as well.
St. Petrsburg Times: Putin Cartoon to Air on 2x2 Next Spring
By Alexandra Odynova
The St. Petersburg Times
Prime Minister Vladimir Putin will appear on Russian television next spring as the weapon-wielding interrogator of two U.S. comedy legends, an evil baby and a talking dog.
Cartoon channel 2x2 told The Moscow Times that it would air a new episode of the popular U.S. cartoon comedy “Family Guy,” known in Russia as “The Griffins,” despite having excised less-than-flattering portrayals of the former president in the past.
The episode plays heavily on stereotypes about Russia and Putin’s past as a KGB officer.
“It will be broadcast in the spring, the complete version. It was approved that its content does not violate any ethical requirements,” 2x2 spokesman Andrei Andreyev said.
He said all cartoons were checked with the company’s legal team before being aired.
Episode 4 of Season 7, which has been released in the United States and is available online, shows two regular characters — 1-year-old Stewie Griffin and the talking family dog, Brian — going to Moscow with comedians Dan Aykroyd and Chevy Chase. On their arrival, they see busy streets full of bears riding unicycles. Since the Americans stick out, they are quickly captured by armed men and delivered straight to Putin’s office as suspected U.S. spies.
Putin is sitting at his desk between two Russian flags and under portraits of Soviet leaders Vladimir Lenin and Josef Stalin. When the Americans come in, he makes a show of using weapons in a nonviolent way. Looking stern, the prime minister makes a coat hanger from what appears to be nunchucks. He then uses a rifle to shoot an arrow to hang his tie on the wall and lights a cigarette with a Kalashnikov. Putin isn’t known to smoke. “I know why you are here and I mean to help you,” Putin says to his guests and shows them a parody version of “Hedgehog in the Fog,” a world-famous Soviet cartoon from 1975.
And while it isn’t the first time that Putin has appeared in a U.S. cartoon, the “Family Guy” portrayal will be one of the few that makes it onto Russian screens.
“South Park,” another ribald U.S. comedy, aired an episode in 2005 depicting Putin, then president, as a greedy and desperate leader. But when the show appeared in July on 2x2, the scene mocking Putin was absent. The country’s broadcast regulator, the Federal Mass Media Inspection Service, said at the time that it knew nothing about the incident, and 2x2 declined to comment on why the clip was missing. Russian MTV had previously shown the episode with Putin. In August, a Moscow court threw out extremism charges against 2x2 for airing a different episode of “South Park.”
The Moscow News: Yaponchik’s death to provoke gang war
19/10/2009
Alexander Bratersky
The mobsters who gathered last week at Moscow's prestigious Vagankovskoye cemetery for the funeral of notorious mafia chief Vyacheslav Ivankov (aka ‘Yaponchik') were doing more than simply bidding farewell to the boss - they were plotting their next move in an expected gang war.
That's the conclusion of leading Russian crime experts, who say the memorial service for Ivankov, who died earlier this month of gunshot wounds inflicted in a July sniper attack, was a shodka, or gangsters' meeting, where the slain man's allies plan to take revenge.
These kind of symbolic events always have an impact and could well lead to allies of Ivankov, an old-school vor v zakone, or thief-in-law, starting a gang war over his death, Alexei Volkov, deputy chairman of the State Duma Security Committee, told The Moscow News.
Volkov, a Soviet-era police general who specialised in fighting organised crime, added that after Ivankov's death the gangs would pause to consider their next steps - so the police should act quickly.
Despite the presence of various mob figures at the funeral, Kommersant reported that Moscow police officials denied that ceremony was used as a gathering.
A series of amendments to the Criminal Code, passed by parliament days after Ivankov's funeral, will increase prison terms for gang leaders from 12 to a maximum of 20 years.
Even taking part in a criminal gathering could be enough to face criminal charges, according to the amendments.
But it will be difficult to prove that people at such events as last week's funeral were participating in criminal conspiracies, said Volkov, who voted for the amendments.
"Something should be done, because these people have enormous power, they are like a parallel [state]," he said.
But not everyone agrees about the threat posed by the mafia.
Their 1990s heyday, when criminal groups controlling the most lucrative parts of the Russian economy and even political power is long gone, said former President Boris Yeltsin's security chief, Alexander Korzhakov. In an interview with The Moscow News, he said that even some regional governors hired former gangsters as personal bodyguards. "Some of those guys were threatening people with machine guns from their car windows," Korzhakov said.
Volkov, who previously served as head of the Amur region police department, recalled that seven of the nearby Khabarovsk region thieves-in-law were trying to infiltrate the local authorities, offering security services to officials. It led to a complete paralysis among the authorities, he said.
Ivankov, who rose through the ranks of the criminal underworld to become one of the Soviet Union's most respected mafia bosses, emigrated to the United States in the early 1990s.
He was arrested by the FBI in 1995 for attempting to extort $8.5 million from two Russian emigre businessmen. Ivankov in turn accused the businessmen of stealing the money from shareholders of the now-defunct Chara Bank.
In the US, the Russian mafia operated largely within the Russian-speaking emigre community, but were more successful in Eastern and Western Europe, where their activities damaged the credibility of several prominent Russian businesses abroad.
One example of a company suffering from alleged links to mafia figures was Lukoil. The oil firm made several attempts to bid for Spain's Repsol, but they were blocked as the Spanish prosecutors accused the company of links to Russian vor v zakone Zakhari Kalashov, an associate of Ivankov's.
According to an investigation by Forbes Russia magazine, citing documents from Spanish prosecutors, Lukoil was among the companies that Kalashov used for money laundering. Kalashov, who is currently awaiting trial in Spain, was a Lukoil shareholder, according to Swiss prosecutors. Among other names connected to the case was Ivankov's bitter enemy, Georgian vor v zakone Tariel Oniani.
Oniani was also a Lukoil shareholder, according to the Spanish police force's investigators.
Lukoil denied that Kalashov received money from Lukoil and said that Spanish prosecutors did not produce any evidence linking Oniani to Lukoil, Forbes reported.
Oniani left Spain after local police started a crackdown on local Russian mafia in 2005. In June 2009 he was arrested in Moscow in connection with the kidnapping of a Georgian businessman, and is currently being held at the city's Matrosskaya Tishina pre-trial detention centre.
The chief of the Moscow Interior Ministry's investigative department, General Iskander Galimov, told reporters earlier this month that 40 criminal bosses have been jailed so far this year, double the figure for 2008.
While about 800 thieves-in-law are thought to be operating in Russia, organised crime groups are responsible for only 4 per cent of all crimes, according to the Interior Ministry.
Oniani has been feuding with another powerful vor v zakone, Aslan Usoyan (aka Grandpa Khasan), who was supported by Ivankov.
After Oniani's arrest, senior crime figures received a letter, signed jointly by Ivankov and Usoyan, according to Ogonyok magazine, which obtained a copy of the letter. In the letter, Ivankov and Usoyan called for Oniani to be stripped of his vor v zakone ranking and punished.
Mark Kruter, a former Ivankov attorney and friend who wrote a book about the late gangster, has said that Ivankov's allies would likely have Oniani killed at the first opportunity, and that the country's Georgian mobsters would face a tough time.
Kruter believes that Ivankov was killed because he sided with Khasan against Oniani in attempting to chisel in on construction rackets connected with the 2014 Sochi Olympics. Contracts for the Olympics are expected to be worth some $80 billion.
Earlier this year a sidekick of Usoyan's, Alek Minalyan (aka Sochinsky) who was involved in money laundering through Sochi construction businesses, was killed in Moscow, by members of the Oniani gang, Moscow police said.
Even if the Sochi connection is unproven, crime experts said that Georgian and Russian gangs would likely fight turf battles across the country. Other battles will also be fought within the Russian criminal fraternity as gangsters now care less about the rules of the vory v zakone than they did in the 1990s.
"Before there was respect towards the thieves-in-law, but today there are no rules or principles," said one young former organised crime member from Ulan Ude, who identified himself only as Roman.
Gennady Gudkov, a former KGB colonel and a State Duma deputy for the Just Russia faction, agreed, predicting an intensified struggle for money and influence.
"There is no unity in the criminal world," Gudkov said. "Before they used to say that a thief-in-law should have no property, but today everyone is fighting for a bigger piece of the pie."
The Moscow Times: Communist Group Sues OSCE for $40 Trillion
20 October 2009
By Natalya Krainova
The Communist Party set up a patriotic youth group Monday that immediately sued Europe’s top security and human rights watchdog for $40 trillion for a resolution equating Nazism and Stalinism.
The group, called Generation of Victory, filed a suit against the Organization for Security and Cooperation in Europe for 27 trillion euros ($40.3 trillion) for passing a resolution that equated the roles of Adolf Hitler’s Germany and Josef Stalin’s Soviet Union in starting World War II, said State Duma Deputy Alexei Korniyenko, who was elected head of the group.
The lawsuit was filed in the European Court of Human Rights, Korniyenko told Interfax.
OSCE officials had no immediate comment on the lawsuit.
Members passed a resolution at the OSCE’s annual parliamentary meeting in July to recognize Aug. 23 as day of remembrance for victims of Stalinism and Nazism. That was the day in 1939 that Germany and the Soviet Union signed a pact carving up Eastern Europe between them. World War II started about a week later.
Generation of Victory will “promote patriotic upbringings and defend the interests of military officers and veterans,” Korniyenko told RIA-Novosti.
He said the group would also set up patriotic clubs for youth that would offer preliminary military training for future conscripts, among other things.
The new group, created by 13 interregional nongovernmental groups, held its founding congress in Moscow on Monday.
National Economic Trends
Bloomberg: Russian Recession Ended With Third-Quarter Growth, Kudrin Says
By Anastasia Ustinova
Oct. 20 (Bloomberg) -- Russia has “exited” its recession as the economy expanded in the third quarter compared with the previous quarter this year, Finance Minister Alexei Kudrin told reporters in St. Petersburg today.
Kudrin declined to give percentages.
To contact the reporter on this story: Anastasia Ustinova in St. Petersburg at austinova@
Last Updated: October 20, 2009 03:31 EDT
Reuters: Russia cbank moves rbl intervention level-dealers
RUSSIA-ROUBLE/ (URGENT)
MOSCOW, Oct 20 (Reuters) - The Russian central bank bought $700 million in the first minutes of trade on Tuesday before moving its intervention level by 5 kopecks and allowing the rouble to scale fresh highs, dealers said.
The central bank has been allowing the rouble's floating corridor to move by 5 kopecks for each $700 million of interventions as part of its policy to keep exchange rate fluctuations gradual.
The rouble strengthened as far as 35.71 against a euro-dollar basket according to Reuters data , its strongest since January and moving beyond the 35.75 mark seen as the previous central bank intervention level.
"Already in the first 10 minutes (of trade on Tuesday) they bought $700 million, they had their fill," said a trader at a major Western bank in Moscow, adding that the intervention barrier was now thought to be located at 35.70. (Reporting by Toni Vorobyova and Andrei Ostroukh; editing by Maria Kiselyova)
Reuters: UPDATE 1-Russia rouble sets fresh highs, free float eyed
By Toni Vorobyova and Andrei Ostroukh
MOSCOW, Oct 20 (Reuters) - The Russian central bank allowed the rouble to scale fresh highs on Tuesday, shifting its intervention level, in a move that analysts said confirmed the country is gradually moving towards a free floating currency.
The rouble has notched up seven consecutive weeks of gains versus a euro-dollar basket, propelled by strong oil prices, growing investor appetite for high-yielding emerging markets and signs the domestic economy is on its way out of recession.
The central bank has regularly entered the market with foreign currency purchases, but has gradually been shifting its intervention level to allow the appreciation to take place.
The rouble strengthened to 35.69 versus the basket according to Reuters data, its strongest since January.
Dealers said the central bank had moved its intervention level to 35.70 from 35.75 after purchasing $700 million in the first few minutes of trade on Tuesday.
"I think what we are seeing is an almost complete move to a policy of inflation targeting. The central bank now sees its aim as smoothing out fluctuations (of the rouble), rather than fixing the rate at a particular level," said Vladimir Tikhomirov, economist at Uralsib.
"The latest comments suggest that on the part of the government such policy has met with support."
Last week Prime Minister Vladimir Putin said rouble appreciation has advantages as well as disadvantages, striking a more balanced note than a month ago when he said Russia will not allow excessive currency strength.
The central bank plans to move to a free float and inflation targeting within the next three years, and Putin said reduced currency market interventions would lead to lower inflation.
BORROWING
In the long run, the rouble could gain greater stability from Russia's drive to encourage companies to borrow less abroad to better insulate the economy from any future problems in global financial markets.
Alexei Ulyukayev, first deputy chairman of the central bank, on Monday called on the leadership of state-controlled companies and banks to introduce caps on foreign borrowing.
One option would be to do this through tax legislation, according to Sergei Shvetsov, the head of the central bank's open market operations department.
Currently interest of up to 15 percent on foreign loans is tax exempt, and Shvetsov proposed reducing this to 3 percent.
"The Bank of Russia's concerns are linked to the fact that...a positive capital account balance additionally stimulates the appreciation of the rouble, destabilising the currency market," Maxim Raskosnov, analyst at Renaissance Capital, said in a research note.
"At times of serious economic shocks it (the capital account) has an opposite influence on the market."
(Additional reporting by Yelena Fabrichnaya; editing by Chris Pizzey) Keywords: RUSSIA ROUBLE/ (antonina.vorobyova@; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.@)
Bloomberg: Russia Planned Asset Sales to Outshine Peers, East Capital Says
By Paul Abelsky
Oct. 20 (Bloomberg) -- Russia’s plans to sell state assets next year will lure investors eager to take advantage of the country’s attractive valuations compared with its peers in the region, according to East Capital Asset Management.
“From our point of view it’s very easy -- we think Russia is always more interesting as we look at valuations,” said Peter Elam Hakansson, chairman of East Capital, a Stockholm- based fund manager investing in eastern Europe with about 3 billion euros ($4.5 billion) in assets under management.
Russia wants to sell state energy and transport holdings to help plug the country’s first budget deficit in a decade and to speed up the makeover of its aging infrastructure. The state has earmarked about 5,500 enterprises for divestment and will sell shares in companies that are already publicly traded, including OAO Rosneft, the country’s biggest oil producer, First Deputy Prime Minister Igor Shuvalov said on Sept. 22.
“There’s a different type of attraction for different types of investors,” Hakansson said. “As Russia is maturing in its market development, you will see more” institutional investors interested in stable cash flow. “They will welcome things other than oil and gas to invest in.”
The government wants to generate 70 billion rubles ($2.4 billion) in 2010, 10 times the original target, by selling all or part of state stakes in 450 enterprises. Sales will consist mainly of airports and river and sea terminals.
Adds to Appeal
The world’s biggest energy exporter needs the funds after the global recession undermined commodity demand and pushed Russia’s economy into its worst contraction on record. Prices for crude oil, 30 percent of the country’s output, slumped by more than two thirds from its peak in July 2008 until the beginning of this year.
While the government needs to finance the budget shortfall, Russia also is seeking to attract private investors to help modernize derelict infrastructure. This adds to the appeal for investors, East Capital’s Chief Economist Marcus Svedberg said, because it increases growth potential. East Capital will target shares in assets linked to domestic demand, rather than stocks that track energy prices.
The fund lowered its holdings of oil and gas stocks to 37.7 of the total at the end of June, compared with 48 percent at the end of last year. It also increased holdings in banks, and bought up shares in the metals and mining industry.
Infrastructure Overhaul
Russian officials including Prime Minister Vladimir Putin have said they want to use crisis measures to overhaul infrastructure and become less reliant on oil and gas exports.
The country needs to spend $875 billion on developing its transportation network, Renaissance Capital said last year. Private investors may finance 80 percent of the $1 trillion the government predicts will be spent on an infrastructure overhaul until 2020, according to Standard & Poor’s.
Moscow and the surrounding region lose 400 billion rubles a year from traffic delays, while drivers waste more than 12 1/2 hours in congestion each month, the Transport Ministry estimates. The capital has an average of 650 traffic jams a day. Gridlock can only worsen as the number of cars is set to double by 2015, the ministry estimates.
Russia isn’t the only former communist country resorting to divestments to bolster finances. Poland plans a record $10 billion of asset sales through next year, offering stakes in power, oil, copper, phone and insurance companies to help plug a deficit the European Commission estimates will reach 7.3 percent of GDP in 2010. Belarus has targeted 2011 for selling a number of state-run companies.
Lower Valuations
“Most of the time Russia has lower valuations than Poland, for right or wrong, but that’s the case,” Hakansson said. “One reason is that there are very strong pension funds in Poland pushing up the valuations. But if you have the same rates of growth, but you have a lower price in Russia, we will be buying Russian assets.”
The ruble-denominated Micex Index, which has surged 120 percent this year as crude oil jumped to $79 a barrel, is priced at 13.13 times earnings. Poland’s WIG20 Index is traded at 16.12 time earnings, according to data compiled by Bloomberg.
“A number of these countries need to bring down debt, balance the budget or reduce the deficit. For Russia it’s not necessarily that. They are not that pressed for money in the short term,” Svedberg said. “There is a clear understanding that Russia needs more technology.”
Outperformed
As of the end of 2008, East Capital’s Russian fund, which oversees about 2 billion euros, returned 5.1 percent on average in the previous five years and brought in an average return of 17.2 percent since its inception in May 1998. It lost an average 18.8 percent in the past three years. The fund gained 53.6 percent in the first six months of this year, compared with a 56.9 percent jump in the benchmark RTS stock index during the same period, according to the fund’s first-half report.
Svedberg says investors can expect more privatization throughout the region as opportunities to buy into assets whose growth had been restricted by state ownership spreads.
To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@.
Last Updated: October 19, 2009 19:00 EDT
Bloomberg: Russia Needs $65 Billion in Debt Sales, Capital Economics Says
By Paul Abelsky
Oct. 19 (Bloomberg) -- Russia may need to sell $65 billion in debt over the next few years to finance its budget deficit, Capital Economics said in a note to clients today.
The government’s planned $18 billion bond sale next year is “just the tip of the iceberg,” Neil Shearing said in the note.
Russia’s economy suffered a record decline in the second quarter, with faltering global demand for commodities culminating in a 10.9 percent output contraction for the world’s biggest energy exporter. That’s depleted state coffers resulting in the country’s first budget deficit in a decade. Any bond sales will be difficult to price, according to Shearing, because of the illiquidity of Russia’s debt market.
“While this means that there is now plenty of scope for the government to issue debt in order to finance its budget deficits, the relative shallowness of sovereign debt markets will make it tricky for investors to price the forthcoming bond issue,” Shearing said.
Russia’s government debt is rated Baa1 at Moody’s Investors Service and BBB at Standard & Poor’s and Fitch Ratings. While investors can compare debt prices from countries with similar credit ratings to arrive at a “ballpark figure,” there are “good reasons to believe that the favorable conditions now facing emerging market bond issuers will not last for long,” Shearing said.
A sluggish global economic recovery may sap risk appetite, and commodity prices may slow, he said.
“In short, we expect that the environment for issuing sovereign debt is likely to be much less favorable this time next year,” Shearing said.
To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@
Last Updated: October 19, 2009 12:01 EDT
RenCap: CBR official suggests limitations on foreign borrowings
Rencap
October 20, 2009
Yesterday (19 Oct) Reuters quoted the Central Bank of Russia's (CBR)head of its financial markets department, Sergei Shvetsov, as saying that the state should possibly consider imposing a negative economic stimulus on private sector external borrowings. Shvetsov said the regulator is concerned that, according to CBR statistics, corporate sector external debt has increased by more than $22.1bn YtD, while the banks have decreased their foreign liabilities by $28.6bn. This means that even during crisis times, corporates are increasing their exposure to the foreign market.
Looking deeper, we believe the CBR is worried that positive capital account balance puts upward pressure on the rouble, in addition to the positive current account, destabilising the forex market, while in periods of massive shocks, it also has a sharp influence on the market, but in the opposite direction. As a possible solution to the problem Shvetsov offered a significant decrease of the maximum interest rate used for taxing external borrowings. Our key considerations are:
We believe that due to some technical accounting reasons, CBR data on corporate sector external borrowings may be significantly inflated because it includes trade finance and some other specific external obligations that are settled in kind. Intercompany transactions also may significantly influence this figure.
We believe the idea of a negative economic stimulus on external borrowings will face a lot of criticism from both major banks and corporates, as the foreign capital markets offer much longer and cheaper money than that available domestically. Therefore, we believe the CBR's idea, to some extent, contradicts the government's push toward decreasing interest rates in the Russian economy.
Overall, we do not see too many credit risks arising from the external borrowings in Russia. Even at their peaks, Russian banks' external debt did not exceed 20% of assets and was largely offset by sizeable foreign assets (compared to a 55% maximum in the Kazakh banking system). As for the corporates, in the past 12 months the general trend was toward replacing foreign borrowings with loans from the largest Russian banks.
Given the still-high hedging costs (three-year implied forward rates of around 8.50%), we believe that aside from the largest exporters, most Russian corporates are incentivised to borrow locally and in roubles. This is one of the key fundamental reasons of the very limited new eurobond and syndicated debt supply out of Russia even at interest rates that are affordable (and even below pre-crisis levels) for most of the largest corporate borrowers.
Maxim Raskosnov
Alfa's Natalia Orlova writes: We believe the CBR's concern over the increase in companies' foreign debt payments is not the main reason it wants to change the tax regime for foreign loans. With $303 bln in corporate foreign debt as of October 2009, Russia is still running a sustainable debt-to-GDP ratio of 37%. The main reason, we believe, is the $18 bln sovereign borrowing program expected to take place in 2010. Any limits on companies' foreign borrowing would reduce the cost of servicing state debt, so it is important for the government to prevent an increase in interest expenditures.
Businessneweurope: Russia's crisis was corporate
bne
October 20, 2009
The tax collection results for the first nine months of this year are out and underscore the corporate nature of this crisis, compared to the 1998 crash which hit the man in the street much harder.
Public finances have been walloped by the current crisis with total budget revenues down by a third year-on-year in the first half of this year, while the government has increased spending by half year-on-year to bolster the sagging economy.
However, the situation has improved in the last quarter with consolidate budget revenues (which counts both the taxes the regions collect and keep as well as the federal level revenues) was down a still bad 20.6% to RUB6.117 trillion for the in January-September. Excluding government non-budget funds, the tax service collected RUB4.94 trillion for the consolidated budget in January-September, down 24.4% on the year, reports Prime Tass.
Looking a bit further into the details of the tax payments and companies have been hit much harder than the economy as a whole with corporate profit taxes down by 53.3% year-on-year over the first nine months of this year to RUB936.8bn the tax service reported on Monday, which includes federal, regional, and municipal budgets. Corporate profit tax collection for just the federal budget fell even harder (some regions get to keep the tax collected) down by 76.3% on the year to RUB142.9bn in the same period.
Compare this with Russia's personal income tax collection, which was down by only 1% over the same period to RUB1.176 trillion, the Federal Tax Service said.
More encouragingly Russia's VAT collection - the most important tax in the budget that usually accounts for a third of total revenues - was actually up 11% on the year between January-September to RUB889.4bn. All VAT collection is transferred to the federal budget.
These numbers suggest that the average man continues to have a job and is still paid. Moreover they are still shopping but that companies are the ones that are losing money.
Business, Energy or Environmental regulations or discussions
RBC: Banks may lose licenses if interest rates remain high
RBC, 20.10.2009, Novosibirsk 11:35:57.Licenses of Russian banks, which received government support, but have not reduced their interest rates on loans for the real economy sector, may be revoked, Chairman of the Audit Chamber Sergei Stepashin said at the meeting of Siberia Federal District's regional heads of supervisory bodies in Novosibirsk. "We can simply revoke licenses of a couple of banks, and make others think carefully," he warned, noting that this was not any kind of threat to banks. Stepashin stressed that the government had allocated nearly RUB 5 trillion (approx. USD 170.3bn) of taxpayers' money for the support of the banking sector.
The official also indicated that the decrease in inflation in the last couple of months has prompted the Bank of Russia to cut discount rate to 10 percent, noting that commercial banks, however, maintained high interest rates for the real economy sector. With this in mind, the Audit Chamber's specialists will carefully examine commercial banks' use of support funds to see if "they are fulfilling their obligations."
Bloomberg: Russia Leads Advance in Emerging Markets on JPMorgan Upgrade
By Michael Patterson and Tian Huang
Oct. 19 (Bloomberg) -- Russian stocks surged the most worldwide, leading a rally in emerging markets, after JPMorgan Chase & Co. upgraded the country to “overweight” on improved earnings prospects at energy companies.
The benchmark Micex index added 3.7 percent to close at the highest level since Sept. 2, 2008, after JPMorgan’s Adrian Mowat made the recommendation in a report today. The Hong Kong-based chief Asian and emerging-market strategist also raised his rating on global developing-nation energy shares to “overweight,” helping to spur gains in oil producers from Beijing-based PetroChina Co. to Brazil’s Petroleo Brasileiro SA. The MSCI Emerging Markets Index rose 1.1 percent.
Russia’s Micex has rallied 120 percent this year as oil jumped to $79 a barrel from $44 on signs the global economy is emerging from recession. Strategists and investors from Goldman Sachs Group Inc. to UBS AG and Templeton Asset Management Ltd.’s Mark Mobius have predicted in the past month that Russian shares will keep advancing as higher commodities boost profits and lift the world’s biggest energy exporter from its sharpest economic contraction on record.
Russian and global energy stocks are “following the oil price higher,” JPMorgan’s Mowat wrote. “We acknowledge that the upgrade may be viewed as chasing a chart, but the growing influence of financial investors in commodity markets has changed them into leading indicators.”
An overweight recommendation means investors should hold more of the shares than are represented in benchmark indexes. JPMorgan didn’t name any companies in today’s report.
Rosneft, Petrobras
OAO Rosneft, Russia’s largest oil company, added 2.7 percent and OAO Lukoil, the second-biggest, climbed 2 percent. The ruble strengthened 0.5 percent against the dollar, while oil rose 1.4 percent to $79.61 in New York trading. Copper rallied 3.9 percent in London, helping spur a 4.8 percent gain in Moscow-based mining company OAO GMK Norilsk Nickel.
Petrobras, Brazil’s state-owned oil producer, gained 2.6 percent to the highest price since July 2008. Workers voted to end a strike ahead of talks with the company tomorrow, a union spokeswoman said. The Bovespa index rose 1.6 percent.
The Shanghai Composite Index jumped 2.1 percent. Hong Kong- traded shares of PetroChina, the world’s second-largest company by market value after Exxon Mobil Corp., added 3 percent.
Investors fled Russia last year, taking capital outflows to a record $132.7 billion, as crude tumbled amid the global recession. A five-day war with Georgia in August 2008 fueled speculation that overseas companies would reduce investments, after the conflict was condemned by the U.S. The Micex tumbled a record 67 percent last year.
‘Cheap’ Valuations
Shares rallied in 2009 after valuations fell to the cheapest levels among the world’s biggest equity markets. Russian stocks are the most-favored among global emerging-market investors, Bank of America Corp. wrote in a research report last week.
Mark Mobius, who oversees about $25 billion as Templeton’s executive chairman in Singapore, said in a Sept. 29 interview that Russian shares may climb to a record by the end of next year as “cheap” valuations attract more investors.
The extra yield investors demand to own developing nations’ bonds instead of U.S. Treasuries rose 2 basis points to 3.01 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index.
To contact the reporters on this story: Michael Patterson in London at mpatterson10@; Tian Huang in New York at thuang57@.
Last Updated: October 19, 2009 17:50 EDT
Citi: Russian Aluminium to list on Euronext?
Citi
October 20, 2009
Vedomosti reports that Russian Aluminium has applied for a listing on Euronext, the Paris stock exchange. The listing may be in addition to the earlier announced plans to list on the Hong Kong stock exchange.
Vedomosti reports the targeted valuation as USD3bn for 10% of the stock. Based on its reported 1H09 aluminium production of 2 million tones and the spot aluminium price, this would imply net sales of USD3-3.5bn in 1H09. The company had total debt of USD16.8bn at the end of 1H09, based on its own press release. Based on these figures USD30bn for 100% of equity appears high compared to that of Norilsk Nickel - a company with 1H09 net sales of USD4.1bn, EBITDA margin of 34%, total debt of USD6.1bn and current market capitalisation of USD26.3bn.
RIA: Volkswagen launches full-cycle production in Russia's Kaluga
10:1420/10/2009
MOSCOW, October 20 (RIA Novosti) - Volkswagen's subsidiary in Russia is launching full-cycle production of cars in the city of Kaluga southwest of Moscow, the German automaker said in a statement Tuesday.
Prime Minister Vladimir Putin will attend the ceremony to launch the assembly of completely knocked-down kits, which includes welding, painting and trimming.
"We in Volkswagen are convinced that Russia is a car market of the future. We have already invested over 570 million euros [$850 million] in our Kaluga plant and firmly intend to continue investing in Russia's economy," Volkswagen said.
Car production at the Kaluga plant began in the fall of 2007. In 2008 the plant produced over 60,000 cars, and the number exceeded 90,000 as of October 2009.
The plant produces VW Passat, Polo, Jetta, Tiguan, Touareg cars, as well as Skoda Fabia, Octavia, Octavia Tour and Superb cars. In July it started producing Caddy and Transporter models.
The Kaluga plant employs over 1,800 people, and the number of employees could reach 3,000 in 2010, when the plant is expected to reach its design capacity of 150,000 cars a year.
Bloomberg: AvtoVAZ Says Seeking Creditor Protection Is Option (Update4)
By Anastasia Ustinova and Kiyori Ueno
Oct. 19 (Bloomberg) -- OAO AvtoVAZ, Russia’s largest carmaker, said seeking protection from creditors is an option it may consider as the Russian government asks for help from partner Renault SA amid plunging auto sales.
The Russian government has given AvtoVAZ 25 billion rubles ($853 million) in emergency loans, while the carmaker has slashed salaries and announced plans to eliminate 21,773 jobs. AvtoVAZ will owe 76.3 billion rubles to financial backers and 9.8 billion rubles to suppliers by the end of the year, the Industry Ministry said last week.
“Seeking protection from creditors is one of the options that our company is considering,” Alexander Shmygov, an AvtoVAZ spokesman, said in a telephone interview today.
Renault, the second-biggest French carmaker, paid $1 billion for 25 percent of AvtoVAZ in 2007 and is discussing its role in a recovery plan with other shareholders including the Russian government. Prime Minister Vladimir Putin said earlier this month Renault would have to invest more cash or see its stake diluted.
Carlos Ghosn, chief executive officer of both Renault and Nissan Motor Co., said he’s prepared to support AvtoVAZ.
It’s “very difficult not being in trouble,” Ghosn told reporters in Tokyo today. “We understand that. We are here to support AvtoVAZ.”
Convertible Bonds
As it seeks to avoid bankruptcy, the Russian carmaker plans to sell 50 billion rubles of convertible bonds to state banks, Igor Burenkov, a spokesman for AvtoVAZ, said today.
The Russian carmaker will fire 9,075 workers of “pension age” and 5,267 of “pre-pension age,” AvtoVAZ President Igor Komarov said today in an e-mailed statement. The manufacturer also will lay off 7,431 employees of “working age” who may be rehired after production is modernized in two years, he said.
“The plans for financial renewal can be varied,” Deputy Industry and Trade Minister Andrei Dementiev told reporters in Moscow today. “Let’s look at their plan of action and then think about the instruments for realizing it.”
AvtoVAZ, Renault and Nissan will invest 240 million euros ($359 million) to revamp production and make five new models, Burenkov said on Oct. 16. Renault and AvtoVAZ will begin joint production of vehicles based on the Boulogne-Billancourt, France-based carmaker’s no-frills Logan sedan in 2012, with Nissan models to follow, Komarov told reporters Oct. 9. Renault and Nissan will provide 75 percent of the investment, he said.
Common Platform
Ghosn said the three carmakers must work together to be competitive in Russia. “The only way you can do this is to have a common platform with AvtoVAZ, Renault and Nissan and with the common platform, we derive three different cars with common suppliers, big volume,” he said. “This is something on which we are working.”
Russian sales of new cars and light commercial vehicles fell 52 percent in September from a year earlier, according to the Moscow-based Association of European Businesses. AvtoVAZ’s Lada remained the most popular brand, with sales of 28,109 in September, a 43 percent decline from a year earlier.
The Russian carmaker said last week that its first-half loss widened to 19.5 billion rubles from 2.15 billion rubles a year earlier. Revenue declined 46 percent to 53.1 billion rubles. The carmaker plans to make 300,000 vehicles this year, or fewer than three units per worker. Last year, AvtoVAZ manufactured about 920,000 cars.
To contact the reporters on this story: Anastasia Ustinova in St. Petersburg, Russia, at austinova@; Kiyori Ueno in Tokyo at kueno2@
Last Updated: October 19, 2009 13:36 EDT
OCTOBER 19, 2009, 1:49 P.M. ET
WSJ: AvtoVAZ Plans Bond Issue
By WILLIAM BLAND
TOGLIATTI, Russia -- Troubled Russian car maker OAO AvtoVAZ, part-owned by France's Renault SA, said it plans to issue convertible bonds worth 50 billion rubles ($1.7 billion) to repay debt, adding it won't rule out filing for bankruptcy if refinancing efforts are unsuccessful.
If it succeeds in refinancing its debt to Russian state-controlled banks through the bond issue, for which it wants government backing, AvtoVAZ will seek to borrow at market rates to finance an investment program through 2014, Chief Financial Officer Oleg Lobanov said Monday. Otherwise, it is prepared to consider restructuring its debt to state-controlled banks including OAO Sberbank, OAO Bank VTB and state development bank Vnesheconombank, he said.
The unprofitable car maker, based in the Russian city of Togliatti, has been cutting its bloated work force to cope with a slowdown in demand. Chief Executive Igor Komarov aims to reduce the work force, which totaled 102,000 on July 1, to 96,000 as of the beginning of this month, to 90,000 by Dec. 1 and to about 80,000 by 2012. AvtoVAZ's plant made eight cars an employee in 2008, compared with 28 cars an employee at Renault's Moscow factory.
Renault bought a 25% stake in AvtoVAZ last year with the goal of helping modernize the ailing car maker, still best known for its boxy, outdated Lada sedan. The Lada brand accounted for almost a quarter of the cars sold in Russia last year, but demand has fallen by more than half as an economic downturn boosts unemployment and reduces bank lending.
To cope, AvtoVAZ has been cutting production and worker hours, and average salaries have been dropping as a result, persuading some employees to leave of their own accord, said Vladimir Novikov, deputy head of personnel for the car maker's assembly line.
AvtoVAZ is now seeking a second wave of government backing to stave off creditors, underlining its failure to adapt over the past decade, when foreign car makers broke its dominance of the market.
The company's management has tacitly recognized the limitations of its Lada brand, saying it plans to assemble cars under foreign brands by 2012. Of five new model lines planned, two will come under the Renault brand, with one new line based on a design from sister company Nissan Motor Co. and a further two "ultrabudget" cars based on AvtoVAZ's Lada Kalina, the company's head of strategy, Grigory Khvorostyanov, said Friday.
Plans to launch five new models in 2012 "appear to be extremely ambitious, especially taking into account the company's current financial situation," VTB Capital analyst Elena Sakhnova said Monday.
"We hope that as a result of our efforts, AvtoVAZ can start a new life." Mr. Komarov said Monday, at his first news conference since he joined the company.
"Our first goal is to avoid bankruptcy, i.e. a complete halt in production, " Mr. Khvorostyanov said Monday.
Politicians and shareholders have for several weeks been debating the future of AvtoVAZ, Russia's largest car maker. Last month, Prime Minister Vladimir Putin raised the stakes, warning that Renault's 25% stake could be diluted if it doesn't help bail out the company.
Renault has declined to comment on AvtoVAZ's plans. The French company said it will meet with Russian Deputy Prime Minister Igor Shuvalov in mid-November.
— Jacob Gronholt-Pedersen and William Mauldin in Moscow contributed to this article.
Write to William Bland at William.Bland@
: Russia to auction poultry import quotas 20 Oct 2009
The Russian government is planning to change the mechanism of meat and poultry import quotas allocation by selling part of them through the auction, Russian media reports.
According to sources in the Russian government, this will help to stimulate competition in the Russian meat market, making it more competitive in Europe. However, most of the local producers believe that this will only harm the local industry resulting in monopoly and higher prices.
According to the press service of the government, for the next 3 years meat import quotas for beef, pork and poultry will be changed. For example, poultry quotas in 2010 will amount to 780,000 t versus 931,000 t in 2009, while in 2012 they will be reduced up to 550,000 t.
In addition, the Russian government has also agreed to a mechanism for quotas allocation: starting from the next year 70% of the quotas will be divided among the producers on a historical basis (based on the volume of imports in 2007-2009), while the remaining 30% will be put up for auction. The government believes that this approach is optimal and provides the development of strong competition in the Russian meat market.
Meanwhile, most of the Russian meat producers have already criticised the new measures. According to the chairman of the Russian Agri-Industrial Union, Ivan Obolentsev, the new measures may undermine the market, leading to shortages of meat, higher prices for it and the expansion of foreign companies, while a CEO of the Russian Institute of Agricultural Market of Russia Dmitry Rylko believes that a new way of quotas allocation will contribute to price increases.
By Evegen Vorotnikov
EasyBourse: Russia's MTS Raises '09 Capex Forecast To $1.8 Billion – Interfax
Publié le 19 octobre 2009
MOSCOW -(Dow Jones)- OAO Mobile TeleSystems (MTS) said it is raising its estimate for capital expenditure in 2009 to $1.8 billion from $1.5 billion, Interfax news agency reported Monday.
Revenue in 2009 will be about $8.25 billion, while its profit margin based on operating income before depreciation and amortization will be more than 45%, the newswire said.
Agency Web site: interfax.ru
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Steel Guru: TMK Q3 pipe shipments up by 15pct over Q2 due to demand
Tuesday, 20 Oct 2009
The Russian pipe producer TMK Group expects that the implementation of large scale oil and gas pipeline projects will contribute to a further increase of its shipment volumes in the fourth quarter of 2009, although full year shipments will remain below 2008 volumes due to the first half drop.
Accordingly, in Q3 2009 TMK increased its pipe shipment volumes by 15%QoQ to 716,000 tonnes due to the start of a recovery in demand for pipe products and the strengthening of the company's market share.
TMK's OCTG and line pipe shipment volumes reached 377,000 tonnes in Q3 up by 8%QoQ. This sizable increase is attributed to the growth in demand from TMK key oil and gas customers. Meanwhile, in Q3 TMK also increased its shipment volumes in the premium segment by 49%QoQ to 43,000 tonnes and also upped its shipments of industrial pipes, in order to meet the increase in demand. Depending on the segment, the growth in industrial pipe shipments varied between 20% and 47%.
However, as a result of the sharp H1 decrease in demand for pipe products the shipment volumes for the full year 2009 will remain down. During the first nine months of 2009, TMK registered a decrease of 21%YoY in its pipes shipments to 1.92 million tonnes. Meanwhile, due to the successful launch of Volzhsky longitudinal welded large diameter pipe mill, TMK LD shipments started to pick up in the Q2 of this year and are expected to register a significant growth in H2 with the implementation of Gazprom and Transneft projects such as Sakhalin-Khabarovsk-Vladivostok gas pipeline and the second phase of the Baltic pipeline system.
In addition, the pipe shipments from TMK's American division, TMK IPSCO have also registered a significant increase in the third quarter of the current year reaching 96,000 tonnes up by 52%QoQ on the back of increased oil and gas pipe demand, especially for OCTG products.
TMK expects its US assets to reach a 70% utilization rate by the end of the year. These expectations are largely conditional to a recovery in US gas prices, and given their current low levels, the company forecasts a steep market upturn in 2010 as opposed to late 2009.
The company said in its statement "Positive oil and gas drilling and production dynamics in Russia and North America will further stimulate TMK shipment volumes. Nevertheless, as a result of the sharp demand contraction in the H1 of the year, the company expects full year 2009 shipment volumes to remain below 2008 volumes."
19.10.2009
Oil and Gas Eurasia: Wartsila Opens New Service Center in Russia
Wärtsilä has opened a Service Centre in Murmansk, Russia to serve the rapidly growing number of vessels in northern waters. The Service Centre demonstrates Wärtsilä's commitment to expand in line with the increasing marine activity in the Barents Sea region. To emphasize the importance of co-operation, Wärtsilä's CEO and President, Ole Johansson and the Governor of the Murmansk Oblast region of Russia, Dmitry Vladimirovich Dmitrienko, jointly signed a document of goodwill.
Being the only year-round ice-free port in north western Russia, Murmansk is rapidly being developed as a major transport hub. It is also the operational centre for the development of the vast Shtokman gas condensates field. The port is home to more than 20 maritime companies, and is attracting an increasing number of international companies to the region.
"Local presence and availability are of utmost importance in assuring efficient customer support. The new Service Centre in Murmansk is a further step in our strategy to continuously develop our unique worldwide service network," said Christoph Vitzthum, Group Vice President, Wärtsilä Services.
Full range of sales and service support
The Wärtsilä Murmansk Service Centre provides a full range of sales and support services for all local marine and offshore customers. The service capacity will enable Wärtsilä to offer more efficient and fully focused support to the growing fleet of merchant vessels, offshore vessels, offshore platforms, and offshore facilities in the region.
The Murmansk Service Centre covers an area of 280 m2 and includes both workshops and offices. The Service Centre offers overhauling of main and auxiliary marine engines, as well as maintenance and repairs of ancillary equipment, pipework, electrical equipment, ship automation systems, and other equipment.
The Murmansk service workshop is being staffed initially with 15 employees, but this number is expected to increase in the near future. The majority of employees are being hired locally. They will be trained both at the Wärtsilä Land & Sea Academy in Finland, and on site according to Wärtsilä’s global standards.
Copyright 2009. . All rights reserved.
Bloomberg: Rostelecom’s Kolpakov Cuts 2009 Sales Forecast, Kommersant Says
By Maria Ermakova
Oct. 20 (Bloomberg) -- OAO Rostelecom Chief Executive Officer Anton Kolpakov said the company’s board last month reduced the sales forecast for this year, Kommersant reported, citing an interview with Kolpakov.
Rostelecom expects 2009 revenue at 61 billion rubles ($2.09 billion), excluding sales from subsidiaries, down from 65 billion rubles the company forecast earlier, Kolpakov told the newspaper.
Separately, the long-distance telephone operator’s board in November will consider whether to de-list the company’s shares from the U.S. bourses before Rostelecom’s parent OAO Svyazinvest begins its reorganization process, the CEO was cited as saying by Kommersant.
To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@.
Last Updated: October 20, 2009 02:16 EDT
Telegraph.co.uk: Russians position for nanotech future
RUSSIAN pledges to spend billions in public funds to develop its nanotechnology industry are being treated cautiously by leading British technology companies.
By Richard Tyler
Published: 5:49PM BST 19 Oct 2009
RUSSIAN pledges to spend billions in public funds to develop its nanotechnology industry are being treated cautiously by leading British technology companies.
President Dmitry Medvedev said the country will channel 318bn rubles (£6.3bn) into the development of a nanotech infrastructure to increase exports of products built in Russia using the technology.
"We want to lead the process, and we have the intellectual potential, the organisational skills and the finance," he said.
Oxford Instruments, a British nanotechnology company, said, however, that that it may take time for the cash to become available.
Frazer Anderson, a business development director, from its Bristol-based plasma technology division, said: "Their timescales are a lot longer than ours. If they say $10bn, they probably will do that over the next 10 to 15 years." He added: "If you see big numbers it's excellent but the reality is that it does not always come to pass."
However, Mr Anderson said his company had seen an increase in technology spending from governments worldwide as part of their fiscal stimulus packages.
"We do see President Obama putting more into solar and solid-state lighting. We see that in China. India is on photovoltaics," he said.
This trend had led to more demand for Oxford's equipment, used to create thin-film or nano-tech devices in everything from the motion sensors in the Nintendo Wii games console to Osram light-emitting diode lights and pure research at institutes such as MIT and Harvard, and Max Planck in Germany.
Oxford exports 90pc of what it sells and all its manufacturing is in the UK. It just sent £200m of equipment to Saudi Arabia's King Abdullah university of science and techology.
Mr Anderson said that to win work in Russia, companies had to understand procurement. He said the country operates three buying houses for technology purchases. These have just been privatised but operate in a similar way to when they were state-owned. British companies keen to sell have to use an intermediary, which is licensed. However, these companies will only deal with Russian agents. "They influence things behind the scenes," said Mr Anderson.
• The UK Nano and Emerging Technologies Forum will be in London on November 3-4, hosted by UK Trade & Investment. Rusnano, a Russian agency investing in nanotechnology projects, is attending.
NewsRoom Finland: Finnish hauliers pay up to EUR 20,000 a year in bribes at Russian border –Report
20.10.2009 at 10:42
Finnish hauliers pay between 10,000 and 20,000 euros a year in bribes to Russian border officials, according to Finnish-Russian report released Monday.
The report added that the average haulier sustained further costs of more than 50,000 euros a year in unofficial fees and delays attributable to corruption.
About 30 officials and businessmen were interviewed on either side of the border. The study was commissioned by the justice ministry and carried out by the European Institute for Crime Prevention and Control, the Finnish Research Institute of Legal Policy and the Russian Academy of Justice.
Activity in the Oil and Gas sector (including regulatory)
Politiken.dk: Denmark OK’s Russian Baltic pipeline
20. okt 2009 kl. 09:48
The Danish Energy Agency has approved Russia’s controversial North Stream pipeline across the Baltic. DONG Energy has doubled its orders for Russian gas.
Denmark will be officially providing Russia’s giant gas company Gazprom the go-ahead today to lay a controversial pipeline through Danish waters in the Baltic Sea. The approval comes after several months of heavy diplomatic activity between Denmark and Russia, including a personal phone call from the Russian Premier Vladimir Putin to Prime Minister Lars Løkke Rasmussen.
”We have given our approval after evaluating all the environmental problems. We have found the project to be fully safe,” says Energy Agency Engineer Kirsten Lundt Eriksen.
The North Stream project, which is to lead gas from Vyborg in Russia to Greifswald on the German coast, has been strongly opposed by several eastern and central European countries, but now seems closer than ever to reality.
North Stream will enable Russia to cut off gas to its eastern neighbours while maintaining supplies to Western Europe. Disagreements with Ukraine in particular have given rise to temporary cut-offs in supplies in recent years.
Critics
Critics of the pipeline say that Russia will use its gas pipeline in the Baltic for strategic reasons.
””Yesterday it was tanks, today it’s oil and gas,” Zbigniew Siemiatkowski, the former head of Poland’s security service tells the New York Times, which adds that the Russian premier put pressure on the government in Copenhagen to approve the project in a recent telephone call to the Danish prime minister.
The prime minister’s office has confirmed that Prime Minister Lars Løkke Rasmussen recently received a telephone call from Premier Putin, but declined to say what the conversation was about. Løkke Rasmussen is due to go to Russia on an official visit in November, while the Russian president is due on a reciprocal visit next year.
DONG
Danish approval comes as Denmark’s largest energy provider DONG Energy has decided to double an already announced contract for gas supplies from Gazprom, which will be supplying an annual two billion cubic metres of gas to Denmark by 2012 at the latest.
Dong Energy, however, denies that Denmark will become dependent on Russian gas.
”This is not about dependency on Russia, but on not being dependent on only one source. We are currently 100 percent dependent on North Sea gas. We are thinking about the security of supply to Denmark and Sweden, both of whom currently get all their supplies from Denmark,” says DONG Spokesman Ulrik Frøhlke.
Sweden
Sweden is also currently deciding whether to approve North Stream, which has caused major debate in Stockholm. Russia’s original proposal was to establish a manned platform in Swedish waters, but after that element has been dropped, Sweden seems close to approval.
The deadline for protests against the pipeline is today, after which the Swedish government will handle complaints and decide on its position.
Security
Danish authorities have said that they do not have security issues with the pipeline as long as Russia asks permission before inspecting its pipeline in Danish waters.
But Copenhagen University Security Expert Assistant Professor Peter Viggo Jacobsen says the pipeline is without doubt part of Russia’s geo-political policy.
”Russia is doing what it can to be able to run as many pipelines as possible and deliver gas to Europe in order to be able to put pressure on us,” Jacobsen says.
”(The supplies) can be used as pressure when parties disagree and the gas can be stopped. But apart from that Russia also has an interest in earning more money. So there is both a commercial and geo-political interest. It’s a good card to have if you want to get something from the EU,” Jakobsen says.
Gazprom
According to Gazprom, which currently covers 28 percent of the EU’s gas requirement, North Stream is purely commercial, energy strategic and has nothing to do with politics.
North Stream Director Matthias Warnig in Germany tells the New York Times that the fears of Eastern Europe are unfounded and that Europe needs Russian gas.
”The Wall was brought down twenty years ago,” Warnig says.
RIA: Turkey approves Black Sea exploration for South Stream
22:5819/10/2009
MOSCOW, October 19 (RIA Novosti) - Turkey's government has approved geological exploration work for the South Stream gas pipeline in its Black Sea economic zone, the Kremlin quoted the countries' presidents as saying on Monday.
During a phone conversation, "Turkey's president said that in line with earlier agreements... the Turkish government has made all necessary decisions to approve the conducting of geological exploration work in Turkey's exclusive economic zone in the Black Sea for the implementation of the South Stream gas pipeline project," the Kremlin said.
Dmitry Medvedev thanked Abdullah Gul and said he hopes the decision will strengthen strategic bilateral ties.
Turkey's energy minister said earlier in the day that his country will officially hand Russia documents approving the laying of the South Stream gas pipeline along its seabed on October 20.
Taner Yildiz spoke to journalists in Milan after a three-party meeting involving Russian Deputy Prime Minister Igor Sechin and Italian economics minister Claudio Scajola.
On August 6, Russia and Turkey signed agreements on cooperation in the gas sphere, envisioning in particular Turkish consent for the construction of the South Stream pipeline, in its territorial waters - an alternative to the Nabucco pipeline important for Ankara.
The 25 billion-euro ($36.5 billion) South Stream project is designed to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries, bypassing Ukraine, which has frequent disputes with Russia over gas supplies and transits. The pipeline's capacity is expected to be eventually increased to 63 billion cubic meters.
Itar-Tass: Turkey allows Russia to begin South Stream work in its economic zone
19.10.2009, 21.38
MOSCOW, October 19 (Itar-Tass) -- Turkish President Abdullah Gul telephoned President Dmitry Medvedev on Monday to inform him of Turkey’s decision to allow geological exploration in its economic zone as part of the South Stream project.
“In accordance with the earlier understandings reached at the top and high levels, the Turkish government has made all the necessary decisions to issue permissions for geological exploration in Turkey’s exclusive economic zone in the Black Sea for the sake of the South Stream gas pipeline project,” Gul said.
Medvedev thanked Gul and expressed confidence that “this decision will facilitate further strengthening of the strategic nature of Russian-Turkish relations.
The two presidents also discussed cooperation on the global agenda in international organisations.
South Stream, which will be jointly built by Gazprom and ENI of Italy, will eventually take 30 billion cubic meters of Russian natural gas a year to southern Europe, with Greece becoming a transit state on the southern arm of the pipeline pumping gas to Italy.
Analysts have said that the project, which aims to link Gazprom's Siberian gas fields with Europe and is seen as a competitor to the EU-backed Nabucco pipeline, will cost around 10 billion euro, or 15.82 billion U.S. dollars.
The projected South Steam gas transit pipeline starts at the Beregovaya compressor station at the Russian Black Sea coast. It would run through the Black Sea to the Bulgarian port of Varna, where it splits - the southwestern pipe would go to southern Italy via Greece, whereas the northwestern route would go through Serbia to northern Italy, possibly including Croatia, Slovenia, Hungary, and Austria.
South Stream is scheduled to become operational in 2013. The 900-kilometer-long undersea section of the pipeline will run from the gas compressor facility at Beregovaya, on Russia's Black Sea coast, near Arkhipo-Osipovka, towards the city of Burgas, in Bulgaria. The sea's maximum depth on this route is 2,000 meters.
On the ground the pipeline will split. One (southwestern) branch will be laid across Bulgaria and Greece and the Adriatic Sea towards Brindisi, in Italy, and the other (northwestern one) may follow either of the two routes still being considered - Bulgaria-Serbia-Hungary-Austria, or Bulgaria-Serbia-Croatia, Slovenia-Austria.
The first gas should enter the Nabucco system (about 15 billion cubic metres) in 2014. The main suppliers are expected to be Azerbaijan and Iraq, which have so far not signed the appropriate agreements.
In the future, the consortium hopes to get Turkmen gas, but Turkmenistan, which had earlier agreed to join the project, did not attend the signing ceremony in Ankara.
RIA: Turkish oil pipeline project to involve three Russian companies
21:3919/10/2009
MILAN, October 19 (RIA Novosti) - Three Russian oil companies signed an agreement on Monday with Turkey's Calik Enerji and Italy's Eni on a pipeline project to pump Caspian oil to the Mediterranean via Turkey.
Turkey launched the $1.5-billion Samsun-Ceyhan project with the Italian energy giant in 2007, and has repeatedly invited Russia to join it.
The three Russian companies to participate are state-run Rosneft, oil pipeline monopoly Transneft, and shipping company Sovcomflot, one of the world's leading energy transporters.
According to Eni, the memorandum of understanding signed at the talks in Milan "envisages the commitment to discuss the definition of the economic and contractual conditions for Russian companies to participate" in the project.
Russian Deputy Prime Minister Igor Sechin, who chairs Rosneft, Italian Economic Development Minister Claudio Scajola, and Turkish Energy Minister Taner Yildiz also signed a memo of understanding to set up a working group for the Samsun-Ceyhan project.
Sechin said Russia's largest independent oil producer LUKoil has also shown an interest in supplying oil via the pipeline.
"Other Russian companies, in particular LUKoil, are showing an interest in supplies. We are also holding talks with third countries," he said.
The Turkish energy minister said the project would improve mutual confidence among participants.
"The project will become part of an energy security system for many European countries, and not only for the countries involved in it," Yildiz said.
The pipeline's projected capacity will be 60-70 million tons of oil a year (1.2-1.4 million bbl/d).
The project is designed to reduce the oil transportation load on the Black Sea Strait of Bosporus and the Dardanelles on the Marmara Sea, which handles some 150 million tons (1.1 billion bbl) annually.
RIA: Russia's No.2 gas producer Novatek to raise output by 44%
22:0819/10/2009
MOSCOW, October 19 (RIA Novosti) - Russia's largest independent gas producer Novatek will be able to increase its gas output by around 44% annually due to the upgrade of facilities at a major deposit, the company said on Monday.
With the launch of two facilities for low-temperature gas separation at the Yurkharovskoye field in the Arctic, Novatek will be able to produce up to 23 billion cubic meters of natural gas and 2 million metric tons of gas condensate there, representing an increase of 7 bcm.
The launch will push the company's total gas output up to 23 bcm annually.
Novatek produced 11.71 bcm of natural gas and 895,000 metric tons of gas condensate at the field in 2008.
Proven reserves at the Yurkharovskoye field amount to 343 bcm of gas and 17 million metric tons of gas condensate. Novatek has been developing it since 2003.
Upstreamonline: Novatek boosts flow from Arctic field
Wire reports
Russian gas player Novatek will be able to increase its output capacity by almost 20% after it upgraded infrastructure at its major gas field, the company said today.
Novatek said it launched two additional processing trains for separating natural gas as it implements the second stage of development at the Arctic Yurkharovskoye field.
This will provide the company "with the potential to increase annual productive capacity at the field by seven billion cubic metres of natural gas and approximately 600,000 tonnes of unstable gas condensate".
"With the launch of the second stage, Novatek has the productive capacity to produce up to 44 Bcm of natural gas per annum," the company said in a Reuters report.
The Yurkharovskoye field, which Novatek has been developing since 2003, is within the Polar Circle southeast of the Tazovsky peninsula.
It has proven reserves of 343 Bcm of natural gas and 17 million tonnes of liquid hydrocarbons.
Last year, the field produced 11.71 Bcm of natural gas and 895 thousand tonnes of gas condensate.
Last year, Novatek's total gas output rose by 8% to 30.87 Bcm.
Monday, 19 October, 2009, 18:29 GMT | last updated: Monday, 19 October, 2009, 18:29 GMT
Alfa: First glimpses of LUKoil's upcoming 10-year strategy
Alfa
October 20, 2009
Yesterday LUKoil's CEO, Vagit Alekperov, announced that the company will approve its long-term development strategy this month, which will see some $100 bln invested over a ten-year period.
According to the strategic development program, LUKoil will complete the modernization program of its Russian refining assets by 2019, which will bring the average refining depth of its refineries to 90%. Mr. Alekperov also mentioned that the company is also planning to build new petrochemical facilities.
The main source for the production growth in the next decade will be foreign expansion, in particular in West Africa and Venezuela. If Iraqi concessions are awarded, the level of capital expenditures will rise accordingly
These are the first glimpses of LUKoil's ten-year strategy, which investors are eagerly waiting for. Unfortunately, the issue of how the company will grow domestically has not been addressed at all. It seems that LUKoil is resigned to the fact that access to domestic growth is limited or non existent.
Iraq aside - where the company can presumably wield some influence as a result of past Russian and Soviet contacts in the country - LUKoil has no visible expertise and/or experience to advance meaningful technologically complex exploration projects overseas and therefore with domestic production growth issues left unaddressed, this news is not likely to impress investors.
Ronald P. Smith
RBC: Lukoil chief rebukes possible gasoline station chain's divestment
RBC, 19.10.2009, Yekaterinburg 16:51:30.The Federal Anti-Monopoly Service's proposal on the divestment of gasoline stations from oil companies may affect the cost and quality of light oil products, President of the Russian oil giant Vagit Alekperov told reporters in Yekaterinburg today. He pointed out that such practice had proven to be a failure abroad. "The separation of extraction, production and sale processes will have a negative result, as in case with a vertically integrated company an unsatisfied consumer may complain to the management and make suggestions to it. Furthermore, the existing system allows the company to have a more flexible pricing policy during the crisis," Alekperov observed.
The Moscow Times: Alekperov: Oil Firms Belong in Retail
20 October 2009
The Moscow Times
LUKoil chief Vagit Alekperov on Monday blasted the Federal Anti-Monopoly Service’s suggestion that it might force oil companies out of the retail business, saying it would lead to a less stable market.
“Nowhere in the world has separating retail, refining and drilling ever led to positive trends,” Alekperov told reporters in Yekaterinburg, Interfax reported. “We can guarantee quality along the entire production chain.”
Earlier this month, Anatoly Golomolzin, a deputy head of the anti-monopoly service, said the agency would consider forcing oil companies to leave the gas station business unless they change the way they price oil products.
Alekperov also said U.S. major ConocoPhillips, which owns 20 percent of LUKoil, was not planning to sell shares. “I met with the president of ConocoPhillips last week, on Friday, and we talked about these matters,” he said.
UralSib: Rospan may double TNK-BP's gas production
UralSib
October 20, 2009
Rospan production may reach 15 bcm by 2015. Rospan International, which is 100%-owned by TNK-BP (TNBP - Hold), may boost its production to about 15 bcm by 2015 from the current 2.3 bcm, but only if Gazprom provides access to the gas trunk-pipeline system, Rospan CEO Dmitry Orlov said yesterday. The company has received the technical requirements for access to the pipeline from Gazprom, and recently began designing a pipeline from its fields to the Unified Gas Supply System (UGSS). TNK-BP invested $128 mln into Rospan in 2007-08; but the total required to accelerate production to the target level of 15 bcm is an estimated $5 bln.
Production limited artificially. Rospan holds licenses to develop two gas and condensate fields, Vostochno-Urengoiskoye and Novo-Urengoiskoye, in the Yamal Nenets autonomous district with total estimated C1+C2 gas reserves of 891 bcm of gas and 133 mt of gas condensate under Russian classification. Although the company has significant production growth potential, its production is artificially limited due to issues with access to the trunk pipeline. The company's gas output was 1.5 bcm in 2007 and 2.5 bcm in 2008, which is a respective 17.6% and 24.7% of TNK-BP's total gas output. Gazprom subsidiary Mezhregiongaz and Rospan agreed in 2008 to establish a JV to market Rospan's gas.
Potentially positive for TNK-BP valuation. The fact that Rospan could double TNK-BP's gas production from 10.2 bcm in 2008 to about 23 bcm by 2015 is well known by the market. However, the timing and capex of Rospan development remain uncertain. Given the latest news, we estimate that development of Rospan could add 16.3% to TNK-BP's target price, although until approved, we have not incorporated this in our base-case DCF-model, as the key issues - access to the UGSS and gas-market distribution - remain unsolved. We reiterate our Hold recommendation on TNK-BP. Victor Mishnyakov
Gazprom
Kyiv Post: Eni chief says South Stream construction could begin late 2010
Today, 10:31 | Interfax-Ukraine
Moscow, October 20 (Interfax) - Construction of the South Stream gas pipeline across the Black Sea bed could begin towards the end of next year, Paolo Scaroni, chief executive of Italy's Eni, told the Russia Today TV channel.
Scaroni said a feasibility study should be rounded off early next year, and that economic and project management issues would then have to be resolved prior to a final investment decision being reached.
Turkey said Monday that its government had authorized all necessary permits for geological work in its Black Sea zone in the interests of the South Stream project.
Russian Deputy Prime Minister Igor Sechin told Russia Today that "concrete work" was now under way. He said "the closer we get to physically implementing the project, the more partners we will have. We are extending invitations to all and are prepared to work with everybody. The sooner we start work the more partners and support we will have," Sechin said.
The 900-km South Stream pipeline could carry 63 bcm of gas per year from Russia's Black Sea coast to Bulgaria, southern Italy and Austria.
Italy's Eni is already a partner in the marine section's construction, and Gazprom is talking to France's EDF about a role in the project.
RBC: Gazprom Neft secures $500m loan
RBC, 19.10.2009, Moscow 17:59:39.Gazprom Neft has completed the procedure for securing a $500m syndicated loan, the Russian oil company announced today. The interest rate has been set at LIBOR plus 5 percent. Bank of Tokyo-Mitsubishi UFJ, Ltd. will act as the company's agent for the borrowing.
Gazprom Neft plans to apply the money towards general corporate needs. The company's long-term loans stood at $3.8bn as of December 31, 2008, having eased from $3.81bn as of December 31, 2007.
Moscow News: Waiting for Shtokman
19/10/2009
Anna Arutunyan
MURMANSK - For the 1,700 business executives attending the 1st Murmansk Economic Forum, the question was not what to invest in, but when the multi-billion dollar project will get underway.
With 3.2 trillion cubic metres of gas stored deep under the icy Barents Sea, the Shtokman gas field is a cornerstone of Russia's gas policy. Featuring speeches by Foreign Minister Sergei Lavrov, Gazprom President Alexei Miller, Rosneft CEO Sergei Bogdanchikov and other heavyweights (Vladimir Putin cancelled his visit at the last minute, travelling to China to sign a 70 billion cubic metre gas deal) the forum sought to raise confidence in a project that has had its problems since the field's 1988 discovery.
"Development of the Shtokman gas field is the key to Arctic" expansion, Miller told participants.
Once developed, this $20 billion project will yield up to 70 billion cubic meters a year destined for Western Europe via the Nord Stream pipeline, thus securing Russia's position as the chief energy supplier of the continent for decades to come.
With the technology developed to gain access to condensed gas stores 350 metres below the surface of an icy sea, it will pave the way for the development of other Arctic fields, whose gas stores are estimated to be at least 6 trillion cubic metres. Finally, the investment drawn from the project will be a boon for Russia's impoverished northwest regions, like Murmansk.
Regional investment deals signed at the forum, including one to turn Murmansk into an Arctic transportation hub, exceeded $1 billion, and this was the central message that forum organisers sought to get across.
But if Shtokman is the key, it is also a project with many unknowns. Some participants, speaking off the record, conceded that there was a sense of more talk than action, however important that talk was for investor confidence. Top management at Shtokman Development AG (of which Gazprom controls 51 per cent, Total 25 per cent, and Statoil Hydro 24 per cent) skilfully evaded the big question at the forum - when development was actually going to start.
Shtokman Development CEO Yury Komarov explained that the planning stage was complete, and developers had entered the investment stage, with a final investment decision involving all partners to be made in the first half of 2010, with gas production set to begin by 2015.
"The market is prone to change, and investment decisions depend on the market," Komarov told journalists when pressed about potential delays. "But there have been no decisions to change the schedule."
A statement earlier this month by Total CEO Christophe de Margerie that the project might be "uneconomical at today's gas prices" suggested there was further potential for delaying the final investment decision.
"I'm not trying to evade the question, but I will say the same thing, adding that, from the technical point of view, work carried out so far is above all praise," said Total's exploration and production general director for Russia, Pierre Nerguararian. "The project will be realised."
Another question that has hung over the Shtokman field is how far Russia will allow foreign companies to take part in development. Gazprom took Total and Statoil Hydro as partners on the condition that the French and Norwegians would sell their shares back to Gazprom after the end of the project's first phase.
During one panel discussion, Rosneft president Sergei Bogdanchikov said he firmly backed a law passed last year ensuring that only Russian companies would get licenses and controlling shares for oil and gas projects.
Grigory Straty, head of the Murmansk Shelf Association, which provides infrastructure related to Shtokman, said the project was "[not] affected by this in any way, everyone is happy with the way things are working. Of course, in general the foreigners were a little upset, maybe they wanted to hear something else. But I can't speak for them. I support this decision, because it will allow us to get new technologies."
For participants hoping for a piece of the Shtokman pie, the forum was primarily a venue to get to know each other. Speaking off the record one manager at a local energy company said he had little idea how exactly such a difficult project would be implemented. "It's too far out in the sea. 600 km is too much." But he said he was able to reach a few preliminary agreements on future deals.
"I got a sense that [the forum] was mostly about asking for money," said another US participant.
OfficialWire: Gazprom, France Talk South Stream
|Published on October 20, 2009 |
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|by EU News Network |
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|( and OfficialWire) |
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|PARIS, FRANCE |
A delegation from Russian energy giant Gazprom met with French officials to discuss cooperation in the energy sector, mainly the South Stream gas pipeline.
Gazprom Chairman Alexei Miller met with Pierre Gadonneix, chief executive at Electricite de France, to discuss the possibility of EDF participating in the construction of the submerged section of the South Stream gas pipeline.
South Stream would bring natural gas from Central Asia and Russia to European markets through the Black Sea.
Both executives expressed the importance of South Steam in bringing diversity to the European energy market.
A January gas row between Gazprom and Ukraine that left Europe in the cold for weeks prompted a push to expand the regional energy infrastructure. Europe sees energy diversity in its Nabucco pipeline, while Russia backs its Nord Stream and South Stream options.
"South Stream, being a strategic project in terms of enhancing reliability and stability of natural gas supplies to Europe, will become the basis for this cooperation," Miller said of the meeting.
Gazprom signed a series of deals with regional partners for South Stream development. An addendum to a memorandum of understanding between Gazprom and Italy's ENI envisions as much as 2.2 trillion cubic feet of natural gas for South Stream each year.
PGNiG 'close to' extra gas agreement with Gazprom
19th October 2009
Rzeczpospolita obtained information that directors of Polish Oil and Gas (PGNiG) sent Russian Gazprom a proposal relating to signing new intra-government gas agreements.
The deputy president of PGNiG, Radosław Dudziński, confirmed this information, but declined to give any details, and restricted himself to saying that in his opinion the odds are on that an agreement will be signed within a few weeks to increase gas supplies from December.
Negotiations concerning the new gas contract have been in progress since spring, but despite numerous meetings, Poland has not received any extra gas. "If it will be a harsh winter – and we've already had some frost over the last few days, demand will be even higher and then PGNiG will be forced to call on its warehouses," said Mr Dudziński.
In his opinion, if the weather is mild, and temperature hovers around zero, the gas deficit will be lower at around 200 million cubic meters instead of 400-500 million cubic meters.
Source: Rzeczpospolita
Armenia negotiates with Russia on gas price drop
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[ 19 Oct 2009 14:15 ] [pic]
Baku. Elmin Ibrahimov – APA-ECONOMICS. Armenia is negotiating with Russia for reduction of the natural gas tariff from the present $200 per 1,000 cu meters to $180 starting April 1 2010, Minister of Energy and Natural Resources of Armenia told media on Friday.
He said the contract with Gazprom on the gas tariff for $200 per 1,000 cu meters was signed last year. "Armenia hopes for certain reduction of the tariff though Russia is not ready yet to exceed the frameworks of the agreements reached." The minister refuted the reports by Russian media that Russia will allegedly reduce the tariff in exchange of the exclusive construction of the new nuclear power plant in the country.
A. Movsisyan said no such negotiations have been made with Russia and the idea of monopoly construction of the NPP contradicts the policy of the Armenian Government. "We hope to use the best international experience but no country is able to build an up-to-date NPP independently. We know that good reactors are produced in Russia, good automatic equipment is in the West and good turbines are in Europe. Therefore, we are goring to use the best experience of all countries. An international consortium involving all the countries interested will probably be set up," the minister said.
Reuters: Gazprom meets Turkmen leader, no word on gas flow
Mon Oct 19, 2009 9:07am EDT
MOSCOW, Oct 19 (Reuters) - The head of Russia's Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) met Turkmenistan's leadership on Monday, the company said, but it gave no update on the progress of talks to resume imports of Turkmen gas that were suspended six months ago.
The world's biggest gas producer said in a statement its chief executive, Alexei Miller, met Turkmen President Kurbanguly Berdymukhamedov to discuss "long-term strategic partnership in the gas sector".
Turkmen gas flows to Russia were suspended in April after a pipeline blast and Ashgabat accused Gazprom of creating conditions that led to the incident by drastically lowering imports amid low demand for Russian gas in Europe.
Gazprom denied the accusations but said a new contract must be agreed with Turkmenistan to reflect new realities.
Before the incident Gazprom was importing around 50 billion cubic metres of Turkmen gas a year -- enough to cover annual demand in a country such as France. (Reporting by Vladimir Soldatkin; Editing by Anthony Barker)
The St. Petersburg Times: Gazprombank Plays Down $529M Losses
Vedomosti
MOSCOW — Gazprombank reported losses of 15.5 billion rubles ($529 million) after the ruble strengthened in September, its worst month this year, but a spokesman said the damage was only on paper and that it has earned more than 24 billion rubles in 2009.
The results were the sixth time this year that Gazprombank has posted a monthly loss. The previous worst month was May, when the bank lost 8.4 billion rubles.
The lender’s losses are coming from currency deals, said Maxim Osadchy, an analyst at Bank of Corporate Financing. Gazprombank’s foreign-currency assets exceeded its foreign-currency liabilities by 392.6 billion rubles as of Oct. 1. According to official Central Bank exchange rates, the ruble strengthened against the dollar 1.1 percent in September and against the euro by 3.4 percent.
The September results are a consequence of the strengthening ruble, a bank spokesperson said. But the bank did not suffer any real losses since the changes were a result of exchange-rate shifts and related revaluations of foreign-currency assets — not expenses from currency operations.
Gazprombank suffered from exchange-rate changes last year as well. According to the bank’s full-year results to international financial reporting standards, it had a record loss of 68.2 billion rubles. The losses were from the bank’s futures contracts for currency, which were worth 96.9 billion rubles, according to the results, including 75.8 billion rubles in downward revaluations because of the ruble devaluation and falling securities prices.
At the time, a bank spokesman said the risks were hedged but that because of the way the figures for the cash transactions and futures contracts show up in its results, there was an accounting loss of 33 billion rubles under international financial reporting standards. Gazprom bank would have additional profit of the same amount in the following reporting period, he said.
In the first quarter of 2009, the bank made 8.1 billion rubles on currency operations, and a total of 16.5 billion rubles.
Gazprom owns 41.7 percent of the lender, while its pension fund, Gazfond, owns 50 percent. As of the first quarter of 2009, the lender was Russia’s third-largest, with assets of 2.05 trillion rubles.
All of Gazprombank’s operations are hedged now, as well, and the company doesn’t have currency risks, deputy chief Alexander Sobol said. These transactions, as well as the profit from them, are not included in the balance, he said.
The bank’s international financial reporting will be more telling, with a profit of 24 billion rubles in the first half and even more for the first nine months, the spokesman said. Even the company’s nine-month profit of 16 billion rubles under Russian reporting standards wasn’t bad, he said.
VTB Group, which is larger than Gazprombank by assets, had net profit of 7.9 billion rubles in the first nine months, while Sberbank gained 7.4 billion rubles in the first eight months of the year.
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