Russia
Russia 091113
Basic Political Developments
• PRESS DIGEST - Russia - Nov 13
• Medvedev wants Siberia, Far East integrated into APR - Russian President Dmitry Medvedev said Siberia and the Far East of the country shall be integrated into the markets of Asia and the Pacific Rim.
• Medvedev to Address APEC Summit - President Dmitry Medvedev on Saturday will address the annual Asia-Pacific Economic Cooperation summit in Singapore, where leaders will discuss ways to spur economic recovery and Medvedev will hold a series of bilateral talks with his Asian and American counterparts.
• Dmitry Medvedev's article "APEC: Toward a Stable, Safe and Prosperous Community" has been published: APEC: Toward a Stable, Safe and Prosperous Community
• Singapore prime minister Lee Hsien Loong’s interview with RIA Novosti
• Russia delays S300 missile contract: Iranian armed forces - Russia has delayed a contract six months to transfer S300 missiles to Iran, Iranian armed forces Chief of Staff, General Hassan Firouzabad was quoted as saying by the Mehr news agency.
• U.S. envoy to Afghanistan to visit Moscow - United States Special Representative for Afghanistan and Pakistan Richard Holbrooke will visit Moscow on November 15-17 to discuss the problems of Afghanistan and Pakistan, U.S. Department of State spokesman Ian Kelly said on Thursday.
• Sergei Lavrov to visit Afghanistan on Nov 19 – FM: “Sergei Lavrov will visit Afghanistan to take part in the inauguration ceremony of re-elected President Hamid Karzai,” the ministry’s spokesman said.
• Friday November 27, 2009: PARIS - Russian Prime Minister Vladimir Putin visits France for Franco-Russian government seminar
• Putin’s Sochi, Far East Trip - Prime Minister Vladimir Putin said Thursday in a meeting with Transportation Minister Igor Levitin that he would travel to Sochi and the Far East by the end of the year.
• Russia to deliver last of six Su fighters to Indonesia in 2010
• Russia to help Cuba establish emergency training center
• No need to politicize Black Sea fleet issue – Yanukovych
• Georgian National Security Council to discuss opening of borders with Russia
• Climate, crisis, WTO entry to be on agenda at Russia-EU summit - Russian President Dmitry Medvedev, European Commission President Jose Manuel Barroso, EU High Representative for the Common Foreign and Security Policy Javier Solana and Swedish Prime Minister Fredrik Reinfeldt will take part in the summit on November 18.
• Moscow, Athens discuss plans to sign new security treaty - Russian Deputy Foreign Minister Vladimir Titov met his Greek counterpart Dimitris P. Droutsas on Thursday to discuss Russia’s initiative on signing a European security treaty.
• START ending, but US and Russia still agree on nuke verification - The main details of a new Strategic Arms Reduction Treaty have already been worked out and now the US and Russia have to agree on verification and warheads counting issues, non-proliferation expert Peter Crail told RT.
• Russia Seeks Removal of U.S. Observers Under New Nuclear Accord
• A Possible US-Russian Arrangement and Implications for the Middle East - By Zvi Magen
• Moscow mayor to deliver humanitarian aid to Abkhazia
• 3 State Corporations To Lose Status in ’10 - Russian Technologies, Rusnano and Vneshekonombank will likely lose their status as state corporations as early as next year, presidential aide Arkady Dvorkovich said Thursday.
• Sayano-Shushenskaya HPP unit starting planned for December
• Former Russneft Head Gutseriyev No Longer on Interpol Wanted List – Statement
• Gutseriev May Wrest Back Russneft Oil Company, Vedomosti Says
• Court extends Khodorkovsky’s detention to February 17
• Three gunmen shot dead in Russia's Ingushetia - Three militants were killed in a security operation in the south Russian republic of Ingushetia on Friday, a local law enforcement officer said.
• Cleric injured in Ingushetia
• Attacks and Shootouts Reported in Dagestan, Ingushetia and Karachaevo-Cherkessia
• Wrecks tell tale of growing violence - By Rupert Wingfield-Hayes , BBC News, Nazran
• Prominent Tatar Activist Talks Of Leaving Russia - Bayramova told RFE/RL that Russian officials have curtailed her freedom and hindered her struggle for the independence of Tatarstan, which she said now "cannot be a homeland" for her.
South Russia editor charged with extremism over poem
• Praying to Putin - In the absence of meaningful civic action, many Russians continue the czarist tradition of appealing to the country’s rulers.
• Federal Protection Service chief left post of Russian Boxing Federation president - Federal Protection Service chief left post of Russian Boxing Federation president
• UK key suspect in Litvinenko murder not against meeting with British inspectors in London
• Litvinenko murder suspect may return to Britain for questioning as Germany drops case against 'accomplice'
• St. Petersburg Prepares for Flu Jab
• Smuggler Given 9 Years - A St. Petersburg court has sentenced a 45-year-old Uzbekistan citizen to nine years in prison for attempting to smuggle heroin, Interfax reported Thursday, citing the web site of the St. Petersburg prosecutor’s office.
• Opposition raps Medvedev poll reforms plan
• Europe should seize on Medvedev's calls for modernization - In his annual state of the nation address, Russian President Dimitry Medvedev called for sweeping internal reforms. Deutsche Welle's Ingo Mannteufel thinks this is a golden opportunity for the EU.
• WSJ: Russia's Thoroughly Modern Medvedev - By LIAM DENNING
• More Influential Than Oprah Winfrey? - Medvedev’s State of the Nation Address Centered on Modernization, but It Only Covered Old Ground - By Tom Balmforth
• The hour may be at hand for Russia's 11 time zones
National Economic Trends
• CBR keeps intact forecast for private capital outflow at $40 bln
• Russia expects positive trade surplus
• TABLE-Russia monetary base rises to 4.08 trln rbls
• : Kremlin attempts to double its grain exports
Business, Energy or Environmental regulations or discussions
• Russian Govt Approves Draft Transfer Pricing Law
• Inter RAO consolidates blocking stake in TGK-11
• TeliaSonera, Russia’s Altimo to Merge MegaFon, Turkcell Stakes
• Usmanov: no gains for MegaFon from Telia/Altimo deal
• Deal places Alfa atop Russian mobile industry
• Deripaska’s Rusal May Offer Assets to China for IPO Support
• Evraz Group secures amendments in debt covenants
• Russia Evraz--covenants amended on $3.6 bln debt
• Siemens VAI to reconstruct concaster No 3 at Evraz NTMK
• Allocine buys into Russian website - Kinopoisk stake is part of international expansion
• INTERVIEW-UPDATE 1-Baltika: tax hike to hit Russia beer mkt
• Austrian Airlines Not Planning To Cancel Flights To Russia
Activity in the Oil and Gas sector (including regulatory)
• Slovenian PM to sign agreement for gas pipeline - Slovenian Prime Minister Borut Pahor will sign a deal in Russia on Saturday for the construction through its territory of the massive South Stream gas pipeline to Europe, a government minister said Thursday.
• Wall Street Journal calls Nord Stream project "Molotov-Ribbentrop Pipeline"
• Russia Gains a Political Victory in Scandinavia with Nord Stream Approval
Gazprom
• Gazprom reveals borrowings plan for 2010
• Gazprom: Naftogaz must honor obligation to transit gas to Europe
• Gazprom, Naftogaz heads discuss problem of gas payments
• Gazprom postpones drilling in Tajikistan
• UPDATE 2-Gazprom says ups 2010 investment to $28 bln
• Oao Gazprom Approves Draft Investment Program And Budget
• Belarus asks Gazprom to review gas prices for 2010
• Why Poland Upped Its Reliance on Gazprom - Poland wants to diversify its energy supply, but a recent deal with Gazprom only increases its dependence on the Russian gas giant. Folly—or smart move?
• Gazprom's American Ambitions - Gazprom, the bare-knuckled king of natural gas, is out to make its mark in America - By Steve LeVine
------------------------------------------------------------------------------------------
Full Text Articles
Basic Political Developments
PRESS DIGEST - Russia - Nov 13
Fri Nov 13, 2009 8:07am GMT
MOSCOW, Nov 13 (Reuters) - The following are some of the leading stories in Russia's newspapers on Friday. Reuters has not verified these stories and does not vouch for their accuracy.
KOMMERSANT
kommersant.ru
- Russia's anti-monopoly service is gathering evidence against French hypermarket chain Auchan over its card programme with Credit Europe Bank, the paper says.
- Twenty-four percent less apartments were sold in Moscow in the first three months of 2009 compared to the same period last year, the paper writes.
VEDOMOSTI
vedomosti.ru
- Russia's economy fell by 8.9 percent in the third quarter of 2009 compared to the same period of 2008, the paper writes.
- Russia's gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research) plans to increase spending by 5 percent in 2010, the daily writes.
GAZETA
gzt.ru
- Russia's federal budget deficit in the 10 months of 2009 reached 1.5 trillion roubles, which is 4.7 percent of GDP, the paper reports.
TRUD
trud.ru
- Russia's largest lender Sberbank (SBER03.MM: Quote, Profile, Research) will cut 27,000 jobs by the end of 2009 and 30,000 in 2010-2013, the paper writes.
KOMSOMOLSKAYA PRAVDA
kp.ru
- The paper publishes comments of Russian experts, officials, human rights activists and other public figures on the state of the nation address by Russian President Dmitry Medvedev.
- Moscow officials have announced that 24 underwater parking lots will be built in Russia's capital, the paper reports.
- An officer of Russia's defence ministry threw eight-year-old daughters of his cohabitant out of the balcony, the popular daily writes.
Medvedev wants Siberia, Far East integrated into APR
13.11.2009, 00.32
MOSCOW, November 13 (Itar-Tass) -- Russian President Dmitry Medvedev said Siberia and the Far East of the country shall be integrated into the markets of Asia and the Pacific Rim.
“Russia wants Siberia and the Russian Far East to be directly involved in regional integration. We did not join APEC empty-handed. We have much to offer our partners, not just abundant reserves of oil, gas and various minerals, biological resources and fresh water, but also the no less competitive asset of the science and technology, industrial and intellectual potential that the eastern part of our country possesses,” the president said in a article headlined APEC: Toward a Stable, Safe and Prosperous Community. Medvedev leaves fore APEC summit in Singapore on Friday.
The president said preparations for Russian presidency in APEC in 2012 is a major priority.
“We are open to diverse and mutually beneficial cooperation in the Asia-Pacific region. Our main reference point in this area is the preparation for Russia's chairmanship of the forum in 2012. This honorary mission carries with it great responsibilities and comes with many obligations. We will do everything necessary to ensure that the APEC summit in Vladivostok is productive and of the highest quality,” Medvedev said.
“Russia has built up invaluable experience of cooperation with its APEC colleagues since we joined the forum in 1998. We have always been actively involved in resolving the issues of greatest urgency and concern, not only at the summits and ministerial meetings, but also through the ongoing painstaking work in the forum's various expert committees and groups. As in the other international organisations, we seek to be a reliable and responsible partner within APEC,” the president said.
Medvedev to Address APEC Summit
13 November 2009
By Aaron Mulvihill
President Dmitry Medvedev on Saturday will address the annual Asia-Pacific Economic Cooperation summit in Singapore, where leaders will discuss ways to spur economic recovery and Medvedev will hold a series of bilateral talks with his Asian and American counterparts.
Medvedev will carry out bilateral talks with Chinese leader Hu Jintao, Japanese Prime Minister Yukio Hatoyama and U.S. President Barack Obama, a Kremlin official said Thursday. Medvedev and Obama will also have one-on-one talks in which they will discuss a revision to the Strategic Arms Reduction Treaty, due to expire Dec. 5, the White House said.
At the APEC CEO summit Saturday, Medvedev is slated to give a keynote address, in which he will discuss priorities for action in the global economy.
The summit for heads of state comes after a week of lower-level ministerial conferences discussing ways to cement worldwide economic recovery. APEC finance ministers met Thursday and agreed to move to “market-oriented” exchange rates and keep in place huge stimulus programs for as long as it takes for the economy to completely recover.
“We will undertake monetary policies consistent with price stability in the context of market oriented exchange rates that reflect underlying economic fundamentals,” the ministers said in a statement.
China has come under increasing criticism for its pegged exchange rate, which critics say artificially props up the countries’ exporters, providing an unfair trade advantage. China’s central bank said Wednesday that it would consider major currencies in guiding the yuan, suggesting a departure from the effective dollar peg. Russia’s Central Bank has set a floating exchange rate as its long-term goal.
Nevertheless, the countries agree that sudden realignments in exchange rates are no ‘silver bullet’ for addressing economic imbalances, Shanmugaratnam said.
Separately, APEC foreign and trade ministers met on Thursday and expressed concern over a fragile global recovery and high unemployment. They promised to “lay a foundation for growth that is inclusive, balanced and sustainable, supported by innovation and a knowledge-based economy.”
Delegates also reiterated their support for Russian accession to the World Trade Organization in line with a regional push to dismantle trade barriers.
Deputy Finance Minister Dmitry Pankin headed Russia’s delegation to the finance ministers’ meeting, while Economic Development Minister Elvira Nabiullina led the country’s delegation to the foreign and trade ministers’ meeting.
Deputy Foreign Minister Alexei Borodavkin, also at the meeting, said Thursday that North Korea’s nuclear program will be the focus of multilateral talks on the summit sidelines.
“We intend to put to use possible contacts with our colleagues from China, South Korea, Japan, the United States and other countries to compare our positions on the sidelines of the summit, including [our views] on the Korean Peninsula nuclear problem,” Borodavkin said. Medvedev’s visit to Singapore is the first ever to the Pacific Rim country by a Russian head of state.
Dmitry Medvedev's article "APEC: Toward a Stable, Safe and Prosperous Community" has been published:
APEC: Toward a Stable, Safe and Prosperous Community
|November 13, 2009 |
|Published in the media of the APEC member states |
The Asia-Pacific Economic Cooperation summit about to begin in Singapore coincides with the twentieth anniversary of this influential regional grouping’s founding. I think this is an opportune moment to look back over its achievements so far and outline its key tasks for the period ahead.
Today, APEC has established itself clearly as a powerful engine for integration in the Asia-Pacific region and a generator of new ideas contributing to regional development. Over these last twenty years, the forum has become an independent and crucially important factor in the global economy and politics, and its role will continue to grow.
What is the secret of APEC’s success? We can find the answer to this question in the concluding statement of the first APEC ministerial meeting that took place in November 1989 in Canberra. It emphasises that the organisation will build cooperation based on principles such as recognition of the differing social and economic systems and levels of development of the APEC’s Member Economies, voluntary choice, commitment to open dialogue and consensus, and equal respect for the views of all participants. Combining these principles has enabled APEC to stimulate investment cooperation, resolve international and regional trade issues and much more.
The dialogue on the global economic crisis further confirms the forum’s effectiveness, flexible approach and ability to make the needed responses to global change. Of course, each individual economy is battling the crisis based on its own priorities and possibilities, but it is always useful to study partner countries’ positive experience. APEC offers the tools we need to organise just this kind of active exchange of positive experience.
APEC’s agenda is not limited to economic matters alone. The forum’s participants are constantly engaged in the search for joint answers to the challenges we face today in guaranteeing security and social protection for millions of people.
Over the years, APEC has proven multi-polar diplomacy’s viability in practice. Joint efforts and equal involvement of its members in the search for solutions to our common problems is the basis of the forum’s work. I am certain that this is the guarantee of APEC’s success now and in the future.
Russia has built up invaluable experience of cooperation with its APEC colleagues since we joined the forum in 1998. We have always been actively involved in resolving the issues of greatest urgency and concern, not only at the summits and ministerial meetings, but also through the ongoing painstaking work in the forum’s various expert committees and groups. As in the other international organisations, we seek to be a reliable and responsible partner within APEC.
Russia wants Siberia and the Russian Far East to be directly involved in regional integration. We did not join APEC empty-handed. We have much to offer our partners, not just abundant reserves of oil, gas and various minerals, biological resources and fresh water, but also the no less competitive asset of the science and technology, industrial and intellectual potential that the eastern part of our country possesses.
We are open to diverse and mutually beneficial cooperation in the Asia-Pacific region. Our main reference point in this area is the preparation for Russia’s chairmanship of the forum in 2012. This honorary mission carries with it great responsibilities and comes with many obligations. We will do everything necessary to ensure that the APEC summit in Vladivostok is productive and of the highest quality.
“Sustaining Growth, Connecting the Region” is the slogan for APEC’s work this year. In Singapore, we will discuss a broad range of anti-crisis measures, most of them related to the decisions taken at their recent summit by the leaders of the G20 countries, where almost one half of APEC members took part. Discussions will examine, of course, the steps needed to reform the global financial system and make it fairer and more balanced. If we do not do this the global economy will remain in danger of more crises in the future.
Although the world has not put all the economic difficulties behind it yet, the forum will nonetheless examine optimum models for APEC’s economic development in the post-crisis period. I think this is a far-sighted and effective decision, for we need to prepare in advance for the next stage in global economic growth.
Like the other APEC leaders, I share the view that economic growth should be not only sustainable but also universal. We need to bring growth to all countries and all economic sectors, and bring its fruits to all members of society, above all the most vulnerable groups – children and the elderly, unemployed people, and people with disabilities.
I think the corporate social responsibility concept currently being discussed actively in APEC is vitally important. It has particular relevance for the companies and financial institutions receiving state support during the economic downturn period.
I also share the predominant view in APEC on protectionism in global trade. This kind of state support should be targeted and only a temporary measure. Each country makes a priority of supporting its own producers of course, but excessive protectionist barriers that create hothouse conditions for unprofitable businesses run counter to the principles of free competition and ultimately do more harm than good to a country’s business development.
Russia is ready to take part in continued regional economic integration and cooperate on other issues on the APEC agenda. We want to exchange experience and work together on innovative development and spreading the use of advanced technology and computerisation. In accordance with the commitment to the Bogor Goals – building a system of free and open trade and investment activity in the Asia-Pacific region – that we declared when we joined APEC, we will work with our partners on enhancing economic legislation, carrying out structural reform, ensuring transparency and preventing corruption, developing small businesses and micro-enterprises, and activating public-private partnerships. The review of Russia’s individual action in APEC, carried out in July 2009, showed that our country has made considerable progress in these and other areas.
We will continue to build up cooperation on guaranteeing food, energy, transport, environmental and information security throughout the APEC region. Our work together on guaranteeing personal security and emergency situation management is also set to move to a new level. The fight against international terrorism, organised crime, drugs trafficking, human trafficking and piracy continues to call for our closest attention.
I would like to conclude by congratulating the APEC forum on its twentieth anniversary and wishing it a successful road forward to our common goal of building a harmonious and prosperous Asia-Pacific community and guaranteeing stability, security and prosperity for our peoples.
Singapore prime minister Lee Hsien Loong’s interview with RIA Novosti
09:0713/11/2009
Q: “What does the first-ever visit of the Russian President to the Republic of Singapore mean for your state?”
Mr Lee: “It is a very significant milestone for our relationship. We have cultivated our relations with Russia over many years. There have been many exchanges of visits at different levels, including ministers’ visits, but this is the first time that the President of Russia is visiting Singapore. So, we are very much looking forward to it.”
Q: “The Russian Federation and the Republic of Singapore seem to be very different in almost every aspect. One is the largest country in the world and the other one is one of the smallest ones, one is cold and snowy and the other one is hot and humid, etc. And yet, relations between our two countries lately seem to be developing very fast. Could it be because Russia and the Republic of Singapore are mutually complementary to each other?”
Mr Lee: “I think there are opportunities for us to work together. We may be very different in scale and size and location, even in outlook on the world, but there is opportunity to work together because we welcome Russia to come to Asia, to our part of the world, to trade, to invest, to visit, do business. We think that through Singapore Russian companies, Russian tourists, Russian business people can gain an entry into the Asian region because we are an environment which you will be comfortable to operate in and you can use us as a base to operate throughout Asia.
“On the other side, there are opportunities in Russia for Singaporean companies: to invest, to do business with, to trade with. There are infrastructure projects like airports, there are other projects like special economic zones. There are also cooperation opportunities outside of business, for example, research and development, for example, cultural links, for example, links with your business schools, like the Skolkovo School, which are our Minister Mentor is on the Board of Advisers of. So, I think that being different does not mean we cannot work together. In fact, it means there are more opportunities where we can complement one another’s different characteristics.”
Q: “Can you give some examples of the latest developments in the mutually beneficent cooperation between our two countries?”
Mr Lee: “We have a double-tax agreement which has been signed, I think it has now been ratified. Recently, we had a Russian business forum in Singapore which had several hundred Russian business people come here and network with Singaporean business people as well as people from the region - Vietnam, Taiwan, Malaysia, Indonesia and that was a great success. As I said earlier, Minister Mentor Lee Kuan Yew has just visited Moscow and he was at the Skolkovo School again and also, we have relationships between Keppel and Sembawang, which are our oil rig builders, supporting and supplying Russian oil exploration companies. So, I think there is quite a broad-based relationship.”
Q: “Can you give us more details, such as general trade, investment and finance, tourists, transport and specifically, air transport, logistics and infrastructure and science and technology?”
Mr Lee: “We have items on all those areas. I think what we would like to see is that Russia enhances its links, not just with Singapore, but through Singapore, its links with Asean, and more broadly with the Asia-Pacific region, but I think Asean is a good focus and Singapore is a natural centre for that.”
Q: “Singapore is also acting as a consultant for special economic zones for Russia. What can your government teach us in this area?
Mr Lee: “Our circumstances are very different. So, we would be hesitant to say we can teach another country, but we have some experience building special economic zones, building industrial infrastructure, industrial estates, in fact, townships, not just the hardware of the city layout and the services and utilities and the factory buildings, but also the software, the governance of the industrial park, how you can attract investments in, how you have to manage the investments so that they will have a good experience and they will continue to invest and continue to create jobs for your people in the country.
So, on that basis, we have an MOU with Russia and I think under this MOU, we have had quite a number of Russian officials come to Singapore for exposure, for attachments to understand how we operate in these key areas, investment promotion, estate management of the industrial park, development of the industrial park and we hope that something of what we do will be relevant in Russia’s very different circumstances.
But it is up to the Russian officials and the Russian Government to decide what you think is relevant and how perhaps what we have might be adapted to your circumstances.”
Q: “What about political cooperation between our countries?”
Mr Lee: “Political cooperation – we work together in Apec, of course, and we have bilateral visits, our Minister Mentor has visited, Senior Minister Goh Chok Tong has also visited Russia. Foreign Minister George Yeo has also visited Russia, I think, just this year and on the other side, your Foreign Minister has visited and your President is coming. So, I think that there are exchanges and we should continue to intensify and deepen them.”
Q: The head of the Russian Orthodox Church has recently expressed his gratitude to Singapore authorities for their help to a Russian Orthodox church in Singapore. Is there any other religious cooperation between our countries?
Mr Lee: “Well, I think the Russian Orthodox Church would very much like to build a church in Singapore and we would like to welcome that because it would be marvellous if in Singapore, in the middle of the tropics, we have an Orthodox church with golden onion domes, like you have in St Basil’s Cathedral and in the Red Square and all over the Russian countryside. We have told the Russian Government we would like to be helpful and we will do our best to see what we can do to make this happen.”
Q: “One of the few instances where Russia and Singapore are similar is that both countries are are multiethnic and multicultural. So what about cultural cooperation between us?
Mr Lee: “We have visits. I think we have got visits from your orchestras, from your ballets, from your performing groups. It has been a long time since a Russian circus has visited recently, but we also would like to have cooperation between our institutes of higher learning, our educational centres and in research and development and I think that our institutions are in touch with yours and there are certain projects which are already under way.”
Q: “Prime Minister, you mentioned just now a recent visit of Minister Mentor to Russia when he agreed to become a member or the trustees of the Business School of Management at Skolkovo. But are there any Russians currently studying in Singapore universities - and vice versa?”
Mr Lee: “There are a few dozen students in the universities and a few even in our schools. We hope that as the Russian population here grows, the number of students who are here will also increase because the families will grow. But we also hope that we will have more exchange visitors, students who are coming to spend a semester or two in our universities and our students can also spend a term or two in your universities and we get to know each other and we enrich each other’s educational experience.”
Q: “First of all maybe there is something you yourself would like to tell to Russian people?”
Mr Lee: “Well, we would like Russia to pay an active interest in the Asia-Pacific region and particularly in the Southeast Asian region. I think your main population mass is in Europe. A lot of your preoccupation is your relations with European countries, near abroad, of course, but also with EU and NATO.
But in the Far East, there are many opportunities for trade, for visits for exchanges and the Far East is prospering. We used to have bananas and lemon trees. We still try and keep Singapore a clean and green and beautiful garden city with waters and plants, but at the same time, it’s a vibrant cosmopolitan city which has people from all over the world and which is constantly transforming itself because the whole region is doing so and so are we. And we would like Russians also to come and to visit. Right now, we have maybe about 50,000 Russian visitors a year, but considering your population, I think even ten times that number would not be too many.”
By RIA Novosti's Mikhail Tsyganov in Istana (Singapore Presidential Palace)
Russia delays S300 missile contract: Iranian armed forces
13.11.2009 12:38
Russia has delayed a contract six months to transfer S300 missiles to Iran, Iranian armed forces Chief of Staff, General Hassan Firouzabad was quoted as saying by the Mehr news agency.
"We are dissatisfied with the actions of the Russians who we consider our friends," he said. "Do Russians not know about the significance of Iran's geopolitical strategy to ensure the security of Russia? Why has Russia not fulfilled the contract on the transfer of S300 missiles or complied with the terms of the contract for the past six months?"
Firouzabad hoped his statement would serve as a reminder to Russia to fulfill the contract.
Concerning nuclear fuel exchange with Western countries, Firouzabad said the country has nothing to lose. By purchasing 20-percent enriched uranium fuel for the Iranian reactors, energy could be provided to one million Iranians per year, he added.
In late September, while attending the Sixty-Fourth U.N. General Assembly, Iranian President Mahmoud Ahmadinejad agreed to exchange 3.5-percent enriched uranium fuel for 20-percent enriched uranium fuel for Tehran's nuclear laboratories.
U.S. envoy to Afghanistan to visit Moscow
WASHINGTON. Nov 13 (Interfax) - United States Special
Representative for Afghanistan and Pakistan Richard Holbrooke will visit
Moscow on November 15-17 to discuss the problems of Afghanistan and
Pakistan, U.S. Department of State spokesman Ian Kelly said on Thursday.
The high-ranking U.S. diplomat will visit Russia as part of his European
tour, during which he will visit Berlin (November 12), Paris (November
13), Munich (November 14), the spokesperson said.
"These routine meetings are part of continued efforts to stay in
close touch with allies and partners on Afghanistan and Pakistan. He
will then travel to Afghanistan for the inauguration of President Hamid
Karzai," the U.S. State Department said.
Sergei Lavrov to visit Afghanistan on Nov 19 – FM
13.11.2009, 10.50
MOSCOW, November 13 (Itar-Tass) -- Russian Foreign Minister Sergei Lavrov is to visit Afghanistan on November 19, the Russian Foreign Ministry reported on Friday.
“Sergei Lavrov will visit Afghanistan to take part in the inauguration ceremony of re-elected President Hamid Karzai,” the ministry’s spokesman said.
Friday November 27, 2009
PARIS - Russian Prime Minister Vladimir Putin visits France for Franco-Russian government seminar.
Putin’s Sochi, Far East Trip
13 November 2009
Prime Minister Vladimir Putin said Thursday in a meeting with Transportation Minister Igor Levitin that he would travel to Sochi and the Far East by the end of the year.
Levitin invited Putin to see a ring road around the Black Sea resort town, which he said would be finished by the end of November.
Levitin also told Putin that a state program to subsidize flights for residents in the Far East would be expanded next year, and that domestically made planes such as Sukhoi’s Superjet could be used to fly the routes. More than 160,000 people have made use of the program since President Dmitry Medvedev announced it in February, Levitin said.
Russia to deliver last of six Su fighters to Indonesia in 2010
09:3713/11/2009
MOSCOW, November 13 (RIA Novosti) - Russia will deliver the last of six contracted Su fighter jets to Indonesia in 2010, a Russian Federal Service for Military and Technical Co-Operation deputy director said on Friday.
Under a $300 million contract, signed in 2007, Russia is to supply three Su-30MK2 and three Su-27SKM fighters to Jakarta.
"Under the contract, two Su-27SK jets must be delivered by the end of 2009. One more fighter will be delivered in 2010," Konstantin Birulin said.
The third Su-30MK2 jet was delivered in January.
Indonesian Armed Forces Commander Air Marshal Djoko Suyanto said in 2007 that the country needed at least one squadron equipped with 16 Sukhoi fighters to replace part of the outdated fleet of U.S. F-16 fighters.
Russia to help Cuba establish emergency training center
05:4313/11/2009
HAVANA, November 13 (RIA Novosti) - Russia will help Cuba establish a training center for defense and emergencies services specialists, Russia's emergencies minister said.
Sergei Shoigu, who is currently on a working visit in the Cuban capital Havana, said he had signed a memorandum and a plan on cooperation with Cuban Civil Defence Chief Ramon Pardo Guerra on Thursday.
"The main point of the plan is the establishment of an [emergency] training center," the minister said, adding the center is intended not only for training specialists, but also for providing a "fast response to various emergencies."
The minister said the center, expected to be established by 2010, will prepare a wide range of specialists, including rescuers, firemen and divers, as well as civil defense specialists.
Shoigu also said Russia will help Cuba modernize its meteorological and seismological systems.
Cuba, located across the entrance to the Gulf of Mexico, is prone to frequent hurricanes. Three storms devastated the Caribbean island last summer, causing more than $10 billion in damage.
No need to politicize Black Sea fleet issue – Yanukovych
00:4913/11/2009
SIMFEROPOL, November 13 (RIA Novosti) - Ukrainian presidential candidate and former prime minister Viktor Yanukovych has said the issue of Russia's Black Sea Fleet, based in Ukraine's Crimea, should not be politicized.
"Taking into consideration our international obligations, earlier undertaken by Ukraine, we must not politicize the issue and appear like an unreliable or unpredictable partner," Yanukovych, who is the leader of the opposition pro-Russian Party of Regions, said on Thursday.
Russia's Black Sea Fleet uses a range of naval facilities in Ukraine's Crimea, including a base in Sevastopol, as part of a 1997 lease agreement valid until 2017.
On Wednesday, Ukrainian President Viktor Yushchenko said "the existence of Russia's Black Sea Fleet has seriously destabilized Ukrainian-Russian relations."
Yushchenko has also led calls for Russia to prepare to withdraw its fleet from Ukraine's territory when the agreement expires in 2017. Russia hopes to extend the lease. Russian and Ukrainian deputy foreign ministers hold regular meetings to discuss the implementation of the 1997 agreement.
Yanukovych said the position of the Ukrainian authorities on the issue is the result of a negative attitude toward Russia.
"The current "orange" authorities have been demonstrating openly their enmity to Russia, which is our strategic ally... and have been searching for conflicts," Yanukovych said.
"[Foreign] policy has to be balanced and mutually beneficial," he added.
Georgian National Security Council to discuss opening of borders with Russia
| |
| |
| |
[ 13 Nov 2009 11:57 ] [pic]
Tbilisi. Nizami Mammadzadeh – APA. National Security Council of Georgia will hold a meeting on Friday to discuss the opening of Lars checkpoint on Georgian-Russian borders, APA reports. Minister of Foreign Affairs of Georgia Grigol Vashadze will declare his ideas about the issue. Interior Minister Vano Merabishvili will inform the council about the situation in the occupied territories. The council will also address the issue related to the arrest of Georgian young people in Tskhinvali few days ago.
Oppositionists not represented at the parliament Zurab Tkmeladze, Akaki Asatiani, as well as oppositionist parliamentarians, members of the Christian-Democratic Party Giya Tortladze, Bachuki Kardava and Jondi Bagaturia are also expected to attend the National Security Council meeting.
Recently Minister of Foreign Affairs Grigol Vashadze told APA Georgian bureau that Russia proposed to Tbilisi to open Lars checkpoint on Russian-Georgian borders.
Climate, crisis, WTO entry to be on agenda at Russia-EU summit
12.11.2009, 20.05
STOCKHOLM, November 12 (Itar-Tass) - Climate problems, the economic crisis and Russia’s WTO entry will be in the focus of attention at the Russia-EU summit on November 18.
Russian President Dmitry Medvedev, European Commission President Jose Manuel Barroso, EU High Representative for the Common Foreign and Security Policy Javier Solana and Swedish Prime Minister Fredrik Reinfeldt will take part in the summit.
A statement of Sweden, which currently chairs the European Union, said one of summit priorities would be an appeal to Russia to produce plans on the reduction of carbon dioxide emissions ahead of the U.N. conference on climate protection, due in Copenhagen in December.
Russia and the EU will continue coordinating efforts towards overcoming the economic crisis, the statement said. The European Union intends to particularly emphasize a need to avoid protectionism and remove the remaining trade barriers between the European Union and Russia, it stressed.
It said the EU keeps analysing the new situation after Russia has changed its stance on WTO entry. Major delays in Russia’s entry will influence bilateral relations, Swedish European Affairs Minister Cecilia Malmstrom said.
The parties will also discuss at the summit Russia’s role as the major energy partner of the EU, as well as the issue of bringing into action mechanisms of an early warning in case of the reduction of gas deliveries.
Moscow, Athens discuss plans to sign new security treaty
12.11.2009, 21.49
ATHENS, November 12 (Itar-Tass) - Russian Deputy Foreign Minister Vladimir Titov met his Greek counterpart Dimitris P. Droutsas on Thursday to discuss Russia’s initiative on signing a European security treaty.
“We discussed European security, including within Russia’s initiative on signing a European security treaty, as well as Russia-EU and Russia-NATO interaction. During the talks, both sides showed interest in continuing close cooperation and developing foreign political interaction on many regional and European problems. Both parties exchanged views on the OSCE agenda due to Greece’s presidency in the organisation and an upcoming session of the Council of OSCE Foreign Ministers in Athens,” Titov said.
According to the deputy minister, “the sides also discussed several regional problems, including the situation on the Balkans, the Cypriot settlement, the Middle East peace process. They revealed the commonness of positions on these problems.”
Commenting on what changes Greece would like to see in joint projects on the construction of the Burgas-Alexandroupolis oil pipeline and the South Stream gas pipeline, Titov said: “Greece stressed the importance to realise these projects and observing environmental requirements when facilities are erected. But Greece does not concretise its position. We are open for a dialogue on these issues.”
According to the deputy minister, as a whole both parties showed interest in intensifying business-like cooperation and searching for new forms of bilateral interaction. “An idea of holding Year of Russia to Greece and Year of Greece to Russia in the nearest years has been discussed,” he said.
Greece hopes to strengthen relations with Russia, Droutsas said. “I welcome Russian Deputy Foreign Minister Mr Titov who has arrived here on the first visit (after a new Greek government came to power). I believe that this prove of close relations between Russia and Greece. The peoples of our countries have common moments in the history and common culture. I think that this unites us,” he said.
“We hope to strengthen relations with Russia,” the Greek deputy foreign minister said.
Titov said: “Strategic cooperation between both countries is important for us. We want to interact with the new Greek government more closely because we have common goals at many levels.”
“We should respond to many challenges in our common region. Our views on international problems coincide. Both sides rivet much attention to intensifying the dialogue,” the Russian diplomat said.
START ending, but US and Russia still agree on nuke verification
13 November, 2009, 02:18
The main details of a new Strategic Arms Reduction Treaty have already been worked out and now the US and Russia have to agree on verification and warheads counting issues, non-proliferation expert Peter Crail told RT.
The current version of the treaty known as START expires on December 5. On Monday, Russia and the US began the eighth round of negotiations on upgrading the Cold War-era document.
Most of the major details of a new treaty have already been hammered out, said Crail, a research analyst at the Arms Control Association. “It’s now down to narrowing out technical details, mostly related to verification issues.”
Presidents Barack Obama and Dmitry Medvedev “came to an agreement on the broad outlines during this summer” and since then there’ve been a lot of negotiations on details. One of the issues the sides have to agree on, Crail said, is counting the warheads and delivery systems.
“We’ve seen a very high level commitment by both presidents to get this done by the deadline,” he said.
Russia Seeks Removal of U.S. Observers Under New Nuclear Accord
By Lyubov Pronina
Nov. 12 (Bloomberg) -- Russia seeks to overcome “a range of problems,” including the presence of U.S. monitors at a ballistic-missile plant, as it pushes to meet a December deadline for a new bilateral nuclear arms agreement, the head of the Russian military’s General Staff said.
Under the 1991 Strategic Arms Reduction Treaty, which expires on Dec. 5, the U.S. has a permanent observer mission at a facility in Votkinsk, where Russia produces the Topol-M intercontinental ballistic missile.
“There’s an issue on Topol,” Nikolai Makarov told reporters in the Kremlin today. “We don’t have such observer missions in the U.S., so it’s natural that we tell them that this mission needs to be removed. On Dec. 5 it will depart.”
Russian President Dmitry Medvedev and his U.S. counterpart, Barack Obama, have made signing a new nuclear arms accord a priority as they try to repair ties that sank to a post-Cold War low under Obama’s predecessor, George W. Bush. At a summit in July, Medvedev and Obama called for a reduction of nuclear arsenals to between 1,500 and 1,675 warheads and between 500 and 1,100 delivery systems.
“We want the agreement, if it’s signed by Dec. 5, to take the security interests of Russia and the U.S. into account in equal measure,” Makarov said.
Another sticking point is a limit on delivery systems proposed by the U.S. that Russia doesn’t agree with, the Kommersant newspaper reported today, citing an unidentified member of Russia’s negotiating team.
Russian Foreign Minister Sergei Lavrov declined to discuss the details of the talks, which resumed in Geneva on Nov. 9. Ministry spokesman Andrei Nesterenko said on Nov. 6 that Russia hoped this round of talks would be the last.
Medvedev and Obama will meet in Singapore on Nov. 15 during the Asia-Pacific Economic Cooperation Forum.
To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@
Last Updated: November 12, 2009 11:44 EST
Russia aimed to induce a confrontation in the international arena on three levels
A Possible US-Russian Arrangement and Implications for the Middle East
By INSS Thursday, November 12, 2009
By Zvi Magen
We have recently been witness to a new US initiative launched by the Obama[pic] administration for dialogue with Russia that affects both the bilateral and global levels.
The American proposal, which generated several top level meetings, including with presidents and foreign ministers, was apparently submitted to the Russian side as a comprehensive “package deal.” If it materializes, this arrangement will yield a positive change in relations between Russia and the West and stands to have considerable implications for the international system, with an emphasis on the Middle East.
According to the previous policy, which was driven by superpower aspirations, Russia aimed to induce a confrontation in the international arena on three levels:
1. On the global level: alongside full integration in the international system, Russia pursued assertive and defiant activity against the United States and its allies in order to enhance its own status.
2. On the regional level: Russia aimed to displace the United States and further its own agenda, using a range of leveraging means. Naturally, the Middle East, which was the locus of cooperation with the Axis of Evil, featured strongly here.
3. On the “near abroad”/former Soviet Union (FSU) level: In this area, identified as the Russian interest in the area of the former Soviet Union, Russia is desperately resisting the efforts of the West to extend its influence eastwards.
The American initiative makes a reversal possible by generating conditions for positive dialogue with Russia, while offering proposals for solving most of the aforementioned problems based on far reaching concessions. However, along with the important concessions for Russia, it appears that the American proposal is submitted as a single unit encompassing all the issues, including those that are problematic – first and foremost Iran. There is a growing impression that this process has been successful and that the sides have agreed on most of the package, even though a number of issues are still to be settled.
As far as it is possible to assess, the arrangement incorporates the follow topics:
· Understanding with regard to the agreement on limiting strategic arms, which is due to come into force this December (START).
· US forgoing of its anti-missile defense in Eastern Europe.
· Cooperation on containment of the Iranian nuclear program, including the transfer of uranium for enrichment in Russia.
· The inclusion of Russia in political activity in the Middle East, alongside the United States, in all main areas. An indication of this is agreement to hold a conference on Middle East affairs in Moscow.
· Recognition of Russia’s status in the domain of the former Soviet Union. This topic has been defined as “a solution for conflict in the post-Soviet expanse.”
· Russian involvement in NATO operations, which relates to assistance (aerial passage) for the US in Afghanistan, cooperation on a policy of restraint on North Korea[pic], and Russian involvement in a new plan for European security.
This arrangement apparently includes American concessions that are important to Russia and that substantially upgrade Moscow’s international standing. In turn, Russia is expected to reward American flexibility by softening its stance on the Iranian nuclear program as well as cooperating in the war on terror. This constitutes an important American achievement, but it appears that it is the Russians who have gained a diplomatic victory in proving that the Russian strategy of the last few years has paid off. Without tangible means, Russia has managed to improve its international standing and achieve most of its objectives.
With regard to the implications of the arrangement for Middle East affairs, it seems that Russia has positioned itself in a new and significantly improved position compared with the past. This is a function of two main issues. The first is the Iranian issue, which will enable Russia to gain important leverage because of its role in the agreement on uranium enrichment. At the same time, Russia’s inclusion in an arrangement with the West highlights the familiar Russian dilemma: choosing between cooperation with the international community and the option of full cooperation with Iran and its partners in the Axis of Evil. Russia still views Iran as an important partner, a regional power, a potential leader of the future Muslim world, and as such, a country capable of furthering Russian global objectives. This makes it difficult to apply the Iranian clause of the American-Russian arrangement. Yet given inconsistent Iranian behavior and Russia’s tough bargaining with the Americans, Russia has gained a sense of self-importance. In any case, Russia is ensured a central role in future talks with the Iranians.
The second issue concerns the new and enhanced standing that Russia is expected to gain in all areas of the Middle East political process. A conference in Moscow on the Middle East will constitute a clear expression of this. According to Russian foreign minister Lavrov, the conference will incorporate the Israeli-Palestinian channel and the Syrian and Lebanese channels. This is naturally also contingent on other developments, including Israel’s willingness to cooperate.
These two areas provide Russia with relative advantages in forging an influential position with regard to Middle East affairs, and gaining a standing similar to that of the United States. Thus if the agreement is implemented, the Middle East may see a strategic transformation in the region.
This script confronts Israel with a new reality. Instead of the familiar regional picture, a different complex of problems and ways to seek solutions are expected to emerge. In such a situation, the success of the new direction is largely dependent on Israel’s position, largely because Russia identifies it as one of the main regional players, both vis-à-vis the Iranian issue and the political process. Russia’s active participation in the political process creates additional pressure on Israel with regard to the price and conditions of any future arrangements it makes.
It appears that Russia has lately been working on creating an image of a fair and efficient broker that is acceptable to all the sides in the region, and indeed, it has scored points in this area. A certain degree of tension that has recently emerged in the bilateral relationship with Israel may be attributable, beyond an expression of Russian dissatisfaction with Israel’s conduct, to Russia’s interest in demonstrating an “objective” position.
The United States has put together a clever proposal, offered as a single package with concessions to Russia that also obligates Russia to make corresponding concessions, primarily on the Iranian issue. For Russia this is a considerable achievement and an impressive diplomatic success that enabled it to achieve strategic objectives without what would otherwise presumably be considered necessary tools. The arrangement grants Russia a position in the Middle East with considerable future influence, potentially similar to that of the United States. As such, this constitutes a change that can be defined as strategic, and it requires a proper, thoughtful response by Israel and other relevant actors.
The Institute is non-partisan, independent, and autonomous in its fields of research and expressed opinions. As an external institute of Tel Aviv University, it maintains a strong association with the academic environment. In addition, it has a strong association with the political and military establishment.
Moscow mayor to deliver humanitarian aid to Abkhazia
02:4113/11/2009
SUKHUMI, November 13 (RIA Novosti) - Moscow Mayor Yuri Luzhkov will visit Abkhazia on Friday to hand over humanitarian aid and sign an agreement on food supplies to the former Georgian republic, an Abkhaz presidential spokesman said.
Moscow will deliver office equipment, computers and electrical equipment, cables and car tires to Abkhazia. The Russian city will also give the republic a rescue vehicle, an ambulance and laboratory and medicinal equipment.
Luzhkov allocated 1.2 million rubles ($41,000) for the delivery of the cargo and customs clearance.
During his stay in Abkhazia, the Moscow mayor is also expected to visit a Russian border guard base.
Russia recognized Abkhazia and another former Georgian republic, South Ossetia, as independent after a five-day war over the latter with Georgia last August.
Last summer, the Moscow mayor suggested Georgia recognize the independence of both Abkhazia and South Ossetia, referring to what he described as the inevitable drive for sovereignty in Europe and globally.
3 State Corporations To Lose Status in ’10
13 November 2009
By Irina Filatova
Russian Technologies, Rusnano and Vneshekonombank will likely lose their status as state corporations as early as next year, presidential aide Arkady Dvorkovich said Thursday.
The state corporations could be transformed into state-controlled joint-stock companies in 2010, Dvorkovich said at a news conference responding to President Dmitry Medvedev’s state-of-the-nation address.
Medvedev laid out the case against state corporations in his address to the Federation Council, saying some of the corporations should be wound down soon.
“As far as state corporations are concerned, I think they have no prospects in the current environment,” Medvedev said in his address.
“Those that work on commercial, competitive terms should become modern, open joint-stock companies controlled by the state. In the future, they shouldn’t be held in the public sector and should be opened to private investors.”
Medvedev and other high-ranking officials have come out against state corporations since they were created in 2007, with the critics saying they should operate under the same laws as regular joint-stock companies. State corporations are not obliged to make public any financial information, and laws on bankruptcy do not apply to them.
The seven state corporations include: the Deposit Insurance Agency, Vneshekonombank, Rusnano, Rosatom, the Housing and Utilities Reform Fund, Olimpstroi and Russian Technologies.
Rosatom and the Housing and Utilities Reform Fund will keep their status in the short term, as there “is no urgency,” Dvorkovich said. Those corporations that were created to achieve a set goal, such as Olimpstroi and the Housing and Utilities Reform Fund, will be wound up as soon as that goal is accomplished, he said.
As for the first three state corporations to be transformed, in the long term, their assets could be sold to private investors, Dvorkovich said.
“I think it first and foremost concerns the assets of Russian Technologies,” he added.
Russian Technologies, a state holding with stakes in more than 400 companies ranging from miners to defense firms, said becoming a joint-stock company would make it easier to do business.
“We are finishing up the process of transforming our defense plants into joint-stock companies, and several holdings created from these companies will have an IPO,” Russian Technologies said in a statement. It added that the corporation would welcome private investment in the defense sector, which is currently facing financing problems.
Rusnano was similarly optimistic on the prospects of a new charter.
“There’s no fundamental difference between a state corporation and a joint-stock company,” Rusnano spokeswoman Yelena Kovalyova said. She added that Rusnano’s job was investment, which the firm could do easier if it were a joint-stock company.
“For foreign investors, co-financing a project with a state corporation is not very transparent,” she said. “We understand that our financial model must be based not only on the government’s level of support but also on the level of income from project companies.”
VEB’s press service declined to comment Thursday.
Dvorkovich’s comments came two days after Prosecutor General Yury Chesented the results of his inspection of state corporations to Medvedev. Chaika said Tuesday that the prosecutor’s office had opened 22 criminal cases as a result of the investigation.
Rusnano, which is currently investing in 38 nanotechnology projects, has also come under direct fire in the report. Of the 130 billion rubles that Rusnano received from the state two years ago, only 10 billion rubles ($348,280) has been used. Of that, 5 billion rubles went to fulfilling its day-to-day operations.
Chubais said in September that Rusnano would pay back the 130 billion rubles that it had received from the government as early as 2015 in order to become financially independent.
Sayano-Shushenskaya HPP unit starting planned for December
13.11.2009, 08.42
GORNO-ALTAISK, November 13 (Itar-Tass) -- The Sayano-Shushenskaya hydroelectric power plant infrastructure damaged in the disaster has been restored, and the first starting of its hydro power units is planned for December.
Representatives of the station and the Emergencies Ministry met in Abakan to discuss life-support systems safety and electricity supply issues. Among the first tasks is starting of the undamaged sixth unit.
[pic]
Former Russneft Head Gutseriyev No Longer on Interpol Wanted List – Statement
Wednesday, November 11, 2009 2:52 PM
(Source: Daily News Bulletin; Moscow - English)[pic]MOSCOW. Nov 11 (Interfax) - The Russian National Central Bureau of Interpol has confirmed that the name of Mikhail Gutseriyev, the former head of the Russneft oil company, has been removed from Interpol's international database of wanted individuals.
"Gutseriyev's international search has been officially terminated," a spokesperson for the Russian National Central Bureau of Interpol told Interfax on Wednesday.
Gutseriyev was declared internationally wanted in August 2007, and his assets[pic] were frozen. Moscow City Court spokesperson Anna Usachyova said Gutseriyev was charged with tax evasion and "large- scale illegal entrepreneurship committed by an organized group."
Gutseriev May Wrest Back Russneft Oil Company, Vedomosti Says
By Alex Nicholson
Nov. 13 (Bloomberg) -- Mikhail Gutseriev, the founder of OAO Russneft who fled Russia amid tax evasion charges, may regain control of the oil company, Vedomosti reported, citing people it did not identify.
AFK Sistema, billionaire Vladimir Yevtushenkov’s holding company, may help Gutseriev with the deal, the newspaper reported. The company may already be under Gutseriev’s control, according to one person, while another said the sale to either Sistema or Gutseriev was being considered, Vedomosti said.
Gutseriev sold Russneft to companies belonging to Russian billionaire Oleg Deripaska in 2007 for $6.5 billion, Vedomosti said. Investigators canceled a warrant for Gutseriev’s arrest in October and he was removed from Interpol’s wanted list last week, the newspaper said.
To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@.
Last Updated: November 13, 2009 00:29 EST
Court extends Khodorkovsky’s detention to February 17
13.11.2009, 02.31
MOSCOW, November 13 (Itar-Tass) -- The Khamovniki district court of Moscow on Thursday extended the investigation prison custody for former YUKOS head Mikhail Khodorkovsky and his partner Platon Lebedev up to February 17 in the framework of their second criminal case.
Khodorkovsky’s lawyer Natalya Terekhova said the court provided no reasons for the extension and the defense will appeal against the decision to the Moscow City Court.
Khodorkovsky and Lebedev are serving 8-year prison terms for tax dodging and fraud, but were moved to the investigation prison in connection with new accusations.
Three gunmen shot dead in Russia's Ingushetia
11:2113/11/2009
ROSTOV ON DON, November 13 (RIA Novosti) - Three militants were killed in a security operation in the south Russian republic of Ingushetia on Friday, a local law enforcement officer said.
He said they were killed in a shootout with security forces when their car was stopped at 9:40 Moscow time (6:40 GMT) on the Magas-Ali Yurt highway.
One of the militants was Vakha Bekov, on the federal wanted list since 2004, while the other two have yet to be identified.
Attacks on troops, police and other officials have been reported almost daily in Ingushetia and Russia's other North Caucasus republics in recent months.
On August 17, Ingushetia was rocked by a suicide bombing which killed at least 20 people and injured 260 people. In June, Ingush President Yunus-Bek Yevkurov survived a car bomb attack on his motorcade.
12 November 2009, 15:20
Cleric injured in Ingushetia
Moscow, November 12, Interfax - A cleric was slightly injured in a car explosion in Ingushetia, the Russian Prosecutor General's Office Investigation Committee said on Thursday.
"A bomb presumably placed under a VAZ-21099 vehicle was set off on Demchenko Street in Orjonikidzevskaya in the Sunzha District of Ingushetia at approximately 11:45 a.m.," the committee said.
"Cleric Kosum Meiriyev, who was inside the car at the moment of the explosion, was slightly injured and taken to hospital," the committee said.
Forensic experts are working at the scene of the incident.
Attacks and Shootouts Reported in Dagestan, Ingushetia and Karachaevo-Cherkessia
[tt_news]=35724&tx_ttnews[backPid]=7&cHash=0063b8828a
Publication: Eurasia Daily Monitor Volume: 6 Issue: 209
November 12, 2009 04:01 PM Age: 8 hrs
Category: Eurasia Daily Monitor, North Caucasus Analysis, Home Page, Military/Security, North Caucasus
By: The Jamestown Foundation
The Russian Emergency Situations Ministry was quoted today (November 12) as saying that a blast from an “unidentified explosive device” last night had ruptured a section of the natural gas pipeline stretching between Mozdok, North Ossetia and Kazimagomed, Azerbaijan. The affected section of pipeline is located in Dagestan’s Karabudakhkentsky district south of the republican capital Makhachkala. Security guards had reportedly discovered a suspicious item under the pipeline at around 9.00 p.m., local time, and called the Federal Security Service (FSB) bomb disposal experts, but the blast occurred before the FSB unit arrived. The incident cut off gas supplies to villages in Makhachkala’s suburbs and parts of the city itself, affecting an estimated 545,000 people.
Earlier in the day, signs of an explosion were discovered at a section of another natural gas pipeline –this one linking the Baku, Azerbaijan and Novorossiysk, in Russia’s Krasnodar Krai– also in Dagestan’s Karabudakhkentsky district. That blast, which was estimated as having the force of one kilogram of TNT, resulted in the pipeline’s deformation, but apparently did not rupture it (rbc.ru, regnum.ru, Interfax, November 11-12).
Another apparent terrorist attack took place late yesterday in Dagestan’s Karabudakhkentsky district, when an explosive device detonated inside a car on the Madzhalis-Makhachkala highway. The car was reportedly registered to a 64-year-old Makhachkala resident and a driver’s license of a 21-year-old resident of the city of Derbent was found inside the vehicle along with the ID’s of two other people, three 100-liter plastic barrels, a gas cooker and gas bottle (rosbalt.ru, November 12).
In another incident yesterday, two unidentified gunmen traveling in a Zhiguli car on the outskirts of the city of Khasavyurt opened fire on traffic police post, killing one policeman and wounding another. The shooters managed to escape while the driver, apparently a taxi driver, was taken into custody (rbc.ru, November 12).
Two militants were reportedly killed in a shootout with police and FSB personnel in the village of Botashyurt in Dagestan’s Khasavyurt district on November 7 (Interfax, November 9).
Meanwhile, Dagestani President Mukhu Aliev told policemen in a speech marking Police Day on November 10 that kidnapping is a shameful phenomenon which is casting a shadow not only on Dagestan’s law enforcement bodies, but the entire republic. Aliev said Dagestan had in recent years managed to sharply curtail kidnappings, but that they had flared up over the last few months. “In various media you hear the idea that members of the law enforcement bodies are involved in the kidnappings,” he said, adding: “Of course, anyone can get hold of a camouflage uniform these days. But while there are cases in which the police located people who went missing, nonetheless the law enforcement bodies will be complicit in those kidnappings as long as they do not solve the crimes. It is the only way to preserve an unsoiled reputation. Protecting the honor not of the uniform, but protecting the honor of each citizen is what guarantees the authority of the law enforcement system.”
Kavkazsky Uzel quoted Aliev as telling the policemen that one of the goals of Dagestan’s Islamic insurgents is to discredit the law enforcement bodies, but that it is necessary to distinguish between “objective criticism of the police” and politically motivated criticism aimed at destabilizing the republic.
According to the Mothers of Dagestan human rights group, 25 people were kidnapped in the republic between February and August of this year, including five young people in August alone. According to the Memorial human rights group, 12 people were kidnapped in Dagestan in 2008 (kavkaz-uzel.ru, November 11).
Violent incidents have been reported in other republics of the North Caucasus over the last several days. Unidentified attackers in Ingushetia fired a grenade launcher at a gas station in the city of Nazran yesterday. No one was hurt in the resulting blast. Twenty minutes later, unidentified gunmen fired on the administration building in Nazran’s Altievsky municipal district. No one was hurt in that incident either (kavkaz-uzel.ru, November 12).
On the evening of November 10, unidentified attackers opened fire on police in the city of Karachaevsk, Karachaevo-Cherkessia, wounding two officers and a former colleague who had come by to offer them congratulations on Police Day (kavkaz-uzel.ru, November 11). The previous day, November 9, four men were killed during a special operation near the village of Indysh in Karachaevo-Cherkessia. The operation was aimed at capturing Ruslan Khubiev, who was suspected of attacking several policemen. Khubiev and three others were killed in a shootout with police, while one policeman was wounded (Interfax, November 9).
Wrecks tell tale of growing violence
Page last updated at 15:07 GMT, Thursday, 12 November 2009
By Rupert Wingfield-Hayes
BBC News, Nazran
Who has ever heard of Ingushetia?
Not many people outside Russia. And why should they? It's tiny.
In this vast country of 11 time zones, Ingushetia is a speck on the map.
In the "about the size of" stakes, it ranks with the English county of Hampshire. Its population is less than half a million.
Ingushetia has always been overshadowed by its larger and more violent neighbour, Chechnya.
But that suddenly changed in August when Ingushetia hit the headlines for all the worst reasons.
A suicide bomber smashed a lorry into the police headquarters in the republic's capital Nazran. Twenty policemen were incinerated. Another 160 were badly injured.
The bombers were Islamist radicals. In a chilling video posted on the internet, a Russian-born Muslim convert called Said Buryatsky makes it clear the bomb was intended to kill as many people as possible.
He shows how they packed chopped-up pieces of metal bar around the bomb to act as shrapnel, to shred the bodies of the policemen and anyone else standing nearby.
And he promises that there will be more attacks on those "who deny the book of Allah".
Blood-stained seats
In fact this attack was only the largest, not the first. The violence in Ingushetia has been growing for two years.
On my first day in Nazran I'm taken to a police compound on the edge of town (it's hardly large enough to be called a city).
Behind the high walls sit piles and piles of smashed-up cars.
It looks like a junkyard.
But closer inspection reveals a different story.
Every one of the vehicles has been destroyed in some violent confrontation.
My guide is a jolly, corpulent policeman who clearly doesn't get many foreign guests.
"Three militants were killed in that one," he says, pointing to a bullet-riddled Lada.
"You can still see the blood on the seats," he adds with enthusiasm.
"And that one was a suicide bomber." He points to another Lada with its roof opened like a tin can.
The dozens of cars piled up have all arrived within the last few months.
I have come to see one very specific piece of wreckage. It's sitting in a corner by itself.
"Ah yes," says my guide. "This was the president's car."
Bizarre conspiracy theory
All that is left is a burned-out heap of twisted steel.
It was blown up by a huge car bomb in June as Ingushetia's president, Yunus-Bek Yevkurov, was on his way to work.
The thought that anyone could have got out of the mangled wreckage alive seems impossible. But somehow he did.
When I'm shown in to his office the Ingush president looks remarkably well for a man who was reported to be on the verge of death just four months ago.
But his explanation for what is going on in his tiny republic smacks of Moscow-scripted propaganda.
"The security services of several foreign countries, working together with the illegal terrorist groups, are seeking to destabilise this part of southern Russia," he says.
When pushed he refuses to name the foreign countries, but hints strongly that Georgia is one of them, and by implication Georgia's best friend, America.
This seems a bizarre conspiracy theory.
But it's a fairly standard Russian line.
Blown up three times
It traces its origins back to 1980s Afghanistan, when the CIA really did pay radical Islamist groups to fight against Moscow.
But it is of little help in explaining what's going on here today.
At the burned-out shell of the police headquarters, they're still clearing away the debris from the August suicide bombing.
Standing on the spot where he very nearly died, Lt Vasanbek Porogov tells me a different story of Ingushetia. It's the third time he's been blown up.
So why, I ask him, does he still do this job?
"There are no other jobs here," he says. "If you have a family to raise the security services are the only option."
I ask him why he thinks the violence is growing.
"You need to ask our leaders," he says. "They kill people, they say they're killing fighters, but I don't know.
"They're killing a lot of young people. There are 12 so-called fighters who have been in detention for three years - I guarded them, I talked to them; they didn't seem like fighters to me.
"If they're guilty, they need to be convicted; if not, let go."
Bitterness and fury
It's an odd answer from a man who's nearly been killed by rebels more than once.
But it demonstrates just how convoluted everything is about Ingushetia.
My last stop is a large house on the edge of Nazran.
It belongs to the Aushev clan, one of the wealthiest and most powerful families in Ingushetia.
Magomed Aushev is a huge man, with a barrel chest, a long white beard and tall woollen hat.
He is the archetypal Ingush patriarch.
He is also filled with bitterness and anger.
Ten days before my visit his son was murdered in his car. He had been a leading opposition politician.
"My son got in the way because he tried to tell the truth," he tells me. "He got in the way of this political game."
Then he launches into a tirade against the security services.
"They have money and the weapons. It's them who do the kidnappings, the killings, the illegal executions. They embezzle half the budget, but nothing is done about them."
I ask him if that's why the young men are turning to violence.
"These generals who come have no regard for the law," he says.
"They kill, they burn, they beat. They have weapons, they have armoured vehicles.
"The young men who stand against them don't have anything. They take a gun and go to the woods.
"They have a [suicide] belt. They're not drug addicts or madmen. No, they're good young men from good families; they take that belt and walk away to death."
Prominent Tatar Activist Talks Of Leaving Russia
November 11, 2009
KAZAN, Russia -- Prominent Tatar activist Fauzia Bayramova has said she wants to leave Russia because of the pressure put on her by federal authorities for her political activism, RFE/RL's Tatar-Bashkir Service reports.
Bayramova told RFE/RL that Russian officials have curtailed her freedom and hindered her struggle for the independence of Tatarstan, which she said now "cannot be a homeland" for her.
She did not say to which countries she may try to emigrate.
Bayramova, 58, said that federal authorities have in the past several months put great pressure on her and others in the self-proclaimed, pan-Tatar National Parliament (TMM), of which Bayramova is the chairwoman.
She said Tatar President Mintimer Shaimiyev, Prosecutor-General Kafil Amirov, and police in Tatarstan have not assisted her in regard to the problems she has had with the Russian authorities.
In fact, she said that Tatar officials have actually helped Moscow officials put pressure on her.
Meanwhile, Tatarstan's Justice Ministry ruled this week that TMM's activities should be suspended for four months.
The TMM was established by Tatar nationalists in 1992.
In an open letter issued in December 2008, the TMM called on the international community to recognize Tatarstan's independence from Russia.
The call came just a few months after Russia recognized the independence of the breakaway Georgian republics of Abkhazia and South Ossetia.
The action by TMM angered Moscow and led Russian officials to begin an investigation into TMM's activities.
Bayramova and her TMM colleagues were officially accused of fomenting interethnic hatred in Tatarstan.
South Russia editor charged with extremism over poem
10:1013/11/2009
KRASNODAR, November 13 (RIA Novosti) - The editor of a paper in south Russia's Krasnodar Territory is to stand trial on charges of extremism after publishing an allegedly racist poem, prosecutors said on Friday.
Investigators say that Boris Solomakha, editor of the regional Vesti Slavyan Yuga Rossii (South Russia Slavic News) paper, approved in 2007 the publication of a poem entitled "Be Russian!"
The poem, whose author was only identified as Skvoreshnev, was judged to be insulting and racist with regard to "Jews and Roma." Prosecutors also claim the poem was aimed at stirring up interracial discord.
Solomakha faces five years behind bars if found guilty of the charges.
Praying to Putin
by Galina Stolyarova
12 November 2009
In the absence of meaningful civic action, many Russians continue the czarist tradition of appealing to the country’s rulers.
ST. PETERSBURG | A sociologist here conducted some interesting research a couple of years ago, asking poll respondents – Russian citizens from various parts of the country – what they thought were the key qualities of the Russian people and what brings the nation together. The majority of the survey’s participants suggested a typical Russian is kind, open, passive, and unhappy.
I was reminded of that poll this week while reading yet another petition to the Russian president about the absurdity of the Mikhail Khodorkovsky trial. I agreed with every word in the appeal, yet I could not help thinking that one very common quality of the Russian people had somehow escaped the sociologist’s Russian national character research. Naïve, I was thinking. Just how naïve.
Sending petitions to President Dmitry Medvedev and Prime Minister Vladimir Putin is a popular pastime in Russia. As a journalist, I see many such petitions – on subjects ranging from the construction of a waste-burning facility to freeing a prisoner of conscience, to protecting a city park to renaming a street – on a weekly basis. A few days ago, I even received a special file containing a bunch of petitions from a Moscow-based NGO, with the revealing subtitle “Writing Letters, Hoping For the Better.”
At every Russian school, history teachers tell pupils about the naivety of the old-time peasants who would send petitions to the czar – whom they would address with worship and reverence as “the Lord’s Anointed” – and expect him to solve all imaginable problems and come to the rescue as justice personified. Such a petition was called a chelobitnaya, and when delivered, was accompanied with the deepest bow, so that the forehead would touch the ground. What the teachers do not say is how little has changed.
THE EQUALIZER
Apparently, it is hard for many of my compatriots to draw an obvious parallel. They throw themselves enthusiastically into writing letters to the Kremlin.
Putin clearly takes pleasure in the image of “justice personified” – or good fairy, take your pick – as he often acts in a manner that encourages the petition-writing fever. The prime minister has made it a tradition to regularly appear amid a conflict or crisis and forcefully resolve it by personal order. In one of the most resonant cases, in June Putin flew in dramatically to resolve a crisis in the village of Pikalevo near St. Petersburg, where the village’s three major enterprises, including tycoon Oleg Deripaska’s BaselCement, had not paid workers for several months. As he stepped out of his helicopter, Putin started an impressive tour de force, ordering Deripaska to pay the workers immediately and making sarcastic remarks about the oligarch as he went about his mission.
“It’s my opinion that you’ve made thousands of people hostages to your ambition, lack of professionalism, and plain greed. This is absolutely intolerable,” Putin said.
On another occasion, the prime minister unexpectedly responded to a desperate Christmas letter from a poverty-stricken provincial girl and invited her to a New Year’s party at the Kremlin. There is nothing wrong with children believing in good fairies, but it is dangerous when such attitudes prevail among adults.
Naturally, the plight of Pikalevo’s workers was not unique. There are still huge numbers of Russian villages suffering from similar problems. Inspired by the Pikalevo happy ending, desperate residents of these poverty-stricken places are sending letters to Moscow. They do not understand that the Pikalevo case was a muscle-flexing game with a high dose of self-promotion – and naturally the prime minister is far too busy to intervene in every case.
What the petitioners who signed the letter to Dmitry Medvedev in support of Khodorkovsky are hoping for is hard to say. The petition is one of many on the subject, and there has been no sign of movement on the situation.
The hordes of letters sent to Putin and Medvedev show that Russia is ruled like an empire, and that its leaders are clearly comfortable with such public attitudes. Each letter is proof that everyone acknowledges the power vertical system and knows who really makes decisions. To see human rights advocates indulge in sending repeated letters – which are never answered – on topics about which the rulers hold a very different view, makes it seem that civil society in Russia has been completely neutered.
Another part of the problem is that while nongovernmental organizations are struggling to make a bigger impact, they have very few ways even to be heard, let alone make a difference. Indeed, there are crucial differences between Russian legislation and European law, the key point being that the definition of a nongovernmental organization and the understanding of its functions differ dramatically.
In Europe, nongovernmental organizations are an important check on the government, while in Russia things have been turned upside down. The government restricts civil society instead of ensuring its own transparency and accountability.
Even so, petition-writing to the head of state is not a solution. Legal battles often end up being horrendously time-consuming and hopeless enterprises, and street protests fail to gather any meaningful numbers, yet the only answer is to face up to these challenges and stop writing letters. An Eastern European politician and former civil-society activist whom I recently met when she was visiting St. Petersburg compared modern Russia with East Germany in the late 1980s.
She mentioned the massive street protests of August and September 1989 on the heels of the “Pan European Picnic” held near the border town of Sopron, Hungary, still very vivid in her memory, where East Germans peacefully demanded an open border.
“The streets were flooded with protesters,” the politician told me. “Of course, at the time, media coverage of the demonstrations was very different from what I saw with my own eyes, but the scale of the protests was so massive that it was impossible for the government to ignore. And this was how the political situation started to change.” This example alone is a compelling enough illustration of how to make a difference. And it is much easier, indeed, to learn from someone else’s positive experience than from your own repeated frustration. Russia’s petition-writers can either learn from the East German protesters, or from the peasants who constantly pinned their hopes on the czar.
Federal Protection Service chief left post of Russian Boxing Federation president
12.11.2009
| |
| |
| |
The president of the Russian Boxing Federation, the Director of the Federal Protection Service (FSO) General Yevgeny Murov yesterday at session of the Russian Boxing Federation presidium announced his resignation, online paper NEWSru reports. He will head a new structure, the Supreme supervisory council of the Russian Boxing Federation.
"At the session of presidium the president of the federation, Yevgeny Alekseevich Murov, within the framework of performance of the assignment of the President of Russia Dmitry Medvedev, has declared his resignation,” the executive director of the Russian Boxing Federation Vladimir Surkov ascertained in an interview to news agency Ves Sport. „Thus it has agreed to head the Supreme supervisory council of the federation. The first vice president of the Russian Boxing Federation Boris Viktorovich Ivanyuzhenkov was elected by the presidium members the acting president of the federation”.
In a new wording the charter, besides other, occurrence of the new structure, the Supreme supervisory council of the Russian Boxing Federation which will come in stead of the current Council of assistance to the Russian Boxing Federation should be registered, NEWSru adds.
Vladimir Surkov also explained the status of the Supreme supervisory council of the federation which will be headed by General Murov: "It will be a supervising body within the framework of the Russian Boxing Federation which will simultaneously carry out coordination of work between structures of federation, to give the recommendation for achievement of the authorized purposes, and also to realize other functions ".
UK key suspect in Litvinenko murder not against meeting with British inspectors in London
12.11.2009
The member of the State Duma Andrei Lugovoy, the UK’s key suspect of participation in the poisoning murder of the former Russian Federal Security Service (FSB) officer Alexander Litvinenko, is ready to leave under certain circumstances for London to give evidence on the murder case, radio Ekho Moskvy reports. According to Lugovoy, dropping of charges against his business partner Dmitry Kovtun in Germany in the case of illegal transportation, purchase or knowingly coming into contact with the radioactive isotope confirms that "the polonium case was nothing but a provocation”.
"I do not exclude a possibility to meet English Public Prosecutor not only in the territory of Russia, but also in London", Lugovoy told news agency Interfax today. "I am ready to leave for London under certain circumstances. We shall formulate them after studying materials from the German Office of Public Prosecutor", Lugovoy noted.
AIA reported yesterday that the German Office of Public Prosecutor had dropped all charges against Kovtun in connection with the death of former Russian Federal Security Service officer Alexander Litvinenko in 2006 in London. According to the German press, investigators had suspected him of leaving a trace of polonium-210, which according to the British investigators, was used to poison Litvinenko, in a Hamburg apartment. German investigators said Kovtun had travelled to London via Hamburg, where he stayed for one night with his ex-wife. Hamburg prosecutors say there is not enough evidence to continue investigating Kovtun.
“The accusations never had any basis,” The New York Times cites Kovtun’s telephone interview. “I’m happy that the investigation was carried out objectively in Germany, despite the politicization of this issue.”
"The fact that charges against Kovtun have been dropped in Germany is a crucial turn of events. The new circumstances of the case undermine the whole British investigation. Now we demand unbiased investigation of the Litvinenko case in Britain. It is obvious that the act of provocation has failed and it is time that London move from politics to constructive actions", Lugovoy told the RIA Novosti news agency.
"We were saying and declaring a year ago and we are saying now that Kovtun is ready to leave for London for continuation of investigation, however the Englishmen do not show any initiative in this connection", Lugovoy pointed out. "Now we are looking forward for the criminal case materials from Germany. We will study everything, then we shall inform mass media on new details of the Litvinenko case”.
Senior British officials have said they believe the murder was carried out with the backing of the Russian state, BBC News marked.
Litvinenko murder suspect may return to Britain for questioning as Germany drops case against 'accomplice'
By Will Stewart
Last updated at 9:21 AM on 13th November 2009
The main suspect in the London murder of Kremlin critic Alexander Litvinenko yesterday dramatically stated that he might travel to Britain to face questioning over the killing.
Andrei Lugovoy spoke out after German prosecutors dropped a case against his friend Dmitry Kovtun in an apparent blow to the Scotland Yard case against the Russian MP and former KGB operative.
Litvinenko - an outspoken critic of Vladimir Putin, formerly president and now prime minister - died three years ago after drinking tea spiked with deadly radioactive agent polonium-210.
Kovtun was seen as a possible courier and accomplice in the Litvinenko murder, but a painstaking German probe has ended with no charges against a man who left traces of polonium in Hamburg where he travelled around the time of the London killing.
The Germans said there was a lack of evidence to bring charges.
Yesterday Lugovoy - who Putin refused to extradite to Britain, causing the worst diplomatic fall-out since the Cold War between London and Moscow - claimed the German decision massively undermined the Scotland Yard case against him.
'I do not rule out the possibility of meeting with British prosecutors not only in Russia but also in London,' he said.
'I am prepared to go to London under certain conditions. We demand that London conduct a new and impartial investigation into the Litvinenko case in these new circumstances.'
Kovtun, a Moscow businessman, said: 'The case against me and against Andrei Lugovoy was a bit too thin and doctored by certain circles in England, and, as German experience shows, fell apart like a snowball when examined impartially.'
The move by the German authorities was 'not only the first step towards full rehabilitation of me and Andrei Lugovoy, but it has also taken a cornerstone out of the charges in England that will also collapse like the Berlin Wall.'
Litvinenko, who illegally fled Russia in 2000, died in a London hospital on 23 November 2006.
Three weeks before his death he had had meetings with Lugovoy and Kovtun. As he lay dying, he pointed the finger at the Kremlin for masterminding his murder.
Lugovoy, a millionaire, stated yesterday that after analysing the German decision, he expected to make unspecified new revelations about the Litvinenko case.
He maintains that the case is trumped up against him yet observers of this episode doubt that Lugovoy would ever risk travelling to London or anywhere else with extradition agreements with Britain.
The Foreign Office is likely to see the new statements as posturing by Lugovoy, who British secret services believed was operating in connivance with the former KGB, though he was the only man sought for extradition.
But Lugovoy claims polonium was found in London at places he did not visit.
'The polonium traces were found 30 days after my stay,' he said.
'But polonium is not fingerprints, and it is impossible to identify who left these traces.'
City Prepares for Flu Jab
Issue #1526 (88), Friday, November 13, 2009
ST. PETERSBURG (SPT) — The city’s Health Committee has ordered vaccines against the A(H1N1) virus, or swine flu, and vaccinations will begin next week, Interfax reported Thursday.
The vaccine will arrive in the city next week, according to Marianna Yerofeyeva, head of the influenza prevention laboratory testing, the news agency reported..
“First and foremost will be vaccinations for staff at citizen’s welfare services — the vaccination will be given at medical institutes,” said Yerofeyeva. She said that the vaccine would not be sold, but given to city residents for free.
Yerofeyeva added that children in St. Petersburg would start being vaccinated in December. “We have already begun testing a pediatric vaccine in Smolensk and Perm, and as soon as we receive the first results, we can start to vaccinate children,” she said.
Smuggler Given 9 Years
Issue #1526 (88), Friday, November 13, 2009
ST. PETERSBURG (SPT) — A St. Petersburg court has sentenced a 45-year-old Uzbekistan citizen to nine years in prison for attempting to smuggle heroin, Interfax reported Thursday, citing the web site of the St. Petersburg prosecutor’s office.
“Abdusalom Narkulov attempted to smuggle 370 plastic bags packed with heroin from Tashkent (Uzbekistan) into St. Petersburg,” read the statement on the web site. “In November 2008, he bought a ticket to St. Petersburg and swallowed packets of the drug with the aim of transporting it across the border. Upon his arrival at the airport in St. Petersburg, he was detained at customs.”
Opposition raps Medvedev poll reforms plan
Web posted at: 11/13/2009 7:51:40
Source ::: REUTERS
MOSCOW: Russia’s pro-Western opposition yesterday dismissed President Dmitry Medvedev’s promises to reform the political system as empty and said they saw little prospect of an easing of Kremlin domination.
In his annual state of the nation address, Medvedev listed ten reforms aimed at breaking the domination of pro-Kremlin United Russia which has dominated politics in Russia since the presidency of Vladimir Putin, who now serves as prime minister.
Medvedev focused on the local election system, heavily criticised during votes last month. He promised “in future” to cancel controversial requirements on political parties to collect signatures to register for elections.
But leaders of Russia’s pro-Western opposition parties, who have long complained that officials rule signatures as fake to block their parties from registering, were not impressed.
“What does ‘in future mean’? In 20 years, in 30 years?” said Sergei Mitrokhin, leader of the opposition Yabloko party, which saw several candidates blocked from Moscow elections in October due to problems with signatures.
He compared Medvedev’s claims to have boosted democracy since coming to power last year to statements by the Soviet Communist Party. “It’s calling black white,” he said.
Boris Nemtsov who has failed repeated attempts to register his Solidarity movement as a political party, described the reform proposals as “clownery and comedy.” “At essence it is a continuation of Putin’s regime,” he said, complaining that Medvedev said nothing about Russia’s electoral fraud, biased court decisions and the persecution of journalists and rights workers. The Communist Party, the largest opposition party in parliament and among the most careful in its criticism of the Kremlin, was more guarded, with Gennady Zyuganov saying “at least half” of his parties demands had been met.
The Communists are accused by pro-Western opposition of refraining from serious criticism of the Kremlin in exchange for representation in parliament.
That unwritten deal appeared to collapse in October when the Communists and the two other nominally opposition parties staged a walk-out from parliament in protest at violations in Moscow city elections in which United Russia won 32 out of 35 seats. They only returned when promised a meeting with Medvedev. Ruling party deputy and political expert Sergei Markov said Medvedev’s speech in essence divided the opposition into two camps. While Medvedev promised to help opposition parties who are working for the people, he rebuffed the pro-West parties set on destabilising the country, Markov said.
“The authorities consider democrats as those who work for the people. Garry Kasparov is the classic example of those who do not work to support the population,” Markov said, referring to the former Chess grandmaster who led a series of opposition demonstrations in 2006.
Meanwhile, Russia’s top general said yesterday problems still remained in concluding a nuclear arms treaty with the United States, Interfax news agency reported, weeks before the current START agreement expires.
Russia | 12.11.2009
Europe should seize on Medvedev's calls for modernization
In his annual state of the nation address, Russian President Dimitry Medvedev called for sweeping internal reforms. Deutsche Welle's Ingo Mannteufel thinks this is a golden opportunity for the EU.
The Russian president did not mince his words as he described the socio-economic situation in Russia. He ranted at what he called the country's "chronic backwardness," the "lack of economic competitiveness," the rampant corruption and the high level of dependency on gas and oil.
And there's no arguing with his assessment. All the problems he listed play a major part in Russia's failure to fulfill its potential and to offer its people a modern way of life.
His appeals for change appear to be the right way forward, including the modernization and strengthening of democratic values and institutions and his pledge to fight terrorism in the North Caucasus region.
However, any approval and support for his ideas should not overshadow two important questions: Can Medvedev achieve his ambitious aims given the extent of corruption and state-run bureaucracy, and can Russia undergo an economic and technological modernization without far-reaching political reforms? His remarks in that respect did little to inspire confidence. Although he criticized authoritarian structures on a regional level and demanded improvements for Russia's opposition parties, there was little of substance on radical political and legal reform.
Kremlin experts will have noted with interest Medvedev's calls to overhaul Russia's state-run companies, the behemoths created by his predecessor, Vladimir Putin. However, it would be wrong to interpret that as a deep rift between the two men. A closer look reveals that Medvedev's drive to modernize the country's economy is part of the strategy pursued by Putin. Medvedev can take credit for trying to give those ideas more substance and for giving them a democratic platform, thereby allowing optimists to hope whereas realists will say it's time for action, not words.
Still, Medvedev's message offers the West, and Germany in particular, a promising opportunity. For the first time Russia is not using ideology or military might to define its status as a world power, instead it's looking at whether it can offer its people modern living conditions. This means that Russia is being forced to adopt a more cooperative position towards the outside world. As Medvedev himself put it: Modernization can only be achieved through integration with the global economy.
And that's why it was no surprise that foreign policy was hardly mentioned. Medvedev said Russia's foreign policy would merely be an instrument to secure the sweeping internal reforms he has called for. Historically this would indicate a significant paradigm shift. The European Union should use this chance by defining its own aims and stating how it intends to help Russia achieve modernization.
Ingo Mannteufel is head of Deutsche Welle's Russian Service (rm)
Editor: Susan Houlton
NOVEMBER 13, 2009
Russia's Thoroughly Modern Medvedev
By LIAM DENNING
Russian President Dimitry Medvedev's call to modernize his oil-addicted economy carries on a grand tradition stretching back to Czar Peter the Great. But in targeting inefficient state-owned corporations, he also is attacking the centralization of economic power under his predecessor and current prime minister, Vladimir Putin.
Mr. Putin has presumably signed off on this, perhaps recognizing his own reorganization of the economy, while politically useful, left it vulnerable during the financial crisis. Meanwhile, the prosecutor general has opened 22 criminal cases after inspections of Russia state corporations. Peter Zeihan, of consultancy Stratfor, takes this as a sign that Mr. Medvedev means business: "The difficult political bit has already been launched."
Crucial to realizing Mr. Medvedev's vision is attracting foreign investment.
Near-term progress looks more dependent on Washington than Moscow. U.S. monetary policy is pushing investor dollars back toward hard and high-risk assets like oil and Russian securities. The need to persuade foreign companies that Russia is becoming friendlier might explain the lack of belligerent rhetoric in Mr. Medvedev's speech. A bigger test will be if coming legislation governing access to Russia's natural resources accommodates foreign companies.
One certainty is that the risk of political instability is rising. The Kremlin has spent a decade entrenching one set of allies at the commanding heights of the economy. Dislodging them in the interests of the greater good likely will prove challenging.
—Liam Denning
November 12, 2009
More Influential Than Oprah Winfrey?
By Tom Balmforth
Russia Profile
Medvedev’s State of the Nation Address Centered on Modernization, but It Only Covered Old Ground
Russian President Dmitry Medvedev issued another call for Russia’s modernization in his State of the Nation Address on November 12, but critics say the speech lacked practical substance. Medvedev promised to set forth “concrete plans” for carrying out Russia’s modernization strategy, expanding on his “Go! Russia” article published in September, which offered a stark appraisal of the problems facing the country. The president once again underlined the need for profound structural change based on the “institutions of democracy,” and did in fact promise some modest political reforms. Nonetheless, those who were hoping to hear the specifics were disappointed.
As in his “Go! Russia” article, Medvedev was frank in stressing the need for Russia to evolve from the Soviet model, and insisted that Russia could not blame external factors for the economic crisis that hit it so badly. “We have not yet managed to get rid of the primitive structure of our economy…The competitiveness of production here is shamefully low,” he said. “Instead of a primitive economy based on raw materials, we will create a smart economy, producing unique knowledge, new goods and technologies, which are of use to people,” the president added.
While he once again bluntly condemned endemic corruption, as well as Russia’s over-reliance on revenue from natural resources, Medvedev’s address to the Federal Assembly failed to shed any light on the Kremlin’s “concrete plans” for conducting its modernization strategy. “All we got was more rhetoric, frankly,” said Chris Weafer, the chief strategist at Uralsib. “I think it was more a restatement of what he said in his ‘Go Russia!’ article in September, again highlighting the problems the economy is facing and the over-dependency on oil and gas. The bottom line is that it was a speech that was long on rhetoric and just reminded people of what the problems and the issues are. But from an investment point of view it was a disappointment that there were not more specifics, that there were not more details of what the government was going to do, which is actually what we were hoping to hear. That didn’t come.”
Nonetheless, Sergey Markov, a State Duma deputy from the United Russia faction, feels that the speech was significant and demonstrated that Russia is stepping into a new phase of development. “What was most important today is that Medvedev confirmed Russia’s pursuit of the path toward modernization,” said Markov. “Today showed the transition to the next phase in the development of the country. The first phase was the 1990s and gaining freedom; the 2000s was the gaining of state stability; and now - that is to say, the 2010s - we are entering the phase of modernization.”
In spite of the lack of “concrete measures” for modernizing the economy, Medvedev did make some political pledges. He proposed to relax party registration laws to make the electoral process more transparent, including scrapping the minimum number of signatures required for registration for parliamentary polls. Electoral fraud and the lack of transparency in the electoral process have been making regular headlines in Russia ever since widespread fraud in regional elections prompted the three opposition parties to storm out of the Moscow State Duma in October. Vladimir Zhirinovsky, the head of the Liberal Democratic Party of Russia that led the walkout, was palpably pleased by the proposed reforms, smiling broadly during the ovation that followed Medvedev’s proposals. Still, the president was careful to couple these proposals for political reform with a warning to the opposition that they should not “destabilize the state and split society” in the name of democracy, a clear reference to the Duma walkout last month.
Medvedev originally suggested reducing the number of signatures required by a party to register for elections in his State of the Nation Address last year, and the reform was later adopted. But today’s proposals represent a much deeper change to current electoral legislation, and the implementation of last year’s promises does not guarantee success this time around, said Alexei Mukhin, director of the Moscow-based Center for Political Information. “Medvedev made a lot of bold announcements that would destabilize the political situation and change it. But, as we know, the present system is suited to the needs of United Russia. And United Russia has shown itself to be an effective lobbyist, skillfully blocking practically all initiatives directed at changing the election legislation. Therefore Dmitry Medvedev will now be confronted with the problem of implementing what he defined as his ‘political initiatives’,” he said.
Liberal Russians who had hoped that Medvedev might steer Russia away from the “power-vertical” that gained traction during Vladimir Putin’s presidency are still searching for evidence that Russia’s current president is able to convert the liberal tone of his speeches into practical democratic reforms. Mukhin, for one, is unsure that Medvedev’s electoral reform proposals will ever see the light of day. “To free parties from collecting signatures before elections and making campaigning easier is possible in principle, of course, but I think that in this situation United Russia will try to somewhat limit the president’s initiatives,” he said.
Outsiders, as well as Russians, are skeptical of Medvedev’s ability to deliver on his promises. Today, Forbes magazine ranked Prime Minister Vladimir Putin, the head of United Russia, as the third most influential man on the planet. Medvedev, nominally his boss, was at number 43 - just ahead of Oprah Winfrey, but behind Deputy Prime Minister and Putin loyalist Igor Sechin.
The hour may be at hand for Russia's 11 time zones
By DAVID NOWAK (AP) – 7 hours ago
MOSCOW — Russia has 11 time zones across its vast territory — and its leaders believe that's just too many hours in the day.
President Dmitry Medvedev suggested Thursday that Russia reduce the number of time zones in the name of economic efficiency, which could have residents in the far eastern city of Vladivostok eating their breakfast blini at the same time their Chinese neighbors just a few miles away are slurping their noodles at lunch.
With one-ninth of the world's land mass, Russia stretches from Kaliningrad, which is next to Poland, more than 5,500 miles to the eastern tip of Chukotka, across the Bering Strait from Alaska. By contrast, it's nearly 2,700 miles across the four time zones of the 48 contiguous states in the U.S.
Thus, when the Kremlin's bell tower on Red Square tolls 9 a.m. at the start of the business day in Moscow, it's already 6 p.m. in the farthest part of Russia's Far East.
Russia's vastness is a source of national pride, but it also hinders economic development, Medvedev said.
"The examples of other countries — the U.S., China — show that it is possible to cope with a smaller time difference," Medvedev said in his annual state-of-the-nation speech. "We need to examine the possibility of reducing the number of time zones."
Medvedev didn't say how extensive any cut would be, but Vladivostok Economics University rector Gennady Lazarev told the RIA Novosti news agency it would likely mean shrinking to just four time zones: One each for Kaliningrad, Moscow, the Ural Mountains region and the vast reaches of Siberia and the Far East.
Less than a quarter of Russia's 142 million people live east of the Urals — the boundary between Europe and Asia. Those huge areas constitute two-thirds of Russia.
Cutting down to four zones would likely mean reducing the seven-hour time difference between Moscow and Vladivostok to just four hours, Lazarev said. In that case, residents of the Pacific coast city would see the sunset before 3 p.m. at this time of year.
"I can't fathom it," said Lilia Shevtsova, a political analyst at the Carnegie Moscow Center. "It is potentially life-changing for some people, for the sake of convenience in Moscow."
Supporters say cutting time zones could help bring the distant east closer and build loyalty toward the central government in Moscow. But experience in other countries warns of the opposite effect — a potentially divisive feeling of separation.
Before China's 1949 communist revolution, the country had five time zones. Under Mao Zedong's government — with its obsession with strong central leadership and unified national political movements — they were all abolished in favor of using the time in Beijing as the standard.
The major impact in China has been to require government offices in far western cities such as Kashgar, which lies at the same longitude as New Delhi, to open at the break of dawn. Some residents have responded with defiance, setting their clocks 3 1/2 hours behind Beijing in violation of official policy.
Arkady Tishkov, geographer at the Russian Academy of Sciences, told Ekho Moskvy radio that playing with clocks is unacceptable if the economic benefit is outweighed by health problems associated with out-of-synch lifestyles.
Lazarev, also a city lawmaker in Vladivostok suggested implementing a time switch gradually by jumping forward to daylight saving time in some areas every year, then not setting the clocks back in the fall.
Medvedev stressed the need to assess the advantages and the "obvious discomforts" before eliminating some of the time zones.
Setting new time zones — and thus changing people's daily patterns across Russia — wouldn't be Moscow's first attempt to defy Mother Nature in the motherland.
In Soviet times, authorities tried unsuccessfully to reverse the flow of mighty Siberian rivers that were thought to be flowing wastefully into the Arctic Ocean rather than toward arid southern areas.
More recently, Moscow authorities have tried to control the weather. Planes spray chemicals into the clouds to stimulate rainfall ahead of major public holidays in hopes of avoiding parades being rained out. Mayor Yuri Luzhkov recently announced plans to use the same method in winter so that snow would fall outside the capital, reducing street-plowing costs.
Associated Press writer Christopher Bodeen in Beijing contributed.
National Economic Trends
13.11.2009 - PRIME-TASS via Banki.ru
CBR keeps intact forecast for private capital outflow at $40 bln
The Central Bank of the Russian Federation CBR retained its 2009 forecast for private capital outflow for the country at $40 bln. Growth in hard currency reserves is estimated at $2.2 bln, said the updated final edition of Russia’s draft monetary policy for 2010—2012 that the Bank of Russia submitted to the State Duma on Thursday.
In addition, CBR also left unchanged its forecast for 2010—2012. Net capital outflow is expected at $10 bln to $25 bln in 2010, a $5 bln outflow to a $10 bln inflow in 2011 and a $10—25 bln influx in 2012.
From January through September net outflow of private capital was estimated at $2.2 bln ($2.3 bln in the same period of 2008).
The changing situation with cross-border flows of goods, services and capital urged the Bank of Russia to take a more active part in forming the environment on the domestic currency market, which translated, also, in currency interventions. As a result, from January through September international reserves recorded in the balance of payments declined by $21.8 bln against an $85.7 bln increase in the year-earlier period. As of October 1, 2009 Russia’s hard currency reserves decreased to $413.4 bln. However, in view of a squeeze in imports the reserve adequacy ratio improved, as the cumulative amount of reserves would be sufficient to finance goods and services imports during 21 months (the same ratio was equal to 18 months in the January-September period of 2008).
13.11.2009 - RBC
Russia expects positive trade surplus
According to the Bank of Russia's forecast, the country's trade balance surplus will be positive at $34.2bn if the oil price stands at $59.5 per barrel or above. These figures were cited in the report on the main principles of the monetary and credit policy for 2010 and the planning period of 2011-2012.
The surplus in products and services is expected to reach $71.8bn in 2009. Meanwhile, net private capital inflow is estimated at $40bn, and the increase in foreign currency reserves at $2.2bn.
TABLE-Russia monetary base rises to 4.08 trln rbls
Nov 13 (Reuters) - Russia's monetary base rose to 4,081.3 billion roubles on Nov. 9 from 4,049.7 billion roubles on Nov. 2, the central bank said on Friday.
It provided the following details for this month.
Date monetary base
(bln roubles)
2009
Nov 9 4,081.3
Nov 2 4,049.7
Oct 26 4,101.6
Oct 19 4,095.9
Oct 12 4,047.0
Oct 5 3,988.3
Sept 28 4,026.8
Sept 21 4,055.4
Sept 14 4,039.3
Sept 7 3,990.9
Aug 31 3,976.4
Aug 24 4,078.6
Aug 17 4,076.5
Aug 10 4,023.5
Aug 3 3,985.7
July 27 4,059.6
July 20 4,083.6
July 13 4,055.8
July 6 3,986.6
June 29 3,988.4
June 22 4,007.3
June 15 3,975.8
June 8 3,883.5
June 1 3,857.4
May 25 3,893.9
May 18 3,871.7
May 12 3,848.2
May 4 3,820.2
April 27 3,820.9
April 20 3,825.7
April 13 3,772.0
April 6 3,710.1
March 30 3,729.8
March 23 3,759.6
March 16 3,751.5
March 10 3,741.4
March 2 3,715.9
Feb 24 3,781.8
Feb 16 3,741.2
Feb 9 3,707.5
Feb 2 3,755.4
Jan 26 3,896.1
Jan 19 4,066.2
Jan 12 4,218.7
Jan 1 4,391.7
2008
Dec 29 4,283.1
2007
Dec 24 4,016.6
2006
Dec 25 3,002.0
NOTE - Monetary base comprises cash in circulation and commercial banks' deposits at the central bank.
To see more detailed historical data on Russia's monetary base you can go to cbr.ru/eng/main.asp Keywords: RUSSIA BASE/ (Moscow Newsroom, +7495 775 1242, moscow.newsroom@)
: Kremlin attempts to double its grain exports
By Isabel Gorst in Moscow
Published: November 12 2009 22:14 | Last updated: November 12 2009 22:14
When Pyotr Stolypin, prime minister under the last Tsar, gave Russian farmers the right to own land, the country soared in five years to be the world’s biggest grain producer.
A century and a production roller-coaster ride later, Russia once again has set its eyes on becoming a major grain player, banking on strong private sector interest due to rising global food prices.
This is in spite of the financial crisis curtailing some investors’ ambitions. “It is just a matter of time,” says Arkady Zlochevsky, president of the Russian Grain Union, the industry association. “If market conditions are good, there will be investment and we could add a lot of food to world markets.”
The region is already one of the world’s top exporters of wheat, barley and corn, supplying the big cereal importers in North Africa and the Middle East, but the Kremlin believes there are greater opportunities. It has announced it wants to double grain exports in the next 15 years.
Ukraine and Kazakhstan are pushing forward with similar targets.
The World Bank estimates that, with modern technology, fertilisers and by bringing derelict land into production, the Kremlin’s export target of 40m-50m tons a year could be met.
It believes farms could boost annual grain yields by at least 20m tons. Another 10m tons could be added by planting 25m hectares of derelict land.
The main problem, says Samir Suleyman, the bank’s head of policy and operations, “is money, and how to attract foreign direct investment”.
Black Earth Farming, which raised $255m (£153m, €170m) on the Swedish stock exchange in 2007, for example, has accumulated 500,000 hectares of Russian land, much of it in the past year. It is also investing in new grain silos.
“Outside hydrocarbons, grain is the next best thing for Russia in the foresee-able future, no question,” says Michael Shneyderman, the chief executive of Agro-Invest, the holding company for Black Earth Farming in Russia. “But this is a long-term business. There is no such thing as an overnight success.”
As world leaders prepare to attend next week’s United Nations’ World Summit on Food Security, the prospect of an agricultural revival in Russia and other former Soviet Union states will be an important point for discussion. Some see their potential return as food powerhouses as a blessing, hoping for higher production and lower prices for staples such as wheat. Others are worried about the prospect of depending too much on Russian food supplies due to the Kremlin’s past use of natural resources for political leverage.
But the nations of the former Soviet Union face a titanic challenge if they are to re-emerge successfully as a global breadbasket. Their farms are struggling to escape the legacy of communist-era collectivisation and the decade of neglect that followed the demise of the Soviet Union in 1991.
In spite of a favourable climate and some of the world’s most fertile soil, average grain yields are a third of the levels in western Europe.
Lack of capital means that vast tracts of land lie idle, in spite of being relatively cheap. In a move to stimulate agriculture, Moscow is introducing regulations that will oblige investors to cultivate arable land or relinquish their property. A register of arable land, drawn up with the help of the World Bank, sets the stage for the development of a property market where farmers can use land as collateral for loans.
But bringing the land into use and improving yields will be the easy part.
The key barriers to growth are bottlenecks in transporting and storing grain. Capacity at Russian sea ports is too small . In Kazakhstan, some of the wheat fields are more than 1,000km from export terminals. Huge investment in infrastructure is required.
The Russian state-owned United Grain Company, formed by presidential decree in March, has invited private investors to take part in a $4bn programme to build new grain silos and export terminals to ease congestion at Black Sea ports.
Foreign investors, however, remain wary about pouring millions into the former Soviet Union, where governments still debate their respective national food security policies.
They still remember that during last year’s food crisis, both Moscow and Astana restricted the export of agricultural commodities to keep their local markets well supplied and prices down.
Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.
Business, Energy or Environmental regulations or discussions
Russian Govt Approves Draft Transfer Pricing Law
by Tatiana Smolenskaya, Tax-, Moscow
Last updated 3 minutes ago | Friday, November 13, 2009
The Russian government has approved a draft law on transfer pricing ready for its first reading in the Duma before the end of the year. The proposed law defines clearly the nature of arm's length related party transactions and increases penalties for failure to adopt this approach. It also outlines procedures for Advance Pricing Agreements.
The law has been five years in the making; Russian commentators suggest that the legislation has grown in urgency after criminal proceedings were taken against the management of the Yukos oil company. The case against former Yukos executives, Mikhail Khodorkovsky and Platon Lebedev, was that they had evaded taxes by means of the group's transfer pricing policies. In May 2009, President Dmitry Medvedev said that such tax evasion schemes threatened the stability of state finances and the law needed to be changed to eliminate all risks of ambiguity in the Tax Code.
The draft amendments to the Tax Code involves the creation of a team of tax officials to monitor so-called "controlled transactions" between related parties. In the first year, the minimum level of controlled transactions, which must be reported to the tax authorities, will be RUB100m (USD3.5m), but five years on, the limit will reduce to RUB10m. Penalties for understatement of tax liabilities, where non-market pricing has been applied on related party transactions, can be up to 40% (presently 20%) of the tax arrears and subject to a minimum of RUB30,000.
Article 40 of the Tax Code, which sets current pricing guidelines, would be deleted and replaced by an entirely new section on all aspects of transfer pricing. Russia's 20% "safe harbor" regulations will also be abolished.
The terms have been brought more in line with OECD standards with a broadening of definitions of related parties and the inclusion of intellectual property rights as controlled transactions. Special attention will be given to commodity trading and transactions in which one party is established in a foreign country with especially low tax rates, or where no tax information exchange agreements are in place.
The bill also allows for consolidation of group accounts for tax purposes for the first time, in which case transfer pricing principles need not apply in respect of consolidated companies.
Advance Pricing Agreement procedures (APAs) will become available subject to a charge of RUB1.5m. Violation of APAs will likewise attract a RUB1.5m fine.
The Russian finance ministry expects the new law to be enacted by next spring and effective from January 1, 2011.
Inter RAO consolidates blocking stake in TGK-11
MOSCOW. Nov 13 (Interfax) - Inter RAO UES (RTS: IRAO) has
consolidated a blocking stake in TGK-11, Inter RAO reported on Friday.
The company plans to consolidate shares in TGK-11 - either owned or
under its management - that amount to a controlling stake before the end
of the year.
TeliaSonera, Russia’s Altimo to Merge MegaFon, Turkcell Stakes
By Diana ben-Aaron and Ilya Khrennikov
Nov. 13 (Bloomberg) -- TeliaSonera AB, Sweden’s largest telephone company, and Russia’s Altimo agreed to combine their stakes in OAO MegaFon and Turkcell Iletisim Hizmetleri AS in a new company to clarify ownership and increase dividends.
The new company will be listed on the New York Stock Exchange and established in a Western jurisdiction, Stockholm- based TeliaSonera said in a statement. TeliaSonera and Altimo will contribute their stakes to the venture without a premium and invite other shareholders to join them. MegaFon is Russia’s third-largest mobile-phone company, and Turkcell is Turkey’s largest mobile-phone company.
TeliaSonera aims to increase control in its partially owned holdings in the Baltics and Eurasia, while Altimo said it believes the deal will bring opportunities for expansion into other emerging markets. The agreement includes a solution to a legal dispute with Cukurova Holding over a stake in Turkcell, which will now be acquired by Altimo and merged into the new company.
“The main positive change is for MegaFon, which will likely provide detailed financial information every quarter and will pay a dividend,” said Sven Skoeld, a Stockholm-based analyst with Swedbank. “Some investors have been cautious on TeliaSonera because only part of the group pays a dividend. There’s been a profit contribution from MegaFon, but no cash flow coming out, and now there will be.”
Biggest Jump
TeliaSonera climbed as much as 3.7 kronor, or 7.7 percent, to 52.05 kronor in Stockholm, the biggest jump in almost a year. The stock closed at 51.30 kronor.
MegaFon and Turkcell will continue as independent operators, the companies said. Turkcell is already listed and pays dividends, while MegaFon has been closely held. The accord won’t affect the Turkish phone company’s operations, Deputy Chief Executive Officer Koray Ozturkler said in a phone interview.
Altimo, the telecommunications arm of billionaire Mikhail Fridman’s Alfa Group, last month announced a similar deal with Norway’s Telenor ASA to combine stakes in OAO VimpelCom and ZAT Kyivstar in a new company incorporated in Bermuda and listed on the New York Stock Exchange.
“Altimo wants to bet on several horses, and it’s a very smart strategy from their side,” TeliaSonera Chief Executive Officer Lars Nyberg said in an interview. “It’s a non-issue for me.”
Invited to Merge
OOO AF Telecom Holding, the third major shareholder in MegaFon and part of the holdings of billionaire Alisher Usmanov, has been invited to merge its shares into the new venture, TeliaSonera said.
If AF Telecom Holding decides to join, TeliaSonera and Russian companies should have “about the same share” in the merged company, Altimo Chief Executive Officer Alexey Reznikovich said at a briefing in Moscow. An independent appraisal of both companies needs to be conducted to establish exchange conditions and complete the deal, he said.
AF Telecom Holding said in an e-mail that it doesn’t see value in the merger and doesn’t find foreign ownership beneficial to Russian wireless companies.
“We see practically no synergy when we forecast future performance of the merged company,” AF Telecom commented. “This is clearly a proposal that would benefit only some shareholders.”
Equal Number
No banks have yet been hired to work on establishing the new venture, the companies said. TeliaSonera and the Russian investors will have an equal number of board members and there will also be independent members and an independent chairman, the companies said.
MegaFon currently has about $2 billion in cash and Turkcell has about $3 billion in cash, Reznikovich said. The new company intends to return cash to shareholders if it doesn’t find acquisitions or other places to put the money, TeliaSonera and Altimo said.
The venture will have more than 90 million subscribers in Russia, Turkey and the CIS, TeliaSonera said. Altimo said it expects the new venture to furnish economies of scale, better chances to expand to the Middle East and Africa, and opportunities to better serve Russian tourists in Turkey.
The Russian government is expected to approve the deal even though MegaFon is considered a strategic enterprise, Reznikovich said.
Resolution Process
It may take as long as two years for the new company to start operating, TeliaSonera CEO Nyberg said in an interview. First it needs to settle the dispute with Cukurova over Turkcell shares that were sold to both TeliaSonera and Altimo, he said. Those shares will belong to Altimo and then to the new company after a resolution process that may take 12 months, TeliaSonera said.
In exchange, Altimo will support TeliaSonera’s move to acquire the 41.45 percent of Eurasian operator FinTur Holdings BV that it doesn’t already own. The Swedish company plans to buy the stake from Turkcell at a fair market value, it said.
Altimo and TeliaSonera together own about 42 percent of Turkcell and would boost their stake to 64 percent on settlement of the Cukurova dispute. Together they own about 69 percent of MegaFon, with Usmanov owning the rest.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@; Ilya Khrennikov in Moscow ikhrennikov@
Last Updated: November 12, 2009 19:12 EST
Usmanov: no gains for MegaFon from Telia/Altimo deal
11.13.09, 01:21 AM EST
MOSCOW, Nov 13 (Reuters) - Russian billionaire Alisher Usmanov has rejected an invitation to contribute its 31.1 percent stake in Russia's third-largest mobile operator MegaFon to a new company announced by TeliaSonera and Russia's Alfa Group.
TeliaSonera ( TLSNF.PK - news - people ) and Alfa's unit Altimo said on Thursday they would combine their stakes in MegaFon and Turkcell in a move to resolve a bitter dispute over ownership of the top Turkish operator and invited Usmanov's company AF Telecom to contribute its stake as well.
'At this moment, company has not received any offers from our partners about the merger. However, estimating the outlook of this deal, we think that the merger of MegaFon and Turkcell stakes, owned by Altimo and TeliaSonera, will not contribute to capitalization of Megafon,' AF Telecom said late on Thursday.
'Forecasting future financial results of the united company we practically don't see synergy from the merger. This offer favors only a part of shareholders.'
Vedomosti business daily reported on Wednesday that Usmanov was considering swapping his MegaFon stake for a share in long-distance telecom operator Rostelecom ( ROS - news - people ) which will combine seven regional fixed-line telecoms groups controlled by state telecoms holding company Svyazinvest.
'We are interested in realization of possible cooperation with Svyazinvest. But it is too early to talk about any definite agreements,' AF Telecom said in the Thursday's statement. (Reporting by Maria Kiselyova; Editing by Valerie Lee) Keywords: MEGAFON/
Deal places Alfa atop Russian mobile industry
By Catherine Belton in Moscow
Published: November 13 2009 01:44 | Last updated: November 13 2009 01:44
Alfa Group’s latest deal puts it at the top of the Russian mobile industry after more than five years of bruising corporate battles that saw it take on Scandinavian telecoms, a Turkish billionaire and even the Russian telecoms minister.
In court cases that stretched from New York, Bermuda, the British Virgin Islands to Siberia and Ukraine, oligarch Mikhail Fridman’s group fought “extraordinary hardball”, according to one industry insider, standoffs that in some cases have raised concerns about Russia’s investment climate.
Thursday’s deal to pool Alfa and TeliaSonera’s stakes in Megafon, the number three mobile operator in Russia, and in Turkcell, the Turkish mobile operator, into a new company, comes on top of a deal last month in which Telenor, the Norwegian company, agreed to merge its assets in Vimpelcom, the number two mobile operator, and Ukraine’s Kyivstar with Alfa to create a new joint entity, in a deal aimed at ending a five-year vicious corporate war.
“This has been a banner year for Alfa. They should win oligarch of the year awards,” the insider said.
Even though the deals spell out that Alfa and its partners will operate each company on a 50:50 basis with independent directors on the boards to decide deadlock situations, the Russian reality is that Alfa will most likely control both companies.
The deals raise parallels with a similar peace agreement between Alfa’s oil arm, TNK, and BP of the UK over their joint oil venture last year which has the same 50:50 governance mechanisms but has left Alfa with effective control.
“There are technological and marketing skills that Telia can bring to the JV, but Alfa is in a position to better navigate the business environment in Russia and in that sense they will dominate it,” said Roland Nash, head of research at Renaissance Capital, the Moscow investment bank. “Alfa helped write the rules of doing business here.”
“We really are expert in difficult complicated sophisticated business and legal situations,” Alexei Reznikovich, chief executive of Altimo, telecoms subsidiary of Alfa, told the Financial Times. “That’s why we get involved in these situations on a constant basis and often enough we resolve them and create shareholder value.”
Critics, however, say Alfa’s speciality is using its power to abuse the Russian court system to come out on top, a charge which Mr Reznikovich denies.
“We are trying to use all possible ways within the framework of the legal system ... to defend our shareholder interests,” he said.
In the case of Telenor, a five-year corporate battle escalated in March this year when a Siberian court ruled in favour of an obscure minority shareholder to fine Telenor $1.7bn, or the value of its stake in Vimpelcom, for blocking Vimpelcom’s entry to the Ukrainian market. Telenor alleged Alfa had helped engineer the suit filed by Farimex to “steal” its stake in Vimpelcom. Alfa denied any connection to the suit.
One insider said bailiff threats to sell the stake to pay off the fine were the final straw for Telenor. “Telenor blinked,” he said.
Telenor, however, has said it never believed Russia would go so far as to sell the stake because it would be too damaging for the investment climate.
Mr Reznikovich said he did not think the threat was a deciding factor. “Everyone is tired of all these legal battles ... this is not what business is supposed to do: to spend the money and energy of their organisations to feed the law firm industry ... When it goes on for a long time ... people start thinking why are we doing this: maybe it is better to try and agree something.”
The same courtroom fatigue goes for the deal with TeliaSonera, he said. In this case, the two companies – although they have had much better relations than Alfa had with Telenor – have been at loggerheads over a stake in Turkcell.
The standoff stems from a deal in 2005 when Turkish conglomerate Çukurova, owned by Mehmet Emin Karamehmet, a flamboyant Turkish billionaire, reneged on a deal to sell shares in Turkcell to TeliaSonera, and decided instead to form a venture with Alfa.
An arbitration court in August ruled that Çukurova should sell its remaining stake in Turkcell Holding to TeliaSonera for $3.1bn. Altimo meanwhile, had charged it was owed the same stake as collateral for a loan Çukurova had not paid. “We decided to join forces to make sure that whoever prevails will prevail not to start a new legal battle between us and Telia but rather to actually get the shares and put them in a new company and start a new life with that,” Mr Reznikovich said.
Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.
Deripaska’s Rusal May Offer Assets to China for IPO Support
By Yuriy Humber
Nov. 13 (Bloomberg) -- Russian billionaire Oleg Deripaska’s aluminum producer United Co. Rusal may offer stakes in smelters and mines to Chinese companies to ensure the success of its initial public offering in Hong Kong, analysts said.
The world’s largest maker of the metal plans to sell a 10 percent stake to help repay more than $14 billion of debt. Rusal may seek to win Chinese state-owned companies as investors by offering production joint ventures and access to raw materials, said Chris Weafer, chief strategist at UralSib Financial Corp., and Eric Kraus, a strategy adviser at Otkritie Financial Co.
“The only way that Rusal can get a high valuation is if it gets a couple of big state-backed anchor investors,” Weafer said in Moscow. “Chinese companies usually only buy if they can leverage this by getting access to projects or strategic assets.”
Access to Rusal’s output would help China, the largest aluminum user, to secure supplies as its own production is curbed by comparatively higher costs. A deal may also cement a deepening trading relationship between the countries. Russian Prime Minister Vladimir Putin, accompanied by a delegation including Deripaska, visited China last month to clinch oil, natural gas and nuclear deals for more than $100 billion.
Rusal, which intends to proceed with the IPO, can’t go ahead without first agreeing on a debt restructuring with foreign creditors, according to two people familiar with the situation who declined to be identified because the debt talks are private. A postponement would mean delaying the offering until at least March to allow for Chinese New Year, one of the people said.
New Customers
Rusal plans to win over seven or eight major customers in China to secure long-term deliveries of aluminum, Rusal’s Head of Strategy Artem Volynets said by e-mail in response to questions from Bloomberg News.
“We will secure contracts with large consumers or provide our potential partners access to the raw material resource to jointly develop them,” Volynets said.
Rusal’s debt almost doubled last year after it bought 25 percent of OAO GMK Norilsk Nickel, Russia’s biggest mining company, for $7 billion in cash and a 14 percent Rusal stake. Commodity prices subsequently collapsed, and Rusal had a net loss of $6 billion last year, Vedomosti reported last month. Rusal received $4.5 billion from Vnesheconombank in October 2008, the biggest state bailout of any Russian company.
Political Interests
Rusal is in talks with potential investors including China Investment Corp., a Chinese sovereign wealth fund, and Singaporean fund Temasek Holdings Pte, the Hong Kong Economic Journal reported last month. State-controlled Aluminum Corp. of China Ltd., also known as Chalco, looked at the IPO and decided against buying a stake, Caijing magazine reported Oct. 12.
“It would be naive to conceive Rusal’s IPO as a purely financial transaction with no political interests,” said Kraus, who helps Asian clients invest in Russia. “It would make sense that the Chinese would be looking for an entry in a more energy- efficient aluminum smelting project via Rusal.”
The utilization of China’s aluminum smelting capacity dropped to 69 percent by July, while the global rate was 81 percent, according to Chalco’s Web site. Electricity is the biggest cost for aluminum producers. China’s aluminum industry is 86 percent reliant on coal-fired generation, while Rusal sources most of its electricity from hydropower plants, some of them owned by Deripaska.
Higher Valuation
That has helped make Rusal more profitable last year than Alcoa Inc., the largest U.S. producer, and Beijing-based Chalco, Vedomosti reported last month, citing a Rusal presentation to analysts.
Rusal also may obtain a higher valuation in Hong Kong compared with other locations. Hong Kong’s Hang Seng benchmark index trades at an estimated price-to-earnings ratio of 17.8 for 2010, compared with 14.7 for the U.K.’s FTSE 100 Index. The ratio of Chalco’s enterprise value to its estimated 2010 earnings is 17, while New York-based Alcoa’s is 9, according to data compiled by Bloomberg.
Enterprise value is calculated by adding market capitalization to preferred equity, minority interest and total debt, minus cash and equivalents.
Smelting aluminum in Siberia, where Rusal has plants, would offer China a chance to “get serious about closing down its own production,” said Lochlann Toolin, a partner with Balor Capital Management LLC, a commodity-trading fund in New York. “China has been talking for years about closing down smelters, and they should as it’s a very uneconomic use of resources.”
6-Year Deal
Rusal said last week it agreed to a six-year contract to supply defense company China North Industries Corp. with 1.7 million metric tons of aluminum. Rusal’s Volynets told Dow Jones in March Rusal was in talks with Japanese and Chinese investors about Russian smelting and power projects.
In February 2008, Rusal signed an accord to build a 500,000-ton factory in China and mining complex in Guinea with China Power Investment Corp.
“Currently, Asia is where the money is,” Weafer said. “Deripaska’s trying to piggyback on a theme of Russia being the raw material supplier to Asia and he’s boosting his Asian credentials.”
To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@
Last Updated: November 12, 2009 19:00 EST
Evraz Group secures amendments in debt covenants
RBC, 13.11.2009, Moscow 11:36:10.The creditors of Evraz Group have approved changes to debt covenants under the company's syndicated loans, the press office of the Russian metallurgical and mining company reported today. The changes will affect several loans taken out in 2006-2007 worth $3.214bn, $225m, and $200m.
J.P.Morgan and Lazard&Co Limited acted as the company's financial consultants.
Russia Evraz--covenants amended on $3.6 bln debt
Thu Nov 12, 2009 2:38pm EST
MOSCOW, Nov 12 (Reuters) - Russian steelmaker Evraz (HK1q.L: Quote, Profile, Research, Stock Buzz) said on Thursday its lenders agreed to change covenants on $3.6 billion worth of loans and it is also seeking to amend covenants on three bond issues.
"Evraz Group is pleased to announce that the lenders under its syndicated facilities have approved, by the early bird deadline, the requested amendments to those facilities, which include a reset of the financial covenants," the company said.
Evraz, part-owned by billionaire Roman Abramovich, also said it seeks to change covenants on three issues of notes maturing in 2013, 2015 and 2018 and worth a combined $2.75 billion, in particular a requirement to maintain a debt to EBITDA ratio of three to one.
"Evraz is proactively seeking amendments to existing covenant packages to allow it increased flexibility in a difficult environment to the benefit of all of its stakeholders, including holders of the notes," the company said.
Evraz said that on 2015 notes it also wants "certain relaxations of the net debt to EBITDA maintenance covenant." It said it is currently not in breach of any covenants. (Writing by Gleb Bryanski, editing by Gerald E. McCormick)
Siemens VAI to reconstruct concaster No 3 at Evraz NTMK
Friday, 13 Nov 2009
It is reported that Russian steelmaker and iron ore producer Evraz Group has placed a EUR 30 million order with Austria based giant engineering and plant making company Siemens VAI Metals Technologies for the reconstruction of the continuous billet caster No. 3 at its subsidiary Nizhny Tagil Iron and Steel Works.
Accordingly, the reconstruction of NTMK concaster No 3 which will begin in November 2010 and will last for two and a half months will allow the increase of the unit's annual production capacity from the current level of 700,000 tonnes to up to one million tonnes and will also enable the producer to expand its product range. At the same time, within the framework of the contract signed with Evraz in 2006 for the modernization of NTMK the oxygen converter shop, Siemens VAI is to upgrade the plant's oxygen converter No 4. Previously, the Austrian plantmaker reconstructed NTMK converters Nos. 1, 2 and 3.
As SteelOrbis previously reported, following the implementation of Evraz investment projects, four new converters and continuous casting machines will operate at NTMK, allowing it to increase the output of its oxygen converter shop to 4.5 million tonnes of steel per year.
(Sourced from SteelOrbis)
Visit for more
Allocine buys into Russian website
Kinopoisk stake is part of international expansion
By NICK HOLDSWORTH
LONDON -- French Internet group Allocine has bought a 40% share in Russia's popular Kinopoisk movie info website.
The group, which runs cinema web portals in France, Spain, Germany, U.K. and Canada, purchased the share from Russia's Digital Sky Technologies for an undisclosed sum, Russian business daily Kommersant said Thursday.
Allocine said it had invested in the Russian site as part of its policy of international growth.
In a statement, it said that entering the Russian market was a key target. It was a country of 142 million people, with high cinemagoing numbers, more than 1,500 modern screens, and had witnessed a 30% increase in ticket sales last year with 110 million visitors.
Kinopoisk, which was founded in 2003, has around four million unique visitors every month.
Market observers in Russia put the value of Kinopoisk at between $3 million and $5 million.
INTERVIEW-UPDATE 1-Baltika: tax hike to hit Russia beer mkt
Friday November 13, 2009 01:27:08 AM GMTBALTIKA/ (INTERVIEW, UPDATE 1)
* Excise tax set to triple in 2010
* If passed onto consumers, will speed up market decline
* Baltika expands production away from beer (Adds quotes, detail, background)
By Maria Plis
MOSCOW, Nov 13 (Reuters) - A tripling of excise taxes on Russian beer will hike prices by up to 30 percent for drinkers and speed up the market's decline, the chief executive of Russia's leading brewer, Baltika said.
Baltika is owned by Danish brewer Carlsberg, the world's fourth-biggest brewer, whose shares have tumbled on the news about plans to raise the duty next year to 9 roubles per litre from 3 roubles now.
"A simple calculation shows that if 100 percent of the tax is passed on to the retail price, given current price mark-ups on the wholesale and retail levels and VAT, the (retail) price may rise 20-30 percent," Anton Artemyev told Reuters in an interview on Wednesday.
He said the beer market is particularly vulnerable in a country where vodka is a far more popular alcoholic drink.
"The beer market in Russia is sensitive to prices, an increase will have negative consequences. Just because of a decline in disposable incomes, without any tax increases, the market fell by 10 percent over the past ten months."
Carlsberg earns nearly half its profits from Russia where it is by far the largest brewer, and its Chief Executive Officer Jorgen Rasmussen has said the company could grow its Russian beer market share if the tax takes effect.
The Russian government hopes to fetch 65 billion roubles through the tax increase to plug the budget deficit of the recession-hit economy, but Artemyev said the industry could incur losses of about the same amount.
However, he believes that brewers could avoid shutting production facilities by boosting efficiency and making alternative products.
In September, Baltika halted beer production at one of its plants in St Petersburg which is now producing only non-beer drinks. It has also this year launched the production of kvas, a traditional mildly alcoholic beverage made from black rye or rye bread.
"We have acquired 6 percent of the Russian kvas market in September. We have the potential to build up this share going forward. As kvas is a product of fermentation, we can use some facilities we used in beer brewing," Artemyev said.
Beer sales at Baltika fell 8 percent in the first nine months of 2009, but it's full-year results will outpace the market, which is forecast to fall 10 percent this year, Artemyev said.
"We have been doing better than the market, have reached a 41 percent share - this is our historical maximum."
Artemyev said the company intended to expand licensed production and export to more countries.
In particular, Baltika plans to start exporting beer from newly acquired plant in Azerbaijan to Georgia and Turkmenistan. (Writing by Maria Kiselyova; editing by John Bowker and Erica Billingham)
Austrian Airlines Not Planning To Cancel Flights To Russia
12.11.2009 — News
THE SVERDLOVSK OBLAST.
There are no plans to cancel Austrian Airlines' Vienna - Ekaterinburg - Vienna flight. At the same time according to the data from the Russian Ministry for Transport the Austrian carrier works in Russia in accordance with a temporary permit that expires on 1 December 2009.
Austrian Airlines runs flights from Vienna to 8 cities in Russia (Moscow, Saint Petersburg, Ekaterinburg, Nizhniy Novgorod, Sochi, Rostov-on-Don, Krasnodar, and Krasnoyarsk) on the basis of Russian-Austrian intergovernmental agreement on air traffic. This legal foundation has disappeared when European Commission approved Austrian Airlines being purchased by the German Lufthansa in September 2009. The Russian Ministry reckons that if the dominating Austrian ownership of Austrian Airlines is not proven then the Austrian party may appoint any other air carrier for the implementation of the agreement.
The Ekaterinburg representation of Austrian Airlines informed RusBusinessNews that the carrier did and still does run three flights a week to the capital of the Urals. "No change is planned for time after November, tickets are sold for all flights both for the end of 2009 and 2010," Yelena Chizhik, the company's representative, pointed out.
Activity in the Oil and Gas sector (including regulatory)
Slovenian PM to sign agreement for gas pipeline
The signing will take place in Moscow on the same day the national squads of the two countries will play at the football World Cup.
Slovenian Prime Minister Borut Pahor will sign a deal in Russia on Saturday for the construction through its territory of the massive South Stream gas pipeline to Europe, a government minister said Thursday.
- Negotiations have been successfully concluded, therefore we will sign the deal on Saturday - Economy Minister Matej Lahovnik told journalists in Ljubljana.
He said the South Stream pipeline is extremely important for Slovenia - especially in light of the dispute we are permanently witnessing between Russia and Ukraine and the trouble in supply through the existing network. -
Lahovnik announced last spring the deal would be signed in June but negotiations over the jointly owned company that would construct the pipeline were prolonged and concluded only last Friday.
The pipeline through Slovenia, with a capacity of some 10 billion cubic metres, will be constructed by a company co-owned by Russia's gas giant Gazprom and Slovenia's gas distributor Geoplin Plinovodi.
The signing will take place in Moscow on the same day the national squads of the two countries will play at the football World Cup play-offs.
South Stream is one of two major gas pipeline projects that Russia is developing, aimed at consolidating its commanding position in supplies of gas to Europe.
Wall Street Journal calls Nord Stream project "Molotov-Ribbentrop Pipeline"
Alla Petrova, BC, Riga, 13.11.2009
The influential The Wall Street Journal (WSJ) has named the Nord Stream project, initiated by energy companies in Russia and Germany, "the Molotov-Ribbentrop Pipeline"
The magazine points out that the Nord Stream project is as ambitious as it is controversial, writes LETA.
"Next spring the first pipeline segments will likely be dropped to the sea floor in a line that will wind through Russian, Finish, Swedish, Danish and German waters—conspicuously avoiding the Baltic States and Poland. This is because the Nord Stream project is part of an exclusionary agreement between Moscow and Berlin—nicknamed in circumvented Warsaw the "Molotov-Ribbentrop Pact," WSJ reports.
"It would have been much cheaper to build an overland pipeline through Eastern Europe, but the purpose of Nord Stream from the beginning was to bypass countries Moscow still considers to be part of its sphere of influence," the newspaper writes.
"Russia's geopolitical message here is clear: it doesn't trust the new EU member states as transit countries or even as energy consumers and is willing to incur enormous costs to bypass them. The other message, or implied threat, is that Nord Stream will allow the Kremlin to cut off gas deliveries to Eastern Europe through current pipelines without reducing energy supplies to Germany," WSJ point out, posing a question "But what sort of message does Germany, a fellow EU member, intend to send to its neighbors?"
Nord Stream was championed by former German Chancellor Gerhard Schröder, who now serves as one of its executives. From within her previous coalition government, current Chancellor Angela Merkel lobbied successfully for EU endorsement of the project even though the pipeline consortium is registered in Switzerland and controlled by Russia's Gazprom.
Of the dozens of companies involved in the pipeline's construction, not one is from the Baltics, Central or Eastern Europe.
Germany's recent election results produced a ripple of hope among the countries on Russia's periphery. With the traditionally pro-Moscow Social Democratic Party out of the governing coalition, would German Chancellor Merkel perhaps seek to change the terms of the Nord Stream agreement and push Russia to alter the route so that the pipeline would cross the waters or territories of Eastern EU members? Perhaps she would lobby Moscow to include also East European companies in the Nord Stream consortium? At least, it was hoped, Berlin would throw its weight behind the Nabucco pipeline, which seeks to improve Central and Eastern Europe's energy security with the help of Caspian and Middle Eastern gas.
After all, Germany's RWE is part of the Nabucco consortium and Mr. Schröder's pro-EU former foreign minister, Joschka Fischer, is now a lobbyist for the project.
"Recent progress on Nord Stream, however, has dashed those hopes. The Nordic countries had until now delayed the project's approval, raising environmental concerns, which most interpreted as unease about the pipeline's geopolitical implications. Last Thursday, though, Finland and Sweden, which holds the European Union presidency until the end of the year, joined Denmark in signing off on the project," WSJ reports.
"The very realistic prospect that construction on Moscow's pet project might begin early next year is a symbolic blow to those seeking to reduce Europe's energy dependence on Russian gas. Most of all, it is a blow to any semblance of EU unity on energy security. Russia's neighbors, both within and without the EU, are already reeling from a sense of Euro-Atlantic abandonment following Washington's "reset" policy toward Russia and the EU's lackluster outreach to its Eastern neighbors," the newspaper points out.
The 1,220 km long pipeline will connect Russia's Vyborg and Germany's Greifswald, stretching through the Baltic Sea, crossing the territorial borders of Russia, Finland, Sweden, Denmark and Germany.
Denmark gave green light to the project on October 20; Finland and Sweden gave their approval on November 5, thus, Russia and Germany remain the only ones among the involved countries that still have not officially approved the project, however, no problems with these two countries' assent are expected to occur.
The two main companies behind the project are Russia's energy giant Gazprom and German companies E. On Ruhrgas and BASF-Wintershall.
Construction of the project's two parallel pipelines is planned to be started in the first half of 2010; the first gas supplies via the pipeline to Europe could start in autumn 2011. The project is planned to be completed by 2012.
Poland and the Baltic States are against the project as, in their view, the principal aim of the project is to bypass their territory.
The Baltic States are also concerned about the project's impact on the environment and potential damage to the Baltic Sea seabed as a large number of conventional and unconventional ammunition sank down in the sea during and after the Second World War.
Russia Gains a Political Victory in Scandinavia with Nord Stream Approval
[tt_news]=35723&tx_ttnews[backPid]=7&cHash=86711c7766
Publication: Eurasia Daily Monitor Volume: 6 Issue: 209
November 12, 2009 04:00 PM Age: 8 hrs
Category: Eurasia Daily Monitor, Vlad’s Corner, Home Page, Russia, Energy
By: Vladimir Socor
Three Scandinavian governments have allowed Gazprom’s Nord Stream pipeline, from Russia to Germany, to be built on the Baltic seabed (EDM, November 10). The Finnish, Swedish, and Danish governments had procrastinated or resisted for three years and their public opinion does not welcome the Nord Stream project. Government agencies and public organizations in the three countries were conducting detailed analyses of the project’s economic, security, and environmental implications. On the environmental account, the Scandinavian governments and publics are uniquely sensitive.
The sudden approval marks a significant success for Russian policy in Northern Europe. It shows Moscow’s ability to influence decisions in individual countries, outside the framework of the European Union, of which the three countries are members. Their neighbors on the opposite Baltic shore –the E.U. members Estonia, Latvia, Lithuania, and Poland– had resisted the Nord Stream project. They continue objecting to it on the basis of energy security, ecological risk, and maritime safety considerations.
The go-ahead to a bilateral Russo-German project of such magnitude marks a setback to the E.U.’s common energy policy and political solidarity. The project reflects –and, if implemented, would reinforce– the self-described Russo-German “strategic partnership,” eroding Germany’s relationships with its allies. Berlin also lobbied the Scandinavian governments for a go-ahead to Nord Stream; but Moscow proved more effective in swaying the Scandinavian governments by introducing linkages that affected their interests.
This outcome also means a setback to Nordic regional solidarity, as individual governments ultimately made their own trade-off with Russia, on issues of interest to each. They only seemed to synchronize the timing of giving in. The situation also shows the limitations of the Council of Baltic Sea States, a consensus-based, inclusive organization that was all along unable to take a position on the Russo-German Nord Stream.
Denmark had first given its consent on October 20, ahead of Prime Minister Lars Lokke Rasmussen’s November 2 maiden visit to Moscow. Meanwhile, the Danish energy conglomerate DONG, 73 percent state-owned, has contracted with Gazprom to import gas through the Nord Stream pipeline, in small volumes initially. From Denmark’s standpoint (unlike Germany’s), this is a diversification move, to compensate for the anticipated decline in North Sea gas production. Apart from this, Russian Prime Minister Vladimir Putin agreed to cooperate with Rasmussen’s initiative on a “binding political declaration” for the post-Kyoto period, at the U.N.’s climate-change conference next month in Copenhagen (Interfax, November 2; Kommersant, November 6).
Finland gave its consent as part of a tacit quid-pro-quo whereby Russia delays the imposition of high export duties on round timber. The Russian government had announced two years ago (at first confidentially, then publicly) its intention to introduce that measure, threatening Finland’s wood-processing industry, which is a key sector of that country’s economy. High export duties on Russian round timber would either drive up production costs in Finland or compel Finnish companies to transfer production and technologies to Russian territory. Moscow has now postponed the imposition of those duties by two years (BNS, November 5).
In Sweden, the conservative government gave its approval although many on the conservative side, as well as the Social-Democrats and left-leaning groups, continue to oppose Nord Stream. According to Social-Democrat leader Mona Sahlin, citing a joint statement of opposition parties, new investments in Russian gas imports correspondingly delay investments in other forms of energy while “strengthening European dependence on Russian gas” and “giving Russia new possibilities to use its energy resources for leverage against the E.U.” (Handelsblatt, November 6; Le Monde, November 7).
Military considerations had played an important role in the Swedish debate. The Nord Stream pipeline route skirts Gotland Island, the site of top-secret military installations. Ultimately, however, the Swedish government was influenced by the Danish and Finnish positions, German lobbying, and concern for the E.U.-Russia summit, which Sweden is scheduled to host next month. As current holder of the E.U.’s presidency, the Swedish government apparently felt that it could not take a partisan side in the Nord Stream controversy. The Russian government, moreover, had hinted in October that Sweden might not be an appropriate host for a successful E.U.-Russia summit.
Nord Stream’s political success, however, ensures neither gas supplies nor financing for the project. Its outlook seems doubtful on both counts at this juncture.
Gazprom
Gazprom reveals borrowings plan for 2010
RBC, 13.11.2009, Moscow 11:11:35.Gazprom's borrowings have been set at $90bn for 2010, according to the Russian energy giant's statement. This figure is cited in the draft investment program and budget for 2010 that was approved by the holding's management board today.
Earlier, the company's board of directors approved Gazprom's forecast for performance in 2009, which provides for RUB 304.bn (approx. USD 10.63bn) in borrowings, RUB 214.9bn (approx. USD 7.5bn) greater than the figure cited in the original plan approved in December 2008.
Gazprom: Naftogaz must honor obligation to transit gas to Europe
Today at 10:36 | Interfax-Ukraine
Moscow, November 13 (Interfax) - The heads of Gazprom and Naftogaz Ukrainy Alexei Miller and Oleh Dubyna met in Moscow on Thursday to discuss the functioning of the Ukrainian gas transit system during the 2009-2010 autumn/winter period.
"[The parties] stressed that Ukraine must strictly honor its contractual obligations to transit Russian gas to Europe," Gazprom said.
They also discussed Naftogaz Ukrainy's current financial situation and how to solve the problem of paying for the November supplies of Russian gas.
Gazprom, Naftogaz heads discuss problem of gas payments
13.11.2009, 09.11
MOSCOW, November 13 (Itar-Tass) - Chairman of Gazprom’s Management Committee Alexei Miller and Chairman of the Board of Directors of Naftogaz Ukrainy Oleg Dubina discussed at a working meeting on Thursday issues related to the current financial condition of Naftogaz Ukrainy and the settlement of the problem of payment for November supplies of Russian natural gas, the Gazprom information department said, Prime-Tass reports.
Miller and Dubina also considered issues of the work of the Ukrainian gas transportation system in the autumn-winter period of 2009-2010. At the meeting the sides stressed the need of strict observance by the Ukrainian side of contract obligations on the transit of Russian gas to Europe.
The state company Naftogaz Ukrainy has enough gas resources to provide all domestic consumers with gas and ensure the transit of Russian natural gas to Europe, Ukrainian president’s commissioner for international energy security, Bogdan Sokolovsky, told a briefing earlier this week.
“Ukraine is fully ready to meet its commitments on the transit of gas via its territory within at least the next half-a-year,” Sokolovsky said. He said there are about 27 billion cubic meters of gas in Ukrainian underground facilities, ”which is quite enough for fulfilling the functions of supply and transit”.
He specified that this year Naftogaz has bought from Russia’s Gazprom 19 billion cubic meters of gas, while the contract signed on January 19 envisaged the purchase of 31.667 billion cubic meters.
This is over 12 billion cubic meters of gas less, he said. However, “already at the moment of the signing it was clear that Ukraine can neither get, nor consume nor pay for such amounts of gas,” he added.
According to Sokolovsky, because Ukraine has not bought the full amount of gas, Gazprom can impose penalty sanctions worth almost eight billion dollars, while this year Naftogaz has paid Gazprom 4.59 billion dollars. Sokolovsky said half of that sum had to be attracted through borrowings or other schemes, as Naftogaz has no money of its own.
The presidential envoy said that the lack of reforms on the gas market and understated prices could lead to the situation in which Ukraine would lose Naftogaz and its gas transit system. Under the contract signed on January 19, 2009, Naftogaz must buy 40 billion cubic meters of gas this year.
Gazprom postpones drilling in Tajikistan
bne
November 13, 2009
Gazprom will not start drilling its first exploration well at the Sarykamysh site in Tajikistan until mid 2010.
A company spokesperson told Gazprom that drilling would start in July or August 2010, rather than in late 2009 or early 2010 as previously announced, Interfax reports.
The delay is due to the need for detailed analysis of date from the 3D seismic survey carried out earlier this year
According to Gazprom, there are also difficulties in transporting heavy drilling equipment to the site, since a new road needs to be built.
In October 2009, Tajikistan�s President Emomali Rakhmon criticised Gazprom for the �insufficient� speed of the country�s project development in Tajikistan, state news agency Khovar reported.
UPDATE 2-Gazprom says ups 2010 investment to $28 bln
Fri Nov 13, 2009 1:37am IST
* Total investment to be 802 bln rbls vs 761 bln
* Investment programme to be increased by 5 percent
* Funding needed for ambitious projects (Changes source to Gazprom)
By Katya Golubkova
MOSCOW, Nov 12 (Reuters) - Russian gas giant Gazprom will increase its investment programme next year by 5 percent to 802.4 billion roubles ($27.94 billion), the company said in a statement on Thursday.
The company said its capital investments will rise to 663.56 billion roubles from previously planned 483.5 billion roubles. Long-term financial investments will rise to 138.84 billion roubles.
Gazprom's investment programme is usually revised several times during the course of the year depending on market conditions. The decision was taken at a management meeting on Wednesday.
Gazprom said its 2010 total revenue will stand at 3.79 trillion roubles. It said it plans to borrow 90 billion roubles in 2010.
Analysts are closely watching the high costs of the world's largest gas firm and have criticised the company for spending too much.
Valery Nesterov, analyst at Troika Dialog brokerage, said it remained to be seen if Gazprom will revise its strategy as the gas market has changed.
"The buyers' gas market has transformed into a sellers' market. And it's obvious that Gazprom's prospects are not as rosy as was the case a few years ago," he told Reuters.
He and Masha Radina from Nomura also noted that in dollar terms, investments could be even lower next year, if the rouble depreciates, as envisaged by the Economy Ministry.
"Usually, Gazprom bases its investment programmes on official macro forecasts -- which is $58 per barrel of oil and a weak rouble (34 per $1)," Radina said.
In September, Gazprom said it would cut its investment programme for 2009 by almost $5 billion to 761.53 billion roubles as the global economic downturn bit and demand for gas fell.
The company will need extra money next year as it prepares to implement ambitious projects including the Nord Stream pipeline to Europe beneath the Baltic Sea and a gas link to the Pacific port of Vladivostok, as well as the development of Yamal Arctic fi
NOVEMBER 12, 2009, 11:41 A.M. ET
Oao Gazprom Approves Draft Investment Program And Budget
LONDON (Dow Jones)--OAO Gazprom (OGZD.LN), an energy company, announced Thursday that committee approval of its draft Investment Program, Budget and Cost Optimization (Reduction) Program for 2010 and reviews projected major financial documents over 2011 to 2012.
MAIN FACTS:
-According to the draft Investment Program for 2010, overall investments will make up RUB 802.4 billion, capital investments - RUB 663.56 billion, long-term financial investments - RUB 138.84 billion.
-The Gazprom Management Committee took into consideration the information on preliminary operating highlights of the company in 2009 and endorsed the draft Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program of Gazprom for 2010.
-The Management Committee also took note of the projected Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program over 2011 to 2012.
-The information relevant to the Gazprom preliminary operating highlights over 2009 and draft Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2010, as well as the projected Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program will be submitted for review by the Board of Directors.
-It was noted that the implementation of the Gazprom Investment Program, Budget and Cost Optimization (Reduction) Program in 2009 was expected to match the level of the approved parameters.
-According to the draft Budget for 2010, total income and revenues will make up RUB 3.79 trillion, liabilities, expenditures and investments - RUB 3.88 trillion.
-Financial borrowings will total RUB 90 billion. The budget surplus will account for RUB 0.5 billion.
-The draft Cost Optimization (Reduction) Program for 2010 provides for the measures aimed at cost optimization (reduction) to result in a cumulative effect of RUB 11.7 billion.
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; +44 (0)20 7842 9296; ian.walker@
Belarus asks Gazprom to review gas prices for 2010
01:4613/11/2009
MINSK, November 13 (RIA Novosti) - Belarus has handed over to Russian energy giant Gazprom a package of proposals concerning reduction of gas prices for 2010, the Belarusian prime minister said.
Sergei Sidorsky said Belarus has a right to demand equal gas prices for Russian and Ukrainian consumers.
"We should point out that when the joint enterprise was created and 50% of Beltransgaz's shares were sold to Gazprom, we agreed on equal profitability," he said, adding "Belarus has a legal right to negotiate on the issue, taking into consideration the slump in [global] gas prices."
He said Belarus has so far fulfilled its gas payment obligations towards Russia.
Earlier, the Belarusian authorities asked Gazprom to maintain gas prices for 2010 at the current level. However, Gazprom head Alexei Miller said the prices would be raised in accordance with a contract, signed by Gazprom and the Belarusian Beltransgaz company in 2006.
A dispute between the two countries over payments for Russian gas took place in June, when Gazprom demanded Belarus pay $244 million in gas debts and warned that supplies could be cut if the sum was not paid. Belarus said it had been paying for Russian natural gas supplies in full and dismissed reports of Gazprom's demand for payment.
The debt arose due to differences between contract and average prices. In the first quarter Belarus paid $250 per 1,000 cubic meters, but by the end of the year this figure should have dropped to under $100. In line with verbal agreements the price should average out at $150 per 1,000 cubic meters.
Belarusian First Deputy Prime Minister Vladimir Semashko then said that the government expected Russian gas prices to reach $166 per 1,000 cubic meters on January 1, 2010 if oil prices remain around the $70 per barrel mark this year. The rate is still well below the average rate Russia charges European Union countries for its gas.
In 2007, Gazprom bought half of Beltransgaz's shares for $2.5 billion.
Why Poland Upped Its Reliance on Gazprom
Poland wants to diversify its energy supply, but a recent deal with Gazprom only increases its dependence on the Russian gas giant. Folly—or smart move?
By Marynia Kruk
In late October, nearly a year after the Russian-Ukrainian crisis left Poland with a 2.5 billion cubic meter shortfall of natural gas for 2009, Polish state-controlled gas monopoly PGNiG (PGNI.WA) and Gazprom (GAZP.RTS) agreed to significantly increase the amount of the fuel Poland will buy from the Russian company starting next year.
If approved by the Polish and Russian governments, the deal would see Gazprom's gas exports to Poland rise to 10.27 billion cubic meters a year through 2037 instead of the current 7 billion cubic meters. Whether the deal undermines Poland's oft-repeated supply diversification goals or ensures a steady supply of natural gas remains to be seen.
Radoslaw Dudzinski, PGNIG's deputy chief in charge of strategy, said the value of the contract is a function of the nine-month moving average of light and heavy gas oil prices and is adjusted quarterly.
"At current crude oil prices and the zloty's exchange rate to the dollar, the 10.27 billion cubic meter contract is worth about 7.7 billion zlotys ($2.8 billion), but that can change quickly as the price of oil or exchange rates shift," said Kamil Kliszcz, an energy analyst at BRE Bank in Warsaw.
One thing the agreement cannot forestall is a repeat of the situation that occurred in January, when Russia closed the tap on Ukraine, which in turn stopped pumping gas on to Poland and other European countries.
During the standoff, Poland could have used more interconnectors, which would have enabled it to import last-minute supplies from other countries in the European Union, as well as an up-and-running liquefied natural gas terminal. There are plans to build such a terminal, but it won't be ready until 2014 at the earliest.
The EU's largest ex-communist member has managed to cope with the shortfall this year thanks to sluggish economic growth, which has limited demand for gas. But now that Poland has locked in an additional supply, it is unclear whether GDP growth and annual gas consumption will start increasing quickly enough to absorb the extra gas as soon as 2010, when the new agreement comes into effect, analysts said.
SUPPLY SECURITY
"The agreement ensures a predictable, stable supply [of gas] in the future, based on a long-term contract," Economy Minister Waldemar Pawlak told the daily Dziennik Gazeta Prawna. "If there will be a bit too much of this commodity, nothing bad will happen."
State-controlled PGNiG echoed Pawlak's lack of concern about over-supply when it said it expects to sell about 18 billion cubic meters of gas by 2015, up from 14 billion now, mainly thanks to several gas-fired power plants in the works.
But analysts are concerned the added volume will come on-stream too soon to be consumed by the plants, which haven't been built yet.
"PGNiG may have to pay for gas it doesn't want," said Pawel Burzynski, an energy analyst at Polish bank BZ WBK in Warsaw.
Under the terms of the contract with Gazprom, PGNiG would have to pay a fine if it bought less gas than a specified yearly minimum.
Poland relies overwhelmingly on coal-fired power plants for its electricity. Cleaner-burning, gas-fired power plants are among the favored solutions to the expected carbon dioxide emissions limits Poland will face in coming years.
"The EU climate change package puts great pressure on [Poland] to reduce its coal burn," said Dieter Helm, an Oxford University professor and adviser on energy policy to the British government.
PGNiG, which says Polish per capita gas consumption is two-thirds lower than in Western Europe, is itself involved in three power-plant joint ventures that will require about 1.2 billion cubic meters of gas per year, the company said. Other Polish electricity producers are planning to build gas-fired plants expected to use about 2 billion cubic meters per year.
Over-supply concerns are exacerbated by Poland's plans to build a liquefied natural gas terminal on the Baltic coast.
The terminal, scheduled for completion in 2014 and with capacity to supply Poland with about a third of its gas needs, would free the country to buy LNG from any global producer.
Earlier this year, PGNiG agreed with Qatargas for the Qatari company to start shipping liquefied gas to Poland in 2014. Government and PGNiG officials hailed the deal as a decisive step toward energy diversification, but detractors noted the gas was more expensive than Russian gas.
DIVERSIFICATION
Given Russia's history as Poland's former imperial and communist-era master, successive Polish governments have for years paid lip service to gas supply diversification away from the country's large neighbor to the east, but actual implementation of such a strategy is time-consuming and costly.
"Russian gas is the cheapest," Burzynski said. "But as a society we don't want to pay more, so effectively we don't want to diversify."
Pawel Magierowski, a partner at the Baker & McKenzie law firm's energy practice in Warsaw, says that attitude is changing.
"From a short-term business perspective, it makes sense to keep buying from Russia and accept the risks. But currently we are seeing the beginning of acceptance of the decision to pay more for security," Magierowski said.
During January's gas conflict between Russia and Ukraine, Poland was not completely cut off from gas supplies, as it was still receiving gas via Belarus, but the shortfall forced PGNiG to cut supply to industrial consumers. Polish households, which use gas for cooking and heating, were spared, but chemical and fertilizer factories had to grind to a halt.
That stoppage, and possible future gas supply problems, in turn spooked potential investors just as Poland gears up to privatize many state-controlled chemical and fertilizer companies in a bid to wipe out a yawning budget deficit.
"The current contract, which gives more volume, is good for the chemical-fertilizer companies," Burzynski said
INTERCONNECTORS
Even if it wanted to diversify, Poland has no way of quickly shifting its source of imports to a supplier other than Russia. It imports Russian gas via pipelines running through Belarus and Ukraine and extracts the rest of its annual gas supply, about one-third, domestically. For now, the map of Central Europe's pipeline network dictates that no matter what deal Polish and Russian gas companies strike, the country will be vulnerable to the fraught relationship between Ukraine and Russia.
Burzynski said interconnectors, pipelines that can send gas both ways between countries' fragmented gas pipeline systems, are the cheapest way for Poland to diversify its supply. They are a solution the European Union favors, and they proved key in easing the effects of the January crisis on many European countries.
"The projects linked to other directions, such as the LNG terminal or links to the gas systems of Germany, the Czech Republic, or Slovakia should be treated as complementary, guaranteeing more flexibility in crisis situations," Economy Minister Pawlak said.
Poland has just one interconnector—to the German network. Although Polish state-owned gas pipeline operator Gaz-System SA is working to increase this interconnector's capacity by two-thirds, to 1.5 billion cubic meters per year, the capacity pales in comparison with the 14 billion cubic meters Poland consumes annually.
The company is working on only one other interconnector, near the town of Cieszyn, which will enable Poland to import 0.5 billion cubic meters from the Czech system by 2011, said Gaz-System spokeswoman Malgorzata Polkowska.
Asked whether there were other planned interconnector projects, Polkowska mentioned the Baltic Pipe, which would link Poland to the Danish gas system, and another one with Lithuania. But both projects are on hold as the Polish companies that might buy gas from these two directions say they do not need these links, Polkowska said.
Andrzej Szczesniak, an independent energy expert based in Warsaw, said more interconnectors to Germany would break PGNiG's monopoly in Poland. He likened successive Polish administrations' failure to build more interconnectors to a homeowner who doesn't buy flood insurance and then demands a bailout.
"Poland hasn't done anything in 15 years, not one pipeline," Szczesniak said. "There are several [interconnector] projects ready, but some politicians say they don't want it because it would be Russian gas [flowing through them].
"It would link us to the European Union system and the German system, which is an energy hub," Szczesniak said. He noted that there is no way of knowing if gas from a new German interconnector would be more expensive, as unpredictable market mechanisms would come into play.
Ironically, the new, larger contract with Gazprom might allay the over-supply problem. "As the situation stabilizes, gas consumption will grow," Szczesniak said. Entrepreneurs thinking about kicking off projects that need natural gas, such as the planned power plants, may be more likely to go ahead with them now. "But as use grows, it becomes even more important to have more than one supplier," Szczesniak added.
Burzynski, on the other hand, emphasized there was no point in getting emotional and complaining about dependence on Russia. "The relationship with Russia is symbiotic," he said.
Gazprom's American Ambitions
Gazprom, the bare-knuckled king of natural gas, is out to make its mark in America
By Steve LeVine
Just how tough is Gazprom? As the world's biggest supplier of natural gas, the Russian company has a reputation for hard-nosed bargaining. So when John Hattenberger, chief of the company's new U.S. operation, hired George Thorogood and The Destroyers to play at a party marking the opening of Gazprom's Houston office, he insisted Thorogood leave his Epiphone guitar after the show. "That was clause 19 of the contract," Hattenberger jokes. Today the autographed instrument hangs above Gazprom's trading floor.
That's Gazprom with a sense of humor. But more often, its negotiating style is no laughing matter. In January, Gazprom slowed gas deliveries to Ukraine in a price dispute, leaving customers further down the pipeline in Central Europe shivering in the winter cold—the third time in three years Gazprom has taken similar steps.
Now, Gazprom has set its sights on the U.S. The company wants to sell liquefied natural gas shipped from Russia's east coast. And with two dozen traders working from the 25th floor of a Houston skyscraper, Gazprom hopes to become a big player in U.S. gas trading. While the company has yet to sell any LNG in the U.S. because it's getting higher prices elsewhere, its traders have found a niche in organizing swaps with European companies that have excess volume in the U.S. but need to shore up supplies at home. Hattenberger's five-year goal is to capture 5% of the U.S. gas market, selling 3 billion cubic feet a day.
The 54-year-old Minnesota native isn't new to bare-knuckle employers. He joined Gazprom four years ago, after a three-decade career that included a stint with Transworld Oil, which defied a U.N. ban on oil trading with apartheid-era South Africa. "Sometimes we do get a double take" at Gazprom, he says. "But we don't have any ulterior motives. We're here to make money like anyone else."
Many in the business say that goal may remain elusive. New technologies have made it possible to get at vast volumes of gas encased in shale, effectively tripling U.S. reserves. That has helped send prices down by nearly 80% and will surely cut demand for Russian LNG. "This game-changing shale play may mean we're going to be sending gas over to Russia," says Adam Robinson, a vice-president at RBS Sempra Commodities.
Even though Gazprom controls nearly a fifth of known global gas reserves, it could use a lift from the U.S. operation. The International Energy Agency says abundant supplies are likely to keep gas prices in Europe low for a decade or more, and Gazprom's second-quarter profit was off by 36% year-on-year. After borrowing heavily to pay Italy's Eni (E) for the 20% stake it held in Gazprom Neft, an oil-producing unit, Gazprom saw its debt rise by 31% in the first half, to $48 billion. "The world has changed on Gazprom in a very short time," says Frank Verrastro, an analyst with the Center for Security & International Studies, a Washington think tank.
Hattenberger is confident he can ease Gazprom's troubles. He is already parlaying the company's heft in Europe into a trading business in the U.S. In October utility Electricité de France agreed to a swap, providing Gazprom with 50 million cubic feet of gas per day in the U.S. in exchange for the same amount delivered to EDF's operations in Britain. Hattenberger predicts that with the recession ending and worries about global warming spurring a shift to gas, "industrial demand will come surging back." Gas, he says, "will be king again."
LeVine is a correspondent in BusinessWeek's Washington bureau.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- 10 facts about russia s history
- facts about russia for kids
- videos about russia for kids
- learn about russia for kids
- map of russia for kids
- russia kids learning tube
- russia for kids printables
- information about russia for kids
- russia and central asia map
- german soldiers in russia ww2
- china and russia warn us
- iran china russia news