Russia - WikiLeaks
Russia 100608
Basic Political Developments
• Prime-Tass: MAJOR EVENTS LATER THIS MONTH
o Jun 9: Russia’s President Dmitry Medvedev to meet Guinea’s Acting President Sekouba Konate in Moscow
o Jun 12: Public holiday, the Day of Russia
o Jun 14: Holiday moved from Saturday, June 12, all markets closed
• Reuters: DIARY-France to June 30: Saturday June 19, 2010: SAINT PETERSBURG, Russia - President Nicolas Sarkozy attends Franc-Russian economic forum.
• RBC: Rosatom chief: Bushehr to be up and running in August
• Interfax: RUSSIA, IRAN TO FORM JOINT OPERATING COMPANY FOR BUSHEHR NPP – KIRIYENKO
• CNBC: Russian PM says gas pipeline may not go to Israel
o Interfax:
o RUSSIA CONDEMNS ATTACK ON PEACE FLOTILLA IN NEUTRAL WATERS - PUTIN
o PUTIN NOT RULING OUT MEETING WITH IRANIAN PRESIDENT ON SIDELINES OF ISTANBUL SUMMIT
o SANCTIONS AGAINST IRAN SHOULD NOT BE EXCESSIVE - PUTIN
o BLUE STREAM-2 SEEN AS POSSIBILITY TO DELIVER ADDITIONAL GAS TO TURKEY, WON'T STRETCH AS FAR AS ISRAEL – PUTIN
o BUSHEHR NUCLEAR PLANT TO GO INTO SERVICE IN AUGUST 2010 – PUTIN
o BLUE STREAM-2 PROJECT ALIVE, RUSSIA AND TURKEY WORKING ON IT – PUTIN
o Itar-Tass: Putin: the resolution on Iran at the UN Security Council "almost agreed"
o Russian PM: Russia can not press on parties of Nagorno-Karabakh conflict
o Hurriyet: Putin has condemned Israel in a live broadcast
o Reuters: Putin says Azeri gas will not meet Nabucco needs
o Russia Today: Collective punishment on Israel to be discussed in Istanbul
o Itar-Tass: Putin meets with Erdogan before the summit on Asia
o Unian: Yanukovych is about to meet with Putin in Istanbul today
o VOR: Russian PM Putin arrives in Istanbul
o RIA: Putin arrives in Turkey for security summit, bilateral talks
• Foreign Policy: Medvedev coming to see Obama - Sources close to the U.S. and Russian governments confirmed to The Cable Monday that Russian President Dmitry Medvedev will visit Washington and meet with President Obama on June 24.
• RIA: Afghan drug trade threat to global stability - Russian drug chief - The Moscow-backed action plan includes the elimination of poppy plantations and the inclusion of large landowners who provide land for the plantations on the UN sanction list.
• Interfax: Finnish military chief to visit Moscow to discuss cooperation
• RIA: Russian experts to report Cheonan sinking conclusions to Defense Ministry soon
• RBC: President to participate in SCO meeting
• People Daily: SCO Tashkent summit to focus on security, economic coordination - The 10th annual summit of the Shanghai Cooperation Organization (SCO), set for June 10-11 in the Uzbek capital of Tashkent, will discuss key regional and global problems.
RIA: Belarus gives Russia list of Customs Union demands - paper
• VOR: Medvedev, Lukashenko discuss meeting to consider Customs Union details
• RIA: Paraguay ready to cooperate with Russia in security sphere
• Turkish Weekly: President of Uzbekistan Receives Russian President's Special Representative
• Trend.az: Regular meeting on missing persons in South Osetia to be held today
• Moscow Times: Serbia Reaches Railway Deal - Serbia and Russia reached a preliminary agreement on financing two railway projects for a total of 470 million euros ($561 million), said Milovan Markovic, general manager of state railway company Zeleznice Srbije.
• RenCap: Irkut signs agreement of intent to deliver 50 MC-21 to Malaysia for $5bn
• Zawya: Strong Presence for Bahraini Enterprises in Russia - Bahraini enterprises supported by Tamkeen's Growth Assistance scheme will have strong presence at the second "Arabia Expo 2010", held in Moscow from 7 - 9 June.
• Barentsobserver: Minister calls for careful conduct in Norwegian-Russian waters
• Barentsobserver: Radioactive scrap vessel sank - The former transport vessel for spent nuclear fuel Severka reportedly sank at the naval shipyard in Aleksandrovsk on the Kola Peninsula in late May. Officials at the shipyard confirm that the vessel went down.
• Itar-Tass: 3 servicemen suspected of stealing demised Polish official things
• RIA: Four injured in southern Russian explosion - "Four people were injured in an explosion in Makhachkala. One is in serious condition. All of them are civilians," a police spokesman said.
• Itar-Tass: Six people get injuries in blast in Makhachkala - Six people were injured in a blast which occurred in Akushinsky Avenue on Monday night. “Four people got different injures and another two were hospitalized with shell-shocks,” a spokesman for the Interior Ministry for Dagestan told ITAR-TASS.
• Itar-Tass: Justice of peace killed in Dagestan - Justice of the Peace Abdurakhman Gamzatov was killed at his house in the settlement of Untsukul overnight to Tuesday.
• Interfax: Judge killed in Dagestan
• bne: Non Duma political parties get right to speak in parliament
• bne: Kremlin misses IFC draft deadline - Kremlin officials missed the June 1 deadline to draw a draft plan to turn Moscow into an International Financial Centre, a top government priority.
• FT: Russia’s bumper grain harvest raises fears of glut - Russia will begin gathering grain crops this week in a harvest that promises to be large enough to fill home tables and leave a large surplus for export.
• Russia Today: New farming project to revive Russian agriculture
• RIA: St. Petersburg court allows Gazprom skyscraper construction
• RIA: Arshavin promotes Russia’s 2018 World Cup bid
• Russia Today: Homeless children still a problem in Russia
• VOR: Russian art fetches $15 million at Sotheby's
• VOR: Russia lends a hand to its expats - The blueprint terms as “compatriots abroad” ethnic Russians and also Russian-speakers with cultural, historical and spiritual links with Russia and feeling an urge to stay in constant touch with their historical homeland.
• VOR: Press review
o Russia’s printed media are focused on the efforts to draft a reform of this country’s Interior Ministry.
o In Sochi, Vladimir Putin has again met the International Olympic Committee chiefs, reports the Komsomolskaya Pravda daily
o The Izvestia daily reports that the Russian-Brazilian agreement on abolishing brief-travel visas for Russians going to Brazil and vice-versa has come into force.
o The international naval exercise Baltops-2010 has got under way in the northwest of Europe in the framework of the Partnership for Peace programme, reports the Rossiyskaya Gazeta daily
o According to the Nezavisimaya Gazeta, the Sapsan project and other high-speed railway routes, currently being drawn up in Russia, are just the first effort to develop high-speed railway movement in this country.
• FOCUS: Russian press review (FOCUS News Agency)
National Economic Trends
• RBC: Moscow to see inflation creep down to 6.5% in 2013
• Alfa: Cabinet considers limiting social payments and public sector indexation
• RenCap: CBR changes forex market intervention strategy
• VTB Capital: CBRs FX interventions weaken the RUB in May, but appreciation ahead?
Business, Energy or Environmental regulations or discussions
• Reuters: Russian markets -- Factors to Watch on June 8
• Reuters: Sberbank says looking to buy a top Ukraine bank
• VTB Capital: Russian sea: First trading update disappoints
• Bne: Petropavlovsk's iron ore assets to receive $60m in Hong Kong investment
• Emerging Markets: VTB Capital to boost its Asian business
• Arka.am: Bank VTB Armenia to merge with VTB leasing in one month
• Moscow Times: VTB Asks State to Leave
• Trend.az: IBA-Moscow enters rating of "The most profitable and efficient banks in first quarter of 2010"
• TravelDailyNews: ASM to develop routes for Airport Rostov-on-Don in Russia
• Bne: Kopeika forced to market? - Rumours of a forthcoming IPO by food retailer Kopeika have kicked off again, with a report in Vedomosti. Quoting 'sources', the newspaper writes that owner Nikolai Tsvetkov will either float part of the company this year, or sell.
• Bne: Coca-Cola invested €99m into Russian business in 2009
• Bne: Russian car market returns to life - Russia's carmakers were hit harder by the international economic and financial crisis than any other sector. But a state sponsored "cash for clunkers" scheme has been so successful the Kremlin decided to extend the programme in May as Russia becomes one of the few countries in Europe to see production recover.
Activity in the Oil and Gas sector (including regulatory)
• Abc.az: Russia begins importing American technologies for shale gas production
• Times: BP suffers $1bn setback in Siberia
Gazprom
• Hurriyet: South Stream to continue despite Ukraine deal
• International Analyst Network: The geo-energy expansion of the South Stream pipeline project in the Balkans
• Russia Today: Gazprom looks to the east for new export markets
• EUobserver: EU officials distance themselves from Gazprom stunt - Current and former top EU officials on Monday (7 June) denied that they have any connection with Gazprom in a yachting project which has been flying the EU flag for the past six years but which is now sponsored by the Russian firm.
• Hydroworld: Gazprom to help build several hydropower plants in S. Ossetia
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Full Text Articles
Basic Political Developments
Prime-Tass: MAJOR EVENTS LATER THIS MONTH
Jun 9: Russia’s President Dmitry Medvedev to meet Guinea’s Acting President Sekouba Konate in Moscow
Jun 12: Public holiday, the Day of Russia
Jun 14: Holiday moved from Saturday, June 12, all markets closed
Reuters: DIARY-France to June 30
Saturday June 19, 2010-----------------------
SAINT PETERSBURG, Russia - President Nicolas Sarkozy attends
Franc-Russian economic forum.
10:27
RUSSIA, IRAN TO FORM JOINT OPERATING COMPANY FOR BUSHEHR NPP – KIRIYENKO
RBC: Rosatom chief: Bushehr to be up and running in August
RBC, 08.06.2010, Moscow 11:30:02.The launch of the Bushehr nuclear power plant in Iran will take place in accordance with the schedule at the end of the summer, head of the Russian atomic energy state corporation Rosatom Sergei Kiriyenko announced at the international forum Atomexpo 2010 in Moscow today. He reiterated that Russia and Iran had agreed on the plant's further joint use. "Since Iran has no experience in the use of nuclear power plants, we have agreed that our specialist will remain at the plant for several years to help conduct its use," Kiriyenko explained.
Earlier, the official announced that potential sanctions against Iran would not affect the Bushehr plant or prevent its launch in August 2010.
CNBC: Russian PM says gas pipeline may not go to Israel
By: The Associated Press | 08 Jun 2010 | 04:38 AM ET
Text Size
ANKARA, Turkey - Russia's prime minister says a new gas pipeline that will link Russia to the Middle East via Turkey may not be extended to Israel as originally projected. He says there are economic concerns after Israel found gas in its own waters.
Russia already supplies gas to Turkey through Blue Stream, a pipeline that opened in 2005 and tunnels under the Black Sea separating the two countries. Putin says an expanded project, dubbed Blue Stream II, could supply gas to countries such as Lebanon and Syria.
Turkey shelved discussions on extending Blue Stream II to Israel after Israeli commandos killed nine Turks on an aid ship last week.
But Putin says "the basic issue is Israel may not be needing this gas that much." He says it is not related to the "tragic incident."
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
12:02
RUSSIA CONDEMNS ATTACK ON PEACE FLOTILLA IN NEUTRAL WATERS - PUTIN
12:01
PUTIN NOT RULING OUT MEETING WITH IRANIAN PRESIDENT ON SIDELINES OF ISTANBUL SUMMIT
11:59
SANCTIONS AGAINST IRAN SHOULD NOT BE EXCESSIVE - PUTIN
11:55
BLUE STREAM-2 SEEN AS POSSIBILITY TO DELIVER ADDITIONAL GAS TO TURKEY, WON'T STRETCH AS FAR AS ISRAEL – PUTIN
11:47
BUSHEHR NUCLEAR PLANT TO GO INTO SERVICE IN AUGUST 2010 – PUTIN
11:44
BLUE STREAM-2 PROJECT ALIVE, RUSSIA AND TURKEY WORKING ON IT – PUTIN
Itar-Tass: Putin: the resolution on Iran at the UN Security Council "almost agreed"
08.06.2010, 12.14
ISTANBUL, June 8. Itar-Tass. Prime Minister Vladimir Putin believes that the future UN Security Council resolution on the Iranian nuclear issue should not close the path to a peaceful nuclear program of Iran.
"We worked hard and we believe that resolution is negotiated, - Putin said. - We hold the view that these decisions should not be excessive and should not make the Iranian people into a false position, which would establish barriers to peaceful atomic energy."
"In this regard, I wish to inform you that in August of the Bushehr plant will be officially opened, work will begin," - said the Russian prime minister at a press conference after talks with Prime Minister Recep Erdogan.
Putin is ready for a meeting with Iranian President Mahmoud Ahmadinejad in the Istanbul summit of CICA, if Iranian counterpart deems it necessary.
"President Ahmadinejad is here, we are with him, probably see you at the meeting", - said Putin. "We will be able to discuss-the problem, if my Iranian colleague, the head of Iran would be such a need," - he added.
Russia and other countries willing to contribute to the Nagorno-Karabakh settlement, but should not substitute for the parties to the conflict, said Prime Minister.
"Both Russia and the other actors are ready to put his shoulder, but we can not substitute for Armenia or Azerbaijan. Then we'll blame to one side or the other" - said Putin.
"I do not want to then someone thought we were pressed to either side," - said the prime minister.
"Only these two states can reach a compromise. What is acceptable for Armenia and Azerbaijan can only say they", - Putin said. "Other countries can act as guarantors, so we intend to act" - he added.
Premier of Russia refused to answer the question of whether Russia would seek the withdrawal of U.S. bases in Kyrgyzstan.
"The issue of the stationing of foreign troops, of course, refers to the exclusive jurisdiction of the country which hosts a military base on its territory", - he said at a press conference, answering a direct question from a journalist. "As the Kyrgyz leadership decides, so be it", - Putin said.
Premier of Russia considers it necessary to calculate the cost feasibility of the project "Blue Stream-2", especially given the fact that for Israel it is likely of no interest.
Russia condemns action against the humanitarian convoy to Gaza, and will occupy an appropriate position in the UN Security Council. "We understand the feelings of the Turkish leadership, expressing condolences to the victims and will occupy an appropriate position in the UN Security Council," - said Prime Minister.
"We condemn this action" - he confirmed. "Particularly disconcerting is the fact that she held in international waters, and this requires separate consideration" - said Putin, adding that he discussed this incident in an interview with Turkish PM Erdogan.
Russian PM: Russia can not press on parties of Nagorno-Karabakh conflict
08.06.2010 13:25
Azerbaijan, Baku, June 8 / Trend A. Gasimova /
Any interference or pressure on one side of the Nagorno-Karabakh conflict is very risky. Russia would not like Azerbaijan and Armenia to say that they are being pressed, Russian Prime Minister Vladimir Putin said at a joint press conference with his Turkish counterpart Recep Teyipom Erdogan today, TRT channel reported.
"Not only one side bears responsibility while resolving of such conflicts. Officials of both countries must discuss this issue and continue a dialogue", Putin said.
He said that a solution to the conflict which would be accepted by both parties must be achieved. "Other countries in this issue can act only as mediators. Patience is required, because the issue is very difficult," Prime Minister said.
Putin said that Azerbaijan and Armenia must resolve the conflict themselves. Russia and other countries are ready to provide them with necessary assistance.
"We can not compel the parties to make a decision. We can not put pressure on them", Putin said
The conflict between the two South Caucasus countries began in 1988 when Armenia made territorial claims against Azerbaijan. Armenian armed forces have occupied 20 percent of Azerbaijan since 1992, including the Nagorno-Karabakh region and 7 surrounding districts. Azerbaijan and Armenia signed a ceasefire agreement in 1994.
The co-chairs of the OSCE Minsk Group - Russia, France, and the U.S. - are currently holding the peace negotiations.
Armenia has not yet implemented the U.N. Security Council's resolutions on the liberation of the Nagorno-Karabakh region and the occupied territories.
GOOGLE TRANSLATION
Hurriyet: Putin has condemned Israel in a live broadcast
.tr
June 8, 2010
Akkuyu nuclear power plant project between Turkey and Russia in the details after the signing ceremony of Prime Minister Recep Tayyip Erdogan has taken and Russian Prime Minister Vladimir Putin held a joint press conference. Israel's attack on the fleet at the meeting came up again. Putin, Blue Marmara condemned the raid because of Israel.
Reuters: Putin says Azeri gas will not meet Nabucco needs
Tue Jun 8, 2010 7:55am GMT
ISTANBUL June 8 (Reuters) - Russian Prime Minister Vladimir Putin said on Tuesday that natural gas from Azerbaijan's Shah Deniz field is not enough to meet the planned Nabucco pipeline's needs.
Putin was speaking at a press conference with Turkish Prime Minister Tayyip Erdogan one day after Turkey and Azerbaijan signed a memorandum of understanding that will allow Baku to export gas to Europe. (Reporting by Thomas Grove and Gleb Bryanski)
Russia Today: Collective punishment on Israel to be discussed in Istanbul
08 June, 2010, 09:18
It is expected that some participants at the first summit of the Conference on Interaction and Confidence Building Measures in Asia in Istanbul will launch a diplomatic offensive against Israel.
Israel’s deadly raid on a Gaza aid flotilla last week sparked international outcry, and is likely to overshadow other business at the meeting of leaders from more than twenty countries, including Russia, Iran, Palestine and Israel.
Many say that the security summit could not have come at a better time with the scandal around the Israeli attacks on the international aid flotilla continuing to rage worldwide.
Nine Turkish nationals were killed by Israeli commandos during the raid on six ships of international humanitarian aid to Gaza. The attack was conducted in open waters.
Ankara has called on the Jewish state to agree to the UN-proposed international probe, but Israel has rejected the idea altogether, saying they will carry out their own investigation. This has sparked accusations that they have something to hide.
“Turkey, which was the closest friend of Israel in the Muslim world, has turned against Israel… so angrily that it is prepared to facilitate new ideas of collective punishment for Israel,” warned Professor Pirouz Mojtahedzadeh from Tarbiat Modarres University in Tehran.
Also the Turkish Prime Minister called on Israel to put an end to the occupation of Arab land and said that Turkey is no longer going to be silent on Gaza, which has become a giant prison. Observers believe that Turkey may use the Istanbul summit as a platform for public censure to call for Israel’s isolation.
However, Israel, being a member state of the organization, refused to send high-ranking officials to the summit which is believed to be Israel’s attempt at escaping responsibility.
Nine heads of state are going to attend the summit, including the Palestinian president Mahmoud Abbas who has called for immediate action.
Russia will be represented by Prime Minister Vladimir Putin.
“The issue has come so far that even someone like Mahmoud Abbas in the Palestinian state has started initiatives of reconciliation with Hamas in Gaza,” Professor Pirouz Mojtahedzadeh noted.
Also present at the summit will be Iranian President Mahmoud Ahmadinejad who proposed an idea to send humanitarian aid to Gaza escorted by the Iranian Navy.
There is an anti-Israeli sentiment among those present in Istanbul and very harsh statements could be expected.
Russia, as one of the main mediators in the Middle East which conducts talks with both Israel and Hamas, will probably promote dialogue between Israel and Palestine to ease the boiling tensions.
Itar-Tass: Putin meets with Erdogan before the summit on Asia
08.06.2010, 10.36
ISTANBUL, June 8 (Itar-Tass) -- Russia’s Prime Minister Vladimir Putin had a breakfast with Turkey’s Prime Minister Recep Tayyip Erdogan on Tuesday before the plenary meeting of the summit of the Conference on Interaction and Confidence-Building Measures in Asia.
Putin and Erdogan spoke behind closed doors.
[08.06.2010 10:23]
Unian: Yanukovych is about to meet with Putin in Istanbul today
President of Ukraine Victor Yanukovych is about to meet with head of the Russian government Vladimir Putin in Istanbul today.
According to an UNIAN correspondent, V. Yanukovych finished two-day working visit to Greece and left for Turkey on a working visit.
According to the program of the visit, the head of the state will take part in the Summit of Conference on Interaction and Confidence Building Measures in Asia that will take place today.
It is scheduled that the President of Ukraine will deliver a speech before participants of the summit and will speak with mass media representatives.
The bilateral meetings of V. Yanukovych with President of Turkey Abdullah Gul, President of Azerbaijan Ilham Aliyev and President of Kazakhstan Nursultan Nazarbayev are also scheduled within the frameworks of the working visit on June 8.
The Ukrainian delegation consists of Head of Administration of President Serhiy Lyovochkin, Foreign Minister of Ukraine Konstyantyn Hryshchenko, Fuel and Energy Minister Yuriy Boyko, head of SBU Valeriy Horoshkovskyi and also deputies head of the Administration of President Andriy Honcharuk and Serhiy Vasyljev.
It is scheduled that V. Yanukovych will return to Kyiv today’s evening.
VOR: Russian PM Putin arrives in Istanbul
|Jun 8, 2010 09:31 Moscow Time |
Russian Prime Minister Vladimir Putin has arrived in Istanbul to attend a meeting of the Third Conference on Interaction and Confidence-Building Measures in Asia (CICBMA).
The agenda features Iran’s nuclear problem, the situation in Iraq and prospects for a settlement of the Middle East conflict. Putin is scheduled to meet the Prime Minister and President of Turkey, and also the Presidents of Azerbaijan, Ukraine and Kazakhstan on a bilateral basis in the framework of the Conference.
It was Kazakhstan that came up with the idea of calling the CICBMA back in 1992 to resolve the key regional problems and support sustainable development of cooperation between the member-states. The organization currently brings together 20 countries.
RIA: Putin arrives in Turkey for security summit, bilateral talks
02:58 08/06/2010
Russian Prime Minister Vladimir Putin arrived in Turkey on Tuesday to attend the third summit of the Conference on Interaction and Confidence-Building Measures in Asia (CICA) and hold bilateral talks with top officials from Turkey and other countries.
The CICA is an inter-governmental Asian security forum, which was established in 1992 and currently comprises 18 member states, including Russia, China, South Korea and Turkey.
The summit will most likely focus on the current crisis on the Korean peninsula, following the alleged sinking of a South Korean warship by a North Korean submarine.
The South Korean Navy vessel sunk on March 26 in the Yellow Sea near the disputed maritime border between the two Koreas. Forty-six sailors died.
An international investigation concluded two weeks ago that the South Korean Cheonan corvette was sunk by a torpedo fired from a North Korean submarine, but Pyongyang has denied any involvement in the sinking and the conclusions of the investigation.
A group of Russian Navy experts left Seoul on Monday after completing their assessment of the investigation that found North Korea was responsible for the sinking of the Cheonan. Russian President Dmitry Medvedev accepted Seoul's offer to send specialists at the end of May.
Putin's spokesman Dmitry Peskov told RIA Novosti Monday that in Istanbul, Putin and his Turkish counterpart Recep Tayyip Erdogan will also discuss bilateral cooperation.
Medvedev visited Turkey's capital Ankara on May 11-12. The Istanbul talks are seen as a continuation of the dialogue started at the level of the heads of state.
Russian-Turkish trade last year went down almost by 40% to $19.6 billion, but Turkey remains one of Russia's key economic partners, and the aggregate volume of Turkish direct investment in Russia exceeds $5 billion.
Besides, Moscow and Ankara have successfully cooperated in the energy sphere, including on the Blue Stream gas pipeline project, the South Stream gas pipeline, the Samsun-Ceyhan oil pipeline and the construction of Turkey's first nuclear power plant near the Mediterranean port of Mersin in the Akkuyu area.
Putin will also meet with Turkish President Abdullah Gul. The top officials are to exchange opinions on urgent issues on the international and regional agenda.
The Russian government press service said the Russian premier will also meet with the Azerbaijani, Kazakh and Ukrainian presidents.
MOSCOW, June 8 (RIA Novosti)
Foreign Policy: Medvedev coming to see Obama
Posted By Josh Rogin [pic]Monday, June 7, 2010 - 4:23 PM
Sources close to the U.S. and Russian governments confirmed to The Cable Monday that Russian President Dmitry Medvedev will visit Washington and meet with President Obama on June 24.
The visit is timed exactly after Obama's stated deadline for finishing up U.N. Security Council action to bring new sanctions against Iran. The State Department has said repeatedly that Obama wants to see the sanctions vote before the end of spring -- June 21 -- and the Medvedev visit would be an opportunity to show unity on that front, or if the process lags, to give it one final push across the finish line.
Putting Iran sanctions in the rear-view mirror will also allow the administration to concentrate on the main accomplishment of Obama's "reset" of U.S. relations with Russia: ratification of the new START nuclear reductions treaty. Russia's desire for a civilian nuclear agreement with the United States, which is the secondary "reset" agenda item right now, is also sure to be discussed.
That agreement, which was first submitted by the Bush administration but pulled after the Russian-Georgian war of 2008, was sent back to Congress last month. If Congress doesn't formally object by August, it will go into effect.
A bipartisan effort to block the Russian civilian nuclear agreement is heating up now, led by Massachusetts Democrat Ed Markey and Nebraska Republican Jeff Fortenberry, who introduced the House version of the resolution opposing the deal.
Recent reports about the risks of terrorists acquiring Russian nuclear technology have heightened concerns among lawmakers. Hill sources say that a Senate companion measure could surface with bipartisan sponsorship this week.
"Russia continues to train Iranian nuclear physicists, supply to Iran sensitive nuclear technology, and give secret instruction on Russian soil to the Iranian Revolutionary Guard on the use of the advanced S-300 interceptor-missile systems," said Markey about the deal.
"As long as I've been in this job, there's been no concern about Russian entities providing nuclear assistance to Iran," the NSC's non-proliferation Czar Gary Samore said earlier this month when talking about the 123 agreement, the shorthand used for civilian nuclear deals because they are based on section 123 of the Atomic Energy Act of 1954.
State Department officials have said that Moscow's ability to get the deal is tied directly to how helpful the Russians are in securing new sanctions against Iran, so the visit is perfectly timed for the administration to make an argument on that front.
"The White House has publicly stated that the Russian government's cooperation on the Iranian nuclear issue will be a significant consideration in making this determination and this continues to be the case," acting Assistant Secretary of State Vann Van Diepen testified last month.
Further details of the Medvedev visit are still being worked out. We've heard but haven't confirmed yet that a State Dinner is in the offing.
RIA: Afghan drug trade threat to global stability - Russian drug chief
12:11 08/06/2010
Afghan drug production is an international rather than a local or regional threat, Russia's drug control chief has said.
"The time has come to qualify the status of Afghan drug production as a threat to world peace and security," Viktor Ivanov told an international security conference in Berlin.
"This is a key postulate of the action plan that was proposed by Russia to the international community and voiced at NATO headquarters, the European Parliament and Beijing," he said at the Central Asia and Afghanistan: Problems and Solutions forum.
Ivanov also called global drug trafficking far more destructive than terrorism.
He emphasized it was drug production that had given rise to rife political and economic instability in Afghanistan.
The Moscow-backed action plan includes the elimination of poppy plantations and the inclusion of large landowners who provide land for the plantations on the UN sanction list.
"Evidently, the time is ripe for the international community to consolidate around our plan," Ivanov said.
The head of Russia's Federal Drug Control Service said combating the drug trade was impossible without economic measures to encourage landowners to grow wheat, not opium poppies.
"Market prices for opium are three times higher than those for wheat, and the risks involved in its production and trading are incomparably higher," he went on.
"Here is the core of the problem and an evident failure of international efforts, which are concentrated on so-called alternative farming."
He said the U.S. and EU annual grants for alternative farming in Afghanistan, amounting up to $500 million, do not prevent farmers from growing poppies, whereas in Columbia a mere $50 million saw a "stunning result."
The United States has effectively used defoliants to eradicate coca and poppy plantations in Columbia, wiping out nearly 230,000 hectares in 2008 alone. During the same period, only 3% of Afghan poppy plantations were eradicated.
As a follow-up to the conference, an international forum on combating Afghan drug trafficking will be held in Moscow on June 9-10.
According to the Federal Drug Control Service, Afghan opium causes the deaths of around 100,000 people around the world annually. In Russia alone Afghan heroin kills around 30,000 young people each year.
Afghan drug production increased dramatically after the U.S.-led invasion that toppled the Taliban in 2001, and Russia has been one of the most affected countries, with heroin consumption rising steeply.
BERLIN, June 8 (RIA Novosti)
June 08, 2010 12:17
Interfax: Finnish military chief to visit Moscow to discuss cooperation
MOSCOW. June 8 (Interfax-AVN) - Chief of the Russian Army General Staff, General of the Army Nikolai Makarov, will hold talks in Moscow on Tuesday with Finland's commander-in-chief, Gen. Ari Puheloinen, to discuss military and military-technical cooperation.
A Finnish military delegation, led by Puheloinen, will arrive in Moscow on Tuesday, a Russian Defense Ministry spokesman told Interfax-AVN.
The Finnish delegates will visit the All-Arms Academy, where Puheloinen will speak to staff and students.
The delegation will also travel to the Ryazan Margelov airborne command college to look at training facilities on offer.
The visit is to last until June 11, he said.
RIA: Russian experts to report Cheonan sinking conclusions to Defense Ministry soon
01:09 08/06/2010
The conclusions of Russian experts on the sinking of South Korea's Cheonan corvette will be reported to the Defense Ministry in two to three days, a top ministry official said.
"In two-three days generalized results and conclusions of Russian experts who studied in South Korea the circumstances of the Cheonan corvette's loss will be reported to the Defense Ministry chiefs," the official said Monday.
A group of Russian Navy experts left Seoul on Monday after completing their assessment of the investigation that found North Korea was responsible for the sinking of a South Korean warship in March.
The South Korean Navy vessel sunk on March 26 in the Yellow Sea near the disputed maritime border between the two Koreas. Forty-six sailors died.
An international investigation concluded two weeks ago that the South Korean Cheonan corvette was sunk by a torpedo fired from a North Korean submarine.
Pyongyang has denied any involvement in the sinking and the conclusions of the investigation, which was carried out by U.S. and Australian experts, further worsened relations hit by the loss of the Cheonan.
Russian President Dmitry Medvedev accepted Seoul's offer to send specialists at the end of May.
The Kremlin press service said Medvedev believed it was important be certain of the cause of the sinking of the warship before taking action.
South Korean Navy and Defense Ministry officials have said the experts visited the naval base in Pyeongtaek, where the wrecked ship was towed after being recovered from the seabed.
They met with South Korean experts and some of the 58 surviving crewmembers, and also inspected the wreckage of a torpedo, which allegedly hit the Cheonan.
South Korea has called on the UN Security Council to consider the situation.
Russia has called on all sides to show restraint amid fears that a further escalation of tensions on the Korean Peninsula could develop into a military crisis.
MOSCOW, June 8 (RIA Novosti)
RBC: President to participate in SCO meeting
RBC, 08.06.2010, Moscow 11:57:02.Russian President Dmitry Medvedev is scheduled to participate in a meeting of the heads of states of members of the Shanghai Cooperation Organization (SCO) in Tashkent on June 10-11, the Russian leader's press office announced today.
The SCO is a regional international organization formed in 2001 by Russia, Kazakhstan, China, Kyrgyzstan, Tajikistan, and Uzbekistan.
People Daily: SCO Tashkent summit to focus on security, economic coordination
14:10, June 08, 2010
The 10th annual summit of the Shanghai Cooperation Organization (SCO), set for June 10-11 in the Uzbek capital of Tashkent, will discuss key regional and global problems.
It also will consider issues of strengthening stability and security in Central Asia and the expansion of SCO contacts with other multilateral organizations.
As the organization has developed and found its own position in regional and world affairs, the objective of the SCO now is to complement and coordinate, not to compete, especially in security and economic issues, analysts say.
REGIONAL SECURITY: COMMON GROUND
Some experts believe the strongest aspect of the SCO is that it is a convenient place for dialogue on security in Central Asia, including Afghan factors such as drug trafficking, terrorism, and organized crime. Currently, the SCO has been invited to every major international event related to Afghanistan.
Irina Kobrinskaya, an expert at the Russian Global Economy and International Affairs Institute, told Xinhua on the eve of the summit that common interests inside the bloc include regional security, mainly in Afghanistan.
The aims of the member centuries' foreign policies are different, but the threat to their security originates from a common source, he said.
RIA: Belarus gives Russia list of Customs Union demands - paper
12:35 08/06/2010
Belarus has released a list of trade problems with Russia that it says hinder the signing of a Customs Union agreement, a Russian business daily said on Tuesday.
Kommersant said Minsk was dissatisfied over high gas prices for Belarus, the "humiliating" attitudes of Russian banks over loans to Belarusian farmers and Russia's restrictions on the import of Belarusian medicine.
Minsk insists that all members of the Customs Union, which also includes Kazakhstan, should have parity.
"The restrictive measures taken by Russia cause the greatest economic damage [to Belarus]," Kommersant quoted an unnamed Belarusian Foreign ministry spokesperson as saying.
Belarus refuses to accept Russian gas prices, set at $169 per 1,000 cubic meters in the first quarter of the year and $185 in the second quarter, and has been paying $150 since January 1 instead.
Minsk also has disputes with Moscow over tariffs on Russian oil, which Belarus said should be completely duty-free in the planned common market.
On Sunday, Russian Economy Minister Elvira Nabiullina said that all the disputed Russian-Belarusian issues including the export duties on Russian oil and petroleum products, "will be settled simultaneously with all the other issues concerning the single economic space".
Russia, Belarus and Kazakhstan signed an agreement on the creation of the Customs Code in the Belarusian capital, Minsk, on November 27, 2009.
The Customs Union formally came into existence on January 1, but is unable to start working fully until disputes are resolved and the customs code comes into effect.
The Code was due to start operating on July 1, but at the end of May the three former Soviet republics failed to resolve disputes at a meeting in St. Petersburg.
Belarusian Prime Minister Sergei Sidorsky then said the disputed issues between the countries included the import of foreign cars and aircraft into the Union's customs territory and export duties on Russian oil and petroleum products to Belarus.
President Medvedev signed a federal law last week ratifying the Customs Code and Kazakhstan's lower house of parliament ratified it on the same day.
MOSCOW, June 8 (RIA Novosti)
VOR: Medvedev, Lukashenko discuss meeting to consider Customs Union details
|Jun 8, 2010 09:39 Moscow Time |
The Russian and Belarusian Presidents Dmitry Medvedev and Alexander Lukashenko have taken up preparations for a meeting to discuss the details of shaping the Customs Union. This came in a statement Monday by the Kremlin’s press service following the two leaders’ telephone conversation.
Earlier the Belarusian Economics Minister Nikolai Snopkov told reporters that Belarus was prepared to join the Union as of July 1st after settling some controversial points.
The other parties to the Customs Union, Russia and Kazakhstan, ratified the Union Code in St. Petersburg on May 28th.
RIA: Paraguay ready to cooperate with Russia in security sphere
08:00 08/06/2010
Paraguayan Foreign Minister Hector Lacognata said Monday his country is ready to cooperate with Russia in the spheres of security and defense.
Lacognata, who made an official visit to Russia - the first such visit in the history of bilateral relations - in early June, said Russia showed interest in cooperation with Paraguay during his visit.
"The Russian authorities showed great interest in cooperation with Paraguay in different spheres, including in security and defense. Russia is a world leader in this field," the minister told journalists.
"We take this into account and hope to satisfy our demands for armaments with purchases in Russia," he said, adding that he handed a list of military hardware and armaments compiled by Russia's Defense Ministry to his country's Defense Ministry.
Lacognata said Paraguyan Interior Minister Rafael Filizzola will soon head to Moscow to consider possible purchases of equipment for law enforcement agencies.
MEXICO CITY, June 8 (RIA Novosti)
Turkish Weekly: President of Uzbekistan Receives Russian President's Special Representative
Tuesday, 8 June 2010
President of Uzbekistan Islam Karimov received special representative of the President of Russia for development of relations with Kyrgyzstan Vladimir Rushailo at Oqsaroy residence on 7 June.
During the talks, the sides exchanged opinions on the development of the situation in the region, cooperation within the Shanghai Cooperation Organization and other international structures in ensuring regional security and stability, as well as other issues representing mutual interest, UzA reported.
Trend.az: Regular meeting on missing persons in South Osetia to be held today
08.06.2010 10:21
Georgia, Tbilisi, June 8 / Trend, N.Kirtskhalia /
A meeting of representatives of Russia, unrecognized South Ossetia and Georgia on the fate of missing persons during the August conflict in 2008 will be held June 8 under the auspices of the International Committee of the Red Cross (ICRC).
The problem of missing persons is one of the sensitive issues for discussions, for which former opponents periodically meet in Geneva on the conflict of 2008.
The meeting will take place in the conflict zone.
At the previous meeting, held three weeks ago, "all sides expressed interest in improving coordination of actions of medico-legal character to facilitate the identification of human remains."
The first such meeting was held in Switzerland February 23, the next - the same place in late March. During the first meeting it was able to from a list of 47 missing persons.
Moscow Times: Serbia Reaches Railway Deal
08 June 2010
BELGRADE — Serbia and Russia reached a preliminary agreement on financing two railway projects for a total of 470 million euros ($561 million), said Milovan Markovic, general manager of state railway company Zeleznice Srbije.
“The funds will be used for the construction of the Valjevo-Loznica rail line in the west … worth 260 million euros, and for a railway junction in Belgrade which is 210 million euros,” Markovic told B92 television.
(Bloomberg)
RenCap: Irkut signs agreement of intent to deliver 50 MC-21 to Malaysia for $5bn
Renaissance Capital
June 8, 2010
Event: Yesterday (7 June), Russian aircraft corporation Irkut (IRKT) signed an agreement of intent with Malaysian company Crecom Burj Resources to deliver 50 MC-21 regional aircraft to Malaysia. The total amount of the order is $5bn, and deliveries are planned to start in 2016. IRKT says it has no prior contracts for the MC-21. The MC-21 development program includes three short-to-medium-range passenger aircraft: the MC-21-200, with 150 seats; the MC-21-300, with 181 seats; and the MS-21-400, with 212 seats.
IRKT is part of United Aircraft Corporation (UAC), which controls a 94.44% stake in IRKT. UAC also produces other civilian aircraft: the Sukhoi Superjet 100 (SSJ-100), the AN-148, the IL-96 and the TU-204. At the end of 1Q10, IRKT's order book included 178 orders for the SSJ-100, 65 orders for the AN-148, seven orders for the TU-204, five orders for the TU-204SM, and four orders for the IL-96. Sales of civilian aircraft accounted for 9% of UAC's revenues in 2009. The company doesn't disclose its order book for defense aircraft, but according to media reports, in Aug 2009 Sukhoi negotiated a RUB80bn ($2.5bn) contract to deliver 48 SU-35S aircraft, four SU-30M2 aircraft and 12 SU-27SM3 aircraft to the Russian Air Force through 2015.
Action: The news is positive for Irkut and UAC, in our view.
Rationale: The MC-21 is one of UAC's key priorities and is the source of sustainable sales growth for the company. The MC-21's price of $100mn is higher than that of other aircraft of the same class; the Airbus A320 family of aircraft were priced at $60-92.8mn in 2008, while the Boeing 737 family of aircraft were priced at $51.5-87mn in 2008.
Mikhail Safin
Zawya: Strong Presence for Bahraini Enterprises in Russia
Tamkeen supports 16 national companies at "Arabia Expo 2010"
Tamkeen, Manama, Monday 7 June 2010: Bahraini enterprises supported by Tamkeen's Growth Assistance scheme will have strong presence at the second "Arabia Expo 2010", held in Moscow from 7 - 9 June.
Tamkeen allocated BD67,000 to support 16 enterprises participating in the event through its Growth Assistance Scheme, which is a co-financing scheme designed to make enterprises become sustainable by increasing the reach of their products and services. The Scheme is one of many available to Bahraini enterprises under the Enterprise Development Support programme, which is managed by KPMG FakhroKPMG Fakhro . The programme's numerous schemes are designed to boost the productivity, efficiency, and competitiveness of Bahraini enterprises, in line with Bahrain's Economic Vision 2030.
A large number of Arab and Russian companies will participate in the exhibition held at Crocus Expo, the largest exhibition centre in the country, and features pavilions from various Arab countries and stalls for Russian companies and other regions wishing to enter Arab markets. A number of leading organisations of the Kingdom, including the Economic Development Board, Gulf Air, and Alba, will also participate in the exhibition as part of Bahrain's pavilion.
Dr. Ahmed Abdul Ghani Al Shaikh, Vice President of the Enterprise and Human Capital Development at Tamkeen, travelling as part of Bahrain's delegation to Arabia Expo 2010, commented, "Major international exhibitions provide ideal platforms to promote national enterprises to a much wider audience, and we are pleased that we can present these valuable opportunities to Bahraini entrepreneurs."
Arabia Expo 2010 aims to expand commercial and economic relations between Russia and the Arab world and help participants build partnerships and exchange ideas and expertise to market their products and services.
As one of the world's largest markets, the opportunity to showcase their products and services there resonated well with the participants. In addition, the event allows participants to study the possibility of marketing Bahraini products in Russia, learn about latest technologies, and build relations with other exhibitors.
More than 200 Bahraini entrepreneurs have benefited from Tamkeen's Enterprise Development programme in the first few months of the second phase of this flagship programme which aims to develop the private sector.
The Enterprise Development Support Agency, managed by KPMG FakhroKPMG Fakhro , assists Bahraini enterprises in the various programmes. To facilitate the application process, the Agency has dedicated premises in Meral Building in the Seef Area. Entrepreneurs and companies wishing to apply for any of the various schemes under the Enterprise Development Support Programme can contact the Enterprise Development Support Agency by phone 17 565393 or by visiting tamkeen.bh/edsa.
Barentsobserver: Minister calls for careful conduct in Norwegian-Russian waters
2010-06-07
The Norwegian Minister of Environment says Norway and Russia should learn from the spills in the Gulf of Mexico and base policies in the newly delineated waters in the Barents Sea on careful conduct.
-Nobody predicted this accident. We have to find out what actually happened in the Mexico Gulf and what it will mean for Norwegian oil policies and the management of coastal waters, Minister of Environment and International Development Erik Solheim told newspaper Aftenposten.
He is confident that the accident in the Gulf of Mexico has strengthens the arguments against oil drilling in the vulnerable waters outside Lofoten. Solheim represents the Socialist Left party, a junior partner in the Norwegian government coalition, and a strong opponent against expanded oil drilling the High North.
He also believes that Norway and Russia together should learn from the accident and base activities in the newly delineated areas in the Barents Sea on recommendations made after a careful mapping of the area.
-After the agreement on the disputed waters [in the Barents Sea] it almost sounds like we can start drilling tomorrow. However, also here the principle of careful conduct must be applied, Solheim stresses.
Barentsobserver: Radioactive scrap vessel sank
2010-06-07
UPDATED: The former transport vessel for spent nuclear fuel Severka reportedly sank at the naval shipyard in Aleksandrovsk on the Kola Peninsula in late May. Officials at the shipyard confirm that the vessel went down.
The information about the sinking of the nuclear waste ship is published by the regional portal blogger51.ru and is based on the words of what is said to be an employee at the shipyard No. 10 in Aleksandrovsk.
Also, the environmental organization Bellona comments on the fate of Severka. Head of Bellona Murmansk Andrey Zolotkov says in an article published at Bellona's own portal: “Since Severka for a long time was used to transport spent nuclear fuel in old containers, then it is likely that there are radioactive contaminated facilities and equipment onboard and likely also small amounts of low-level liquid radioactive waste.”
Highly radioactive uranium fuel
Severka was one of the first vessels in the Northern fleet to transport spent nuclear fuel from submarine reactors to re-loading and storage sites along the coast of the Kola Peninsula. The vessel was built in 1957 and taken out of operation in the early 90ties.
The vessel transported the containers with spent nuclear fuel to the Sevmorput naval yard in the city of Murmansk from the Russian Northern fleet's Andreeva Bay nuclear fuel storage in the Litsa fjord, just 55 kilometres east of Russia's border to Norway.
Severka has since then been laidup at the shipyard in Aleksandrovsk where also many other nuclear objects are stored.
Naval yard No. 10, also named Shkval, is located in Aleksandrovsk, previously named Polyarny. Aleksandrovsk is a closed military town and has a population of more than 20,000 people. The town is located northwest of Murmansk in the outermost part of the Kola bay on the coast of the Barents Sea.
Whistle blower
The anonymous blogger that first reported about the sinking is concerned about the radiation situation: “Now I wonder what awaits us in the future,” the blogger asks.
The employee from the naval yard writing at the blog also complains about the level of expertise among the workers. “Specialists from the shipyard leaves, but almost no one teach the newcomers.” Also; “This year salaries are delayed with almost four months.”
Severka was listed in a 2005 proposal from Rosatom to the International Atomic Energy Agency (IAEA) on nuclear service ships in need of dismantlement based on international cooperation.
The document says dismantlement of the service vessel can be done with the same infrastructure as for dismantlement of retired nuclear powered submarines. The document also reads that such dismantlement must be based on the same safety precaution concept as for dismantlement of submarines with nuclear reactors.
Radioactive contaminated
According to a document presented to IAEA in 2005, the vessel has no longer spent nuclear fuel onboard, but parts of the vessel are radioactive contaminated.
The plan presented in Rosatom’s document to IAEA lists a three stage order of dismantlement of Severka:
First stage: liquid radioactive waste and high-level solid radioactive waste should be removed from the vessel. Non-radioactive equipment and structures should then be disassembled. Thereafter; safe storage of the vessel afloat should be carried out after the main hull and the upper deck are sealed.
Second stage: The still floating vessel should be monitored and stored awaiting the establishment of a regional facility for disposal of solid radioactive waste.
Third stage: The vessel will be dismantled and the solid radioactive waste packed and delivered to final disposal.
Until blogger51.ru published the information about the sinking of the vessel on Monday, no other news reports are available. Neither the shipyard itself nor any other officials in the Murmansk region have reported about the sinking or its possible consequences.
Itar-Tass: 3 servicemen suspected of stealing demised Polish official things
08.06.2010, 10.20
MOSCOW, June 8 (Itar-Tass) -- Three Russian conscription servicemen were detained on suspicions of stealing personal belongings of a Polish official, who died in the crash of Polish President Lech Kaczynski’s airplane outside Smolensk, a reliable source in the Russian law enforcement agencies told Itar-Tass on Tuesday.
“On suspicions of committing this crime three servicemen were detained. They were passing the conscription military service in a maintenance unit of the Severny airport, where the Polish presidential airplane must have landed,” the source said. “The investigation into the stealing case is underway. The detectives have already gathered guilty evidence against servicemen,” he said.
The Russian Interior Ministry has earlier officially refuted some reports about the arrest of the three Smolensk regional crack policemen, who were allegedly suspected of stealing personal things of the April 10 air crash victims.
RIA: Four injured in southern Russian explosion
05:06 08/06/2010
Four people were injured as a result of an explosion in a southern Russian region, police said Tuesday.
"Four people were injured in an explosion in Makhachkala. One is in serious condition. All of them are civilians," a police spokesman said.
Makhachkala is the capital of Dagestan, a volatile North Caucasus republic in southern Russia.
The explosion occurred Monday at about 2300 local time [1900 GMT] at an avenue near a marketplace. It damaged two cars parked nearby.
Sporadic terrorist attacks and militant clashes are common in Russia's volatile southern republics, where Russia has held two brutal wars against separatists in the region of Chechnya, although the Kremlin has officially ended its military campaign against separatists and terrorists there.
An investigation is underway. Experts are working to establish where the explosive device was placed.
MAKHACHKALA, June 8 (RIA Novosti)
Itar-Tass: Six people get injuries in blast in Makhachkala
08.06.2010, 09.23
MAKHACHKALA, June 8 (Itar-Tass) -- Six people were injured in a blast which occurred in Akushinsky Avenue on Monday night. “Four people got different injures and another two were hospitalized with shell-shocks,” a spokesman for the Interior Ministry for Dagestan told ITAR-TASS.
As was reported earlier, a district police officer was injured in the blast.
The incident took place not far from the caf· Rubin near the wholesale market. According to investigators, “the remote control explosive device filled with nuts and bolts was placed near a VAZ-2107 car belonging to a senior district police officer of the Interior Department for the Sovetsky district of Makhachkala. The power of the explosive device was equivalent to 700 grams of TNT. The owner of the car didn’t suffer, the car was considerably damaged.
Itar-Tass: Justice of peace killed in Dagestan
08.06.2010, 10.22
MAKHACHKALA, June 8 (Itar-Tass) -- Justice of the Peace Abdurakhman Gamzatov was killed at his house in the settlement of Untsukul overnight to Tuesday.
“Unidentified bandits broke into the house of a 63-year-old judge at about 01.00 Moscow time and made two shots in the head of the judge,” sources in the republican law enforcement agencies told Itar-Tass.
A criminal case was instituted for murder and the illegal circulation of weapons and ammunition.
June 08, 2010 10:45
Interfax: Judge killed in Dagestan
MAKHACHKALA. June 8 (Interfax) - A judge was shot dead at his home in the Untsukul district of Russia's North Caucasus republic of Dagestan last night, a local police spokesman told Interfax.
"Judge Abdurakham Gamzatov was killed at his own home in the village of Untsukul at around 2:00 a.m. Obviously, he left the door unlocked. He sustained two gunshot wounds. He is believed to have been attacked with a pistol," the spokesman said.
An investigation is under way.
Gamzatov previously served as prosecutor of Dagestan's Gumbet district and headed the district administration.
tm ap
bne: Non Duma political parties get right to speak in parliament
bne
June 8, 2010
As part of Russian president Dmitry Medvedev slow move to a more open civil society, political parties that have no seats in the Duma or regional legislatures will be given the right to speak during parliamentary debates at least once a year, reports the Moscow Times.
The law comes seven months after Medvedev promised during a state-of-the-nation address to make life easier for smaller parties.
A quota system to allow smaller parties to enter the Duma during elections has also been introduced, however, the threshold 7% of the vote needed to get elected has not been lowered yet and is unlikely to be until after the 2012 round of elections.
bne: Kremlin misses IFC draft deadline
bne
June 8, 2010
Kremlin officials missed the June 1 deadline to draw a draft plan to turn Moscow into an International Financial Centre, a top government priority.
Russian president Dmitry Medvedev met with senior bankers this week to talk over proposals, but work to deepen Russia's domestic capital market, while moving forward, is not going well.
In April the president ordered the regulators to draw up a comprehensive plan by the start of this month. An advisory board was also set up and attached to the presidential executive, composed of representatives of Russian and foreign financial and consulting firms.
Currently Russia occupies 68th place in the GFCI international index rankings of financial centres. The Head of the Finance Ministry said that, "if divided into global, transnational and local markets, our potential is on a par with global financial centres such as Dubai, Beijing and Shanghai. It means that we are on top of the list in terms of potential."
Laws on clearing activities and on legal regulation of entitlement to securities are to become effective this year.
FT: Russia’s bumper grain harvest raises fears of glut
June 7, 2010 11:32pm
by Isabel Gorst
Russia will begin gathering grain crops this week in a harvest that promises to be large enough to fill home tables and leave a large surplus for export.
But what might be good news for consumers in Russia and around the world will pose a challenge for rival grain producers competing for market share.
A good harvest will also be a mixed blessing for Russian farmers facing a crisis amid plenty as domestic grain prices fall.
Russia is already one of the world’s top wheat exporters supplying the big cereal importers in North Africa and the Middle East. But the Kremlin sees greater opportunities ahead and has set a target to double exports in the coming 15 years.
Little more than a decade ago, Russia was dependent on US grain imports to feed itself. But it is now set to challenge the US dominance of world wheat markets as farms are modernized and fallow land is brought under the plough.
Russia could become the world’s top wheat exporter by 2019, helping to increase world food availability and easing global food security concerns, according to a recent report by the US Department of Agriculture.
Meanwhile, the US, the world’s largest wheat exporter since World War II, could slip into second place as its farmers switch acreage among other crops.
After gathering bumper harvests for two years, Russia is seeing a grain glut that is depressing domestic prices and discouraging investment. Its silos are still crammed with last year’s crops, adding to pressure to boost exports.
“The situation is not attractive. It does not bring any happiness to farmers,” said Arkady Zlochevsky, the president of the Russian Grain Union.
The Grain Union appealed to the government last week to subsidise grain exports for the first time to allow farmers to compete more aggressively on global markets. “We plan to help farmers live through these difficult times. [Export subsidies] will enable us to strengthen our position on world markets,” he said.
Agricultural analysts said it made no sense for Russia to subsidise exports and strive to be big for big’s sake.
“It does not matter who is the biggest or second biggest exporter, it matters who is the most profitable,” said Andrey Sizov, managing director of Sovecon, a Moscow-based agriculture consultancy.
Government funds would be better spent on building new grain processing industries to boost Russian production of food and livestock.
But Mr Zlochevsky said the Kremlin would stand by its plan to increase wheat exports through thick and thin. “The market always swings We are used to it. It is nothing new,” he said.
In a bid to diversify into Asian markets, Russia plans to build a grain export terminal on its Pacific coast and has entered a partnership with Japanese trading house to seek new buyers.
Russia Today: New farming project to revive Russian agriculture
08 June, 2010, 10:44
A farmhouse lifestyle - in return for your labour- and your animals watched over by web-cams. It's the reality on offer in the New Russian Village - a multi-million dollar private project.
The sun rises on a new agricultural dream. Not a collective farm – but a hybrid of farmer and managing company. New homes, state-of-the-art farms, competitive pay – a very different picture from the usual Russian countryside. A $170 million project to revive village life. It gives young farmers the chance to earn a thousand dollars a month – and to own a house and farm within a decade.
Pig farmer, Aleksandr, considers himself lucky to be part of the project.
“Not many believe it’s for real, however there is a huge competition to get a place here – about 100 people for one vacancy. I was lucky to get chosen.”
A Former welder, Aleksandr is already producing better results than the world’s top hogbreeders. Former crane operator, Luba, turned her hand to goats.
“Now the managing company thinks for us – provides us with animals and fodder. In 10 years it will be harder – we will be working by ourselves, but we will be earning much more.”
The village is packed with webcams so each farmer can find out any time – what’s going on at his farm. It’s all the brain child of a manager and a co-investor in the project – Yury Shevchenko. According to his plan – all livestock will be processed on-site, butchered and packed – and then sold directly from their own fleet of refrigerated trucks
“The whole production cycle from field to consumer is within our control. There are no middle men such as retailers. The village produces and sells its products itself – so all the value added stays in the village. 70% goes to the farmer and 30% to the managing company.”
Yury believes – the world may soon be fighting for food. This way, he says Russia with its vast land resources within 15 years should be able to feed itself and to export. Foreign investors could also help finance and manage such villages on Russian soil.
“In the West the agricultural market is saturated. Here in Russian agriculture you can still increase productivity 10 times! The pay-back of such an agricultural cluster is about 7 years – profitability is no less than 20%.”
For now, just a few farmhouses stand here – but the village is expected to be fully operational in a year or two. Only then will it be possible to say whether this project represents sunrise or sunset for the Russian village.
RIA: St. Petersburg court allows Gazprom skyscraper construction
10:56 08/06/2010
A court in St. Petersburg has given a green light for the construction of a 403-meter skyscraper in the heart of the city, despite President Dmitry Medvedev's disapproval, Russian business daily Kommersant said on Tuesday.
"We expected that - it was clear that a district court would not make a positive decision in such a high-profile case," said Maxim Reznik, leader of the St. Petersburg branch of Russian liberal party Yabloko, who are against the project.
"Although it looks like Judge Matusyak has simply dismissed the president's opinion," he added.
His statement comes after the Smolninsky district court dismissed on Monday a suit from an activist group, spearheaded by Yabloko, which oppose the Gazprom-led construction of the Okhta business center on one of St. Petersburg's UNESCO World Heritage sites.
Yabloko's suit had received an unexpected boost from President Dmitry Medvedev, who joined UNESCO's call to limit construction in late May.
The activists accused the city's authorities of flouting the City Planning Code, saying that under a 2001 law, buildings in the area cannot be higher than 100 meters.
They said the skyscraper would be a giant eyesore in the midst of the city, hampering access to heritage objects as well as spoiling the city's historic panoramas.
Yabloko used the president's support to accuse the city's authorities of a greater crime - that of the violation of international law, namely the Convention Concerning the Protection of World Cultural and Natural Heritage, which was adopted by UNESCO in 1972.
Governor Valentina Matviyenko gave the go-ahead for the construction in September 2009 despite strong public opposition.
Matviyenko is reported to have said in July 2009 that St. Petersburg had gained nothing from UNESCO and the organization was just "a pretty bow on the body of St. Petersburg."
The city's heritage protection unit said it hoped Medvedev's suggestions would make Matviyenko change her mind.
MOSCOW, June 8 (RIA Novosti)
RIA: Arshavin promotes Russia’s 2018 World Cup bid
08:54 08/06/2010
Russia may have failed to make this summer’s World Cup, but Arsenal star Andrei Arshavin will make an appearance in South Africa all the same - as part of a Russian delegation to promote the country’s bid to host the tournament.
“In terms of how we are promoting Russia’s bid, we have achieved a high level of mutual understanding - reminiscent of one-touch football,” bid head Aleksei Sorokin was quoted as saying by sportbox.ru.
“As well as government representatives - First Deputy Prime Minister Igor Shuvalov and sports minister Vitaly Mutko - we are pleased to welcome the symbol of Russian football, Andrei Arshavin, to our ranks. He will meet up with us in Johannesburg and strengthen our team,” he added.
Russia is competing with England, Australia, the United States, Spain and Portugal and Belgium and the Netherlands to host the World Cup in 2018
FIFA will appoint hosts for the 2018 and 2022 World Cups on December 2.
The 2010 World Cup kicks off on Friday with a match between hosts South Africa and Mexico.
Russia Today: Homeless children still a problem in Russia
08 June, 2010, 06:28
Thanks to charitable organizations and social services, the numbers of homeless children in Russia have gone down in recent years. Despite this, some still live on the streets.
Although it’s hard to gauge an accurate figure, since the fall of the Soviet Union thousands of children have become homeless.
Just a few years ago they were a common sight, children who had either been abandoned or escaped from abuse and families that very often had broken apart because of alcohol addiction and extreme poverty.
In the last decade, thanks to the efforts of charities and the government, many of these children have been placed in children's homes or shelters. But still today, there remain those who are simply falling through the net.
“I wasn’t beaten or anything by my mom, it just feels better living outside,” said Sasha Istomin, one of such children. “I walk around and get money by begging in Red Square or in various parks… We also watch to see if people are leaving a house, it means the house is going to be pulled down soon. In that case it’s better to get into a flat before others come and grab it for themselves.”
Despite being only thirteen years old, Sasha’s lived away from home for nearly a year. He’s lived here in a derelict building for a month without being removed by authorities and the living conditions are extremely poor.
Broken glass, alcohol bottles and cigarette packets litter the filthy floor and the smell of rotten garbage is overpowering… yet Sasha insists that this lifestyle gives him freedom, though while standing among the piles of waste one can’t imagine anything further from it.
“It seems to me that this situation requires serious government involvement,” claimed Elena Nikolaeva , chairwoman, Commission for Social Issues and Demographic Development, Public Chamber of the Russian Federation. “Authorities at different levels and the public should primarily understand the reason for homeless children in this country, today. In many respects the problem is that the family unit in Russia has a very low status. There is very little said about any serious family policy that would support, including economically, the family.”
Sasha described how the friends he’s made on the street feel like his family, and very often this lifestyle can be more desirable to children than the shelters where they find it hard to deal with discipline. But the reality is that life on the streets often ends with addiction, abuse, disease and even death.
“When the authorities find a child, they should first determine their legal status – meaning whether they have parents or not and the family situation,” explained Pavel Astakhov, Ombudsman for Children's Rights in the Russian President's Administration. “It should be defined within 6 months so that they can be sent to the correct place or returned to their parents. Over the past couple of years Russia has been trying to take all homeless children off the streets. But there will always be children who will run away.”
When RT’s film crew informed authorities about Sasha’s whereabouts, they went to pick him up.
“Sasha comes from a good family,” said Denis Stepanov, Commissioner for the Affairs of Minors from Pavlov Posad District. “His mother is a good woman. It’s just that he has no father and we think that’s why Sasha is often away from home. We’ve been monitoring him for two years and will hopefully arrange for him to be at a social centre summer camp this year.”
Although steps are being taken, it's still just the start of what will be a long road – trying to reintegrate these lost children to ensure they don’t once again end up on the streets alone.
VOR: Russian art fetches $15 million at Sotheby's
|Jun 8, 2010 10:03 Moscow Time |
Alexander Yakovlev’s Titi and Naranghe, daughters of tribal chief Yekibondo painting became the priciest lot at the Sotheby’s auction of Russian art treasures of the 19th and 20th centuries now underway in London. The painting Yakovlev made after a trip to Africa fetched $3.6 million. Blackwoods by Ivan Shishkin went for $1.8 million. 17 lots in all went under the hammer fetching $15 million. Russian icons and applied artworks will be auctioned off on Wednesday.
VOR: Russia lends a hand to its expats
Jun 8, 2010 10:35 Moscow Time
Russia is expanding its ties with Russian-language diasporas in and out of the former Soviet Union. A bill to this effect has just been approved in the first reading by the State Duma lower house of parliament. The blueprint terms as “compatriots abroad” ethnic Russians and also Russian-speakers with cultural, historical and spiritual links with Russia and feeling an urge to stay in constant touch with their historical homeland.
Russia is providing humanitarian and legal support for and protection of the rights of its compatriots living in various parts of the globe. At roughly 40 million, the Russian expat community is one of the largest around. Most of these people live in the former Soviet republics and about 10 million in the so-called “far abroad”.
"Work with compatriots abroad is going along several tracks," said Deputy Foreign Minister Grigory Karasin when submitting the bill to parliament. "All our compatriots abroad enjoy the unconditional help and support of the Russian state. We care much about where their children will live and study, we want them to feel good and assured about the future of their children and grandchildren. That’s exactly what this bill is meant for, containing a special clause for state support of compatriots willing to settle down here in Russia."
Nearly 20% of Russians and Russian speakers have already applied to relocate to Russia, along with their families. Within the next three months they will all receive Russian citizenship according to a facilitated procedure. The bill is a political statement of sorts, which State Duma deputy speaker Oleg Morozov sees as a sign of cooperation with and assistance for compatriots abroad becoming a major priority for Russia.
VOR: Press review
Jun 8, 2010 11:58 Moscow Time
Russia’s printed media are focused on the efforts to draft a reform of this country’s Interior Ministry. According to the Rossiyskaya Gazeta daily, the Russian leader is keeping a close watch on progress in the transformations. Dmitry Medvedev said that the objective is to invite professionals, honest people to the police ranks, the people that would serve as sentinels of the rights and interests of Russian citizens. Dmitry Medvedev formalized a number of provisions of the Interior Ministry reform, which is currently being drafted, by signing a spate of his own decrees and submitting a number of draft laws to the State Duma for consideration.
In Sochi, Vladimir Putin has again met the International Olympic Committee chiefs, reports the Komsomolskaya Pravda daily. The Prime Minister briefed the IOC officials on the ongoing construction of 72 sports facilities, of which 32 will have been commissioned by the end of this year. The Prime Minister pointed out that preparations for the 2014 Olympics are important for the entire south of Russia. 80% of infrastructure that’s currently being built is not directly related to sports, since these are roads, communications and power grids. The IOC officials decided that preparations for the 2014 Games are excellent. Jacques Rogge said following his inspection of construction sites that he wanted to make it perfectly clear that the Russians are doing a fantastic job.
The Izvestia daily reports that the Russian-Brazilian agreement on abolishing brief-travel visas for Russians going to Brazil and vice-versa has come into force. According to the Russian Foreign Ministry, citizens are exempted from the need to apply for a visa to enter, leave, stay in or while in transit of, the other country for a period of 90 days. Earlier Russia signed a similar visa-cancelling agreement with Turkey.
The international naval exercise Baltops-2010 has got under way in the northwest of Europe in the framework of the Partnership for Peace programme, reports the Rossiyskaya Gazeta daily. The exercise has been held for many years now solely to secure safe navigation on the Baltic Sea. Of course, the sea is generally less dangerous than southern seas, still drug barons and arms dealers are keenly interested in the Baltic Sea. This prompted the coastal states and their military and trade partners to jointly enforce order on sea lines. Russia has sent to that end the Kaliningrad large landing ship, reinforced by a Marine unit.
According to the Nezavisimaya Gazeta, the Sapsan project and other high-speed railway routes, currently being drawn up in Russia, are just the first effort to develop high-speed railway movement in this country. The velocity increment, achieved at the Moscow-St. Petersburg railway route, is actually insignificant. Given the situation, the railways chiefs have decided at the first stage to make the Sapsan rapid transit trains part of ordinary trains’ traffic schedule.
FOCUS: Russian press review (FOCUS News Agency)
[pic][pic][pic]8 June 2010 | 09:57 | FOCUS News Agency [pic][pic][pic]
Moscow. This week two international forums will take place in Turkey. They will pay attention to the situation in the Gaza Strip, Kommersant daily writes.
On Wednesday the issue will be discussed by the foreign ministers of the Arab League countries and on Tuesday Istanbul will host a meeting on the cooperation and confidence in Asia. The latter will be attended by the leaders of 20 states, including Russia. The idea of the forum is to become the Asian OSCE.
Despite the official information about the rise in incomes, the actual purchase power of the population remains low, Nazavisimaya Gazeta daily writes.
In order to increase the food demand at least, the Russian companies cut prices. But experts believe the drop in food prices even by 20% will not be able to restore the purchase power to the pre-crisis levels.
After Belarus said it will ratify, though with remarks, the documents concerning the Customs Union, the authorities in Minsk published Monday a list of the claims to Moscow within the framework of the future Single Economic Area, Kommersant daily writes.
Minsk thinks the low prices of Gazprom on Russia’s home market appear to be a subsidy for the Russian economy, describes as discrimination the inability to credit the Belarusian agriculture from Russian banks, and says Russia restricts the import of Belarusian medicines.
The Parliamentary Assembly of the Council of Europe (PACE) starts its won investigation into the A/H1N1 outbreak. On Monday PACE started giving hearings to find out whether the last year’s swine flu outbreak was real or a marketing move taken by the pharmaceutical sector in a secret agreement with World Health Organization (WHO) officials, Vremya Novostei daily writes.
At the first meeting in Paris there was a report claiming it was absolutely unsubstantiated for WHO to raise the level of influenza pandemic alert to the highest phase 6. What is interesting here is that a few days ago WHO once again refused to declare the end of the pandemic and reduce the level of alert.
National Economic Trends
RBC: Moscow to see inflation creep down to 6.5% in 2013
RBC, 08.06.2010, Moscow 10:52:32.Moscow's authorities expect the city's inflation to go down to 6.5 percent in 2013, according to the draft decree on the principals of Moscow's social and economic development until 2013. The document is set to be reviewed at the city's government meeting today. The forecast puts the consumer price index at 108 percent in 2010 (down from 111.8 percent in 2009), 108 percent in 2011, 107 percent in 2012, and 106.5 percent in 2013. At the same time, the industrial production index is projected to be at 104 percent in 2010, 105 percent in 2011, 106 percent in 2012, and 108 percent in 2013.
The document also provides for investments in fixed capital at RUB 784.9bn (approx. USD 24.71bn) in 2010, RUB 880.8bn (approx. USD 27.72bn) in 2011, RUB 1.023 trillion (approx. USD 32.2bn) in 2012, and RUB 1.240 trillion (approx. USD 39.03bn) in 2013.
Alfa: Cabinet considers limiting social payments and public sector indexation
Alfa Bank
June 8, 2010
According to Vedomosti, the Russian government is considering limiting public salary payments and social indexation in 2011-2012. However, as the budget effect of this measure would only be RUB37.3 bln for 2011 and RUB46.6 bln for 2012, and as elections are approaching, we believe this proposal is unlikely to be implemented.
The discussion of possible limits to public sector salaries and social payments is fuelled by the cabinet's intention of maintaining the budget deficit at a manageable level of 3.5-4.0% of GDP for the coming years. However, tight control over social spending does not seem to be realistic ahead of the upcoming presidential election. We also believe that the proposed RUB37.3 bln decline in social spending in 2011 and RUB46.6 bln in 2012 will have a very low financial contribution to reducing the RUB2.4-2.9 trln annual budget deficit, and at the same time very high social costs. Even if implemented, the potential cut in spending is equivalent to around 0.2% of Russia's annual private consumption and thus cannot have a material negative impact on final demand.
RenCap: CBR changes forex market intervention strategy
Renaissance Capital
June 8, 2010
The Central Bank of Russia (CBR) announced yesterday (7 June) that it has changed its intervention strategy in the forex market and introduced target interventions, with their volume depending on oil-price dynamics. According to the CBR, these variable volumes inside the CBR's floating band are aimed at weakening the predictability of exchange-rate fluctuations. We estimate the current account surplus in May at $6-7bn. So, it appears to us that yet again the regulator has committed to buying out the largest part of Russia's current account surplus and, in the current volatile environment, in order to implement this strategy the CBR seems to be taking a more flexible approach to interventions than before.
Based on the last week's forex market dynamics, the amount of the CBR's foreign currency purchases varied depending on how close the exchange rate was to the lower end of the floating band. According to our estimates, last week intra-day purchases inside the floating band were in the range of $200-500mn. We think the CBR is setting smaller bands inside the officially fixed bigger one of 33.40-36.40. Yesterday the CBR announced it had bought $4.3bn and around EUR1bn in May, with the largest part of those purchases attributed to target interventions ($3.4bn and EUR0.7bn). Therefore, in our view, despite the high volatility in global markets, the CBR continues to be committed to its strategy.
VTB Capital: CBRs FX interventions weaken the RUB in May, but appreciation ahead?
VTB Capital
June 8, 2010
News: The CBR has started to disclose more detailed data on its FX interventions. Previously, it only included net total purchases, gross planned purchases and gross planned selling. Now it will be possible to see gross total purchases and gross total selling as well.
The data for May reveals that the CBR bought about USD 5.6bn of USD and EUR. Planned interventions amounted to USD 4.3bn, or 75% of total FX purchases. According to the CBR, the regulator decides on planned FX interventions taking into account the balance of payment dynamics.
Our View: The May interventions data also confirms the previous announcement that capital inflows were positive that month (according to VIX Index, May was the most volatile of the past twelve months). This implies that the rouble has good potential to appreciate once European debt crisis woes subside.
The size of the CBRs FX interventions in May suggests that the rouble weakened last month not so much due to capital outflows but to the exchange rate management.
The planned interventions (USD 4.3bn) almost certainly exceeded the current account surplus in May. For example, in 1Q10 the current account surplus reached USD 9.7bn, i.e. about USD 3bn per month, and since then imports have recovered and average oil prices were only marginally higher in May than in 1Q10. On the back of the financial markets turbulence, this was probably enough to weaken the rouble as capital inflows were thin.
Aleksandra Evtifyeva
Business, Energy or Environmental regulations or discussions
2010-06-08 06:48
Reuters: Russian markets -- Factors to Watch on June 8
MOSCOW, June 8 (Reuters) - Here are events and news stories that could move Russian markets on Tuesday.
You can reach us on: +7 495 775 1242
STOCKS CALL (Contributions to moscow.newsroom@):
Gallion Capital: "We expect a neutral opening of trade in Russia; companies from the oil and gas sector will outperform the market."
Olma: "On the one hand, there was a negative close in Europe and the U.S., on the other hand there is the upward trend on Asian bourses and oil futures."
EVENTS (All times GMT):
MOSCOW- MTS Q1 results, conference call
ISTANBUL- Russian Prime Minister Vladimir Putin to meet Turkish Prime Minister Tayyip Erdogan.
MOSCOW- Adam Smith real estate forum (final day)
MOSCOW- Adam Smith forum on retail banking (to June 9)
MOSCOW- Agro-industrial Union holds annual summit
MOSCOW- AEB expected to publish monthly Russian car sales data for May
MOSCOW- Sberbank CEO German Gref attends a press conference organised by RIA news agency, 0900
MOSCOW- Finance Ministry to offer 50 billion roubles of temporarily available budget funds via auction for deposits at commercial banks
IN THE PAPERS:
AvtoVAZ, Russia's largest car maker, is set to diversify its output this autumn to include cheap snowmobiles, costing no more than 60,000 roubles ($1,888), Vedomosti reports.
Retailer X5 plans to slash prices for 25 percent of its products in Perekryostok stores, which could help turnaround the falling traffic trend, Vedomosti also writes.
Kommersant runs an interview with Eric Schmidt, chief executive of Google, who says the company will receive most of its revenues from advertising and would like to develop further in Russia.
TOP STORIES IN RUSSIA AND THE CIS:
COMPANIES/MARKETS: Sberbank to mull yr f'cast after record Q1 net
INTERVIEW-VTB aims to triple Asian operations
Yum Brands to buy Russia's Rostik's-KFC
PIK says portfolio value falls 13 pct
Protek reports 4.4 pct Q1 sales rise
Sibirtelecom okays merger with Rostelecom
Russkoye Morye sees sales rising substantially
ECONOMY/POLITICS: Russia, Belarus to hold talks on customs union
Russia cbank seeks to cap oil volatility in rbl
Weak oil drags Russian rouble down to 9-mth low
ENERGY: Gazprom sees no need for BP's Kovykta gas field
Gazprom, Greece sign S.Stream gas venture deal
COMMODITIES: Petropavlovsk mulls Hong Kong iron ore listing
Potanin says not interested in Uralkali
Novosibirsk tin plant seeks bankruptcy
MARKETS CLOSE/LATEST:
RTS 1,331.80 -0.67 pct
MSCI Russia 713.05 -2.07 pct
MSCI Emerging Markets 891.11 +0.16 pct
Russia 30-year Eurobond yield: 5.739 pct
EMBI+ Russia 284 basis points over
Rouble/dollar 31.7174
Rouble/euro 37.9350
NYMEX crude $71.64 +$0.21
ICE Brent crude $72.24 +$0.12
Reuters: Sberbank says looking to buy a top Ukraine bank
3:52am EDT
MOSCOW, June 8 (Reuters) - Russia's Sberbank (SBER03.MM: Quote, Profile, Research, Stock Buzz) is looking into buying one of Ukraine's top 10 banks, including Bank Aval, Dmitri Tarasov, director of strategic planning at the state-controlled lender, said on Tuesday.
"We are interested in acquisition targets in the top 10," he told reporters, adding that Sberbank would only be interested in a controlling stake.
Raiffeisen International (RIBH.VI: Quote, Profile, Research, Stock Buzz) on Monday denied a report that it was in talks to sell its Bank Aval BAVL.PFT arm, Ukraine's fourth largest bank, to Russia's biggest lender Sberbank. [ID:nWEA5134]
"We are looking at all possibilities, including the one you asked about," Tarasov said, when asked about the possibility of Sberbank buying Aval. (Reporting by Oksana Kobzeva; Writing by Toni Vorobyova)
VTB Capital: Russian sea: First trading update disappoints
VTB Capital
June 7, 2010
bne: Not good news for Russian companies planning to raise equity funding anytime soon. Russian Sea was the first IPO out of a 2010 pipeline initially forecast to total around $20bn. Whilst we'll inevitably see a much lower total after several following floats experienced problems, coupled with the rise of risk appetite globally, some will still be forced to seek equity finance this year to deal with heavy debt burdens. Given the share performance of Russian stocks following highly-priced IPOs pre-crisis, investors were already wary of the pricing of floats - this will do nothing to help forthcoming issues achieve the prices they hope to achieve.
Russian Sea has just reported weak 1Q10 operating results.
The company's performance was impacted by the extremely tough market conditions during the period. The significant undersupply of salmon and trout globally (due to low production in Chile and Norway as well as increased demand from the USA) resulted in an abnormal price surge in this category. The price increase in retail caused a serious decline in demand domestically. We note that the company's exposure to this segment accounts for almost 50% of its revenues (in both ready-to-eat and chilled & frozen).
In addition, the company did not start its full-scale regional expansion strategy in 1Q10 (hiring exclusive sales teams and sales representatives). As a result total revenues were down 9.6% YoY to RUB 3,936mn. In the ready-to-eat segment, revenues increased 0.8% YoY to RUB 937mn (6.7% volume decline, 12.2% average price increase), while in the chilled & frozen segment the top line decreased 11.9% YoY (9.8% volume decline, 2.3% average price decrease).
Management suggests that the abnormal market conditions seen in 1Q10 are now gradually reverting to norm, with prices declining. It is also worth noting the Russian Sea's profits are usually skewed to the second half of the year, and so the company will have a chance to catch up during the remaining quarters.
As stated in the press release, the growth in the ready-to-eat segment escalated from month to month: while sales in January 2010 were down 32% YoY, in February 2010 they were up 11% YoY and in March they were 19% higher YoY.
Management said that major improvements would be visible in 2H10 once the market had recovered and the regional expansion strategy gained momentum.
Bne: Petropavlovsk's iron ore assets to receive $60m in Hong Kong investment
bne
June 8, 2010
Russian miner Petropavlovsk Plc says it will take in $60m in investments from a group of investors based in Hong Kong to develop its iron ore business, formerly Aricom, now NPMHoldCo.
The company was planning to IPO in Hong Kong, but the investment announcement made on Monday suggests that it has gone for a private placement instead.
The iron ore assets are valued at $860m and are held by the NPMHoldCo subsidiary.
The company's major iron ore assets include the Kuranakh iron ore deposit in the Amur Region and the Garinskoye, Sutarskoye, Kimkanskoye and Bolshoi Seym iron ore projects in the Jewish Autonomous District.
Alfa writes: Petropavlovsk announced yesterday that it has agreed on terms with General Enterprise Management Services (GEMS) and CEF Holdings for an investment of $60 mln into the non-precious metals unit of the company in exchange for an approximate 7% equity stake in the unit. The proposed instrument carries a two-year put option (carrying an 8% per annum coupon) exercisable if the price of a proposed IPO of the unit falls below a certain threshold. Because the proposed structure allows the investor to pull out cash and a coupon return, based on the information available at this time and not knowing all the terms of the deal, we would think of this instrument as similar to a convertible bond not an equity investment.
The implied value of the unit was disclosed at $860 mln, which is slightly higher than our most recent estimate of $750 mln.
We believe this deal lends credibility to our view that the project will be successfully developed and further builds market confidence in the unit’s value. The key catalyst remains the finalization of a $400 mln long-term loan to finance the project. It is probable that this deal is contingent on, among other things, the completion of the long-term loan.
Emerging Markets: VTB Capital to boost its Asian business
by admin on June 8, 2010
By Ivan Anderzhanov
Russian investment bank VTB Capital intends to triple its Asian business by launching operations in Hong Kong and expanding further into China, Vietnam and India, according to a Reuters report.
VTB Capital currently employs about 30 people in Singapore, its only Asian office, which focuses on placing Russian government and corporate debt with Asian investors. It intends to raise that number to 100 over the next three years by expanding into equity capital raisings, trading and M&A.
VTB Capital currently employs about 750 people globally, up from 600 at the start of 2009. The bank has previously said it will boost numbers by 40 percent this year.
Arka.am: Bank VTB Armenia to merge with VTB leasing in one month
YEREVAN, June 8, /ARKA/. Mher Grigorian, a deputy CEO of Bank VTB Armenia, said Monday the process of the bank’s merger with VTB Leasing will be accomplished in a month. Speaking at a news conference he said Bank VTB Armenia will handle all the leasing transactions that the Russia-based VTB Group planned to carry out in Armenia.
Mher Grigorian said ‘the cost of money and profitability of the capital have led to the necessity to group and do business on behalf of one entity.’ He said also the restructured large companies are getting increasingly reluctant to work with mediators.
Mher Grigorian said also the bank extended 8.8 billion Drams ($23.3 million) worth mortgage loans in the first quarter of 2010. Bank VTB Armenia CEO Valery Ovsyanikov said earlier the bank released last year $40 million worth mortgage loans.
Bank VTB Armenia is owned fully by Russian VTB Group. At the end of March 31, 2010 its assets totaled 125.6 billion Drams, liabilities-99.8 billion Drams, the aggregate capital stood at 25.8 billion Drams, the chartered capital was worth 13.9 billion Drams, credit investments totaled 82.5 billion Drams. The Bank also earned 670 million Drams in net profits. ($1- 377.74 Drams). -0-
Moscow Times: VTB Asks State to Leave
08 June 2010
VTB Group may ask the government to sell the 8 percent of the lender’s shares that the government bought last year to support the stock’s price, Vedomosti reported Monday, citing unidentified VTB officials.
The government boosted its stake in the lender to 85.5 percent last year from 77.5 percent, the newspaper said. VTB officials will hold meetings with investors this month to gauge interest in the stock, Vedomosti said.
(Bloomberg)
Trend.az: IBA-Moscow enters rating of "The most profitable and efficient banks in first quarter of 2010"
08.06.2010 11:39
Azerbaijan, Baku, June 8 / Trend /
The subsidiary of International Bank of Azerbaijan (IBA) IBA-Moscow entered the RosBusinessConsulting's rating "The most profitable and efficient banks in the first quarter of 2010" taking the 193rd position in the TOP 500 profitable banks in the first quarter of 2010, the bank reported.
The bank took the 193rd position in the TOP 500 profitable banks in the first quarter of 2010, 120th - a ranking of efficiency of assets over the same period and 162nd - in the TOP 300 of the universal banks.
IBA-Moscow has also entered the RBC's rating "The largest banks of Russia in the first quarter of 2010" taking the 136th position on net assets (15 972.07 million rubles) and 129th - the loan portfolio (7 182.94 million rubles).
The IBA-Moscow is the first and only bank with full Azerbaijani capital operating in the Russian territory.
Rostov-on-Don is a major regional and international transport hub
TravelDailyNews: ASM to develop routes for Airport Rostov-on-Don in Russia
Tuesday, June 08, 2010
Manchester-based ASM, the world leader in route development for airports, has been appointed for a 12-month period to carry out a comprehensive route development project for Airport Rostov-on-Don in Russia. ASM will commence its work by supporting Rostov-on-Don in its route development activities at the Routes CIS event in Kharkiv, 7 – 9 June 2010.
The starting point of the project will be an in-depth statistical analysis, a review of the Rostov-on-Don catchment area and a competitor analysis. On this basis, ASM will formulate a route development strategy, identify route targets across all sectors and lay out an implementation plan for selected route targets.
Throughout the duration of the contract, ASM will support the airport in formulating a route development implementation programme, deliver meetings and prepare for and present at route development events.
Tony Griffin, Chief Operating Officer at ASM, commented: "Working in the CIS market during its recovery from world recession poses its challenges and great opportunities. We are delighted to work with such a dynamic airport as Rostov-on-Don, which, we believe, offers a great range of opportunities for routes to Europe, Asia and CIS, and allows us to reinforce our experience in the CIS market."
Roughly 670 miles southeast of Moscow, Rostov-on-Don is a major regional and international transport hub, located in a metropolitan area with a population of over 2.5m. The contract between ASM and Airport Rostov-on-Don was signed on 1 June 2010.
Bne: Kopeika forced to market?
bne
June 8, 2010
Rumours of a forthcoming IPO by food retailer Kopeika have kicked off again, with a report in Vedomosti. Quoting 'sources', the newspaper writes that owner Nikolai Tsvetkov will either float part of the company this year, or sell.
There was much anticipation at the start of the year that IPOs would flood out of Russia in 2010 - with suggestions that over $20bn was set to float. However, after early listings in April limped home, and since risk aversion has risen around the globe, many companies are now reassessing their plans, and hope to hang on without the need to tap equity funding. Some however, will be forced to accept investor pricing due to heavy debt burdens accrued during the crisis.
Reports of a forthcoming IPO from Kopeika first surfaced in mid-April. Sources then told media that the discounter chain aimed to raise as much as $500m in order to deal with debt of $350m.
Vedomosti reports that Tsvetkov is also considering selling the business to either X5 Retail or Wal-Mart. The US company said recently that it remains keen to enter the Russian market via an acquisition but has been held back by high price demands from potential sellers.
Bne: Coca-Cola invested €99m into Russian business in 2009
bne
June 8, 2010
American soft drinks producer Coca-Cola Ltd says it invested €99m to develop its Russian business in 2009.
Coke's Russian operation is controlled by the Greece's Hellenic Bottling Company, which is the exclusive bottler of Coca-Cola in Russia, the CIS and Europe.
The company continued to expand production capacity, and develop its sales and distribution infrastructure.
The company's share on Russia's market for non-alcoholic beverages at the end of 2009 was 21.7%, up by 0.7 of a percentage point.
Coca-Cola earlier said that total sales in Russia for 2009 fell by 13% to 299.7 million cases of production (nine liters per case), reports Prime Tass.
Coca-Cola has fourteen plants in Russia and over sixty distribution centres.
Bne: Russian car market returns to life
bne
June 7, 2010
Russia's carmakers were hit harder by the international economic and financial crisis than any other sector. But a state sponsored "cash for clunkers" scheme has been so successful the Kremlin decided to extend the programme in May as Russia becomes one of the few countries in Europe to see production recover.
Car sales rose on the year in April for the first time since October 2008, says David Thomas, chairman of the automobile manufacturers committee at the Association of European businesses. April also was the first full month during which the "cash for clunkers" program was run.
Russia's auto output rose 52.7% on the year to 330,321 units in January-April, reports ASM Holding, which monitors the country's auto industry, of which foreign-branded car output rose 66.8% on the year to 155,291 units, while domestic car output rose 40.9% on the year to 127,449 units.
Following America's lead, the Kremlin allocated RUB10bn ($333m) last year for the state-sponsored scheme to subsidies sales of Russian-made cars (including foreign brands manufactured in Russia).
More than 200,000 loans were made available and 65,000 cars have already been sold under the scheme. Russia's Minister of Industry Viktor Khristenko said at the end of May that the his ministry is still receiving some 2,500 applications for the scheme a day and that the government has decided to extend the scheme with another RUB10bn.
"The reason for extending the scrappage programme was the success of the first stage, which was due to end in June," say Elena Sakhnova, an analyst with VTB Capital. "International experience shows that sales drop dramatically once such programmes end, so the government decided to reallocate financing from other budget items to support domestic producers, which have just started feeling better."
Russia's economy contracted some 7.9% in 2009 but carmakers came to a virtual standstill as sales collapsed over night. Factories were closed and workers sent on enforced holidays. Russia produced 1.65m units by the summer of 2008, over taking Germany to briefly become the largest car market in Europe, but the sector was the worst performing in all of Europe in 2009, with production down 60% year-on-year to just 595,000 vehicles, according to the International Organization of Motor Vehicle Manufacturers.
The state has won praise of the speed with which it managed to implement the scrappage programme. The main beneficiary has been the state controlled giant Avtovaz, the maker of the iconic Lada, which accounts for 80% of the purchases made with the cash for clunkers money.
The company has seen sales recovery this spring and plans to produce 56,700 cars in June. The forecast for the whole year has also been upped to 570,000, or about a third of Russia's total car production in 2010, thanks to recovering demand. About half of the cars the company sold since the start of this year have been sold under the scappage scheme.
Of the few foreign carmakers included in the program, Renault was the most popular, followed by Volkswagen, which entered the cash-for-clunkers club with its new Polo sedan. Most of the world's biggest carmakers have built factories, mostly in the Russian cities of St Petersburg and Kaluga.
Car production will continue to recover this year, however, total production for 2010 is expected to reach 1.4m units, according to the Association of European Businesses - about half as many cars as Russia produced before the crisis struck.
And the pain has not stopped for carmakers. Russia's steel manufacturers hiked the cost of metal to the industry by 20% in May and Avtovaz has been forced to restructure, cutting its staff from 102,000 last summer to 72,000 now - an extremely painful decision as the local economy of its hometown of Togliatti is almost entirely dependent on the Avtovaz factory.
But further down the road, the future for Russia's car market remains bright. Russia stands out in emerging Europe as one of the better performers and few doubt Russia will regain its position as largest car market in Europe in the medium term. Despite the current overcapacity in the sector foreign manufacturers have continued to invest into new facilities in Russia.
Amongst the biggest deals announced in May, the Korean joint venture Hyundai-Kia said it will invest $450m into three new Russian plants to produce up to 500,000 cars a year, at stroke increasing Russia's total production by a fifth. Other large investors like Renault, Volkswagen and Ford (Russia's third, fourth and fifth largest carmakers respectively) also plan significant investments in the near future.
Activity in the Oil and Gas sector (including regulatory)
Abc.az: Russia begins importing American technologies for shale gas production
Baku, Fineko/abc.az. The United States is ready to provide natural shale gas technologies for the entire world.
In the course of his recent visit to Azerbaijan Richard Morningstar, special envoy of the US secretary of state for Eurasian energy, stated that the US was going to begin export supplies of technologies and equipment for shale gas production.
“Recently representatives of Russia who participated in the session of US-Russia Energy Security Committee displayed to those technologies. Currently technical documentation and tariffs for the start of supplies are under consideration,” Mr. Morningstar said.
Earlier it was claimed that by 2010 production of natural shale gas in the US reached 51 bn cu m but then the US Department of Energy stated that statistics was overstated and would be corrected.
“Of course, shale gas will hardly replace traditional fuel but it can become essential part of energy balance,” Mr. Morningstar emphasized.
Shale gas is extracted from strata of combustible shales in a way of drilling of horizontal wells.
June 8, 2010
Times: BP suffers $1bn setback in Siberia
The political storm engulfing BP intensified yesterday as the group came under renewed pressure on its Russian front.
Gazprom, the Kremlin-controlled gas monopoly, has raised new questions over the future of a giant gasfield in Siberia controlled by the British group’s Russian joint venture TNK-BP.
As at least two international brokerages cut their recommendations on BP to “neutral”, citing spiralling costs from the Gulf of Mexico oil spill and a potential cut to the dividend, Gazprom piled on the pressure by ending hopes that it might buy Kovytka from TNK-BP for up to $1 billion.
Speaking in Moscow, Viktor Timoshilov, the Gazprom executive responsible for Siberian developments, claimed that Russia’s gas export monopoly had no need for access to Kovytka’s resources because it had ample supplies elsewhere.
Last week, TNK-BP said that Rusia Petroleum, its unit that controls Kovytka, had filed for bankruptcy after a lengthy battle with the Russian State over the development.
The news is another body blow to BP, which yesterday announced some modest success in its efforts to contain the Gulf spill by fitting a cap on the leaking seabed riser pipe. The company said that it had siphoned off 11,100 barrels of oil on Sunday, a slight improvement on the previous 24 hours.
Discovered in 1987, the Kovytka field in Irkutsk contains an estimated two trillion cubic metres of gas and has been earmarked as a key source of energy supplies for China. Since the mid-1990s it has been majority-owned by TNK-BP, which started limited development of the field in 2001.
However, in the interim Moscow identified Kovytka as a strategic field that could be developed only by a company with majority Russian ownership. As the Kremlin has increasingly flexed its muscles over the country’s resources, state officials have repeatedly threatened to strip TNK-BP of its licence to develop Kovytka.
In 2007, TNK-BP struck a deal to sell the field to Gazprom for nearly $1 billion. But the talks subsequently ground to a halt.
Decreased demand amid the global economic downturn plus a glut of gas supplies have undermined the rationale for developing new gas projects.
Yesterday, a spokesman for BP in Moscow said that the future of the Kovytka field would be decided by a bankruptcy court in Irkutsk. He said: “It looks like the assets will be sold. It is hard to say when but I don’t expect it to be a very quick procedure.”
The remarks yesterday from Gazprom came a few days after President Medvedev questioned the future of BP. He said: “There is even an uncertainty as to what will happen to the firm. The nature of environmental responsibility is such that it can destroy anyone.”
Rusia Petroleum is 63 per cent-owned by TNK-BP, with the rest owned by other groups including the regional government of Irkutsk.
Separately, it has emerged that BP’s under-fire chairman Carl-Henric Svanberg is nursing a £1.4 million loss on shares he bought in the oil giant earlier this year.
The Swede, who joined BP on January 1, less than four months before the explosion on the Deepwater Horizon rig, paid £5.4 million for 925,000 shares in the company in two separate transactions in February and April. The average price Mr Svanberg paid was 584p a share. Yesterday the price had slumped to 432p each, making the shares worth just under £4 million.
Mr Svanberg, the former chief executive of Ericsson who has been heavily criticised for his low profile during the crisis, continued to buy shares in BP after the accident on the Deepwater Horizon.
He paid just under £1.1 million for 175,000 shares on April 28 — eight days after the deadly accident in the Gulf of Mexico. He had earlier paid £4.3 million for 750,000 shares at 575p each via his investment vehicle Chas Aludden — his first purchase of BP shares.
• The Government will set out plans today to strengthen its safety regime in the North Sea oil industry, doubling annual rig inspections and creating a new taskforce to examine the country’s ability to prevent and respond to oil spills (Robin Pagnamenta writes).
In the first official British response to the Deepwater Horizon spill, Chris Huhne, the new Energy Secretary, said that the events in the Gulf of Mexico were devastating and would have many long-term effects for the industry.
Mr Huhne said: “What we are seeing will transform the regulation of deep water drilling worldwide.”
He added that Britain’s safety and environmental regime was “fit for purpose”.
However, he continued: “But the Deepwater Horizon gives us pause for thought and, given the beginning of exploration in deeper waters West of Shetland, there is every reason to increase our vigilance.”
Gazprom
Hurriyet: South Stream to continue despite Ukraine deal
Monday, June 7, 2010
BARÇIN YİNANÇ
MOSCOW - Hürriyet Daily News
Russia will not abandon plans to build an alternative pipeline under the Black Sea that bypasses Ukraine despite a recent agreement between Russian gas monopoly Gazprom and the Ukrainian government, according to a company official.
“We will definitely go ahead with South Stream, despite the agreement with Ukraine, because we need different routes to carry natural gas,” Sergei Komlev, the head of Contract Structuring and Price Formation Directorate at Gazprom, told the Hürriyet Daily News & Economic Review in an interview in Moscow last week.
But the plans to diversify pipeline routes still do not include possible participation on the Nabucco project, a pipeline that would go to Europe via Turkey.
“We believe this is not an economic project but an ideological one,” said Komlev. “It was against Russia. Although we were later invited to join, we remain neutral to it.”
Under the deal reached last month, Russia agreed to a 30 percent drop in the price of natural gas sold to Ukraine in exchange for permission to extend Russia's lease of a major naval base in the Black Sea port of Sevastopol for another 25 years.
The deal, which followed elections that brought pro-Russian Victor Yanukovych to the presidency, may bring an end to years of disputes over natural gas prices, which culminated in Russia turning off the pipeline to Ukraine. The gas dispute left Ukrainians and many Europeans who depended on Russian gas pumped through Ukraine shivering during past winters.
Ukraine and Russia had been at odds ever since the Orange Revolution brought Yanukovych's anti-Russian predecessor, Viktor Yushchenko, to power in 2005.
“We are happy that Ukraine no longer plays the Russia-phobia game. We think that the improvement in our relations with Ukraine is in the interest of Europe as well,” said Komlev, adding that the deal with Ukraine is viewed also as an investment to relations with European customers.
Energy not a political tool
Komlev objected to criticism that Russia uses its natural energy sources as a political tool, saying the transformation from selling gas from subsidized prices to ex-Soviet republics to commercial arrangements after the dissolution of the Soviet Union had been difficult.
He said no one could show a single example of Russia using its natural resources for political purposes.
When asked about the recent deal with Ukraine, Komlev said it was the first time in Gazprom’s history that gas was being sold to another country at discounted price without harming the company’s shareholders.
“The government takes responsibility for this discount. It does not bother Gazprom,” he said, explaining that the discounted amount is coming out of Moscow’s pocket, not Gazprom’s. “The political deal is between Ukraine and the Russian government. It is not at the expense of the shareholders since Gazprom will get the same amount of revenue.”
The South Stream project, originally designed to bypass Ukraine, will continue, according to Komlev, who said Europe’s gas imports are expected to double in 2030 over their current levels. He also said Russia hopes to diversify its transport routes.
“We are a commercial company, we would obviously prefer to have Central Asian gas to pass from our pipelines since we will make a profit from transit fees,” he said. But Komlev believes there is also room for the Nabucco project as well, in view of Europe’s rising energy demand. “If Nabucco can secure the natural gas to carry, it’s fine.”
When asked why Gazprom insists on buying gas from Azerbaijan, he said it costs less to provide Russia’s southern regions with Azerbaijani gas as compared to providing it from Western Siberia.
Komlev also dismissed speculations that due to lack of investment, Russia might not be able to provide sufficient gas in the future. “There is no such risk,” he said. “I find it ironic that those who are calling on a reduction of imports from Russia to reduce dependence are those that also argue Russia will not have enough gas.”
Turkey a strategic partner
Komlev said Gazprom saw Turkey as its most important client.
Noting that Turkey is the second-biggest client in terms of volume, Komlev said bilateral energy relations were developing through deals on nuclear power plants and that constructing oil pipelines and gas deals were a part of those relations.
He declined to comment on the current negotiations on new purchasing deals, where there is speculation that Turkey could obtain a certain discount and a better take-or-pay arrangement.
Gas deals often endorse a so-called take-or-pay deal that requires the purchasing country to pay for the gas that it pledged to buy, even if it no longer needs to purchase it.
“Our relations are mutually beneficial,” said Komlev, adding that it is not in Russia’s interests to use natural gas as a political instrument against Turkey.
International Analyst Network: The geo-energy expansion of the South Stream pipeline project in the Balkans
07 Jun 2010
The geo-energy expansion of the South Stream pipeline project in the Balkans
The South Stream natural gas pipeline project was conceived originally as a 50-50 Russian-Italian energy project, relating to the creation of a pipeline between Gazprom and ENI, to transfer some 30 billion cbm from Russian to the EU. Since 2007 and the first agreement, some notable developments took place, that mostly include the introduction of several other countries into the project, mostly from the Southeastern European region.
The present synopsis provides the basic outline of this "Geo-energy" expansion by the Russian side along with key figures and historical notes.
South Stream and Austria
Austria signed an intergovernmental agreement with Russia to join the South Stream project on April 24, 2010.
Austrian energy company OMV was the first Western company to sign a long-term contract for
Russian gas deliveries in 1968. The annual gas consumption in Austria ranges around 8.6 bcm. In 2009, Gazprom sold 5.4 bcm of natural gas to Austria.
South Stream and Bulgaria
On May 15, 2009, the Bulgarian Energy Holding (BEH) and Gazprom signed a cooperation Agreement for Bulgaria’s participation in South Stream. BEH and Gazprom are going to create a 50-50 joint venture for the pre-investment feasibility study, design, construction, and operation of the Bulgarian section of South Stream.
Russia is the sole exporter of natural gas to Bulgaria. Deliveries began in 1974. Cooperation between the two countries is based on a series of agreements. In 2009, Gazprom delivered 2.6 bcm of natural gas to Bulgaria.
Bulgaria is planned to be South Stream’s landing point in the EU, just as Germany is for Nord Stream.
On January 18, 2008, the Russian and Bulgarian governments signed an intergovernmental agreement to cooperate on building a natural gas transit pipeline via Bulgaria.
The Bulgarian Parliament ratified the agreement on July 25, 2008. The ownership of the company that will build and operate the pipeline within the Bulgarian borders will be split equally between Gazprom and its Bulgarian partners.
South Stream and Croatia
On 2 March 2010, Moscow and Zagreb signed an intergovernmental agreement on building and operating
the Croatian segment of the South Stream gas pipeline. There is already a long history of Russian natural gas deliveries to former Yugoslavia, dating back to 1978.
The annual gas consumption in Croatia ranges around 3.2 bcm. In 2009, Gazprom sold 1.1 bcm of natural gas to Croatia.
South Stream and Greece
Greece signed an intergovernmental agreement with Russia to join the South Stream project on April 29, 2008. The Greek parliament ratified the agreement on September 2, 2008. South Stream is of vital importance to satisfy Greece’s increasing energy demand, which is expected to double in the next decade.
On May 15, 2009, the National Natural Gas System Operator (DESFA), a full subsidiary of the Public Gas Corporation of Greece (DEPA), and Gazprom signed a Basic Cooperation Agreement on Greece’s participation in South Stream.
On June 7, 2010 Gazprom and DESFA created the joint project company South Stream Greece SA on parity
basis (50% held by each company) for the implementation of the South Stream project in the territory of the Hellenic Republic.
Russia has been exporting gas to Greece since 1996, under a contract between V/O Soyuzgazexport and
DEPA. The annual gas consumption in Greece ranges around 4 bcm. In 2009, Gazprom sold 2.1 bcm of natural gas to Greece.
South Stream and Hungary
Hungary and Russia signed an intergovernmental agreement on South Stream on February 28, 2008. Within this framework, a business deal was closed between Gazprom and Hungary’s Development Bank on March 10, 2009, establishing a joint venture to carry out a feasibility study and later build and operate the Hungarian section of the pipeline.
In a separate agreement, MOL and Gazprom agreed to establish a 50 –50 joint venture to transform MOL’s Pusztafoldvar-Dus gas field in Southeast Hungary into an underground gas storage facility.
This will significantly increase the security of supply in the region. Russian gas deliveries to Hungary began in 1975. Panrusgaz, a joint Hungarian-Russian gas venture, was founded in 1994 mainly to import Russian gas. In 2009, Hungary received 7.6 bcm of gas from Gazprom.
South Stream and Serbia
On January 25, 2008, the Russian and Serbian governments signed a general intergovernmental energy agreement anticipating the construction of a South Stream section via Serbia. The agreement was ratified by the Serbian Parliament on September 9, 2008.
On October 20, 2009, Gazprom and Srbijagas agreed to set up the South Stream Serbia AG joint design venture (JDV), which will engineer, build and operate the South Stream pipeline section on the territory of the Republic of Serbia.
The joint venture, 51% held by Gazprom and 49% by Srbijagas, is expected to finalize the feasibility study of the Serbian section in 2010, while construction should start no later than 2011.
The annual gas consumption in Serbia ranges around 2.5 bcm. In 2009, Gazprom sold 1.5 bcm of natural gas
to Serbia
South Stream and Slovenia
Slovenia signed an intergovernmental agreement with Russia to join the South Stream project on
November 24, 2009.
There is already a long history of Russian natural gas deliveries to former Yugoslavia, dating back to 1978.
The annual gas consumption in Slovenia ranges around 1.1 bcm. In 2009, Gazprom sold 0.5 bcm of natural gas
to Slovenia.
Russia Today: Gazprom looks to the east for new export markets
08 June, 2010, 10:31
Europe's weakened gas demand market is leading Russia's gas export monopoly to Asia. Gazprom is considering liquefied natural gas sales to India, and has bigger ambitions in China.
The Sakhalin 2 oil and gas project is Gazprom's only route to Asia from the east of Russia. The company is on target to supply 9.6 million tonnes of LNG each year to Japan and South Korea. Gazprom is also supplying other Asian markets like India, Taiwan and Singapore – though not yet on a contract basis. And that's also true of China, the market that Gazprom is most keen to enter, says Stanislav Tsigankov, head Gazprom’s international business unit.
“Unfortunately so far the Chinese don't have any experience of striking long-term contracts to supply gas via pipeline so we have to agree to a number of other conditions like volumes of supply, flexibility, inequality – all this is being set up now.”
Price is the key issue – or rather a stumbling block – in the gas partnership with China, according to Sergey Pravosudov, General Director of the Institute of National Energy.
“The Chinese are keen to get the maximum discount for Russian gas. Initially they wanted to tie the price of gas to that of home-produced coal. However, Gazprom insists on binding the gas price to a basket of oil products on long-term contracts – as it does with other countries.”
Gazprom's gas supplies to other customers like Japan are based on long-term contracts. But those markets are a drop in the ocean compared to fast-growing China which could be worth as much as 80 billion cubic meters of Russian gas annually.
EUobserver: EU officials distance themselves from Gazprom stunt
VALENTINA POP
Today @ 09:23 CET
EUOBSERVER / BRUSSELS – Current and former top EU officials on Monday (7 June) denied that they have any connection with Gazprom in a yachting project which has been flying the EU flag for the past six years but which is now sponsored by the Russian firm.
The EU-flagged boat "Esimit Europa 2" is to be launched on Thursday (10 June) in Cannes at an event hosted by Gazprom chief Alexei Miller and will take part in eight regattas this year. On its inner sail, the logo of the Russian gas company features prominently under the EU flag and the inscription "European energy."
Gazprom is Russia's largest energy company and is keen to expand in the EU.
It has a shady image, however. Run by Russian Prime Minister Vladimir Putin's close circle of friends with links to the KGB, it is widely seen as a tool of Russian foreign policy. Its public profile was further damaged by the 2006 and 2009 gas supply crises involving Ukraine.
On its website the Esimit project is said to be "under the patronage of EU commission president Jose Manuel Barroso." A video clip also includes a spoken testimonial by Pat Cox, a recent president of the European Parliament, who says the "spirit of Europe is captured at the heart of this project."
Both Mr Cox and Mr Barroso were quick to distance themselves from Gazprom when queried by this website, however.
Mr Cox said that the footage dates back to a few years ago, before Gazprom became the main sponsor of the project earlier this year. "I was not involved in any negotiations on sponsorships and have no commercial interest in the matter," he said.
He explained that his initial endorsement came about in 2004, when he was still Parliament chief, as an act of "good will" for the boat scheme, which involves flying the EU flag in various regattas and having a multi-national crew. A few years later, during a visit to Ljubljana, the Slovenian team behind the Esimit project asked him to film the video testimonial.
"I knew they were looking for sponsors, but I wasn't asked about any sponsor and I have nothing to do with Gazprom," Mr Cox said.
A spokesman for the EU commission also said that Mr Barroso endorsed the project before Gazprom came on board. "He gave his patronage to this project in November 2006. There was no money involved, it was a simple patronage like so many other EU and national dignitaries do," commission spokesman Mark Gray said.
Neither Mr Barroso or Mr Cox are considering withdrawing their support for the project over the Gazprom link, however.
Nor have they complained about having their faces and names attached to the Gazprom logo, Gorazd Mauri, the public relations manager for the yachting project, told EUobserver.
"The European Parliament and Commission's patronage is just for the yacht. It's a written support allowing us to fly under the EU flag. They were informed when Gazprom became sponsor and so we haven't had any complaints about it," Mr Mauri said.
Aware of the EU-Gazprom controversies in recent years, Mr Mauri said the sponsorship had no political implications.
"Gazprom decided to sponsor us because of the vision it promotes – all Europeans on the same boat. We want to win, we are honoured to be have such a distinguished sponsor," he said. Asked who would benefit the most, Gazprom or the EU, if the yacht won any of the competitions it is to take part in, Mr Mauri pointed to the motto of the project "all Europeans together on the same boat."
The Esimit sponsorship, worth several million euros, is not the only sports-related Gazprom PR project. The Russian firm is also sponsoring German football club FC Schalke, for which it pays €25 million a year.
Hydroworld: Gazprom to help build several hydropower plants in S. Ossetia
A network of hydropower plants is to be built in South Ossetia, South Ossetian Prime Minister Vadim Brovtsev said in Tskhinvali on June 7.
"The energy ministry has held talks, followed by the decision to build at least seven hydropower plants by the Gazprom - South Ossetia joint venture. A project to build a thermal power plant is being negotiated," he said.
The contract to set up the Gazprom-South Ossetia joint venture was signed on April 6 2010 by Brovtsev and Gazprom CEO Alexei Miller. It envisions South Ossetia's gasification under an investment project, as well as the development and introduction of gas-saving know-how.
Also, information technologies will be developed in the gas-supply system, and environmental friendly and rational utilization of the natural environment will be guaranteed.
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