Russia - WikiLeaks
Russia 091002
Basic Political Developments
• Bloomberg: U.K.’s Miliband to Visit Russia, Try to Thaw Relations, FT Says
• Interfax: Miliband getting ready for first Russia visit
• Russia Today: Iran agrees to further cooperation - Russia is ready to help
• The Georgiasn Times: Russian Foreign Minister to arrive in Sokhumi
• RIA: Russian FM Lavrov to discuss Geneva talks in Abkhazia
• NEWS.am: Russian FM addresses message to Yerevan conference
• Russia Today: Obama new missile defense policy to shield Russia too?
• Itar-tass: Lavrov, Clinton to discuss Mideast settlement in Oct – Nesterenko
• AP of Pakistan: India to acquire 50 more Sukhois to face Pakistan, China: IAF Chief
• Daily Times: US to lose Afghan war if Soviet mistakes repeated’ - Zamir Kabulov, a veteran diplomat who worked in the Soviet embassy in Kabul throughout the Russian occupation of Afghanistan in the 1980s, said the gloomy picture of present-day Afghanistan reminded him of his own diplomatic past.
RIA: New NASA chief to hold talks in Russian Mission Control
• Israel MFA: President Peres meets with Russian Deputy PM Zubkov
• Interfax: Russia's government to help strengthen the presence of the Russian Church in the Holy Land
• Prime-Tass: Russia, Belarus, Kazakhstan may complete WTO talks within 2 yrs
• RIA: Post-Soviet states to hold military drills in Kazakhstan
• RBC: Transnistria's President insists on Russian military presence
• Trend.az: Russia hardly to support energy projects in Tajikistan without agreement with Uzbekistan: expert
• Kyivpost: Tajik parliament reducing Russian language status
• Reuters: Siemens, Rosatom may sign JV deal in 2009
• Reuters: UPDATE 1-Russian uranium miner ARMZ eyes projects with Cameco
• Business Wire: 2009 Taiwan Trade Mission to Russia
• RBC: Gov't to consider Rusnano budget until 2015
• RIA: Stranded Russian sailors go on hunger strike in Dubai
• RIA: Chechen troops kill 7 militants in special operation
• Interfax: Eight militants killed in southeast of Chechnya - Kadyrov (Part 2)
• Reuters: Kadyrov-led Chechen police kill 8 "bandits"- spox
• Itar-Tass: Car explosion in N Caucasus city kills one person
• RIA: Russian customs officers arrest 2 drug mules in Orenburg airport
• AP: Scientologists win rights case against Russia
• Aysor: 19-years-old Armenian killed in attack in Moscow
• RIA: Russia's richest woman sues former deputy PM for defamation
National Economic Trends
• RIA: Russian monetary base down $950 mln in week to $133.8 bln
• Rencap: Ministry of Finance increases withdrawals from Reserve Fund
• Financial Post: Oil will fuel Russia's growth
• Russia Today: Unemployment on the wane as Russian market revives
• RBS: Russia - data update
Business, Energy or Environmental regulations or discussions
• Bloomberg: MRSK, Gazprom, OGK-1, Norilsk Nickel: Russian Equity Preview
• BNE: COMMENT: Russian equity - play it again, Dmitry
• Itar-Tass: Opel acquisition deal to be finalized within days – Gref
The Moscow Times: Sberbank Eases Criteria for Loans
The Moscow Times: Gold Output Up on New Projects
Reuters: Russian investor buys more Facebook shares-sources
• Bloomberg: Russian Watchdog Says Nokia Broke Competition Laws, Debates Fine
• Alfa: Acron in talks to attract $2.2 bln for apatite and potash projects, may sell 8.1% stake in Silvinit
Activity in the Oil and Gas sector (including regulatory)
• Bloomberg: Russian Crude Production Rises to Post-Soviet High (Update1)
• Reuters: UPDATE 1-Russia Sept oil output hits record 10 mln bpd
• : Russia Targets Annual Production of 3.9 Billion Barrels of Oil and 940 Billion Cubic Meters of Gas
• Today.Az: Azerbaijan to export 1.5mln cu.m of gas to Russia per day
• RenCap: Russia's oil products export duty regime may change from 1 Jan 2010
• RBC: Russia weighs unifying export duty on oil products
• Oil & Gas: MET suggests equalizing light & heavy export duties Reuters: Russia's LUKOIL stops production at Odessa refinery
• Ukrainian Journal: Russia’s Tatneft increases claim in Ukrtatnafta dispute to $2.4b
• The Moscow Times: State to Create New Geology Holding
• UralSib: Sistema starts consolidation of BashTEK assets
• BusinessWeek: U.S. Warns Europe of Russian Energy Threat - Washington supports EU plans to build a natural gas pipeline from the Caspian, but a senior U.S. official cautions the project is 'only a piece of the puzzle'
Gazprom
• Nasdaq: Gazprom: Europe Demand For Russia Gas "Flattening Out" In Sept
• RBC: Gazprom may have new competitor in Europe
• Oil Online: DONG Energy doubles its future gas supplies from Gazprom
• RenCap: S&P downgrades Gazprombank to BB
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Full Text Articles
Basic Political Developments
Bloomberg: U.K.’s Miliband to Visit Russia, Try to Thaw Relations, FT Says
By Alan Purkissc
Oct. 2 (Bloomberg) -- U.K. Foreign Secretary David Miliband will visit Russia on Nov. 2 in an attempt to improve relations between the two governments, the Financial Times reported, citing unidentified Russian officials.
One of Miliband’s first actions as foreign secretary in 2007 was to expel four Russian diplomats after the poisoning in London of Andrei Litvinenko, a former KGB officer; Miliband also halted U.K.-Russian cooperation in several areas and Britain has asked Russia to extradite Andrei Lugovoi, who, prosecutors allege, carried out the murder, the newspaper said.
A key question for Miliband’s visit will be whether the U.K. is prepared to drop some of the penalizing measures it adopted in 2007, the FT said.
Click here for web link
Last Updated: October 2, 2009 00:33 EDT
Interfax: Miliband getting ready for first Russia visit
MOSCOW. Oct 2 (Interfax) - UK Foreign Secretary David Miliband is
expected to pay his first visit to Russia in early November.
"Such a visit is expected to take place on November 2," a source in
the Russian Foreign Ministry told Interfax on Friday.
The agenda of Miliband's visit will involve a wide variety of
bilateral and international issues, the source said.
David Miliband, who was appointed to the post of UK foreign
secretary in the summer of 2007, has not yet visited Russia due to an
abrupt cool-down in bilateral relations following the murder of former
security officer Alexander Litvinenko in London and Russia's refusal to
extradite businessman and MP Andrei Lugovoi, whom the UK authorities
regard as a chief suspect in Litvinenko's killing.
London took a number of measures in response to Moscow's position,
including steps to "freeze" cooperation between law enforcement services
and to suspend talks designed to ease visa rules.
The Russian authorities reacted by deciding to suspend the drafting
of a Russian-UK agreement on culture centers, the absence of which
considerably complicated the functioning of the British Council in
Russia.
However, UK and Russian officials have given high marks to the
level of bilateral trade and business relations.
Russia Today: Iran agrees to further cooperation
02 October, 2009, 11:29
Iran has agreed to cooperate with IAEA and is likely to invite agency inspectors to its second enriching facility in next few weeks. Further talks are also to take place.
The six powers have met with Iranian officials in Geneva for talks over its nuclear ambitions and agreed on three crucial points to answer unresolved questions. This includes further talks, planned for October.
Tehran has also pledged to allow inspectors from the International Atomic Energy Agency to visit the second uranium enrichment facility near Qom, the existence of which was revealed last week at the G20 summit in Pittsburgh. Plus, Iran has agreed to outsource some of its uranium enrichment to third-party countries.
“In consultations with the agency [IAEA] and under margins of today’s meeting it was agreed in principal that low-enriched uranium produced in Iran would be transported to third countries for further enrichment and fabrication into fuel assembles for the Tehran research reactor, which produces isotopes for medical applications," said Javier Solana, the European Union foreign policy chief.
Iran's Chief negotiator, Saeed Jalili, also struck an optimistic note about Thursday's negotiations.
"First, we agreed to continue our talks and secondly we decided to base them on the common ground that we raised in our package of proposals, the common ground what we have agreed upon.We will set the time and venue for the next talks within the next month," Jalili said.
Saeed Jalili also noted, though, that the media pressure was high during the negotiations.
“We are witnessing media terrorism, a fabrication of a fearful atmosphere, some ideas injected, while these threats are not real. And on the other hand, some of the real threats are being neglected,” Jalili said.
The Iranian negotiator made his point about the media even more poignant when he refused to answer a question from an Israeli reporter.
The U.S. and Iran also sat down for bilateral talks during a break in the meeting, what signaled a significant step forward from past U.S. policy of not negotiating with Tehran.
Nevertheless, the US later indicated that punitive actions will be back on the table if there is no progress by December.
“Today’s meeting was a constructive beginning,” said President Barack Obama. “But it must be followed with constructive action by the Iranian government. If Iran doesn’t take steps in the near future to live up to its obligations, then the US will not continue to negotiate indefinitely and we are prepared to move toward increased pressure.”
The Geneva talks included Iran and the 5 permanent members of the UN Security Council, France, the United States, Britain, China, Russia plus Germany.
Russia is ready to help
Russia says it could additionally enrich Iranian uranium (4% enrichment) to 19.75% in the framework of the International Atomic Energy Agency’s project on making fuel for a Tehran research reactor, a source familiar with the talks told journalists, according to Interfax and Itar-Tass news agencies.
“Russia views this idea positively,” the source said. “If the request comes from the IAEA, we will be ready to accept and additionally enrich this uranium.”
As for the fuel itself, Iran will have to order it from France, the source added, as the Iranian research reactor was built by Argentina, which used French technology.
“After the enrichment Russia can pass the fuel to France or Argentina, which can then make the fuel assembly for the Iranian research reactor,” the source said.
A 19.75% enrichment conforms with the IAEA standards for civilian nuclear materials.
The Georgiasn Times: Russian Foreign Minister to arrive in Sokhumi
Russia plans to sign an agreement with the Abkhazian puppet regime about the visa free regime with Georgia`s breakaway region. Russian Foreign Minister Sergey Lavrov will arrive in Sokhumi today in this regard.
Within the visit, the Russia`s firs diplomat will negotiate with the separatist leader Sergey Bagapsh and the foreign minister Sergey Shamba. The sides will discuss bilateral relations and the results of the Geneva international consultations.
Lavrov also plans to hold meetings with the local staff of the Russian Federal Service dislocated in Abkhazia and the seventh base of the Russian Federation.
It will be Lavrov`s second visit to the occupied region since Russia recognized independence of Abkhazia and South Ossetia from Georgia.
Rustavi2 2009.10.02 12:07
RIA: Russian FM Lavrov to discuss Geneva talks in Abkhazia
05:1002/10/2009
MOSCOW, October 2 (RIA Novosti) - Russian Foreign Minister Sergei Lavrov is arriving in Abkhazia on a two-day visit Friday to discuss the latest round of Geneva discussions on the situation in the Caucasus and meet with the Russian military.
Foreign Ministry spokesman Andrei Nesterenko said prior to the visit that Lavrov is scheduled to hold talks with Abkhaz President Sergei Bagapsh and Sergei Shamba, the foreign minister of the former Georgian republic.
They will discuss the seventh round of talks between representatives of Abkhazia, South Ossetia, Georgia, Russia, the United States, the EU and OSCE on the situation in the South Caucasus held in Geneva on September 17.
"The participation by Abkhazia, on an equal basis, with Russia and Western partners in Geneva discussions, as well as in joint mechanisms to prevent incidents in border areas and react to them, vividly confirms that Sukhumi's opinion should be further taken into account when considering the region's vitally important issues," Nesterenko said.
Lavrov will also meet with the command of the 7th Russian base and the Russian Federal Security Service border department for Abkhazia.
Russia recognized the independence of the former Georgian republics of Abkhazia and South Ossetia last August after a five-day war with Georgia over the latter, which was attacked by Tbilisi in an attempt to bring it back under central control.
Under mutual assistance treaties signed last November, Russia pledged to help South Ossetia and Abkhazia protect their borders. Moscow promised significant financial support to rebuild the republics, which had been de facto independent since the early 1990s.
NEWS.am: Russian FM addresses message to Yerevan conference
13:19 / 10/02/2009
Russia has consistently been for the consolidation of peace, stability and security, mutual confidence, friendly relations and tolerance in the Transcaucasus, RF Foreign Minister Sergey Lavrov said in his message to the scientific and practical conference “Security in South Caucasus: realizing interests of regional nations”, which has been opened in Yerevan.
Minister Lavrov expressed the confidence that the Caucasian peoples, which have for centuries been living together, will settle disagreements and turn the region into a zone of peace and prosperity.
“Due to various factors, including geopolitical ones, the Caucasus has turned into a ‘nerve knot’ of international politics,” Lavrov said. The Russian FM expressed the opinion that these complicated processes need to be thoroughly considered by the scientific community, civil institutions and public.
Russia Today: Obama new missile defense policy to shield Russia too?
02 October, 2009, 12:57
The US administration's recent decision to scrap plans for an anti-missile defense shield in Europe has warmed relations with Russia, but replacing it with a new shield is now on the agenda.
As missiles blasted off in Iran, the debate about President Barack Obama's new missile defense plan was launched in the US and it has left even the most eloquent in Washington tongue tied.
“It is very clear that nothing that we did had anything to do with getting something from Russia,” said Ellen Tauscher, US Under Secretary of State for Arms Control and International Security.
But the timing of the announcement raised a few eyebrows among members of Congress.
“It occurred on the eve of the negotiations with Russia on the START treaty, and we know President Medvedev has suggested that progress on START could hinge on the US giving up its European missile defense plans,” said one of the members of Congress.
And while US foreign policy and military experts insist the decision had nothing to do with Russia, they're not afraid to acknowledge the benefits.
“We're obviously aware of the ancillary benefits of working more closely with Russia… our NATO allies are very interested in working and engaging with Russia,” said Tauscher.
The Bush-era missile defense plan is now officially dead. Experts say the new one is more powerful, cost-effective and mobile.
While members of Congress couldn't all agree on the motivation behind the new plan, they all did seem to believe that missile defense is important to counteract the growing threat from Iran, a threat that the US believes also endangers Russia.
“Russia shares the same threats that we do from short, medium and long-range missile missiles from Iran,” said Tauscher.
And despite the new plan, people behind it say the US is not abandoning its old friends – provided those friends actually understand what the new plan means.
“In the case of Poland, it’s changing literally the reference to a ground-based interceptor, capital letters, to a ground-based interceptor, lower case,” said Lt. Gen. Patrick J. O'Reilly, director of the Missile Defense Agency.
Itar-tass: Lavrov, Clinton to discuss Mideast settlement in Oct – Nesterenko
01.10.2009, 18.07
MOSCOW, October 1 (Itar-Tass) - Middle East settlement will be in the focus of a meeting between Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Hillary Clinton in Moscow, Foreign Ministry spokesman Andrei Nesterenko said on Thursday.
“The Middle East settlement will be central at the meeting between the Russian foreign minister and the U.S. Secretary of State due to take place in Moscow in October,” Nesterenko said.
According to U.S. State Department spokesman Ian Kelly, Hillary Clinton will visit Moscow in the middle of October to take part in the first session of the bilateral president’s commission set up by Russian President Dmitry Medvedev and U.S. President Barack Obama during the American leader’s visit to Moscow in July.
The commission will include two working groups on different directions. Among them Kelly named such as nuclear power engineering and nuclear security, weapons control and international security, the fight against terrorism, countering illicit drug trafficking, the development of business relations and trade and economic relations, energy and the environment, healthcare, science and technologies, educational and cultural exchanges, and civil society.
Under the agreement reached by the Russian and U.S. presidents, work of the commission will be coordinated by the foreign ministers of both countries – Sergei Lavrov and Hillary Clinton.
|AP of Pakistan: India to acquire 50 more Sukhois to face Pakistan, China: IAF Chief | | | |
| | | | |
|NEW DELHI, October 2 (APP) India will acquire fifty more 50 Sukhoi-30MKI multi-role aircraft to counter Pakistan and China. In an|
|interview with ‘Times of India’ Indian Air force Chief Air Chief Marshal P V Naik said his force was indeed interested in |
|acquiring more Sukhois, which will be the mainstay of India’s fighter fleet for the forseeable future. |
|These 50 new Sukhois will be in addition to the 230 of these twin-seater fighters already contracted from Russia in three deals |
|worth upwards of $8.5 billion, the daily said. |
|IAF has already inducted 105 of the 230 Sukhois. It has also started their deployment in North-East close to China border. |
|India has already deployed these aircraft on Pakistani side. Two more squadrons will be stationed by 2011. |
|The government has directed Hindustan Aeronautics to produce 140 of the 230 Sukhois under transfer of technology by 2015 at all |
|costs. |
|India’s “dissuasive deterrence” military posture is based on deployment of Sukhois as well as the 3,500 km nuclear-capable |
|Agni-III missile, which will be ready for operational deployment by 2011, and the 5,000 km range Agni-V missile in the pipeline, |
|the daily added. |
|India is embarked upon a major modernization programme including acquisition of Israeli AWACS, aerostat radars and American |
|C-130J ‘Super Hercules’ aircraft. |
Daily Times: US to lose Afghan war if Soviet mistakes repeated’
* Russian envoy says ‘gloomy’ Afghan scenario reminiscent of past
* McChrystal says insurgency growing, military success ‘can’t be taken for granted’
* UK for talks with lesser elements of Taliban
KABUL: The United States risks losing the war in Afghanistan if it continues to repeat the mistakes that once helped the Taliban's forerunners defeat the Soviet Union, Russia's outgoing ambassador in Kabul said.
Zamir Kabulov, a veteran diplomat who worked in the Soviet embassy in Kabul throughout the Russian occupation of Afghanistan in the 1980s, said the gloomy picture of present-day Afghanistan reminded him of his own diplomatic past.
“There are many similarities between the Soviet embassy of the 1980s and the American embassy of 2009,” he told a group of reporters late on Wednesday ahead of his departure next week.
“There are a lot of similarities as well as differences. The outcome in both cases is quite poor. It makes me feel very sad that after having spent so much time in Afghanistan ... I am leaving a country that is still at war without any firm prospects of improvement,” added Kabulov.
The remarks by the Russian ambassador, whose surname coincidentally means “from Kabul” in Russian, come at a time when NATO-led troops are engaged in the fiercest fighting in Afghanistan since 2001, when the Taliban were forced from power.
Twenty years since Moscow's humiliating withdrawal following its own 10-year war, Kabulov's words resonate in Kabul's diplomatic circles.
“Neglect of the population. Failure in establishing firm cooperation with local communities. Leaving them at the behest of the enemy,” Kabulov said, listing examples of Soviet mistakes he believed were now being repeated.
Speaking at the lavishly refurbished embassy compound, ransacked in the post-Soviet mayhem of the 1990s, he said the country was slipping back into chaos because efforts to rebuild the economy and win people's “hearts and minds” came too late.
“If you compare the situation with five or six years ago, it is of course much worse,” he said. “Our partners have lost a lot of opportunities to really control the country, to help assist the Afghan government, ... provide law and order.”
Kabulov said, however, that scaling down US forces in Afghanistan at this stage would be another mistake.
Insurgency growing: The head of US and NATO troops in Afghanistan said on Thursday that the insurgency in the country was growing and the success of the military campaign there could not be taken for granted. General Stanley McChrystal described the situation in Afghanistan as serious. “Neither success nor failure can be taken for granted,” he said in a speech in London.
“It is complex, difficult terrain, both the land and the people. It is a tribal society with a culture vastly different from what most of us are familiar with,” he told the International Institute for Strategic Studies.
“I discount immediately anyone who simplifies the problem or offers a solution ... or says 'this is what you have got to do' because they absolutely have no clue about the complexity of what we are dealing with.
“In Afghanistan, things are rarely as they seem and the outcomes of actions we take, however well intended, are often different from what we expect.”
Also on Thursday, Britain's Defence Secretary Bob Ainsworth said any increase in soldiers was some way off and not guaranteed. “Before I agree to any increase in troop numbers, I must be sure that the balance of risks is acceptable by evaluating the capacity of the supply chain to properly equip an increased force,” he told the Labour Party's annual conference.
Talks: Speaking at the same meeting, Foreign Secretary David Miliband repeated a call for talks with lesser elements of the Taliban if the poison was to be drawn from the insurgency. "The way to defeat this enemy is to divide it – separate the hardcore from the rest," Miliband said.
"Does that mean the Afghan government talking to the Taliban? Yes, with a simple message: Live within the constitution and you can come home to your communities and have a share of power, but stay outside, in hiding ... and you will face an unremitting military force." reuters
RIA: New NASA chief to hold talks in Russian Mission Control
07:3002/10/2009
MOSCOW, October 2 (RIA Novosti) - New NASA chief Charles F. Bolden will arrive on Friday at Russia's Mission Control to watch a Soyuz TMA-16 spacecraft dock with the ISS and hold talks with Russian space agency Roscosmos head Anatoly Perminov, Roscosmos said.
"Talks on all spheres of joint space activity by Roscosmos and NASA will be held. Anatoly Perminov and Charles Bolden will also jointly watch the docking scheduled for Friday 12:35 p.m. Moscow time," Roscosmos spokesman Alexander Vorobyov said.
Bolden, confirmed as NASA Administrator by the Senate in mid-July, is the first African American to head the agency. The visit to Russia is his first foreign trip as new NASA head.
Three new crewmembers on board a Soyuz TMA-16 spacecraft successfully blasted off for the International Space Station from Baikonur, Kazakhstan on Wednesday.
The new crew consists of expedition commander U.S. astronaut Jeffrey Williams, Russian flight engineer Maxim Surayev, and space tourist Canadian billionaire Guy Laliberte, founder of the Cirque du Soleil.
Israel MFA: President Peres meets with Russian Deputy PM Zubkov
1 Oct 2009 President Peres: "Israel trusts that Russia will act to frustrate the vote to adopt the Goldstone Report in Geneva and to prevent Iran from getting nuclear capabilities."
Communicated by the Spokesperson of the Office of the President)
President of Israel Shimon Peres, met this morning (1 October) for an extended meeting with Russian First Deputy Prime Minister Viktor Zubkov. At the beginning of the meeting, President Peres stated that Israel is closely following the P5+1 talks with Iran that began today in Geneva, as well as tomorrow's expected vote in the Human Rights Council on the Goldstone Report.
The President emphasized that Israel trusts that Russia will maintain its position, as expressed by President Medvedev and Premier Putin, that Russia opposes Iran possessing nuclear weapons. The President added that Russia, as a country with many years of experience in fighting terrorism, is well aware that adopting the conclusions of the Goldstone Report would reward and strengthen terrorism, stating that "the war against terrorists is neither esthetic nor pleasant. Terrorists target civilian populations and there is no alternative to an all-out fight against terrorism. That is how we acted against Hamas in Gaza, that is how we acted against Hizbullah in Lebanon and that is how we halted the rockets and the attacks on civilians. When making peace, risks must be taken, while adopting the Goldstone Report will make it difficult for Israel to take the security risks necessary for peace, necessary for going forward."
President Peres also stated, "I ask: do not give a prize to terrorism and do not give weapons to Iran, even if that weapon is an anti-aircraft weapon, as everything flows from Iran to the terror organizations in Lebanon and Gaza, and that harms Israel. Iranian aggression supports Hamas and Hizbullah and we would greatly appreciate it if Russia would act, in the existing frameworks, to foil Iran's intentions."
First Deputy Prime Minister Zubkov told the President: "I send you warm regards from President Medvedev and Premier Putin. Russia and Israel maintain close contact in the political sphere, a relationship that was strengthened after your last visit in Russia. The whole world knows how Russia considers terrorism. Terrorism has no nationality and we destroyed the terrorists in our territory, we continue to destroy them and will do so in the future. That is why Russian President Medvedev and Premier Putin speak as one and with determination against terrorism, as well as against Iran possessing nuclear weapons."
The Deputy Prime Minister gave President Peres a message, according to which Russia is interested in significantly expanding the advancement of the joint Israel-Russia agricultural-economic project, which was agreed upon between Presidents Peres and Medvedev at their last meeting. At that time, it was decided to turn Russia into the world's largest food provider through the use of advanced Israeli agricultural technology. The goal is to sign a series of agreements that will facilitate the establishment of the largest joint agricultural-technological-economic system to fight world hunger, which will cause an acute shortage of food and water in another decade.
Deputy Prime Minister Zubkov noted; "I had an extensive meeting with my colleague, Deputy Prime Minister and Minister of Foreign Affairs, Avigdor Liberman. I have not held such a productive meeting for many years. We are interested in actions, and therefore, I sent a clear directive to the ministries in Russia to prepare the legal groundwork for wide-ranging cooperation with Israel. In December, the first meeting of the complete Israel-Russia joint economic committee will take place. Early in 2010, a large business forum will take place in Moscow, between Israeli and Russian businesspersons and heads of companies, with the goal of immediately starting to enact widespread cooperation with Israel."
President Peres thanked his visitor and noted that this project will be called "Food for Peace." It will be a joint effort that will combine Russia's great size, with one-sixth of the world's lands and one-third of its water supplies, and the small size of Israel, which has led it to depend on advanced technology and to base its splendid agriculture on hi-tech.
President Peres concluded that: "There is no doubt that your visit, at the present time, ensures that our talks will not be summarized in a protocol that will lay forgotten in an archive."
01 October 2009, 15:34
Interfax: Russia's government to help strengthen the presence of the Russian Church in the Holy Land
Jerusalem, October 1, Interfax - The Russian Government will continue to help the Russian Orthodox Church to expand and strengthen its presence in the Holy Land, Russia's First Vice Premier Viktor Zubkov stated.
"We shall continue to help the Church in its strengthening of Orthodox positions, its property, as well as promote its church construction and increasing the number of pilgrims (to the Holy Land - IF)," Zubkov said Thursday during a visit to Trinity Cathedral of the Russian Ecclesiastical Mission in Jerusalem.
Head of the Mission Archimandrite Isidor (Minayev) told Vice Premier about the history of the "Jerusalem Moscovia" - a quarter in Jerusalem which was almost completely owned by the Russian Church and private patrons in the early 20th century. He also mentioned the current tasks and challenges of the Russian Orthodoxy in the Holy Land.
Prime-Tass: Russia, Belarus, Kazakhstan may complete WTO talks within 2 yrs
MOSCOW, Oct 1 (PRIME-TASS) -- Russia, Belarus and Kazakhstan may complete their talks on accession to the World Trade Organization (WTO) within 18 months to two years, Deputy Economic Development Minister Andrei Slepnev told reporters Thursday.
The countries are currently setting up a customs union and jointly negotiating accession to the WTO.
He also reiterated that some Russian import tariffs would be cut due to the planned switch to a single tariff system with Kazakhstan and Belarus.
Slepnev said planned changes to Russian import tariffs might be postponed until the single tariff system comes into effect on January 1, 2010.
RIA: Post-Soviet states to hold military drills in Kazakhstan
20:3601/10/2009
MOSCOW, October 1 (RIA Novosti) - Over 7,000 service personnel from member states of the Collective Security Treaty Organization (CSTO) will take part in large-scale regional security drills in Kazakhstan, the Russian military said on Thursday.
The exercise of the CSTO collective rapid reaction force will be held at Kazakhstan's Matybulak training grounds on October 2-15, and involve units from Kazakhstan, Kyrgyzstan, Russia and Tajikistan.
"Kazakhstan has never hosted military exercises on such a large scale with the simultaneous involvement of over 7,000 troops," a Russian Airborne Troops spokesman said.
"All the participants in the exercises - operational commands, military contingents and special force units - have arrived at the training grounds," the official said.
According to the CSTO Secretariat, the exercise is aimed at practicing the deployment of the collective rapid reaction force in crisis situations on the territory of CSTO member states.
The CSTO comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Uzbekistan and Tajikistan. However, Belarus and Uzbekistan refused to join the collective rapid reaction force structure.
Analysts say the creation of a powerful military contingent in Central Asia reflects Moscow's drive to make the CSTO a pro-Russian military bloc, rivaling NATO forces in Europe.
Russia's security strategy until 2020, recently approved by President Dmitry Medvedev, envisions the CSTO as "a key mechanism to counter regional military challenges and threats."
RBC: Transnistria's President insists on Russian military presence
RBC, 02.10.2009, Tiraspol 11:59:23.President of Transnistria Igor Smirnov claims that the withdrawal of Russian troops from Transnistria at the request of the new Moldovan leadership was downright unacceptable, and also announced that Russia had fulfilled all its obligations undertaken during the OSCE summit in Istanbul regarding the withdrawal of its military equipment from Transnistria.
During a press conference in Tiraspol, Transnistria's leader stressed that the Russian military presence played a vital role in stabilizing the region. He reiterated that the leaders of Russia, Moldova and Transnistria had all signed a joint agreement on March 18 in Moscow, noting that the document provided for Russia's military presence in the region until a complete settlement was reached between Moldova and Transnistria.
Smirnov also expressed hope that Russian Foreign Minister Sergei Lavrov would discuss matters relating to Transnistria and Russia's military presence in the region during his visit to Chisinau next week.
Trend.az: Russia hardly to support energy projects in Tajikistan without agreement with Uzbekistan: expert
02.10.2009 09:24
Azerbaijan, Baku, Oct. 2 / Trend News V.Zhavoronkova /
Moscow will hardly support energy projects in Tajikistan without the consent of Uzbekistan, Russian expert on the Central Asia, Arkadiy Dubnov, said.
Tajikistan needs construction of hydropower plants (HP) to provide an additional amount of electricity. However, the country is in need of financing from abroad to implement its projects. The country was to attempt to attract investment to build a big Rogun hydropower plants.
Theoretically, Tajikistan considers Russia's financing the construction of hydropower plants. But, neighboring Uzbekistan fiercely opposes the construction of stations on the rivers of the region because the country believes this may limit the flow of water to Uzbekistan and expose the region to anthropogenic disaster.
However, Russia will not support the Dushanbe projects without the consent of Tashkent, the expert believe.
"As to Moscow's support to plans to build a power plant in Tajikistan without agreement with Uzbekistan, I think it is extremely unlikely," an international columnist for "Vremya novostey" newspaper, Dubnov wrote via e-mail.
"In my opinion, Tashkent is "very difficult and often unpredictable partner" for Moscow, but to have it as an opponent is much more problematic than Dushanbe," the expert added.
According to Dubnov, Tajikistan is a country that much more dependent on external support than Uzbekistan. Moreover, by the will of history, it is in the geopolitical and geo-economic impasse.
Regardless the projects related to electric power generation at hydroelectric power plants and its sale to India and Afghanistan, currently Tajikistan almost has nothing more to offer the region in economic cooperation or communication, Dubnov said.
Kyivpost: Tajik parliament reducing Russian language status
Today, 10:40 | Interfax-Ukraine
Dushanbe, October 2 (Interfax) - Russian could lose its status as the language of international communication in Tajikistan.
The majority in the Tajik parliament's lower house voted for the new law, "Regarding the official language," which totally excludes the notion of "the language of international communication" that the current laws assign to the Russian language.
The draft bill was laid before the parliament in July by country's President Emomali Rakhmon, who dropped the Slavic "ov" from the end of his surname two years ago.
"The current language law of the Republic of Tajikistan was passed during the Soviet ear and does not meet the requirements of an independent state," MP Dodihudo Saimuddinow of the ruling People's Democratic Party of Tajikistan (PDPT) said during the debates.
Rakhmon is the leader of the PDPT which holds 49 out of the 63 seats in the house.
The new bill does not discriminate the Russian language in the country, Saimuddinow said. "Though the bill does not say that Russia will remain the language of international communication in Tajikistan, the Constitution does stipulate this status for Russian," the MP said.
"Tajik is the official language of the Republic of Tajikistan. A Tajik citizen is obligated to know the official language," says Article 3 of the bill, a copy of which was made available to Interfax.
The bill also compels to use the official language when writing law, managing paperwork, conducting social events, research, posting announcements and advertisements, in official correspondence between country's citizens, and in naming all companies and institutions regardless of the form of ownership. The current law allows to use Russian at trials, in letters to authorities and governmental agencies, and to use Uzbek in the areas populated mainly by ethnic Uzbeks.
The new bill was opposed only by the Communist Party of Tajikistan (CPT) faction that is represented by just five mandates in the house. "According to the new law, each Tajik citizen must know the official language, whereas the country has failed to provide conditions to ensure it. The passage of the bill could prompt the outflow of qualified specialists from Tajikistan and worsen relations with Russia," said Communist MP Ismoil Talbakow.
On Saturday the bill will be considered by the upper house (Majlis Milli). If the house approves the bill, it will be sent to the president for signature. Once signed, the law will be published in the official press and then become in effect.
The population of Tajikistan is 7.5 million people. The biggest ethnic minority are the Uzbeks who account for 25%. The Russians and Kyrgyz in Tajikistan account each for 1% of the total population of the country.
Schools badly need Russian teachers. Outside Dushanbe it is very hard to find a young man who would be fluent in Russian. However, urban residents prefer their children to go to school where subjects are taught in Russian, because it is believed that such schools provide better quality of teaching.
Reuters: Siemens, Rosatom may sign JV deal in 2009
Thu Oct 1, 2009 11:04pm IST
MOSCOW, Oct 1 (Reuters) - Siemens (SIEGn.DE: Quote, Profile, Research) may form a venture with Russian state nuclear firm Rosatom this year, a source in Rosatom told Interfax news agency, in a move likely to irk the German group's spurned French partner Areva (CEPFi.PA: Quote, Profile, Research).
Siemens announced in January that it would leave its nuclear reactor joint venture with Areva to tie up with Rosatom, a move that Areva has said breaches a non-competition clause.
"A probability of this agreement (between Siemens and Rosatom) being signed this year is very high," Interfax quoted the source as saying on Thursday.
Areva, which is currently negotiating with Siemens on the price at which it will buy back the German group's 24 percent stake in their venture, declined to comment on the report.
Siemens and Rosatom, which will hold a majority stake in the venture, have said they would develop a new-generation nuclear reactor that will compete with Areva's 1,650 megawatt Evolutionary Power Reactor.
They will also build new nuclear power plants and modernise existing plants, turning their venture into a direct rival of Areva, which already competes with Westinghouse Electric, a unit of Japan's Toshiba (6502.T: Quote, Profile, Research).
Under the terms of a shareholders' agreement tying Siemens to Areva until 2012, the French group can wait until the pact's expiry to pay Siemens, and Siemens must not compete with Areva for eight years after the end of the pact. (Additional reporting by Marie Maitre in Paris; Writing by Gleb Bryanski; Editing by David Cowell)
Reuters: UPDATE 1-Russian uranium miner ARMZ eyes projects with Cameco
10.01.09, 11:41 AM EDT
By Polina Devitt
MOSCOW, Oct 1 (Reuters) - Russian uranium miner ARMZ Holding said on Thursday it was holding talks with Cameco Corp ( CCJ - news - people ) on projects in Australia and Africa after strategic investment laws stalled the Canadian miner's projects in Russia.
State-controlled ARMZ, which mines uranium in Russia and Kazakhstan, has also raised its 2009 output forecast to 4,700 tonnes from an earlier estimate of 4,300 tonnes, deputy general director Alexander Boitsov told a news conference.
'Cameco at present is offering us projects in other countries,' Boitsov said, adding these projects were in Africa and Australia. He did not specify which African countries.
The idea arose, he said, because a joint venture with Cameco to explore uranium deposits in northwest Russia had stalled due to laws limiting foreign access to strategic mineral resources.
'We will follow the situation on this project and find other ways to cooperate,' Boitsov said.
Demand for uranium is growing worldwide as more nuclear power plants are built by countries trying to cut emissions and reduce fossil-fuel dependence.
Spot uranium is trading at $46 per pound, down from records around $136 in June 2007.
ARMZ plans this month to hold talks in Namibia with French state-controlled nuclear reactor maker Areva ( ARVCF.PK - news - people ) on uranium projects in Africa, the Russian company's general director, Vadim Zhivov, said last month.
In 2007, Areva bought UraMin, the owner of the Trekkopje mine in Namibia, for $2.5 billion.
President Dmitry Medvedev visited Namibia in June as part of a trip to promote Russia's economic interests in Africa. Namibia's uranium resources are attractive to the Kremlin, which plans to build over two dozen new reactors in the next 15 years.
ARMZ, the mining arm of state nuclear concern Rosatom, plans to increase uranium production to 4,700 tonnes this year from 3,880 tonnes in 2008, Boitsov said.
'It's a renewed forecast, because Kazakhstan has specified its indicators, and there have been changes for a host of different companies,' he said.
(Writing by Robin Paxton; Editing by Keiron Henderson) Keywords: RUSSIA URANIUM/
(robin.paxton@; +7 495 775 1242; Reuters Messaging: robin.paxton.@)
Business Wire: 2009 Taiwan Trade Mission to Russia
October 02, 2009 03:58 AM Eastern Daylight Time
TAIPEI, Taiwan--(BUSINESS WIRE)--The Taiwan External Trade Development Council (TAITRA) will lead a delegation consisting of 13 Taiwanese companies to visit Saint Petersburg, Yekaterinburg and Moscow from 6th – 18th October. The purpose of this visit is to explore the various opportunities these markets have to offer. TAITRA will also seize the chance to strengthen cooperative ties with its Russian partners.
Based on a WTO report released in March, Taiwan ranked 18th in both global export and import with trade transactions totaling 256 billion and 240 billion USD, respectively. Taiwanese products and services are widely received for their excellent quality, innovative features and reasonable prices. Buyers can count on Taiwan to provide professional skills and timely delivery. As a leading supplier in the global marketplace, Taiwanese enterprises utilize extensive experience, expertise, and determination to meet individual customer needs.
In order to satisfy the sourcing requirements of buyers from this region, the mission will hold a trade meeting session in each of these three cities, and will also present selected samples of the most innovative and state-of-the-art products. Through this event, local businesspeople will have a unique opportunity to meet the Taiwanese delegates in person to discuss possible business cooperation.
The dates and locations for the trade meeting sessions are as follow:
Oct. 8th, Saint-Petersburg Chamber of Commerce and Industry (Saint-Petersburg)
12th, Ural Chamber of Commerce and Industry (Yekaterinburg)
15th, Holiday Inn Moscow Suschevsky (Moscow)
Since the Taiwanese firms participating in this mission are from different industries, local visitors will be able to see an extensive range of products, including top quality auto parts and accessories, machinery and equipment, special occasion wear, consumer goods, industrial products and more.
TAITRA would like to encourage all interested parties to log onto and make an online appointment with the Taiwanese delegates. Or you can contact the Taiwan Trade Center, Moscow for further information:
Taiwan Trade Center, Moscow
Tel: 7(495)-234-2988
Fax: 7(495)-234-2989
E-Mail: moscow@.tw
Moreover, if you wish to find more suppliers and products, simply log onto Taiwantrade, a powerful B2B website assuring your way to successful business.
RBC: Gov't to consider Rusnano budget until 2015
RBC, 02.10.2009, Moscow 11:24:11.A decree on financing the Russian Corporation of Nanotechnologies (Rusnano) until 2015 was presented to the government today, the RBC Daily newspaper reported. The document provides for the return of RUB 65bn (approx. USD 2.16bn) to Rusnano, which the state corporation will pay to the federal budget as an asset contribution in December 2009. Moreover, the government will allocate RUB 180bn (approx. USD 5.99bn) in state guarantees to support Rusnano in entering the capital markets. The two sums should be sufficient enough for the state corporation to develop its project portfolio and bring the company's turnover up to over RUB 400bn (approx. USD 13.31bn) by 2015, analysts say.
Head of Rusnano Anatoly Chubais announced today that the decree regulating relations between the state corporation and the government until 2015 had been presented to the government. He also expressed hope that the decree was passed by the end of October. "The idea is fully supported by the government," he added. Rusnano requires funds to invest in new projects in the sphere of nanotechnologies. According to forecasts, the volume of the nanoindustry market will reach RUB 900bn (approx. USD 29.94bn) by 2015, RUB 311bn (approx. USD 10.35bn) of which will be accounted for by revenue from Rusnano's projects.
RIA: Stranded Russian sailors go on hunger strike in Dubai
10:3202/10/2009
VLADIVOSTOK, October 2 (RIA Novosti) - Three Russian seamen from a vessel stranded in the port of Dubai began a hunger strike on Friday, an International Transport Workers' Federation official said.
The Magdalena, owned by a German company and flying the flag of Antigua and Barbuda, has been anchored in Dubai since early August. The vessel's owner reportedly owes the crew $230,000 in wage arrears. Onboard are nine Russians, two Ukrainians, four citizens of the Philippines, and one Estonian.
"The captain of the vessel said that three crew members... went on hunger strike. The vessel's owner has also been informed," Pyotr Osichansky said.
The seamen demand repatriation and the repayment of wage arrears, and refuse to perform their duties.
In early September the crew asked for international aid as they were running out of food and water. A week later two weeks' worth of water supplies, provisions for three weeks, and fuel for 50 days were provided.
A total of 23 Russian sailors are currently in a similar situation on two other vessels - the Piryit bulk carrier, which is stranded near the port of Cristobal in Panama, and the Southern Pearl vessel is anchored off the Bulgarian coast.
RIA: Chechen troops kill 7 militants in special operation
09:1102/10/2009
GROZNY, October 2 (RIA Novosti) - Seven militants have been killed in the mountains of Chechnya during a special operation lead by President Ramzan Kadyrov, the republic's interior minister said on Friday.
"In the evening [Thursday] near the village of Benoi Nozhai special operations were started where seven members of an armed group were killed," Lt. Gen. Ruslan Alkhanov told RIA Novosti.
Alkhanov said Kadyrov was heading the special operation and was in the area while the search for the around 10 remaining members of the group continued.
He said information on the militant group was received and analyzed before the group was surrounded in the mountains. He added that no Interior Ministry personnel had been injured in the operations.
Russia's North Caucasus republics of Chechnya, Dagestan, Ingushetia and Karachayevo-Circassia have seen an upsurge of militant violence of late, with frequent attacks on police and officials.
Interfax: Eight militants killed in southeast of Chechnya - Kadyrov (Part 2)
BENOI, Chechnya. Oct 2 (Interfax) - The number of armed group
members killed in the mountains in the southeast of Chechnya has reached
eight.
"A report issued at 9:45 a.m. confirms the elimination of eight
militants during a security operation. The participants in the operation
continue hunting the rest of the gang," Chechen President Ramzan
Kadyrov, who is currently in the area of the operation, told Interfax.
"The bodies of all militants killed [in the operation] have been
delivered to the suburbs of Benoi. Investigators are now working to
identify them," Kadyrov said.
The security operation involved servicemen from the Sever (North)
and Yug (South) battalions, Special Operations Police Regiment No. 2 and
the "R" special operations police department of the Russian Interior
Ministry's branch for the Southern Federal District, Chechnya's head
said.
"They are the most experienced servicemen and police officers, who
have systematically participated in security operations in the past few
years. This circumstance helped avoid casualties among policemen," he
said.
The operation is currently taking place in the immediate vicinity
of the administrative border with Dagestan, Kadyrov said.
"I assess the results of the operation as exceptionally high.
Arrangements for it were made in absolute secrecy, which helped surround
the gang and eliminate nearly one-half of its members within the first
few hours [of the operation]," he said.
Reuters: Kadyrov-led Chechen police kill 8 "bandits"- spox
Fri Oct 2, 2009 3:10am EDT
GROZNY, Russia, Oct 2 (Reuters) - An operation coordinated by Kremlin-backed Chechen leader Ramzan Kadyrov killed eight militants in the mountains of the southern Russian republic on Friday, the president's office said.
Kadyrov imposed a period of relative calm on Chechnya after two separatist wars since the early 1990s, but a series of attacks this year in Chechnya and neighbouring Ingushetia and Dagestan has challenged Moscow's grip on its southern flank.
"Currently underway is an operation that started yesterday led by the president of Chechnya, Ramzan Kadyrov," a spokesman in Kadyrov's office said. "As a result so far, eight bandits have been liquidated."
There were no police casualties, he added. Russian Interfax news agency quoted Kadyrov as saying: "There are dense forests and high mountains, but regardless we managed to start and carry out the operation successfully."
The operation was located near the boundary with Dagestan.
Rights groups accuse Kadyrov of ruling with a climate of fear to keep control over the mainly Muslim region, where a number of human rights and charity activists have been killed this year. He denies any link to the killings.
Critics say Kadyrov's tough measures in fighting rebels and crushing dissent are only fuelling the insurrection. (Writing by Matt Robinson; editi
Itar-Tass: Car explosion in N Caucasus city kills one person
01.10.2009, 23.29
MAKHACHKALA, October 1 (Itar-Tass) - A car explosion that occurred Thursday night in Makhachkala, the capital of the North Caucasian region of Dagestan, killed one person, officials at the press service of the Dagestani Interior Ministry said.
An Opel Astra exploded at 20:25 on a small street near Imam Shamil Avenue, not far from a district police department.
The blast set the car on fire, after extinguishing which a burned body of a man was found inside.
Operatives working at the site of the accident at the time this report was wired were trying to establish the cause of the explosion.
RIA: Russian customs officers arrest 2 drug mules in Orenburg airport
09:4402/10/2009
ORENBURG, October 2 (RIA Novosti) - Russian customs officials in the southern Urals city of Orenburg on Friday morning arrested two drug mules from Tajikistan with 225 capsules of heroin in their stomachs, a spokeswoman said.
"Orenburg customs officials identified two suspicious citizens of Tajikistan who arrived on a Dushanbe-Orenburg flight," Oksana Shabalina said. "A personal search was carried out as a result of which it was determined that there were alien objects in their stomachs."
She said one of the detainees was found to have 115 capsules of heroin in his stomach, while the other had 110. The capsules contained a total of 702 grams of heroin.
The men could face 12 years in prison if convicted of drug trafficking.
The former Soviet Central Asian states are major drug suppliers to Russia, where heroin addiction has risen rapidly in recent years.
According to estimates, about 90% of heroin consumed in Russia is trafficked from Afghanistan via Tajikistan and Uzbekistan. And the vast majority of heroin consumed in Europe passes through Russia on its way from Afghanistan, where illegal drug production has reportedly risen more than 40 times since 2001.
AP: Scientologists win rights case against Russia
By Associated Press
October 2, 2009
STRASBOURG, France - Russia’s ban on the Church of Scientology is illegal, the European Court of Human Rights said yesterday in a binding ruling.
The court said Russia cannot ban the Church of Scientology just because it has not been in the country for long and awarded each of the groups $7,270 in damages.
The case was brought to the court, based in Strasbourg, by two Russian Scientology branches that were refused listing as religious organizations because they have not existed for at least 15 years as required by Russia’s Religions Act.
Aysor: 19-years-old Armenian killed in attack in Moscow
19-years-old Armenian was found dead in south-west of Moscow late Thursday, according to a report released by Russian media outlets.
“Death was the result of multiple stab wounds,” say forensic experts.
The accident’s witnesses note that the killed young man was attacked by a group of young people.
“The deceased lived in Moscow illegally being wanted in Armenia on suspicion of evading military service,” the source reports.
Law enforcement officials do not rule out that the killed was living at relatives’ place in Moscow, hiding from military service in Armenia.
RIA: Russia's richest woman sues former deputy PM for defamation
12:0902/10/2009
MOSCOW, October 2 (RIA Novosti) - The wife of Moscow's mayor, the richest woman in Russia, is suing a former Russian deputy prime minister for defamation, her construction company said on Friday.
Yelena Baturina, the wife of Yury Luzhkov, is the president of the construction conglomerate Inteka. Her personal wealth was estimated by Forbes Magazine last year at $4.2 billion, but she is believed to have lost large sums in the financial crisis, which has severely hit the real estate market in Russia, and her current worth is estimated at some $900 million.
Baturina is suing former deputy prime minister Boris Nemtsov over the publication of a report that the company said made "a conscious attempt to show that Inteko's effective activity is possible only in Moscow," which Baturina said is "absurd."
The suit also seeks damages for defamation of honor and moral damage.
There is no information on the amount of damages Baturina is seeking.
Nemtsov's report, titled An Independent Expert Report - Luzhkov: Conclusions, criticizes Inteko for only being efficient in the Russian capital.
According to the company's press release, Nemtsov's report "contains explicit lies that distort Inteko's actual activities."
"The company has successfully accomplished and accomplishes large-scale investment construction projects in other regions of the country and abroad," the press release reads.
Inteko said it reconstructs existing and constructs new residential and industrial buildings, as well as prospecting for raw materials deposits throughout Russia and abroad.
It pointed to the Moscow region, St. Petersburg, Rostov-on-Don as Russian regions where the company worked successfully and Kazakhstan, the Czech Republic and Austria as foreign markets.
Nemtsov, who served as deputy premier from 1997 to 1998, is a leading member of Russia's political opposition and in April lost a race for mayor in Russia's Black Sea resort city of Sochi, which is to host the Winter Olympics in 2014.
RIA Novost has been unable to contact Nemtsov.
Inteko was founded in the mid-1990s and deals in reconstruction material for facades of buildings, as well as producing cement, panel and monolith housing construction, and operates in the developer and realty industry.
National Economic Trends
RIA: Russian monetary base down $950 mln in week to $133.8 bln
10:0602/10/2009
MOSCOW, October 2 (RIA Novosti) - Russia's Central Bank said Friday the country's narrowly defined money supply (M1) was 4 trillion 26.8 million rubles ($133.8 million at the current exchange rate) as of September 28, down 28.6 billion rubles ($950 million) in the week since September 21.
According to the Bank, M1 money supply consists of the currency issued by the bank, including cash in vaults of credit institutions, and required reserves balances on ruble deposits with the Central Bank.
Rencap: Ministry of Finance increases withdrawals from Reserve Fund
Rencap
October 2, 2009
Yesterday (1 Oct), the Ministry of Finance published statistics on the usage of oil and gas revenues in September. According to the data, oil and gas revenues were transferred in full to the federal budget in order to cover oil and gas transfer payments. Government funds' rouble volumes dropped in September: the Reserve Fund decreased to RUB2,298trn ($76.37bn) and the National Welfare Fund was down to RUB2,764trn ($91.86bn). The National Welfare Fund decrease is associated with the revaluation effect due to both rouble strengthening and dollar weakening against world currencies.
In September the Ministry of Finance transferred RUB300bn from Reserve Fund to the federal budget to finance a budget deficit, according to the data. During the past four months the average transfer was RUB180bn per month. Such a massive withdrawal of funds might be an indicator of a significant increase in budget expenditures last month. As official federal budget data for September has not yet been provided, we expect budget expenditures to increase only slightly (we base our view on money market indicators and recent comments by government officials). Since the start of the year, we have seen a few mismatches between the amount of budget deficit and transfers from the Reserve Fund. Therefore, we think the ministry may withdraw funds in advance according to a predetermined schedule. If the Ministry of Finance is preparing for massive spending in the upcoming months, it could transfer the necessary funds over a number of months. Therefore, the transferred amount may not cause monetary emission into the economy, as the funds are likely to stay in federal budget accounts.
Anton Nikitin
Financial Post: Oil will fuel Russia's growth
Buy-and-wait strategy could pay in long term
Levi Folk, Financial Post Published: Friday, October 02, 2009
When Tolstoy said "the two most powerful warriors are patience and time," he could have been referring to Russia's equity market -- if you throw in the fact Russia still has one of the most undervalued stock markets in the world. It will take several years for Russia to recover its trend rate of growth after a painful recession, but low historical valuations suggest investors will get paid to buy into and wait on Russia's stock market.
Russia unfortunately brings to Canadian investors all the diversity of a Zimbabwean election. The economies of Russia and Canada are both dominated by resources and banking; those sectors comprise more than 80% of the MSCI Russia index and 77% of the S&P/TSX composite index.
What Russia offers Canadian investors is low valuations and above-average long-term growth potential. The country is home to undervalued oil assets and a banking sector that could expand at very high rates over the next two decades.
Russia is now the biggest oil producer globally, thanks to OPEC production quotas that have fallen squarely on the shoulders of Saudi Arabia. That fact brings the influence of oil on Russia's economy sharply into focus, and it dominates the picture. Therefore, investors in Russia will live or die by the long-term price of oil.
The collapse in oil prices last year devastated Russia's economy and stock market. GDP contracted more than 10% in the first half of the year and the stock market fell 75% from peak to trough. The country is only now turning the corner from economic recession to recovery, yet economic output will remain below trend for the next several years. The government is attempting to make up for the shortfall by spending its way out the crisis.
"I expect acceleration of growth most importantly due to fiscal stimulus because 40% of government expenditure is back-ended to the fourth quarter of 2009," says Julia Tsepliaeva, an economist at Merrill Lynch, reached in Moscow. Fortunately, the government has the fiscal latitude to increase spending because foreign holdings of sovereign debt are a mere 3% of GDP, Ms. Tsepliaeva says.
Economists have been ratcheting up their forecasts for economic growth in Russia for next year, says Ms. Tsepliaeva, who optimistically raised her numbers for GDP growth to 3.9% for 2010.
The expected growth recovery will lead to a significant earnings rebound that could propel the stock market higher. Company earnings will grow at a 60% compound annual growth rate between 2009 and 2011 according to Goldman Sachs, which sees 40% potential upside to equity indices based on an oil price forecast of US$110 per barrel oil in 2010.
The investment opportunity in Russia is buttressed by fact that the cheapest oil assets in the world are not in the ground but on the country's stock market.
"Oil is very interesting because energy companies in Russia are the cheapest globally, and demand from emerging economies is going to be higher," says Ghadir Abu Leil-Cooper, head of Europe Middle East and Africa equities at Barings, reached in London. Economic stimulus in China is focused on infrastructure spending that is pushing up commodity prices and directly benefiting Russia, Dr. Abu Leil-Cooper says.
Higher oil prices act like fertilizer on the entire economy, enabling the growth of other industries. The opportunity in banking is significant given low credit penetration across Russia's economy. Mortgages account for only 2.5% of GDP, a number that stands to grow with rising incomes over the next two decades. As a point of comparison, mortgage penetration in the United States is close to 75% of GDP.
The choice for Canadian investors looking to invest in Russia is limited. The Market Vectors Russia ETF Trust trades on the New York Stock Exchange and offers investors the lowest cost and most direct approach. The fund is down 47% since the start of 2008.
As the credit crisis slowly releases its grip on Russia's economy, one of the hardest hit last year, investors will revisit the long-term opportunity for investing in Russia's stock market. They will be attracted to undervalued energy assets and the long-term growth potential in banking, and they will need Tolstoy's two warriors, patience and time. - Levi Folk acts as a consultant to Excel Funds, a fund management company with an emerging markets focus.
Russia Today: Unemployment on the wane as Russian market revives
02 October, 2009, 10:23
The financial crisis in Russia has claimed 8% of the country’s total workforce, but the number of unemployed is on the decline as the economic situation improves in Russia.
The crisis left no one untouched in Russia. Vera Romanova used to work for a large telecoms company as project manager. As the credit crunch loomed last autumn, and the company suspended annual bonuses, she felt it was time to look for another job.
“Some of my friends had already lost their jobs, so I felt it could happen to me. When I was offered another position with a lower salary, I left. Luckily, they gave me a good redundancy pay-off, and I managed to find another job within three months,” she said.
“The only expenses I had to cut were on my hobby and shopping. Truly, the 1998 crisis was much worse,” she added.
A year ago many economists spoke of Armageddon for the Russian economy, but their forecasts were wrong as the economic data has proven over the past year.
“That’s how I would divide the situation – a very bad first half, high uncertainty, very unpredictable, unfortunately worsening from month to month and a significantly better second half with even improvement in the last quarter,” said Evgeny Nadorshin, Trust Bank chief economist. “We are no longer going down, we’re probably moving up.”
Apart from already ailing industries like car making, and credit-dependent construction, Russian companies are still standing steady.
The government bailed out those most in trouble, protecting the so-called “strategic firms”. Many argue this led to tighter government control, but Russia didn’t see any major bankruptcies following the crisis.
“I don’t think there will be a second wave of the crisis,” Sergey Salikov, general director of Ancor company said. “There may be problems in individual companies and corporations, but only in those which failed to adapt to the new economic conditions over the past 12 months.”
Despite the fact that Russia’s economy has been showing signs of recovery, 6.2 million Russians still remain on the doorstep of recruiting agencies. This is one a half times more than a year ago. However, recruitment agents say that the situation is gradually improving, even though it will take a long time before it returns to pre-crisis levels.
“The number of vacancies dropped two or even three-fold this winter. Some industries, like marketing, still see hundreds of applicants per vacancy,” said Tatyana Dolyakova, general director of Penny Lane Personnel Russia.
“But now the summer is over, industrialists have stopped making staff take forced vacations and are now even hiring. September 2009 was a pleasant surprise for recruiters, we have a lot of work to do now,” she added.
With oil prices rebounding and investment returning, Russia’s government has promised that the worst is over, but it is too early to relax as the scars of the credit crunch still haven’t healed.
RBS: Russia - data update
RBS
October 2, 2009
A pretty heavy day today in Russia on the data front:
First, VTB's PMI manufacturing survey continued the recent improving trend, increasing to 52 in September, i.e. signifying actual growth, from 49.6 in August, and a year low of 34.4 in January. The services PMI actually moved into positive territory in August, rising to 52.2. While these numbers suggest a second half recovery, we sense that the PMIs will follow their global peers and level off over the next few months, limiting the actual real economy bounce.
Second, the CBR released final Q2 balance of payments data. This showed a narrowing in the quarterly surplus to just US$7.6bn, down from US$9.4bn in Q1. The good news is that the surplus on merchandise trade increased to US$24.3bn from US$19.1bn in Q1, showing the impact of the double in oil prices over this period. The deficit on services more or less flat-lined at US$4.4bn, but the key driver of the deterioration in the current account was a huge increase in the deficit on income, with a net outflow of US$10.1bn, three times the year earlier level, as payables increased to US$17.6bn - of which three quarters comprised increased payables by corporates. Herein, presumably, corporates suffered higher interest costs, plus there was also increased profit-repatriation, e.g. capital flight.
On the capital account, net FDI posted an outflow of US$1.5bn in Q2, itself an improvement from the net outflow of US$4bn in Q1. Portfolio flows posted a net inflow of US$1.9bn in Q2, a turnaround from a net outflow of US$1.9bn in Q1. Net Loans posted an outflow of US$748m in Q2, versus the net inflow of US$880m in Q1. Other net outflows eased back to US$5.6bn in Q2, from US$14.5bn in Q1, as capital flight eased back. Net errors and omissions actually posted a net inflow of US$3.7bn in Q2, following a net outflow of US$8bn in Q1. The CBR rebuilt reserves by US$21bn in Q2, after losing US$31.1bn in reserves in Q1.
Third, the CBR reported reserves rose to US$412.7bn in the week to September 25, a rise of US$1bn on the week. After a rise of US$800m the week before, we are still surprised at the relatively slow pace of reserve accumulation despite the recovery in oil prices to around the US$70 a barrel mark, and despite the fact that sell-side houses seem to be getting much more bullish the Russian growth/rouble appreciation story. It seems to is that around the current oil price the rouble is finely balanced from a fundamental perspective, and there is not a compelling rouble appreciation story herein; actually quite the opposite still given the weak outlook for growth in our minds.
Fourth, the MOF reported a hefty US$9.3bn draw down in funds in the Reserve Fund in September, to stand at US$76.4bn. Average monthly reserve draw down in the year to date has been around US$6.7bn, so the pick up in September is further evidence that the government is really pump priming growth with a huge fiscal expansion. The rate of Reserve Fund depletion also surely brings forward the date of the MOF tapping external capital market; this is likely in Q4 2009.
Business, Energy or Environmental regulations or discussions
Bloomberg: MRSK, Gazprom, OGK-1, Norilsk Nickel: Russian Equity Preview
By Paul Abelsky
Oct. 2 (Bloomberg) -- The following shares may have unusual price changes in Russia trading. Stock symbols are in parentheses, and prices are from the previous close unless otherwise noted.
The 30-stock Micex Index advanced for the third day this week, gaining 1.2 percent to 1,211.44 in Moscow. The RTS Index gained 1 percent to 1,266.85.
OAO MRSK Holding (MRKH RX): The Russian power distributor plans to sell bonds as it prepares for the 2014 Winter Olympics in Sochi and seeks to upgrade aging assets. MRSK climbed 8.6 percent to 3.27 rubles.
OAO Gazprom (GAZP RX): Dong Energy A/S, Denmark’s biggest natural gas supplier, said it has exercised an option to double delivery from Russia’s gas export monopoly via the Nord Stream pipeline under the Baltic Sea. Gazprom will deliver 2 billion cubic meters of fuel annually from 2012 to 2030. The shares advanced 0.6 percent to 176.10 rubles.
OAO OGK-1 (OGK1 RX): OAO Inter RAO UES expects the Russian government to decide on its purchase of shares in the OGK-1 power generator from state companies “in the near future,” Chief Executive Officer Yevgeny Dod said. OGK-1 climbed 4.7 percent to 0.673 ruble.
OAO GMK Norilsk Nickel (GMKN RX): All Russian exports of metals traded on the London Metal Exchange should be subject to flexible rather than flat duties to match a planned levy on nickel, the country’s Economy Ministry said. Russia’s largest mining company rose 1.4 percent to 3,786.23 rubles in Moscow.
To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@.
Last Updated: October 1, 2009 22:00 EDT
BNE: COMMENT: Russian equity - play it again, Dmitry
Roland Nash of Renaissance Capital
October 2, 2009
Perception of Russia risk is a curious phenomenon. The connection with reality is often glimpsed, but only in passing. The swing from safe haven to pariah in the summer of 2008 was exceptionally painful, even by the standards of the crisis. The swing back from pariah to legitimate investment destination is proving analogously lucrative. Optimism is necessarily now a more crowded position, but we remain confident that the grafting of the "R" back into BRIC will drive the next leg of Russia's re-rating, and potentially plough straight through the fundamentals.
Russia sits in the sweet spot between liquidity and economic recovery. A consensus international commitment to hold interest rates low for long enough to ensure growth in the structurally challenged economies of the developed world provides a boost to Russia through simultaneously tending to decrease the price of risk and increase the price of dollarised commodities. Likewise, the recovery of demand in the developing world provides a medium-term, demand-side underpinning to commodity prices, while improving the risk-reward trade between the low-growth developed world and high-opportunity emerging markets.
We already see reasons to be cautious about equity valuations. Using a risk-free rate of 8%, an equity-risk premium of 5-10% and an average oil price increasing from $59/barrel this year to $80 into the medium term, our aggregate discounted cash flow valuation of Russian equities provides only 6% upside potential to our fair value. A 6% undervaluation will not set pulses racing after a 100% market re-rating.
But while the correction back from sharply oversold is now largely complete, we think the improvement in the fundamentals will drive further appreciation.
Reasons to be cheerful
The cost of capital is still falling ahead of the equity market. Having risen to levels above 11% at the end of last year, Russian sovereign yield is now at 6.1%, just 50 basis points above where it was before the crisis. Domestically, interest rates are being pushed lower. Reserves are again being built up as the Central Bank of Russia (CBR) defends the rouble at RUB30/USD. We expect CBR base rates to move another 50-75 basis points lower before the year-end.
Growth is beginning to return. As interest rates drop towards inflation, the same incentive to build inventories will likely drive a new wave of investment. The government stimulus package now looks likely to be less aggressive than we had originally expected, but only because private-sector demand is coming back more strongly. Our 4% growth target for 2010, while still slightly above consensus, no longer looks particularly outlandish.
The final potential positive is the improving rhetoric surrounding both a government reform programme and the relationship between Russia and the US. As the political focus shifts away from the minute-to-minute management of the crisis, it is becoming increasingly clear that President Dmitry Medvedev is intent on burnishing Russia's image as an investment destination and a reliable partner in the international arena. Prime Minister Vladimir Putin seems happy to stand out of his way. While both ambitions deserve to be treated with some scepticism, we note that even a change in rhetoric has, in the past, proved a powerful catalyst for the equity market.
The biggest risk remains the oil price. With inventories and spare capacity so high, we readily admit that Russia's whole investment case rides on the Saudis continuing to keep Opec in line. While this risk remains, Russian assets should continue to trade at a significant discount to emerging market peers.
Top-down stock picks
Our stock-specific conclusions fall out of the top-down discussion. Much like in the second and third quarters of this year, as risk appetite returns, the clear investment conclusion is to move down the liquidity curve and into riskier assets. We continue to favour domestically oriented stocks, despite their outperformance in the past three months. Some, like Sberbank (BUY, TP $2.72), are now among the most crowded trades in Russia. But fundamentals still support the stock, and we now regard it as the cleanest liquid exposure to returning economic growth, rouble appreciation and lower interest rates. Similarly, we continue to favour VTB (BUY, TP $4.64/GDR) as a less crowded alternative in the financial space. In the same vein, we would also recommend looking at the less liquid opportunities both in Russia, as well as in Kazakhstan and Georgia.
The reform rhetoric is best played, in our view, in the utilities space. Electricity distribution companies have had a tremendous run over the past few months, but we think their fundamental upside potential remains impressive. As we have seen in the past, utilities can move several times higher as enthusiasm returns. It seems like the increase in valuations may even be backed up by the realisation of reforms this time around. In particular, we like MRSK Holding (BUY, TP $0.17) as the most liquid opportunity among the regional utilities, and the one with most to benefit from tariff changes.
Real estate is another theme that is working well. Real estate companies remain among the most beaten-up in Russia, despite their recent run. With finance - both private and public - returning to the space, we think PIK (HOLD, TP $1.45), Raven Russia and LSR (BUY, TP $5.60) should all run further.
On the more cautious side, we note that both Rosneft (HOLD, TP $4.36) and LUKOIL (HOLD, TP $45.2) are now trading above our target prices. At reasonable oil-price assumptions, we are cautious about more fundamental value at current levels. Moreover, even if the oil price does rally, we believe a better way to gain exposure is through names that benefit from economic recovery, a decreasing cost of capital and rouble appreciation, rather than through the liquid oils. We would, therefore, remain underweight these two names against the benchmark.
Our official DCF target for the RTS at the end of 2009 is being raised slightly from 1,200 to 1,350. But we believe that this is just the beginning of a medium-term rerating of Russian stocks, and are lifting our end-2010 RTS target from 1,600 to 1,800.
Roland Nash is head of research at Renaissance Capital, Moscow
Itar-Tass: Opel acquisition deal to be finalized within days – Gref
01.10.2009, 20.18
NIZHNI NOVGOROD, October 1 (Itar-Tass) -- The signing of the Opel acquisition deal is a matter of days, the chief executive officer of Russia’s Sberbank, German Gref, told the media on Thursday. He visited the city’s Gorky automobile plant.
Gref said the signing of a final version of the agreement was due in several days’ time and currently some technicalities of the contract were being finalized. The Sberbank chief said there were no differences on the issue.
In Nizhni Novgorod the Sberbank CEO, Magna concern CEO Ziegfried Wolf and GAZ Group President Bo Andersson discussed further joint steps to be taken after the Opel acquisition contract has been signed.
“We have agreed on how we shall act from the standpoint of analysis of the production facilities that might be used to manufacture Opel cars for the Russian market,” Gref said.
Ziegfried Wolf confirmed that time- and effort-consuming proof-reading work on the contract was in progress. Wolf said it would be completed within days. Also, he announced that after the contract to purchase Opel had been signed Sberbank and Magna representatives would tour all of Russia’s manufacturers of automobiles with the aim to study the possibility of placing production in Russia.
Wolf said the GAZ Group was a recognized and authorized partner for a potential joint venture with Opel. He voiced the certainty that all work would move on very fast, as soon as the decision has been made.
After taking a look at the Gorky plant’s workshops Wolf said he saw no big difference or inferiority in production standards as compared with those of many Western automotive producers.
“We saw for ourselves that despite the serious problems the car plant experienced over the past few months it has achieved considerable progress in improving its competitiveness,” the Magna group’s CEO said. Specifically, he pointed to the flexible assembly line that manufactures the Volga-Siber sedan.
“This line can be used to make a wide variety of models, both medium and higher class ones,” Wolf said. “I believe there will be no problems with choosing an Opel model to be assembled here.”
The Moscow Times: Sberbank Eases Criteria for Loans
02 October 2009
The Moscow Times
Sberbank has relaxed its criteria for individual credit seekers after imposing tighter conditions last year during the onslaught of the global financial crisis.
“Due to the fact that we have a mission to vitalize retail credits, we are ready to lift the restrictions introduced during the recession,” Natalya Karasyova, the director of Sberbank’s retail credit board, said Wednesday.
“We’ve already wound up a number of the measures. The other changes will be introduced by year-end or at the beginning of the next year at the latest.”
The bank has decreased the required down payment for consumer loans to 15 percent to 20 percent from 30 percent, increased the maximum loan amount and decreased requirements for cosigning on a certain number of loans.
In July, Sberbank lowered interest rates on retail loans by 0.5 percent to 1 percent, and the bank resumed foreign currency loans in August.
The Moscow Times: Gold Output Up on New Projects
02 October 2009
Reuters
Russian gold production rose 18.5 percent year on year in the first eight months of 2009, mainly because of the launch of some large projects in the Far East, the Russian Gold Industrialists’ Union said Thursday.
The union, the industry’s lobby, said in a statement that the country’s gold output totaled 126.42 tons in January through August compared with 106.69 tons in the same period a year ago.
It said gold output from mines accounted for most of the 1.39-ton rise in August from August 2008, while output from gravel deposits, termed placers, was practically the same as a year ago.
Production of gold from mines and placers in the first eight months of 2009 rose 18.4 percent year on year to 111.28 tons, the union said.
Output achieved by refining gold from scrap rose 1.9 percent to 4.74 tons, and gold produced as a byproduct of other metals rose 29.3 percent to 10.40 tons.
Russia produced about 8 percent of the world’s gold last year and plans to significantly increase this share by developing its reserves, which are second only to South Africa’s.
The union attributed the latest increase to the launch of production at Kinross Gold’s Kupol mine in the remote Chukotka region, as well as the Karalveyem mine in the same region.
Peter Hambro Mining’s Pioneer project and High River Gold’s Berezitovy mine in the Amur region and the Aginskoye project, run by Kamgold in Kamchatka, also contributed to the rise, the union said. The biggest producing region in January through August was Krasnoyarsk, where the country’s top producer Polyus Gold operates the Olympiada mine.
Chukotka was the second, and the far eastern regions of Amur, Yakutia and Khabarovsk were the third, fourth and fifth respectively in terms of production, the union said.
Reuters: Russian investor buys more Facebook shares-sources
Thu Oct 1, 2009 8:18pm EDT
* Digital Sky Technologies paying $14.77/shr -source
* Buying directly from Facebook shareholders -sources
SAN FRANCISCO, Oct 1 (Reuters) - Russian investment firm Digital Sky Technologies has begun buying more shares in Facebook, seeking to expand its stake in the world's No. 1 social networking company, two sources told Reuters.
DST has begun purchasing shares directly from Facebook shareholders, two people familiar with the deal said on Thursday on condition of anonymity.
"Their appetite with me is: 'whatever you have, we'll take it,'" said one of the sources, a Facebook shareholder who agreed to sell his stock.
According to the shareholder, DST is offering $14.77 a share, the same price paid in July when it bought $100 million of Facebook shares from the social networking site's employees and ex-employees, at a $6.5 billion valuation.
DST also invested $200 million in Facebook preferred shares in May. The two transactions gave DST a 3.5 percent stake in the company.
A second source familiar with the matter said DST could buy up to $100 million of additional Facebook shares, though that amount had not been finalized.
Representatives for Facebook and DST were not immediately available for comment. (Reporting by Alexei Oreskovic; Editing by Gary Hill)
Bloomberg: Russian Watchdog Says Nokia Broke Competition Laws, Debates Fine
By Maria Ermakova
Oct. 2 (Bloomberg) -- Nokia Oyj, the largest maker of mobile telephones, violated Russian competition laws and may be fined for the infringements, the country’s Anti-Monopoly Service said.
“The service is now considering whether to open an administrative case to impose a fine on the company,” said Irina Kashunina, a spokeswoman for the regulator, said by phone today in Moscow.
To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@
Last Updated: October 2, 2009 01:55 EDT
Alfa: Acron in talks to attract $2.2 bln for apatite and potash projects, may sell 8.1% stake in Silvinit
Alfa
October 2, 2009
Acron's Chairman, Alexander Popov, said the company is in talks to attract $550 mln from Sberbank to develop the Oleniy Ruchey apatite-nepheline deposit and a further $1.650 bln from VTB to fund its Talitsky potash site.
Acron needs money to pay off short-term debt of ~$580 mln, most of which is due before the year-end. Acron's stake in Silvinit is a financial asset of $380 mln at current value. Given that Acron sold its 21% stake in Sibneftegaz for $132 mln and successfully placed a four-year RUB3.5 bln bond issue, the sale of its stake in Silvinit will enable the company to resolve its short-term debt problem completely. The price Acron will sell its Silvinit shares at (above market value or in line) will determine whether the move is positive or neutral for Acron.
We do not think a $1.65 bln loan to develop a potash mine is a good idea because: 1) according to our estimates, the NPV of this project is negative at the current potash price, and 2) Acron does not generate enough cash flow to service such a huge debt and the potash project will not generate income any earlier than 2015.
The company has been working on its apatite-nepheline project since 2006 and has already invested $60 mln. Apatite production is set to start in 2012. The company has no choice but to develop the project otherwise it will lose the license for it. Under our conservative estimates, the NPV of the project is close to zero at current apatite prices. However, this project is important for the company as it will resolve the problem of unstable apatite supplies. On the other hand, it would be better for Acron to attract a partner in the Oleniy Ruchey project to share risks and decrease the required amount of CAPEX (some time ago Acron said a Turkish fertilizer trader might become a partner). Overall, both loans are at the negotiation stage, and we are not sure if Acron will receive any money from banks for these projects in the near future.
Georgy Ivanin
Activity in the Oil and Gas sector (including regulatory)
Bloomberg: Russian Crude Production Rises to Post-Soviet High (Update1)
By Stephen Bierman
Oct. 2 (Bloomberg) -- Russia, the world’s biggest energy supplier, increased oil output 1.7 percent to a post-Soviet high in September from a year earlier after OAO Rosneft, Russia’s largest crude producer, brought a new field on line in August.
Russian oil production rose to 10.01 million barrels a day from 9.84 million barrels a day in September last year, the Energy Ministry’s CDU-TEK unit said in an e-mailed statement today. Russia produced 9.97 million barrels a day in August.
Rosneft output increased 4.8 percent against the same month last year with the addition of the Vankor field, which may become one of the world’s ten-largest fields, based on a list of major deposits compiled by the Cambridge Energy Research Associates. The state-controlled company plans to pump 220,000 barrels a day at the northern Siberian field by the end of this year and will more than double output to 510,000 barrels a day at peak production.
Oil produced at projects under so-called production sharing agreements, set up by Royal Dutch Shell Plc, Exxon Mobil Corp. and Total SA, increased 8.6 percent from the previous month and 7.5 percent from the previous year.
Total crude exports rose to 5.47 million barrels a day, an increase of 4 percent from the same month last year and 0.6 percent from the previous month.
Russian natural gas output rose to 45.5 billion cubic meters in September from 43.5 billion cubic meters in August.
To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@
Last Updated: October 2, 2009 03:07 EDT
Reuters: UPDATE 1-Russia Sept oil output hits record 10 mln bpd
Fri Oct 2, 2009 12:44pm IST
* Output rises 0.4 pct from previous record in Aug
* Rosneft's Vankor deposit helps rise
* Gas output up 8.6 pct month-on-month
* Gazprom output rises 11.1 pct
(Adds background)
MOSCOW, Oct 2 (Reuters) - Russia set a new monthly record for crude oil production in September, producing more than 10 million barrels per day (bpd) in a single month for the first time, Energy Ministry data released on Friday showed.
Russia, the world's largest oil producer since Saudi Arabia has reduced output in line with OPEC cuts, produced 10.01 million bpd last month, up 0.4 percent from the 9.97 million bpd produced in August, which was also a record high at the time.
Russian production has recovered in 2009 after suffering its first drop in a decade last year. The latest spike in output follows the August launch by state-controlled industry leader Rosneft (ROSN.MM: Quote, Profile, Research) of its massive Vankor deposit in the Arctic.
Russian natural gas output also rose in September. The world's largest gas producer produced 1.52 billion cubic metres (bcm) per day last month, up 8.6 percent from August, the Energy Ministry data showed.
Gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) produced 1.20 bcm per day in September, up 11.1 percent from August, the data showed. (Reporting by Robin Paxton; editing James Jukwey)
: Russia Targets Annual Production of 3.9 Billion Barrels of Oil and 940 Billion Cubic Meters of Gas
GALWAY, IRELAND--October 2, 2009--Researched by Industrial Info Resources (Sugar Land, Texas)--Russia is aiming for an oil production target between 3.89 billion and 3.93 billion barrels per year, and a gas production target of 880 billion to 940 billion cubic meters per year by 2030. The country also plans to increase electric power generation to 1.8 trillion to 2 trillion kilowatt-hours (kWh) per year by that time. These are the targets set for the country under a new national energy strategy in place until 2030. The plan forecasts investments of about $1.9 trillion during this period.
Today.Az: Azerbaijan to export 1.5mln cu.m of gas to Russia per day
02 October 2009 [11:17] - Today.Az
|[pic] |
From Jan. 1, 2010, the State Oil Company of Azerbaijan Republic (SOCAR) will export 1.5 million cubic meters of Azerbaijani gas to Russia per day, said Nazim Samadzade, First Deputy Head of Azerigas Production Unity (PU) of SOCAR.
|"From Jan. 1, we will transport 1.5 million cubic meters of the Azerbaijani gas to Russia per day. At present preparatory work |
|is underway," said Samadzade. |
| |
|The agreement signed in June in Baku between SOCAR and Gazprom covers 5 years with the possibility of exporting at least 500 |
|million cubic meters of gas per year. |
| |
|"This contract is profitable for us. By signing it, we can export our existing surplus of gas," SOCAR President Rovnag |
|Abdullayev said earlier. |
| |
|Export volumes will be negotiated six months in advance. |
| |
|By late 2009, the Kazimagomed-Mozdok pipeline connecting Azerbaijan and Russia will undergo technical work for its operation in |
|reverse mode. |
| |
|Its capacity is 5 billion cubic meters of gas per year. |
| |
|RenCap: Russia's oil products export duty regime may change from 1 Jan 2010 |
| |
| |
|Rencap |
|October 2, 2009 |
| |
|Event: Yesterday (1 Oct), Prime-TASS, citing Andrei Slepnev, deputy minister of economic development, reported that Russia's |
|export regime for oil products may change from 1 Jan 2010 (much earlier than the previously expected 2012). The change is |
|intended to unify export duties for both light and dirty oil products, in order to provide economic incentives for refinery |
|upgrades. Under the current tax regime, at a $70/bbl oil price, export duty on light products represents about 69% of crude oil |
|duty; while for dirty products the figure is only 37%, on our estimates. It had previously been suggested that both duties could|
|be unified at around 55%, but Slepnev said yesterday that this would not be the case, although no further details were given. |
| |
|Action: This change could have a very significant effect on the fundamental value of Russian oil companies, in our view. |
|Depending on the level of the equalising coefficient, it could affect individual company valuations in either direction. |
| |
|Rationale: Russia's current, favourable, export tax regime for oil products is one of the main reasons for the very high |
|profitability of Russia's vertically integrated oil companies, with an average refining margin approaching $18/bbl, on our |
|estimates. We estimate, for example, that the downstream segment accounted for about 45% of operating profit for both Rosneft |
|and LUKOIL in 2008. Although it is not clear from Slepnev's statement how the tax regime will change, we assume the government |
|will gradually reduce the overall tax benefit on products exports, which may significantly affect profitability of individual |
|oil companies, in our view. |
| |
|RBC: Russia weighs unifying export duty on oil products |
| |
|/091001/ |
| |
|The unified customs duty on heavy and light oil products may take effect beginning January 1, 2010, Deputy Economy Minister of |
|Russia Andrei Slepnev told journalists today. |
|“There has certainly been some progress on the matter, but the final decision has not yet been made,” Slepnev stated, adding |
|that the approval of Russia's Energy Ministry had already been secured. Meanwhile, Slepnev emphasized that the Economy Ministry |
|felt the unified duty should be imposed from January 1, 2010. |
|Back on February 12, 2009, the government held special consultations to support the oil industry. Among other decisions made at |
|the meeting, the government resolved to slash the oil export duties for East Siberia and the Far East to zero, to look into the |
|possibility of equal export duties on light and heavy oil products, and to devise a special tax treatment for new oil and gas |
|fields. |
|As a means of further support, the government is now also considering granting state guarantees for loans extended for the |
|construction of new oil refineries or the upgrading of existing ones. |
|In June 2009, the Russian Finance Ministry put forward a proposal to level off the difference between export duties on oil and |
|oil products, arguing that this would generate “far more substantial” export profit. Likewise, they pressed for a single duty on|
|heavy and light oil products. |
Oil & Gas: MET suggests equalizing light & heavy export duties
UralSib
October 2, 2009
Oil product export duty rate calculation approach yet to be agreed. The Economy Ministry has suggested equalizing export duties on light and heavy oil products from 1 January, 2010, Interfax reported yesterday, citing the Deputy Energy Minister Andrei Slepnev. The ministry is currently in negotiations with the Energy Ministry, hence no method of calculating oil product export duties was given, but Slepnev said that export duty on oil products is to differ from the previously discussed 55% crude oil export duty.
Main goal to accelerate refinery modernization. The government wants to equalize export duties on oil products to stimulate oil companies to accelerate refinery modernization and to increase the share of high value added product output, i.e. light products (gasoline, diesel fuel, jet fuel), and to reduce heavy product output (fuel and tar oil, gas carbon). Export duties on light and heavy oil products are currently calculated on a monthly basis as a respective 70-75% and 35-40% of crude oil export duty. As a result, it is more economically reasonable for oil companies to export heavy products and to keep downstream investments at a moderate scale. In 7M09, more than a respective 51% and 31% of total oil products exported were fuel oil and diesel, while gasoline made up just 4.7%. The government wants to equalize export duties on oil products to stimulate oil companies to accelerate refinery modernization
Strong downstream exposure provides more gains. Equalization of export duties on oil products is mainly in the interest of companies with strong downstream exposure: Gazprom Neft, LUKOIL, TNK-BP, and Rosneft will benefit the most, since the refining depths of these companies' refineries and their coverage (total refining/total production) are the highest in Russia. Our preliminary calculations, based on an equalization export duty rate assumption of 55%, show that the positive effect on the target prices should be 4-8% for these companies. Tatneft and Surgutneftegas should benefit the least, with only 1-2% upside to their current DCF-based target prices. Victor Mishnyakov
Reuters: Russia's LUKOIL stops production at Odessa refinery
Fri Oct 2, 2009 12:13pm IST
MOSCOW, Oct 2 (Reuters) - LUKOIL (LKOH.MM: Quote, Profile, Research), Russia's second-largest oil producer, has stopped oil product output at its Odessa refinery in Ukraine due to crude shortages, a company spokesman said on Friday.
"Oil products output has stopped," the spokesman, Dmitry Dolgov, said.
On Thursday, market sources said crude deliveries to the Odessa refinery were halted on Oct. 1, as Ukrainian state pipeline operator Ukrtransnafta refused to supply crude to the refinery via the Kremenchug-Odessa pipeline. (Reporting by Vladimir Soldatkin, editing by Robin Paxton)
Ukrainian Journal: Russia’s Tatneft increases claim in Ukrtatnafta dispute to $2.4b
Journal Staff Report
|KIEV, Oct. 1 – Russia's OAO Tatneft has increased the amount of its claim against Ukraine in the conflict over Ukrtatnafta, where|
|the company is a shareholder, to $2.4 billion, according to materials from Naftogaz Ukrayiny and the cabinet, which were |
|published with a proposal on the restructuring of Naftogaz's eurobonds worth $500 million. |
| |
|According to the document, the claims were increased on June 29, 2009, which relates to alleged losses incurred by Tatneft in |
|connection with the sale of an 18.3% shareholding by Amruz Trading AG and Seagroup International Inc. to LLC Korsan. |
The Moscow Times: State to Create New Geology Holding
02 October 2009
The Moscow Times
The government is planning to create a new state holding to unite and coordinate the country’s various geological assets, Deputy Natural Resources and Environment Minister Sergei Donskoi said Thursday.
Rosgeologia will unite scientific institutes, industrial firms and geological information resources, the ministry said in a statement on its web site. Organizations that specialize in researching the Arctic shelf will also become part of the holding, Donskoi said.
The government is planning to increase its financing of geological research next year, Donskoi said, adding that several large oil reserves close to the strategic volume of 50 million tons will be opened this year despite a 10 percent to 20 percent decrease in research. One is the 50-million- to 80-million-ton Lugovoye oil reserve in the Saratov region, another is the 50-million-ton Chaikin reserve in the Sakha republic.
UralSib: Sistema starts consolidation of BashTEK assets
UralSib
October 2, 2009
Buyout offer proposed to Bashneft minorities. AFK Sistema (SSA LI - Buy) yesterday announced a mandatory buyout offer to Bashneft's minority shareholders at RUB286.5/ordinary share ($9.5 at RUB30.1/$), which was 30% lower than Wednesday's closing price. The buyout price is based on the weighted-average RTS prices over last six months. The market's reaction was moderate, with the share prices declining just 3.7%. Sistema currently controls 58.8% of Bashneft ords, and Sistema-Invest controls 25%, with minorities controlling the rest. This implies that the offer is to be made by Sistema to both Sistema-Invest and minorities, which together control 68,301,112 ordinary shares. Only RUB7.4 bln ($245 mln), paid for minorities' 25.7 mln ords, will leave AFK Sistema's US GAAP financial consolidation perimeter (as of 2Q09, Sistema had RUB36.4 bln of cash on its RAS accounts). Although Sistema announced that its stake in Sistema-Invest decreased from 65% to 19.99%, according to Sistema, its controlling stake in Sistema-Invest remained within Sistema Group and did not decrease. Bashneft to consolidate the refineries. According to Sistema, Bashneft is to be made the company's energy-asset consolidation center. The main rationale is the fact that Bashneft owns the licenses for oilfields (though the upstream operations will be shifted to Bashneft-Production LLC, a yet to be set up subsidiary). Bashneft will buyout the controlling stakes of the refineries from Sistema, financing the acquisition via a RUB50 bln ($1.7 bln) bond issue. We assume that 75-85% of this issue will be used to buy out refineries, with the rest to finance capex and working capital needs. We believe that this matches perfectly with the market value of the respective stakes in the refineries. By consolidating the cash flows, Sistema is aiming to maximize its value via efficient utilization of the potential of these individual, formerly unrelated oil assets, amalgamating them into a single mechanism.
Avoid consolidation game via oil assets; Buy Sistema. Key Sistema shareholder Vladimir Evtushenkov earlier estimated that the holding might spend about $500 mln on buying out Bashkirian energy asset minorities. This figure matches our estimate, and hence buyouts will not stretch Sistema's financial position. Streamlining the cash flows, Sistema maximizes its value. Neither Bashneft nor the refineries, which have started to operate as cost centers, provide any lure in terms of potential consolidation benefits or attractive conversion ratios. Sistema is currently only at the very early stages of consolidating the oil assets, but in time will be able to improve profitability significantly by redirecting Bashneft oil to Bashkirian refineries, developing petrol stations, and possibly by expanding its upstream business into new regions.
BusinessWeek: U.S. Warns Europe of Russian Energy Threat
Washington supports EU plans to build a natural gas pipeline from the Caspian, but a senior U.S. official cautions the project is 'only a piece of the puzzle'
By Valentina Pop
Washington continues to support the EU-backed Nabucco gas pipeline, but this project is "only a piece of the puzzle" when it comes to reducing Europe's reliance on Russian gas, U.S. special envoy for Eurasian energy Richard Morningstar has said.
"We support Nabucco. We support the Southern Corridor. It's an important part of the puzzle, but it's only one piece," Mr Morningstar told EUobserver on Wednesday (30 September) in an interview on the margins of a Black Sea energy forum organised in Bucharest by the Atlantic Council, a Washington-based think tank.
Alternative technologies and energy efficiency were also important in Europe's bid to reduce its reliance on Russian gas, he said.
"More interconnections between the countries in Europe, more storage facilities, terminals for liquified natural gas (LNG)—all will help reduce dependence on a sole supplier."
But at the same time, Russia will be a "major player over the coming years. That's a reality," he noted, while making clear that the U.S. energy policy in the Caucasus and Central Asia was not 'anti-Russia.'
"We want to engage with Russia and we're hoping there will be ways to co-operate, that we don't look at things as a zero-sum game. Zero-sum games are expensive and [unappealing] in today's financial world."
In the Obama administration's view, there is "no contradiction at all" in backing Europe's energy diversification while also engaging with Moscow as broadly as possible on the energy front.
A bi-national commission chaired by U.S. secretary of state Hillary Clinton and Russian foreign minister Sergei Lavrov is in the making, with energy being dealt with in a special working group of that body. Its task is to look at ways American and European companies can develop projects in Russia for instance to bring the Soviet-era infrastructure back into shape.
But these investments have to be carried out "in a predictable and transparent business environment," Mr Morningstar said, in reference to a long history of Western companies being forced to sell their assets to Russian state firms.
Asked if the U.S. was pressing Moscow to ratify the Energy Charter, a legally binding document protecting foreign investments in Russia, the U.S. diplomat said his country was itself not a member of this agreement, but it "certainly certainly supports all of the principles which the Energy Charter represents."
Former Soviet states not abandoned
As to ways of alleviating fears in former Soviet republics such as Georgia over their own energy security if the U.S. was developing a Russia-friendly policy, the diplomat said that Washington was not abandoning them.
"We talk with President Saakashvili and Georgian officials all the time. They know that we strongly support Georgia's energy security and its independence. And Georgia will be a transit country for routes coming from the Caucasus and central Asia. So again, there's nothing contradictory about this at all," he said.
The EU's own involvement in the Caucasus and central Asia was "critically important" in order to show these countries that the bloc is "really serious" about buying up their gas, he added.
"Just looking back three to four years ago, the involvement on energy issues in the Caucasus and central Asia by the EU was close to non-existent. That has changed tremendously over the the past years and it's been a very positive thing which I think will lead to more resources going west towards Europe."
As to promoting human rights and democracy in energy-rich countries the U.S. and EU is doing business with, Mr Morningstar said that by just talking to those governments "makes things incrementally better."
"I don't think anybody will be able to convince me that by not engaging in energy, democracy and human rights issues will be better in any of those countries."
Energy-rich Caspian states commonly dubbed as the 'Stans' have a consistently bad record in human rights violations, corruption and organised crime.
Potential energy resources in the Black Sea
With a potential for energy resources to be exploited in the Black Sea, the U.S. considers it to be very important for all the bordering states—Russia, Ukraine, Georgia, Turkey, Romania and Bulgaria—as well as central and eastern European countries work together to develop these resources and diversify their energy supplies.
"It's really important for the countries of this region—both the Black Sea and the central and eastern European countries to work together and develop these resources," Mr Morningstar said.
Asked about the Russian-Italian South Stream project that would run along the seabed of the Black Sea and bring gas to countries such as Bulgaria and Hungary, already dependant to a large extent on Russian gas, the diplomat said the U.S. was "not opposed to it."
"We don't consider South Stream and the potential for South Stream to be a detriment to Nabucco. There are countries involved in South Stream, but it's still very unclear whether South Stream will happen," he said, citing high construction costs and uncertainties about where the gas would come from.
Nabucco, the 3,300-kilometre pipeline set to run from Turkey to Bulgaria, Romania, Hungary and Austria also needs firm gas commitments from supplying countries in Central Asia and possibly Iraq.
But Mr Morningstar was confident that the project will eventually be completed, after a breakthrough in July when the five countries agreed on transit and legal issues.
"There are still a lot of steps that need to be taken to get from here to there, but I think it's going to happen. The key is that there be the political will to do it," the diplomat concluded.
Provided by EUobserver—For the latest EU related news
Gazprom
Nasdaq: Gazprom: Europe Demand For Russia Gas "Flattening Out" In Sept
MOSCOW -(Dow Jones)- Demand in Europe for Russian gas has flattened out in September, after falling earlier this year, Russian gas producer OAO Gazprom ( GAZP.RS) said Friday.
"Statistics for September show that demand [in Europe] for Russian gas is flattening out," the company said in a statement.
State-controlled Gazprom has seen exports to Europe, its most lucrative market, fall significantly this year, due to high prices and lower demand amid an economic slowdown.
Europe depends on Russia for more than a quarter of its gas needs.
Company Web site: gazprom.ru
-By Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 937 8445; jacob.pedersen@
RBC: Gazprom may have new competitor in Europe
RBC, 02.10.2009, Moscow 10:45:06.Gunvor, one of the world's top independent companies specializing in the oil trade, is poised to diversify its business. The company is assembling a team of specialists to launch trade on international liquefied natural gas (LNG), coal and electricity markets as early as 2010. Sources in the trading circles maintain that the company hopes to engage in Russian natural gas exports in Europe, despite the fact that Gazprom's uncontested ownership of the export monopoly in Russia renders the idea useless to even think about, the RBC Daily newspaper reported today.
Gunover Group's annual revenue is estimated at $70bn, and the company is co-owned by Russian businessman Gennady Timchenko, who is said to be closely associated with Prime Minister Vladimir Putin.
Meanwhile, Gunvor stated that the company was forming an energy department to target development in principally new spheres, taking advantage of the company's experience and infrastructure in trade and transportation of oil and oil products to do so. "We expect to develop our business on international coal, biofuel, liquefied and natural gas, electricity and freight markets," the company indicated.
At the moment, Gunvor is purchasing oil exclusively by participating in tenders. Experts say, however, that in the case of natural gas, the company may change its tactics if it decides to purchase gas from Gazprom for reselling.
Oil Online: DONG Energy doubles its future gas supplies from Gazprom
10/01/09 10:34 AM
Gazprom Export (a Gazprom Group company) and DONG Energy have signed a contract for delivery of gas to DONG Energy via the Nord Stream pipeline in the Baltic Sea. The gas volumes will be delivered at the Danish/German border.
In June 2006, Gazprom and DONG Energy signed a contract stipulating Gazprom's delivery of one billion cubic meters of gas per year, starting from 2011, for a period of 20 years. The contract included an option to substantially increase annual quantities. This option has now been partly put into use, resulting in the new additional contract under which Gazprom, starting from 2012, will deliver an additional one billion cubic meters of gas per year for a period of 18 years through the Nord Stream pipeline. The contract is linked to the finalisation of the second part of the Nord Stream pipeline.
"We are very pleased that we with this additional contract are strengthening our long term co-operation with Gazprom. The supplies from Gazprom are part of our gas sourcing strategy which builds on diversifying our sources of delivery in order to secure our energy supplies," said Mr. Kurt Bligaard Pedersen, Executive Vice President in DONG Energy.
The agreement supplements current gas supplies from DONG Energy's E&P production and long term contracts on deliveries from Northwest Europe, which will be further complemented in 2011 with gas from the Gate LNG-terminal in Rotterdam. With such a diversified portfolio, DONG Energy is in a strong position to secure the supply to the Danish and Swedish markets in the future.
RenCap: S&P downgrades Gazprombank to BB
Rencap
October 2, 2009
Yesterday (1 Oct) S&P downgraded Gazprombank (GPB) from BB+ to BB. Unlike most of S&P's recent actions with regard to Russian banks, we view this one as justified, given the bank's poor 2008 financial results and still relatively weak equity position. However, the key argument given by the agency (increased credit risks due to the bank's involvement in various state lending programmes) does not sound fully convincing to us.
GPB's loan growth has been relatively modest YtD (12% according to its RAS 8M09 financials). Moreover, as reported by the bank, it has originated a substantial number of new loans in the metals and mining sector (TMK, ChTPZ, Mechel etc) which, in our view, should not be treated as overly problematic. We believe, the key problem with GPB's credit is a very substantial loss from trading operations incurred by the bank in 2008, which has significantly weakened the bank's capital position (click here to view Gazprombank FY08 and 1Q09 IFRS: Highlighting the fundamental weaknesses in our 2 July 2009 Fixed Income Daily Snapshot). This problem is to a very large extent compensated by the very substantail amount of capital support received by the bank through the state-sponsored Tier-2 recapitalisation programme.
We believe that in terms of fundamentals (including the degree of state support) GPB is significantly weaker than VTB (which has already received RUB180bn in equity injections from the government), therefore we think Gazprombank's spreads to the VTB curve (around 30-50 bpts) as too tight.
Maxim Raskosnov
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