Russia - WikiLeaks
Russia 091023
Basic Political Developments
• RIA: Russia-NATO Council meeting penciled for December 4
• UNIAN: Poroshenko arrived in Moscow - Foreign Minister of Ukraine Petro Poroshenko arrived in Moscow on working visit.
• RIA: Ukraine's new foreign minister to visit Russia Friday
• Ukrainian Journal: Foreign minister to visit Moscow Friday
• Gaztea.kz: Kazakhstan to open border with Russia a year earlier
• RFERL: Tajik President's Moscow Talks Inconclusive
• RIA: Over half-ton of drugs destroyed in Tajikistan
• The Moscow Times: Russia a ‘Top Narcotics User’
• Standart: Cold Shower for Bulgaria's Energy Minister in Moscow
• Focus: Russia would build energy projects in Montenegro
• Russia Today: Russian companies beat path to Hanoi as Vietnamese market beckons
• VOVNews.vn: Southern city strengthens trade ties with Russia
• Institute of International Trade: Russia hopes to enter WTO in 2010 with US backing
• The Jamestown Foundation: Tehran on the Brink of Procuring S-300 Missiles
• : Russia and China work on draft Kalashnikov copyright deal
• Xinhua: Xinhua, RIA Novosti sign agreement on news photo services
• News.am: Incident in Russian Pacific Fleet warehouses
• Barentsobserver: Modernized nuclear submarine on sea trials in Arctic waters
• RIA: Russian police killed Chechen militant leader
• The Jamestown Foundation: Kadyrov Again Declares Victory as Rebel Attacks Continue
• Daghestan Violence Designed to Influence Kremlin’s Selection of Leaders There, Moscow Analyst Says
• Reuters: Bombings up sharply in Russia's North Caucasus
• BBC: Life on N Caucasus 'front line' - The BBC Russian Service has joined forces with online news portal Caucasian Knot to assess what everyday life is like in the North Caucasus, where violence is becoming more common.
• Reuters: EU parliament awards prize to Russian rights group
• The Moscow Times: Banned Islamic Groups Closed
• Itar-Tass: Three children killed in oil tank blast in Sverdlovsk region
• Russia Today: Communists rally against election results
• RIA: Russia's top election official rejects resignation calls
• RIA: City of Moscow to dispatch humanitarian aid to Abkhazia
• The Moscow Times: Kudrin Offers Rare Rebuke to Luzhkov
• The Moscow Times: Using Twitter to Take Spin to the Next Level - The Communications and Press Ministry is looking for a company to provide the technology needed to allow bureaucrats to promote state interests on social networking sites like Twitter and Facebook.
• The St. Petersburg Times: Clock Ticking for State Corporations
• Bloomberg: Putin’s Russia Is Like Cart on Superhighway, Khodorkovsky Says
• Russia Profile: Balancing the Books - Russia Is Still a Long Way From Financial Self-Sufficiency
• Newsweek: The Dissident Who Came In From the Cold
• Georgian Daily: Russian Military Planners Thinking About a Post-CIS Eurasia
• Worldbulletin: Deadly swine fever may spread from Russia: FAO
National Economic Trends
• RIA: Russian monetary base up $1.7 bln in week to $141 bln
• Reuters: Russia c.bank shifts bid level, buys $700 mln
• Interfax: Russian money supply may rise 4%-5% in 2009 – Ulyukayev (Part 2)
• Reuters: UPDATE 1-Russian c.bank allows rouble to scale new peaks
• Interfax: Given chronic budget deficits, VAT reduction not realistic – Shatalov
• Bloomberg: Russian Economy May Stagnate on Weak Domestic Demand, Alfa Says
• Bloomberg: Russia Credit Ratings ‘Substantially’ Undervalue Debt, UBS Says
• Kyivpost: Russia falls to 40th place in financial development rankings
Business, Energy or Environmental regulations or discussions
• Reuters: Russian markets -- Factors to Watch on Oct 23
• RIA: Sberbank's RAS net profit down 91% in Jan.-Sep.
• Your Metal News: Mechel completed placement of its 05 series bonds
• Bloomberg: Russia’s Deka May Sell Stake to Fight Coke With ‘Not Cola’ Kvas
• Reuters: FACTBOX-What happens to spent nuclear fuel
Activity in the Oil and Gas sector (including regulatory)
• NY Times: Russian Oil Surges After Break With OPEC
• Barentsobserver: Record drop in Russian gas consumption
• Upstreamonline: Eni eyes South Stream decision next year
• RIA: Kazakhstan willing to pump oil into pipeline via Turkey
• Gazeta.kz: Kazakhstan, Russia ready to participate in construction of oil pipeline Samsun – Ceyhan
• EurasiaNet: Turkmenistan: New Pipeline To Start Pumping Gas To Iran On December 20
• Upstreamonline: Vanco and Lukoil swap rigs off Ghana
• UPI: TNK-BP sinks money in north Russia
• Reuters: Russia's Tatneft net profit rises 40 pct in H1
• RBC: Tatneft's net profit jumps nearly 40%
• Steel Guru: Transneft studying alternatives to western loans
• The Moscow Times: Transneft to Finish Pipeline to China by 2010
• Businessneweurope: Nord Dream? - Nord Stream is still very much stuck in the planning stages with numerous obstacles to overcome, though talk to the partners involved in building this gas pipeline and a very different picture emerges.
• FOCUS: Arrangement of energy routes – comments in Russian press
Gazprom
• Reuters: Europe gas demand exceeds pre-crisis levels –Gazprom
• Kyivpost: Gazprom could up output 11 percent in winter Gazprom could up output 11percent in winter season
• Steel Guru: Gazprom Neft gets majority on Moscow Oil Gas Co board
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Full Text Articles
Basic Political Developments
RIA: Russia-NATO Council meeting penciled for December 4
12:3323/10/2009
BRUSSELS, October 23 (RIA Novosti) - The first formal Russia-NATO Council ministerial meeting since the military conflict between Russia and Georgia in August 2008 may be held in early December, Russia's envoy to NATO said on Friday.
During an informal ministerial meeting in Greece in June, Russia and NATO agreed to renew cooperation on security issues, which was frozen after Russia and Georgia fought a five-day war over the former Georgian republic of South Ossetia, after which Russia recognized the independence of South Ossetia and Abkhazia, another former Georgian republic.
"The preferred time of the meeting is December 4," Dmitry Rogozin told RIA Novosti, adding that the date still needs to be confirmed by the Western military alliance.
Rogozin also said NATO Secretary General Anders Fogh Rasmussen's visit to Moscow on December 15-17 was "optimal."
Rasmussen earlier proposed Russia-NATO discussions to analyze security challenges of the 21st century, considering common security interests and possible threats.
He has also expressed readiness to intensify Russia-NATO cooperation on Afghanistan and to strengthen military collaboration.
Relations have also been strained by Russia's resistance to Georgia and Ukraine's bids to join NATO.
Russian President Dmitry Medvedev reiterated on Tuesday that "Russia is ready to harmonize relations with the United States and other Western partners, including constructive cooperation with NATO in resolving common tasks."
[23.10.2009 10:34]
UNIAN: Poroshenko arrived in Moscow
Foreign Minister of Ukraine Petro Poroshenko arrived in Moscow on working visit.
According to an UNIAN correspondent, in accordance with the program of the visit, P. Poroshenko is about to carry out negotiations with his Russian counterpart Sergey Lavrov.
It is planned that the ministers will discuss the key issues of the Ukrainian-Russian relations, particularly important topics of the economic interaction and preparation process of the session of the Committee on economic cooperation issues of the Ukrainian-Russian intergovernmental commission.
RIA: Ukraine's new foreign minister to visit Russia Friday
03:1923/10/2009
KIEV/MOSCOW, October 23 (RIA Novosti) - Ukraine's recently appointed Foreign Minister Petro Poroshenko will pay a visit to Moscow on Friday in an attempt to renew dialogue between Moscow and Kiev.
Ukraine had been without a top diplomat since former foreign minister Volodymyr Ohryzko, known for his anti-Russian stance, was dismissed on March 3. Petro Poroshenko, appointed to the post earlier this month, said improving ties with Russia would be one of his top priorities.
"The aim of the visit would be to intensify our dialog and to build up trust between our countries," Poroshenko told journalists ahead of the visit.
He said that boosting cooperation with Ukraine's immediate neighbors - Belarus, Moldova, the EU and Russia - was his country's top priority.
Poroshenko said that among other issues he is set to discuss with his Russian counterpart Sergei Lavrov are the Russian Black Sea Fleet's presence in Ukraine, the delimitation of the Kerch Strait, economic cooperation and other key problems.
Russia's Black Sea Fleet uses a range of naval facilities in Ukraine's Crimea, including the main base in Sevastopol, as part of a 1997 agreement under which Ukraine agreed to lease the bases to Russia until 2017. Kiev insists that Russia withdraws its fleet from the Ukrainian territory.
As for the delimitation of the Kerch Strait, the two countries have been in a dispute over their maritime borders since the early 1990s.
In August, Russian President Dmitry Medvedev delayed sending a Russian ambassador to Ukraine over a worsening in relations between the neighbors.
In an August 11 letter to Ukrainian President Viktor Yushchenko, Medvedev blamed Kiev for the deterioration in relations between the two former Soviet republics, strained in recent years by gas disputes, Ukraine's desire to join NATO, and interpretations of the Soviet-era famine in Ukraine. Russia has also accused Ukraine of supplying weapons to Georgia during last year's war between Russia and Georgia over South Ossetia.
Ukrainian Journal: Foreign minister to visit Moscow Friday
Journal Staff Report
|KIEV, Oct. 22 – Recently appointed Foreign Minister Petro Poroshenko will pay a visit to Moscow on Friday in an attempt to renew |
|dialogue between Moscow and Kiev, a Russian news agency reported Thursday. |
| |
|Poroshenko, who in early 2007 was declared persona non-grata by Russia for his pro-Western views, was appointed minister two |
|weeks ago, pledging to improve relations with Moscow. |
| |
|"The aim of the visit would be to intensify our dialog and to build up trust between our countries," RIA Novosti cited Poroshenko|
|as saying. |
| |
|Ukraine had been without a top diplomat since former foreign minister Volodymyr Ohryzko, known for his anti-Russian stance, was |
|dismissed on March 3. |
| |
|Poroshenko said that among other issues he is set to discuss with his Russian counterpart Sergei Lavrov are the Russian Black Sea|
|Fleet's presence in Ukraine, the delimitation of the Kerch Strait, economic cooperation and other key problems. |
| |
|Russia's Black Sea Fleet uses a range of naval facilities in Ukraine's Crimea, including the main base in Sevastopol, as part of |
|a 1997 agreement under which Ukraine agreed to lease the bases to Russia until 2017. |
| |
|Kiev insists that Russia must withdraw its fleet from the Ukrainian territory when the agreement expires in 2017. |
| |
|As for the delimitation of the Kerch Strait, the two countries have been in a dispute over their maritime borders since the early|
|1990s. |
| |
|In August, Russian President Dmitry Medvedev delayed sending a Russian ambassador to Ukraine over a worsening in relations |
|between the neighbors. |
| |
|In an August 11 letter to President Viktor Yushchenko, Medvedev blamed Kiev for the deterioration in relations between the two |
|former Soviet republics, strained in recent years by gas disputes, Ukraine's desire to join NATO, and interpretations of the |
|Soviet-era famine in Ukraine. |
| |
|Russia has also accused Ukraine of supplying weapons to Georgia during last year's war between Russia and Georgia over South |
|Ossetia. (rn/ez) |
Gaztea.kz: Kazakhstan to open border with Russia a year earlier
14:36 23.10.2009
text: "Kazakhstan Today"
Kazakhstan intends to open its border with Russia a year earlier. Vice Minister of Industry and Commerce of Kazakhstan, Zhanar Aytzhanova, informed in an interview to journalists on Thursday, Kazakhstan Today agency reports.
"Our colleagues from the Ministry of Finance yesterday at the commission session informed that Kazakhstan would be able to open Kazakhstan-Russian border from July 1, 2010," Z. Aytzhanova informed.
She also said that this question will be considered in greater details from January, 2010. Z. Aytzhanova underlined that "the border may be opened a year earlier." "It depends on the outcome of the negotiations between our countries," Vice Minister explained.
RFERL: Tajik President's Moscow Talks Inconclusive
October 22, 2009
MOSCOW -- Tajik President Emomali Rahmon's talks with Russian counterpart Dmitry Medvedev near Moscow have produced no significant results, RFE/RL's Tajik Service reports.
Medvedev told journalists after the closed-door talks that Russia and Tajikistan would develop cooperation in defense and military exports to third countries to improve national and regional security.
Medvedev and Rahmon confirmed their interest in hydropower projects in Tajikistan while taking other Central Asian countries' interests into account.
Tajik analysts tell RFE/RL that Russia was not ready to discuss the main issues concerning Dushanbe: the rent for a Russian military base in Tajikistan and Russian participation in the Roghun Hydroelectric Plant project.
Experts in Tajikistan say Russia's involvement in construction of Roghun would likely irritate neighboring Uzbekistan, which considers the new plant a threat to its regional monopoly on water.
RIA: Over half-ton of drugs destroyed in Tajikistan
10:5423/10/2009
DUSHANBE, October 23 (RIA Novosti) - Around 560 kilograms of drugs, including 140 kilograms of heroin, were destroyed on Friday by narcotics officers in Tajikistan, the deputy director of the country's Drug Control Agency said.
Vaisiddin Azamatov said the drugs were burned after they had been used as material evidence in 32 criminal cases, which have concluded.
According to the agency, in January-September 2009 Tajik police seized over 3.8 tons of drugs, 23.4% less than the same period of last year.
The agency said the amount of seized drugs was down due to greater control of precursors essential to the production process, and better prevention of their smuggling into Afghanistan.
An estimated 90% of heroin consumed in Russia is trafficked from Afghanistan via Tajikistan and Uzbekistan, and the vast majority of heroin consumed in Europe passes through Russia on its way from Afghanistan, where illegal drug production has reportedly risen more than 40 times since 2001.
The Moscow Times: Russia a ‘Top Narcotics User’
23 October 2009
Russia is among the world’s largest consumers of illegal drugs from Afghanistan, together with Iran and Europe, according to a new UN report.
Afghanistan produces 92 percent of the world’s opium, a thick paste from poppy used to make heroin, and the equivalent of 3,500 tons is trafficked out of Afghanistan every year, the UN Office on Drugs and Crime said. The report said about 70 tons of Afghan heroin was trafficked for sale in Russia in 2008, three times more than to Canada and the United States combined.
Europe accounts for 19 percent of the world’s opiate consumption, while Russia and Iran each account for 15 percent and China 12 percent. The UN report said the price of heroin increases with each border crossing and a gram that costs $3 in Kabul could sell for up to $100 in the streets of Moscow.
(MT)
Standart: Cold Shower for Bulgaria's Energy Minister in Moscow
Russia repeated its request to use Bulgaria's gas transportation system, while Italians showed interest in NPP Belene
Russia has made a second attempt to gain control over Bulgaria's system for transportation of natural gas. Moscow has submitted information concerning the expansion of the South Stream project. This emerged after yesterday's meeting of Economy and Energy Minister Traycho Traykov and his Russian counterpart, Sergei Shmatko, in Moscow. The Russian party presented a detailed analysis of all possible options for the realization of South Stream project, including the one that regards the utilization of the now existing natural gas transit system, Mr. Shmatko said, as quoted by Russian news agencies.
According to a publication of Gazeta.ru, such a move will increase the capacity of the pipeline.
Exactly a year ago, the Bulgarian government turned down such a proposal from Moscow and said that South Stream should use a new infrastructure. Bulgarian experts have voiced concerns that if the transit system is full of natural gas from South Stream, Bulgaria will not be able to use alternative supplies through Turkey.
The proposal of Moscow has surprised the experts in Sofia, who received it during Minister Traykov's visit to Russia and they are still to analyze it.
Italian companies have shown interest in Bulgaria's NPP Belene project. This emerged after the meeting of Economy and Energy Minister Traycho Traykov with his Russian counterpart, Sergei Shmatko, in Moscow yesterday.
Minister Traykov did not name the Italian companies, but only said that the interest was demonstrated during the visit of Italian PM Silvio Berlusconi to Sofia a week ago. Italy's Enel participated in the tender for the realization of NPP Belene project some years ago. Sofia's government said they would put under the hammer part of their 51-percent share in the nuclear plant.
According to information of the national radio, Traykov and Shmatko did not discuss the option of Russian financing of the construction of NPP Belene.
During his talk with Mr. Shmatko, Minister Traykov confirmed Bulgaria's commitment to continue working on all three projects - Belene, South Stream and Bourgas-Alexandroupolis.
"Work on the realization of South Stream shall be accelerated," the two ministers said after their meeting.
During the talks in Moscow, Minister Traykov was informed that South Stream would not circumvent Bulgaria, even though some segments of the pipeline might pass through Turkish territorial waters.
Experts are now analyzing the technical and the economic parameters of Bourgas-Alexandroupolis, as well as the impact of the project on the environment, Mr. Traykov added.
Focus: Russia would build energy projects in Montenegro
23 October 2009 | 09:46 | FOCUS News Agency
Podgorica. Russian companies are interested in building energy projects in Montenegro, announced Russian Minister of Emergency Situations Sergey Shoygu, Free Europe radio station reports.
The minister visited Podgorica on Thursday. He and Montenegrin Foreign Minister Milan Rocen signed the protocol from the third session of the intergovernmental commission on trade, economic, scientific and technical cooperation between Russia and Montenegro.
Russia Today: Russian companies beat path to Hanoi as Vietnamese market beckons
23 October, 2009, 08:36
Dozens of Russian companies are in Vietnam in a bid to win business from its traditional partner, China, with the energy sector seen as showing particular promise.
Nine hours by plane from Moscow gets you to Vietnam – and it’s a route taken by sixty Russian firms exhibiting what they’ve got to offer in Hanoi. Industry and Trade Minister, Viktor Khristenko, says that despite the economic crisis, Russian trade with its long-standing Asian partner has increased.
“Between 2007 and 2008, trade with Vietnam grew by 45 percent. Now we are looking for ways to diversify our co-operation. We have long-established relations with Vietnam which we see as a hub in the region – from where we can expand.”
Serious investment is expected in the gas and oil sectors, while electricity generation is another area where Russian experience can win business locally.
Many Asian countries including Vietnam face electricity supply difficulties – with economic growth meaning increased consumption. The demand for power is something Pyotr Shchedrovsky, Deputy Director General at Rosatom, says is opening up a market for Russian companies.
"Currently Vietnam buys expensive energy in China. Building nuclear plants is an option to consider. Russian technological expertise is well-known and we are here to offer our skills. We are now planning to take part in a tender to build four power facilities here."
To support trade between Hanoi and Moscow a joint bank was set up. Aleksandr Titov, Chairman of the Vietnam-Russia Joint Venture Bank says demand for its services is growing.
"We have increased our client-base two-fold. We are going to open a new subsidiary in Russia next year.
Having lost its strong position in Vietnam since Soviet times, Russia now seems eager to re-establish itself as a reliable partner with plenty to offer. Exhibitors in Hanoi include producers of pharmaceuticals, trucks, state-of-the-art aeroplanes, banking and education.
All part of the new Russian drive to return to the Vietnamese market as Russia seeks to move away from commodity exports.
Updated : 3:00 PM, 10/23/2009
VOVNews.vn: Southern city strengthens trade ties with Russia
| |
The Mekong Delta city of Can Tho is carrying out a trade cooperation programme with Russia to earn US$100 million in export turnover in two years (2009 and 2010).
This is part of Vietnam and Russia’s medium-term plan to join efforts in trade and investment until 2012.
The municipal People’s Committee has instructed relevant departments and agencies to promote trade activity and advertisement, including exhibitions on the city’s specialties, especially seafood products.
The city will assist businesses to modernize technologies and equipment with the aim of improving competitiveness in international markets.
Based on this, Vietnamese authorities have requested Russia to lift the prohibition of Vietnam’s exported seafood.
Can Tho’s export turnover to Russia hit US$20 million in 2008, up by 69.4 percent year on year.
23-Oct-2009
Institute of International Trade: Russia hopes to enter WTO in 2010 with US backing
Russia hopes to finalise its membership in the WTO before the end of 2010, and the US will support Moscow’s bid, senior officials from the two countries said after a meeting in Washington.
Igor Shugalov, Russia’s First Deputy Prime Minister, discussed Moscow’s bid with US Trade Representative Ron Kirk on 21 September. Both men said the meeting went well.
Vladimir Putin, Russia’s prime minister, caused a minor skirmish among trade observers when he announced in June that the country would abandon its unilateral bid to join the WTO and instead pursue membership as a customs union, jointly with former Soviet states Belarus and Kazakhstan. Such an approach is unheard of in the Organization’s nearly 15-year history.
Russia seems to be sticking by its customs-union approach, although Shugalov conceded that heads of state can always change their minds.
Russia, by far the largest economy outside the WTO, has been trying to negotiate its entry into the organisation for 16 years. The accession talks proceeded for more than a decade, and stalled in August 2008 when conflict broke out between Russia and Georgia. Angered by what it considered Russian aggression against a smaller neighbour, the US threatened to block Moscow’s bid to join the global trade body. Russia hit back, vowing to drop some of the commitments it had already made in the accession talks.
Source: International Centre for Trade and Sustainable Development.
The Jamestown Foundation: Tehran on the Brink of Procuring S-300 Missiles
[tt_news]=35641&tx_ttnews[backPid]=7&cHash=671ded36de
Publication: Eurasia Daily Monitor Volume: 6 Issue: 194
October 22, 2009 03:31 PM Age: 9 hrs
By: Pavel Felgenhauer
The Russian-Iranian deal on advanced S-300 long-range anti-aircraft missiles may go ahead despite U.S. and Israeli objections. This week the Interfax news agency quoted an unnamed government source confirming that the deal to sell Iran S-300 missiles had been “frozen” for several years, but Russia will not unilaterally legally invalidate it. According to the source, since the S-300 contract was “frozen,” Russia has not received any advance payments from Iran. The S-300 deal may or may not go ahead in the future, “depending on different political circumstances, since it is now more than simply a commercial contract” (Interfax, October 21).
According to Interfax, if Moscow decides to proceed, the missiles could be shipped to Iran immediately: they have been fully prepared, stockpiled, and ready for shipment in the defense ministry arsenals. The Interfax source directly connected the S-300 deal to the talks in Vienna on the Iran nuclear issue. Unnamed sources “close to Russia’s arms traders and arms producers” are quoted by Interfax as suggesting that: “If Russia does not fulfill its obligation to sell Iran S-300’s, this may undermine Russia’s reputation on the international arms trade market” (Interfax, October 21).
Since 1991, Russia has been a major supplier of modern arms to Iran, including MiG-29 jet fighters and Su-24 jet bombers, thousands of T-72 tanks, Kilo-class submarines, S-200 and Tor M1 anti-aircraft missiles. In 1995, a secret memorandum was signed by U.S. Vice President Al Gore and the Russian Prime Minister Victor Chernomyrdin to stop Moscow from selling arms to Iran in exchange for allowing commercial launches by Russian space rockets of foreign communication satellites containing U.S. technology.
In 2000, then President Vladimir Putin repudiated the Gore-Chernomyrdin memorandum and Moscow resumed signing arms contracts with Tehran. In December 2005, Moscow sold Iran 29 modern short-range Tor M1 anti-aircraft missile launchers with radars for $700 million. The Tor M1 missiles have a range of 12 kilometers (km) and can hit targets 6 km high. Reportedly, in the same year, a contract was signed to sell Iran S-300 missiles. The contract to sell S-300’s is reported to involve “five divisions of S-300 PMU1 anti-aircraft complexes” –40 to 60 anti-aircraft missile launchers each carrying four missile tubes, radars and control stations, with a combined value of $800 million. The S-300 PMU1 has a range of 150 km and can hit targets up to 27 km high (Kommersant, February 17).
The S-300 missiles earmarked for Iran are not newly built, but instead they are drawn from the Russian defense ministry inventory. The S-300 deal is highly profitable and arms traders want the deal with Iran to go through. The political decision to “freeze” the deal was taken by Putin and before he decides otherwise, it remains on hold. Tehran has pressed Moscow hard to deliver the S-300’s. In December 2008 the Iranian state news agency IRNA reported that after several years of negotiations to buy S-300’s Iran and Russia had finalized a deal, and that Tehran would take “delivery of the S-300 air defense system from Russia soon.” Tehran dismissed Israeli objections on the sale of S-300’s, announcing that, “Israelis are not able to damage Iranian-Russian friendly relations” (IRNA, December 21, 2008). However, Russian officials repudiated the statement and Iran is still awaiting a positive decision (Interfax, October 21). Now the waiting could be over.
Moscow has indicated its displeasure with Iranian intransigence over its nuclear program. But this week it was reported from Vienna that a draft agreement has been drawn up by the International Atomic Energy Agency (IAEA) between Iran the U.S., Russia and France to ship to Russia 1,200 kilograms of the 3.5 percent low-enriched uranium that Iran has produced (about 75 percent of its stockpile). There the uranium will be further enriched to 19.75 percent and sent to France to make fuel rods for a U.S.-built research reactor in Tehran that is used to produce radioisotopes for scientific and medical purposes (ITAR-TASS, October 21). This deal was hailed in the West as a sign of Iranian flexibility, since it seems to significantly reduce the amount of Iranian enriched uranium and lowers the immediate prospect of Tehran making a nuclear bomb (Reuters, October 21). However, this apparent breakthrough may come at a grave price if in exchange for its “flexibility” Iran finally gets the S-300’s from Moscow. Washington is currently praising Tehran for finally responding to Barack Obama’s outstretched hand and will not be in a strong position to do or say much if Moscow rewards Tehran with S-300’s.
Together with the Tor M1 and the older super long-range S-200 (provided by Russia in 1994) and the S-300 missiles Iran could build a solid multilayer anti-aircraft defense shield that could defend its nuclear facilities against a possible U.S. or Israeli air attack and inflict serious damage on any attacking force. Without the S-300’s Iran does not have any credible air defenses and its nuclear facilities are vulnerable to such attacks (Interfax, October 21). The possible price for showing “flexibility” to get the S-300’s by sending 1.2 tons of low-enriched uranium abroad may not be as significant as it seems. In 2008, Russia shipped to Iran some 82 tons of low-enriched uranium as nuclear fuel for the Bushehr nuclear power reactor and it is stored under the protection of an IAEA seal (RIA-Novosti, February 25). Iran could dip into that source to easily replace the uranium it may agree to send to Russia under the IAEA draft deal as soon as its nuclear facilities are protected by a credible air defense system from a devastating outside attack. The over-enthusiastic Obama administration might face a nasty surprise.
: Russia and China work on draft Kalashnikov copyright deal
06:56 GMT, October 23, 2009 KLIMOVSK | Russia is working to reach an agreement with China on copyright protection of Kalashnikov assault rifles, the head of Russia's state arms exporter Rosoboronexport said Thursday.
"We have received China's national patent for Kalashnikov products. The documents have been handed to the Federal Service for Military and Technical Cooperation to prepare and conclude an intergovernmental agreement in the field," Anatoly Isaikin told journalists.
Isaikin said the process of reaching a deal with China will be lengthy, but that Russia hopes it will be finished soon, and noted the huge number of unlicensed Kalashnikov rifles produced all over the world.
"There are about 100 million Kalashnikov assault rifles worldwide, of which half are counterfeit, i.e. produced without licenses, patents and intergovernmental agreements," he said.
Isaikin said over 15 countries, including Bulgaria, Romania, Egypt, and China, produce the rifles either on expired licenses or without them.
"Even America produces the assault rifles, even though the country has never received a license for their manufacture," he said.
Isaikin said there are at least 30 organizations illegally producing and trafficking the weapons, whose activities are very difficult to prevent.
The best-known Kalashnikov rifle is the 1947 model known as the AK-47. It is the most widely produced used assault rifle in the world, and is used by both regular armies and militant groups.
The creator of the AK-47, Mikhail Kalashnikov, is 89 years old and lives in Izhevsk.
Xinhua: Xinhua, RIA Novosti sign agreement on news photo services
2009-10-23 15:19:58
BEIJING, Oct. 23 (Xinhua) -- Xinhua News Agency on Friday signed an agreement on news photo services with the Russian News & Information Agency (RIA Novosti).
Under the agreement, Xinhua will be the authorized distributor of news photos and photo archive services of RIA Novosti on the Chinese mainland, Hong Kong, Macao and Taiwan, as well as in Southeast Asia.
Xinhua Vice President Lu Wei said at the signing ceremony in Beijing that the agreement marked a key progress by Xinhua in joining with other news agencies to develop the global market of photo services.
This was also a consensus reached during the first World Media Summit held in Beijing two weeks ago, Lu said.
He added that the agreement would further the cooperation between Xinhua and RIA Novosti, which began 14 years ago.
Stanislav Kranc, head of RIA Novosti's Beijing bureau, said the two agencies had achieved good results in introducing Russian economic information to the Chinese market under an agreement signed in April last year.
News.am: Incident in Russian Pacific Fleet warehouses
09:45 / 10/23/2009
Russian Pacific Fleet (RPF) warehouses were on fire early Oct. 23 morning in Nadezhdensky District of Primorye region. Over 600 sq. m. area reduced to ashes, Interfax informs.
The fire brigades managed to extinguish the fire shortly. Representatives of the Fleet Prosecutor’s Office are at spot to deduce the cause of incident. According to preliminary data, bad wiring caused the combustion. No injured or dead have been reported.
RPF Commanders say no ammunition, but outfit and hardware items were stored there.
Barentsobserver: Modernized nuclear submarine on sea trials in Arctic waters
2009-10-22
The strategic nuclear Delta-IV class submarine K-18 “Kareliya” is soon ready for its first sea trials after modernization to improve its tactical and technical performance.
Mooring trials are currently at the finishing stage and the first sea trials will start in the White Sea in the beginning of November, Advis.ru reports, citing a press report from Zvezdochka.
The submarine has been at the Zvezdochka shipyard in Severodvinsk, Arkahangelsk Oblast, since October 2004. The modernization has prolonged the submarine’s lifetime with approximately ten years and improved its tactical and technical performance considerably. The submarine is planned to be returned to the Northern Fleet before the end of the year.
According toWikipedia, “Kareliya” is one of seven Delta-IV class nuclear submarines built from 1985 to 1992. All are still in service in the Russian navy today. Five submarines have already gone through modernization at the Zvezdochka shipyard.
After the modernization the submarine’s main weapon system is the Sineva ballistic missile. According to Wikipedia, it can carry ten 100kT warheads. In a test launch on 11 October 2008, an R-29RMU travelled 11,547 kilometers downrange.
RIA: Russian police killed Chechen militant leader
09:2223/10/2009
GROZNY, October 23 (RIA Novosti) - Police in Chechnya have killed a militant who planned an assassination attempt against the president of the southern Russian republic, Ramzan Kadyrov, a police spokesman said on Friday.
"In a private residence in Michurin village in Grozny a so called emir of Gudermes [Said-Emi] Khizriev was surrounded. Police made an attempt to arrest him, but he put up armed resistance and was killed with when fire was returned," the spokesman said.
According to the police, Khazriev planned and took part in explosions at two gas stations in Gudermes in the spring of this year, as well as in an armed attack at a sport club in the city.
Russia's North Caucasus republics, in particular Chechnya, Dagestan and Ingushetia, have seen frequent attacks on police and officials this year despite the end of a decade-long special regime for counterterrorism operations in Chechnya six months ago.
The Jamestown Foundation: Kadyrov Again Declares Victory as Rebel Attacks Continue
[tt_news]=35642&tx_ttnews[backPid]=7&cHash=be5a48216d
Publication: Eurasia Daily Monitor Volume: 6 Issue: 194
October 22, 2009 03:33 PM Age: 9 hrs
By: The Jamestown Foundation
Several terrorist attacks have been carried out in Ingushetia and Chechnya this week. Today (October 22), a bomb exploded as Isa Korigov, the head of the criminal police in the Ingush city of Malgobek, was getting into his car with his wife at their home in the city of Malgobek. The blast injured Korigov and his wife, and killed their driver, Maksharip Dzeitov. Korigov’s injuries were described as moderate, while those of his wife were described as severe. According to preliminary findings, the blast had the force of three kilograms of TNT. The attack was not the first on Korigov; in July 2008, unidentified gunmen fired a grenade launcher at his house. No one was hurt in that attack, but when the police arrived at the scene of that incident, the attackers detonated a bomb that wounded Korigov and three other policemen, all of whom were hospitalized (, October 22).
Yesterday (October 21), a roadside bomb was detonated as a police vehicle was traveling to the scene of an attack near the village of Yandare in Ingushetia’s Nazran district. A source in Ingushetia’s law enforcement bodies told Interfax that according to preliminary information, an undetermined number of people were killed and wounded in the blast. However, a source in Ingushetia’s interior ministry later said that no one was killed in the blast. The bombing took place after unidentified attackers fired grenade launchers and automatic weapons at a traffic police post near Yandare, wounding two traffic police officers and two OMON police commandos. The attackers had apparently prepared a roadside bomb knowing that police reinforcements would be called to the scene of the attack on the traffic police post (, October 21).
On October 20, unknown attackers fired on a car being driven by a member of the Nazran police department, Timur Tungoev. According to the press service of Ingushetia’s interior ministry, the police officer was not hurt in the attack and fired back at the attackers (kavkaz-uzel.ru, October 20). That same day, police found an arms cache near an agricultural mill in the village of Barsuki in Ingushetia’s Nazran district. The cache included seven grenades for a grenade launcher, two hand grenades and a small amount of ammunition (kavkaz-uzel.ru, October 20).
On October 19, bomb disposal experts defused a car bomb near a bus stop in the city of Nazran near the building housing the main staff of Ingushetia’s interior ministry. After clearing the area, they detonated the car bomb in a controlled explosion that reportedly could be heard outside the city. According to investigators, the force of the explosion was the equivalent of five to ten kilograms of TNT (, October 19).
Also on October 19, a local resident of Nazran’s Plievo village was shot to death in his car by unknown attackers. The victim was identified only by his last name, Azhigov (kavkaz-uzel.ru, October 19).
Meanwhile, four policemen and a passerby were injured in neighboring Chechnya yesterday (October 21) when a suicide bomber detonated a bomb in the Oktyabrsky district of the capital Grozny. Chechen Interior Minister Ruslan Alkhanov told Interfax that the incident took place when police tried to detain the bomber, whom he identified as Zaurbek Khashumov, who was born in 1992 and was on the list of those in the republic who had supposedly disappeared without a trace. According to the Kavkazsky Uzel website, the incident marked the ninth suicide bombing in Chechnya since the federal authorities announced an end to anti-terrorist operations in the republic last April (kavkaz-uzel.ru, October 21).
Also on October 21, one policeman was killed and two wounded during a counter-insurgency operation in Chechnya’s Urus-Martan district, in which two militants were also killed. The operation was launched in the village of Goiti after police blockaded a group of rebels in several homes. That same day, Chechen Interior Minister Alkhanov said that a 20-year-old militant, Aslanbek Khachukaev, had been killed by security forces on the outskirts of the village of Yermolovka in Chechnya’s Grozny agricultural district. According to Alkhanov, Khachukaev was involved in the murder last month of the head of the administration of the village of Stary Achkhoi, Ali Atramov, and his son (sknews.ru, October 21).
Meanwhile, two Russian servicemen were wounded when gunmen fired grenade launchers and assault rifles at two vehicles outside the village of Khatuni in Chechnya’s southern Vedeno district. A Chechen law enforcement source said that the attackers fired on a Ural truck and an armored tractor ferrying Russian servicemen to cut down trees. The two injured soldiers were contract servicemen –a sergeant and a private (ITAR-TASS, October 21).
On October 19 the Deputy Prosecutor-General Ivan Sydoruk told the Legal and Court Affairs Committee of the Federation Council, the Russian parliament’s upper chamber, that Chechnya, Dagestan and Ingushetia are “the biggest problems in southern Russia” and that the rate of attacks on law enforcement personnel in the North Caucasus is growing steadily. He said that 192 people, including policemen, were killed, 484 were wounded and 425 extremist crimes were perpetrated in the three republics in the first nine months of the year. Sydoruk added that militants are propagandizing the “extremely aggressive” religious tendency of “Wahhabism” and are “ideologically preparing” suicide bombers (Interfax, October 19).
Chechen President Ramzan Kadyrov declared on October 17 that the fight against the republic’s rebels is approaching a victorious end, telling top law enforcement officials that it is necessary to start dealing with “small problems,” including collecting intelligence on the militants in order to “act preventively” to “foil their plans at their planning stage.” Kadyrov also said that the search for Chechen rebel leader Dokka Umarov, the head of the self-declared Caucasus Emirate, and two other rebel leaders, Muslim and Khusein Gakaev, must continue. “They must be destroyed,” he said. “They themselves have signed their [death] sentences. We have studied each square meter of the woods; we are looking for them everywhere. And I am convinced that they have not got long left to run in the forest,” Kadyrov claimed (, October 17).
Daghestan Violence Designed to Influence Kremlin’s Selection of Leaders There, Moscow Analyst Says
October 22, 2009
Paul Goble
The recent upsurge in violence in Daghestan reflects less the growth of Islamist influence than a struggle by various ethnic and family groups in that republic to influence the outcome of a unique form of election there, one in which “the voters” are not the people of that North Caucasus republic but rather officials in the Kremlin administration.
Indeed, Igor Boykov argues, the same rise in violence occurred there in 2005, the last time Moscow had to decide who would be the next president of that republic, and consequently, the politics of Makhachkala and Moscow rather than Islam or even ethnicity per se constitute “the key to understanding” what is going on (apn.ru/publications/article22076.htm).
Moscow media reporting about Daghestan and the North Caucasus not only increasingly resemble reportage from a war zone – yesterday officials announced that terrorist crimes in that region had risen 57 percent over the last year (kavkaz-uzel.ru/articles/161019/) but increasingly offers the same explanations, Boykov says.
On the one hand, Russian officials routinely insist that the problems in the North Caucasus reflect either outside Islamist influence or deep-seated social-economic conditions. And on the other, Russian critics say that Moscow has brought much of the problem on itself by its policy of offering regional elites “money in exchange for external declarations of loyalty.”
But while there is some truth in each of these assertions, Boykov concedes, “the key to understanding many negative processes which are taking place in Daghestan today” is to be found in the peculiar “political situation in the republic” in the last year of the term of Daghestan President Mukhu Aliyev.
The violence, the Moscow analyst suggests, is part of this “as it were ‘pre-election’ year, with only this difference that the voters in this case are not the population of Daghestan but a group of senior bureaucrats in the Administration of the President of the Russian Federation” who will decide who will be Daghestan’s president.
“For precisely their ‘votes’,” Boykov continues, both declared and shadowy pretenders to the highest post [in Daghestan] are now carrying out a struggle” in which they do not feel constrained from using violent “means” if those will have an impact this time around just as they appear to have done in 2005. (He concedes that other groups may be exploiting this infighting.)
As many have observed, Daghestani politics is both profoundly ethnic – until Vladimir Putin intervened in the name of “majoritarian” democracy, positions in the Makhachkala government were allocated according to an ethnic quota – and equally or even more profoundly criminalized, making ties between politicians and criminals a necessity.
Mukhu Aliyev, a former member of the Soviet party nomenklatura who, Boykov says, is “the last of the Mohicans,” is somewhat different, far less corrupt and violent than those around him, and thus in many ways far less effective in implementing his policies and those of the Russian government in Moscow.
At the same time, Boykov says, one should not “idealize” Aliyev because he is very much part of the existing system and has engaged in massive falsification of election results on behalf of Putin’s United Russia Party, most recently in the much-disputed mayoral election in Derbent. But those who come after him are likely to be far more openly criminal.
That is what it takes for politicians there to be effective, Boykov says, and thus “all summer and all fall,” they have organized “explosions, murders, special operations and the kidnapping of people,” not only in Derbent, which attracted the attention of the Moscow media, but throughout much of the republic.
In order to understand just how Daghestani politics are played, he continues, it is necessary to dispense with three myths that Moscow holds dear. First, while Daghestan ranks among the poorest republics according to official statistics, its enormous shadow economy means that incomes are higher there than most think.
Second, the violence in Daghestan is highly concentrated. Almost all of it has taken place in only six of the republic’s 42 regions, a reflection of differences in nationality and attachment to Islam. And third, the number of militants is fairly small -- certainly fewer than 200 – but they or those using them know how to exploit the media to magnify every action.
Indeed, Boykov argues, “the militants are carrying out a quite effective information-psychological war,” creating an atmosphere in Daghestan that allows them to extract money from government officials and to keep the population in a state of panic, a situation which means “the powers that be control the territory [of the republic] but not the minds of its population.”
“Unfortunately,” the Moscow analyst continues, the situation is likely to deteriorate further unless or until a new set of rulers or new Moscow policies are put in place. “The increasing degradation of the system of power … the growing distrust of the population, [and] the struggle for power of various classes and groups” guarantee that.
Moreover, Moscow itself is making the situation worse, Boykov suggests, because the it does not have a well-designed policy or even understand what is happening because it will not employ experts who could help. Such people, he adds, would have to criticize those above them, and that is something, those in “the power vertical” are not prepared to tolerate.
Reuters: Bombings up sharply in Russia's North Caucasus
Thu Oct 22, 2009 4:27am EDT
MOSCOW, Oct 22 (Reuters) - Bomb blasts and attacks on officials in Russia's troubled North Caucasus have risen by more than half this year, Interfax news agency quoted a senior investigator as saying on Thursday.
"We have failed to reduce the level of terrorist crimes in the North Caucasus," said Alexander Bastrykin, head of the investigations committee at the prosecutor-general's office.
"This year 513 such crimes have been registered, which is a 57 percent increase," he added.
Analysts say the attacks, blamed by the government on Muslim insurgents backed by foreign cash, threaten Moscow's control over the volatile southern region, which is plagued by poverty and corruption. The worst hit areas have been Dagestan, Ingushetia and Chechnya, where Russia has fought two wars against separatists since 1994.
On Thursday, four policemen were injured in the Chechen capital Grozny when a suicide bomber triggered a 2 kg (4.4 lb) explosive device, news agencies reported. The bomber was killed.
In a separate incident, a car carrying the head of district criminal police was blown up in Ingushetia, the agencies said. They said the driver was killed, while the officer and his wife were rushed to hospital with injuries of "medium severity". (Writing by Oleg Shchedrov, editing by Mark Trevelyan)
BBC: Life on N Caucasus 'front line'
The BBC Russian Service has joined forces with online news portal Caucasian Knot to assess what everyday life is like in the North Caucasus, where violence is becoming more common.
This is the second of a series of articles bringing together thoughts and opinions from the region - North Caucasus through the eyes of bloggers.
Lechi Khamzatov
Lechi Khamzatov (a pen-name) was born in the southern Russian region of Astrakhan, and now lives in the Chechen capital, Grozny. A history graduate, he has been a journalist for two years and also runs a small business. He discusses the changing face of the young in Chechnya.
Recently a statue of assassinated Chechen leader Akhmat Kadyrov - which had dominated one of the city's main streets since 2005 - was pulled down. Many people are still wondering where the several-tonne bronze monument has disappeared to.
What happened in the Chechen capital of Grozny resembled a high-profile security operation. This operation was not directed against suicide bombers, rebels or their accomplices. Chechen authorities dismantled the statue of Kadyrov - the "first Chechen president" and father of the current Chechen leader Ramzan - in the middle of the night in a highly secretive fashion.
People had grown used to the monument and then all of a sudden it was removed and taken away to an undisclosed location. Moreover, monuments, busts and statues of Akhmat Kadyrov were removed from everywhere - from main squares of Chechen towns and schools. So there is reason for bewilderment.
Ramzan Kadyrov, Chechen parliament speaker Dukvakha Abdurakhmanov and mufti of Chechnya Sultan Mirzayev had a simple explanation for why the monument was dismantled - they said this was the wish of Akhmat Kadyrov himself.
But as Kadyrov was assassinated back in 2004, and the monument was erected in 2005, why did it take until 2009 for them to recall his reluctance to have monuments of himself made?
Akhmat Kadyrov is already part of history. His is part of the official discourse as the saviour of the Chechen people from complete elimination and a passionate fighter against extremism, Wahhabism, terrorism and the rest.
In the unofficial (people's) history he went down as the ex-mufti of the separatist Ichkeria, which waged a jihad against Russia, who then betrayed his ideals to become a no less ardent supporter of Russia's unity.
But there is still a question burning in the minds of some of Chechnya's more inquisitive residents: Where did the monument go?
One Grozny resident even made a seditious, but interesting guess that the statue was pulled down because of the financial crisis. He reckoned the Kadyrov monument and all the smaller statues were melted and sold off.
Bronze fetches a good price these days.
Ruslan Tarkiev
Fatima Pliyeva (a pseudonym), 24, was born in a village in Ingushetia and is a journalism student. Her articles have appeared in local newspapers and now she writes for web-based publications.
When women from the North Caucasus find themselves in central Russia they are made to face the stereotype that a woman from Ingushetia is a "veiled Muslim wife".
I have personally encountered such stereotypes. People would tell me: it must be tough for women, men must be despotic where you live. It is often said that in the Caucasus women are forced to marry. And although unlike women in Arab countries we do not wear the veil, people do not think there is much difference between us.
Most young Muslim women from the North Caucasus who come to Moscow to study wear tight jeans. This is not in line with Islamic laws and at home it would be considered strictly indecent.
Of course, the lifestyle, values and social status of an Ingush woman is very different from that of a native Muscovite. I would define the Ingush woman's lifestyle as Islamic-secular.
Some of her values are the same as of any other Russian woman, but some are informed by Islam.
For instance, an Ingush girl:
• Cannot go to discos (in fact, as far as I am aware, there are none in Ingushetia)
• Is forbidden from spending the night, or even the evening, out
• Is not allowed to bring her fiance home
• Is often forbidden from visiting a girlfriend
But all this varies and depends on the individual's family traditions.
Some families - generally those of clerics - forbid their young women from studying, working and even leaving the house.
But in the majority of cases it is considered acceptable and, in fact, desirable, for an Ingush woman to get an education and a job.
Educated and employed women even enjoy better chances as prospective brides.
These days girls are rarely made to marry by force. It was the generation of our mothers and grandmothers that was subjected to this.
Now girls are "abducted" (as tradition requires) after they consent to this ritual. The bride is not captured and thrown into a car, she gets into it voluntarily.
Sometimes parents refuse to give their daughter to the man who proposes. Then he tries again and again until he has worn them out and they finally agree to give their daughter to him.
Murad Magomatov
Sergei Akhmedov (not his real name) was born in 1968 in Makhachkala, the capital of Dagestan. He is an economics graduate and is currently unemployed.
Recently, leaflets with a "hitlist" of people targeted for assassination appeared in the Dagestani capital of Makhachkala. It was alleged these lists were compiled by relatives of policemen who had been killed.
On the leaflets were the names of 16 journalists, human rights activists and lawyers. They were said to be accomplices of rebels and a blood feud was proclaimed against them.
Rumours are rife in Dagestan about who could be behind the hitlists. Some claim it was an act of provocation by security officials; others accuse some destructive force that wants to destabilise the republic ahead of the upcoming change of government.
Everyone seems to agree that the relatives of the policemen who were killed were not in any way involved in putting together the hitlist.
There is another aspect to this incident that is not being discussed at all - the involvement of the authorities. Of course, it was not public officials who distributed these leaflets around the city at night, but some of their statements might have provoked the incident.
For example, Dagestani President Mikhu Aliyev and assassinated minister of the interior Adilgerei Magomedtagirov had openly and repeatedly voiced their discontent about local independent journalists and human rights activists.
Obviously nobody dares allege publicly that the easiest way to deal with the opponents of the ruling regime would be to put a bullet in their head.
But I have a creeping suspicion that some officials would not be terribly saddened if two or three people whose names are on the hitlist were assassinated.
Reuters: EU parliament awards prize to Russian rights group
Thu Oct 22, 2009 6:43am EDT
STRASBOURG, France, Oct 22 (Reuters) - The EU parliament awarded its Sakharov prize for freedom of thought to Russian human rights group Memorial, which is battling to uncover the truth about the murder of one of its activists from Chechnya.
Memorial was ordered on Oct. 6 by a Moscow court to retract its accusation that Chechen President Ramzan Kadyrov was responsible for the kidnap and killing of Natalia Estemirova.
The human rights organisation is appealing the decision.
The EU prize is named for the physicist Andrei Sakharov, a Soviet dissident who won the Nobel Peace Prize in 1957 and was the head of Memorial in the late 1980s. The annual prize is worth 50,000 euros ($74,660).
Estemirova was kidnapped in Chechnya and found dead in neighbouring Ingushetia on July 15.
Memorial's lawyers argued in court that Kadyrov had created a climate of fear in Chechnya and threatened to kill his enemies, including rights workers. But they did not present direct evidence of any involvement by Kadyrov in the murder.
Opponents accuse Kadyrov of massive rights violations in Chechnya, the scene of two separatist wars with Russia in the 1990s, and of tolerating no independent voices in the region.
Kadyrov rejects the charges. He has amassed enormous personal power in Chechnya and some analysts say this could eventually pose a renewed threat to Kremlin control. (Reporting by Gilbert Reilhac, writing by Estelle Shirbon; Editing by Elizabeth Fullerton)
The Moscow Times: Banned Islamic Groups Closed
23 October 2009
The Moscow Times
Bashkortostan authorities have broken up two groups associated with the banned Islamic organization Hizb-ut-Tahrir, the local branch of the Investigative Committee said Thursday.
Investigators have opened a criminal case into the activities of the groups in the regional capital, Ufa, and the town of Dyurtyuli, 125 kilometers northwest of Ufa, on charges of extremism, committee spokesman Viktor Butyrkin said by telephone.
Butyrkin would not say whether any suspects had been detained.
Hizb-ut-Tahrir advocates the creation of an Islamic state but claims to reject violence. It has been outlawed in a number of countries, including Russia and Uzbekistan.
Members of the Bashkortostan groups recruited people to engage in illegal activities and urged them to use propaganda and violence to overthrow the government and establish one inspired by Islam, under which a number of Russian regions would become part of the so-called International Islamic Caliphate, the regional branch of the Federal Security Service told Interfax.
Law enforcement officers on Thursday searched the homes of the local Hizb-ut-Tahrir members, where they seized propaganda materials, including magazines, leaflets and films, Butyrkin said.
Hizb-ut-Tahrir activities in Bashkortostan were first registered in 2001, Interfax said. Regional courts handed down prison sentences to suspected members of the group in 2005 and 2008.
Itar-Tass: Three children killed in oil tank blast in Sverdlovsk region
23.10.2009, 10.21
YEKATERINBURG, October 23 (Itar-Tass) -- Three children aged 9, 11 and 13 years were killed in the blast of an oil tank in the village of Turinskaya Sloboda, Sverdlovsk region. A strong blast triggered a fire on Thursday evening, regional chief police press officer Valery Gorelykh told Itar-Tass. The children aged 9, 11 and 14 years were found dead at the blast site.
“The 50-tonne oil tank exploded. The oil tank provided fuel for a local boiler house that heated ten apartment blocks. At the blast moment the oil tank was filled up by less than a half and contained about 16 tonnes of oil,” Gorelykh said.
According to him, the investigators found out that the children handled fire carelessly at the gas pipes near the oil tank. The gas-air mixture sparked up that triggered the blast of the oil tank.
The call about the blast of an oil tank in the village of Turinskaya Sloboda came at 7.35 p.m. on October 22. The fire has been put down for an hour. The operative group of the main emergencies department in the Sverdlovsk region, investigators and the prosecutor’s office are working at the blast site.
The restoration works are underway at the boiler house and are planned to complete by 13.00 local time (11.00 Moscow time) on Friday. The boiler house heats a kindergarten, an orphanage and ten apartment blocks, where 280 people live.
Russia Today: Communists rally against election results
23 October, 2009, 05:31
Hundreds of Russian Communist Party members protested on the streets of Moscow this month's local election results.
The rally was part of a nationwide protest campaign against what communists call “riggings” during the elections that took place on October 11 when the United Russia Party received a clear majority.
"We have launched a nation-wide action which spreads from Kaliningrad to Vladivostok,” said Vladimir Kashin, Vice Chairman of the party Central Committee. “Our main slogan is "For Honest Elections!"
Communist leader Gennady Zyuganov said that while the elections should have been “a form of a dialogue between power and opposition”, the United Russia “turned it into a farce.”
He announced that the party would be calling on the country's Electoral Commission head to resign, as well as for establishing a presidential commission to investigate the election results.
Supporters of other opposition parties, including democratic Yabloko, also took part in the demonstration.
The rally comes in the aftermath of the opposition protest over the elections.
On October, 14 three opposition parties, including the Communists, Liberal Democrats and Fair Russia, walked out of the lower house of the Russian parliament, the State Duma, in protest over the election results. They demanded urgent meeting with Russian president Dmitry Medvedev.
Later, all parties returned to the Duma sessions, though the Communists returned later than the rest. On October 23, the head of the Central Election Committee, Vladimir Churov, is expected to give a report on the elections.
RIA: Russia's top election official rejects resignation calls
07:4323/10/2009
MOSCOW, October 23 (RIA Novosti) - The chairman of Russia's Central Election Commission Vladimir Churov told a government daily on Friday he saw no reasons to resign amid alleged election violations.
About 7,000 regional polls have been held in 75 Russian regions on October 11. Russian opposition parties claimed electoral fraud after the ruling United Russia party won the elections by a landslide.
Two of opposition parties, the nationalist LDPR and the Communists, demanded Churov's resignation.
In an interview with Rossiyskaya Gazeta, Churov said no political body has authority over the election commission. Under the Russian legislature, the CEC chairman is elected by the 15 members of the commission. The Russian president appoints five of them, with the remaining ten appointed by each of the two chambers of the Russian parliament.
"After the president, the State Duma and the Federation Council had nominated five members each, and they [commission members] had chosen the chairman, his deputies and a secretary, they cannot be sacked before their term expires," Russia's top election official said.
Churov added that the commission's members can be dismissed only by a court ruling.
"In this case, a court should establish that a Central Election Commission member had violated election legislature, or, for example, committed some kind of extremist action," the official said.
On October 14, three opposition parties - the Communists, the nationalist Liberal Democratic Party (LDPR) and the Kremlin-backed A Just Russia - left the State Duma in protest against the polls. Two of the parties have since returned to parliament, and the Communists announced on Wednesday they would also end their boycott.
RIA: City of Moscow to dispatch humanitarian aid to Abkhazia
11:2423/10/2009
MOSCOW, October 23 (RIA Novosti) - Moscow Mayor Yury Luzhkov has ordered the city government to send humanitarian aid to the former Georgian republic of Abkhazia, a municipal administration source said on Friday.
Russia recognized Abkhazia and another former Georgian republic, South Ossetia, as independent after a five-day war over the latter with Georgia last August.
Moscow will deliver office equipment, computers and electrical equipment, cables and car tires to Abkhazia.
The Russian city will also give Abkhazia a used rescue vehicle, an ambulance and some laboratory and medicinal equipment.
Luzhkov allocated 1.2 million rubles ($41,000) for the delivery of the cargo and customs clearance.
Last summer, the Moscow mayor suggested Georgia recognize the independence of both Abkhazia and South Ossetia, referring to what he described as the inevitable drive for sovereignty in Europe and globally.
A previous call for Russia to reclaim Sevastopol, the main base for Russia's Black Sea Fleet, from Ukraine earned him the status of persona non grata in the former Soviet republic. Moscow's City Hall has invested budget funds on cultural projects in Crimea, which has a predominantly Russian population.
The Moscow Times: Kudrin Offers Rare Rebuke to Luzhkov
23 October 2009
The Moscow Times
Finance Minister Alexei Kudrin warned Mayor Yury Luzhkov on Thursday to keep a better eye on his city’s expenses and to focus on building the metro rather than increasing officials’ salaries.
The comments hit a sore point for Luzhkov — the overcrowded subway system — and were a rare rebuke from Kudrin, who typically does not respond to criticism from lower-ranking or regional officials.
Luzhkov, 73, had to fend off speculation in the run-up to the Moscow City Duma elections this month that the federal government is getting ready to replace him. Several prominent city officials have been investigated on suspicion of corruption in recent months.
Kudrin, also a deputy prime minister, has faced constant opposition to his fiscal conservatism since he took over the Finance Ministry in 2000, including from the ruling United Russia party. But his instance on saving windfall oil revenues won him high marks from economists, who said the stash has helped Russia avoid a worse economic downturn.
On Thursday, Kudrin told a State Duma working group that expenses for Moscow officials have risen 24 percent this year, or by 6 billion rubles ($206 million).
The figures, from a Moscow finance department report submitted to Kudrin on Sept. 14, showed a 19 percent rise in salaries, accounting for an additional 2.76 billion rubles in spending, he said.
“I think Yury Mikhailovich should study the results and statistics for Moscow more closely and keep his press service more honestly informed,” Kudrin said. “I could continue with what’s going on with the Moscow budget, there are so many interesting situations.”
City Hall spokesman Sergei Tsoi denounced the comments as false and said they were intended to “incite negative feelings among the capital’s residents regarding the Moscow government.” Management expenses have risen just 3 percent this year, he said.
Luzhkov has long made Kudrin-bashing a staple of his populist politics, most recently over the funding cuts to the metro. “Kudrin will achieve in 2010 what not even the Germans managed to do in 1941 — to halt the works at the metro,” he told a trade union earlier this month.
The Moscow Times: Using Twitter to Take Spin to the Next Level
23 October 2009
By Natalya Krainova
The Soviet government was infamous for spinning the news through newspapers and television. But now the ministry that inherited the state propaganda machine wants to take a stab at something that Lenin and Stalin never dreamed of: tweeting the praises of the Russian state.
The Communications and Press Ministry is looking for a company to provide the technology needed to allow bureaucrats to promote state interests on social networking sites like Twitter and Facebook.
The technology, possibly a computer program, should also allow bureaucrats to sift through discussion topics on professional and ordinary social networks by categories such as profession, subject and date, the ministry said in an e-mailed statement.
“On the one hand, we will absorb the information, but on the other hand we will initiate a discussion on issues important for the ministry,” the statement said.
The initiative to promote state interests on social networking sites comes as the government continues to tighten its grip on mass media outlets, a process that started with the takeover of NTV television by state-owned Gazprom shortly after Vladimir Putin began his first presidential term in 2000.
Public interest in traditional media such as newspapers and television has dwindled as people increasingly flock to social networking sites and blogs to keep abreast of current events. The potential political clout of social networks emerged last summer when Iran blocked Facebook during a disputed vote and Twitter was credited with igniting election protests in Moldova.
The Communications and Press Ministry acknowledged the growing importance of social networking sites in documents published for a tender to find the company that will provide the technology to navigate the sites.
This research work is “timely” because of “the growing role of social networking sites in the system of mass communications,” said the documents published on the federal government’s web site for state tenders, .ru.
The ministry said it was offering up to 5 million rubles (almost $166,000) to the company that could provide “effective mechanisms of promoting the interests of the federal bodies of the executive branch of power on specialized social networking sites.”
The winning bidder will also need to research the Russian-language Internet for specialized social networking sites, “draft a concept” to promote state interests through the web sites, and propose “methods of monitoring” the sites in order to “boost the effectiveness” of the activities of state bodies on the sites, the documents for the tender said.
The ministry said in the e-mailed statement that it was also considering tracking discussions at social networking sites operating in languages other than Russian.
The ministry plans to sign a contract with the winning bidder on Dec. 10.
The move toward Twitter comes at a time when the state has direct or indirect control over all national television channels. In 2005, it created an English-language channel, RT, to promote its views internationally. In the latest possible setback to independent news coverage, it emerged last week that RT might take over news programming at Petersburg Channel 5 and Ren-TV next year.
A foray into championing state interests on social networking sites would conform to President Dmitry Medvedev’s passion for the Internet, where he keeps a blog and has a YouTube page.
The government’s social networking project is “suitable” for the Internet, said Anton Nosik, a pioneer of the Russian Internet. “It is accepted practice for companies to look for creative ideas on the Internet,” he added.
Alexei Mukhin, an analyst with the Center for Political Information, said the ministry’s idea “is in line with the general errand of Medvedev to develop high technology.”
But officials risk failing in any attempts to initiate public discussion on social networking sites because their thinking is bureaucratic rather than creative, said Alexei Makarkin, an analyst with the Center for Political Technologies. “Bloggers like independent people with outstanding opinions,” he said.
As for the stated goal of using social networking sites to study public opinion, perhaps the officials just want to please Medvedev by reporting to him that they are introducing high technology into their work, Makarkin said.
In late August, Medvedev threatened to reduce state funding for organizations that failed to introduce electronic documentation systems.
“Our authorities aren’t interested in public opinion but want to create the appearance of being interested in it,” said Vladimir Pribylovsky, head of the Panorama think tank.
Analysts dismissed the notion that the government would be able to control social networking sites the way that the Soviet authorities kept newspapers and television on a tight leash.
“Pointed strikes” on unwanted web sites are possible through hacker attacks, but it is impossible to control all the social networking sites due to a large amount of information that is posted on them, Mukhin said.
The St. Petersburg Times: Clock Ticking for State Corporations
By Irina Filatova
The St. Petersburg Times
Issue #1520 (82), Friday, October 23, 2009
By Irina Filatova
The St. Petersburg Times
MOSCOW — President Dmitry Medvedev said Wednesday that many state corporations must change their legal status or be shut down, signaling the beginning of the end of the state behemoths.
Medvedev also urged business leaders to help the Kremlin fight graft and called for the imprisonment of court intermediaries, whom he described as “the highest form of corruption.”
State corporations have gotten out of control, and those that work in competitive sectors face two alternatives: being turned into public companies or liquidation, Medvedev said at a meeting of the Russian Union of Industrialists and Entrepreneurs.
The president said state corporations that were created to carry out a specific business activity over a certain period of time should also be closed.
But “state corporations will remain in the sectors where we have not been able to provide normal competition so far,” he said, Interfax reported.
State corporations have come under fire from the likes of Finance Minister Alexei Kudrin and Kremlin aide Arkady Dvorkovich for hampering economic growth since they were created in 2007. Medvedev himself signed an order placing government stakes from more than 400 companies into Russian Technologies last year, but he has shown a change of heart after his legal council advised him in March that state corporations should operate under the same laws as private businesses.
Medvedev on Aug. 7 ordered the Prosecutor General’s Office and the head of the Kremlin’s oversight department to carry out a sweeping investigation into how state corporations function.
The results of the investigation will be presented to the president on Nov. 1, Medvedev’s spokeswoman, Natalya Timakova, said Wednesday.
In addition to Russian Technologies, state corporations include Olympics construction firm Olimpstroi, nanotechnology giant Rusnano, state lender Vneshekonombank, nuclear conglomerate Rosatom, the Housing Maintenance Fund and the Deposit Insurance Agency.
The head of one state corporation cautioned Medvedev against changing his company’s legal status in August. “Any experiments conducted on the Olympics project will only lead to negative consequences,” said Taimuraz Bolloyev, president of Olimpstroi, which was created Oct. 10, 2007, to prepare Sochi to host the 2014 Winter Games.
Medvedev’s call, however, seems to have some support from Prime Minister Vladimir Putin. Amid complaints from government officials that the state corporation model had made it difficult to oversee expenses for Olympics preparations, Putin proposed returning to the previous financing model — a federal targeted program, Vedomosti reported in late August. The Finance Ministry later rejected the idea.
Analysts said the economic crisis meant that the time was not right to overhaul state corporations. “I don’t think it’s a good time to denationalize Russia’s economy,” said Alexander Osin, chief economist at Finam. “The risks of inflation growth in the long term are high, but it’s possible to avoid them through the state regulation of the economy.”
At Wednesday’s meeting, billionaire Oleg Deripaska complained to Medvedev about the difficulty of doing business because of intermediaries used by courts, “without whom it is impossible to receive a fair ruling.”
“Everyone knows that for this you have to pay,” Deripaska said.
Medvedev said businesspeople did not have to pay. “In this situation, a businessman’s duty is to file a complaint to prosecutors, the Interior Ministry, the Federal Security Service,” he said.
As for the intermediaries, “they must be put in prison. This is the highest form of corruption,” he said.
Medvedev, who has made the fight against corruption a hallmark of his presidency, appealed to the businessmen to join him in the battle. “If we don’t start fighting against it ourselves, they will keep taking your money and you will pay because there’s no other option,” he said.
Also Wednesday, Medvedev reiterated that Russia has too many banks. But he added, “We must not emerge from the crisis with only three state banks,” RIA-Novosti reported.
Medvedev also said the state could not abandon its involvement in the economy. “The crisis has shown that all our aspirations to abandon state involvement are without a foundation,” he said.
Bloomberg: Putin’s Russia Is Like Cart on Superhighway, Khodorkovsky Says
By Lucian Kim
Oct. 23 (Bloomberg) -- Mikhail Khodorkovsky, the jailed former owner of OAO Yukos Oil Co. and once Russia’s richest man, said Prime Minister Vladimir Putin’s handling of the Russian economy can be compared with a horse-cart on a superhighway.
“We’re passengers in this cart, and the manure from under the horse’s tail is the unavoidable option,” Khodorkovsky, 46, said in written answers to more than 100 readers’ questions published by online newspaper Gazeta.ru yesterday.
Khodorkovsky, who has been serving an eight-year sentence in a Siberian penal colony for tax evasion and fraud, is back in Moscow for a second trial that could add 22 1/2 years to his term. Prosecutors claim he and his former business partner Platon Lebedev embezzled oil worth more than 892.4 billion rubles ($31 billion) from Yukos units.
The former oilman, who maintains his innocence, said he wouldn’t ask the authorities for a pardon and left open his future, saying only that he didn’t plan to go into politics or return to business. Khodorkovsky has called the case against him retribution for his political opposition to Putin, who was president at the time of his arrest six years ago.
“I’m convinced that an authoritarian political regime in 21st century Russia will be short-lived,” Khodorkovsky wrote in response to one question. “Putin doesn’t want to damage the country. He’s implementing the model that he understands, and believes it’s the best. Alas, his ideas are mistaken.”
‘Resource Province’
Russia’s optimistic scenario is that it will be come democratic by 2015 and follow the “Norwegian-Canadian model” of economic development, Khodorkovsky wrote. A more pessimistic scenario is Russia becoming a “resource province” for China and Europe.
Khodorkovsky said he’s convinced he’ll eventually be freed from prison and plans to remain in Russia, where he has a wife and four children.
The “fundamental” price of oil should be between $50 and $70 per barrel, not counting speculation, Khodorkovsky said.
Yukos, once Russia’s largest oil company, was bankrupted after Khodorkovsky’s arrest and dismantled under a $30 billion back-tax debt. State-run oil company OAO Rosneft bought up the assets at auctions, becoming Russia’s biggest crude producer.
President Dmitry Medvedev, Putin’s successor, published a manifesto in Gazeta.ru last month, urging his fellow citizens to join him in fighting corruption, economic dependence on natural resources and the lack of rule of law in Russia.
To contact the reporter on this story: Lucian Kim in Moscow at lkim3@
Last Updated: October 22, 2009 16:00 EDT
October 22, 2009
Russia Profile: Balancing the Books
By Roland Oliphant
Russia Profile
Russia Is Still a Long Way From Financial Self-Sufficiency
As the nights draw in and Russians turn up their collars against the looming threat of winter, the country’s rulers turn once again to the task of drafting the budget for the coming year. Yesterday the State Duma overwhelmingly approved the first reading of Finance Minister Alexei Kudrin’s federal budget for 2010, effectively signing off on deficit spending funded by the first foreign borrowing in a decade.
It was actually United Russia, the ruling party, rather than the Duma, that approved Kudrin’s planned document. The opposition parties – the Liberal Democrats, Communists and Just Russia – unanimously voted against it, but United Russia’s 315-strong majority was more than enough to guarantee approval.
The document envisages spending some 9.89 trillion rubles ($340 billion) in 2010. Only 6.95 trillion of that will come from budget revenues. The rest, amounting to 6.8 percent of the GDP, will be made up of a combination of internal and external borrowing, and the virtual emptying of the Reserve Fund.
The deficit does not come as a surprise. Russia’s financial planners were forced into the red when oil prices collapsed in 2008. Consequently, the 2009 budget ran the first deficit in a decade, and the government has made it clear that it would rather continue that policy than risk the consequences of slashing public spending in the face of the crisis. ITAR TASS quoted President Dmitry Medvedev as saying that the continuation of deficit spending was a “deliberate” move in order to “meet all our basic social obligations.”
Experts are so far happy that the government is not indulging in an imprudent splurge. “For many years, of course, we lived without a deficit – revenues always exceeded spending,” said Alexander Shirov, of the Center for Macroeconomic Analysis of the Russian Academy of Sciences. “And in principle, a six percent deficit is big, but it’s not critical in the framework of one to two years.”
And so far the government has displayed impressive self-discipline when it comes to controlling the overdraft. “We can see from the experience of this year that the government seems to implement a tight budget policy,” said Natalia Orlova, the chief economist at Alfa Bank. “The budget deficit for this year was expected to be three trillion rubles, and we were at 1.4 trillion after nine months. They may spend another trillion before the end of the year, but they will be below three for sure.”
Put it on my slate
The deficit is meant to run for at least three years, according to Kudrin’s plans, falling to four percent of the GDP in 2011, and by another percentage point the following year. The government’s record thus far suggests it may be able to keep within those limits. But that will have little leeway if oil-prices fall again, especially if it empties the reserve fund. The document Kudrin presented to the Duma yesterday envisages burning through some 1.3 trillion rubles by 2011 to 2012, leaving just 48.8 billion rubles – around $1.68 billion – in the fund.
Oksana Dmitrieva, one of the leaders of the Just Russia faction in the Duma, told the BBC’s Russian Service after the Duma vote that “the government is betting solely on the growth of international oil prices.” Given Russia’s well-known reliance on the oil price, that is a commonplace, and attacking Kudrin for producing a budget that reflects the structure of the economy might be seen as vacuous. But the consequences are clear. “If oil prices fall further, the government will have to cut spending,” acknowledged Shirov. But, if the government can stick to its plans of slashing the deficit to three percent in three years, suggested Shirov, the overdraft could be maintained for several years. “A two or three percent deficit is normal – practically the whole world lives like this,” he said.
Besides looting the reserve fund, the deficit will be funded by both internal and, interestingly, external borrowing. If 2009 marked the first deficit in a decade, 2010 will mark the end of another ten-year run. Russia has not tapped international financial institutions for a loan since 2000, but Kudrin has said that he may approach the World Bank for three or four billion dollars. That’s not a disaster. But it is another sign that the dream of Russian self-sufficiency, if it was ever viable, is further away than ever.
Newsweek: The Dissident Who Came In From the Cold
Nikita Belykh is radically remaking Russia's vast Kirov region. The country's democratic future may depend on his success.
By Owen Matthews and Anna Nemtsova | NEWSWEEK
Published Oct 22, 2009
From the magazine issue dated Nov 2, 2009
Dozens of villagers are lined up at the gates of the decrepit local boatyard on a breezy Saturday morning to witness an unheard-of event. They gaze in wonder as the visitor arrives: never in living memory has a regional governor paid a call to the backwater town of Arkul, on the Vyatka River, roughly 500 miles northeast of Moscow. Climbing out of his battered Land Cruiser in scuffed jeans and a New York Yankees cap, Nikita Belykh makes a startling contrast to Russia's standard-issue provincial bureaucrats.
Looks are the least of the differences: Belykh made his name opposing those entrenched post-Soviet apparatchiks as one of the most determined pro-democracy activists in the country. Old friends were shocked and angry when he abruptly abandoned their street protests and took a Kremlin appointment as governor of Kirov oblast, deep in Russia's neglected heartland. But Belykh is tackling his new job with all the energy he used to radiate as an opposition leader. He immediately begins peppering the boatyard's director with questions—especially about what needs fixing. "Tell me what you do!" Belykh says briskly. "Tell me everything!"
The shipyard is one small piece of an experiment he hopes will transform Russia—and so far, at least, he has the blessing of no less than Russia's president, Dmitry Medvedev. It was Medvedev who appointed Belykh to the job late last year, essentially granting him a socioeconomic laboratory slightly larger than England. Kirov is a microcosm of Russia and its problems—chronic unemployment, decaying Soviet infrastructure and wretched public-health conditions, to name only three. Medvedev has made it clear that Kirov is his personal project and Belykh his protégé. If Belykh can raise Kirov up from its knees, there will be a clear precedent for applying the same management style across Russia. "Maybe some people would like to see us liberals fail," says Belykh. "My job is to prove the opposite."
And fast. Medvedev publicly deplores Russia's economic plight and has called for massive changes, but he may not have much longer to do anything about it. Former president Vladimir Putin, the KGB veteran who chose him as successor, recently dropped broad hints that he intends to take the presidency back at the next election, in 2012. Worse yet for both Medvedev and Belykh, hostility toward the Kirov project is growing, even within Medvedev's (and Putin's) own United Russia party. Two weeks ago the party's youth wing, the Young Guards, marched against Belykh's plan to hold a conference on regional development in Kirov. Whipped up by false rumors that the conference was sponsored by the U.S. International Republican Institute, the protesters carried professionally made banners with slogans like GET OUT WASHINGTON ORGANIZERS! and YANKEE GO HOME! They displayed no qualms about publicly attacking Medvedev's protégé—a sign of bigger challenges ahead.
But Belykh seems undeterred. Even by the standards of Russian democratic activists, he has a mind of his own. He grew up in a well-educated family near the Urals city of Perm. His parents expected him to study at one of the top schools in Moscow, but when he was 16 his father died of a heart attack, and Belykh stayed in Perm to look after his mother. That was the year Boris Yeltsin stood atop a tank and defied an attempted coup by hardliners trying to roll back democratic reforms. To this day, Russia's first post-Soviet president remains Belykh's hero. "I come from a generation of Yeltsin democrats," he says. "Nobody else but Yeltsin dared to give people freedom in the conditions Russia lived in the 1990s. Unfortunately we did not manage to keep that hard-won freedom." Belykh adds, "Now our job is to rehabilitate democracy."
A high flier from the start, Belykh majored in law and economics simultaneously at Perm State. At 23 he was made vice president of a local investment house, and at 28 he was appointed the region's vice governor. The next year—2003—he ran for Parliament on the reformist Union of Right Forces ticket, but the tide had turned against the progressives: the party won no seats at all. Belykh stuck with the party anyway and moved to Moscow to become its leader, but times grew even tougher, and members began talking about making peace with Putin. Belykh opposed any such idea. "I did not see myself as a part of the Kremlin's project," he recalls. He quit the party in protest.
Putin's strong-arm tactics had effectively neutered Russia's liberal opposition. And yet Belykh couldn't just stand by while the country deteriorated. While Putin has won heavy domestic support with his loud, aggressive foreign policy, Russia is hollowing out inside. Reform at the local level gets no attention, but it's essential if the country is ever to thrive.
That's where Belykh decided to focus his efforts. He passed a message to Medvedev that he wanted to work in regional government. He knew his old associates would accuse him of selling out, but he saw no other way he could make a difference. He was still struggling with himself when Medvedev suggested making him governor of Kirov. The Kremlin wasn't taking chances. Belykh's first interview was with Vladislav Surkov, the Kremlin's chief ideologist, who warned him to keep his mouth shut in public about national issues like the war with Georgia. Belykh would be permitted to do a weekly radio show called A Governor's Diary on the liberal Moscow-based Radio Echo network—but only if the program stayed away from "provocative" questions.
The new governor arrived in Kirov in January. One of the first things he did was hang a portrait of Boris Yeltsin on his office wall. Then he auctioned off his predecessor's official car, a Lexus. He allowed all street protests to go ahead, including a thinly attended gay pride parade, and announced he was ready to meet with any group that had a beef with the government. He's been working 12-hour days ever since, mainly talking with people about their grievances.
Kirov has no shortage of complaints. Unemployment is set to reach 20 percent by the end of the year. The oblast's sole gasoline distributor, Lukoil, uses its monopoly to demand the highest prices in the entire Volga federal region. Infrastructure and public utilities are a constant source of outrage. And as almost everywhere in Russia, the demographics are a disaster: between January and August 2008 (the most recent statistics available) Kirov recorded 10,474 births and 16,204 deaths in a total population of 1.5 million. On top of that, an estimated 15,000 people left last year to seek better lives elsewhere.
But what seems even more baffling to Belykh is that Kirov's people seem stuck in the old ways of dealing with a hostile bureaucracy. "For the first time in my life I find myself on the same side of the barricades as the government," he says in frustration. At one recent meeting, he struck a deal with local labor chiefs on job security and keeping factories open—and the next day, they published an open letter excoriating him for trying to cut teachers' salaries. In another instance, a group of local NGOs organized street protests against high utility rates only a day after Belykh gathered their leaders in his office to find a solution to exactly that problem. "I want to say to them: 'People, I am much more experienced with protests than all of you. Here I am, your governor, come in and find solutions together with me!' "
But the single biggest challenge may be the region's law-enforcement system. Local NGOs have documented dozens of police-brutality charges, including numerous alleged cases of anal rape in police custody. At least four alleged victims have registered complaints with prosecutors. Nevertheless, victims who were interviewed by NEWSWEEK insisted on closing their curtains and speaking in whispers for fear of retribution. Few have much hope that Belykh will prevail over the local security forces. "There are areas which neither Belykh nor even President Medvedev can change," says one of the victims' lawyers, asking not to be named criticizing the police. "I have lived a long life in the Russian law-enforcement system and can assure you, it lives by its own rules."
Belykh has asked all his old activist friends to join his team in Kirov, but few are willing to relocate so far from the social and cultural mainstream. Even his wife and their three children remain in Moscow, where she manages a travel agency. (Their eldest son, 6-year-old Yuri, started school there in September because Belykh didn't want the boy tagged by Kirov classmates as "the governor's son.") One activist friend who has accepted the invitation is Maria Gaidar, 27, the daughter of Yeltsin's acting prime minister back in 1992, YegorGaidar. She once rappelled down the side of the Great Stone Bridge just outside the Kremlin, to unfurl a banner declaring NO TO KGB POWER. When Belykh accepted the Kirov job, she excoriated him for "selling his soul to the devil" but then relented. Another old friend from the opposition, Konstantin Arzamastsev, had to think hard before joining the team. "Only my respect for Belykh made me take this job," he says. "Kirov is far from being an easy place to liberalize."
After months of wrangling, Belykh has managed to appoint eight deputies, but almost every other member of his government is a holdover from the old regime. Kirov's legislature has blocked other appointments. By law the governor is also entitled to nominate a senator to represent Kirov in the Federation Council, but Belykh's pick was vetoed by Medvedev himself. "They made Belykh governor without letting him put together a team of his own," says an aide to Nikolai Shaklein, the senator who was named instead, requesting anonymity when discussing his bosses.
Nevertheless, Belykh insists on running the place his way—as democratically as possible. He keeps his advisers working practically nonstop and has them debate all sides of any issue before he makes a decision on it. "We plan to turn this region into the most transparent, corruption-free, and business-friendly region in Russia," says Gaidar. "But that is a long way off. We face a wall of Soviet mentality that has not changed in 20 years." Sometimes it seems nearly impossible. "On my worst days I think it is easier to rule like an Asian despot than to become a Russian Obama," Belykh says. "But look, to me this job is a chance to change people's attitudes about democratic values."
Changing those attitudes in Kirov alone will take "a social revolution," Belykh says. First, people need to see tangible benefits in their lives. "The level of trust for liberals in Putin's Russia has shrunk to almost zero," says Belykh. Even so, Medvedev has shown plenty of trust in him. This May the president became the first Russian leader to visit the oblast since Tsar Alexander I in 1824. Medvedev didn't merely put in an appearance; with Belykh at his side, he announced a crowd-pleasing new plan to pay newly unemployed Russians a full year's benefits to help them launch new businesses. "I am Medvedev's man," says Belykh. "I am his appointee, on his team. And not anybody else's." The question is how far the leader of that team can go to make Belykh's experiment a success.
Georgian Daily: Russian Military Planners Thinking About a Post-CIS Eurasia
October 22, 2009
Paul Goble
In the clearest indication yet that senior officials in Moscow are worried about what will happen if, as seems likely, the Commonwealth of Independent States dissolves, an article in the journal of the Russian military-industrial complex argues that the demise of the CIS could fundamental alter security arrangements in Eurasia.
In the current issue of the “VPK Kurier,” security analyst Aleksey Matveyev says that the Chinisau summit shows that “the disintegrative processes on the post-Soviet space continue to develop”(vpk-news.ru/index.php?option=com_content&view=article&id=3457:2009-10-20-13-47-54&catid=3:2009-05-02-13-24-14&Itemid=4).
Four presidents of the CIS countries in Central Asia did not even show up , the presidents of Belarus and Ukraine were sharply critical of Russia, and the CIS Anti-Crisis Fund which Moscow had announced earlier still has to be created and “it is not a fact that it is working,” Matveyev writes.
Indeed, he continues, as many analysts have pointed out, “the leaders of the post-Soviet states are losing faith in the competence of the CIS. And in reality, it must be acknowledged that the Commonwealth now exists as a semi-amorphous formation which, possibly, will in general cease to exist.”
What would its disappearance mean for the post-Soviet space? Matveyev asks rhetorically, and in his article, he addresses “only one aspect” of this question – “the military-political,” which he suggests is the one that “for the countries of the CIS and Russia is the most important.”
Matveyev points to four consequences of the collapse of the CIS. First, he says, the end of the CIS would promote “the activation and formation on the remains of qualitatively new military-political blocs and super-governmental unions,” with the pro-Moscow Organization of the Treaty of Collective Security and the pro-NATO GUAM being “the poles” of attraction.
Moreover, he continues, Belarus and Uzbekistan would likely leave the first, and Uzbekistan and Turkmenistan would be likely to join GUAM.
Second, the disbanding of the CIS would “inevitably involve a significant activation of NATO in the post-Soviet space.” Indeed, Matveyev argues, “it is not excluding that given the current nature of relations and political orientation of the leaders of the post-Soviet republics, all members of GUAM, plus Uzbekistan and “possibly” Kazakhstan might join the alliance.
Third, the “VPK-Kurier” author says, “the disintegrative processes in post-Soviet space would reverberate through [their] military relations”, with the collapse of the unified anti-aircraft system likely to fall apart and “the role of the military-industrial complex in the provision of arms and military technology to the post-Soviet countries even more reduced.”
And fourth, Matveyev continues, the demise of the CIS could “possibly stimulate inter-state conflicts over disputed territories” -- not only over Karabakh and Transdniestria but also in the Ferghana valley in Central Asia and also over Crimea between Russia and Ukraine, conflicts especially likely in the course of generational changes in the leaderships of these countries.
These challenges would be so severe, the Moscow military analyst argues, that “Russia must [immediately] work out a correct and clear policy so as not to allow these tendencies to develop” and seek to reinvigorate the Commonwealth by promoting collective peace-keeping forces and other joint activities.
To that end, he suggests, Moscow should be willing to make “significant concessions to Minsk in order to complete the creation of a Union state and [set the stage for drawing] into that union new countries including Kazakhstan, Armenia and other states which are now members of the Organization of the Collective Security Treaty.”
Indeed, Matveyev argues, saving the CIS is so important that Russia “must not be afraid to promote its interests in CIS countries by means of lobbying and supporting the Russian-language population living in them,” both directly and by offering them a simplified procedure for gaining Russian citizenship.
While Matveyev’s conclusion makes it clear that he believes Moscow cannot easily do without the CIS if it is to retain influence in the post-Soviet space, his article as a whole suggests that many senior people in the Russian capital are already looking beyond the commonwealth and considering the environment Russia will have to deal with after the CIS ceases to exist.
Worldbulletin: Deadly swine fever may spread from Russia: FAO
The deadly pig disease African swine fever has spread from the Caucasus to Russia, and may go further into EU, the U.N.'s FAO said.
Thursday, 22 October 2009 21:28
The deadly pig disease African swine fever (ASF) has spread from the Caucasus to Russia, and may go further into the European Union and as far east as China, the U.N's Food and Agriculture Organisation said on Thursday.
"The danger is that ASF, which can not be transmitted to humans, could spread to other regions including the European Union countries, Eastern Europe, the Black Sea basin countries and, in the worst case scenario, to central Asia and even China, which has the largest pig population in the world," the FAO said in a statement.
The viral disease was discovered several days ago in the small village of Mga in north-western Russia, the Russian animal and plant health body Rosselkhoznadzor said on its website fsvps.ru.
It said the disease was found in 7 of 14 pigs held in the village, of which 7 died and 7 had to be killed. The disease spread to the village from the south of Russia, where it was first discovered in wild boars at the end of September.
"Although we have known that the virus has been circulating in the Caucasus - in Georgia, Armenia and Azerbaijan - for several years now, eventually spreading to southern Russia, it is its sudden appearance far away near the Baltic coast that is worrying," said Juan Lubroth, FAO's Chief Veterinary Officer.
He said the Baltic Republics together with the Ukraine, Belarus, Moldova, Romania and Bulgaria were directly threatened.
"That means there could be possible incursions into the EU and also it could spread across Russia, including eastwards into Siberia and perhaps eventually China," he added.
Russia's Agricultural Minister Yelena Skrynnik said in a statement on the ministry's website mcx.ru that she had ordered pigs be kept indoors at all farms, especially in the south of Russia, where ASF had been discovered in 25 locations.
"As a result of negligence of some officials, direct losses in the pig breeding sector may amount to 25-30 billion roubles ($860 million-$1 billion), Skrynnik said.
ASF is believed to have entered into the Caucasus through the Georgian Black Sea port of Poti, where garbage from a ship was taken to a dump where pigs would come to feed, the FAO said.
There is currently no vaccine against ASF, which is usually eradicated by culling infected animals and strict movement control.
Reuters
National Economic Trends
RIA: Russian monetary base up $1.7 bln in week to $141 bln
10:1423/10/2009
MOSCOW, October 23 (RIA Novosti) - The Central Bank said on Friday that Russia's narrowly defined money supply (M1) was 4.096 trillion rubles ($141 billion at the current exchange rate) as of October 19, up 48.9 billion rubles ($1.7 billion) in the week since October 12.
According to the bank, M1 money supply consists of the currency issued by the bank, including cash in vaults of credit institutions, and required reserve balances on ruble deposits with the Central Bank.
Reuters: Russia c.bank shifts bid level, buys $700 mln
10.23.09, 04:29 AM EDT
MOSCOW, Oct 23 (Reuters) - Russia's central bank on Friday again shifted its intervention bid level after buying as much as $700 million on the forex market, dealers said.
The regulator moved its intervention bid level to 35.50 roubles per euro/dollar basket, used for guiding the rouble's nominal exchange rate policy, from the previous 35.55, dealers said.
At 0706 GMT, the rouble traded at 35.52 against the basket.
The rouble also continued its upward march against the dollar, which has been weakening globally. The rouble firmed to to below 29.00 per dollar early on Friday.
'Every time we cross the central bank's bid, buying starts,' a local dealer said.
(Reporting by Andrei Ostroukh; writing by Lidia Kelly; Editing by Dmitry Sergeyev) Keywords: RUSSIA/ROUBLE
Interfax: Russian money supply may rise 4%-5% in 2009 – Ulyukayev (Part 2)
MOSCOW. Oct 23 (Interfax) - Russia's money supply is forecast to
rise 4%-5% in 2009, Central Bank First Deputy Chairman Alexei Ulyukayev
said.
"By the end of the year we will have a growth trend in the money
supply, 4%-5%," Ulyukayev said at a conference on Friday.
Russia's M2 money supply (national definition) declined 1.4% in
January-August to 13.305 trillion rubles from 13.493 trillion rubles at
the beginning of the year.
It declined 8.4% in the 12 months ending September 1, from 14.530
trillion rubles on September 1, 2008.
Reuters: UPDATE 1-Russian c.bank allows rouble to scale new peaks
10.22.09, 10:45 AM EDT
By Andrei Ostroukh
MOSCOW, Oct 22 (Reuters) - The Russian rouble set its strongest level since January versus a euro-dollar basket for the sixth day on Thursday, as the central bank stuck to its policy to slowdown the rally with interventions but not halt it.
The rouble's ascent is now in its eighth consecutive week, fanned by one-year peaks in the oil price, news that the Russian economy has come out of recession and growing investor appetite for high-yielding emerging markets.
So far most officials have been sanguine about any possible negative economic impact from the strong rouble, although deputy economy minister Andrei Klepach said on Wednesday continued appreciation could be dangerous.
Nonetheless the central bank has been regularly intervening in the currency market to ensure the rally is not too fast -- it has been allowing the rouble to strengthen in 5 kopeck steps versus the basket for each $700 million of interventions.
On Thursday, the rouble firmed as far as 35.57 per basket , with dealers saying the regulator had shifted its intervention level again to 35.55 from 35.60 after purchasing $700 million during the morning's trade.
'Now we are preventing excessive strengthening of the rouble, buying dollars,' central bank first deputy chairman Alexei Ulyukayev told Komsomolskaya Pravda populist daily.
'We do not have a target on the rouble rate. We do not know unambiguously whether the current rouble level is good or bad for the economy. But we do know that excessive bumps in the exchange rate are harmful,' he added, reiterating the sentiment of his comments in recent days.
Versus the dollar, the rouble strengthened as far as 29.06, its firmest since December and closing in on the psychologically key 29 level.
Citibank has revised up its forecasts to show the rouble at 28.3 per dollar by year-end from 29.8 previously.
'We think the central bank of Russia is likely to yield to rouble appreciation pressures stemming from a stronger balance of payments and fiscal outturn,' Citi ( C - news - people ) analysts said in a note.
'The monetary authorities seem to be keener on a floating exchange rate and keeping inflation in check as well as stimulating de-dollarisation.'
Non-deliverable forwards (NDFs), a barometer of market sentiment, showed the rouble at 31.06 per dollar a year from now -- 30 kopecks stronger than they were pricing at the start of the week and 5 roubles stronger than at the end of August, before the current wave of appreciation began.
The dollar purchases have helped Russia boost its Forex reserves, which were depleted during a controlled devaluation of the rouble in late 2008-early 2009.
The reserves, the world's third largest, rose by $4.7 billion in the latest week to $423.4 billion -- their highest level since January.
(Writing by Toni Vorobyova; Editing by Dmitry Sergeyev) Keywords: RUSSIA/ROUBLE
(antonina.vorobyova@; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.@)
Interfax: Given chronic budget deficits, VAT reduction not realistic – Shatalov
MOSCOW. Oct 23 (Interfax) - The issue of cutting the VAT rate will
remain on the back burner so long as Russia is experiencing budget
deficits, Deputy Finance Minister and State Secretary Sergei Shatalov
said.
"Given the chronic budget deficit in the coming years, the issue of
reducing the VAT rate is no longer relevant," Shatalov said at a
conference on Friday.
The Finance Ministry was categorically opposed to reducing that tax
and had warned that cutting the VAT rate entailed risks.
"VAT is the main source for supplying the budget. Even in a crisis
period it does not decline as dramatically as other taxes that were the
main ones used in forming the budget," he said.
Bloomberg: Russian Economy May Stagnate on Weak Domestic Demand, Alfa Says
By Paul Abelsky
Oct. 23 (Bloomberg) -- Russia’s economy risks stagnating as banks are slow to resume lending and domestic demand fails to rebound, Alfa Bank said, casting doubt over the strength of the recovery that the government says is underway.
“While government officials are saying that Russia has emerged from recession, we believe the economic data are more indicative of stagnation,” Natalia Orlova, chief economist at Alfa, said in an e-mailed report late yesterday. “The government’s view is based on the recovery in export-focused sectors; however, domestic sources of growth are still fragile.”
Gross domestic product grew 0.6 percent in the third quarter from the previous three months, the Economy Ministry said this week. The annual decline eased to 9.4 percent, according to the ministry. That compares with a reported 10.9 percent record contraction in the second quarter.
The economy may expand as much as 4 percent in the fourth quarter, and grow more than 2 percent next year, Deputy Economy Minister Andrei Klepach said on Oct. 21.
While rising exports boosted sectors such as metals production, Russia posted annual declines last month in construction, capital investment, real disposable income and retail sales. The metals sector is close to reaching full capacity and may not expand further, according to Alfa.
At the same time, banks have continued to reduce the size of their loan books as they use their funds to repay emergency financing extended earlier by the central bank, Orlova said.
Restrictive credit flows are choking demand and preventing businesses from investing. The central bank said this week that reduced access to credit is one of its main concerns. That’s compounding uncertainty on an export-led recovery.
“We doubt that Russia’s GDP will resume growth without a continuing rise in exports,’ she said. “Until the lack of investment is addressed, we believe there is a high risk that output will remain stagnant.”
To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@.
Last Updated: October 23, 2009 02:21 EDT
Bloomberg: Russia Credit Ratings ‘Substantially’ Undervalue Debt, UBS Says
By Alex Nicholson
Oct. 23 (Bloomberg) -- Russia’s credit ratings undervalue the country’s debt and won’t hold back investors from showing an “abundance of demand” for next year’s planned $18 billion in bond sales, according to UBS AG.
“The macro-fundamentals are substantially better than their credit rating,” Steven Meehan, UBS chief executive officer for Russia, said in an Oct. 21 interview at the bank’s investor conference in Moscow. “The debt buyers, the sovereign buyers think that there is a mismatch between the ratings of the Russian sovereigns compared to the macro-fundamentals.”
Russia’s government debt is rated Baa1 at Moody’s Investors Service, three notches above junk, putting it in the same bracket as bailout-dependent Iceland. Fitch Ratings and Standard & Poor’s rate the country’s debt BBB, two grades higher than junk. This year, the government of the world’s biggest energy exporter will have debt equivalent to 10.5 percent of gross domestic product, well below debt ratios in Germany and the U.K.
Next year’s debt sale is Russia’s first since the country’s 1998 default on $40 billion, and the decade-long pause has “built up demand,” Meehan said. “People not only want to have it in their portfolio, they have to have it in their portfolio.”
Standard & Poor’s analyst Elena Romanova said in a report on Sept. 28 the ratings company’s view of Russia reflects “increased systemic risks and remaining structural weaknesses, which highlight the vulnerabilities of the country’s economy and banking sector.”
Tip of the Iceberg
While overall debt levels are low, the government needs to sell bonds to plug a budget deficit that will stand at 6.8 percent of GDP in 2010, compared with about 7.7 percent in 2009, according to the Finance Ministry. The shortfall is the nation’s first in a decade and follows a commodity market slump that wiped more than 70 percent off the price of oil in July last year through January.
The government may need to sell as much as $65 billion in debt over the next few years to finance the deficit, Capital Economics said in a note on Oct. 19.
The $18 billion sale is “just the tip of the iceberg” emerging markets strategist Neil Shearing said in the note.
Oil, which makes up about 30 percent of Russia’s GDP, has since touched $80 a barrel and gained about 80 percent this year. Resurgent demand for commodities boosts Russia’s recovery prospects and will help the economy rebound from a record 10.9 percent contraction in the second quarter.
Russia emerged from its recession last quarter, Deputy Economy Minister Andrei Klepach said on Oct. 21 and his ministry estimates output may expand more than 2 percent next year.
Growth Prospects
Improved growth prospects and a resurgent commodities market are also buoying the ruble. The central bank, which uses reserves to steer the currency within a target range against a basket of dollars and euros, has enough reserves to offset currency volatility.
Russia’s currency reserves, the world’s third biggest stockpile, have advanced almost 13 percent to $423.4 billion from a low of $376.1 billion on March 13. The bank has sold rubles in an effort to help exporters after rising commodity prices pushed the currency higher.
Meehan said he expected the bond sales to take place over 2 years. Russia will start a roadshow in London in the beginning of November, the U.K.’s ambassador in Moscow Anne Pringle, said on Oct. 21.
“There’s an abundance of demand for Russian sovereign issue,” Meehan said, while adding that the current absence of a benchmark is “an issue.”
The government expects to pay between 7 percent and 9 percent interest, Finance Minister Alexei Kudrin said Sept. 4.
To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@.
Last Updated: October 22, 2009 16:00 EDT
Kyivpost: Russia falls to 40th place in financial development rankings
Today, 09:44 | Interfax-Ukraine
Russia has fallen to 40th place in the financial development rankings compiled by the World Economic Forum (WEF).
Russia was 36th in the 2008 rankings. In the latest rankings, which included 55 countries, it was passed up by Brazil among others, the WEF's global competitiveness program coordinator in Russia Alexei Prazdnichnykh said at a meeting with securities markets participants.
Russia ranked the lowest among the BRIC countries (Brazil was 34th, India - 38th and China 26th). But Russia's CIS neighbors were ranked lower: Kazakhstan was in 47th place and Ukraine
Business, Energy or Environmental regulations or discussions
Reuters: Russian markets -- Factors to Watch on Oct 23
MOSCOW, Oct 23 (Reuters) - Here are events and news stories that could move Russian markets on Friday.
You can reach us on: +7 495 775 1242
STOCKS CALL (Contributions to moscow.newsroom@):
OTP: We expect shares to open up from yeasterday's close on the back of gains of United States stock market and rising oil futures.
EVENTS (All times GMT):
MOSCOW- Newly-appointed Ukrainian Foreign Minister Petro Poroshenko to visit Russia
MOSCOW- Tajik President Imomali Rakhmon visits Russia (final day)
• KAZAN, RUSSIA- RUSSIA'S PRESIDENT DMITRY MEDVEDEV TO CHAIR A meeting of President's council on physical fitness and sports
• MOSCOW- RUSSIA'S ALFA-BANK TO HOLD A CONFERENCE ON RUSSIAN banking sector. Alexei Ulyukaev, the central bank's first deputy chairman, to attend
• MOSCOW- RUSSIA'S AGRICULTURE MINISTER YELENA SKRYNNIK TO speak at the State Duma, lower house of parliament, on the agriculture development until 2012
• MOSCOW- MINISTRY OF ECONOMY TO HOLD A BRIEFING ON TARIFFS for a custom union of Russia, Kazakhstan and Belarus
• MOSCOW- MILLIONAIRE FAIR MOSCOW 2009 (TO OCT. 25). LINK:
IN THE PAPERS:
Comminications Minister Igor Shchyogolev may head the board of directors of Svyazinvest, state-controlled telecoms group, as a part of company's restructuring plan, Kommersant business daily reported.
TOP STORIES IN RUSSIA AND THE CIS: TOP NEWS:
• KAZAKHSTAN MAY TAKE PART IN SAMSUN-CEYHAN
• TRANSNEFT SET TO FINISH CHINA OIL LINK IN 09
• RUSSIA DROPS $22.5 BLN SUIT VS BANK OF NEW YORK
• RUSSIAN C.BANK ALLOWS ROUBLE TO SCALE NEW PEAKS COMPANIES/MARKETS:
• SBERBANK NET PROFIT FALLS 91 PCT IN JAN-SEP
• TATNEFT NET PROFIT RISES 40 PCT IN H1
• VIMPELCOM NOT BIDDING FOR ZAMTEL
• NLMK RAISES FULL-YEAR STEEL OUTPUT TARGET
• POLYMETAL Q3 GOLD OUTPUT 3 PCT UP YR/YR
• ALROSA AIMS TO CUT OVER $1 BLN IN DEBT BY YR-END ECONOMY/POLITICS:
• RUSSIA, INDIA TO STUDY ROUBLE/RUPEE USE IN TRADE ENERGY:
• EUROPE GAS DEMAND EXCEEDS PRE-CRISIS LEVELS COMMODITIES:
MARKETS CLOSE/LATEST:
RTS 1,448.34 +0.12 pct
MSCI Russia 833.11 -1.29 pct
MSCI Emerging Markets 969.35 +0.84 pct
Russia 30-year Eurobond yield: 5.716/5.671 pct
EMBI+ Russia 238 basis points over
Rouble/dollar 29.0725
Rouble/euro 43.5845
NYMEX crude $81.56 +$0.37
ICE Brent crude $79.97 +$0.46
For Russian company news, double click on
Treasury news Corporate debt
Russian stocks Russia country guide
All Russian news Scrolling stocks news
Emerging markets top news
Top deals European companies
Keywords: RUSSIA FACTORS/ (dmitry.sergeev@; +7 495 775 1242; Reuters Messaging: dmitry.sergeev.@)
RIA: Sberbank's RAS net profit down 91% in Jan.-Sep.
21:4622/10/2009
MOSCOW, October 22 (RIA Novosti) - Sberbank's net profit in the first nine months of 2009 calculated to the Russian Accounting Standards declined 91% year-on-year to 9.1 billion rubles ($313 million), the bank said Thursday.
State-owned Sberbank is Russia's largest lender.
"Due to significant expenditure to create reserves, the bank's pre-tax profit declined compared to the first nine months of 2008 to 11.9 billion rubles [$410 million]," the bank said.
Provisions for the large volume of bad loans amid the ongoing economic crisis are likely to use up most of the bank's earnings for 2009.
Sberbank is currently involved in a deal to buy a stake in the car manufacturer Opel. General Motors took a long-awaited decision in early September to sell Opel to a consortium of auto parts maker Magna and Sberbank. The decision was approved by the Opel board and the German government.
Your Metal News: Mechel completed placement of its 05 series bonds
Friday, Oct 23, 2009
Mechel OAO, one of the leading Russian mining and metals companies, announces that it has completed placement of non-convertible interest-bearing documentary bonds of 05 series with total value of 5 billion rubles.
Mechel completed placement of its secured non-convertible interest-bearing documentary bonds payable on demand, an opportunity for early redemption at holders’ request and issuer’s discretion provided. Maturity falls 3 276 days after placement date, id est on October 9, 2018. Payment of 36 quarterly coupons and three-year offer for early redemption of bonds provided for.
Placement was performed by public subscription under the terms and conditions of Securities Prospectus and Decision on Securities Issuance through collection of purchasers’ applications for fixed-price purchase of bonds with coupon rate for the first coupon period.
Securities offered in the amount of 5 million, nominal value of each bond being 1 000 rubles. Coupon rate for the first coupon period set at 12.5% per annum. VTB Capital, Gazprombank and Sberbank acted as arrangers for the placement, Uglemetbank being its lead co-arranger.
Stanislav Ploschenko, Mechel’s CFO commented: “We are satisfied with placement results. High demand for our bonds and trends for reduction of borrowing cost provide Russian companies with further opportunities to overcome the downturn manifestations for a transition to investment-driven growth stage. Russian capital market potential allowed for cost-efficient fundraising for Elga coal mine development. We hope as well financial institutions will regard the outcome as a price guidepost in respect of long-term unsecured debt of the company”.
Bloomberg: Russia’s Deka May Sell Stake to Fight Coke With ‘Not Cola’ Kvas
By Maria Ermakova
Oct. 23 (Bloomberg) -- OAO Deka, Russia’s second-largest maker of the traditional soft drink kvas, may sell a stake of about 25 percent as it fights inroads by Coca-Cola Co. and Carlsberg A/S’s OAO Baltika Breweries in the local market.
Deka is playing on patriotism and increased beer taxes to lure customers to its Nikola brand of the fermented beverage. Kvas is made from bread or malt and can be flavored with sugar, birch sap and fruit. It’s naturally bubbly and contains negligible amounts of alcohol.
“Our goal is leadership in this highly competitive market,” Chairman Andrei Mansky, who is also Deka’s co-owner, said in an interview in Moscow. “Coca-Cola and Baltika have a big potential, and if they would be ready to spend big money, they could achieve some meaningful market share.”
Russian sales of kvas are expected to rise about 15 percent annually over the next five years to more than $1 billion in 2015, Mansky said. Carlsberg, the nation’s biggest brewer, diversified away from its Baltika beer brand by starting kvas production this year. Coca-Cola began making the brew under the name Kruzhka & Bochka, or “Mug & Barrel,” in April 2008.
Deka has 31 percent of the market, compared with 37 percent for Ochakovo. Coca-Cola, the world’s largest soft-drink company, and Baltika have a combined 10 percent.
Investment would most likely come from “some wealthy individual, rather than a private equity fund,” said Irina Yarotskaya, an analyst at Otkritie Financial Corp. in Moscow. “Private equity funds usually buy stakes to be able to sell them back later at a higher price. It’s not for sure they’ll be able to do it with a kvas producer.”
‘Not Cola’
Nikola was the fifth most-recognized brand of carbonated drink in Russia last year, after Coca-Cola, Pepsi, Fanta and Sprite, according to the company. Deka came up with the name “to oppose imported drinks such as Coca-Cola,” Mansky said.
The company uses the advertising slogan “Kvas Is Not Cola, Drink Nikola.”
“Kvas is the national Russian drink and has been produced for at least 1,000 years,” Mansky said. “Everyone has a memory of kvas being made in his family.”
Deka was founded in 1992 when the 19th century brewery in Veliky Novgorod, southwest of St. Petersburg, was privatized. Mansky and partner Konstantin Barinov bought control of the company in 2001. They took full control in 2004 and started producing kvas the next year. The company continues to make beer, which accounts for about 25 percent of its revenue.
Beer Tax
Russia has proposed tripling the beer tax and banning the sale of beer in kiosks and outdoor retail markets to curb what President Dmitry Medvedev calls the country’s “colossal” alcohol consumption.
“Considering the government is conducting an anti-alcohol campaign, including against beer consumption, it’s possible that some of those non-heavy drinkers may switch to kvas,” said Maria Sulima, an analyst at IFC Metropol in Moscow. “It’s a very Russian product and quite a popular one.”
Deka would use some of the money raised in a stake sale to boost advertising, improve distribution and pay down debt, Mansky said. He didn’t say how much the company might raise.
Deka is rebuilding its sales network after some distributors went out of business in the credit crunch. Revenue may fall 20 percent to 1.5 billion rubles ($51 million) this year because of the disruption, according to Mansky. The beverage maker has started selling directly to retailers to recover lost revenue, he said.
Sales Growth
“We are at the initial stage of the kvas market development,” he said. “Russians consume just 4 liters of kvas per person a year.”
In 2010, Deka forecasts sales will rise 35 percent to 2.02 billion rubles, helped by the “market’s recovery” and its purchase of the Stepan Timofeevich brand from Heineken NV in September, Mansky said.
Sulima estimates sales will rise 20 percent to 22 percent next year, calling the 35 percent forecast too optimistic.
“To achieve that, they would have to raise production volumes by at least 10 percent and raise prices by about 20 percent, which is quite a lot.”
Earnings before interest, taxes, depreciation and amortization will rise 6 percent to 250 million rubles this year and will reach 300 million rubles in 2010, the company estimates. The margin of Ebitda as a percentage of sales will expand to 16.3 percent this year from 12 percent in 2008, after Deka reduced spending on television advertising and focused on marketing its product to retail chains, Mansky said.
To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@
Last Updated: October 22, 2009 16:00 EDT
Reuters: FACTBOX-What happens to spent nuclear fuel?
Fri Oct 23, 2009 3:59am EDT
LONDON, Oct 23 (Reuters) - GE Hitachi Nuclear Energy (GE.N: Quote, Profile, Research, Stock Buzz) (6501.T: Quote, Profile, Research, Stock Buzz) has proposed an alternative nuclear fuel recycling system, which could reduce radioactive waste and avoid extraction of plutonium that can be used for making weapons.
Nuclear experts say while the proposed Advanced Recycling Center (ARC) could help to solve some of the biggest worries as more countries build nuclear reactors, high costs are drawbacks.
Here is what is happens about spent nuclear fuel at present:
-- What happens to spent nuclear fuel?
Nuclear fuel elements are discharged and cooled down in a water pool for up to 50 years at reactor sites. Many countries plan to put them in repositories in deep geological sites afterwards. Finland or Sweden may become the first to put such waste into repository after 2020.
-- What happens in countries that have opted to recycle spent nuclear fuels?
Used nuclear fuel is reprocessed to extract the remaining uranium and plutonium generated during irradiation of the fuel in the reactor.
Uranium accounts for about 95 percent of the volume, while plutonium is about 1 percent and about 3 percent is fission products or nuclear waste.
Uranium can be re-enriched and used as fuel in nuclear reactors. At present, it is stored in most countries. France has reactors that can use such fuel after it is re-enriched in Russia. Plutonium is processed into mixed oxide fuel, or MOX, for use in reactors.
Separated highly-radioactive waste is vitrified and put into heavy stainless containers and mostly stored at reprocessing plants.
-- Which countries have opted for the closed fuel cycle or to reprocess spent nuclear fuel?
China, France, India, Japan, the Netherlands, Russia and Britain. The United States is reconsidering its policy and could in future treat spent nuclear fuels.
-- Where are such reprocessing capacity?
Major facilities include those in La Hague in France, Sellafield in Britain, Ozersk in Russia, and Rokkasho in Japan. (Source: World Nuclear Association) (Reporting by Nao Nakanishi; editing by James Jukwey)
Activity in the Oil and Gas sector (including regulatory)
NY Times: Russian Oil Surges After Break With OPEC
By ANDREW E. KRAMER
Published: October 22, 2009
MOSCOW — Improbably, Russia’s oil sector has emerged as one of this country’s few growth industries.
While the 12 nations of OPEC have limped through the last year, painfully cutting production as the global economy slumped, Russian oil companies have had an extraordinary run. Profits and share prices at companies like Lukoil and Rosneft are up and the Russian budget deficit is coming down, in part because of oil revenue.
The divergent fortunes of Russia and the Organization of the Petroleum Exporting Countries suggest that the Kremlin will never revive the proposal it floated a year ago, then withdrew, that Russia and OPEC coordinate production limits. Russia has benefited handsomely from opening the taps full throttle.
Already the world’s largest oil-producing nation, Russia has become the biggest exporter too, surpassing Saudi Arabia as the Saudis reduced production to stay within OPEC’s limits.
“OPEC made a concerted effort to stem its exports,” Alex Fak, an oil analyst at Troika investment bank in Moscow, said. “The result of that action was higher oil prices. So Russia was encouraged to produce more and sell more. Which is what it did.”
The jump in oil prices to $82 a barrel on Wednesday only added to Russia’s good fortunes; unlike the members of OPEC, it is banking the full benefits of this price increase because it is pumping at full volume.
While OPEC countries shut their wells and idled their pipelines, new tax incentives encouraged companies in Russia to, in effect, drill, baby, drill. A devaluation of the ruble helped exporters, and now new policy changes may lure foreign companies back.
(BP, the British oil titan, has also benefited from Russia policy, through its joint venture in Russia, TNK-BP.)
It may not be until December that OPEC lifts quotas last set in January, and then only if prices remain elevated, the cartel’s secretary general, Abdullah al-Badri said Thursday, Agence France-Presse reported from London.
Yet not too long ago, Russian officials seemed ready to revise a long-held axiom that Russia’s national interests were not served by cooperating with OPEC. In 2008, prices had fallen so sharply that Russian oil companies, in just a few months, went from money-minting machines to loss makers. Far from propping up Russia’s government, which relies on oil exports for about 40 percent of the budget, the oil companies were in need of help themselves.
In the fourth quarter of 2008, the state oil company, Rosneft, had an unheard-of loss on its pumping assets, though currency gains and refining and gas station margins brought the overall profit to about zero, a close shave for the company. “We were operating at a loss,” Peter O’Brien, the American chief financial officer of Rosneft, said in a telephone interview.
In that quarter, taxes and transportation tariffs equaled 99 percent of the current oil price, the company reported. That left almost nothing for operations: Rosneft was losing money for every barrel pumped out of Siberia.
The choice was to throw some of Russia’s daily production of about 10 million barrels a day behind OPEC cuts to force, somehow, a global price recovery, or to liberalize the domestic industry to save teetering companies.
Nowhere was the choice more stark than at Rosneft’s showcase project, the Vankor field that is the largest Russian oil development since the collapse of the Soviet Union. The field’s derricks, pipelines and tanks were rising out of a featureless northern waste, though at a great expense.
It was the type of new investment needed to sustain the industry. But embarrassingly, after the oil price collapse, it was set to begin operating at a loss if old tax and oil transportation tariff policies were left in place, and capital costs taken into consideration.
Last fall, even as Russia’s deputy prime minister, Igor I. Sechin, attended OPEC summits in Vienna and hinted at a possible production cut, solving the immediate problem of keeping projects like Vankor alive at home set the course of Russian oil policy.
The mineral extraction tax was lowered and the export tariffs recalculated to the benefit of companies. Oil companies pressed for the indexing of extraction and export taxes to inflation, but did not win.
Then, in July, Prime Minister Vladimir V. Putin signed a decree waiving the export tax entirely for east Siberian crude, creating a significant incentive to invest in these new fields, even as world demand for oil had yet to recover and excess capacity was idled elsewhere. The tax exemption has not yet taken effect, but is expected to be retroactive to Sept. 1. At an oil price of $70, the tax is $33.30 a barrel.
The Vankor field opened commercial production in August, accounting for much of the Russian increase in production this year. Relatively close to China, by Siberian standards, it will become a source for exports to that country and reach half a million barrels a day.
In an investor note, Troika, the investment bank, said the tax holiday was a game-changer for Rosneft in east Siberia, remaking what was at best a break-even project, at current oil prices, into a profitable one.
Mr. O’Brien, the Rosneft chief financial officer, said most financing for Vankor had been committed before last autumn’s tax breaks; instead, the tax breaks freed up funds to maintain output at other fields so that new oil coming online from Vankor came in addition to, rather than replacing, existing output.
Last year, production dropped by 0.7 percent; Russian officials had suggested they would let it slip to help OPEC support prices. Last autumn, Mr. Sechin, the deputy minister, in meetings with OPEC, had made assurances that Russia would “coordinate” its production policies with the cartel. Rosneft braced for a mandatory cut of 300,000 barrels a day.
Instead, this year’s output in Russia is projected to grow by 0.3 percent, and Russia brought Vankor online with fanfare as Mr. Putin pressed a ceremonial button and industry officials stood by and cheered.
OPEC officials have hardly disguised their outrage.
Abdullah al-Badri, secretary general of OPEC, said he was “not encouraged” by Russia’s policies, Reuters reported from Vienna last month. Mr. Badri said he did not intend to accept an invitation by Russian authorities for another meeting later this year.
Sergei Shmatko, Russia’s minister of energy, said Russia had never pledged adherence to quotas — only “cooperation.”
“Our goal is to improve coordination, to more actively exchange information and to carry out in-depth analysis on the oil market,” Mr. Shmatko told a foreign audience in September. “Our position is that today’s prices are not limiting development in the oil sector.”
Barentsobserver: Record drop in Russian gas consumption
2009-10-22
Russian consumers in September bought 15,6 percent less gas than in the same period in 2008. That is the biggest domestic drop in consumption ever in Russia.
Gazprom deputy Valerii Golubyov in a journal article confirms that domestic gas consumption in September amounted to 19,1 billion cubic meters. That is down 15,6 percent compared with the same period in 2008 -- the biggest year-on-year drop in Russia ever, newspaper Kommersant reports.
Russia in November last year experienced almost a similar drop in consumption. Despite positive tendencies in 2009, consumption was still down more than 10 percent year-on-year after the first four months of the year, Kommersant writes.
Before November 2008, domestic gas consumption in Russia had increased steadily for a major number of years.
A key reason for the downturn is that fact that the country’s thermal power plants have significantly cut use of gas. Meanwhile, both nuclear power plants and hydro power plants have increased output.
Upstreamonline: Eni eyes South Stream decision next year
Wire services
Italian oil and gas group Eni will take a final investment decision on the South Stream gas pipeline in 2010, chief executive Paolo Scaroni said in an interview published today.
"All is going well. In 2010 we will take the final investment decision," he told Italian daily Corriere delle Sera, adding Eni would "evaluate with attention" a request by French utility EDF to enter the project.
Speaking on a flurry of gas pipeline projects tabled by various companies, Scaroni said "a very abundant offer (of gas)" was on the horizon.
Scaroni also said the company's target was to produce more than two million barrels of oil per day, without giving a timeframe. "Eni assumes a barrel of $70 for the next two or three years ...," he said.
On Iran, Scaroni said Eni had invested $5 billion in two oil contracts signed in 2000-2001, adding it intended to finish them. "We have stipulated no new contracts," Reuters reported him saying.
Friday, 23 October, 2009, 06:34 GMT | last updated: Friday, 23 October, 2009, 06:36 GMT
RIA: Kazakhstan willing to pump oil into pipeline via Turkey
20:3822/10/2009
ANKARA, October 22 (RIA Novosti) - Kazakhstan's president confirmed on Thursday that his country is willing to pump crude into a planned $1.5-billion pipeline to bring Caspian oil to the Mediterranean via Turkey.
Addressing Turkey's parliament, Nursultan Nazarbayev said: "We along with Russia are ready to join the Samsun-Ceyhan oil pipeline project."
His statement came after a video conference between St. Petersburg and Ankara earlier on Thursday, when Russian Prime Minister Vladimir Putin told his Turkish counterpart, Tayyip Erdogan, of Kazakhstan's possible role.
"Our Kazakh colleagues have expressed readiness for joint work to fill this oil pipeline system," Putin said at the conference, also involving Italian Prime Minister Silvio Berlusconi, who met with his Russian counterpart in St. Petersburg for talks focusing on cooperation in car manufacture and agriculture.
Three Russian oil companies - state-run Rosneft, oil pipeline monopoly Transneft and shipping firm Sovcomflot - signed a deal in Milan on Monday with Turkey's Calik Enerji and Italy's Eni S.p.A. on the pipeline with projected capacity of 60-70 million metric tons a year (1.2-1.4 million bbl/d).
Russian Deputy Prime Minister and Rosneft chairman Igor Sechin said other producers, including LUKoil, have also shown an interest in supplying oil via the pipeline.
The pipeline is designed to reduce the oil transportation load on the Bosporus Strait liking the Black and Mediterranean and the Dardanelles on the Marmara Sea, which handles some 150 million tons (1.1 billion bbl) annually.
The Kazakh leader said his country is willing to contribute to Turkey's drive to strengthen its role as a transit hub for oil and gas.
Turkey, which sits at the energy crossroads of Russia, Europe, Central Asia and the Middle East, signed two more energy deals with Russia and the EU earlier this year, fueling concerns in Moscow and Brussels of growing dependence on Ankara.
In August, Turkey allowed Russia's Gazprom to use its sector of the Black Sea for the South Stream gas pipeline to Europe, bypassing Ukraine. In July, the country signed a deal on the EU-backed rival pipeline Nabucco.
Speaking to Putin and Berlusconi on Thursday, Erdogan thanked them for contribution to energy security in Turkey and Europe.
Gazeta.kz: Kazakhstan, Russia ready to participate in construction of oil pipeline Samsun – Ceyhan
13:09 23.10.2009
text: "Kazakhstan Today"
Kazakhstan and Russia are ready to participate in construction of the oil pipeline Samsun - Ceyhan. The President of Kazakhstan, Nursultan Nazarbayev, said in the Parliament of Turkey, Kazakhstan Today agency reports citing official mass media.
"We have supported construction of the oil pipeline Baku - Ceyhan and now we are ready to participate along with Russia in the project of the oil pipeline Samsun - Ceyhan," the head of state said.
The President has reminded that Kazakhstan annually extracts 70 million tons of oil. Since 2013, taking into account Kashagan oil, oil extraction will increase in the country by 50 million tons.
According to the head of state, transit of the Kazakhstan hydrocarbons through Turkey to Europe is favorable for both states. "Turkey is between Europe and Asia and will be a transit country. If the Kazakhstan oil and gas is transported through Turkey, it will be beneficial both for Turkey and Kazakhstan."
According to N. Nazarbayev, goods turnover between Kazakhstan and Turkey has been $3 billion. Goods turnover between Kazakhstan and Russia has been $20 billion, with the European Union - $25 billion, and with China - $10 billion.
EurasiaNet: Turkmenistan: New Pipeline To Start Pumping Gas To Iran On December 20
10/22/09
Turkmen gas exports to Iran via a new pipeline are slated to begin on December 20. According to Iranian news sources, northern Iran will receive gas supplies originally earmarked for purchase by the Russian energy giant Gazprom.
"The decision to turn the gas flow south was taken in April 2009 after Gazprom halted gas imports from Turkmenistan because of the gas pipeline explosion the CAC-4 [pipeline] on the border with Uzbekistan," news site Iran.ru reported on October 22. [For background see the Eurasia Insight archive].
The new export pipeline will carry fuel from the Dovletabat gas field to Iran. Iranian officials say consumers could need up to 20 billion cubic meters of Turkmen gas a year. "The two sides made considerable efforts to ensure that gas from Turkmenistan, using the new pipeline, could flow to Iran before winter," Reza Kasaeizadeh, the managing director of National Iranian Gas Export Company, is quoted as saying.
Upstreamonline: Vanco and Lukoil swap rigs off Ghana
By Upstream staff
US explorer Vanco Energy and Russian giant Lukoil restarted a drilling campaign in the Ghanaian section of offshore West Africa after changing rigs.
The partners terminated a contract with the Aban Abraham drillship and began exploring again for oil and gas on 19 October with a Sedco-702 semi-submersible dynamically-positioned rig, Vanco’s Vice President Jeffrey Mitchell said by telephone from Houston.
The pair suspended drilling at Dzata-1 in July almost immediately after starting because the Aban Abraham rig required maintenance, Mitchell said at the time.
The prospect is about 70 miles away from the Jubilee field, a find that has drawn significant interest from oil giants around the world.
Closely held Kosmos Energy LLC said earlier this month it agreed to sell its stake in Jubilee field to US supermajor ExxonMobil, while BP, CNOOC Ltd. and Ghana’s state-run Ghana National Petroleum Company (GNPC) are all reportedly interested in the stake as well.
Lukoil plans to drill three exploration wells offshore Ghana and neighboring Cote d’Ivoire, boss Vagit Alekperov said in April.
Lukoil owns 57% of the Dzata-1 wildcat, with Vanco holding 28%.
GNPC owns the remaining 15% of the venture.
Thursday, 22 October, 2009, 16:28 GMT | last updated: Thursday, 22 October, 2009, 16:28 GMT
UPI: TNK-BP sinks money in north Russia
Published: Oct. 22, 2009 at 11:47 AM
MOSCOW, Oct. 22 (UPI) -- Anglo-Russian venture TNK-BP said it plans to invest $180 million to develop the Russkoe oil field in northern Russia, corporate executives said.
Sergei Biryukov, the head of the Russkoe project, said the TNK-BP board of directors approved investments of $180 million for the field for 2010 and early 2011.
TNK-BP has 10 wells operating in the Russkoe field. The company said it plans to test a thermal method of oil recovery using hot-water injections beginning in 2010.
Biryukov said production at Russkoe occurs only during the winter because of the presence of ice roads. The company plans to construct an automobile road to the field as well as a gas-fired power plant with a portion of the investments, the Interfax news agency reports.
Development is scheduled for 2011 if oil transportation challenges are handled. TNK-BP said oil production would peak at around 65 million barrels of oil per year during a period from 2010 to 2020.
Reuters: Russia's Tatneft net profit rises 40 pct in H1
10.22.09, 11:18 AM EDT
MOSCOW, Oct 22 (Reutes) - Mid-sized Russian oil firm Tatneft reported on Thursday a 40 percent year-on-year net profit increase in the first half of 2009 to 29.69 billion roubles ($892 million).
The results, calculated to U.S. Generally Accepted Accounting Principles (GAAP), showed the revenue fell to 163.97 billion roubles in the first six months of this year from 246.49 billion roubles for the same period of 2008.
Reporting by Vladimir Soldatkin; Editing by Dmitry Sergeyev) ($1=33.27 Rouble in H1 2009) Keywords: RUSSIA TATNEFT/RESULTS
(vladimir.soldatkin@, +7 495 775 12 42, Reuters Messaging: vladimir.soldatkin.@)
RBC: Tatneft's net profit jumps nearly 40%
RBC, 23.10.2009, Moscow 10:55:44.The net profit of Tatneft under U.S. GAAP climbed 39.8 percent to RUB 29.65bn (approx. USD 1.02bn) in the first half of 2009 compared to the corresponding period of the previous year, the Russian oil company stated in its report. Revenue shrank 1.5 times to RUB 163.7bn (approx. USD 5.64bn) and operating expenses amounted to RUB 27.6bn (approx. USD 949m), which is 8.3 percent less than in January-June 2008.
Pretax profit increase 23.8 percent to RUB 39.95bn (approx. USD 1.37bn), and EBITDA rose 23.38 percent to RUB 44.47bn (approx. USD 1.53bn).
The company attributes a drop in sales revenue in H1 2009 against H1 2008 to a considerable decrease in crude oil prices, which was partially balanced out by the ruble's devaluation against the dollar.
Steel Guru: Transneft studying alternatives to western loans
Friday, 23 Oct 2009
Interfax quoted Mr Vladimir Kushnarev VP of OJSC Transneft said OJSC Transneft is still not planning to raise external loans.
He said that Transneft recently raised a large Chinese loan. "There are other forms of investment, such as increasing charter capital," he said.
It was earlier reported that in February Transneft signed an agreement with China Development Bank to raise USD 10 billion with a floating rate dependent on the LIBOR set for payment over 20 years in equal installments. The loan has a five year grace period. The loan agreement's rates foresee a single payment in the six months until January 1st 2011 and monthly payments after this date.
The funds will be earmarked for the construction of pipelines in Russia, including the Skovorodino-Chinese border section of the Eastern Siberia-Pacific Ocean pipeline. The loan is part of an agreement between Russia and China for oil partnership. This agreement is binding for 23 years and starts the implementation of loans agreements between Rosneft, Transneft and China Development Bank worth USD 25 billion in exchange for long-term supply of oil from Russia to China through ESPO.
(Sourced from Interfax)
The Moscow Times: Transneft to Finish Pipeline to China by 2010
22 October 2009
Reuters
MOSCOW — Russia's oil pipeline to China is due to be completed by the end of 2009, and users will be charged an export tariff of $30 to $35 per ton to deliver crude along the 2,700-kilometer route, Russia's oil pipeline monopoly said on Thursday.
The construction of the pipeline had been delayed several times and was one of the reasons behind a reshuffle of the state-controlled monopoly's management in 2007.
"The pipeline is almost filled with oil. Preparations for the pipeline's commissioning are under way," Transneft President Nikolai Tokarev said, adding that the trunk pipeline could start pumping crude eastward on Dec. 15, a few days ahead of schedule.
He said zero-export duties on oil from East Siberian fields were likely to be applied retroactively from Oct. 1.
In July, Russia's government decided to introduce the long-awaited, zero-export duty for 13 huge oil fields in Eastern Siberia in a bid to help crisis-stricken oil companies and boost crude production, although the decision is yet to be implemented.
According to Tokarev, who became Transneft president in 2007, the issue is being reviewed by the Justice Ministry. "I think the duty will be retroactive to Oct. 1," he added.
Tokarev said the oil, which will eventually be shipped to the Pacific port of Vladivostok through the second phase of the link, would also be of interest to South Korea and Japan. Japanese companies were looking into upstream projects in Eastern Siberia.
"Japanese companies showed readiness [to step in] and are now considering participation in upstream projects in Eastern Siberia," he said without elaborating.
Transneft aims to invest 190 billion rubles [$6.51 billion] in its main projects next year. It has no plans to increase "excessively" the tariffs now in place for the company's pipeline system, as they are already high, Tokarev said.
Major oil exporter Russia is building the pipeline to move oil from huge new fields in Eastern Siberia to energy-hungry Asian markets, a move that will also diversify Moscow's energy reach beyond its traditional markets in Europe.
The first stage of the East Siberian-Pacific Ocean (ESPO) pipeline will have capacity to move 30 million tons a year (600,000 barrels per day) from the town of Taishet to Skovorodino, from where a spur will run to the Chinese border.
Transneft is set to start the second stage of the link's construction, to the sea port of Kazmino, near Vladivostok, next year. The second link is planned to be finished in 2014 and until then, oil will be shipped to the Pacific Ocean coast by rail.
Earlier on Thursday, a first cargo of oil arrived to Kazmino, and at least one tanker will ship crude from the port in December, Tokarev said.
"South Korea and Japan [besides China] showed interest in this oil too. ... The demand and deficit are massive."
Bulgaria's new government was hesitating over whether to implement Russia-sponsored energy projects, including an oil link from the Bulgarian Black Sea port of Burgas to the Greek port of Alexandroupolis on the Aegean Sea.
In August, Russia asked Bulgaria to clarify its stance on energy projects that it had committed to, Tokarev said.
"We are interested in some clarity. It's the end of October now, but no one from Bulgaria answered us."
Last month, Bulgarian Prime Minister Boiko Borisov said his country would decide on the projects in November.
Businessneweurope: Nord Dream?
Nicholas Watson in Prague
October 23, 2009
Nord Stream is still very much stuck in the planning stages with numerous obstacles to overcome, though talk to the partners involved in building this gas pipeline and a very different picture emerges.
The head of the Nord Stream consortium, Matthias Warnig, told journalists at the World Gas Congress in Buenos Aires at the beginning of October that even though the pipeline has yet to receive approval from any of the Baltic littoral states for the route, which will run from Russian gasfields in Siberia under the Baltic Sea and into Germany, construction is still scheduled to begin in April 2010. "We're stoical about it," Warnig said, adding that Nord Stream had spent "so much money" on environmental-impact studies that it was not considering the possibility that the approvals would be denied.
Russia's strained relations with its former vassals in the Baltics, which are now EU members, was always going to complicate Moscow's attempts to get planning approval for the pipeline, which critics argue could result in huge ecological damage if there's an explosion of long-buried World War II munitions or a break in the pipeline. Each littoral state of the Baltic Sea - Lithuania, Estonia, Latvia, Poland, Finland, Sweden, Germany and Denmark – have to grant their permission for the pipeline to go ahead; "If only one country says 'no', the implementation of the project may be impossible," Jens Mueller, spokesman for the Nord Stream consortium, has admitted.
Marcel Kramer, chief executive of the Dutch gas company Gasunie, which holds a 9% stake in the Nord Stream consortium – the other members are Gazprom with 51% and BASF/Wintershall and E.On Ruhrgas with 20% each – accepts that when it comes to major energy projects like this, the countries involved will inevitably regard them in a strategic and political context. However, he is confident that if looked at from a purely environmental perspective, the pipeline will get the necessary approvals. "It's interesting to see the recent debate in the Finnish parliament and how it was emphasised that the way you look at this project is from an environmental point of view… and there were no real objectors to Nord Stream. The Swedish government has also repeatedly stated that it will look at it in environmental terms," he says. "We would not be in it if we didn't think it was environmentally sound or sufficiently transparent or financially responsible."
At the same time, the Nord Stream consortium is succeeding in its attempt to broaden support for pipeline in Europe by bringing in new partners. Jean-Francois Cirelli, vice chairman and president of GDF-Suez, told reports at the WGC that talks over the French firm joining the consortium were going well and that the principal whereby the two German firms would give up about a 4.5% stake each to give GdF Suez 9% had been established. Commercial terms were still being discussed, he said, though he foresaw no problems and the parties had set the objective of concluding the terms by the end of this year, Cirelli said.
"We think that Nord Stream will be an important new route for Europe and it is in the interests of Europe to build Nord Stream," he said, referring to the 55.0bn cm/y of Russia gas that will flow through the pipeline when the second phase is completed in 2012.
FOCUS: Arrangement of energy routes – comments in Russian press
(FOCUS News Agency) [pic][pic][pic]23 October 2009 | 10:48 | FOCUS News Agency [pic][pic][pic]
Moscow. The intensive international contacts between the Russian, Italian and Turkish government heads enlarged the boundaries of the energy cooperation, Vremya Novostey writes.
At the beginning of the week it was announced that Russia could join the Samsun-Ceyhan oil pipeline and Turkey gave Deputy Prime Minister Igor Sechin a package of documents allowing South Stream gas pipeline to cross Turkish waters.
Russian Energy Minister Sergei Shmatko held Thursday a meeting with his Bulgarian counterpart Traycho Traykov, notifying him about the bigger capacity of South Stream. “This will reject most of the questions around the Russian gas supplies,” said Shmatko.
After the decision about the Russian participation in the construction of Samsun-Ceyhan oil pipeline, the question about the perspectives of the alternative project, Burgas-Alexandroupolis, was raised. Its construction has been put off several times. The project implementation is to start next year. But the stand of Bulgaria, whose share is almost one fourth, could once again delay the project. The state has repeatedly questioned its expedience and has even given up financing, despite Vladimir Putin’s sufficiently harsh statements addressed to the Bulgarian government. In addition, Kazakh oil companies seriously eye a share in the project, which could happen at the expense of the Bulgarian or Greek share.
Despite everything, for now Russia does not plan to give up the project.
Russian and Italian Prime Minister Vladimir Putin and Silvio Berlusconi want to speed up the construction of the South Stream gas pipeline, which crosses the Black Sea so that it could be set into operation before the Nord Stream gas pipeline. It is to cross the Baltic Sea, but its profitability is doubted, writes Russian Kommersant daily.
By the way the economic and financial assessment of the South Stream project is close to zero for now.
Russia is trying to speed up the construction of the new gas pipelines bypassing Ukraine and Belarus without taking into consideration possible losses, comments Nezavisimaya Gazeta daily.
Putin called on the Bulgarian PM Boyko Borisov to make a decision on the implementation of the joint project in March. The silence coming as a response to that call forced Russia to act decisively, which resulted in a forced extraordinary visit of the Bulgarian Minister of Economy, Energy and Tourism Traycho Traykov to Moscow.
Gazprom
Reuters: Europe gas demand exceeds pre-crisis levels –Gazprom
Thu Oct 22, 2009 10:34am EDT
MOSCOW, Oct 22 (Reuters) - Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) Chief Executive Alexei Miller said on Thursday gas consumption in Europe is now exceeding levels seen prior to the financial crisis.
"We are seeing an increase in demand for Russian gas in Europe over the course of the last two months," Miller said in a statement. "Daily consumption of gas today is already higher than it was before the crisis." (Reporting by Robin Paxton; Editing by Dmitry Sergeyev)
Kyivpost: Gazprom could up output 11 percent in winter Gazprom could up output 11percent in winter season
Yesterday, 16:18 | Interfax-Ukraine
Gazprom is prepared to produce 289.2 billion cubic meters of gas during the 2009/2010 winter season, 10.6% more than last winter, the Russian gas giant said in a press release.
Gazprom produced 261.6 bcm in the 2008/2009 season. It initially planned to produce 296 bcm last winter, but cut production due to falling demand and due to the gas dispute with Ukraine.
It is the lowest winter production target since 2005/2006, when Gazprom planned to produce 288.67 bcm. However, actual production that winter exceeded plan by 5.5 bcm due to the colder than average weather.
The weather is the key factor in gas production and sales. The underground storage facilities are mainly responsible for buffering fluctuations in demand. This year Gazprom decided to halt its program for expanding capacity in the underground storage facilities in light of falling demand, maintaining the operational inventories at the beginning of the heating season at 64 bcm. Previously Gazprom had boosted storage capacity by 0.5 bcm each year.
The Gazprom management board examined the Unified Gas Transportation system's readiness to handle peak loads in the 2009-2010 season. It noted overall that the system was ready for the fall/winter season. Management will subsequently report to the board of directors on the matter.
Steel Guru: Gazprom Neft gets majority on Moscow Oil Gas Co board
Friday, 23 Oct 2009
Interfax reported that Gazprom Neft got seven representatives elected to the board of directors at Moscow Oil & Gas Company which controls the Moscow Oil Refinery at an EGM.
MOGC said the City of Moscow got five representatives on the board.
The Gazprom Neft directors include Mr Alexander Dyukov, the company chief and the City representatives include Mr Mayor Yury Luzhkov who will chair the board.
MOGC is wholly owned by Britain Sibir Energy. Gazprom Neft bought 55% of Sibir in the Q2 of 2009 but it is thought to control around 81% of the shares directly and indirectly. The City of Moscow owns just over 19% of Sibir. It and Sibir used to have equal representation on the MOGC board, but the balance has now swung in favor of Gazprom Neft.
(Sourced from Interfax)
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