Russia
Russia 101018
Basic Political Developments
• START threatened unless ratified by mid-term Senate elections
o INTERVIEW - Nuclear pact with U.S. at risk - Russian lawmaker - "If for whatever reason -- political, technical -- that does not happen ... then I think the agreement will have problems from the point of view of ratification, very big problems," Kosachyov told Reuters in an interview late on Saturday.
• Medvedev to discuss security, visas with leaders of France, Germany - Russian President Dmitry Medvedev will meet with French and German leaders on Monday to discuss, among other things, European security and the Russia-EU visa regime.
o Leaders of Germany, France and Russia brainstorm by the sea - More pressing matters like the economic crisis, and its effect on bilateral and European trade with Russia, are also expected to be discussed. Also on the agenda is the framework with which Russia is prepared to negotiate with NATO.
o Medvedev, Sarkozy, Merkel to discuss RF-NATO ties, Iran, Mideast - The Iranian nuclear problem, Russia-NATO relations, the promotion of Russia’s initiative for a new European security treaty will be high on the agenda of a Russia-France-Germany two-day summit that will open in Deauville on Monday, Russian presidential aide Sergei Prikhodko told Itar-Tass on Sunday.
o France and Germany aim to enhance Russia ties at summit - No big decisions are expected - not least because the German and French leaders do not want to be seen to be bypassing the European Union - but they will be discussing big ideas such as a proposed security and economic partnership.
o France and Germany seek to draw Russia closer - The French and German leaders see it as an opportunity to build on a recent warming of their relationships with Russia and to draw Moscow deeper into what the Elysée Palace calls “a common economic, human and security space in Europe”.
o Paris and Berlin seek ‘reset’ with Moscow - The meeting between Nicolas Sarkozy, French president, Angela Merkel, Germany’s chancellor, and Dmitry Medvedev, president of Russia, is intended to discuss security relations and the global economy in advance of next month’s summits of the G20 group of leading economies, the Nato alliance and the Organisation for Security and Co-operation in Europe.
o Merkel and Sarkozy 'brainstorm' with Russia on security - According to the Elysee palace, this will be "a brainstorming exercise, certainly not a directorate of three," Le Figaro reports – a reassurance meant to alleviate potential criticism from neighbouring Poland or even the US over the exclusive nature of the meeting.
o Medvedev, Sarkozy and Merkel to Meet - “We have serious differences,” Prikhodko said of the missile defense plans. “They relate to practically one main issue: We do not always similarly identify threats. When we establish a dialogue on this topic and these threats are identified, it won’t be difficult to make decisions.”
o Three-way meeting of European powers to discuss security - A meeting among German, French, and Russian leaders gets under way Monday to discuss European security cooperation. France and Germany are expected to emphasize that a missile defense plan does not threaten Moscow.
o Russia Wants to Formalize Relation With E.U. - “We would like Russia and the E.U. to be able to take joint decisions,” Vladimir Chizhov, Moscow’s ambassador to the European Union, said in a telephone interview with the International Herald Tribune over the weekend from Brussels. “I don’t expect to be sitting at every session of the political and security committee, but there should be some mechanism that would enable us to take joint steps.”
• Axel Springer: Russian Newsweek License Won't Be Prolonged - German publishing house Axel Springer AG (SPR.XE) said Monday its subsidiary Axel Springer Russia isn't extending Russky Newsweek's license agreement due to economic reasons.
o Axel Springer Closes Russian Newsweek for ‘Economic Reasons’ - “We have failed to bring the magazine to a firm economic base and we could not create a prosperous perspective,” Axel Springer International President Ralph Buechi said in the statement.
• Russian president to visit Poland - The Polish president says his Russian counterpart, Dmitry Medvedev, will visit Poland on December 6. President Bronislaw Komorowski announced the date on Sunday and described the planned visit as a step in a difficult process of reconciliation between the two nations.
• New Polish Gas Deal Agreed, Details Being Hammered Out
o UPDATE 1-Russia, Poland agree gas supply deal - Gazprom, PGNiG to finalise contract; Poland says EU delegation raised no objections; Gazprom says deal to be finalised within two weeks
o Russia, Poland agree on gas deal text
o Moscow, Warsaw approve deal to increase gas supplies
• Polish investigator to Moscow to study final report on air crash - The Polish envoy on the investigation in the crash of the late President Lech Kaczynski’s airliner, Edmund Klich, will arrive here on Monday to study a final report drafted by the Interstate Aviation Committee (MAK), a source in the civil aviation authorities told Itar-Tass on Sunday.
o Leading Polish expert to study Smolensk plane crash probe in Moscow
• Russian watchdog slaps import ban on several Ukrainian food producers - Therefore, of the 15 meat-processing enterprises in Ukraine with the right to import to Russia, only three remain and of the 14 dairy facilities, 10 still can import.
• Russian companies interested in developing business relations with Abkhazia - Kremlin chief of staff - Russian companies are interested in developing business and trade relations, along with implementation of investment projects with Abkhazia, the Kremlin chief of staff said. Sergei Naryshkin arrived in the Abkhazian capital of Sukhumi to participate in a business forum.
• Moscow Duma to vote for new mayor on Thursday
• Mayor Sobyanin to Court Investors - "There are many opportunities for doing business in Moscow, but not all of them can be easily accomplished," Medvedev said. "There are many reasons for this, one of which we are openly talking about: corruption."
• Putin’s Nobody for Mayor - Although the appointment of Deputy Prime Minister Sergei Sobyanin to the post of Moscow mayor was widely expected, the news set off a barrage of emotional opinions on the Russian Internet. Most were negative. Sobyanin was already being criticized for being a nobody, not a public politician and, most damningly, the closest associate of Prime Minister Vladimir Putin among all the candidates for mayor.
• Central Moscow opposition rallies set to get green light - “It’s too early to shout ‘victory,’ but it looks as if the authorities are tied and will give us Triumfalnaya,” leading opposition figure Eduard Limonov wrote on his Live Journal blog on October 17. He also said the Kremlin had taken opportunity of the departure of Luzhkov to “blame everything” on the former mayor.
• Court to pronounce verdict in Ruslan Yamadayev’s murder case - The Moscow City Court will pronounce a verdict in the murder case of the former State Duma deputy Ruslan Yamadayev on Monday.
• The Minister of the Interior of Russia arrives in Dagestan - Makhachkala, October, 18, 2010. On October, 18, the Minister of Internal Affairs of the Russian Federation, Army General Rashid Nurgaliyev has arrived in Dagestan with working visit. The President of Dagestan Magomedsalam Magomedov, the Minister of the Interior of Dagestan Abdurashid Magomedov, members of the government and other officials have met the guest of honour at the airport.
• Chechen leader vows to end bride kidnapping - Ramzan Kadyrov says bride kidnapping violates the laws ofRussia, of whichChechnyais a part, and goes against Islam, the dominant religion in the North Caucasus republic.
Gazprom economist found shot dead in Moscow - Initial reports suggested Sergei Klyuka had died from a self-inflicted gun shot from a gun presented to him by the Kazakh prime minister.
• Russia Today journalist shot in foot in Moscow - Natalya Arkhiptseva was shot with a gun firing rubber bullets a by a 35-year-old native of St. Petersburg in the capital’s Prado Cafe. She said he opened fire after she objected to being sworn at by him and his friends as she passed their table.
• Putins reappear in public to reaffirm marriage - Russian Prime Minister Vladimir Putin and his wife Lyudmila made a rare joint public appearance over the weekend seeking to reaffirm their marriage amid persistent divorce rumours.
• Russian spacemen take part in census
• Russia hopes to join ranks of top tourist destinations - The Russian government will soon be considering a 352-billion-ruble (11.7-billion-dollar, 8.5-billion-euro) plan to improve infrastructure, train specialists and launch a major advertising campaign, she said.
• Krasnodar territory to help all people affected in flood-governor
• South Russia to mourn flash flood victims on Monday
• Communication cable damaged in Sakhalin, Khabarovsk - Thousands of residents of Sakhalin, the Khabarovsk Territory and Birobidzhan were left without communication on Monday due to damaged fibre-optic cables of the Transtelecom and Dalsvyaz companies.
• Orange alert in Russia`s volcano - Eruption of Russia’s Klyuchevskaya sopka volcano in Kamchatka has sent ashes and gas to the area of 418 kilometers.
o Ash and gas plume from Klyuchevskoi volcano stretching for 418 km
• Russian political and economic calendar: October 18
• RIA Novosti Press Review for Monday, October 18, 2010
o Russian President Dmitry Medvedev nominated Deputy Prime Minister Sergei Sobyanin to the post of Moscow mayor on Friday evening. Experts say Sobyanin had no real opponents on the list of four candidates, compiled by the ruling United Russia party, and that transportation minister Igor Levitin was included in the list only to make the presidential choice less evident. Meanwhile, media and experts are trying to guess possible candidates to take up Sobyanin's old post as Chief of Staff.
o A meeting between the prime ministers of the Customs Union states - Russia, Belarus and Kazakhstan - went smoothly despite ongoing tensions between Moscow and Minsk. At the meeting in Moscow, the premiers reached agreements on a number of controversial issues, including gas prices. They also agreed on the key issues surrounding the formation of a single economic space. The meeting made the future of the Union State between Russia and Belarus look even more uncertain as Russian Prime Minister Vladimir Putin hinted that it might be replaced by the single economic space.
o Russian President Dmitry Medvedev demanded that the Central Election Commission (CEC) conduct a thorough probe into all 551 violations, reported during the October 10 elections. The president said, however, that the recent amendments to election laws "have created better voting conditions."
o Viktor Baturin, the brother of Moscow ex-mayor's billionaire wife Yelena Baturina, said he did not receive a just price for his share in the Inteko company "because of Moscow corruption," and is now set to collect the debt from his sister in court, even if it leads to selling some of Inteko's assets
o The Georgian parliament adopted constitutional amendments on the redistribution of powers between the president and the prime minister. Georgian opposition have criticized the move, saying the amendments are designed to allow President Mikheil Saakashvili to stay in power when his term expires in 2013.
o Revenues of almost 700 billion rubles ($23 billion) were included into the Russian 2011-2013 draft budget without relevant calculation and substantiation, the Russian Audit Chamber said in its evaluation. It is unclear where the money, which makes up almost 8 percent of all budget revenues, would come from, the chamber said.
o The government may include Russia's flagship air carrier Aeroflot and Moscow's Sheremetyevo airport into its privatization program for the coming years
o Russia's state-controlled nuclear corporation Rosatom said it would build Venezuela's first nuclear power plant, while the South American country agreed to allow Russian oil giant Rosneft and Russian-British joint venture TNK-BP to purchase oil assets as part of a package of 10 agreements signed during Venezuelan President Hugo Chavez's visit to Moscow.
o As residents and public activists express their outrage at the plans of the Russian energy giant Gazprom to build the 403-meter tower in the historical center of St. Petersburg, architects at RMJM, the company designing the tower, have received letters of support from Russian Prime Minister Vladimir Putin, U.S. architect Anton Glikin told Kommersant. Russian President Dmitry Medvedev said last week the decision on the skyscraper would only be made after all court procedures and UN consultations are carried out.
o The second nationwide census in Russia since the break-up of the Soviet Union continued over the weekend, with both the president and the prime minister being surveyed before cameras
o Ukraine's WBC Heavyweight Champion 'Dr. Ironfist' Vitali Klitschko (40-2, 38 KOs) defeated U.S. Shannon 'The Cannon' Briggs (51-5-1-1, 45 KOs) on points and defended his champion title.
• Expulsion for Kremlin Ride - Surkho Taramov, 19, the son of a wealthy Chechen businessman, parked his car by the eternal flame memorial and then sped away after police officers attempted to fine him 4,500 rubles ($150) last Monday, the Rapsi legal news web site reported. He was detained by traffic police half an hour later.
• Children of Russia’s elite accused of living above the law
• Secret agents more doltish than tough - The New Nobility by Andrei Soldatov and Irina Borogan offers a detailed dissection of the FSB, the heir to the KGB, which still casts a long shadow over Moscow. For more than a decade, the two authors have run the website Agentura.ru, a gold mine of information on the inner workings of the security services, particularly the FSB. In a country where many journalists have been attacked or killed for speaking truth to power, their reporting has been brave.
• Video-Blog Diplomacy Could Trap Medvedev - Medvedev’s call for a regime change in Kiev was successful largely because the Ukrainian political winds had already been blowing in Moscow’s favor. Yushchenko had such low ratings that his defeat was all but a given. This is hardly the case in Belarus, where the “last dictator of Europe” stands a good chance of being re-elected without resorting to electoral fraud. The Kremlin would then be forced to deal with Lukashenko.
• Why the Media Ignore Russia - While China, India and Brazil — and now even Indonesia, Thailand and Turkey — are starting to play an enhanced role in the world economy and world affairs, Russia, despite occupying one-seventh of the world’s landmass and controlling an enormous nuclear arsenal, has largely become irrelevant. The global financial and economic crisis has essentially knocked Russia out of the BRIC grouping of the world’s most dynamic developing nations and economies of the future.
National Economic Trends
• Energy Deals Pressure Ruble - The ruble Monday hit its weakest levels for the month against the dollar and a nine-month low against the euro-dollar basket, with market players saying that a slew of deals by energy companies have raised the demand for dollars and weakened the Russian currency.
• Russia wants to sell stakes in Aeroflot in bid to boost budget - Moscow wants to sell shares in Russia's largest airline, Aeroflot, in a 'grand-scale privatisation programme' that is meant to lower the country's budget deficit, the broadcaster Echo Moskvy on Sunday quoted Finance Minister Alexei Kudrin as saying
• Part of Aeroflot to be privatized, says Russian minister
Business, Energy or Environmental regulations or discussions
• Razgulay, Gazprom and Aeroflot: Russian Stock Market Preview
• Micex Eases Investor Rules to Double Bond Market: Russia Credit
• Bankers wait for word from Kremlin - When the Russian ministry of finance announced in late July that it was embarking on a privatisation drive, investment bankers in the country could be forgiven for thinking their ship had come in.
• Russia's NCSP says cargo turnover down 3.9 pct to 62.67 mln T
• Magnit Oao Nine-Month Net Income 7.17 Billion Rubles, Up 22.3%
• Russia Magnit 9-mo net rises 22.3 pct in rouble terms
• Norilsk to Swap OGK-3 Stake for Inter RAO Shares, Vedomosti Says
• Inter RAO Seeks to Buy OGK-3 Utility From Norilsk for Shares
• Bridging Russia and China, UC Rusal Presents "Evolution of Russia" TV Series
• Sechin Ends Fertilizer Fight - PhosAgro and UralChem, two of Russia’s largest fertilizer makers, agreed to end their legal dispute over ownership of a smaller producer after Deputy Prime Minister Igor Sechin intervened, Vedomosti reported Friday.
• Colorado Breedstock Marketed to Russian Cattlemen - A trip to Russia earlier this month by the Colorado Department of Agriculture helped foster business relationships with Russian cattlemen and provided opportunities for market Colorado breedstock.
• Union of industrialists plans a Week of Russian Business - The event will take a number of conferences on tax and budget systems, innovations and technology modernization, market competition and legislation.
Activity in the Oil and Gas sector (including regulatory)
• Turkmenistan inaugurates Russia-bound natural gas pipeline
• Russia's Itera launches gas pipeline in Turkmenistan
• Turkmenistan launches new gas pipeline - The 198.2-km-long pipeline, with a pipe diameter of 720 millimeters, would pump gas from the desert outside Darvaza town in the Akhal region into the main export gas arteries of Turkmenistan that were Russia-bound, the Turkmen State Information Service said.
• RESULTS OF NOVATEK’S EXTRAORDINARY GENERAL MEETING
OF SHAREHOLDERS
• Russia and Middle East control 63% of world oil and gas reserves and 39% of world oil and gas production
• TNK-BP SIGNS AGREEMENTS TO ACQUIRE ASSETS IN VENEZUELA AND VIETNAM FROM BP - TNK-BP and BP p.l.c. announced today that they have reached an agreement for TNK-BP to acquire BP’s upstream and pipeline assets in Vietnam and Venezuela for an overall price of $US 1.8 billion.
Gazprom
• Poland and Russia agree on new gas deal - Russian gas export monopoly Gazprom and Poland's gas monopoly PGNiG will now work on details with Gazprom's deputy chief executive Alexander Medvedev, saying the contract would be finalised within two weeks.
• Moscow, Sofia to Speed Work on South Stream - Gazprom will sign an agreement with Bulgaria next week to do a feasibility study for the country's section of the pipeline, chief executive Alexei Miller told reporters in Sofia. The link may carry 63 billion cubic meters of gas a year to the European Union.
• Bulgaria, Russia to set up joint venture as early as November-Miller Gazprom
• "Shtokman partners will meet all deadlines" - The Russian-Norwegian meeting in the Gazprom headquarters had full focus on the Shtokman project and first of all included discussions on preparations for the first project development phase. The Norwegian delegation included of the company’s leaders, among them Vice-Presidents Peter Mellbye and Torgeir Kydland and Statoil Russia leader Jan Helge Skogen.
• Prirazlomnoye drilling in 2011? - The Prirazlomnoye project in the Pechora Sea “could be put in production in 2011”, leader of the responsible Gazprom subsidiary said this week.
• Gazprom increases its pressure on Bulgaria, Ukraine - “Gazprom is trying to use Romania as an instrument of influence on Bulgaria,” Konstantin Simonov, director of the independent National Energy Security Fund in Moscow, told New Europe by phone on 15 October. “Now the question is what will be the route of South Stream. Will it go through Bulgaria or through Romania?”
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Full Text Articles
Basic Political Developments
START threatened unless ratified by mid-term Senate elections
|Oct 18, 2010 09:44 Moscow Time |
The new Russian-US Strategic Offensive Arms Reduction Treaty, START, may come under threat unless Washington ratifies it before the mid-term Senate elections, due in November. This came in a statement by the Chairman of the Russian Duma Foreign Affairs Committee Konstantin Kosachev. He was speaking during a conference on world politics in the Moroccan city of Marrakesh. The Russian MP warns that if the US Republicans win a Senate majority, it is likely that an attempt to muster the two thirds of votes for treaty ratification may fail. The Russian and US Presidents signed the new START in April this year. They agreed that the treaty should be ratified simultaneously.
INTERVIEW - Nuclear pact with U.S. at risk - Russian lawmaker
Sun, Oct 17 2010
By Christian Lowe
MARRAKESH, Morocco (Reuters) - A nuclear arms treaty between Russia and the United States could collapse unless Washington ratifies it before next month's elections change the Senate's composition, a senior Russian lawmaker said.
The signing of the new START treaty in April was a step towards U.S. President Barack Obama's goal of "resetting" relations with the Kremlin, so its derailment would be a big setback for the White House's foreign policy agenda.
The treaty is not in force until it has been ratified by legislatures in both countries and Konstantin Kosachyov, chairman of the international affairs committee in Russia's lower house of parliament, said this now hung in the balance.
The Kremlin ally said he remained hopeful that the Senate could ratify the treaty in the so-called lame duck session, when it re-convenes after the Nov. 2 congressional elections but before newly elected senators take up their seats.
"If for whatever reason -- political, technical -- that does not happen ... then I think the agreement will have problems from the point of view of ratification, very big problems," Kosachyov told Reuters in an interview late on Saturday.
The agreement will cut strategic nuclear arsenals deployed by the former Cold War foes by 30 percent within seven years but leave each with enough to destroy the other. Its predecessor treaty expired in December last year.
"WORSE CASE SCENARIO"
Kosachyov said if Republicans made big gains in the Senate in next month's election, as many opinion polls suggest, it would not be possible to garner the two-thirds vote needed to ratify the new treaty.
"Many (Republican Senators) will be in principle against agreeing on anything with Russia. In that case we will have to start from scratch. That is the worst case scenario. Completely awful. For now I do not want to believe in it," he said.
"For now I am disappointed with how all this is going but I am optimistic because there are very good chances that it will be ratified in the lame duck session," Kosachyov said on the sidelines of the World Policy Conference in Morocco.
But he said: "If it (the treaty) collapses just because of internal political considerations of the United States, that would be very bad."
Some Republican senators say they worry the new treaty may limit U.S. missile defences, and some want Obama to promise to spend more money modernizing the nuclear weapons that remain.
Russian President Dmitry Medvedev has submitted the treaty to Russia's parliament, but he told lawmakers not to ratify the agreement before the full U.S. Senate has approved it.
(Editing by Mark Trevelyan)
Medvedev to discuss security, visas with leaders of France, Germany
06:07 18/10/2010
Russian President Dmitry Medvedev will meet with French and German leaders on Monday to discuss, among other things, European security and the Russia-EU visa regime.
The talks between Medvedev, French President Nicolas Sarkozy and German Chancellor Angela Merkel in Deauville, northern France, would resume after the five-year break with a working dinner on Monday. Three-party consultations are scheduled for Tuesday morning, followed by a joint news conference.
"A three-sided meeting is not an exclusive club to work out decisions separately from other states, but rather a convenient format for discussing our common vision in a trustful, frank atmosphere with our closest partners in Europe," Prikhodko said.
Regarding European security, Prikhodko said Russia wants to promote Medvedev's European security treaty initiative.
Medvedev proposed drawing up a new European security pact in June 2008, and Russia published a draft of the treaty in December 2009, sending copies to heads of state and international organizations, including NATO. However, the proposal has been met coolly by Western powers.
Prikhodko also said that soonest introduction eased visa regime between Russia and the European Union will be among the key issues on the agenda.
"The first issue that we would put forward will be the eased procedure of visa issuance and introduction of advanced methods in data processing," the Kremlin official said.
He did not rule out that Russia may raise the question of scrapping visa regime with the EU, which has become a major foreign policy goal in Moscow's relations with Brussels.
Russia submitted a draft agreement on scrapping visa requirements to the European Union at the Russia-EU summit in the southern city of Rostov-on-Don on May 31. Prime Minister Vladimir Putin said on the same day that "the majority of our partners in Europe support this idea," but several EU states reject it, mainly for political reasons.
Prikhodko said that energy issues, Iran's controversial nuclear program, as well as Russia-NATO and Russia-EU cooperation would also be discussed at the meeting.
MOSCOW, October 18 (RIA Novosti)
Leaders of Germany, France and Russia brainstorm by the sea
18 October, 2010, 11:15
The tiny French resort town of Deauville is hosting a brainstorming session for three major world powers.
Russia's President will be the guest of the leaders of Germany and France to focus on warming ties between Moscow and the EU.
During the so-called ‘Troika’ dialog, Dmitry Medvedev, Nicolas Sarkozy and Angela Merkel, are expected to discuss many issues concerning European matters and the international community.
The international issues on the agenda include G8 and G20 tasks, stability in the Middle East, the ongoing situation in Afghanistan and Iran’s nuclear activities.
The three leaders also plan to discuss issues relevant to European-Russian relations.
Among them is the possibility of a visa-free regime for Russian citizens who want to visit European countries. The prospect has long been under negotiation.
More pressing matters like the economic crisis, and its effect on bilateral and European trade with Russia, are also expected to be discussed.
Also on the agenda is the framework with which Russia is prepared to negotiate with NATO.
The three leaders say the informality of the meeting allows them to speak freely and, perhaps, achieve more results that way.
So far, no bilateral meetings are scheduled during the talks.
Medvedev, Sarkozy, Merkel to discuss RF-NATO ties, Iran, Mideast
18.10.2010, 05.38
MOSCOW, October 18 (Itar-Tass) -- The Iranian nuclear problem, Russia-NATO relations, the promotion of Russia’s initiative for a new European security treaty will be high on the agenda of a Russia-France-Germany two-day summit that will open in Deauville on Monday, Russian presidential aide Sergei Prikhodko told Itar-Tass on Sunday.
“High on the agenda of a forthcoming summit in the Group of Three format are the prospects to build up in the Euro-Atlantic region and the Eurasia a democratic space of equal and indivisible security that should meet modern political realities and should give joint responses to common threats and challenges,” Prikhodko said.
Russia “gives priority to the promotion of the initiative, which President Dmitry Medvedev put forward in 2008 to draft a new European security treaty,” he noted. In this respect, the Kremlin official recalled about similar ideas: Russian-German initiative to form a Russia-EU committee at the ministerial level for foreign policy and security, the French idea to form a common space in economy and security between Russia and the European Union.
“In this context, I believe that Russia-NATO relations will be discussed at the initiative of the Russian president,” Prikhodko remarked.
Prikhodko doubts that the problem of NATO missile defense systems in Europe will be discussed in detail in Deauville, though “the problem will be discussed in general.” “Russia considers the U.S. decision on Poland and the Czech Republic very important, as well as the fact that the U.S. leadership is also ready to launch the negotiations on the major issue – the joint determination of potential threats,” Prikhodko indicated. Still, the sides “have some disagreements over one major issue – not all sides take commonly and equally the current threats.” The Russian presidential aide noted that after the settlement of this problem “all other questions will be lifted.”
The summiteers “will share opinions on the Iranian nuclear problem, primarily in line with the development of positive tendencies that are taking shape after the meeting of the Sextet foreign ministers in New York,” Prikhodko underlined. Alongside, Prikhodko added that the resumption of the Sextet negotiations on the Iranian nuclear problem can hardly be discussed in the practical field at a summit of the leaders of Russia, France and Germany. “We cannot take separate isolated decisions, this is not the prerogative right of the Group of Three countries,” he elaborated.
“Medvedev, Sarkozy and Merkel are expected to come out in support of the direct Palestinian-Israeli dialogue,” the Kremlin official said.
The Deauville summiteers “will also discuss preparations and will synchronize the positions ahead of forthcoming major foreign political events – an OSCE summit (Astana, December 1-2) and a Russia-EU summit (Brussels, December 7),” Prikhodko added.
Russia hopes to get the right for the G20 presidency in 2013 and would like to gain the support for the idea of Russia’s G20 presidency at a Deauville summit, Russian presidential aide Sergei Prikhodko told Itar-Tass.
He pledged that a coming Group of Three summit “definitely does not run counter to the collective work (in the G20) and should help ponder over the issues on the G20 agenda in the creative way.”
The summiteers “will discuss in detail the cooperation between Russia, Germany and France in such key international structures as the G8 and the G20. This discussion is becoming more and more topical taking into account France’s forthcoming presidency in the foresaid organizations,” the Kremlin official said.
A next G20 summit will be held in Seoul on November 11-12, 2010. Then a G20 summit will be held in November 2011 under France’s presidency and in 2012 under Mexico’s presidency. Russia’s intentions to host a G20 summit in 2013 have not been approved yet.
A Deauville summit “will also focus on the measures, which the international community is taking to overcome the aftermath of the world economic crisis.” “Despite the fact that the crisis has not been settled completely the economies of the three countries are reviving actively. Russia’s trade with the EU states reached 141.8 billion dollars in the first half of 2010 with a 43.5% year-to-year growth,” Prikhodko underlined.
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18 October 2010 Last updated at 05:20 GMT
France and Germany aim to enhance Russia ties at summit
By Hugh Schofield BBC News, Paris
French President Nicolas Sarkozy is to hold two days of talks with his Russian counterpart, Dmitry Medvedev, and the German Chancellor, Angela Merkel.
The summit in the Normandy seaside resort of Deauville will discuss ways of enhancing economic and security co-operation between the EU and Russia.
Germany and France also want to build closer ties between Russia and Nato.
Nato will unveil its new strategy in Lisbon next month, and European leaders hope Mr Medvedev will lend his support.
Easing tensions
This is being billed as a brainstorming session for the three leaders.
No big decisions are expected - not least because the German and French leaders do not want to be seen to be bypassing the European Union - but they will be discussing big ideas such as a proposed security and economic partnership.
French officials say that tensions between Russia and the West have eased over the last couple of years, and they detect a new openness on the part of Moscow, which they want to consolidate.
There are differences - notably over Nato's proposed European missile shield, which will be the main subject of discussion at the alliance's upcoming summit.
But even on this, Moscow seems less suspicious than it used to, and the German and French leaders will try to persuade Mr Medvedev that Russia too could benefit.
Mr Sarkozy, of course, has other preoccupations at the moment, with waves of protests against his pension reforms.
For him it is a chance to play the statesman - and briefly forget his pressing domestic concerns.
The Irish Times - Monday, October 18, 2010
France and Germany seek to draw Russia closer
EU leaders wish to pull Moscow into a common economic and security space, writes RUADHÁN Mac CORMAIC in Paris
GERMAN CHANCELLOR Angela Merkel and Russian president Dmitry Medvedev are due to arrive in the French seaside town of Deauville today for a summit on European security hosted by President Nicolas Sarkozy.
The two-day meeting is described by French officials as a tripartite “brainstorming” session in advance of an important Nato summit next month and France’s chairmanship of the G8 and G20 next year.
The French and German leaders see it as an opportunity to build on a recent warming of their relationships with Russia and to draw Moscow deeper into what the Elysée Palace calls “a common economic, human and security space in Europe”.
“Russia seems to us to be rediscovering the merits of a co-operative attitude towards western countries,” a senior French official said. “It will be a chance . . . to consolidate this positive change.”
While Moscow’s hope for a relaxing of visa requirements for Russian citizens travelling to the EU and the vexed topic of energy policy are likely to be aired, the summit will be dominated by security questions. Medvedev is likely to push his preference for a new security treaty in Europe, while France and Germany have rallied around Berlin’s idea for a less formal EU-Russia “political and security committee” to structure closer discussions.
The Europeans are keen to secure better co-operation between the Kremlin and Nato, and the Deauville summit takes places just a month before Atlantic alliance leaders meet in Lisbon to approve a new strategic doctrine.
Paris believes circumstances have made this a propitious moment to draw Russia into closer co-operation with Europe. The vaunted “reset” in relations between the US and Russia, symbolised by the agreement of a new nuclear arms reduction treaty between the Cold War adversaries, has given momentum to the EU-Russia dialogue, while Paris believes the growth of China has also helped by leading Russia to forge closer ties to its west.
With the prospect of Georgia and Ukraine joining Nato having grown more remote and memories of tensions over the Georgian conflict in 2008 receding somewhat, Moscow’s rhetoric has become noticeably less confrontational, while the Russians’ recent vote for sanctions against Iran, as well as their co-operation with Nato over Afghanistan, have been seen as encouraging signs in European capitals.
British ties with Russia have been strained by Moscow’s refusal to extradite a suspect in the murder in London of a former Russian agent, but some of Russia’s other bilateral relationships – notably with Poland – have been growing warmer. Sarkozy and Medvedev are known to get along, and Paris hopes the controversial sale of two Mistral warships to Russia will strengthen the political and commercial ties between them.
For all that, however, the Elysée Palace accepts the Russia-EU relationship remains fragile. “We’re not yet certain that Moscow has taken an irreversible strategic decision,” the senior French official said of its recent posture. The official pointed to the fact that Russia still says it regards Nato as the principal threat to its security, and to the difficult relationships between Moscow and neighbours such as Moldova, Romania, Georgia and the Baltic states.
One of the most sensitive issues on the Deauville agenda is the Nato-wide anti-missile defence system, which Russia has strongly opposed. With Paris and Berlin hoping to reassure Moscow that its concerns are unfounded, Sarkozy can tell Medvedev that France itself has had to come around to the idea. The French government had been sceptical about earlier, more ambitious versions the plan, but now says it is willing to provide funds and technical expertise, having been reassured that it complements rather than replaces the principle of nuclear deterrence.
Finally, even if this week’s agenda fails to stir discord inside the summit, the limited guest list surely will outside of it. Defending their decision not to invite the leaders of countries such as the UK, Spain, Italy and Poland – not to mention the US, which is cool on the idea of any common security initiatives that might undermine Nato – French officials stress no major decisions will be taken this week, and every small gathering gives rise to claims from non-attendees that they should be there.
“Germany and France, which Russia considers its principal partners in Europe, are well placed to convey the message,” the French official added.
Paris and Berlin seek ‘reset’ with Moscow
By Ben Hall in Paris and Quentin Peel in Berlin
Published: October 17 2010 20:55 | Last updated: October 17 2010 20:55
France and Germany are hoping to do their own pressing of “the reset button” on the European Union’s uneasy relationship with Russia at a two-day trilateral summit that starts on Monday.
The meeting between Nicolas Sarkozy, French president, Angela Merkel, Germany’s chancellor, and Dmitry Medvedev, president of Russia, is intended to discuss security relations and the global economy in advance of next month’s summits of the G20 group of leading economies, the Nato alliance and the Organisation for Security and Co-operation in Europe.
No decisions are expected from the talks, to be held in the smart French seaside resort of Deauville. It will be the first three-way meeting in five years, at which Mr Sarkozy and Ms Merkel will be joint hosts to Mr Medvedev. Officials in Paris and Berlin last week said the occasion was an opportunity to improve ties between Moscow and the EU.
A senior French official described it as “a kind of brainstorming session . . . to better understand the expectations and ambitions of each partner”.
Berlin is conscious that the meeting is regarded with some suspicion by its EU and Nato partners. These include Italy, which is upset at not being invited, and some east European states that fear France and Germany are looking to improve relations with Russia without taking account of their own security concerns.
A German official said, however, that Russia must show it was “constructive in the solution of regional conflicts” if the relationship with the EU was to be widened and deepened.
In Paris, French officials said there were auspicious signs that Russia was “rediscovering the merits of co-operation with western countries”, having been receptive to a “reset” in its relations with Washington. However, “we are still not convinced this amounts to an irreversible strategic choice by Moscow”, one official added.
Mr Sarkozy has advocated an “economic security union” between the EU and Russia, although he has yet to spell out what this might involve. The French president is also keen to promote co-operation in counter-terrorism efforts.
He would also like Mr Medvedev to help lead discussions on regulation of commodities markets, one of the priorities for the French presidency of the G20 which starts next month. in November.
Ms Merkel is backing the French agenda for market regulation, and is keen to ensure Russian support for the G20 discussions on tighter rules for the financial sector.
In Moscow, Mr Medvedev’s senior foreign policy adviser said the Russian president would be raising the subject of closer ties with Nato, including Russia’s goal of a formal new joint European security framework.
On that issue there is clearly less enthusiasm in both Berlin and Paris. A senior German official said it was “more important to have closer EU-Russia co-operation”, while a French official said the Russian idea for a new security framework was “no longer really the subject”.
Merkel and Sarkozy 'brainstorm' with Russia on security
VALENTINA POP
Today @ 09:49 CET
EUOBSERVER / BRUSSELS – German Chancellor Angela Merkel and French President Nicolas Sarkozy on Monday are set to hold a "brainstorming" session with Russian leader Dmitry Medvedev on issues ranging from missile defence to frozen conflicts, responding to Moscow's requests to be more involved in European security matters.
The two-day meeting in the French resort of Deauville is aimed among others at alleviating Russian concerns over a missile defence shield to be endorsed by Nato at a summit next month, to which Mr Medvedev has also been invited.
According to the Elysee palace, this will be "a brainstorming exercise, certainly not a directorate of three," Le Figaro reports – a reassurance meant to alleviate potential criticism from neighbouring Poland or even the US over the exclusive nature of the meeting.
In 2003, the German, French and Russian leaders met in the same format to air criticism of the war on Iraq – an issue that divided leaders on the continent. The last meeting of the trio was in 2006 in Compiegne, with Ms Merkel meeting former French President Jacques Chirac and the current Russian premier, Vladimir Putin.
Mr Sarkozy, under fire for his pension reforms and tough anti-immigration stance, is looking at the Deauville meeting to divert media attention from the prolongued strikes and public dissent. "Russia is looking more and more to the West and Deauville should be an occasion to accomadate this positive evolution," an Elysee source told Le Figaro.
Meanwhile, in Berlin, Chancellor Merkel said that the main aim of the meeting is to "talk about possibilities to let Russia and Nato co-operate better, because the time of the Cold War is over once and for all."
Moscow has until now fiercely opposed plans to deploy a US missile defence shield in Europe, arguing that it was in fact aimed against Russia. At a summit in Lisbon on 19-20 November, however, Nato allies are set to endorse linking up existing European air defence systems to the US shield, all under a Nato umbrella, and to extend the invitation to Russia as well.
Mr Medvedev has also been invited to Lisbon, but he has not responded yet. The French and German leaders will try to convince him that the new missile shield is not a revival of Cold-War-era rockets aimed against each other and part of a concrete "security architecture" from Vancouver to Vladivostok, as the Nato secretary general put it.
The idea to have a common security arrangement from Canada to Russia is one of Mr Medevedev's pet ideas and is likely to come up again in Deauville. Ms Merkel has so far signalled openness to have Russia-EU security meetings, but no European or American country has the stomach for a new security treaty with Russia.
"We would like Russia and the EU to be able to take joint decisions," Vladimir Chizhov, Moscow's ambassador to the European Union, told the International Herald Tribune. "I don't expect to be sitting at every session of the political and security committee, but there should be some mechanism that would enable us to take joint steps," he said.
When Ms Merkel and Mr Medvedev met in June near Berlin, both leaders proposed the establishment of a new entity, the EU-Russia Political and Security Committee. The new committee would consist of the foreign ministers from Russia and the EU, as well as foreign policy chief Catherine Ashton.
The frozen conflict of Transnistria, a region sandwiched in the eastern part of Moldova and bordering Ukraine, may be one concrete initiative this committee would work on solving, the two leaders announced then.
EU's envoy to Moldova, Kalman Mizsei, recently stated that Russia must end its peace-keeping mission to Transnistria and pleaded for the EU and US to be fully engaged in negotiating a peace accord. Currently, the two only have observer status in the UN-mediated talks.
Medvedev, Sarkozy and Merkel to Meet
18 October 2010
Combined Reports
The leaders of France and Germany will press President Dmitry Medvedev at talks in Deauville, France, this week to consider NATO's call for Russia to cooperate in missile defense, officials said.
The two-day summit, which starts Monday, comes after French President Nicolas Sarkozy's office announced Friday that France was ready to help develop and pay for a U.S.-led European anti-missile shield as a backup, not a replacement, for the country's nuclear deterrent.
Russian and EU officials said Friday that cooperation with NATO — including on missile defense — would be a key issue at the talks between Medvedev, Sarkozy and German Chancellor Angela Merkel, which will resume trilateral talks last held in 2005.
The leaders will also discuss visas, economic links and Iran’s nuclear program, Sergei Prikhodko, Medvedev’s foreign policy aide, told reporters in Moscow.
“We have serious differences,” Prikhodko said of the missile defense plans. “They relate to practically one main issue: We do not always similarly identify threats. When we establish a dialogue on this topic and these threats are identified, it won’t be difficult to make decisions.”
EU partners will try to convince Medvedev to accept an invitation to attend a NATO summit next month in Lisbon to discuss cooperation on missile defense.
"I would like to see cooperation with Russia. It makes sense … a security roof from Vancouver to Vladivostok," NATO Secretary-General Anders Fogh Rasmussen said after talks with Sarkozy in Paris on Friday.
But Fogh Rasmussen said Russia has so far not responded to the invitation to cooperate.
A decision may be reached at the NATO summit for a missile defense "adapted to the evolution of the ballistic menace weighing from certain programs in the Middle East," Sarkozy's office said in a statement after the president's meeting with Fogh Rasmussen.
France's government has questioned the need for an anti-missile shield in the past, but on Friday an official in Sarkozy's office said, "France is fully for missile defense." He said France was ready to make a "financial and technical contribution" to the effort but added that it would "complement the deterrent."
Russia's ambassador to NATO, Dmitry Rogozin, said a decision had yet to be made on whether to attend the NATO summit. But he reiterated Russian concerns that the system could be used to counter Russian long-range missiles.
"Is it just a pretext to move the missile interceptors closer to Russian borders?" Rogozin told a seminar in Brussels.
"We have appealed to our NATO partners to limit the range of action of the missile interceptors by geography and for some technical parameters to make it possible for the system to only intercept small and medium-sized missiles," he said. "But they don't want any limitations and that really poses a threat to the strategic missiles on Russian territory."
(Reuters, Bloomberg, AP)
17.10.2010
Three-way meeting of European powers to discuss security
A meeting among German, French, and Russian leaders gets under way Monday to discuss European security cooperation. France and Germany are expected to emphasize that a missile defense plan does not threaten Moscow.
German Chancellor Angela Merkel, French President Nicolas Sarkozy and Russian President Dmitry Medvedev are meeting Monday to discuss European security issues, including Russia's future role in NATO, during two days of talks in the French town of Deauville.
In November, NATO is expected to unveil a new security vision which would involve a European missile defense shield. Medvedev has not yet said if he will attend the NATO meeting, but Merkel and Sarkozy hope to use the talks in Deauville to get Medvedev on board.
"We will discuss whether it is possible for Russia and NATO to cooperate better, because the era of the Cold War is definitely over," Merkel said in her weekly video podcast on Saturday.
Closer ties
Recently, Medvedev has come out in support of a new joint European security framework, but Russia has been reluctant to support a missile shield, which it fears could target Russian cities.
Another agenda item for the meeting, which an aide for Sarkozy described as a "brainstorming session," is France's upcoming role as the chair of the G-20 in 2011 when it takes over the reigns from South Korea.
Despite the informal nature of the talks, some of Germany and France's allies are a little miffed at being excluded from the conversation.
Russia is seen as turning its view more and more to the west, but continues to be at odds with some global powers like the United States on some issues.
Germany and France, however, enjoy relatively good relations with Russia, and the three leaders met in June on the sidelines of the G-20 summit in Toronto.
Author: Matt Zuvela (dpa/AFP)
Editor: Sean Sinico
October 17, 2010
Russia Wants to Formalize Relation With E.U.
By JUDY DEMPSEY
BERLIN — Ahead of a summit meeting Monday in Deauville, France, between the leaders of Germany, Russia and France, Moscow is asking for regular participation in the European Union committee that is responsible for setting the bloc’s foreign policy.
“We would like Russia and the E.U. to be able to take joint decisions,” Vladimir Chizhov, Moscow’s ambassador to the European Union, said in a telephone interview with the International Herald Tribune over the weekend from Brussels. “I don’t expect to be sitting at every session of the political and security committee, but there should be some mechanism that would enable us to take joint steps.”
Such arrangements would mark a major change in E.U.-Russia relations, which have been held back because of divisions inside the 27-member bloc over how to deal with Russia. They might also go some way to meet Russia’s calls for a new security architecture, a move aimed at gaining a greater say in strategic issues in Europe.
“We want our relationship with the E.U. through the political and security committee to be formalized, to be more efficient,” Mr. Chizhov said.
It seems Germany, at least, is prepared to go down that path.
When Chancellor Angela Merkel met President Dmitri A. Medvedev of Russia in June near Berlin, both leaders proposed the establishment of a new entity called the E.U.-Russia Political and Security Committee. The new committee would consist of the foreign ministers from Russia and the E.U. states, as well as Catherine Ashton of Britain, the E.U. foreign policy chief.
The proposal, which Mr. Chizhov said was initiated by Mrs. Merkel, leader of the conservative Christian Democrats, came as a jolt to other nations in the bloc.
“Until recently, the German government tended to focus on the economic relationship with Russia and pursue a more pragmatic policy, unlike the Social Democrats, who included a more ideological component in their approach to Russia,” said Susan Stewart, a Russian analyst at the Brussels office of the German Institute for International and Security Affairs. “The focus on security certainly surprised many of Germany’s E.U. partners.”
Analysts say Mrs. Merkel has realized that the European Union needs a security relationship with Russia because strengthening the NATO-Russia Council, which is supposed to discuss such issues, is going nowhere. Also, Mrs. Merkel has established a close relationship with Mr. Medvedev, unlike his predecessor and the current prime minister, Vladimir V. Putin, with whom Mrs. Merkel had a difficult relationship, according to German and Russia diplomats.
Russia, however, is expected to give something in return for gaining access to E.U. institutions.
Mrs. Merkel told Mr. Medvedev in June that Germany wanted Russia to help resolve the continuing conflict in Transnistria, a source of instability on Europe’s south-eastern borders, according to Chancellery and Foreign Ministry officials.
Transnistria, which is part of Moldova, a neighbor of the E.U. member Romania, is ruled by a pro-Russian nationalist movement that has been seeking independence from Moldova. More than 1,100 Russian troops are based in the region “for security reasons,” Mr. Chizhov said. He acknowledged that Transnistria was “regarded as a pilot project” for better relations with the European Union.
Analysts say Germany is now pursuing a two-pronged strategy with Russia.
“I think there are two issues at play,” Ms. Stewart said. “One is that Germany is prepared to push for a dialogue on Medvedev’s security proposals on the E.U. level. But the other is that before that happens, Russia should make a gesture regarding Transistria. If there was some progress there, then it would send a signal to the E.U. that Russia could act on this conflict.”
The dynamics of such a relationship between Russia and the European Union will be discussed Monday and Tuesday in Deauville between Mrs. Merkel, Mr. Medvedev and President Nicolas Sarkozy of France.
“This summit is important because France and Germany are considered the locomotive of European integration,” Mr. Chizhov said. Mr. Sarkozy is also eager to anchor Russia closer to Europe, according to French diplomats.
Security analysts, however, said the key to better relations between the European Union and Russia rested with Germany, Russia’s closest political and economic partner inside the bloc.
The gathering is the first time a trilateral summit meeting has taken place since Mrs. Merkel took office in 2005, after defeating Gerhard Schröder, a Social Democrat.
“Mrs. Merkel stopped holding those summits because of how they were perceived,” said Alexander Rahr, a Russian expert at the German Council for Foreign Relations think tank in Berlin.
Along with the former President Jacques Chirac of France and Mr. Putin, Mr Schröder had held regular trilateral meetings. Together these three leaders led the opposition — in what was then a bitterly divided Europe — against the U.S-led invasion of Iraq.
The meetings took place without consulting other E.U. member states and were criticized by several East European countries, particularly Poland and the Baltic states. They feared that their security could be undermined if France, Germany and Russia revived a policy of spheres of influence. As a result, relations between Poland and Germany deteriorated.
Since Mrs. Merkel’s election, relations have greatly improved. More significantly, Poland’s own relations with Russia have been restored, which is why the revival of the summit meetings between France, Germany and Russia has not upset Poland.
“Our relationship with Germany is now so much better,” said Janusz Reiter, president of the Center for International Relations in Warsaw and former Polish ambassador to Germany and the United States.
But Mr. Chizhov, Russia’s ambassador to the European Union, said establishing a close link between Brussels and Moscow would not take place overnight.
“Let’s see what happens in Deauville,” he said.
OCTOBER 18, 2010, 3:26 A.M. ET
Axel Springer: Russian Newsweek License Won't Be Prolonged
FRANKFURT (Dow Jones)-German publishing house Axel Springer AG (SPR.XE) said Monday its subsidiary Axel Springer Russia isn't extending Russky Newsweek's license agreement due to economic reasons.
MAIN FACTS:
-"Unfortunately, we have failed to bring the magazine to a firm economic base and we could not create a prosperous perspective," said Ralph Buechi, the head of Axel Springer's international operations.
-Axel Springer Russia will continue to publish editions of Forbes, Computer Bild and OK! magazines amongst others.
-Russky Newsweek had been published since 2004.
-Frankfurt Bureau, Dow Jones Newswires; 49-69-29725-500
Axel Springer Closes Russian Newsweek for ‘Economic Reasons’
By Brad Cook
Oct. 18 (Bloomberg) -- Axel Springer AG, Europe’s largest publisher of newspapers, said it will shut its Russian Newsweek magazine “with respect to economic reasons.”
The journal’s Oct. 18 issue will be the last, Axel Springer said in a statement today.
“We have failed to bring the magazine to a firm economic base and we could not create a prosperous perspective,” Axel Springer International President Ralph Buechi said in the statement.
To contact the editor responsible for this story: Brad Cook at bcook7@
Last Updated: October 18, 2010 03:44 EDT
Russian president to visit Poland
October 18, 2010 - 8:14AM
AP
The Polish president says his Russian counterpart, Dmitry Medvedev, will visit Poland on December 6.
President Bronislaw Komorowski announced the date on Sunday and described the planned visit as a step in a difficult process of reconciliation between the two nations.
Tensions still run deep over Russia's past domination of Poland, most recently during the Cold War.
The death in April of Komorowski's predecessor, Lech Kaczynski, jolted the dynamic between the two Slavic countries. An outpouring of sympathy by Russians carried promise for a new age of friendship but lately some Polish officials have complained that Russian authorities investigating the crash are not working as transparently as they would like.
New Polish Gas Deal Agreed, Details Being Hammered Out
18 October 2010
Reuters
Russia and Poland have agreed on a new gas supply deal conforming to EU rules, easing worries that Europe, which takes gas through the Polish pipeline, might face shortages during the coming winter.
An agreement on increasing Russian gas delivery to Poland and its transit to Germany through the Yamal pipeline was negotiated last year but was not signed because of worries that it was incompatible with European Union laws.
"The EU delegation participated in the talks and did not raise any objections to the governmental agreement," Joanna Strzelec-Lobodzinska, Poland's deputy economy minister, told reporters Sunday in Moscow.
Poland's current supply contract runs out next week, and the delay in signing the deal raised fears of supply disruptions similar to those experienced in 2009, when Russia left European consumers shivering during a price row with Ukraine.
Gazprom and Poland's gas monopoly PGNiG will now work on details, with Gazprom deputy CEO Alexander Medvedev saying the contract will be finalized within two weeks.
"What is left is to finalize corporate agreements regarding the functions of the operator of the Yamal-Europe project," Medvedev said.
Philip Lowe, the European Commission's director-general for energy, said the talks were "very constructive."
The deal covers 10 billion cubic meters of Russian gas a year for Poland until 2037, as well as gas flowing onward to the rest of Europe through the pipeline.
The European Commission has said the deal must respect EU rules, which say the pipeline must not be monopolized by PGNiG and Gazprom.
Gazprom warned last week that the bloc's gas industry reforms would mean the end of stable supplies to Europe.
Poland imports 65 percent to 70 percent of its 14 billion cubic meters annual gas consumption from Russia.
UPDATE 1-Russia, Poland agree gas supply deal
Sun, Oct 17 2010
* Gazprom, PGNiG to finalise contract
* Poland says EU delegation raised no objections
* Gazprom says deal to be finalised within two weeks
(Adds quotes, details, background)
By Lidia Kelly
MOSCOW, Oct 17 (Reuters) - Russia and Poland have agreed a new gas supply deal conforming to EU rules, easing worries that Europe, which takes gas through the Polish pipeline, might face shortages during the coming winter.
An agreement on increasing Russian gas delivery to Poland and its transit to Germany through the Yamal pipeline was negotiated last year but was not signed due to worries that it was incompatible with European Union laws.
"The EU delegation participated in the talks and did not raise any objections to the governmental agreement," Joanna Strzelec-Lobodzinska, Poland's Deputy Economy Minister, told reporters in Moscow.
Poland's current supply contract runs out next week, and the delay in signing the deal raised fears of supply disruptions similar to those experienced in 2009, when Russia left European consumers shivering during a price row with Ukraine.
Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) and Poland's gas monopoly PGNiG (PGNI.WA: Quote, Profile, Research) will now work on details with Gazprom's Deputy CEO Alexander Medvedev, saying the contract would be finalised within two weeks.
"What is left is to finalise corporate agreements regarding the functions of the operator of the Yamal-Europe project," Medvedev said.
Philip Lowe, the European Commission's director-general for energy, said the talks were "very constructive".
The deal covers 10 billion cubic metres of Russian gas a year for Poland until 2037, as well as gas flowing onwards to the rest of Europe through the pipeline.
The Commission has said the deal must respect EU rules, which say that the pipeline must not be monopolised by PGNiG and Gazprom.
Gazprom warned last week that the bloc's gas industry reforms would mean the end of stable supplies to Europe. [ID:nLDE69D1V1]
Poland imports about 65-70 percent of its 14 billion cubic metres annual gas consumption from Russia, a dependence that worries many in the EU's biggest ex-communist state. (Reporting by Lidia Kelly; Writing by Gleb Bryanski; Editing by Will Waterman)
Russia, Poland agree on gas deal text
18.10.2010, 00.43
WARSAW, October 18 (Itar-Tass) -- Russia and Poland agreed on the text of an intergovernmental agreement on Russian gas supplies to Poland, a source in the Polish Economy Ministry said on Sunday.
“The negotiations between government officials from Poland and Russia and representatives of the European committee on gas supplies in Poland have completed in Moscow. The sides have agreed on the text of an intergovernmental agreement, which is to be signed after the companies EuRoPol GAZ and Gaz-System complete the negotiations on the gas operator contract,” the source said.
The updated contract envisages Russian higher gas supplies by two billion cubic meters annually to Poland. Despite the previous agreement on the gas supply contract extended until 2037 and the gas transit contract extended until 2045, the contract timeframe remained unchanged, so Russian gas supplies will be made until 2022 and gas transit supplies until 2019, as it was stipulated in the previous contract.
Before a new agreement enters into force it is to be signed at the level of governments and between Gazprom Export and Polskie Gornictwo Naftowe i Gazownictwo (PGNiG). Their joint venture EuRoPol GAZ, which owns the Yamal-Europe gas pipeline, under the European Commission requirements, is to empower the Polish state-run company Gas-System to be an operator of the gas pipeline.
Moscow, Warsaw approve deal to increase gas supplies
03:05 18/10/2010
Moscow and Warsaw have approved a deal to deliver increased amounts of Russian gas to Poland, Polish deputy economics minister said after the talks.
The deal, to increase annual Russian gas supplies to 10 billion cubic meters, will come into force after being signed by governments of the two states, Polish deputy economics minister Joanna Strzelec-Lobodzinska said.
Poland's PAP news agency reported that the text of the inter-government agreement has already been agreed upon.
Russian energy giant Gazprom and Poland's gas monopoly PGNiG are also to sign a contract on the issue.
Gazprom's Deputy CEO Alexander Medvedev said the contract would be finalized within two weeks.
The Russian industry and energy ministry confirmed that the talks took place, but said it would disclose all details of the deal later on Monday.
An estimated 65-70% of all natural gas consumed in Poland comes from Russia.
WARSAW, October 18 (RIA Novosti)
Polish investigator to Moscow to study final report on air crash
18.10.2010, 06.24
MOSCOW, October 18 (Itar-Tass) -- The Polish envoy on the investigation in the crash of the late President Lech Kaczynski’s airliner, Edmund Klich, will arrive here on Monday to study a final report drafted by the Interstate Aviation Committee (MAK), a source in the civil aviation authorities told Itar-Tass on Sunday.
Klich will study the final report for two days, the source said. “It is not ruled out that on Wednesday or on Thursday (October 20-21) the final report, in which the Interstate Aviation Committee has established the reasons for the air crash, will be made public,” the source said.
The Interstate Aviation Committee told Itar-Tass earlier that the MAK technical committee has finalized the gathering of evidence in the Polish presidential airliner crash case and started drafting a final report. “The MAK technical committee entered the final stage of making up a final report, analyzing all flight circumstances, including the emergence and development of an extraordinary situation in the flight, and drawing conclusions on the reasons for the air crash and giving recommendations for a higher flight safety,” a source in the committee said.
The final report “will be discussed with Edmund Klich and passed to him under the Convention on International Civil Aviation.”
The Polish presidential airliner Tu-154M with the official delegation crashed on April 10 outside Smolensk, where Lech Kaczynski was flying to attend the mourning events in Katyn. The air crash killed all 96 people aboard the airliner, including the president and his wife.
Russia has already passed to Poland the deciphered flight recorders and several other documents related to the investigation into this tragedy. Along with the investigation, which the Interstate Aviation Committee is holding with Polish experts, Russia and Poland are taking separate investigating measures.
Leading Polish expert to study Smolensk plane crash probe in Moscow
Poland's special envoy to the Interstate Aviation Committee (IAC), Edmund Klich, will visit Moscow on Monday to study the committee's probe into the crash in April of a Polish presidential plane in western Russia.
Klich and other Polish experts working on a probe of the deadly crash, which killed 96 people, earlier expressed their dissatisfaction with the documents provided by the Russian side. Most of the complaints concerned a lack of technical details about the Severny airport in Smolensk at which the plane was to land.
"On Monday I will fly to Moscow. On Tuesday, the IAC will give us the draft report. On Thursday I will return to Poland," Klich told journalists.
"From that moment, the Polish side will begin to formally assess the IAC report," the Polish expert added.
Klich will be accompanied by a representative of the Polish governmental commission investigating the tragedy.
The worn-out Tu-154 that crashed near the western Russian city of Smolensk while carrying then president Lech Kaczynski and other senior Polish officials to a commemoration ceremony of the 1940 Katyn massacre.
Russian and Polish investigators and experts have been jointly investigating the causes of the crash. Polish military prosecutors conduct a separate probe.
WARSAW, October 18 (RIA Novosti)
Russian watchdog slaps import ban on several Ukrainian food producers
Today at 10:27 | Interfax-Ukraine
Russia is banning the import of meat and dairy goods from various enterprises in Ukraine starting from October 16-17, the country's agricultural watchdog Rosselkhoznadzor said.
The agency said that a ban would come into force on October 16 for importing production from Baltic Dairy Works - Baby Foods and beef from Shepetov Meat Works.
In addition, ban on the import of beef from Trostenet and Vatutin Meat Works will come into effect on October 17.
This decision was made following a joint inspection of installations in Ukraine in September by Russian and Ukrainian veterinary services. Rosselkhoznadzor said that violations of Russian sanitary requirements had been uncovered.
Therefore, of the 15 meat-processing enterprises in Ukraine with the right to import to Russia, only three remain and of the 14 dairy facilities, 10 still can import.
Read more:
Russian companies interested in developing business relations with Abkhazia - Kremlin chief of staff
11:44 16/10/2010
Russian companies are interested in developing business and trade relations, along with implementation of investment projects with Abkhazia, the Kremlin chief of staff said.
Sergei Naryshkin arrived in the Abkhazian capital of Sukhumi to participate in a business forum.
"Today you have organized this great economic forum, which proves that our countries, [our] enterprises and companies are strongly interested in developing relations, in development of mutual trade, interested in implementation of small and large investment projects in Abkhazia, Naryshkin said.
Russian governors, non-governmental organizations and business representatives arrived to Abkhazia to participate in the forum, he said.
"This proves once again that big interest Russia has towards Abkazia," he added.
Russia recognized Abkhazia and South Ossetia as independent states two weeks after a five-day war with Georgia in August 2008, which began when Georgian forces attacked South Ossetia in an attempt to bring it back under central control.
SUKHUMI, October 16 (RIA Novosti)
Moscow Duma to vote for new mayor on Thursday
Oct 18, 2010, 8:03 GMT
Moscow - Moscow lawmakers are to vote on the candidacy of Russia's Deputy Prime Minister Sergey Sobyanin for mayor on Thursday, media reports said Monday.
President Dmitry Medvedev last week nominated Sobyanin as successor to Yuri Lushkov, who was ousted amid allegations of corruption in late September. Lushkov had been Moscow's mayor for 18 years.
Sobyanin's candidacy is seen as certain. The 52-year-old is to be sworn in Thursday, according to Moscow Duma Chairman Vladimir Platonov.
[pic]
Mayor Sobyanin to Court Investors
18 October 2010
By Alexandra Odynova
President Dmitry Medvedev told Deputy Prime Minister Sergei Sobyanin that his priorities as Moscow's next mayor would be to battle traffic jams and corruption in order to attract more investment.
Medvedev announced his decision to name Sobyanin as mayor late Friday, fulfilling expectations raised early that morning when the web site of Rossia One state television prematurely broke the news about Sobyanin's nomination.
Russian newswires quickly picked up the report, which cited a Kremlin statement, but Medvedev's spokeswoman Natalya Timakova denied releasing the statement an hour later and the web site apologized.
But Friday evening, Medvedev invited Sobyanin to his Gorki residence and told him about his nomination.
“This is very difficult work with a lot of responsibility," Medvedev said during the televised meeting.
Medvedev highlighted corruption, traffic and social problems as the main issues that Sobyanin should tackle after being confirmed as mayor by the Moscow City Duma.
"There are many opportunities for doing business in Moscow, but not all of them can be easily accomplished," Medvedev said. "There are many reasons for this, one of which we are openly talking about: corruption."
As for Moscow's notoriously bad traffic, Medvedev said, “if the situation with the traffic cannot be solved, at least it can be significantly improved."
"This is a big responsibility and confidence, and I'll do everything possible to justify it," Sobyanin told Medvedev, according to a transcript of the meeting posted on the Kremlin's web site.
"I've been living in Moscow for a few years, and I know the troubles and problems of this city," he said. "A lot has been done in the last few years, but at the same time, there are serious issues that need to be resolved immediately."
Sobyanin, 52, made no public comments after the meeting, but Kommersant, citing unidentified sources, said he had been highly reluctant to take the post.
In tackling Moscow's traffic, Sobyanin might be able to turn to his own wife for advice. Media reports in 2006 said his wife, Irina, owned a road-construction company called Ira Bordyur. Sobyanin has not commented on the reports.
Sobyanin, who has served as Prime Minister Vladimir Putin's chief of staff, was seen as the front-runner for mayor after making it to United Russia's shortlist for Medvedev on Oct. 9. The other candidates were Transportation Minister Igor Levitin, Nizhny Novgorod Governor Valery Shantsev and Lyudmila Shvetsova, Moscow's deputy mayor in charge of social policies.
“Sergei Sobyanin is an experienced manager, who has all qualities needed to be the mayor of Moscow,” Medvedev wrote on his Twitter blog.
Medvedev fired Mayor Yury Luzhkov on Sept. 28 after 18 years in office over “a loss of confidence.” He has not elaborated on the reasons.
Boris Gryzlov, the State Duma speaker and leader of United Russia's faction in the Duma, predicted that Sobyanin “will be respected by Muscovites.”
Moscow region Governor Boris Gromov, who had been embroiled in various feuds with Luzhkov in recent years, praised Sobyanin's nomination Saturday as a new "dynamic stage of cooperation between Moscow and the Moscow region in all ways,” Interfax reported.
Gennady Zyugannov, leader of the Communist Party, cautioned that the new job “won't be easy” for Sobyanin.
Sobyanin will start by “reorganizing the financial flows” in the city dominated by Luzhkov's allies, including taking away businesses from Luzhkov's wife, Yelena Baturina, the billionaire owner of the Inteko construction company, said Vladimir Pribylovsky, head of the Panorama think tank.
Baturina's relationship with Luzhkov and her wealth raised questions about corruption in City Hall. Investigators have said they do not plan to investigate Luzhkov's family for corruption, and the former mayor and his wife have denied wrongdoing.
Luzhkov, who has been on vacation in Austria for the past week, will only comment on Sonyanin's appointment after he returns to Moscow this week, Interfax reported.
Sobyanin, a lawyer by training, has lived in Moscow for the past five years after shorter stints in the capital in the 1990s. Born in 1958 in an ethnic Mansi village in West Siberia's Khanty-Mansiisk district, Sobyanin quickly rose through the ranks of the Communist Party and Soviet institutions. In 1994, he was elected speaker of the district's parliament and became a Federation Council senator two years later.
“Sobyanin is not a Muscovite, but he made a lot of political connections in the city as the [Khanty-Mansiisk district] speaker,” Pribylovsky said.
Sobyanin was elected governor of the Tyumen region in early 2001 and later that year was elected chairman of the TNK oil company.
After replacing Medvedev as Putin's Kremlin chief of staff in 2005, Sobyanin went on to head Medvedev's election campaign in 2007 and become a deputy prime minister in 2008. He also has served as a co-chairman of Channel One state television since February 2009.
As a new man in City Hall, Sobyanin might want to reshuffle the team formed by Luzhkov, Pribylovsky said. Shvetsova is likely to remain in her post because she was shortlisted by United Russia for the mayor's job, but Sobyanin might also bring in another woman, Anastasia Rakova, he said. Rakova, who is known as Sobyanin's right hand, heads the government's law department and is the only subordinate he brought from Khanty-Mansiisk to Moscow, he said.
Sobyanin, a member of United Russia’s supreme council, will have to resign as deputy prime minister and Putin's chief of staff when his nomination is approved by the Moscow City Duma, where United Russia occupies 32 of the 35 seats. A date for the conformation had not been set by Sunday.
Analysts say Sobyanin's appointment as mayor represents a significant loss for Putin, for whom he established communication with the regions. Putin has not said who will replace Sobyanin.
Sobyanin and his wife have two daughters. According to his income declaration, Sobyanin earned 3.2 million rubles ($105,609) last year and owns a Jeep Cherokee, while his wife earned 18,500 rubles ($610). The two share an apartment of 118 square meters.
Putin’s Nobody for Mayor
18 October 2010
By Victor Davidoff
Although the appointment of Deputy Prime Minister Sergei Sobyanin to the post of Moscow mayor was widely expected, the news set off a barrage of emotional opinions on the Russian Internet. Most were negative. Sobyanin was already being criticized for being a nobody, not a public politician and, most damningly, the closest associate of Prime Minister Vladimir Putin among all the candidates for mayor.
As blogger sergius1971 wrote, “Sobyanin is head of the board of directors of Channel One and bears part of the responsibility for the miserable state of the main source of information for the majority of Russians.”
Sobyanin’s record as governor of the Tyumen region also fell under the bloggers’ scrutiny. k_kiselev wrote that despite a per capita regional budget under Sobyanin that was 1.3 to 1.4 times greater than the budget in the neighboring Sverdlovsk region, Tyumen considerably lagged behind its neighbor in many parameters.
There were only a few voices in support of Sobyanin. Blogger jkuma found it a positive sign that Sobyanin is not a chekist, unlike so many appointed to governors’ posts and agencies under Putin’s presidency. She concluded that Sobyanin’s candidacy represents a compromise between the pro-Putin siloviki and the pro-Medvedev modernizers.
But last week, Russian bloggers weren’t focused only on events in Moscow. They were also following a court case in the Urals city of Nizhny Tagil, where 23-year-old Yegor Bychkov, head of the local branch of a foundation called A City Without Drugs, was accused of kidnapping and imprisoning drug users.
At issue were the foundation’s practices to “cure” drug users — methods that are extremely dubious from the point of view of both medicine and the law. Users were forcibly placed behind bars in wards and handcuffed by hand and foot to their beds. The patients were kept like this for four weeks, during which time they were fed only bread and onions.
Bychkov was sentenced to 3 1/2 years in prison. It’s one of those mysteries of the Russian soul that the public is on the side of the criminal. Bychkov doesn’t deny kidnapping and holding people as prisoners, but neither does he consider himself guilty. He says he did what he did with only the best intentions. Even a survey of the rather liberal audience of Ekho Moskvy radio showed that 93 percent of the respondents supported forcible “treatment” of drug users.
Perhaps the blogger sapojnik got it right when he wrote: “Our kind-natured average citizens don’t consider drug addicts to be people, and they are deathly afraid of them. Society treats drug addicts worse than rabid dogs. They treat them like zombies from a horror film. … People in our society aren’t the least bit sorry for addicts.”
Or perhaps it’s more complicated. Maybe the public is just fed up with the inability of the police to catch drug dealers. Blogger vyatsky writes: “Society is furious that the Russian legal system has put one more Robin Hood behind bars … and that corrupt cops are back in business — together with the drug dealers.”
Meanwhile, a campaign to free Bychkov has gone into high gear. Rock musician Sergei Shakhrin has personally asked President Dmitry Medvedev to review the case.
The good news is that in the age of the Internet, some problems can be solved without a petition to the Kremlin. The blogger and lawyer Alexei Navalny — aka LiveJournal user navalny — noted a very strange request for bids on the web site of the Health and Social Development Ministry. The ministry wanted a contractor to create a social network for medical personnel and patients. This sounds like a good idea. But the catch was that the project, which had a budget of 55 million rubles (about $1.8 million), had to be finished 16 days after the contract was signed. Not even all the programmers in Silicon Valley led by Facebook creator Mark Zuckerberg could create a social network from scratch in just over two weeks.
Navalny reasonably suggested that the unusual requirement was made intentionally to limit the tender to one bidder, which would be submitted by an organization that had a deal with one of the ministry bureaucrats. We may never know what exactly was going on, but in any case, two days after the blogs began to buzz about this, the ministry announced that the person in charge of the request for bids had resigned.
A joke immediately started making the rounds on the blogosphere: All the country’s prosecutors might as well resign, too, since bloggers were doing their jobs for them.
Victor Davidoff is a Moscow-based writer and journalist whose blog is chaadaev56..
| |
|Central Moscow opposition rallies set to get green light |
| |
|18/10/2010 10:14 (00:16 minutes ago) |
|The FINANCIAL -- A senior Kremlin official has said that opposition protests in central MOSCOW are likely to get the go-ahead |
|when the city's new mayor takes office, RIA Novosti reported. |
Protestors have been attempting to hold unsanctioned March of Dissent rallies on Triumfalnaya Square on the last day of each month with 31 days in honor of Article 31 of the Russian Constitution, which guarantees freedom of assembly. The rallies, which usually attract less than 300 people, invariably end in mass arrests.
Prime Minister Vladimir Putin said in August that protestors at such demonstrations should get “whacked with a baton.”
The authorities recently fenced the area off ahead of work to build an underground car park at the site. The opposition has said the construction project is a sham designed to put a halt to the demonstrations.
“We are absolutely calm as regards such events,” Kremlin deputy chief of staff Vladislav Surkov said in an interview with the Vzglyad newspaper. “For a democratic state this is an absolutely normal thing.”
“If 200 people want to gather every 31st of the month on Triumfalnaya Square in MOSCOW , with its multi-million population, then let them gather. I am sure the new mayor of the capital will make the right decision. And this decision will be in the spirit of the president’s policies,” he went on.
Former MOSCOW mayor Yury Luzhkov was recently dismissed by President Dmitry Medvedev over a “loss of trust.” Medvedev nominated Deputy Prime Minister Sergei Sobyanin for mayor. Reports suggest he will be approved by the city parliament on Thursday.
“It’s too early to shout ‘victory,’ but it looks as if the authorities are tied and will give us Triumfalnaya,” leading opposition figure Eduard Limonov wrote on his Live Journal blog on October 17.
He also said the Kremlin had taken opportunity of the departure of Luzhkov to “blame everything” on the former mayor.
Court to pronounce verdict in Ruslan Yamadayev’s murder case
18.10.2010, 07.17
MOSCOW, October 18 (Itar-Tass) -- The Moscow City Court will pronounce a verdict in the murder case of the former State Duma deputy Ruslan Yamadayev on Monday.
During the court deliberations Prosecutor Amalia Ustayeva requested the court to sentence Aslanbek Dadayev to 23 years in prison. He is accused of Yamadayev’s murder and an attempted murder of the former Chechen military commandant Sergei Kizyun. The prosecutor demanded to sentence the second defendant Elimpasha Khatsuyev to 19 years in prison. The prosecutor demanded to sentence Timur Isayev to 16 years in a tough security penitentiary. He is accused of an attempted murder of the Conversbank board chairman Alexander Antonov.
Though all defendants pleaded not guilty the prosecutor concluded that their guilt “is substantiated by the evidence fully and indisputably.” Meanwhile, the lawyers asked the judge to pass an acquittal verdict.
The judge tried the case with the press permitted to attend the court sessions.
According to the public prosecutor, unidentified masterminds contracted Dadayev and Khatsuyev to kill Yamadayev for a reward. The contract killers traced down the former deputy. On September 24, 2008, Yamadayev’s armored Mercedes stopped on the streetlights on the Smolenskaya Embankment in Moscow. Dadayev ran up to the car and taking advantage of the fact that Kizyun, who was sitting on the passenger seat, lowered the window, has made 16 gunshots inside the car. Meanwhile, despite the fact that the killer targeted at Yamadayev he did not want to leave Kizyun alive as a witness. However, he failed to kill Kizyun and the latter was hospitalized timely. Later Kizyun identified Dadayev for his eyes, as the killer was in the mask.
Alongside, the public prosecutor stated that earlier in March Dadayev and another defendant Isayev committed an attempt on the life of banker Antonov and his bodyguard Komarov for a reward from unidentified masterminds. Isayev has made 18 gunshots in them, but the victims survived.
The Minister of the Interior of Russia arrives in Dagestan
18.10.2010 , 11:07
Photo: накануне.ru
Text: Vefader Melikov
Makhachkala, October, 18, 2010. On October, 18, the Minister of Internal Affairs of the Russian Federation, Army General Rashid Nurgaliyev has arrived in Dagestan with working visit. The President of Dagestan Magomedsalam Magomedov, the Minister of the Interior of Dagestan Abdurashid Magomedov, members of the government and other officials have met the guest of honour at the airport.
Chechen leader vows to end bride kidnapping
Yesterday at 17:10 | Associated Press
MOSCOW(AP) — The leader ofChechnyahas ordered an end to the practice of bride kidnapping.
Ramzan Kadyrov says bride kidnapping violates the laws ofRussia, of whichChechnyais a part, and goes against Islam, the dominant religion in the North Caucasus republic.
Kadyrov's press service says he spoke Sunday to an audience of government officials, law enforcement officers and clerics, telling all of them to do their part to end the practice.
Bride kidnapping is part of Chechen culture and has become increasingly popular in recent years.
In many cases men seize women who either have refused to marry them voluntarily or whose families oppose the match. The woman's family may then allow her to stay with her kidnapper on the assumption that the union has already been consummated.
Read more:
Gazprom economist found shot dead in Moscow
by admin on October 18, 2010
By Ivan Anderzhanov
A senior economist for the Russian state gas monopoly Gazprom has been found dead in Moscow from a shot wound.
Initial reports suggested Sergei Klyuka had died from a self-inflicted gun shot from a gun presented to him by the Kazakh prime minister.
A statement from Gazprom said Klyuka had been found dead in the early hours of Sunday morning. 'The cause of his death is being investigated by the security services, Gazprom said.
The state news agency Interfax said his body was then found overnight slumped behind the wheel of his Range Rover in an underground garage in the capital, with a pistol on the seat.
Klyuka’s death may have been suicide but it’s equally possible that it was made to be look like a suicide. Over the years, businessmen and journalists have been founded dead in questionable suicides.
Ivan Safronov, a journalist at the Russian newspaper Kommersant, was found dead after falling from the window in the stairway of his five-storey home. Police and prosecutor initially characterized his death as suicide but his colleagues and editor are convinced he was killed before the publication of material about arms shipments to the Middle East.
Russia Today journalist shot in foot in Moscow
21:34 17/10/2010
A Russia Today journalist is in hospital after being shot in the foot in a Moscow restaurant, the news channel said on Sunday.
There is no indication that the attack, which Russia Today say took place on October 9, is related to her professional activities.
Natalya Arkhiptseva was shot with a gun firing rubber bullets a by a 35-year-old native of St. Petersburg in the capital’s Prado Cafe. She said he opened fire after she objected to being sworn at by him and his friends as she passed their table.
The suspect has been released on a pledge not to leave the city. He has been charged with “hooliganism” - which carries a maximum sentence of five years behind bars.
MOSCOW, October 17 (RIA Novosti)
Putins reappear in public to reaffirm marriage
Yesterday at 15:12 | Reuters
MOSCOW, Oct 17 (Reuters) - Russian Prime Minister Vladimir Putin and his wife Lyudmila made a rare joint public appearance over the weekend seeking to reaffirm their marriage amid persistent divorce rumours.
In a video posted on the government's website on Sunday the couple jointly answered questions from a census-taker who visited Putin's residence outside Moscow as part of a nationwide population count.
Putin, 58, who stepped down as president in 2008 to became prime minister but is still seen as the country's paramount leader, has been married to Lyudmila, 52, a former flight hostess, since 1983. They have two daughters.
The Putins have only rarely been seen in public in recent years, raising media speculation that they had secretly divorced and that Putin planned to marry Olympic champion gymnast Alina Kabayeva, who was born the same year Putin married Lyudmila. Less than a month before stepping down as president, Putin dismissed the rumours, telling journalists to keep their "snotty noses" out of his private life. In the new video, the Putins tell the census-taker they are married.
"I am his wife," says Lyudmila, looking slightly awkward and constantly adjusting her dress. She seemed nervous, her eyes frequently blinking, when asked whether her marriage was registered.
Later in the video, Putin tells Lyudmila she is "not modest" after she says she can speak German, Spanish and French. "But it is true," she says.
Putin's spokesman Dmitry Peskov told Reuters the divorce rumours were "nonsense" and the fact the couple was appearing only rarely in public was due to Putin's "immense workload".
The couple sat at a short distance from each other on the the beige sofa in a simple room with an old television set and basic furniture styled to demonstrate the former KGB spy's relatively modest way of life.
Putin and Lyudmila were last briefly seen together at a pop music concert last year. Before that the couple met with Russian Orthodox Patriarch Kirill, stirring rumours they were seeking official permission from the church to divorce. Putin's personal life is entirely hidden from the public eye and as prime minister he is under no protocol obligation to take Lyudmila to international events. Mainstream media do not report on Putin's private affairs.
Last month the Orthodox Church denied rumours circulating in the Internet that Lyudmila had become a nun and was appointed by the Patriarch an abbess in one of its monasteries.
Read more:
Russian spacemen take part in census
|Oct 18, 2010 09:49 Moscow Time |
The Russian spacemen currently on duty on the International Space Station (ISS), Alexander Kaleri, Oleg Skripochka and Fiodor Yurchikhin, are expected to take part in Russia’s general census during a special video-conference with the National Flight Control Center located in a suburb outside Moscow.
It is not the first time when Russian spacemen are taking part in the census. The census held in Russia in 2002 was the first one in history involving spacemen working in orbit.
Russia hopes to join ranks of top tourist destinations
AFP
Monday, 18 October 2010
Despite being home to some of the world's great attractions - from Red Square and the Kremlin in Moscow to the famed Hermitage museum in Saint Petersburg - Russia has struggled to attract tourists.
With some of the most expensive hotels in the world, inadequate tourism infrastructure, a reputation for surly service and bureaucratic headaches for visitors, Russia is hardly an easy destination for travellers.
Now the Russian government is hoping to change all that and is planning to launch an ambitious programme to make the country a tourist paradise by 2016 and thrust it into the ranks of major tourism destinations.
"We are going to do everything possible so that a foreign visitor feels comfortable in Russia," the deputy minister for tourism and sport, Nadezhda Nazina, told AFP.
The Russian government will soon be considering a 352-billion-ruble (11.7-billion-dollar, 8.5-billion-euro) plan to improve infrastructure, train specialists and launch a major advertising campaign, she said.
If the plan is successful "in five years up to 40 million foreign tourists could visit Russia every year," Nazina said.
Russia last year attracted only 2.3 million foreign visitors, according to the federal tourism agency, placing it far below the top destinations for international tourists.
The top two destinations, France and the United States, attracted 74 million and 55 million visitors respectively in 2009, according to the World Tourism Organisation.
To reach its target, Russia would need to attract about as many tourists every year as Italy, which last year hosted 43 million foreign visitors.
Industry experts in Russia said they would love to see the plan succeed but were highly sceptical.
The figure of 40 million tourists "is a prediction that is in the realm of science fiction," said Maya Lomidze, the executive director of the Association of Tour Operators of Russia.
"Too many conditions would have to be met for this plan to be realised. The main necessity is that we have hotels at affordable prices. Russia is a very expensive country," she said.
According to a recent study by travel consultancy the Hogg Robinson Group, the average price of a hotel room in Moscow is 402 dollars (288 euros), the most expensive in the world. In Paris the average price was 318 dollars (227 euros) and in New York 297 dollars (213 euros).
"In Moscow there are almost no economy-class hotels or they are very bad. The prices are exorbitant," said Irina Tyurina, the spokeswoman for the Russian Tourism Industry Union.
She said Moscow and Russia's Tsarist-era capital Saint Petersburg, famed for their luxury hotels, continue to host most visitors to Russia, accounting for 95-98 percent of foreign guests.
The next most-popular destinations are the so-called Golden Ring of ancient cities near Moscow including Vladimir and Rostov, the Kamchatka peninsula in Russia's Far East and the Lake Baikal region in Siberia.
Industry experts said Russia will also have to overcome the bureaucratic red-tape that is the bane of visits to the country.
Foreign visitors are not only required to indicate the cities they plan to visit when applying for a Russian visa, they are also required to register with local migration authorities every time they visit a new city, a process Tyurina described as "humiliating."
Russia is also country "that has not yet adapted to the needs of foreign tourists," Lomidze said. For example, there are no signs in English in the Moscow Metro except for small plans posted in the underground transportation network.
"The conditions are such that a foreigner who does not speak Russian cannot get around on their own," she said.
Despite their scepticism, tour organisers nonetheless hope the government plan will succeed.
"If the government's plan is realised, tour operators will be thrilled ... There are a lot of things to see in Russia," Lomidze said.
Krasnodar territory to help all people affected in flood-governor
18.10.2010, 04.04
KRASNODAR, October 18 (Itar-Tass) -- The Krasnodar territorial authorities will give all necessary assistance to the residents of the Tuapse district affected in the flood, Governor of the Krasnodar Territory Alexander Tkachev told Itar-Tass on Sunday. He was among the first officials who rushed to the flood-hit settlements and met with their residents.
“People affected in the natural disaster will not be able to restore their houses on their own. I am convinced that we have all the forces to clean up the aftermath of the natural disaster as soon as possible,” the governor said. “The district, city and territory will help the flood-affected residents,” the governor pointed out.
“The current major task is to restore the power supplies, drain the water out the houses and facilities to resume the electric power and heating supplies there and to provide people with all things that they need,” he remarked.
At the Saturday meeting of the emergency headquarters set up to clean up the aftermath of the flash flood Alexander Tkachev demanded the damage assessment be competed on Sunday and so that it could be possible to set the sum of compensations for the flood-affected residents. The governor also demanded to restore electric power and water supplies and to complete other restoration works as soon as possible. Tkachev has examined from the helicopter the natural disaster area, where the rivers burst out due to heavy rains that resulted in the flooding of 22 settlements. In one of the most damaged settlements Novomikhailovsky the governor assessed the damages to the residents immediately and promised to help each family affected in the flood.
The damages from the flood in Kuban “reached several hundred million roubles,” Tkachev noted.
The flash flood killed 13 people, and several more people are reported missing, the press service of the Kuban governor told Itar-Tass.
The Tuapse district authorities will pay all funeral expenses.
According to specified reports, heavy rains triggered a strong flood that inundated 17 settlements in the Tuapse district overnight to October 16.
South Russia to mourn flash flood victims on Monday
05:08 18/10/2010
Monday was declared a day of morning in the Krasnodar region's Tuapse district, worst affected by flash floods in which at least 13 people were killed.
Torrential rains in mountainous areas caused rivers to overflow, flooding more than 20 villages. About 300 people, including 70 children, were evacuated. Local authorities imposed a state of emergency in the area.
The local emergencies ministry dismissed a report issued on Sunday that claimed the body of 14th victim, a man previously listed as missing, had been found.
"The body of a man was indeed found, but the cause of his death is yet to be established. His death is unlikely to be the result of the flood. So, according to official data, the death toll still stands at 13, with 9 listed as missing," a spokeswoman for the region's emergencies service said.
The situation in the flooded area has stabilized and people are currently returning to their homes.
Krasnodar Territory governor Alexander Tkachev said the flooding damage was worth several hundred million rubles and pledged to pay compensation and eliminate the consequences of the disaster as soon as possible.
KRASNODAR, October 18 (RIA Novosti)
Communication cable damaged in Sakhalin, Khabarovsk
18.10.2010, 09.18
VLADIVOSTOK, October 18 (Itar-Tass) - Thousands of residents of Sakhalin, the Khabarovsk Territory and Birobidzhan were left without communication on Monday due to damaged fibre-optic cables of the Transtelecom and Dalsvyaz companies. The press service of Sakhalin-Transtelecom said that a section of the digital mainline of the Transtelecom company was damaged on the Komsomolsk – Sovyetskaya Gavan line in the Khabarovsk Territory in the area of the Oruchya River estuary, which left Sakhalin subscribers without Internet connection. The emergency liquidation efforts are currently in progress.
The second cable, which belongs to the Dalsvyaz company, was damaged by unknown perpetrators in Khabarovsk. According to the company’s press service, 11,000 subscribers in the capital of the Khabarovsk Territory, as well as in the Fyodorovka, Michurinskoye and Berezovka settlements we cut from international and intercity communication. Besides, 3,200 subscribers in Khabarovsk and 13,00 subscribers in Birobidzhan were left without Internet connection. Access to the IPTV service was suspended for another 4,000 subscribers in Birobidzhan. Emergency restoration efforts are continuing, they are planned to be completed by the end of the day.
The Joint Stock Company “Company TransTeleCom” (trademark - TTK) was founded in 1997. The major shareholder is Joint Stock Company “RZD” (Russian Railways). In the course of three years the company has built the most modern and branched fibre-optic telecommunications line, using the most advanced and efficient telecommunication technology. Today, Company TTK operates and services the largest fibre-optic communication network in Russia, with a length of more than 53,000 km and a network capacity of 50 Gbps. The network is laid along the railways, and has more than 1,000 access nodes in all regions of Russia and connects Europe and Asia. 17 regional enterprises created in the largest Russian cities provide TTK services all over the country.
The Company is one of three leading alternative operators of fixed communication and provides 45 percent of long-distance channel lease, occupies 46 percent in the segment of backbone Internet and 34 percent in the IP VPN market. The consolidated return of the group of TTK companies in 2007 was 24.1 billion roubles with a profit of 2.5 billion roubles – 18 percent higher than in 2006. In September 2007 TTK began rendering services on the long-distance and international telecommunications market. TTK actively operates both on the operator and the corporate markets. Customers of the Company are mainly geographically-distributed businesses. These are primarily railway carriers as well as state enterprises and large corporations. Currently, TTK has implemented large-scale telecommunications projects for state organisations and large commercial corporations. The Company’s customers include the Ministry of Emergency Situations, MIA, Regional customs authorities, the Russian Academy of Sciences, Roskosmos, OKB Sukhoi, KnAAPA, Sberbank, Alfa-Bank, Bank Russky Standard, Mezhbusinessbank, Ingosstrakh, Uralsib, Norilsk Nickel, SUAL, PG MAIR, YevrazRuda, Yevrokhim, Vympelcom, Megafon, MTS, and VGTRK.
Orange alert in Russia`s volcano
Oct 18, 2010 10:08 Moscow Time
Eruption of Russia’s Klyuchevskaya sopka volcano in Kamchatka has sent ashes and gas to the area of 418 kilometers.
The local seismologists have issued a code orange alert for the Klyuchevskaya sopka, which is said to be the highest active volcano in Eurasia (4,750 m above sea level).
This color code warns the aviation about the potential threat which may be caused by volcanic ash.
Ash and gas plume from Klyuchevskoi volcano stretching for 418 km
18.10.2010, 08.42
PETROPAVLOVSK-KAMCHATSKY, October 18 (Itar-Tass) -- The ash and gas plume coming from the Klyuchevskoi volcano in Russia’s Far East has been reported to stretch out 418 kilometers to the southeast. An ash cloud has been reported 247 kilometers off the volcano. There is no danger to the nearby settlements, the Kamchatka branch of the Geophysical Service of the Russian Academy of Sciences told Itar-Tass on Monday.
According to the service, spews of gas, fumes and volcanic tuff have been registered in the volcano over the past 24 hours. Residents of the settlement of Kozyrevsk said they saw a flow of lava coming down the Klyuchevskoi’s southeastern slope. Airglow has been reported over the Klyuchevskoi crater, which testifies to the presence of scorching lava.
Klyuchevskoi (or Klyuchevskaya Sopka) stratovolcano is considered to be the highest (4,750 metres above sea level) active volcano of Eurasia. Its steep, symmetrical cone towers about 100 kilometres from the Bering Sea. It is situated in Kamchatka’s east some 32 kilometers off the settlement of Klyuchi with 5,000 residents.
Klyuchevskoi’s first recorded eruption occurred in 1697, and it has been almost continuously active ever since, as have many of its neighbouring volcanoes. The volcano was first climbed in 1788 by Daniel Gauss and two other members of the Billings Expedition. No other ascents were then recorded until 1931, when several climbers were killed by flying lava on the descent. As similar dangers still exist today, few ascents are made. Klyuchevskoi is considered sacred by some indigenous peoples, being viewed by them as the location at which the world was created. It is said that when the god Volkov created the world, this was the point at which he held it, and so it remains unfinished, unsealed, thus the volcanic activity.
The volcano erupts once in five to six years. Beginning in August 2009, the Klyuchevskoi volcano began another eruption cycle.
October 18, 2010 05:00
Russian political and economic calendar: October 18
MOSCOW. Oct 18 (Interfax) - The political and economic calendar in Moscow, Russia and Newly Independent States for October 18 is as follows:
*** The All-Russia population census will take place (14-25.10.2010).
*** Presidents of Russia and France and German Chancellor will meet in France for talks.
*** Annual International Forum of alternative investments in Russia and CIS organized by Adam Smith Institute will take place in Great Britain (18-20.10.2010).
Telephone: +44 20 3377 3706, e-mail: saniya@
*** Advisory council session under foreign investments into the Russian Federation will take place in Moscow.
*** The Russian bank VTB 24 will on October 18 be cutting consumer-loan rates and doing away with commissions on them.
*** Russian retail chain Magnit plans to publish unaudited financial results for the first nine months of 2010 under International Financial Reporting Standards (IFRS).
*** O'Key will begin a road show for its IPO on LSE.
*** OAK will hold extraordinary meeting of shareholders.
*** Probusinessbank will hold a 5.5 year-old subscribed Eurobond road show in New-York.
*** Kazakhstan's Kazkommertsbank plans to start its roadshow for Eurobonds in Asia, Europe and the U.S.
RIA Novosti Press Review for Monday, October 18, 2010
08:46 18/10/2010
A brief look at what is in the Russian papers today
POLITICS
Russian President Dmitry Medvedev nominated Deputy Prime Minister Sergei Sobyanin to the post of Moscow mayor on Friday evening. Experts say Sobyanin had no real opponents on the list of four candidates, compiled by the ruling United Russia party, and that transportation minister Igor Levitin was included in the list only to make the presidential choice less evident. Meanwhile, media and experts are trying to guess possible candidates to take up Sobyanin's old post as Chief of Staff.
(Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)
A meeting between the prime ministers of the Customs Union states - Russia, Belarus and Kazakhstan - went smoothly despite ongoing tensions between Moscow and Minsk. At the meeting in Moscow, the premiers reached agreements on a number of controversial issues, including gas prices. They also agreed on the key issues surrounding the formation of a single economic space. The meeting made the future of the Union State between Russia and Belarus look even more uncertain as Russian Prime Minister Vladimir Putin hinted that it might be replaced by the single economic space.
(Vremya Novostei, Vedomosti, Rossiiskaya Gazeta)
Russian President Dmitry Medvedev demanded that the Central Election Commission (CEC) conduct a thorough probe into all 551 violations, reported during the October 10 elections. The president said, however, that the recent amendments to election laws "have created better voting conditions."
(Vremya Novostei, Kommersant, Nezavisimaya Gazeta)
Viktor Baturin, the brother of Moscow ex-mayor's billionaire wife Yelena Baturina, said he did not receive a just price for his share in the Inteko company "because of Moscow corruption," and is now set to collect the debt from his sister in court, even if it leads to selling some of Inteko's assets
(Kommersant)
The Georgian parliament adopted constitutional amendments on the redistribution of powers between the president and the prime minister. Georgian opposition have criticized the move, saying the amendments are designed to allow President Mikheil Saakashvili to stay in power when his term expires in 2013.
(Vedomosti, Kommersant, The Moscow Times)
ECONOMY
Revenues of almost 700 billion rubles ($23 billion) were included into the Russian 2011-2013 draft budget without relevant calculation and substantiation, the Russian Audit Chamber said in its evaluation. It is unclear where the money, which makes up almost 8 percent of all budget revenues, would come from, the chamber said.
(Vedomosti)
The government may include Russia's flagship air carrier Aeroflot and Moscow's Sheremetyevo airport into its privatization program for the coming years
(Vedomosti)
ENERGY
Russia's state-controlled nuclear corporation Rosatom said it would build Venezuela's first nuclear power plant, while the South American country agreed to allow Russian oil giant Rosneft and Russian-British joint venture TNK-BP to purchase oil assets as part of a package of 10 agreements signed during Venezuelan President Hugo Chavez's visit to Moscow.
(Vremya Novostei, Vedomosti, Kommersant, The Moscow Times, Rossiiskaya Gazeta)
REAL ESTATE
As residents and public activists express their outrage at the plans of the Russian energy giant Gazprom to build the 403-meter tower in the historical center of St. Petersburg, architects at RMJM, the company designing the tower, have received letters of support from Russian Prime Minister Vladimir Putin, U.S. architect Anton Glikin told Kommersant. Russian President Dmitry Medvedev said last week the decision on the skyscraper would only be made after all court procedures and UN consultations are carried out.
(Kommersant)
SOCIETY
The second nationwide census in Russia since the break-up of the Soviet Union continued over the weekend, with both the president and the prime minister being surveyed before cameras
(The Moscow Times, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)
SPORTS
Ukraine's WBC Heavyweight Champion 'Dr. Ironfist' Vitali Klitschko (40-2, 38 KOs) defeated U.S. Shannon 'The Cannon' Briggs (51-5-1-1, 45 KOs) on points and defended his champion title.
(Kommersant, Rossiiskaya Gazeta)
Expulsion for Kremlin Ride
18 October 2010
A Chechen-born student was jailed for three days and expelled from the Moscow State Institute of International Relations for driving through Alexandrovsky Garden by the Kremlin walls, news reports said Friday.
Surkho Taramov, 19, the son of a wealthy Chechen businessman, parked his car by the eternal flame memorial and then sped away after police officers attempted to fine him 4,500 rubles ($150) last Monday, the Rapsi legal news web site reported. He was detained by traffic police half an hour later.
Taramov was jailed for disobeying a police order, the report said. Meanwhile, his institute said he was expelled, but cited his poor grades, not the incident, as the reason, Ekho Moskvy radio reported.
(MT)
Children of Russia’s elite accused of living above the law
18 October, 2010, 09:22
A Russian official’s daughter, who rammed her car into two people, killing one, is facing a retrial. A Russian court says there were major violations in procedure during the first hearing.
The images of Anna Shavenkova, daughter of the head of the Irkutsk election committee, checking the damage to her car and not the victims, caused public outrage.
The accident in December 2009 claimed the life of one woman and severely injured another. Shavenkova was given a three-year suspended sentence which was recently revoked.
The retrial is expected to start soon, but that brings little hope to Yulia Pyatkova, one of Shavenkova’s victims.
“A person can commit a crime and remain unpunished. Anna Shavenkova was not and will not be punished properly for what she did to us. I am sure of it.”
It is not the first time that children of high-ranking officials have caused controversy with their reckless driving and apparent lack of punishment.
When Valery Fadeev was mowed down by a car, it was just the beginning of a long and very difficult road to recovery.
Five years ago, Valery was knocked down at a bus stop and seriously injured. Since then he has been unable to gain a full investigation.
The memories of that day are still very clear in his mind.
“I remember exactly how it all happened – moment by moment,” Valery said. “My friend Ilya and I were standing here. As we parted, he left to cross the street on the green light – I remember the green light vividly. I had turned and begun walking in that direction, when I heard a sound and saw something flying towards me.”
The driver of the car was 18-year-old Evgenia Arbuzova, daughter of a former high-ranking FSB officer.
Valery’s case made it only to the civil courts after being denied a criminal trial.
“We asked for three million rubles in compensation. She was sentenced to paying 100,000 rubles to me. And she did, in installments. But before the trial, she was a shareholder at a major commercial bank in Moscow. At the time of the trial, it appeared she was just a poor student with 600 rubles monthly maintenance allowance,” Valery said.
Valery made eight attempts to have criminal proceedings opened but was refused every time.
“If an ordinary person had been in her place, they would have faced criminal punishment long ago,” notes lawyer Vyacheslav Alekseevich. “The incident is too serious to refuse to open a criminal case. There’s a category of the population in Russia which is immune from criminal prosecution.”
Valery's repeated attempts to get the case tried in the criminal courts led to Arbuzova’s family making accusations against him. They are claiming he jumped in front of the car and was trying to extort money from them.
In response, Valery made an online plea to Dmitry Medvedev: “I hope for your objective help, Mr. President.”
An investigation into the legitimacy of the refusals to launch criminal proceedings has now been ordered.
“I made my online statement not because I want compensation for my health, but because I have been accused falsely and because of all the corruption. I want justice,” – said Valery.
With a full investigation yet to be conducted, Arbuzova remains in the driving seat whilst Valery is left to slowly rebuild his life with the help of his friends and family.
Secret agents more doltish than tough
Review by Charles Clover
Published: October 18 2010 01:57 | Last updated: October 18 2010 01:57
The New Nobility: The Restoration of Russia’s Security State and the Enduring Legacy of the KGB, by Andrei Soldatov and Irina Borogan, PublicAffairs, RRP£18.99
It has become a cliché to write that Russia today is ruled by the siloviki – literally, the “tough guys”. Men from the security services, mainly the KGB and its descendant, the Federal Security Service (FSB), swept to power alongside Vladimir Putin, former president, now prime minister, in 2000.
This has become a cliché because it is basically true. But it is possible to overstate the problem. Throughout the decade of Mr Putin’s Russia, which has seen the rise of an authoritarian national security state, the security apparatus has proved to be among the country’s least effective institutions, less a totalitarian juggernaut of Orwellian proportions than an incompetent, corrupt, out-of-its-depth force of provincial thugs.
The New Nobility by Andrei Soldatov and Irina Borogan offers a detailed dissection of the FSB, the heir to the KGB, which still casts a long shadow over Moscow. For more than a decade, the two authors have run the website Agentura.ru, a gold mine of information on the inner workings of the security services, particularly the FSB. In a country where many journalists have been attacked or killed for speaking truth to power, their reporting has been brave.
Their book tracks the rise of the secretive agency at the centre of Mr Putin’s political ascendancy. The FSB has a staff of 200,000, they estimate, with its own police force, army, prisons, companies and foreign networks of agents and assassins. There is no part of Russian life it does not touch.
On coming to power, Mr Putin, a former FSB chief and KGB agent, offered the special services a deal, the authors write. Demoralised and fractured after the Soviet Union’s fall, they barely escaped the fate of the outlawed Soviet Communist party. But in exchange for their help in consolidating the Kremlin’s grip, “Putin’s offer to the generation of security service veterans was a chance to move into the top echelons of power”.
Whereas the Soviet KGB was heavily supervised by the Communist party, the FSB is answerable to virtually no one, and its reach extends from television to university facilities, from banks to government ministries.
But this being the case, why is the FSB so bad at what it does? Stuffed with provincial Russian cops, today’s FSB is less like the former KGB of elite mandarins, and more like a modern day Mukhabarat of Arab regimes, the authors argue, capable of infiltrating and neutralising student groups but largely at sea when it comes to fighting terrorism or espionage.
The agency is less a monolithic force than a resource for the many-sided and diffuse power struggles that collectively make up Russian political and commercial life. It can be difficult to tell the difference between the FSB and the organised crime groups that it infiltrates, or the banks and oil companies that it keeps tabs on. Who, in other words, is working for whom?
Operatives “go dressed in business suits into a zone of influence where power flows back and forth – sometimes the agents are the exploited, and other times they are the infiltrators” write the authors.
In other areas, notably terrorism, the FSB and interior ministry come across more as Keystone Kops than as cold-eyed professionals. From the Nord Ost theatre siege in Moscow in 2002, in which 130 hostages died, only five at the hands of terrorists, to the Beslan high school takeover in 2004, where leadership failures led to a massacre of more than 300 hostages, mainly children, the security services have failed disastrously.
The FSB’s knee-jerk secretiveness creates more problems than it solves. Even when not manipulating, subverting and conspiring, the agency tends to behave as if it is. Its biggest bugbear, for example, is the behaviour of its leadership during a campaign of apartment bombings in Moscow and other cities in 1999 which killed 293 and led to the second Chechen war. Mr Putin came to power on a wave of xenophobia and war fever accompanying these events and has been the target of speculation that the agency organised the bombings.
When a bomb was discovered in the city of Ryazan and FSB personnel were revealed to be involved, Nikolai Patrushev, FSB director from 1999 to 2008, described it as a training exercise and said the bomb was fake. Soldatov and Borogan believe Mr Patrushev’s claims were essentially true – that a training exercise was indeed under way – but that confusing statements by FSB chiefs fanned the flames of public suspicion. “Instead of providing the public with exhaustive explanations, the FSB did its best to silence questions”, they said. This has inevitably led to more questions.
The writer is the FT’s Moscow bureau chief
Video-Blog Diplomacy Could Trap Medvedev
18 October 2010
By Vladimir Frolov
President Dmitry Medvedev has introduced an innovative way to conduct foreign policy — video-blog diplomacy.
On Oct. 3, Medvedev recorded a video message to the Russian and Belarussian people. He made clear that the Kremlin no longer views Belarussian President Alexander Lukashenko as Russia’s strategic partner. Medvedev basically called for a regime change in Minsk.
Sending powerful video-blog messages to neighboring states and their leaders has become a drill for Medvedev. In August 2009, a few months before the presidential election in Ukraine, Medvedev bluntly called for a freeze in relations between Russia and Ukraine until Ukrainian voters replaced their “anti-Russian president,” Viktor Yushchenko. They did, and Russian-Ukrainian relations are back to normal.
This strategy has the advantage of publicly identifying laudable foreign policy objectives. It provides a direct channel of communication with broad audiences in the target states and Russia. In his video-blog messages, Medvedev is presenting the Kremlin’s foreign policy as grounded more in moral imperatives and less in realpolitik. He is rallying international and domestic support behind his positions— and thus campaigning for leadership at home and abroad, boosting his self-esteem.
But there is a downside to the video-blog diplomacy. It could turn out to be a high-stakes bet, front-loaded with risks of failure, especially when taping a video blog predates strategy development.
Once you publicly unveil the desirable policy outcomes, you deny yourself the advantage of a strategic surprise. You are locked into a strategy that is basically being developed on the go. You no longer have the luxury of making a timely U-turn. Your policy options are further constrained by the public appeal to moral values, all but precluding a face-saving deal to avoid failure.
Medvedev’s call for a regime change in Kiev was successful largely because the Ukrainian political winds had already been blowing in Moscow’s favor. Yushchenko had such low ratings that his defeat was all but a given.
This is hardly the case in Belarus, where the “last dictator of Europe” stands a good chance of being re-elected without resorting to electoral fraud. The Kremlin would then be forced to deal with Lukashenko.
Lukashenko will surely challenge Medvedev’s video-blog diplomacy. Let’s hope that Medvedev has a strategy to deal with the aftermath.
Why the Media Ignore Russia
18 October 2010
By Alexei Bayer
Recently, an American friend — an investment banker with a wide range of interests — complained to me about the lack of coverage of Russia in the U.S. media. Over the past few years, she explained, there has been little in-depth information. As a result, when important events such as the recent dismissal of Mayor Yury Luzhkov occur, it is impossible to understand what is going on.
Is it poor journalism, she wondered, a result of the financial crisis in the mainstream media, or Russia-fatigue after years of blanket coverage during the Cold War?
The problem, I think, is different: Nothing of note has happened in Russia for a very long time.
To be sure, there are still natural and man-made disasters, horrendous terrorist attacks and brutal murders of journalists and human rights campaigners. But these are not events that influence the rest of the world.
Although Russia, as a major player in the energy market, occasionally tries to flex its muscles by using natural gas exports as a political weapon, it can’t even get friendless Belarus to do its bidding, to say nothing of its customers in Western Europe. Worse, periodic supply disruptions have prompted Western Europeans to seek other sources of natural gas, such as North Africa and Israel or transportable liquefied natural gas. This will reduce Russia’s role as a supplier and make a mockery of the multibillion-dollar gas pipelines now being built.
Russia still makes its presence felt by occasionally proposing the sale of military or nuclear gear to a rogue state and lending support to mavericks, such as Venezuelan President Hugo Chavez. But when push comes to shove, Russian elites shrink from an open confrontation that could jeopardize their offshore bank accounts or their children’s residency status in Western countries.
While China, India and Brazil — and now even Indonesia, Thailand and Turkey — are starting to play an enhanced role in the world economy and world affairs, Russia, despite occupying one-seventh of the world’s landmass and controlling an enormous nuclear arsenal, has largely become irrelevant. The global financial and economic crisis has essentially knocked Russia out of the BRIC grouping of the world’s most dynamic developing nations and economies of the future.
Russian leaders have all but admitted this — at least in deeds if not in words. To be sure, there is still talk of Russia’s recovering prestige and growing importance in world affairs after the hiatus of the 1990s. But even Prime Minister Vladimir Putin doesn’t seem to believe the official propaganda. While still Russia’s most powerful man, he has allowed his hand-picked successor, President Dmitry Medvedev, to criticize the hallmarks of his era, such as the dominance of state-owned monopolies, overdependence on raw materials exports and technological backwardness.
Medvedev has indeed started to chart a different course. He has gone to the United States and has hosted California Governor Arnold Schwarzenegger as head of a delegation of venture capitalists and high-tech executives in Moscow. He is now fired up with the idea of building Russia’s version of Silicon Valley outside Moscow. But it is clear that sponsoring another white elephant project by pouring billions of rubles of state money down a black hole will do nothing to create a dynamic, entrepreneurial economy that could compete on the world stage. Until Putin’s legacy is overcome, my friend the investment banker will have to wait a lot longer for important news to come out of Russia.
Alexei Bayer, a native Muscovite, is a New York-based economist.
Russian Olympic Committee makes a concession to the Circassians
Today at 11:25 | Paul Goble
The Russian Olympic Committee supports the inclusion of Circassian themes in the cultural programs at the Sochi Olympics in 2014, a concession to those Circassians who felt Moscow had been planning to ignore them and a transparent effort by Russian officials to derail the efforts of other Circassians who hope to block the Sochi games.
Many Circassians, both the 600,000 in the Russian Federation and the five million living abroad, have been outraged by Moscow’s plans to stage an Olympic games on the site of where their ancestors in 1864 were expelled from the North Caucasus, an action that led to the deaths of several hundred thousand Circassians and that many feel was an act of genocide.
Ever since the International Olympic Committee awarded Moscow the right to hold the Olympics in Sochi, Circassians have been working against that idea, with some demanding that the games be moved from the site of a genocide or cancelled altogether and others insisting only that Moscow acknowledge in some public way the Circassian tragedy.
In March 2010, the State Council of the Adygey Republic adopted an appeal to the Russian Olympic Committee and the president of the Sochi 2014 committee expressing concern about “the possible ignoring in the information and cultural program of the Olympiad of the history and culture of the Circassian people”.
The appeal noted that organizers of the Olympics in Sidney in 2000, in Salt Lake City in 2002 and in Vancouver in 2010 had gone out of their way not only to include references to the role of indigenous peoples in the area where the games took place but also to involve representatives of those indigenous populations in Olympic ceremonials.
Yesterday, the press service of the State Council of the Adygey Republic announced that it had received word from the Russian Olympic Committee saying that the ROC “supports the initiative of reflecting the cultural and historical heritage of the Circassians in the context of supporting the cultural program of the XXII Winter Games and the XI Para-Olympiad.”
Moreover, the press service reported, the ROC has sent a telegram to the speaker of the Adygey Parliament “expressing confidence that the leadership of the organizing committee of Sochi 2014 will devote the necessary attention to this subject.” And the press service quoted from a letter to the republic signed by Dmitry Chernyshenko, the president of that committee.
Chernyshenko was quoted as saying that “in the framework of the Cultural Olympiad … a special place will be occupied by the Caucasus Games, a festival of national forms of sport and popular creativity, the goal of which is the strengthening of the inter-cultural and inter-ethnic ties among representatives of the regions of Russia and the states of the Black Sea region.”
Unlike the organizers of the games in Australia, the United States, and Canada, the ROC has not up to now shown much willingness to involve the indigenous population in any way or acknowledge its presence, a sharp contrast to the case of Vancouver where organizers included references to the indigenous peoples in the symbols of the games themselves.
This latest action by the ROC suggests that Moscow is increasingly concerned about the ongoing Circassian campaign against Sochi, especially because that effort is gaining support not only among Circassian communities in Turkey, Jordan, Europe and the United States but also because it is attracting the attention of European politicians and environmental activists.
And Moscow may hope that this concession to the Circassians, one that Russian officials undoubtedly view as a major one, will cause some Circassians and their allies to reconsider their opposition to the Sochi Games, an event that Vladimir Putin has indicated is something he wants to be remembered for.
It is likely that some Circassians will indeed decide to back away from the efforts of others to block the games, but it is also likely that others will conclude that if Moscow is prepared to make this concession on the basis of what they have done so far, the Russian powers that be might make even more if the Circassians push even harder in the coming months.
Paul Goble is a longtime specialist on ethnic and religious questions in Eurasia, he can be contacted directly at paul.goble@. You can read all his blog entries at
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National Economic Trends
October 18, 2010, 4:14 AM ET
Energy Deals Pressure Ruble
By Ira Iosebashvili and Jacob Gronholt Pedersen
The ruble Monday hit its weakest levels for the month against the dollar and a nine-month low against the euro-dollar basket, with market players saying that a slew of deals by energy companies have raised the demand for dollars and weakened the Russian currency.
The ruble was off 1.5% against the dollar to trade as low as 30.62, its weakest level for October. Against a basket of dollars and euros, the currency lost 0.2% to 35.85, its lowest levels since early January.
Once considered a high flyer, the ruble erased nearly all of its gains for the year in the previous month, even as other commodity currencies rallied with the price of oil, which now hovers near the top of its recent trading range at $83 a barrel for Brent crude.
“There are several ongoing deals where exporters need dollars to fund share and asset purchases,” said Alexei Borichev, a dealer at ING in Moscow. “As a result, these companies are not exchanging their export dollars for the local currency,” creating a demand for foreign currency and weakening the ruble.
TNK-BP Ltd.–a joint venture between BP and a group of Russian billionaires — said Monday it had agreed to pay the U.K. oil major $1.8 billion for assets in Venezuela and Vietnam. Russia’s No. 1 oil producer OAO Rosneft agreed last week to pay $1.6 billion for a 50% stake in German refinery Ruhr Oel GmbH from Venezuelan state oil company Petroleos de Venezuela SA, or PdVSA. Since August, Russia’s second-biggest oil producer OAO Lukoil Holdings has spent $5.82 billion to buy back 12.6% of its own shares from U.S. oil major ConocoPhillips. The Russian company hasn’t ruled out buying further shares from the U.S. company.
Monday’s ruble weakness was also a reflection of the dollar’s rebound against the euro, dealers said.
Russia wants to sell stakes in Aeroflot in bid to boost budget
Oct 17, 2010, 17:24 GMT
Moscow - Moscow wants to sell shares in Russia's largest airline, Aeroflot, in a 'grand-scale privatisation programme' that is meant to lower the country's budget deficit, the broadcaster Echo Moskvy on Sunday quoted Finance Minister Alexei Kudrin as saying.
The state would retain a majority stake in the company. Russian and foreign investors have already shown interest, Kudrin said.
Russia wants to bring in at least 31.4 billion dollars in the coming years with the partial sale of 11 large companies, so that it can slash its national deficit from 6.8 per cent to under 4 per cent.
The companies that have been proposed - with approval from the Finance Ministry - include the oil company Rosneft, the financial institution Sberbank and the national railway company RZD.
President Dmitry Medvedev has repeatedly encouraged privatization, hoping for a speedier modernization of the often antiquated firms.
[pic]
Part of Aeroflot to be privatized, says Russian minister
Monday, October 18, 2010
MOSCOW - Agence France-Presse
Russian airline Aeroflot will be included in a forthcoming program of privatization, Finance Minister Alexei Kudrin told the country's parliament Friday.
"We will carry out a big program of privatization," Kudrin said, cited by the RIA Novosti news agency.
"It concerns shares in oil companies to a lesser extent. It also concerns shares in several other companies, from Aeroflot to the Svyazinvest [telecoms group].”
The announcement in July of the large-scale privatization program, which will be the first since the 1990s, "has received very great attention from Russian and foreign investors," Kudrin said.
The finance minister said in September that Russia hopes to earn 50 billion dollars in the next five years through privatizations.
The Russian authorities announced at the end of July that they had drawn up a list of 11 companies that would be partly sold between 2011 and 2013, although the state will still retain a controlling share.
Among the planned targets of privatization announced in July were the country's largest lender, Sberbank, as well as the country's second largest state bank, VTB, and oil giant Rosneft.
Aeroflot, Russia's largest airline, carried 11 million passengers in 2009 and anticipates that passenger numbers will almost double over 2010.
Since 2006, the company has been a member of the SkyTeam alliance, a group that also includes Air France/KLM and Delta Airlines.
Business, Energy or Environmental regulations or discussions
Razgulay, Gazprom and Aeroflot: Russian Stock Market Preview
By Stephen Bierman
Oct. 18 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.
The 30-stock Micex Index rose 0.2 percent to 1,491.48. The dollar-denominated RTS Index fell 0.32 percent to 1,581.90.
OAO Razgulay (GRAZ RX): Russian Agriculture Minister Elena Skrynnik told her Japanese counterpart that the country will make efforts to lift its ban on exports of wheat and other grains, Kyodo News said without saying where it obtained the information. The Russian grain producer fell 0.4 percent to 44.371 rubles in Moscow.
OAO Gazprom (GAZP RX): Turkmenistan, which sells gas to Russia, opened a new pipeline able to supply Russia with 5 billion cubic meters of gas a year. Russia’s gas exporter slipped 0.8 percent rubles to 161 in Moscow.
OAO Aeroflot (AFLT RX): Russian Finance Minister Alexei Kudrin said Russia’s largest airline will be part of the country’s privatization program in coming years, RosBusinessConsulting reported on Oct. 15. Shares in the airline rose 1.4 percent to 70 rubles in Moscow trading.
To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@.
To contact the editor responsible for this story: Will Kennedy at wkennedy3@.
Last Updated: October 17, 2010 21:00 EDT
Micex Eases Investor Rules to Double Bond Market: Russia Credit
October 17, 2010, 4:24 PM EDT
By Emma O’Brien
Oct. 18 (Bloomberg) -- Russia is seeking to lure buyers for a record amount of debt sales by easing foreign investor restrictions and offering futures on government bonds for the first time.
Moscow’s Micex exchange plans to curb requirements to buy and sell bonds through local brokers, cut the number of trading accounts needed and merge settlement systems into a single unit, Alexander Ageev, director of non-resident client relations, said in an a telephone interview. The exchange also will extend the period for settling trades to three days from the same day to bring Russia in line with global standards and expand the use of contracts to hedge, Ageev said.
The amount of domestic securities outstanding represents 29 percent of Brazil’s, 12 years after Russia’s bond market collapsed as the nation defaulted on $40 billion of local debt, according to data compiled by Bloomberg. While Brazil, Thailand and South Korea are trying to stem foreign investment in their notes to halt currency gains, Russia needs buyers after returns on government ruble securities this year were 15 percentage points below those for real-denominated debt, data compiled by Bloomberg show.
“The market needs to be increased and improvements to the system are the only way to improve that capacity,” said Nikolai Podguzov, head of fixed-income strategy at VTB Capital in Moscow, a unit of Russia’s second-largest bank. “The capacity of the government bond market could be extended substantially, it could be double the size it is now.”
Record Borrowing
Russia returned to the international capital markets for the first time since 1998 in April with the sale of $5.5 billion of dollar bonds to help repair government finances after the country’s worst recession since Soviet times last year. The world’s largest energy exporter also raised a record 839 billion rubles in domestic debt this year, according to the Finance Ministry’s website.
Prime Minister Vladimir Putin’s administration plans to sell 1.3 trillion rubles of bonds next year to help plug a budget deficit the government forecasts will reach 3.6 percent of gross domestic product, down up from 5.4 percent this year. Borrowing will peak at 1.5 trillion rubles in 2012, according to the Finance Ministry.
Russian companies have issued 595.6 billion rubles of debt so far this year, the highest amount ever, data compiled by Bloomberg show.
Lagging Behind
While gains in ruble bonds reduced the yield on the government’s local-currency OFZ notes due in January 2013 to a record-low 5.78 percent on Oct. 15, from 7.28 percent in January, the returns have lagged behind other emerging markets. Ruble bonds returned 11.5 percent this year in dollar terms, compared with 26.3 percent for Brazilan real bonds and 13.8 percent for JPMorgan Chase & Co.’s GBI-Emerging-Markets Broad Index.
The price of Russian government benchmark ruble notes due August 2016 was little changed on Oct. 18, leaving the yield one basis point, or 0.01 percentage point, higher at 7.09 percent.
Russia has $220 billion of outstanding government and corporate bonds in rubles, dwarfed by Brazil’s $771 billion of real-denominated debt, data compiled by Bloomberg show.
“It’s been a real boost for other emerging markets that have made it easier for foreign investors to buy their local debt,” Sergey Dergachev, who helps manage the equivalent of $8.5 billion of emerging-market debt, including Russian corporate bonds, at Union Investments Privatfonds in Frankfurt, said in a phone interview. “The supply pressure is huge so it’s absolutely essential that they make reforms.”
Biggest Complaint
The biggest complaint the Micex receives from foreign investors is the stipulation that investors trade through a broker who must also act as the custodian, Ageev said. While the Micex is lobbying for this rule to be changed, “we can’t predict exactly when this will happen,” he said.
The process of setting up a local broker relationship is made more difficult because investors need to have separate accounts to trade on different markets within the Micex, Ageev said. Investors will be able to use one account for all Micex trading from the end of next year, Ageev said.
Union Investment has been negotiating a broker agreement for a year, Dergachev said. Completing the documentation to enlist a local broker takes at least three months, Dmitry Dudkin, head of fixed income research at UralSib Financial Corp. in Moscow, said in a phone interview.
Switch to T+3
Aviva Investors, the fund management arm of the U.K.’s second-biggest insurer, is in the process of negotiating a brokerage agreement to be able to buy federal bonds and ruble- denominated corporate securities, said Kieran Curtis, who helps manage $2 billion of emerging-market debt at the London-based company.
“In Brazil you also need a local custodian but you don’t need a local brokerage agreement,” Curtis said in e-mailed comments.
By the end of the year, the Micex will amalgamate two clearing houses, the National Depositary Center and the exchange’s own settlement house, which currently both charge investors separate fees, said Ageev.
The Micex will also replace its practice of immediate settlement for trades, which has been in place since at least 1997. Instead, traders will be allowed as many as three days, or T+3, to complete transactions, said Ageev. The switch will bring the Micex into line with the U.S. and European norms.
“Foreign investors will support this as they need time to convert their dollars or euros into rubles,” Ageev said in a telephone interview.
Iceberg, Midpoint
The exchange also plans to start trading futures on short- term interest rates and on long- and medium-term federal bonds, Ageev said. Futures are contracts giving the right to buy or buy a specific amount of a commodity or security at a specific price and time.
The bourse also may introduce the Iceberg and Midpoint systems for bonds and equities, which enable investors to conceal the size of their trades, said Ageev, who was head of investment banking at JPMorgan in Moscow before he was hired in April.
The ruble slid 0.5 percent to 30.2225 per dollar on Oct. 15, its weakest level since Oct. 4. Non-deliverable forwards, or NDFs, which provide a guide to expectations of currency movements and interest rate differentials and allow companies to hedge against currency movements, show the ruble at 30.4463 per dollar in three months.
The yield on Russia’s dollar bonds due in 2020 fell one basis point to 4.170 percent, the lowest level since they were sold in April.
Default Swaps
The cost of protecting Russian debt against non-payment for five years using credit-default swaps declined 0.5 basis point to 133 yesterday, down from this year’s peak of 217, according to data provider CMA. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.
Credit-default swaps for Russia, rated Baa1 by Moody’s Investors Service, its third-lowest investment grade rating, cost 1 basis point more than contracts for Turkey, which is rated four levels lower at Ba2. Russia swaps cost as much as 40 basis points less on April 20.
The extra yield investors demand to hold Russian debt rather than U.S. Treasuries fell four basis points to 194, according to JPMorgan EMBI+ indexes. The difference compares with 141 for debt of similarly rated Mexico and 169 for Brazil, which is rated two steps lower at Baa3 by Moody’s.
‘Currency War’
The yield spread on Russian bonds is 51 basis points below the average for emerging markets, down from a 15-month high of 105 in February, according to JPMorgan Indexes.
Russia’s steps to attract foreign bondholders are at odds with other emerging markets. Brazilian Finance Minister Guido Mantega warned of a “currency war” of competitive devaluation on Sept. 27 and doubled the tax on foreigners’ purchases of bonds on Oct. 4.
South Korea’s Finance Ministry said on Oct. 5 that it would start auditing banks to ensure their holdings of foreign- currency derivatives didn’t exceed limits. Thailand will remove a 15 percent tax exemption for foreigners on income from domestic bonds in a bid to slow inflows into the debt market that have pushed up the baht, Finance Minister Korn Chatikavanij said on Oct. 12.
Tax Change
As part of its plan to expand access to foreigner investors, Russia will simplify the taxation of federal bonds, Deputy Finance Minister Dmitry Pankin said at the International Monetary Fund meeting in Washington on Oct. 8. Investors will be charged one levy of 20 percent on the securities as opposed to the current 15 percent tax on coupon payments and 20 percent charge on profits from selling OFZs, Pankin said. The change was requested by investors, he said.
The Finance Ministry started issuing yield guidance to bondholders before its debt auctions for the first time last month to improve transparency.
“They need to make it much easier for foreign investors to make that decision to come to the Russian market,” said VTB’s Podguzov.
--With assistance from Denis Maternovsky in Moscow and Jason Webb and Sarfraz Thind in London. Editors: Rodney Jefferson, Gavin Serkin
To contact the reporter on this story: Emma O’Brien in Moscow at eobrien6@
To contact the editor responsible for this story: Gavin Serkin at gserkin@
Bankers wait for word from Kremlin
Matt Turner
18 Oct 2010
When the Russian ministry of finance announced in late July that it was embarking on a privatisation drive, investment bankers in the country could be forgiven for thinking their ship had come in.
However, details remain scarce over the exact make-up of the activity, with the shortlist of banks to be used and the value and timeline of the privatisation programme still unclear.
Yaroslav Lissovolik, chief economist for Deutsche Bank in Russia, said: “There is still uncertainty and a lack of clarity on the privatisation programme, and the pace of implementation will depend on market conditions.”
This has led to chaotic scenes, with more than 15 investment banks positioning themselves to win business from the government while struggling to find information on what exactly they are pitching for, according to one banker in Russia.
In July, the ministry of finance said it was looking to raise $30bn by 2013, before finance minister Alexei Kudrin put the figure at $50bn by 2015 in mid-September at the Reuters Russia Investment Summit.
Bankers have privately said the original figure is more likely to prove correct, and doubts exist over whether some of the assets included in the list of 11 state-run companies to be partially sold will make it to market.
The part-privatisation scheme, Russia’s biggest since the 1990s, will see the government offload minority stakes in companies including banks VTB and Sberbank, shipping group Sovcomflot, oil pipeline group Transneft, oil company Rosneft and hydropower utility RusHydro.
The process is being run concurrently with a broader privatisation drive in which hundreds of small and medium-sized state-owned businesses will be sold off or part-privatised as the government seeks to address Russia’s rising budget deficit.
In addition, Russia is keen to rebalance the economy, with prime minister Vladimir Putin dubbing the programme, at a recent conference in Moscow, “a structural shift for the Russian economy”.
Bankers are anticipating the Russian government will reveal a whittled-down shortlist of around 10 advisory banks eligible for work related to the country’s privatisation programme in the next two or three weeks.
While bankers are awaiting news of the shortlist with interest, it remains unclear as to how work will be divided up for those included, and whether exclusion from the list will rule out any involvement in the programme.
Some of the larger deals are already moving ahead, with VTB at present courting strategic investors. Chief executive Andrey Kostin said last week that around 10% of VTB would be sold by the end of the year or at the start of 2011, according to Dow Jones Newswires.
Kostin put the value of the stake at $3bn. Private equity firm TPG is putting together a group of investors, including Asian sovereign wealth funds.
In addition, Sberbank is understood to be moving ahead with similar plans.
However, questions remain over the likelihood of sales of stakes in some energy assets, such as Transneft. While it has been included in the list of potential deals, Russia’s energy minister Sergei Shmatko has said the sale of a 25% stake is unfeasible, while Transneft president Nikolai Tokarev described the prospect of privatisation as terrible, according to a state news agency. One banker said: “Transneft is a good example of a company where management isn’t ready for privatisation.”
With this in mind, bankers are focusing their efforts on developing advisory relationships, talking to both the government and state-controlled companies that have pre-existing listings as decisions are made on the sizes of the stakes up for sale, likely market appetite and potential valuations. Bankers also point out that some of the companies listed on the 11-strong list are not yet structurally ready.
For deals that do get to market, corporate governance and the treatment of minority shareholders are likely to remain a key concern for investors.
In a note by law firm Debevoise & Plimpton, lawyers Bruce Yannett, Alan Kartashkin and Kimberly Kessler said: “Whether a transparent process can be achieved and whether foreign investors can overcome concerns about governance remains unclear as Russia embarks on this next round of privatisation. Despite recent amendments, the privatisation legislation in Russia still lacks the level of sophistication that is necessary to ensure a transparent and fair bidding process.”
Market conditions will play a large role in deciding the timeline for the privatisation programme, with the performance of an existing Russian initial public offering pipeline likely to have a bearing on the speed of implementation.
Chris Marschall, head of central and eastern European origination at Royal Bank of Scotland, said: “There are a number of Russian IPOs in the market at the moment from a variety of sectors, and the Russian government is likely to be watching them closely despite being from different sectors. If they are successful, that could accelerate the finance ministry’s plans for selling stakes.”
If the privatisation programme doesn’t move forward as hoped, sectors such as technology, consumer, construction and infrastructure are likely to represent the best chances of revenues in Russia, according to bankers.
Russia's NCSP says cargo turnover down 3.9 pct to 62.67 mln T
12:00 18/10/2010
MOSCOW, Oct 18 (RIA Novosti) - Cargo turnover at Russia's Novorossiysk Commercial Sea Port (NCSP) amounted to 62.67 million tons in January-September 2010, a 3.9 percent decrease year-on-year, the company said on Monday.
"The grain export ban and volatile crude oil volumes have caused a drop in the volume of cargo turnover in the past nine months," NCSP Chief Executive Officer Igor Vilinov said in a statement.
Grain exports from Russia were officially banned from August 15, 2010, following a severe drought and forest fires across central Russia.
"The grain export ban alone resulted in the loss of almost a million tons of cargo traffic," Vilinov said.
However, Vilinov said the company had seen positive changes in its cargo mix, such as growing share of priority cargoes, including containers, which nearly doubled in volume.
NCSP's liquid cargo volumes decreased by 5.4 percent and bulk cargo volumes by 11.1 percent in January-September 2010. Volumes of crude oil and refined products at the Sheskharis terminal fell by 3.4 percent in the reporting period, while cutbacks in crude oil were partially offset by growing volumes of fuel oil, the company said in a statement.
Cargo turnover of mineral fertilizers increased by 48 percent year-on-year thanks to sustainable high market demand, NCSP said.
Handling of raw sugar in the third quarter of 2010 grew by 21.2 percent year-on-year. Volumes of iron ore and ore concentrate in the reporting period continued to rebound and totaled 1.268 million tons in the first three quarters of 2010, while average monthly volumes of this cargo in August-September remained at 300,000 tons.
General cargo traffic in the reporting period remained practically on the same level. The volumes of non-ferrous metals, timber, and perishable cargo increased by 28.3 percent, by 29.9 percent, and by 85 percent respectively.
Container traffic of all NCSP's terminals amounted to 325.800 tons, exceeding the volume of the same period last year by 89.2 percent.
Magnit Oao Nine-Month Net Income 7.17 Billion Rubles, Up 22.3%
By Tim Smith
Oct. 18 (Bloomberg) -- OAO Magnit, Russia’s second-largest food retailer, reported nine-month net income rose 22.3 percent to 7.17 billion rubles, according to an e-mailed statement.
To contact the reporter on this story: Tim Smith in Sydney at tsmith58@
To contact the editor responsible for this story: Tim Smith at tsmith58@
Last Updated: October 18, 2010 00:06 EDT
Russia Magnit 9-mo net rises 22.3 pct in rouble terms
12:44am EDT
MOSCOW, Oct 18 (Reuters) - Magnit (MGNT.MM: Quote, Profile, Research, Stock Buzz), Russia's largest supermarket chain by number of stores, said its nine-month net profit in rouble terms rose 22.3 percent year-on-year to 7.17 billion roubles.
In dollar terms, net profit for the first three quarters of the year rose 31.3 percent to $237 million, the company said in a statement.
Revenue came to 164.51 billion roubles, a jump of 35 percent compared to a year ago.
"The top line growth was due to an increase in selling space as well as to a 6.78-percent increase of like-for-like sales, excluding value added tax (VAT)," the company said in a statement.
(Writing by Lidia Kelly)
Norilsk to Swap OGK-3 Stake for Inter RAO Shares, Vedomosti Says
By Steve Bierman
Oct. 18 (Bloomberg) -- OAO GMK Norilsk Nickel, Russia’s largest mining company, plans to swap its 83 percent stake in utility OAO OGK-3 for as much as 15 percent of state-run OAO Inter RAO UES, Vedomosti said.
The deal values Norilsk’s OGK-3 stake at $2.1 billion, the Moscow-based newspaper reported, citing unidentified people familiar with the matter.
To contact the reporter on this story: Stephen Bierman at sbierman1@
To contact the editor responsible for this story: Brad Cook at bcook7@
Last Updated: October 18, 2010 00:55 EDT
Inter RAO Seeks to Buy OGK-3 Utility From Norilsk for Shares
By Ilya Khrennikov
Oct. 18 (Bloomberg) -- OAO Inter RAO UES, the Russian utility chaired by Deputy Prime Minister Igor Sechin, said it’s seeking to buy OAO OGK-3 from OAO GMK Norilsk Nickel for shares.
Inter RAO wants to acquire all of Norilsk’s 83 percent stake in OGK-3, said Ekaterina Dobrogorskaya, a spokeswoman for Inter RAO, by telephone in Moscow.
Norilsk may get 15 percent of Inter RAO in the deal, which values 83 percent of OGK-3 at $2.1 billion, the Vedomosti newspaper reported earlier today, citing unidentified people familiar with the matter.
Norilsk’s ownership of OGK-3 has been part of a dispute between rival Norilsk shareholders United Co. Rusal, controlled by Oleg Deripaska, and Vladimir Potanin’s Interros Holding Co. Maria Uvarova, a spokeswoman for Norilsk, declined to comment.
To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@
To contact the editor responsible for this story: Brad Cook in Moscow at Bcook7@
Last Updated: October 18, 2010 01:55 EDT
Bridging Russia and China, UC Rusal Presents "Evolution of Russia" TV Series
Moscow, Oct 18, 2010 - (ACN Newswire) - UC RUSAL (SEHK: 486, EuroNext: RUSAL/RUAL), the world's largest aluminium producer, announces the launch of "Evolution of Russia" TV series. For the first time ever the four-part documentary will bring an exclusive review of modern Russia to the Hong Kong audience. It will highlight the country's social, economical, political, and cultural development. The series will be broadcast on Hong Kong's i-Cable Finance Info Channel (08) at 7:30pm on Saturday for four consecutive weeks, starting on 23 October 2010.
Russia and China are both fast-moving economies that have grown significantly over the past decade. The Russian-Chinese relationship has strengthened and the two countries have close cultural ties, making them naturally bound to cooperate. However, Russia still keeps a low profile, and its recent impressive transformation is little known to the Chinese audience. The "Evolution of Russia" documentary was initiated and supported by UC RUSAL, the first Russian company to list in Hong Kong, and will be a catalyst for each of these two countries learning about the other. The series broadcasts interviews with Russia's influential political and economic leaders, documents the views of Russia's next generation and examines the significant changes that will take place in Russia's economy and society.
The "Evolution of Russia" series consists of four episodes:
The first, "The Wind of Change," gives the audience a brief update of Russia today and tells how Russia overcame the difficulties of two financial tsunamis that occurred in 1998 and 2008. Government officials, businessmen and Russians of different generations share their experience and present their vision of Russia's recent evolution.
The second episode, "Russia Going Global," focuses on Russia's economy and talks about how Russian enterprises learn to cope with increasing competition as the country opens its doors to the world. Exclusive interviews with successful Russian businessmen feature in this episode.
In recent years, Russia has diversified its economy and reduced its reliance on natural resources. The third episode, "Innovations in Motion," features interviews with several young entrepreneurs who have emerged from the new Russian economy.
China and Russia have a close relationship and Russia's rise provides new opportunities for Chinese enterprises. The fourth episode, "Shaping the Future," discusses how Russian companies have leveraged the capital and experience gained in China and Hong Kong to open up fresh opportunities, and explains how the Chinese can invest in Russia.
During the four-month production period, RUSAL cooperated closely with the production team to help better their understanding of the Russian way of thinking and the peculiarities of the country's modern life. To give the audience a better appreciation of Russia's history and development, the programme interviewed important members of Russia's political, commercial hierarchy, as well as key figures in other sectors. Interviewees included Mr Oleg Deripaska, Chief Executive Officer of RUSAL; Mr Arkady Dvorkovich, Aide to the President of the Russian Federation; Mr Sergey Sanakoev, The Chairman of the Russian-Chinese Centre of Trade and Economic Cooperation; Mr Dmitriy Kolomytsyn, Executive Director of Morgan Stanley; and Dr Wilfried R. Vanhonacker, Dean of Moscow School of Management SKOLKOVO etc.
Mr Oleg Deripaska, Chief Executive Officer of RUSAL, said, "We believe that respect for and understanding of each other's culture are crucial for long-term beneficial cooperation. Even though Russia and China have a lot in common, we know little about each other. It was from this that the idea for the documentary sparked. We would like to thank Cable TV for supporting the 'Evolution of Russia' project. We hope that this documentary will enhance the Hong Kong people's understanding of Russia and promote a greater exchange in economic, social, and cultural spheres."
Extracts of interviews used in "UC RUSAL Presents - Evolution of Russia":
Mr Arkady Dvorkovich, Aide to the President of the Russian Federation, "We should continue to stimulate economy, if we are to avoid a second wave of crises in Russia. And simultaneously, we should think about the future, think about our strategy to diversify the Russian economy, and look for modern innovations, so that we will not need to rely so much on exports and natural resources." He also said: "The president has decided to announce new priorities for technological modernization and overall modernization of the Russian economy. In particular we are focusing on energy efficiency, on nuclear energy, on IT communications, space technologies and medical technologies, pharmaceutical and medical equipment. If we put an emphasis on these fields, we can achieve great results in the medium term perspective."
The scale of investment by Chinese enterprises in Russia is increasing. The Red Village district in the South-western part of St. Petersburg will become the "Pearl of the Baltic Sea" - China's largest overseas real estate project. This modern multipurpose project integrates commercial, residential and business functions, occupying a planned area of 208 hectares. The development represents an investment of US$1,346,000,000. Mr Sergey Sanakoev, The Chairman of the Russian-Chinese Centre of Trade and Economic Cooperation, "We are interested in having Chinese companies involved in some Russian projects and of course, we would like to use their credit or investment capabilities and to use it for the development of these projects."
In order to create new demand, a few years ago RUSAL started to sponsor different academic institutions from around the world, capitalising on their R&D expertise to develop more environmentally friendly and efficient production processes, as well as creating new applications for aluminium. This has included changing the electric conductivity of aluminium to substitute copper, which has a higher cost, and using aluminium to substitute gasoline as fuel for vehicles. Mr Oleg Deripaska, Chief Executive Officer of RUSAL, "We try to find solutions not only for today's problems, but for problems that might occur in 15, 20 years. We try to find solutions for technology that is yet to be developed."
Broadcasting Details of "UC RUSAL Presents - Evolution of Russia":
Date: Every Saturday starting from 23 October (four parts)
Time: 7:30 p.m.
Channel: i-Cable Finance Info Channel (08)
Sechin Ends Fertilizer Fight
18 October 2010
PhosAgro and UralChem, two of Russia’s largest fertilizer makers, agreed to end their legal dispute over ownership of a smaller producer after Deputy Prime Minister Igor Sechin intervened, Vedomosti reported Friday.
The firms withdrew mutual court claims over phosphate and nitrogen producer Voskresensk Mineral Fertilizers, the paper reported.
(Bloomberg)
Colorado Breedstock Marketed to Russian Cattlemen
A trip to Russia earlier this month by the Colorado Department of Agriculture helped foster business relationships with Russian cattlemen and provided opportunities for market Colorado breedstock.
Andy Maupin, with Spruce Mountain Cattle Ranch in Larkspur, Colo., traveled with Colorado, Montana and Kansas ag department officials to Moscow and to visit with Angus Genetics of Russia in the Kaluga region.
The group attended the Golden Autumn Livestock Exposition, and visited with Russian beef producers about U.S. beef genetics. They also toured area ranches to see first-hand what Russian beef production looks like.
During the Golden Autumn event, Maupin joined other U.S. Angus producers to meet with their Russian counterparts in the industry.
Maupin sees the trip as a "tremendous opportunity" to see how U.S. genetics can help Russia reach its goal of producing higher quality beef.
Like many seed stock ranches in Colorado, Spruce Mountain wants to expand their marketing efforts overseas. They previously hosted delegations of Russian, Canadian and Mexican industry representatives toward that effort. Spruce Mountain representatives have also traveled to Canada and Mexico.
This is the second business development trip to Russia on behalf of Colorado ranchers conducted by CDA.
"I've seen the market potential grow since our first trip to Russia in 2001," says Dawn Velasquez de Perez, CDA international marketing specialist. "We hope Colorado will become partners with the Russian cattle industry through the export of live cattle, semen and embryos."
The mission was funded through the USDA Market Access Program working with U.S. Livestock Genetics Export, Inc.
For additional information, contact Velasquez de Perez at (303) 239-4123 or dawn.velasquez@ag.state.co.us.
Union of industrialists plans a Week of Russian Business
2010-10-18
Russian union of industrialists and entrepreneurs will hold a Week of Business in 2011.
As decided at the recent session of the Union, next spring there will be held a Week of Russian Business that is supposed to be “a key event of the year that will formulate main tendencies for interaction between the state and business in new economic environment”, says the director of the Union, Mr. Alexander Shokhin.
The event will take a number of conferences on tax and budget systems, innovations and technology modernization, market competition and legislation.
The Union has a membership base of over 120 regional alliances and industry associations representing key industries of the economy, including the fuel and energy industry, the machine-building industry, the investment-banking sector as well as the military industrial complex, the building industry, the chemical industry, and light and food industries. The Union represents over 320 thousand members from industrial, scientific, financial and commercial organizations and individual members in all Russian regions. Operational since early 90s.
Activity in the Oil and Gas sector (including regulatory)
From Alexander Vershinin, October 16, 2010 - 05:50 AM
Turkmenistan inaugurates Russia-bound natural gas pipeline
By Alexander Vershinin
ASHGABAT, Turkmenistan (AP) - Turkmenistan inagurated a pipeline Saturday that will help boost exports of natural gas to Russia.
The 200-kilometer route links reserves in the barren Karakum desert to a compressor station that feeds into the Soviet-built Central-Asia-Center pipeline, which carries gas to Russia.
The route has been created despite Moscow's flagging interest in buying Turkmen gas. Although itself rich in gas, Russia has traditionally bought cheaper Central Asian energy supplies while selling its own reserves to European customers at much higher prices.
Last year, Russia abruptly suspended its imports from Turkmenistan amid mutual accusations over responsibility for a pipeline blast in April. Deliveries resumed in January 2010, but at much smaller quantities.
State-owned Turkmengaz says that Russian gas imports are expected to reach about 10 billion cubic meters this year, down from the annual 40 billion cubic meters it bought previously.
Russian President Dmitry Medvedev is set to arrive in Turkmenistan for a two-day visit Wednesday in a sign that relations between the two former Soviet nations may be on the mend.
"The new pipeline in the Karakum Desert, which will increase the supply of Turkmen gas to Russia, is a vivid example of mutually beneficial cooperation between Turkmenistan and Russia," President Gurbanguli Berdymukhamedov said at a Cabinet meeting Friday.
Next year's schedule for gas deliveries is expected to be discussed during Medvedev's visit.
Russia, which once had a lock on the bulk of Central Asian gas supplies, has seen its dominant position undermined by the recent construction of new pipelines to China and Iran.
Turkmen gas deliveries to China through a pipeline completed in 2009 are expected to reach 6 billion cubic meters this year, with supplies increasing incrementally every year until they reach 40 billion cubic meters in 2015. Turkmen gas supplies to Iran currently stand at about 14 billion cubic meters a year.
Russia appeared to have cornered the market for Central Asian gas exports in 2007, when it sealed a deal to build a new pipeline along the Caspian coast to further boost supplies. But that project has fallen by the wayside as Moscow's readiness to buy Turkmenistan's increasingly expensive gas has waned.
18.10.2010
Russia's Itera launches gas pipeline in Turkmenistan
Russia's large independent oil and gas producer Itera has put into operation its $176 million natural gas pipeline in Turkmenistan, the Turkmen television reported on Saturday.
The 198-kilometer pipeline links gas deposits in the Karakum Desert with the Central Asia - Center gas pipeline system running from Turkmenistan via Uzbekistan and Kazakhstan to Russia.
The new pipeline will help increase annual supplies of Turkmen natural gas to Russia to 3 billion cubic meters and later to 5 billion.
Turkmenistan, which annually produces some 75 billion cubic meters of gas, is home to South Yolotan, the world's fourth largest gas field with estimated reserves of 4 to 14 trillion cubic meters.
Russia, along with China and Iran, is a major consumer of Turkmen gas. The Central Asia - Center gas pipeline system is controlled by Russia's energy giant Gazprom.
In late September, Turkmen president Gurbanguly Berdymukhamedov said Turkmenistan would continue to maintain a policy of strategic cooperation with Russia in the oil and gas sphere despite the negative impact of the global economic crisis on joint projects.
Copyright 2010, RIA-Novosti All rights reserved.
Turkmenistan launches new gas pipeline
08:36, October 18, 2010
Turkmenistan has launched a new gas pipeline that will boost its gas exports to Russia from reserves in the Central Karakum desert, Russia's Interfax news agency reported on Sunday.
The 198.2-km-long pipeline, with a pipe diameter of 720 millimeters, would pump gas from the desert outside Darvaza town in the Akhal region into the main export gas arteries of Turkmenistan that were Russia-bound, the Turkmen State Information Service said.
Turkmen President Gurbanguly Berdimuhamedow authorized construction of the pipeline on Feb. 20, 2009, in accordance with a contract worth 176.6 million U.S. dollars between Turkmengaz and Russian company MRK-Inzeniring.
The pipeline's initial handling capacity is 3 billion cubic meters but could be upgraded to 5 billion cubic meters annually.
Source: Xinhua
RESULTS OF NOVATEK’S EXTRAORDINARY GENERAL MEETING
OF SHAREHOLDERS
Moscow, 18 October 2010. OAO NOVATEK (hereinafter “NOVATEK” and/or the “Company”) announced that the Extraordinary General Meeting of Shareholders (“EGM”) approved the Company’s dividend payment based on NOVATEK’s results for the first half of 2010 prepared in accordance with Russian accounting standards.
The EGM resolved to pay dividends in the amount of RR 1.50 per one ordinary share or RR 15.00 per one Global Depositary Receipt. The total dividend distribution for the first half of 2010 amounts to RR 4,554,459,000.
The interim dividend is payable 60 days after shareholder approval, to shareholders of record of the list of persons entitled to receive dividends compiled on 9 September 2010, which also coincided with the date for making a list of those entitled to attend the Company’s EGM.
The EGM also approved the following related party transactions between ОАО “NOVATEK” and ОАО “Gazprom”: Gas Transportation Services Agreement and Gas Delivery Agreement.
For more information regarding the voting details of NOVATEK’s EGM please go to the Company’s website, novatek.ru/eng/ir/meeting.
Russia and Middle East control 63% of world oil and gas reserves and 39% of world oil and gas production
Published Yesterday - 09:37 GMT
Russia and Middle East energy businesses are embarking on new partnerships that will see joint investment projects in each other's core energy activities. Badr Jafar, Executive Director of the Crescent Group of Companies, explains the active role being played by Crescent in this pioneering initiative.
Despite being the world's two resource giants, with a combined 63% of world oil and gas reserves and 39% of world oil and gas production, Russia and the Middle East have until recently had a surprisingly weak commercial relationship. Whilst Russia has participated in OPEC meetings as an observer and Russia and the Middle East have a common platform in the gas sector via the Gas Exporting Countries Forum, the amount of bilateral investment between the two regions oil and gas industries has been limited thus far.
Part of the reason for the lack of a deep commercial interplay between Russia and the Middle East is historical. In the past the Arab world has focused on its relationship with the West for inward and outward investment. This may be because for a long time the West was the Arab world's largest customer for oil exports. As a result Arab investments abroad tended to be focused in the West in industries such as the oil supply chain (refining etc.), real estate, industrial projects and financial securities. However, Russia only took its first steps to integrate with the global economy in the 1990s. It was then that this other energy world superpower become a viable target for investment by Middle Eastern companies. Joint Arab-Russian investment appetite was still limited during this period due to the uncertainty of Russia's economic and political direction. Since the beginning of the 21st century, with the increased stability of the Putin era, it is quite evident that the ambition of Russian businesses and their aspirations are similar to those of Middle Eastern businesses and that cross-investment should be possible and desirable.
It is in this new environment that Crescent Petroleum and Rosneft realised the benefit of greater energy business cooperation between Russia and the Middle East. Both are leading E&P players in their respective geographic provinces and they understand the power of mutually beneficial alliances. Rosneft is Russia's leading oil company and is amongst the world's major national oil companies, with deep technical expertise and financial strength. Meanwhile, Crescent has long-standing relationships and business development expertise in the Middle East. Crescent and Rosneft value their respective strengths and saw the opportunity to create mutually beneficial joint investments.
The Rosneft-Crescent partnership is the first major alliance in the energy sector between two of the world's largest oil and gas producing regions, Russia and the Middle East, but the world's energy needs and common interests of Russia and the Middle East mean it is unlikely to be the last. Jafar says "We believe the world's energy challenges can only be met by deep partnerships between key industry players which will ensure that necessary investments are channelled into adding new productive capacity to the global oil and gas system. As the world's two largest energy resource holders, deeper cooperation between Russia and the Middle East will be an essential part of this process. We hope our alliance with Rosneft will become a platform for Russia to create a tangible link with the Middle East."
TNK-BP SIGNS AGREEMENTS TO ACQUIRE ASSETS IN VENEZUELA AND VIETNAM FROM BP
October 18, 2010, Monday
TNK-BP and BP p.l.c. announced today that they have reached an agreement for TNK-BP to acquire BP’s upstream and pipeline assets in Vietnam and Venezuela for an overall price of $US 1.8 billion.
The acquisitions will be financed entirely through the company’s available resources and will not require additional capital from the shareholders of TNK-BP. A deposit of $US 1 billion will be made by 29 October, 2010 with final payment upon completion. Subject to government approvals and the fulfillment of other agreed pre-closing conditions, the companies expect the transaction to be completed in the first half of 2011.
According to the terms of the agreements, in Venezuela TNK-BP will acquire from BP a 16.7% equity stake in the PetroMonagas SA extra heavy oil producer, a 40% stake in Petroperija SA which operates the DZO field, and a 26.7% stake in Boquerón SA. These assets are operated as joint ventures with PVDSA and have a combined capacity of 25 thousand barrels of oil equivalent per day.
In Vietnam, TNK-BP will acquire from BP a 35% stake in the upstream offshore gas production Block 06—1 containing the Lan Tay and Lan Do gas condensate fields, a 32.7% stake in the Nam Con Son Pipeline and Terminal, and a 33.3% stake in the Phu My 3 power plant. Together, these assets form an integrated gas and power chain with a production capacity of 30 thousand barrels of oil equivalent per day (on a working interest basis), or 15 thousand barrels per day on a net entitlement basis.
Altogether, the acquisitions of the assets in Venezuela and Vietnam will bring TNK-BP net proved and probable (2P) reserves of ca. 290 million barrels of oil equivalent (WI), or ca. 260 million barrels of oil equivalent on an entitlement basis.
“The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP’s strategic expansion in the global energy market,” said Mikhail Fridman, Executive Chairman of TNK-BP Ltd. “Our company’s ambitious yet highly focused and disciplined diversification provides TNK-BP with an excellent platform for further growth and profitability, while also helping develop new competencies that can be applied at home. Given Russia’s strong relationships with Vietnam and Venezuela, we are sure that this transaction will create significant value both for TNK-BP and our local partners.”
Regarding the sale of the Vietnamese and Venezuelan assets, Robert Dudley, Chief Executive officer of BP p.l.c. said, “These are robust businesses which offer both existing production and potential opportunities for future growth. We believe they will offer TNK-BP a solid foundation as it builds its business outside Russia”.
Lexicon Partners acted as financial advisor to the Board of Directors of TNK-BP Ltd., Credit Suisse acted as financial advisor to TNK-BP management, while Goldman Sachs advised BP.
Notes to editors:
TNK-BP is Russia’s third largest oil company, 50% held by BP and 50% held by the AAR Consortium (Alfa Group, Access Industries, and Renova). TNK-BP also owns close to 50% of another Russian oil and gas company, Slavneft. TNK-BP accounts for approximately 16% of Russia’s production (including its share of Slavneft). SEC proved reserves (life of field basis) were 8.586 billion boe as of December 31, 2009.
References to “TNK-BP” or “the Group” mean “TNK-BP International and the company’s consolidated subsidiaries” unless the context requires otherwise.
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Gazprom
Poland and Russia agree on new gas deal
Russia and Poland have agreed a new gas supply deal conforming to European Union rules, easing worries that Europe, which takes gas through the Polish pipeline, might face shortages during the coming winter.
News wires 18 October 2010 02:36 GMT
An agreement on increasing Russian gas delivery to Poland and its transit to Germany through the Yamal pipeline was negotiated last year but was not signed due to worries that it was incompatible with EU laws.
"The EU delegation participated in the talks and did not raise any objections to the governmental agreement," Poland's Deputy Economy Minister, Joanna Strzelec-Lobodzinska, told reporters in Moscow.
Poland's current supply contract runs out next week, and the delay in signing the deal raised fears of supply disruptions similar to those experienced last year, when Russia left European consumers shivering during a price row with Ukraine.
Russian gas export monopoly Gazprom and Poland's gas monopoly PGNiG will now work on details with Gazprom's deputy chief executive Alexander Medvedev, saying the contract would be finalised within two weeks.
"What is left is to finalise corporate agreements regarding the functions of the operator of the Yamal-Europe project," Reuter’s quoted Medvedev as saying.
Philip Lowe, the European Commission's director-general for energy, said the talks were "very constructive".
The deal covers 10 billion cubic metres of Russian gas a year for Poland until 2037, as well as gas flowing onwards to the rest of Europe through the pipeline.
The Commission has said the deal must respect EU rules, which say that the pipeline must not be monopolised by PGNiG and Gazprom.
Gazprom warned last week that the bloc's gas industry reforms would mean the end of stable supplies to Europe.
Poland imports about 65-70% of its 14 Bcm annual gas consumption from Russia, a dependence that worries many in the EU's biggest ex-communist state.
Published: 18 October 2010 02:36 GMT | Last updated: 18 October 2010 02:38 GMT
Moscow, Sofia to Speed Work on South Stream
18 October 2010
Combined Reports
SOFIA, Bulgaria — Gazprom agreed with Bulgaria on Friday to speed up work on the planned South Stream pipeline that will run across the Black Sea via Bulgaria to Western Europe.
Gazprom will sign an agreement with Bulgaria next week to do a feasibility study for the country's section of the pipeline, chief executive Alexei Miller told reporters in Sofia. The link may carry 63 billion cubic meters of gas a year to the European Union.
"Today's meetings gave a serious push to the project," Miller said after meeting Bulgarian Prime Minister Boyko Borissov. "We achieved serious progress."
Gazprom plans to set up a joint venture in November, a few months ahead of schedule, to oversee the Bulgarian section of South Stream, Miller said.
Bulgarian Economy and Energy Minister Traicho Traikov confirmed that the joint venture would be set up next month.
Gazprom, the world's biggest gas producer, plans to build the pipeline to supply eastern, central and southern Europe, bypassing transit states such as Ukraine. The construction is planned to start in 2013, with the first gas deliveries at the end of 2015.
Miller reiterated that South Stream, controlled by Gazprom and Italy's Eni, will have its first gas shipments to southern Europe at the end of 2015. French power company EDF also holds a stake.
Romania signed an accord with Gazprom on Wednesday about the possible construction of South Stream across its territory. Gazprom has not made a final decision on the route.
Commentators have speculated that Russia was losing patience with Bulgaria's government, which has been reviewing Russian-backed projects since coming to power in July. Some analysts have suggested talks with Romania were aimed at showing Sofia it could be bypassed.
"We are at a very important stage in the project, where we are optimizing the route," Miller said.
The Bulgarian section of the pipeline is estimated to cost $835 million, out of a total cost of 20 billion euros ($26 billion).
Bulgaria also backs the OMV-led Nabucco pipeline, which aims to bring gas from the Caspian Sea region and the Middle East to Austria via Turkey, and thereby reduce Europe's reliance on Russian supplies.
Bulgaria relies entirely on Russian gas imports and is negotiating new supply contracts, which should be signed by June 2011.
Gazprom pumps 17.8 bcm a year to Turkey, Greece and Macedonia via Bulgaria. Bulgaria consumed 2.2 bcm of that in 2009.
(Bloomberg, Reuters)
Bulgaria, Russia to set up joint venture as early as November-Miller Gazprom
Tsvetelia Tsolova, SOFIA, - 18.10.2010
Russia and Bulgaria have agreed to start a joint venture next month to build the Bulgarian part of the Russian-led natural gas pipeline South Stream, Gazprom Chief Executive Alexei Miller said on Friday.
In July, Sofia and Moscow signed a roadmap for the pipeline, which aims to ship up to 63 billion cubic metres of Russian gas per year under the Black Sea to central and southern Europe, after Moscow committed to lower gas prices for Bulgaria.
Initially, Bulgaria and Russia had planned to set up by February a 50/50 joint venture for the Bulgarian part of the pipeline, estimated to cost $835 million.
"We have achieved significant progress," Miller told reporters after meeting with Bulgarian Prime Minister Boiko Borisov.
"We agreed to speed up the set up of a joint venture...I think we can establish it in November. We also agree to sign next week an agreement to launch a feasibility study for the Bulgarian part," he said.
Bulgarian Economy and Energy Minister Traicho Traikov confirmed that the joint venture would be set up next month.
Miller reiterated that South Stream, controlled by Gazprom and Italy's ENI will have its first gas shipments to south Europe at the end of 2015. French power company EDF also holds a stake.
The project is a rival to the EU-backed Nabucco pipeline, designed to bring gas from central Asia and the Middle East and which Bulgaria also supports. Both pipelines are planned to run through Bulgaria.
Miller said Gazprom was working to optimise the route of the project, aimed to bypass Ukraine.
On Wednesday, he signed a deal with Romania which brings Bucharest closer to joining the South Stream project.
Commentators have speculated Russia was losing patience with Bulgaria's government, which has been reviewing Russian-backed projects since coming to power last July, and suggested talks with Romania were aimed at showing Sofia it could be bypassed.
Source Reuters -
"Shtokman partners will meet all deadlines"
2010-10-15
CEO of Statoil Helge Lund yesterday met with Gazprom’s Aleksei Miller and the Russian Ministry of Energy to discuss the development of the Shtokman project.
-The shareholders of the Shtokman Development AG are taking all necessary measures for the Shtokman project to proceed in line with settled schedules, Mr. Lund and Mr. Miller underlined in their meeting, a press release from Gazprom reads.
The Russian-Norwegian meeting in the Gazprom headquarters had full focus on the Shtokman project and first of all included discussions on preparations for the first project development phase. The Norwegian delegation included of the company’s leaders, among them Vice-Presidents Peter Mellbye and Torgeir Kydland and Statoil Russia leader Jan Helge Skogen.
The Norwegian delegation also met with the Russian Ministry of Energy and its leader Sergei Shmatko, a ministry press release confirms.
The Russian-Norwegian meetings come only two days after the Gazprom leadership held a meeting on the project with several of its involved subsidiaries, including the Shtokman Development AG. The meeting was devoted to a number of aspects with the complex project, among them the localization of coastal infrastructure.
“Preparations for the adoption of a final investment decision for the project’s first phase are proceeding in line with the time schedule”, a press release from the company states. According to the revised time schedule approved in February 2010, the final investment decision for the pipeline part of the project is to be adopted in March 2011, while a decision on the project’s LNG part will be taken by the end of the same year.
In that meeting, Gazprom leader Miller stressed that ” the development of the Shtokman project is one of the strategical priority tasks for Gazprom” and that ”I am confident that the work of our joint company Shtokman Development AG and the efforts of its new director Aleksei Zagovorski […] will in the most efficient way develop the first phase of this huge project”, the company's press service informs.
The apparently successful preparations for the Shtokman project continue amid major skepticism from analysts, who believe that the quick changes in the international gas markets are making new expensive offshore projects superfluous and not profitable. Only over the last two year, demand on natural gas has dropped significantly and prices subsequently plummeted.
The Shtokman partners Gazprom, Total and Statoil meanwhile continue their ambitious Shtokman plans. The project hub of Teriberka is being prepared for construction works and two of the project jack-up rigs currently under construction in Vyborg is proceeding. According to Gazprom, the rigs, the “Polar Star” and the “Northern Lights” are to be completed respectively in Q3 2010 and Q1 2011.
Prirazlomnoye drilling in 2011?
2010-10-15
The Prirazlomnoye project in the Pechora Sea “could be put in production in 2011”, leader of the responsible Gazprom subsidiary said this week.
Talking to journalists in Sankt Petersburg this week, leader of the Gazprom Dobycha Shelf Rudolf Ter-Sarkisov said that “perhaps, we will succeed with drilling a well and launch field production in 2011”, Rbc.ru reports.
The launch of the Prirazlomnoye oil field in the Pechora Sea has been postponed a number of times. The last year, however, Gazprom and its partners in Sevmash have stressed that project production will start in 2011.
Now, also 2011 might be too optimistic.
The Prirazlomnoye oil field is located about 50 km from land in the Pechora Sea, reports. The field has estimated resources of 83,2 million tons and annual production is planned at 6,5 million tons. Two tankers have been specially designed for the project.
When in operation, the Prirazlomnoye will be Russia’s first ever offshore oil field in the Arctic.
Gazprom increases its pressure on Bulgaria, Ukraine
Author: Kostis Geropoulos
17 October 2010 - Issue : 907
Moscow has renewed pressure on Sofia to stop stalling in deciding on the South Stream project or Gazprom will replace Bulgaria with Romania as the primary transit hub of the gas pipeline. On 13 October, Alexei Miller, the chief executive at Russian gas giant Gazprom, signed a memorandum of understanding with Romania's Transgas to study the feasibility of South Stream in Romania.
Gazprom and Transgaz will sign an intergovernmental agreement of cooperation on South Stream in early 2011 "provided the results of these feasibility studies are positive." South Stream would branch into two pipelines -- one to Greece and the other through the Balkans -- after it passes through the Turkish waters of the Black Sea.
Hardly had the ink dried on Gazprom’s memorandum with Transgaz when Miller visited Sofia to discuss South Stream with Bulgarian Prime Minister Boiko Borisov. Russia’s pressure on Bulgaria appears to be paying off and both sides agreed to start a joint venture next month to build the Bulgarian part of South Stream. "We have achieved significant progress," Miller told reporters after meeting with Borisov on 15 October. "We agreed to speed up the set up of a joint venture...I think we can establish it in November. We also agree to sign next week an agreement to launch a feasibility study for the Bulgarian part," he said. Miller reiterated that South Stream, which aims to ship up to 63 billion cubic meters of Russian gas per year, will have its first gas shipments to south Europe at the end of 2015.
“Gazprom is trying to use Romania as an instrument of influence on Bulgaria,” Konstantin Simonov, director of the independent National Energy Security Fund in Moscow, told New Europe by phone on 15 October. “Now the question is what will be the route of South Stream. Will it go through Bulgaria or through Romania?”
Simonov opined that South Stream is also an instrument of pressure on Ukraine. Russian Prime Minister Vladimir Putin plans to meet his Ukrainian counterpart Mykola Azarov in Kiev on 27 October. “Now we see a very important phase in our negotiations with Ukraine about the future of the gas pipeline system. If Ukraine will agree with, for example, merging of Gazprom and Naftogaz or if Ukraine will agree on consortium between Russian, Ukrainian, for example, German companies, which will be an operator of Ukrainian gas pipeline system maybe in this case there will be no need to build South Stream,” Simonov said. But Moscow needs the agreement with Sofia to show Kiev that South Stream, which would bypass Ukraine and send natural gas supplies from Russia directly to Bulgaria, is a realistic project and a credible threat to circumvent Ukraine.
Russia boost the credibility of South Stream on 9 October in St Petersburg where Putin and Italian Prime Minister Silvio Berlusconi publicly agreed to allow Wintershall, a unit of Germany’s BASF, to join South Stream, which is controlled by Gazprom and Italy's ENI. French power company EDF also holds a stake. “Now we have already Italian company in this project, a company from France, EDF, and if it will be Wintershall, it’s not only Russian-Italian project, it’s also a European project,” Simonov said.
KGeropoulos@NEurope.eu
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