Russia - WikiLeaks
Russia 091211
Basic Political Developments
• Reuters: Russia Welcomes North Korea Return to Nuclear Talks: Ifax
• RIA: Russia, U.S. to continue arms cut talks in Geneva next week
• AFP: Russia, US could sign arms deal next week: report - The new agreement -- the successor to the 1991 Strategic Arms Reduction Treaty (START) that expired on December 5 -- could be signed by the two leaders on December 18-19 in a European capital, the Vedomosti newspaper reported.
• Nhan Dan: PM to visit Russia, attend UN climate change conference - Prime Minister Nguyen Tan Dung will pay a working visit to Russia from December 14-15 at the invitation of Prime Minister Vladimir Putin according to a communique issued by the Foreign Ministry on December 10.
• RIA: CIS Economic Council to focus on trade relations - The Commonwealth of Independent States' Economic Council will discuss trade relations between CIS member countries during a meeting due in Moscow on Friday, the CIS executive secretary said.
• Aysor.am: 44th CIS Economic Council Session to be held in Moscow
• The Georgian Times: Russian envoy addresses residents of Abkhazia
• Interfax: Russian Defense Ministry, FSB Border Service not planning to step up security during Abkhaz election
• Emportal.rs: Bulgarian-Russian energy projects discussed
• RIA: Russia, Bulgaria to discuss joint energy projects in Sophia - Russian Energy Minister Sergei Shmatko will discuss with his Bulgarian colleagues the implementation of Russian-Bulgarian joint energy projects during his visit to Sophia on Friday, the ministry's press service said.
• RIA: Moldova to seek for closer cooperation with Russia - Moldova will seek to develop cooperation with Russia and ask the Russian authorities to provide it with a loan, the Moldovan vice premier said ahead of his visit to Moscow on Friday.
• RFERL: Russian FSB Officers Leave Port In Ukraine's Crimea
• The Moscow Times: Belarus Offers Bank, Smoother Ties - Belarussian President Alexander Lukashenko came to Moscow on Thursday hoping to mend turbulent ties, and as symbol of his good intentions, gave the go-ahead for Sberbank to purchase his country’s fourth-largest bank.
• Interfax: Baltasar Garzon to arrive in Russia to conduct interrogation – source: Spanish judge Baltasar Garzon is going to arrive in Moscow very soon to conduct several interrogations in the so-called "Russian mafia case" being investigated in Spain.
• Reuters: WRAPUP 3-Russia widens US pork ban, threatens full shutdown
• Reuters: UPDATE 1-Q+A-Why has Russia banned some imports of US pork?
• Reuters: Russia looks beyond U.S. to conquer uranium markets
• Uranium Investing News: Russia: Future Uranium Czar?
• UPI: Rosatom boosts company ranks with new university graduates
• Itar-Tass: Ulan-Ude aircraft plant demonstrates major sales growth
• BarentsObserver: Icebreaker fleet has repaid its tax debt
• KyivPost: Russian policeman convicted of killing journalist
• RIA: Two suspected militants killed in Russia's North Caucasus
• Russia Today: Fifteen years since start of Chechen campaign
• RIA: Russian daily's office attacked with smoke bombs
• The Moscow Times: Public Support for Constitution Growing
• Reuters: Russia's Putin, Medvedev enjoy ratings boost
• Interfax: Russian govt to allocate 45.2 Bln rubles for UAC financial recovery – Putin
• Reuters: Russia's deadly blaze exposed corruption - PM Putin
• Interfax: Putin demands tougher criminal liability for officials, business sector
• Itar-Tass: Putin calls for tough sanctions for officials ignoring state control
• ISRIA: Russia - Prime Minister Vladimir Putin chaired a meeting of the Government Presidium
• Itar-Tass: Putin approves compensations to Perm fire, train crash victims
• Itar-Tass: Death toll from nightclub fire in Perm grows to 139
• RIA: Fire safety breaches in Perm club were ignored for years – Shoigu
• RIA: Wreckage found in Tatar Strait belongs to crashed Tu-142
• NTI: Russian Plant Begins New Chemical Weapons Disposal Project
• RFERL: Russian Defense Ministry Fires Command At Notorious Base
• Blog.: Why Russia Doesn’t Care About Copenhagen – by Yevgeny Volk
• World Football Insider: Exclusive: Vladimir Putin to Have Hands-on Role with Russia World Cup Bid
• AFP: No Moscow Mideast talks for now: Palestinian minister
• Russia profile: Middle Eastern Promise - Russia Somehow Manages to Maintain Equally Warm Relations with Both Sides of the Israel-Palestine Conflict, But Is Powerless to Cajole Them to the Negotiating Table
National Economic Trends
• Interfax: Russian monetary base down 51.2 bln rubles to 4154.7 bln rubles
• RIA: Russian monetary base up $1.7 mln in week to $136.664 bln
• Rencap: Russia's international reserves increase despite rouble weakening
• Bloomberg: Ruble Gains Most in a Month as Oil Price Rebounds Toward $71
• RBC: Gov't to cover social benefits deficit with anti-crisis money
• RBC: Finance Ministry downgrades budget deficit estimate - The Finance Ministry has slashed its budget deficit estimate for 2009 to 6.9 percent from the 8.3 percent predicted earlier, Russia's Deputy Prime Minister, Finance Minister Alexei Kudrin told the government presidium yesterday.
• Bloomberg: Russia’s Economy Shrank 8.9% in Third Quarter, Government Says
• The Moscow Times: New Leading Indicator Sees Q4 Growth - “Year-on-year real GDP is expected to decline 5.7 percent this quarter and increase 6.4 percent in the first quarter of 2010,” Renaissance Capital said in a report presenting the indicator.
• Reuters: ANALYSIS - Russia's debt time bomb brought into focus by Dubai
Business, Energy or Environmental regulations or discussions
• Bloomberg: AvtoVAZ, Irkut, Mobile TeleSystems: Russian Equity Preview
• BNE: Arkhangelsk diamond deposits worth $12bn
• Belarussian President Alexander Lukashenko signed a decree approving the sale of state-controlled BPS Bank to Russia's biggest lender, Sberbank
• Alfa: Sberbank announces launch of re-branding program
• VTB Capital: Russian Railways limits coal handling volumes at ports in Russian Far East
• Citi: Norilsk Nickel - Closer to Chita Copper and Positive 2009 Production Guidance
• Troika: CTC Media and Rodnyansky seemingly settle dispute
• : Alfa and Telenor would eye developing markets
• Bloomberg: Usmanov Increases Stake in Facebook Investor, Vedomosti Says
• Troika: Usmanov continues to oppose MegaFon's merger with Turkcell
• Alfa: Russian government to buy roughly $700 mln of Sistema Shyam TeleServices stock
• Reuters: TIMELINE-Russian banks struggle with bad loans
Activity in the Oil and Gas sector (including regulatory)
• Reuters: Russia to trim Jan oil export duty to $266-268/T
• RIA: Russia could cut oil export duty to $266-268 per ton in January
• Official Wire: Lukoil Projects $60-65 Oil In 2010
• WSJ: ONGC to Raise Funds to Refinance Debt for Imperial Buy
• GLG: Rosneft to face up to difficult conditions in East Siberia
• Your Oil and gas News: Three million tons of crude oil produced from Vankor Field
• Upstreamonline: Metal fatigue blamed for pipe blast - Local media reports said that oil covered about 100 square metres of land after the explosion on the Rosneft-owned link last week.
• Domain-B: ONGC to raise $1 billion to refinance Imperial Energy deal news
• Rigzone: TNK-BP to Boost Investment Program Up to $4B
BarentsObserver: Foreign companies lose interest in Russian hydrocarbons
• Money Morning: Why Russia’s Oil Fields Will Soon Be Crawling with Westerners - By Kent Moors, Ph.D - My sources in Russia's Ministry of Natural Resources and Ecology (MNRE), the government entity responsible for distribution and oversight of development leases, now acknowledge that the country's overall crude oil production could decline by more than 7% over the next several years.
Gazprom
• Barentsobserver: Gazprom progress in Yamal
• Bloomberg: Gazprom May Delay Yamal Start
• VTB Capital: Gazprom might double dividend payments in 2011
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Full Text Articles
Basic Political Developments
Reuters: Russia Welcomes North Korea Return to Nuclear Talks: Ifax
By REUTERS
Published: December 11, 2009
MOSCOW (Reuters) - Russia welcomed on Friday signals from North Korea it was ready to end its year-long boycott of nuclear negotiations, Interfax news agency quoted the Foreign Ministry as saying.
RIA: Russia, U.S. to continue arms cut talks in Geneva next week
11:5311/12/2009
MOSCOW, December 11 (RIA Novosti) - Russia and the United States will continue talks on a new nuclear arms reduction deal to replace the expired START 1 treaty in Geneva next week, a Foreign Ministry official said on Friday.
Moscow and Washington have been in intensive talks since July, when the Russian and U.S. leaders agreed the outline of a replacement to the Strategic Arms Reduction Treaty, the core of Russia-U.S. nuclear disarmament.
"The talks will continue next week at the level of heads of the foreign policy bodies' departments," a ministry official told reporters.
The Foreign Ministry said earlier this month Russia and the U.S. were wrapping up negotiations.
A State Department spokesman said on Wednesday the two countries had agreed on the basic elements of a new treaty.
"The vast majority of the text is already agreed on, but we do have some of these final issues that we need to work out," Ian Kelly said, adding Washington and Moscow were working hard to finish the draft treaty by the end of the year.
Presidents Dmitry Medvedev and Barack Obama announced at their first meeting in April that the two countries would replace the START 1 treaty as part of their efforts to "reset" bilateral ties strained in recent years.
The treaty's outline agreed by the presidents included cutting nuclear arsenals to 1,500-1,675 operational warheads and delivery vehicles to 500-1,000.
Russia's military said earlier the talks had thrown up differences on inspection and verification procedures.
AFP: Russia, US could sign arms deal next week: report
(AFP) – 1 hour ago
MOSCOW — Russian President Dmitry Medvedev and his US counterpart Barack Obama could sign a new deal on cutting nuclear arsenals in Europe next week, a newspaper report said on Friday.
The new agreement -- the successor to the 1991 Strategic Arms Reduction Treaty (START) that expired on December 5 -- could be signed by the two leaders on December 18-19 in a European capital, the Vedomosti newspaper reported.
Both men are to attend the climax of the UN climate summit in Denmark but the new arms deal would be signed "not in Copenhagen but in another European capital," the paper quoted a source close to the foreign ministry as saying.
Officials from both sides have expressed confidence in reaching a new agreement for major arms cuts despite failing to seal a deal before the old treaty expired earlier this month.
Russian news agencies reported meanwhile that Russian and US negotiators would be continuing talks on the new deal next week.
"The arms talks will continue next week" in Geneva, a foreign ministry official was quoted as saying by all Russian news agencies.
The Russian delegation would be led by the foreign ministry's director for disarmament Anatoly Antonov while Assistant Secretary of State Rose Gottemoeller would lead the US side, the official said.
US Secretary of State Hillary Clinton said Thursday both sides were working hard on the negotiations and it was merely a question of when the new accord would be agreed.
Medvedev and Obama in July set as a goal slashing the number of warheads on either side to between 1,500 and 1,675 and the number of "carriers" capable of delivering them to between 500 and 1,100.
Nhan Dan: PM to visit Russia, attend UN climate change conference
Last updated: 16:38 - December 11, 2009
Prime Minister Nguyen Tan Dung will pay a working visit to Russia from December 14-15 at the invitation of Prime Minister Vladimir Putin according to a communique issued by the Foreign Ministry on December 10.
The ministry further informed that from December 16-18, PM Dung will lead a Vietnamese delegation to attend the high-level debate of the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP15) and the 5th Conference of the Parties to the Kyoto Protocol (CMP5) in Copenhagen, Denmark. (VNA)
RIA: CIS Economic Council to focus on trade relations
02:2211/12/2009
MOSCOW, December 11 (RIA Novosti) - The Commonwealth of Independent States' Economic Council will discuss trade relations between CIS member countries during a meeting due in Moscow on Friday, the CIS executive secretary said.
Sergey Lebedev said participants of the meeting are expected to discuss the establishment of an interstate network of information and marketing centers intended to favor the merchandising of goods and services in national markets.
He said information and marketing centers would allow the increase of trade turnover between CIS member states and provide consumers with high-quality and cheaper production.
The development of a joint anti-missile defense project, agreed by CIS member states in 1996, is also included in the agenda of the talks.
Aysor.am: 44th CIS Economic Council Session to be held in Moscow
The 44th CIS Economic Council Session will be held today in Moscow, Russia. The orders of the day are items of cooperation between CIS states, development of the interstate network of the informational and marketing centers for promoting products and services in state markets.
The session will also focus on the matter of the activities by the Advisory Chiefs Council which is responsible for financial management. The participants will also consider matter of the awarding the 2009 CIS Awards for achievements in providing the qualified products and services.
The Georgian Times: Russian envoy addresses residents of Abkhazia
A day before the so-called presidential elections of the Abkhazian occupant regime, the so-called ambassador of Russia to Abkhazia Semion Gregoriyev addressed to the voters of Georgia`s breakaway Abkhazia. Gregoriyev hopes that the Abkhaz people will vote for that candidate in these polls, who will keep on the current political course of the `republic`.
Gregoriyev called for peace and quiet at these elections and asserted that Russia was not involved in the polls, even though the delegations of Russian MPs and some non-governmental organizations are already in the occupied area to `monitors the election`.
The so-called elections of the president in the occupied region of Georgia will be held tomorrow. Five candidates run in the presidential race; they are the current leader Sergey Baghabsh, Beslan Butba, Zaur Ardzinba, Raul Khajimba and Vitali Bghangba.
The so-called interior ministry of the region works in emergency regime Rustavi2 2009.12.11 11:38
Interfax: Russian Defense Ministry, FSB Border Service not planning to step up security during Abkhaz election
ROSTOV-ON-DON/MOSCOW. Dec 11 (Interfax) - The Russian Defense Ministry and Federal Security Service (FSB) Border Service are not planning to step up security in Abkhazia because of the presidential election in that country on December 12, a source in Southern Federal District security authorities told Interfax-AVN on Friday.
"The situation in the region is stable. Russian border guards and servicemen are maintaining security as usual. There are no plans to boost security in relation to the upcoming Abkhaz presidential election," the source said.
"The election is a political matter, and Russian servicemen have nothing to do with these matters," he said.
The Russian Defense Ministry deployed 1,700 servicemen in Abkhazia. There are also over 1,000 border guards performing their mission in the republic. They are protecting over 350 kilometers of the national border, including 215 kilometers at sea, 98 kilometers on the ground, and 39 kilometers on the river.
Abkhazia is holding its presidential election on December 12 for the first time since gaining independence.
Emportal.rs: Bulgarian-Russian energy projects discussed
11. December 2009. | 10:21
Source: BTA
The future of Bulgarian-Russian energy projects is one of the main topics to be discussed at a meeting of the Intergovernmental Bulgarian-Russian Commission on Economic, Scientific and Technological Cooperation, which begins on Thursday.
The future of Bulgarian-Russian energy projects is one of the main topics to be discussed at a meeting of the Intergovernmental Bulgarian-Russian Commission on Economic, Scientific and Technological Cooperation, which begins on Thursday.
This was also the subject of a Bulgarian National Radio interview with Economy, Energy and Tourism Minister Traicho Traikov, Vladimir Ourouchev MEP of GERB and former economy and energy minister Roumen Ovcharov.
Traikov confirmed that work on the projects continues. On the South Stream natural gas pipeline project, Bulgaria is the proactive side, he said. As regards the Bourgas-Alexandroupolis oil pipeline project, there are aspects which are very important for the success of the project, and first and foremost is the supply of oil in general, which gives economic meaning to the project and justifies the search for options for its implementation, he said. After Russia decided to share in the SamsunЦCeyhan oil pipeline, a very big question emerged about whether the interest in Bourgas-Alexandroupolis remains, and this is a question to which an answer will be sought at the meeting, the Minister said.
According to the MEP, Bulgaria is not delaying the projects. It is simply that these are rather complex projects which have not developed in the most correct way and therefore there are many things to clear up, which are related above all to the definition of the Bulgarian interest. According to Ourouchev, there is already a clear position on the three large projects about what should happen from now on. The matter is not to make an abstract political decision, but to judge again the essence of these projects from every point of view. For example, about the Belene Nuclear Power Plant project, things are absolutely clear: Bulgaria needs to find an investor, because the situation changed radically after the withdrawal of the RWE company, Ourouchev said. The new consultant should define the conditions for conducting this bidding procedure for selecting an investor.
As one of the most important elements in this procedure, Ourouchev underscored the definition of the Bulgarian participation also as a share in the future company which will build and operate the plant, as well as the conditions in which the Bulgarian interest should be protected.
Concerning Bourgas-Alexandroupolis, Ourouchev said there are no installations in Bulgarian territory, there are no diversions from which plants are to be built, for example, for oil processing, so that Bulgaria can share in the market. In this sense, it is only a transit pipeline and Bulgaria's profit will only come from the transit fees. It is well known that such profit is not very large, Ourouchev said. Among existing problems, the MEP stressed the lack of clarity about the environmental impact of the project and about where the oil will come from, which, according to Ourouchev, is the main problem.
According to Ovcharov, it is a welcome development that the Bulgarian Government has begun to talk in a little more pragmatic language, to identify real problems, giving up emotional language and unproven statements. He said, however, that long talk is disconcerting. The fact is ignored that now that the crisis is strongly felt in Bulgaria, the implementation of such enormous investments would be quite helpful for everyone, including in social terms.
Ovcharov does not expect any specific results from the meeting of the Bulgarian-Russian Commission, but he expects clearer positions to be expressed by Bulgaria.
Ovcharov said the subject of the environmental impact of Bourgas-Alexandroupolis is a little overemphasized. The ex-minister explained the lack of an environmental impact assessment about the oil pipeline with the lack of a project to be assessed, and expressed surprise at the fact that an assessment will be made now without specifying the unloading technology. Ovcharov said large quantities of oil have been unloaded at Bourgas for over 50 years but there have been no environmental problems.
RIA: Russia, Bulgaria to discuss joint energy projects in Sophia
06:3811/12/2009
MOSCOW, December 11 (RIA Novosti) - Russian Energy Minister Sergei Shmatko will discuss with his Bulgarian colleagues the implementation of Russian-Bulgarian joint energy projects during his visit to Sophia on Friday, the ministry's press service said.
Russia and Bulgaria are jointly developing a range of energy projects, such as the Burgas-Alexandroupolis pipeline project, the South Stream gas project and the building of a nuclear power plant in the Bulgarian northern town of Belene.
Russia, Bulgaria and Greece signed an agreement to build the 280-km Trans-Balkan pipeline to pump Russian and Caspian oil from the Bulgarian port of Burgas to the Greek port of Alexandroupolis in 2007.
The pipeline project is controlled by a consortium of Russian state-run companies.
In early December, the Russian energy minister said Bulgaria's concerns over the environmental impact of the oil pipeline construction may pose problems for the project. He said Bulgaria is also unhappy with the project's economic scheme, as Sofia wants to receive more than just dividends from the project.
Shmatko, however, said he is confident that there will be no problems in implementing another Black Sea oil gas pipeline project, in which Bulgaria is also involved.
Russia signed an inter-governmental agreement on the South Stream gas project with the Socialist-led Bulgarian government in January 2008, and in May 2009, Russia's energy giant Gazprom and state-run Bulgarian Energy Holding (BEH) agreed to set up a joint venture on a parity basis to build the Bulgarian section of the South Stream pipeline by mid-2010.
The South Stream project, designed to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries, involves Bulgaria, Serbia, Hungary, Italy and Greece. The pipeline's capacity could be eventually increased to 63 billion cubic meters annually.
The gas pipeline is expected to start operating in late 2015.
In early 2008, Russia's state nuclear power equipment and service export monopoly Atomstroyexport signed a contract worth around 4 billion euros ($5.8 billion) for the construction of the nuclear power plant in Bulgaria's Belene.
Smatko earlier said there are no problems expected over the project, despite the fact that the German RWE company, one of the leading European electricity producers, which held a 49% stake in the project, withdrew from the venture in late October.
Kiriyenko, head of the Russian state-run civilian nuclear power corporation Rosatom, earlier said Russia was ready to seek a stake in the project.
The implementation of the projects in supervised by the Russian-Bulgarian intergovernmental commission on trade, economic, scientific and technical cooperation.
RIA: Moldova to seek for closer cooperation with Russia
04:1011/12/2009
CHISINAU, December 11 (RIA Novosti) - Moldova will seek to develop cooperation with Russia and ask the Russian authorities to provide it with a loan, the Moldovan vice premier said ahead of his visit to Moscow on Friday.
Valery Lazer, who is also the Moldovan economy minister, will visit the Russian capital for a CIS Economic Council's regular meeting.
"Russia is Moldova's main strategic ally. Our country is highly interested in the closest cooperation with Russia," Lazer told RIA Novosti on Thursday.
He said such cooperation would help the two countries to overcome the consequences of the global economic crisis.
Moldovan Prime Minister Vlad Filat has set Moldova's integration into the European Union and overcoming the economic crisis in Europe's poorest nation as the government's top priorities.
Russian Prime Minister Vladimir Putin agreed in June to provide Moldova with the $500 million loan for investment programs requested by the country's former communist president Vladimir Voronin. Negotiations on the issue are underway.
Valery Lazer said he would ask Russia to provide Moldova with the first $150-million tranche as soon as possible, adding the country "sorely needs" it.
"But we need not just the loan, we need a partnership with Russia," he said.
RFERL: Russian FSB Officers Leave Port In Ukraine's Crimea
December 10, 2009
SEVASTOPOL, Ukraine -- The last Russian Federal Security Service (FSB) officers stationed with Russia's Black Sea Fleet in Crimea reportedly left the Ukrainian peninsula today, RFE/RL's Ukrainian and Russian services report.
Black Sea Fleet officials say the FSB's special department in Sevastopol has been fully transferred to Novorossiisk, another Russian Black Sea port.
The transfer of the FSB officers was made at the request of Ukrainian officials who demanded that the FSB officers leave Ukrainian territory by December 13.
A reported 19 FSB officers have been working in Sevastopol since 2000.
Ukraine's State Security Service Chairman Valentyn Nalivaychenko said earlier this year that security for Russia's Black Sea Fleet should be provided by Ukrainian counterintelligence officers after the FSB officers leave.
But Russian Black Sea Fleet commanders said no Ukrainian counterintelligence officers would be allowed aboard Russian vessels or to places where the fleet is stationed, adding that Russian sailors would be able to maintain security for themselves.
The Moscow Times: Belarus Offers Bank, Smoother Ties
11 December 2009
By Anatoly Medetsky
Belarussian President Alexander Lukashenko came to Moscow on Thursday hoping to mend turbulent ties, and as symbol of his good intentions, gave the go-ahead for Sberbank to purchase his country’s fourth-largest bank.
President Dmitry Medvedev said their one-on-one, five-hour talks had been productive, albeit “emotional at times.” They called in their prime ministers and other officials for assistance partway through.
“During that time, we discussed our differences and tried to move the positions of the two sides closer together,” Lukashenko said after the meeting.
Medvedev said the countries could pursue a more unified foreign policy, as the presidents later opened a broader meeting of Russian and Belarussian officials that was scheduled to discuss joint foreign policy measures for the next two years.
“I hope that in this area … we will have an especially high degree of coordination,” he said, adding that the “climate of our relations” depended on the countries’ positions in the international arena.
Belarus, despite being in a formal union state with Russia, has been reluctant to follow in Russia’s footsteps and recognize two breakaway Georgian provinces as independent states. Moscow made the move after a brief war with Georgia last year.
Medvedev also said Russia would not give Belarus a hard time in their energy trade, saying the presidents agreed on certain fundamental principles in this sphere.
“At the very least, it will not create problems for our Belarussian partners and will make cooperation more up to date,” he said.
Belarus, which borrowed billions of dollars from Russia and is drawing $2.23 billion from the International Monetary Fund to prop up its struggling economy, heavily depends on deliveries of Russian oil and gas and has repeatedly asked to keep the prices below the level that Russian companies charge other consumers.
Before the visit, Lukashenko issued permission for Russia’s state-controlled Sberbank to buy Belarus’ fourth largest lender, state-controlled BPS-Bank, giving the Russian institution a foothold in one of Russia’s biggest trade partners.
Sberbank will pay $280.7 million for the bank, according to Lukashenko’s decree, Interfax reported. British investment bank NM Rothschild & Sons earlier estimated that BPS-Bank was worth from $150 million to $500 million.
Sberbank has been negotiating a purchase of the Belarussian bank, the country’s fourth largest by net assets, since last spring. Sberbank’s deputy chief executive Ilkka Salonen said he would fly to Minsk on Friday to sign the deal, Interfax reported.
As another sign of Russia’s growing influence in the neighbor’s economy, investment bank Renaissance Capital said it opened an office in Minsk on Thursday as Belarus prepares to sell assets to comply with the terms of an emergency IMF loan, Bloomberg reported.
Interfax: Baltasar Garzon to arrive in Russia to conduct interrogation – source (Part 2)
MOSCOW/MADRID. Dec 11 (Interfax) - Spanish judge Baltasar Garzon is going to arrive in Moscow very soon to conduct several interrogations in the so-called "Russian mafia case" being investigated in Spain.
Such an agreement was reached at the talks between Garson and Russian authorities, informed sources in Moscow and Madrid told Interfax.
"The initial plan was that Judge Garzon will visit Russia in mid-December. However later the trip was postponed until next March," one of the sources said.
A day earlier the Spanish press said that Russia is allegedly thwarting the Moscow visit by Garzon, a well-known anti-corruption campaigner.
The Russian Prosecutor General's Office announced last October that it had sent a letter from businessman Oleg Deripaska to Spain, claiming that his rights were violated by the Spanish law enforcement authorities.
"On September 9, 2009, the Russian Prosecutor General's Office received a letter from Deripaska, saying that his rights were violated during a Spanish investigation of the criminal case against Mikhail Chorny and other individuals and denying his involvement in any criminal organizations and committing any crime," Russian Prosecutor General's Office spokeswoman Marina Gridneva told Interfax.
"Deripaska's letter raised the issues that were in the remit of the Spanish authorities, and on Septemer 15, 2009, the letter was sent to the Spanish Justice Ministry for legal proceedings," she said.
Spanish newspaper El Mundo said at the time that in early December one of Russia's richest men Deripaska would have to answer questions of the Spanish justice about his possible ties with "the Russian mafia."
The hearings will be held as part of Operacion Avispa (the Spanish for "wasp"), the first massive operation by Spanish police against the so-called Russian mafia in Spain, the newspaper said.
Reuters: WRAPUP 3-Russia widens US pork ban, threatens full shutdown
Fri Dec 11, 2009 5:05am IST
* Russia bans imports from 13 U.S. plants in past 2 weeks
* Watchdog cites antibiotic, says more bans could follow
* U.S. Trade Representative says bans not based on science
* Only 6 U.S. pork plants left that can export to Russia (Updates with comment from U.S. Trade Representative office, paragraphs 2, 5, 6)
By Bob Burgdorfer and Aleksandras Budrys
CHICAGO/MOSCOW, Dec 10 (Reuters) - Russia widened its ban on U.S. pork imports on Thursday, citing the presence of an antibiotic, and the country also threatened to completely seal its borders to pork from the United States.
Russia's expansion of its ban to four more U.S. meat plants comes at a time when U.S. hog producers were turning the corner after more than two years of losses estimated by industry at more than $5 billion. U.S. trade officials called the bans unjustified.
The bans by Russia, the No 5 market for U.S. pork, included U.S. plants owned by Smithfield Foods Inc. (SFD.N: Quote, Profile, Research), the largest pork producer in the United States, whose shares fell sharply.
Sergei Dankvert, head of Russia's farm watchdog Rosselkhoznadzor, told Reuters more bans could follow. The watchdog cited presence of the antibiotic oxytetracycline, the same factor that led it to ban imports from seven other U.S. plants earlier in December. [ID:nGEE5B812Z]
The U.S. Trade Representative's office in Washington said the bans were not justified. It said it would work with Moscow to get trade back on track.
"The Administration is concerned that current Russian standards are not based on international standards and do not have a scientific justification," a spokeswoman with the U.S. Trade Representative's office said in an email to Reuters.
Sergei Yushin, head of a Russian lobby, the National Meat Association, said Russia might completely halt U.S. pork due to delays in agreeing on meat safety certification.
The U.S. pork industry was hit hard earlier this year as the spread of the H1N1 flu, commonly known as swine flu, cut demand for pork even though there was no scientific evidence to show that eating pork helped to transmit the disease.
Hog futures LHc1 at the Chicago Mercantile Exchange fell in early trading, but rebounded to end higher.
"It's not good news by any means for (U.S.) hog producers," said John Lawrence, extension livestock economist at Iowa State University. "The sector has been on an up-trend since August (2009) after making losses since October 2007."
U.S. MEAT GROUP WORKS TO GET EXPORTS BACK ON TRACK
The U.S. Meat Export Federation said it was working with other industry groups and the U.S. government to help get U.S. pork exports to Russia back on track.
The group said Russia had banned pork imports from 13 U.S. pork plants the past two weeks, cutting the number of approved plant to six from a high of about 40 earlier this year.
The group said the remaining six plants accounted for only about 5 percent of U.S. export volume that had been approved for export to Russia one year ago. Federation data showed the volume of U.S. pork sales to Russia down 37 percent to almost 105,700 tonnes for the Jan-Sep 2009 period from a year-ago.
It said the Russian government had set microbiological testing requirements, including some zero tolerance standards, that were tough for exporters and producers to meet.
"These standards are not in keeping with international scientific standards," the group said in a statement.
Smithfield Chief Executive Larry Pope told analysts during a conference call that the Russian market was "closing as we speak" to U.S. pork.
Russia, has had several trade rows with Washington over meat and poultry in recent years.
HOG FUTURES REBOUND TO CLOSE HIGHER
CME February hog futures LHG0 ended 0.350 cent higher at 65.425 cents per lb after dropping to a low of 63.850 cents, supported by the strength in cash market.
Smithfield shares fell 3.1 percent to $16.33 on the New York Stock Exchange.
Russia's latest ban applies to Smithfield slaughterhouses in Monmouth, Illinois, and Clinton, North Carolina; the Pork King Packing plant in Marengo, Illinois and Hatfield Quality Meats in Hatfield, Pennsylvania.
U.S. economist Steve Meyer, president of consultancy Paragon Economics in Des Moines, Iowa, said Russia was not in a position to completely halt pork imports from the United States over a long period.
"It will be tough because of the spread of African swine fever in its herd and there are no other suppliers other than Brazil," he said. "Food has played an important role in several revolutions there, so I don't think they will do it."
(Reporting by Aleksandars Budrys in Moscow, K.T. Arasu, Bob Burgdorfer and Jerry Bieszk in Chicago, Roberta Rampton and Christopher Doering in Washington; Writing by K.T. Arasu; Editing by Robin Paxton and David Gregorio)
Reuters: UPDATE 1-Q+A-Why has Russia banned some imports of US pork?
Fri Dec 11, 2009 2:47am IST
(Adds comments from U.S. meat trade group)
Dec 10 (Reuters) - Russia this week banned imports of pork from certain U.S. plants. Below are some questions and answers about ongoing meat trade issues between the two nations.
WHY DID RUSSIA BAN IMPORTS OF U.S. PORK?
* Russia's animal and plant health watchdog, Rosselkhoznadzor, told Reuters that its U.S. counterparts said they would not observe Russian food safety standards.
* So Moscow stepped up monitoring of U.S. pork at the end of October.
* Officials have since said they have banned imports from a total of 11 plants because they found excessive levels of an antibiotic called oxytetracycline. [ID:nGEE5B91JJ]
* Russian officials said they found salmonella bacteria in meat from two of the plants.
* Officials at the U.S. Agriculture Department and U.S. Trade Representative have not yet commented on the situation.
* The U.S. Meat Export Federation said 13 U.S. plants have been removed from Russia's approved export list due to violations of microbiological test requirements that "are not in keeping with international scientific standards."
WHY DOES IT MATTER?
* Russia is the fifth-largest export market for U.S. pork and a top market for U.S. chicken.
* The global economic downturn sapped demand for U.S. meat. American hog producers have been losing money for two years.
* The U.S. government spent $164 million on frozen pork in fiscal 2009 for school lunch and other feeding programs in a bid to help the hog industry. So far it has bought $50 million of pork for fiscal 2010. [ID:nN17386749]
* Hog futures at the Chicago Mercantile Exchange fell more than 1 percent as the ban expanded on Thursday. [ID:nN10164925]
* Five of the banned plants belong to Smithfield Foods Inc (SFD.N: Quote, Profile, Research), including the world's biggest pork plant in Tar Heel, North Carolina. Another plant is owned by Tyson Foods Inc (TSN.N: Quote, Profile, Research) [ID:nGEE5B812Z] [ID:nN1051353]
* Six U.S. plants remain approved to export, down from a high of about 40 earlier this year, the USMEF said. They represent about 5 percent of the export volume that had been approved for export to Russia a year ago, the group said.
HAS THIS HAPPENED BEFORE?
* Moscow periodically removes U.S. meat plants from its approved export list, citing technical concerns.
* In January, Russia banned U.S. pork from some of the largest U.S. pork plants because of clerical errors on export certificates. [ID:nN29291561]
* Russia banned pork from U.S. states affected by the human outbreak of H1N1 virus, commonly called swine flu, from late April until June. [ID:nN27208371]
* U.S. government and industry officials have said past bans were politically motivated, or aimed at lowering prices.
* Moscow has said it wants Russia to become self-sufficient in meat, and has invested billions of dollars in recent years to spur domestic production [ID:nLG143853] [ID:nL3165254]
* Industry and government officials held bilateral talks in Paris in May to work out a way to ease trade disruptions. Industry officials said the meetings went well. Government officials did not comment. [ID:nLR703203]
* The Obama administration has said in the past it plans to focus on expanding meat trade by working on technical trade issues. [ID:nN22493954]
WHAT WILL HAPPEN NEXT?
* The head of a Russian industry lobby said Moscow may consider a complete ban on U.S. pork.
* U.S. analysts don't expect that to happen because Russia is not yet self-sufficient and its domestic herd is threatened by an outbreak of a swine disease. [ID:nN28314175] (Reporting by Roberta Rampton in Washington and Aleksandras Budrys in Moscow; editing by Jim Marshall)
Reuters: Russia looks beyond U.S. to conquer uranium markets
Thu Dec 10, 2009 4:49pm IST
By Robin Paxton
MOSCOW (Reuters) - Nearly one in 10 U.S. households runs on power from Soviet nuclear bombs.
Now Russia hopes its Cold War arsenal, twinned with fast-growing uranium mines and enrichment capacity, will also be powering China, India and other booming economies when a 20-year nuclear fuel pact with the United States expires in 2013.
Russia has expressed no desire to refresh the 'Megatons to Megawatts' programme, under which it will recycle the equivalent of 20,000 nuclear warheads and create enough uranium to power the entire United States for two years.
Instead, the Kremlin is pursuing lucrative deals to supply fuel directly to power firms in the U.S. market, home to more than a quarter of the world's nuclear power generating capacity.
Russian supplies from old warheads are currently key in the global uranium market, accounting for 13 percent of world supply, helping fill a gap from mined output.
Analysts expect recycled Russian supplies to continue to flow after the U.S. deal expires in 2013, but falling to around two-thirds of present levels.
"Russia wants to expand its nuclear presence all over the world," said Marina Alexeyenkova, analyst at investment bank Renaissance Capital.
"The economics of the 20-year contract to reprocess weapon-grade uranium are not so attractive to Russia."
Russia, holder of a tenth of the world's uranium reserves, is positioning itself as a major player in meeting growing demand from the nuclear power industry. The country already has a 15 percent share of the global reactor-building market.
The expiry of the post-Cold War partnership with the United States, which is expected to earn Russia more than $8 billion, has fuelled concerns about a looming supply shortfall.
But Russia has not shunned the U.S. market and its 104 reactors. Instead, it has this year signed a succession of deals to supply fuel directly to U.S. utilities, including PG&E Corp, Ameren Corp, Exelon Corp and Luminant.
The first deals prompted Sergei Kiriyenko, the former prime minister who now heads state nuclear giant Rosatom, to say Russia had "broken through the wall" forbidding independent sales of Russian fuel to the U.S. market.
They also effectively end the monopoly of U.S. government agent USEC Inc on imports of Russian uranium.
"Six commercial contracts have already been signed with U.S. nuclear power plant operators," said Ivan Dybov, spokesman for AtomEnergoProm, the civilian arm of Rosatom.
"Russia's potential for enriching uranium is sufficient to secure a notable share of the U.S. market," he said.
NEW CONTRACTS
Russia has to date supplied low-enriched uranium (LEU) recycled from 375 tonnes of bomb-grade material, or highly enriched uranium (HEU). This is equivalent to 75 percent of the 500 tonnes it must supply by 2013.
The LEU supplied by Russia accounts for 45 percent of the fuel used by U.S. nuclear power plants and decommissioned U.S. weapons another 5 percent. Nuclear plants in turn contribute about 20 percent of the power produced in the United States.
Analysts say direct deals could ultimately be more profitable for Russia than the existing programme, which was set up in 1993 to encourage a country still rebuilding after the Cold War to extract and use fuel from dismantled warheads.
Russia is also seeking routes into other developed markets through partnership with companies such as Japan's Toshiba and Germany's Siemens, as well as building a share of emerging economies in Asia.
"The Chinese market is booming, with plans to build over 70 new reactors by 2030. For Russia, it's strategically important to fix contracts in this particular market," Alexeyenkova said.
Max Layton, analyst with Macquarie Securities in London, said global supply concerns related to the expiry of the Russian-U.S. agreement were overplayed.
"The Russians will use it, sell it to the Chinese or sell it as part of other reactor packages," he said. "From a (global) supply-demand balance perspective, it doesn't matter whether they sell it to the U.S."
'NOT AFRAID OF COMPETITION'
Russia, the world's No. 5 uranium miner, plans to dig more of the metal from the ground. ARMZ, the state uranium miner, estimates its Elkon deposit in the eastern region of Yakutia holds 5.3 percent of the world's recoverable reserves.
Russia is also home to 31 reactors with capacity to produce over 22 gigawatts, or 6 percent of world nuclear power capacity.
Moscow has extensive plans to build new reactors at home and abroad. Prime Minister Vladimir Putin, addressing the nation last week in his annual question-and-answer session, said Russia planned to build more than 30 new reactors in the next decade.
And when Indian Prime Minister Manmohan Singh visited Moscow on Dec. 7, he sealed an agreement to widen atomic fuel exports from Russia to India, as well as the construction of reactors.
"It's not simply billions. It's dozens of billions of dollars," Kiriyenko, the Rosatom head, said of the reactor deal.
"We're not afraid of competition. It's clear that nuclear energy is a global sector."
(Additional reporting by Eric Onstad in London; Editing by Hans Peters)
Uranium Investing News: Russia: Future Uranium Czar?
Thu, Dec 10, 2009
By Melissa Pistilli-Exclusive to Uranium Investing News
The nuclear industry is anticipating major support from talks out of the UN Climate Change Conference in Copenhagen this month as global leaders meet to discuss measures to curtail global warming.
Nuclear generated power is quickly becoming an acceptable alternative to fossil fuel-based sources and global uranium demand is expected to increase over the long-term as more reactors come online.
“The move to clean energy to cut emissions, not only in Asia, but also in Europe and elsewhere is a very important positive impulse for uranium prices,” says Commerzbank analyst Eugen Weinberg.
The BNP Paribas Fortis Bank has reported it expects the uranium spot price to reach US$95 per pound in 2010 based on the growing number of nuclear construction programs worldwide.
Major nuclear utilities companies looking to secure reliable uranium supply lines often turn to the “Big Three” producers: Canada, Australia and Kazakhstan. All three are responsible for over half of uranium production worldwide.
But an aggressive competitor is shaking up the global market in an attempt to stake out a greater piece of the pie. As Uranium Investing News previously reported, Russia is seeking to dominate the world’s nuclear and uranium industry, and is very vocal about its ambitions.
Perhaps Russia is looking to become THE energy supplier to the world. The nation already boasts a major foothold in the oil and natural gas market, so why not broaden its energy dominance portfolio to include nuclear power as well? Already, Russia’s technological mastery accounts for 15 per cent of the world’s reactor construction market.
For now, its position relative to the “Big Three” is small. Russia holds about a tenth of the global reserves and is the world’s fifth-largest uranium miner with 8 per cent of global output in 2008. But, when one takes into consideration Russia’s pitbull mentality and steely determination as it puts its plans for dominance into action around the globe, it’s easy to see how quickly a Russian-ruled nuclear empire may become reality.
“Russia wants to expand its nuclear presence all over the world,” said Marina Alexeyenkova, Renaissance Capital analyst. So far, it has partnered with big names like Toshiba and Siemens, and is advancing into developing markets in Asia.
“The Chinese market is booming, with plans to build over 70 new reactors by 2030,” said Alexeyenkova. “For Russia, it’s strategically important to fix contracts in this particular market.”
On Monday this week, Indian Prime Minister Manmohan Singh signed an agreement in Moscow to increase Russian nuclear fuel exports to India and to build new nuclear reactors.
“It’s not simply billions. It’s dozens of billions of dollars,” said Sergei Kiriyenko, head of the Russian state-owned nuclear corporation, Rosatom, in reference to the reactor agreement. “We’re not afraid of competition. It’s clear that nuclear energy is a global sector.”
Recently while addressing the nation, Prime Minister Vladimir Putin announced Moscow has plans to build over 30 new reactors at home and globally over the next decade.
Russia already plays a major role as a nuclear fuel supplier to the US through the “Megatons to Megawatts” program. About 45 per cent of the fuel used by US nuclear power plants, which supply 20 per cent of US power consumption, comes from Russia. Close to one-tenth of the nation’s energy needs are met with fuel produced from Soviet-era nuclear weapons.
However, the program is set to expire in 2013 and Russia is not interested in renewing it. Moscow finds agreements to supply fuel directly to US utility companies much more intriguing. In this way, Russia has the opportunity to corner a big market, given the US with its 104 reactors accounts for over 25 per cent of the world’s nuclear power generating capacity.
Already this year, Rosatom has signed deals to supply nuclear fuel to Ameren Corp, Exelon Corp, PG&E Corp, and Luminant. “Six commercial contracts have already been signed with US nuclear power plant operators,” said Rosatom spokesman Ivan Dybov. “Russia’s potential for enriching uranium is sufficient to secure a notable share of the US market.”
Russia is also working to increase its uranium ore holdings through partnerships with resource-rich nations and miners. ARMZ Uranium Holding Co is Russia’s state-owned uranium miner and it plans to produce 4,700 tonnes of uranium this year and 5,300 tonnes in 2010.
ARMZ has joint venture projects in developing nations like Namibia and Armenia, and with majors like Canada’s Cameco Corp.
Uranium Investing News reported last week on Russia’s latest strong-arming tactics in uranium hotspot Mongolia. ARMZ has made an all-cash offer in a hostile takeover bid for Canadian-based Khan Resources for total control of the Dornod uranium deposit.
I say “total control” even though the Mongolian government has a 21 per cent stake in the joint venture, but the debt-ridden nation is basically at the financial mercy of its much more powerful neighbour, so yeah, total control.
Speaking of uranium-rich neighbours with issues, there’s also Kazakhstan on Russia’s doorstep who also just happens to be the number three in the “Big Three.”
The former Soviet Union nation is home to about one-fifth of global uranium reserves and plans to produce 13,800 tonnes this year with an output of 15,000 for 2010. While nations like Japan, China and Canada are looking to mine Kazakh uranium, Russia already has its fingers in the pie with three joint-venture projects, one with Canadian miner Uranium One.
Kazakhstan also has plans to develop fuel fabrication facilities, which, coupled with its uranium holdings, proves an interesting prospect to Russia, the world leader in nuclear fuel fabrication technology.
As the world turns to nuclear power as an alternative to fossil fuels Russia is quickly moving to dominate the market from uranium exploration and mining to nuclear fuel fabrication to power plant construction. No doubt Canada is working to keep its top dog status by courting India. How will Australia respond?
UPI: Rosatom boosts company ranks with new university graduates
Published: Dec. 10, 2009 at 5:39 PM
MOSCOW, Dec. 10 (UPI) -- As part of Russia's expansion of its nuclear energy capabilities, Russia's Rosatom Nuclear Energy State Corp. is increasing its hiring of university graduates.
Rosatom.ru reported Thursday that more than 160 graduates of Tomsk Polytechnical University and Seversk State Technological Academy have been assigned to Rosatom.
The selection and assignment procedure was attended by representatives of Russian nuclear facilities, including officials from Ekaterinburg's Energomash, Angarsk Electrolysis Chemical Combine, Russia's Scientific-Research Institute of Nuclear Reactors (NIIAR) in Dimitrovgrad, Krasnoyarsk Kray's Electrochemical and Mining Chemical Combines and representatives from most of Russia's 10 nuclear power plants.
Representatives from enterprises in Uzbekistan, Kazakhstan and Kyrgyzstan were also in attendance. In total, more than 300 vacancies were offered to the graduates, who will defend their diplomas early next year.
Russian Prime Minister Vladimir Putin is committed to expanding Russia's nuclear energy use, remarking in his 2007 annual address, "Over the entire Soviet period, 30 nuclear power plant units were built, but we plan to build 26 such units over the next 12 years, and to do so using the most advanced technology available."
Itar-Tass: Ulan-Ude aircraft plant demonstrates major sales growth
11.12.2009, 11.16
ULAN-UDE, December 11 (Itar-Tass) - The Ulan-Ude aircraft plant that makes part of the Vertolyoty Rossii (Helicopters of Russia) holding, ends the year with a growth in sales of about 35 percent. The share of the plant on the world market of helicopters of medium class has grown by one third, the press service of the plant reported on Friday.
The plant has a full stock of orders for 2010 and partially for 2011, its director Leonid Belykh said. “Under the plan developed by the Helicopters of Russia holding, we have launched a major technical updating of production. A growing demand for our shares is supported by clear prospects of the enterprise,” he added.
Such growth comes because the Mi-171 helicopter (deep modification of Mi-8) produced at the plant is in big demand. This helicopter is bought by more than 30 countries. Within the next few years the plant will launch the production of Mi-171M helicopters, which is a further development of world-known Mi-17/171 helicopters.
One more project is the production of a promising high-speed helicopter. Besides, the plant is expected to launch batch production of the Su-25UBM attack aircraft.
BarentsObserver: Icebreaker fleet has repaid its tax debt
2009-12-10
Russia’s nuclear powered icebreaker fleet is no longer on the verge of bankruptcy, head of Rosatom could tell Prime Minister Vladimir Putin when the met this week.
The Murmansk based fleet of nuclear powered icebreakers was assigned to Russia’s state nuclear corporation Rosatom last year. Earlier, the world’s only fleet of civilian nuclear powered vessels was managed by Murmansk Shipping Company, since 1996 a private stock company.
- The fleet has fully repaid its tax debt, which had brought it to the verge of bankruptcy, Kiriyenko told Putin. Kiriyenko was thankful for the 1,8 billion roubles government support to the icebreakers operation.
Kiriyenko continued by informing the Prime Minister that the personnel are happy with the transfer of the fleet from a private company to a state corporation. –Salaries were raised 61% during the last year, Kiriyenko could tell.
Rosatom’s director also informed Vladimir Putin the a new icebreaker model is in the works , the design will be completed this year. The Transport Ministry has ordered a new icebreaker in accordance with next year's federal programme. The service life of existing icebreakers is being extended. This means we will ensure stable operation of Russia's nuclear icebreaker fleet and fulfilment of the national strategic goals in the Arctic, Sergei Kiriyenko said according to a transcript from the meeting.
As BarentsObserver reported last week, Russia's nuclear powered icebreaker fleet celebrated its 50 year anniversary.
KyivPost: Russian policeman convicted of killing journalist
Today at 11:15 | Associated Press
KARABULAK, Russia (AP) — A court in southern Russia has convicted a policeman in the 2008 killing of a journalist and sentenced him to two years in prison.
The victim's relatives have reacted angrily, saying the sentence is too light.
Journalist Magomed Yevloyev, who was critical of regional officials, ran a Web site that reported on abuses, abductions and killings plaguing the southern Ingushetia province.
He was shot in the head in a police car after being detained as he stepped off a flight from Moscow in August 2008. Police say he was shot accidentally during a scuffle.
The court on Friday convicted Ibragim Yevloyev, the former head of the local police chief's guard service, of involuntary homocide. The two men are not related.
The victim's relatives insist that the killing was premeditated.
RIA: Two suspected militants killed in Russia's North Caucasus
10:0011/12/2009
MAKHACHKALA, December 11 (RIA Novosti) - Police officers have shot dead two suspected militants in Russia's North Caucasus republic of Dagestan, a local police spokesman said on Friday.
The incident happened at around 10:00 p.m. (07:00 GMT) on the outskirts of the republic's capital of Makhachkala near the village of Talgi.
Officers attempted to stop car without number plates which was passing a police checkpoint, but the vehicle continued. Police gave chase, the suspected militants opened fire. The driver and his passenger were killed in the ensuing shootout.
"Their identities are being established," the spokesman said. "A machine gun and a handgun were found in the car."
The spokesman also said that the police at the checkpoint had earlier been informed that militants would be passing by.
Russia's North Caucasus republics, in particular Chechnya, Dagestan and Ingushetia, have seen frequent attacks on police and officials this year.
Russia Today: Fifteen years since start of Chechen campaign
11 December, 2009, 10:28
Fifteen years ago to this day the first counter-terrorist operation in Russia’s republic of Chechnya began as federal troops entered the republic to put a stop to mounting violence in the region.
Magomed Khanbiev, now a Chechen parliament deputy with the title of Defense Minister, was once a top Chechen militant. Later he swapped allegiances for a peaceful life.
“People thought I had become a militant as I went with them to the mountains. But then all my Chechen friends began to say I was wrong to do so. And then I thought – what am I fighting for? I realized that my people do not want me there in the mountains and I went back,” Khanbiev says.
After the collapse of the Soviet Union, then-President Boris Yeltsin offered more autonomy to Russia’s Republics, and Chechnya jumped at the chance.
Autonomy bred a desire for independence which saw growing unrest against Moscow. The republic became an enclave for Islamic extremists, spiraling into a conflict threatening to destabilize the neighbouring republics of Dagestan and Ingushetia.
Moscow had to do something to secure the North Caucasus and on December 11, 1994, Russian troops were sent in to restore order.
An operation that was planned to be over in two days lasted for more than two years. The Chechen militants forced Moscow into a peace agreement which was signed in 1996. Chechnya was now de facto independent, but the kidnappings and acts of terror in the neighboring regions continued.
A plot by Chechen militants, which blew up a number of apartment blocks across Russia killing three hundred people, and a military intrusion into Dagestan to establish an Islamic state on the territory of both republics were the last straw.
At the time then-Prime Minister Vladimir Putin was adamant and uncompromising – no more negotiations with terrorists. A second anti-militant campaign in Chechnya was launched, which ended just eight months ago.
A young Ramzan Kadyrov managed to bring relative peace to the republic as Chechen president. He began a program to get the militants to turn their back on violence and return to normal life.
“We have the rule of law, peace and stability – although there are some minor crimes, like anywhere else. This year we have been focusing on healthcare, education and agriculture. We plan to create more jobs, to attract more investment next year. I am sure that next year will be a good one for our economy,” Kadyrov says.
The sound of explosions is now a distant memory and today Chechnya is a large building site, but problems like high unemployment still exist.
With international flights from Grozny airport beginning again last month and the customs service functioning the goal seems attainable.
According to Ramzan Kadyrov, his main achievement while President is that, unlike other Chechen leaders throughout the history of the conflict, he has managed to consolidate the people, to unite them.
As some analysts say, by doing so, this was the beginning of the end of the counter-terrorism mission in Chechnya.
RIA: Russian daily's office attacked with smoke bombs
08:3711/12/2009
A group of youths have attacked the Moscow office of popular Russian daily Komsomolskaya Pravda with smoke bombs and firecrackers, the paper said on its website.
Some 10 people wearing respiratory masks attacked the paper's office, located in Moscow's Northern district, at around 08:00 p.m. local time (17:00 GMT) on Thursday, the paper said. Witnesses were quoted by Komsomolskaya Pravda as saying the youth first attacked the building with stones, and then threw smoke bombs inside, shouting "And now, smell a bit of gas!"
A police spokesman told RIA Novosti police rushed to the scene when the incident was reported, but failed to detain the attackers as they had already fled.
No one was reported injured in the attack.
MOSCOW, December 11 (RIA Novosti)
The Moscow Times: Public Support for Constitution Growing
11 December 2009
The Moscow Times
The share of the Russians who believe that the Constitution is relevant and respected has doubled over the past seven years, according to a survey released Thursday.
Only 21 percent of 1,600 Russians polled on the eve of Constitution Day, which is celebrated Saturday, said the document is unimportant and not respected, compared with 40 percent in 2002, the state-run VTsIOM pollster said.
Also, 47 percent said the Constitution should be amended only in extremely rare circumstances, an increase from 35 percent in a similar poll nine years ago.
The 1993 Constitution underwent its first significant amendments last year at the request of President Dmitry Medvedev, who extended the presidential term to six years, from four, and parliamentary terms to five years, from four.
All previous amendments reflected only changes in the number and names of the country’s regions.
Only 16 percent of respondents said in the latest poll that they had read the Constitution and knew its contents.
The margin of error in the nationwide poll was less than 3.4 percentage points.
Reuters: Russia's Putin, Medvedev enjoy ratings boost
Thu Dec 10, 2009 5:33pm IST
MOSCOW (Reuters) - Russian Prime Minister Vladimir Putin's popularity rose after a national televised address last week, curbing a four-week slide, according to a weekly poll by the Public Opinion Foundation published on Thursday.
Analysts have described Putin's popularity as the backbone of a political system plagued by weak institutions.
All three of Russia's main polling agencies had registered a dip in the popularity of Putin and President Dmitry Medvedev in recent months as the country's economic slump dragged into its second year.
Putin's approval rating climbed 3 percentage points to 68, its highest level in five weeks in a poll of 2,000 people taken on Saturday and Sunday. Medvedev's rating climbed four points to 58 percent, its highest level in a month.
The poll came two days after Putin vowed to ruthlessly fight Islamist rebels in a four-hour televised question and answer session with the Russian people. He also demanded tough measures be taken against those responsible for a train bombing that killed 26 on November 27.
The polling coincided with strong statements by Putin and Medvedev to demand officials be held accountable for their part in a nightclub fire that has killed 132, according to the Emergencies Ministry.
A Levada Centre poll released earlier this week showed only 26 percent of Russians had confidence in the ability of Putin's government to revive the struggling economy, down from 33 percent in September.
Russia remains mired in a deep economic crisis, with GDP contracting 8.9 percent in the third quarter from a year earlier and unemployment up by more around a third since the start of the economic crisis.
(Writing by Conor Humphries; Editing by Dominic Evans)
Interfax: Russian govt to allocate 45.2 Bln rubles for UAC financial recovery – Putin
MOSCOW. Dec 11 (Interfax) - The Russian government will allocate 45.2 billion rubles for the financial recovery of the United Aircraft-building Corporation (UAC), Russian Prime Minister Vladimir Putin said at a government presidium session on Thursday.
It will also allocate 13.5 billion rubles for aviation equipment construction, he added.
Today the UAC credit portfolio is 162 billion rubles, said Deputy Prime Minister Sergei Ivanov. "But the UAC is capable of servicing and does service on its own around 100 billion rubles, which allows the UAC to feel confident financially," he said.
Of the total amount of state support 31.7 billion rubles will be used to repay the UAC urgent debts to banks, while 7.7 billion rubles will be the government's contribution through the Vnesheconombank to ease the corporation's interest payments.
Today the UAC is a fully formed corporation, which has consolidated its aircraft-building assets and lists its shares on a stock exchange, "though in insufficient quantities so far," Ivanov added.
Reuters: Russia's deadly blaze exposed corruption - PM Putin
Fri Dec 11, 2009 7:29am IST
By Gleb Bryanski
MOSCOW (Reuters) - Russia's Prime Minister Vladimir Putin declared a crusade on corrupt bureaucrats after the country's most deadly blaze claimed the lives of 135 people in a nightclub fire in the Russian city of Perm.
"All the vices of our bureaucracy were exposed by this tragedy. Its incompetence, corruption and links to businesses," Putin told a late-night cabinet meeting on Thursday after a visit on Tuesday to Perm where he lambasted local officials.
The entire government of the region resigned after he left.
Russia is mired in corruption, with firms and individuals bribing their way through a plethora of technical, safety and health rules enforced by multiple state agencies. Once the bribes are collected the violations are often overlooked.
The number of jailed bureaucrats is growing but Russia is still ranked 146th out of 180 nations in Transparency International's Corruption Perception Index.
"We need legal changes strengthening criminal punishment for bureaucrats for violations in control and supervision area," Putin said. He said the changes would address negligence on the part of entrepreneurs as well, but did not elaborate.
Putin has a history of using disasters to achieve political goals. In 2004 when he was Russia's president, a hostage-taking raid by rebels from Chechnya on a school in the town of Beslan in North Ossetia in 2004 led to him tightening his grip over regions by abolishing governors' elections.
The fire in Perm was sparked last Friday when an indoor firework show ignited wicker coverings on the walls of a club, prompting a stampede as partygoers rushed towards a narrow door to escape clouds of toxic black smoke.
"There was only one exit in a club where hundreds of people gathered and all the windows were blocked. Although documents show windows were wide open," Putin said.
"They simply signed fake documents. Did they not know about it? Of course they knew. Where did the municipal authorities look? Why did they close their eyes?"
(Writing by Gleb Bryanski; editing by Philippa Fletcher)
Interfax: Putin demands tougher criminal liability for officials, business sector
MOSCOW. Dec 11 (Interfax) - Russian Prime Minister Vladimir Putin has demanded to put supervision services in order and to increase criminal liability for officials who violate state control and supervision regulations.
"We need to sort out our supervision services. We need amendments increasing criminal sanctions for officials breaching state control and supervision rules, particularly, those improperly performing their duties leading to the tragedy and people's deaths [in Perm]," Putin said at a government presidium session on Thursday evening.
"Certainly, there must be more responsibility on businesses," he said. "Negligence, breach of safety regulations, deliberately ignoring the rules for controlling agencies should entail tough administrative or criminal sanctions," the prime minister said.
"A tragedy similar to one in Perm could have happened anywhere, in any Russian town," he said.
To eliminate such a threat "systemic solutions are needed," he said. "The legislation must be carefully analyzed and amended where necessary," the prime minister said.
Itar-Tass: Putin calls for tough sanctions for officials ignoring state control
11.12.2009, 00.39
MOSCOW, December 10 (Itar-Tass) - Officials violating norms and procedures in the field of state control and supervision should face criminal responsibility sanctions, Prime Minister Vladimir Putin said Thursday at a meeting of the government’s presidium.
Criminal responsibility should especially apply to the situations “where the officials don’t fulfill their occupational duties and this brings about tragedies involving people’s deaths,” he said.
As he referred to last Saturday’s tragic fire in a night club in the city of Perm that has claimed more than 130 human lives to date, Putin blamed the tragedy on federal and regional officials, including the ones working for the Federal Service for Protection of Consumer Rights and the services in charge of technical supervision of buildings.
He believes that the tragedy in Perm has mirrored all the deficiencies of Russia’s bureaucratic system – incompetence, corruption and merger with business interests “right in the places where this is totally inadmissible.”
“I wonder where all those consumer protection officials were?” he said. “They are fond of explaining for the frequent inspections by genuine care for people’s interests.”
“The documents say the facility could seat fifty people while the actual typical attendance there would reach 400,” Putin said. “The problem was simply neglected.”
“And where were these services in charge supervising buildings?” he went on. “They just signed deliberately misleading documents.”
“Were they unaware of this? No, they perfectly were,” Putin said.
“And what about the agencies for architectural and construction supervision? Or the municipal authorities? Why did they close their eyes to it?”
“The leaseholders built an unauthorized appendage to the building, and quite naturally, they did it in violation of all the imaginable norms and rules, but there was nor reaction on the part of either federal or regional officials, although the Perm territory branch of the Federation Agency for Ownership Relations is located virtually in the neighboring building,” Putin said.
“Other controlling services are located fairly close to it, too, and all of them in the downtown area,” he went on.
“More than that, the club where hundreds of people would get together had only one normal entry and tightly sealed windows, although the documents said it should have been stained glass,” Putin said.
“The firefighting department confined its steps to issuing formal resolutions and the permission for operations carried the signature of a person who had long resigned by that time,” he said.
ISRIA: Russia - Prime Minister Vladimir Putin chaired a meeting of the Government Presidium
Transcript of the opening of the meeting:
Vladimir Putin: Good afternoon, ladies and gentlemen. Let us start with exchanging urgent information.
Mr Kudrin, please say a few words about the fluctuations of the budget deficit.
Alexei Kudrin: The 2009 federal budget is coming to an end with the year. When we were submitting the revised budget to the State Duma in February-April, we appointed the deficit at 8.3%.
Now, we think it will be 6.9%, considering oil prices higher than , which we proceeded from when drafting the budget (now, the year's average has risen slightly above ), and a part of the money earmarked for bank capitalisation stocked up instead.
If we take into account subordinated loans to VEB and Russian banks engaged in increasing capitalization, and quasi-fiscal measures, the deficit will be 7.3%, provided all ministries keep within budget expenditure limits. That is our forecast.
Vladimir Putin: Good. As you know, there were many questions about maternity funds during my television talk to the public, and suggestions to change the patterns of their spending, somewhat.
We have recently coordinated the rules of spending a part of maternity funds to improve the recipient's accommodations. I have signed the rules for now. Mr Zhukov, please comment.
Alexander Zhukov: The law on additional support of multiple-child families was adopted three years ago. Beneficiaries-the families whose second or third child was born three years ago-will have the right to spend their maternal capital since January 21.
The initial capital was 250,000 roubles. Now, after several indexations, it is 343,378 roubles.
Vladimir Putin: It was 317,000 at the beginning of the year, if I am not mistaken.
Alexander Zhukov: That's right. It will be 343,000 since January 1. The anti-crisis programme has made us authorise the spending of maternal funds on housing mortgage loans even before our previous deadline. The money can be spent on loan and interest payments alike. We have also authorised 12,000 rouble lump grants out of maternity funds.
Both measures have proved very timely. The Pension Fund has met 92,000 applications for mortgage debt and interest payments from maternity funds to total 23 billion roubles, as of December 4.
12,000 rouble lump grants have been paid to a million and 89,000 people to total 13 billion roubles.
Maternity funds will be used to all purposes since January 1-spent not only on housing construction but also on education and pension accumulations. The budget earmarks 102 billion roubles for the purpose. The Pension Fund expects 356,000 relevant applications in 2010.
There were really many requests on the hot line and applications to the Government to extend the limits of spending maternity funds.
In particular, a decree will be signed authorising not only the holder of the maternity fund certificate (mothers in most instances, and occasionally fathers) but also the holder's spouse to use maternity funds on housing purchases and construction. There were many requests on this score.
It has also become possible to spend maternity funds on private house construction loan payments during construction, not only after it as was the case previously.
Maternity funds could be spent only on mortgage loan payments in the outgoing year. Since January 1, they can be spent to buy a flat or build a private house.
Vladimir Putin: Good. Now, say a few words please about federal budget transfers on Social Insurance Fund deficiency payments.
To be continued...
Itar-Tass: Putin approves compensations to Perm fire, train crash victims
11.12.2009, 02.03
MOSCOW, December 11 (Itar-Tass) -- Prime Minister Vladimir Putin signed a resolution on Thursday that established federal budget compensations to victims of the fire in a night club in Perm and of the Nevsky Express train crash.
Families of those killed in Perm will receive 400 thousand rubles (13.5 thousand US dollars), while those injured – 300 thousand rubles.
Families of those killed in the train crash will get 300 thousand rubles. Passengers who sustained grave injuries will receive 100 thousand rubles, and those with medium and light injuries – 50 thousand rubles.
Itar-Tass: Death toll from nightclub fire in Perm grows to 139
11.12.2009, 09.39
PERM, December 11 (Itar-Tass) - The death toll from the fire at the nightclub Lame Horse in Perm last weekend has grown to 139, sources from the Russian Ministry for Emergency Situations told Tass on Friday.
A total of 91 people are in hospitals.
RIA: Fire safety breaches in Perm club were ignored for years – Shoigu
07:4211/12/2009
MOSCOW, December 11 (RIA Novosti) -Russia's Emergencies Minister Sergei Shoigu said inspectors had for years turned a blind eye to breaches of fire safety in a Perm nightclub, where a fire claimed 139 lives last week, a Russian daily said on Friday.
The fire engulfed the Lame Horse nightclub in the west Urals city in the early hours of Saturday after an indoor fireworks display went awry.
Shoigu was quoted by Rossiyskaya Gazeta as saying extensive building work had been carried out in the club some years before the December 5 tragedy, and dozens of fire safety breaches had been revealed since then.
However, the inspectors whose jov it was to supervise the implementation of fire safety rules in the club, showed negligence, the minister said. He said many discrepancies were discovered in documents provided by club's owners during the checks.
Shoigu said inspectors "had turned a blind eye to the discrepancies for many years", adding measures taken by the them could not assure fire safety inside the building.
"An inspector just came, watched, turned round and left. Everything is clear," the minister said, adding "this was the main reason why the people were sacked."
Sergei Shoigu sacked on Tuesday a chief fire inspector and six other officials in the Perm Territory over the accident.
Shoigu said Lame Horse his estimates showed the club's owners had a high income from their business and could have assured fire safety in the club.
On Monday, charges were brought against Lame Horse executive director Svetlana Yefremova, acting art director Oleg Fetkulov and co-owner of the club Anatoly Zak, as well as director of the Pirotsvet fireworks supplier Sergei Derbenev
The government of the Perm region and the Perm city Mayor resigned on Wednesday over the tragedy.
More than 90 people still remain in hospital following the fire, with over 30 in a critical condition.
RIA: Wreckage found in Tatar Strait belongs to crashed Tu-142
01:3011/12/2009
VLADIVOSTOK, December 11 (RIA Novosti) -Wreckage recently discovered in the Tatar Strait belonged to the Russian military Tu-142 plane that crashed in the area in early November, a search team member has said.
"A detailed investigation showed they belonged to the crashed plane," he said.
Eleven people were on board the Pacific Fleet plane that went down during a combat training flight on November 6 some 20 kilometers (12 miles) off the Tatar Strait, which separates mainland Russia from the Far East island of Sakhalin.
A recovery operation is underway, but is frequently suspended due to bad weather.
NTI: Russian Plant Begins New Chemical Weapons Disposal Project
Russia has begun disposal of mixtures of lewisite and mustard blister agents at a chemical weapons disposal factory in the Kirov Region, RIA Novosti reported yesterday (see GSN, Nov. 19).
"Work has started at the Maradykovsky facility to destroy mustard-lewisite mixtures," said regional official Mikhail Manin. "Two and a half [metric] tons of this dangerous substance has been destroyed by now."
A total of 150.1 metric tons of mustard-lewisite mixtures, contained in 277 units of ammunition, is set to be eliminated at the facility, Manin said.
In November, the site finished disposing of 232.6 metric tons of the nerve agent sarin (RIA Novosti, Dec. 9).
Russia is slightly ahead of its chemical warfare material destruction schedule, having already destroyed 45 percent of its 39,967-metric-ton stockpile as required under the Chemical Weapons Convention by the end of the year, Interfax reported. The country reached the 45-percent point on Nov. 26 and has pledged to destroy all of its chemical weapons by the convention deadline of April 29, 2012 (Interfax, Dec. 9).
Thursday, Dec. 10, 2009
RFERL: Russian Defense Ministry Fires Command At Notorious Base
December 10, 2009
ST. PETERSBURG -- The Russian Defense Ministry has dismissed the command of the Kamenka military unit near St. Petersburg, RFE/RL's Russian Service reports.
Kamenka became a notorious Russian Army base this year after numerous reports of the bullying and beating of recruits.
Today's dismissal of a platoon commander, the company commander, the chief of staff, a battalion commander, the 138th motorized rifle brigade's commander, and two of his deputies came as a result of a government inspection at Kamenka after a scandal in early October over hazing practices.
Contractor Vladimir Romanov and conscript Aleksei Banetsky, who ran away from his Kamenka unit, had reported that three sergeants beat 16 soldiers and broke one soldier's jaw.
Romanov's father, who came to the unit to protect his son, said later that he had been dragged out of his car and was also severely beaten by officers of the unit.
Criminal cases against three sergeants were initiated as a result. Two sergeants were accused of exceeding their authority and causing bodily harm and the third charged with abusing his power.
Ella Polyakova, chairwoman of the Soldiers Mothers' Committee in Petersburg, told RFE/RL that the Defense Ministry showed its political will by dismissing the entire command at Kamenka. Polyakova said her organization is pleased with the results.
Meanwhile, the commander of the Leningrad Military District has also fired five St. Petersburg military commissioners.
Romanov has since been sent into the military reserves after the discovery of a medical condition, and Banetsky terminated his contract with the military.
Blog.: Why Russia Doesn’t Care About Copenhagen
Posted December 10th, 2009 at 3.50pm in American Leadership.
MOSCOW - The rest of the world’s passions may be boiling over in Copenhagen this week, but Russia is paying no attention.
There is an impression that the government and public opinion – quite in the classical liberal laissez faire spirit - share the conclusion that global warming has a moderate and non-unprecedented nature, its impact on human health and wildlife is largely positive and that carbon emissions are hardly the primary factor in climate shaping. Thus, it is not a crisis and there is no need to resort to massive cuts in greenhouse gas emissions.
How has such an absurd situation arisen in modern Russia with strong statist traditions? Isn’t objectively existing global climate change impacting it?
Climate studies are largely done by government-funded research centers that are closely linked to international agencies primarily with the UN Intergovernmental Panel for Climate Change (IPCC). In the early 2009 the Federal Hydro-Meteorology and Environmental Monitoring Service (Roshydromet) published the “Assessment Report on Climate Change and Its Consequences in Russian Federation.” Most of the study’s authors are affiliated with this UN agency and their conclusions are in line with IPCC’s basic conceptions. For example, the report claims that “comparison of simulated and observed variations of surface air temperature provides convincing evidence supporting the anthropogenic nature of observed climate warming.” However, the report did not enjoy a broad publicity and had virtually no effect on public opinion.
But there is a widespread opinion among the Russian ruling elites that global warming could be beneficial to Russia. Thus, the aforementioned Roshydromet’s report lists such factors as displacement of comfortable habitation northward, increase in farming potential in regions with sufficient water resources and favorable influence on ice conditions in the Arctic seas, enhancing the potential for sea transportation and development projects on the Arctic shelf.
Admittedly, addressing the Copenhagen Climate Change Conference the Russian representatives are bound to make statements of how critical the global warming problem is and that resolute moves are needed to address it. Practically, however, Russia is hardly going to make a significant and constructive contribution to the debate and decision making.
Author: Yevgeny Volk
World Football Insider: Exclusive: Vladimir Putin to Have Hands-on Role with Russia World Cup Bid
December 11, 2009
(WFI) Vitaly Mutko, Russia’s sports minister and FIFA Executive Committee member, tells World Football Insider that Russian Prime Minister Vladimir Putin is set to play a much more visible role in the country's World Cup bid campaign during 2010.
In a wide-ranging interview in Cape Town last week, Mutko, who also chairs the bid, hailed the “important role” Putin had already played since it was launched in October. He said the former president would become more prominent as the campaign heats up over the next 11 months.
“Yes he will [play a more prominent role],” said Mutko. “He is now playing an important role. As you know he had a meeting with [FIFA] president [Sepp] Blatter last October. Basically he agreed that the Russian government would sign all the guarantees that run.
“[Last week] he had a four-hour direct line with the nation, he does it every year – an extended Q&A session with the country. During the last session he was asked if he supported the bid and once again he reiterated that he supports the bid and he would do ‘anything which is necessary’ to support it.”
Asked if he would attend an event in 2010 similar to the FIFA-organized World Cup bidding expo in Cape Town, where David Beckham stole the show and proved the importance of star quality, Mutko replied: “Sure – he will do everything that he can.”
“We respect our colleagues that are bidding against us. We are not spinning against anyone. We just want to do the bid properly.”
Putin’s intervention in Sochi’s bid to host the 2014 Winter Olympics was considered crucial to the Black Sea city’s ultimate success, and officials on rival bids privately fear his input.
One rival bid official described the Russian premier as the country’s “secret weapon” and another described how Sochi had “absolutely nothing going for it” until Putin weighed in behind the bid campaign.
Russia’s subtle approach
Mutko’s ascent in world sport’s corridors of power was confirmed in June, when the 51-year-old became a FIFA Executive Committee Member. The 24-man committee will decide next December which of the ten bid countries are successful in their efforts to host the 2018 and 2022 finals.
The former Zenit St Petersburg president is candid about using his insider’s perspective to find out what his fellow members are looking for and best applying them to Russia’s bid.
“The FIFA leadership has a philosophy on the staging of the World Cup bid,” he said. “It’s all about development and legacy.
Mutko said that he was emphasizing these aspects when promoting Russia’s World Cup bid.
“We think that our bid is all about development and legacy. It will provide a tremendous boost to football, sports infrastructure, host city infrastructure and the development of Russia.
“I’m convinced that the World Cup will come to a country that has not had it before.”
Mutko said that the formal lobbying of FIFA executive members is still to fully kick into gear, but that when they had been presented with the possibilities offered by the world’s largest country they had been “left a very good impression".
“We’ve started [the lobbying process] subtly and diplomatically,” he said. “I’m not pressing too much, probing.”
Facing down Russia’s difficulties
Some of the problems Russia will face in convincing Mutko’s fellow executive committee members that it is a fit host for a World Cup have been brought into stark focus over the past month.
Last month 26 people were killed when the Moscow-St Petersburg train line was bombed, the latest in a series of terrorist outrages linked to Russia’s controversial role in the Caucasus region.
Mutko denied that the attack imperiled Russia’s World Cup bid and insisted that the country is safe. “I don’t think that the terrorist attack undermines our bid,” he said.
“Unfortunately terror attacks happen anywhere in the world, we know that. We have our own war on terror as you know. In terms of security, Russia is one of the most secure countries and we know how to organize secure and safe events.”
On the football front, the progress made by the national team was undermined by the shock exit at the hands of Slovenia in a World Cup play-off.
“Of course, emotionally, it’s a very big setback for us,” said Mutko. “But there is no direct connection to the bid, these are two different things.”
“There are 32 countries participating in the World Cup. If qualification for playing was a qualification for staging, then all of those countries would be available.”
As Zenit St Petersburg president until 2005 and still a fan, Mutko has witnessed at first hand some of the weaknesses of the domestic league and is honest enough to acknowledge them. He says that the English Premier League – the jewel in the crown of Russia’s main World Cup bid rivals – is “the top football competition in the world".
Although the wages are among the best in the world, the Russian Premier League struggles to hold onto its best players, and its reputation remains muddied by poor attendances, crowd violence and allegations of match corruption.
In January, Zenit reluctantly sold Russian football’s golden boy, Andrei Arshavin, to Arsenal.
“Of course Arshavin was a key player at Zenit that did much for the late, recent successes of the club,” said Mutko.
“Although every player, especially a gifted player has ambitions that he wants to achieve more in life. He wanted to play in the Premier League, which is the top football competition in the world and I hope that it is to his benefit.”
The trend for the Russian Premier League hemorrhaging its best players to the EPL – Roman Pavlyuchenko, Nemanja Vidic and Martin Skrtl are all recent defectors – continued in the summer with the transfers of Yuri Zhirkov to Chelsea and Diniyar Bilyaletdinov to Everton.
Will hosting the World Cup boost Russian domestic football and prevent these defections in the future?
“I don’t think that there is a direct immediate connection,” said Mutko. “The World Cup will improve infrastructure, it will boost Russia’s participation.”
“But the [Russian] Premier League is a different thing. You need different things to improve it – the skills, the quality of players – it takes some time to bring a new generation.
“We are working on improving the quality. Five years ago our internal competition was 25th in terms of European competition, now we are sixth. Six of our clubs are playing in European competition, three in the Champions League and three in the Europa League. There is progress. Our players are attracting some of the best clubs in the world: Arsenal, Chelsea...”
Outdoing England Again
With a powerful domestic mandate, as sports, youth and tourism minister in the world’s largest country, Mutko controls a budget worth billions of rubles and is forceful in his belief that he can help use sport to turn around Russia’s appalling public health problems. He is also a supervisory board member of the Sochi Olympics.
Crucially for Russia’s World Cup bid he has both the ear of the Kremlin and those of Russia’s oligarchs.
Russia has a bid budget of $40 million, 60 per cent more than England, its closest rivals for 2018. This is split between government and Russian Football Union funding and that of private backers, and it is Mutko who can be credited with treading through both worlds with such great subtlety.
Indeed it was Mutko who is credited with securing the private funds that saw the hiring of Guus Hiddink as national manager in 2006. This changed the fortunes of Russia and fundamentally altered the world’s view of Russian football, once considered so dour and mechanical.
In signing up Hiddink, he also beat the English FA to his signature, then beat them again in qualifying for Euro 2008. It is a trick he is trying to repeat for a third time, but this time the coup would be the greatest of all.
Written by James Corbett (james@)
AFP: No Moscow Mideast talks for now: Palestinian minister
(AFP) – 17 hours ago
MOSCOW — Palestinian foreign minister Riyad al-Malki on Thursday rejected holding Middle East peace talks in Moscow in the absence of preliminary negotiations with Israel.
"Organising such a conference in Moscow, without preliminary negotiations with Israel, would be pointless," said the minister at the end of a visit to the Russian capital.
"If the conference took place now, it would not bring a decisive contribution to the peace process," he added.
Russia has been pressing for more than a year to organise a Middle East peace summit.
With regard to a recent French proposal to hold peace talks in Paris, Malki said that "the aims of the French initiative were not contrary to an international conference being held in Moscow."
The proposed Paris meeting would gather the main Middle East players -- Palestinian representatives, and those from Israel, Syria, Jordan, Egypt, and Lebanon.
It would also include the diplomatic Quartet, which comprises the United States, the European Union, the United Nations and Russia).
On a forthcoming visit to Moscow in January Palestinian president Mahmud Abbas should again "tackle the question of holding an international conference in Moscow, which has already been postponed several times," added the foreign minister.
December 10, 2009
Russia profile: Middle Eastern Promise
By Roland Oliphant
Russia Profile
Russia Somehow Manages to Maintain Equally Warm Relations with Both Sides of the Israel-Palestine Conflict, But Is Powerless to Cajole Them to the Negotiating Table
Palestinian Foreign Minister Riad al-Maliki today visited Moscow to enlist Russian support for a bid to get the UN Security Council to recognize the Palestinian state. He left on a positive note, praising the “warmth” of his meetings with Russian Foreign Minister Sergei Lavrov and announcing a follow-up visit by Palestinian President Mahmoud Abbas in January. But is Russia really in a position to support the Palestinian cause – and does it really want to?
“We’ve had cold weather, but a very warm visit,” al-Maliki told journalists on Thursday morning. But al-Maliki was not praising the Russians for doing anything new. In fact, as he said himself, “the Russian position is clear and has not changed.”
The visit to Moscow was part of a global diplomatic offensive to drum up support for its appeal to the UN Security Council to recognize the Palestinian state “on all the Palestinian territories occupied by Israel since June 4, 1967.” “After this I’m going to Havana to see a gathering of Latin American states, and after that I will be touring Europe. By the time we get to the Security Council, this will not simply be a Palestinian request,” al-Maliki explained.
But convincing Russia has never been the problem. The Soviet Union was one of the first states to recognize the State of Palestine after the Palestinian Declaration of Independence in 1988, and Russia has maintained that position. As al-Maliki noted, the “fact there is a Palestinian Embassy in Moscow is a sign of the strength of our relationship.”
And al-Maliki had other reasons to praise Russia’s consistency. It was with evident satisfaction that he noted that despite arriving in Moscow just a week after the Israeli Foreign Minister Avigdor Liberman, he found the Russian position on the peace process and the question of Israeli settlement building in the occupied territories unchanged. As a member of the so-called “quartet” of negotiators (along with the European Union, the United States and the United Nations), it has stuck to the principles of the “road map” for peace, which requires Israel to freeze expansion of settlements in the occupied territories as a condition of further talks.
At the end of November, the Israeli Prime Minister Benjamin Netanyahu did suspend the building of settlements in the West Bank, but the Palestinians counter that the decision is “meaningless” as long as building continues in East Jerusalem. Russia and the EU, which on Wednesday issued a statement saying that Jerusalem ought to be the capital of both states, have rhetorically backed this position.
But while al-Maliki praised Russian steadfastness in defense of the Palestinian cause, others see Moscow as an ally of Israel – or at least as doing its best to keep out of the fray. “From my point of view it is to the Russian establishment’s credit that we minimize the money we invest in Palestinian needs,” said Yevgenny Satanovsky, the president of the Institute for Middle Eastern Studies in Moscow. “Funding the Ramallah government, and by extension the embezzlement of those funds, is the American and European game.”
It is true that while apparently having Palestinian trust, Russia also maintains a very close relationship with Israel. A large proportion of Israeli citizens – including Liberman himself – are Russian speakers with roots in the Soviet Union. The countries also have a very close trade relationship, particularly in terms of military hardware, and shared concerns about Islamist terror. “For us, there is no distinction between ‘rebels’ and ‘terrorists,’ as there is in Europe. They’re all part of the same jihad, and on this we agree with Israel,” said Satanovsky.
Perhaps. But Russia was the only one in the quartet to maintain relations with Hamas, and although it failed to persuade the Islamist group to recognize Israel’s right to exist and commit to a two-state solution, that engagement does not seem to have damaged relations with Israel.
How Russia manages to walk the line between these two loyalties is something of a mystery. Some, such as al-Maliki, seem to believe Russia is able to compartmentalize the issues. “Russia is quite entitled to an economic relationship with other countries,” he said when asked about the relationship with Israel, before repeating his belief that Liberman had failed to change the Russian position on settlements. Satanovsky points out that Russia’s considerable Muslim population is not particularly anti-Israeli, which allows Russia to have a foot in both camps.
Furthermore, said Satanovsky, “our political establishment is unaffected by the political correctness that in Western countries obliges people to consider Israel and Palestine one of the greatest problems in the world. That gives us a much more balanced attitude to Israel.”
Satanovsky does not disguise his bias - he uses the terms “more balanced” and “more positive” interchangeably – but he has a point. The Russian public and its leadership certainly do not tend to encumber themselves with ideological positions when it comes to the Middle East.
That doesn’t give Russia any special weight as an arbiter in the peace process, however. Since the beginning of 2009, Russian President Dmitry Medvedev has been intermittently touting a peace conference in Moscow, purportedly to follow up on the 2007 Annapolis conference where the Americans managed to secure a mutual commitment to a two-state solution. But despite winning the backing of Egypt, another key player in the peace process and an especially influential arbiter in the internal Palestinian conflict between Fatah and Hamas, the event has been constantly postponed. Originally billed for “the first half of 2009,” in June it was moved back to “before the end of the year.” Now the deadline seems to have been dropped altogether.
“The Moscow conference is necessary: we need it,” said al-Maliki. “But there is no point in having a conference without negotiations between Palestine and Israel.” Since the Palestinians say they won’t talk until the Israelis halt their settlement building in East Jerusalem, and since the Israelis believe the freeze on building in the West Bank is already commitment enough, when those talks take place is anyone’s guess. For all its warm relations with either side, Russia appears to have no more power to cajole them to peace than anyone else.
National Economic Trends
Interfax: Russian monetary base down 51.2 bln rubles to 4154.7 bln rubles
MOSCOW. Dec 11 (Interfax) - The narrow monetary base in Russia stood at 4154.7 bln rubles on December 7, down from 4103.5 bln rubles on November 30, the Central Bank reported on Friday.
The narrow monetary base includes cash in circulation (including cash held at credit institutions), and balances on banks' mandatory local-currency-deposit reserve accounts with the Central Bank.
RIA: Russian monetary base up $1.7 mln in week to $136.664 bln
10:5211/12/2009
Russia's Central Bank said Friday the country's narrowly defined money supply (M1) was 4 trillion 154.7 billion rubles ($136.664 billion at the current exchange rate) as of December 7, up 51.2 billion rubles ($1.7 billion) in the week since November 30.
According to the Bank, M1 money supply consists of the currency issued by the bank, including cash in vaults of credit institutions, and required reserves balances on ruble deposits with the Central Bank.
MOSCOW, December 11 (RIA Novosti)
Rencap: Russia's international reserves increase despite rouble weakening
Rencap
December 11, 2009
Yesterday (10 Dec), the Central Bank of Russia (CBR) said gold and FX reserves for the period 28 Nov-4 Dec increased by $1.5bn. According to our estimates, around $1.1bn is attributable to gold reserves' revaluation and around $3.8bn to FX reserves revaluation as the dollar weakened in global markets. The euro exchange rate moved from $1.49/EUR1 to $1.51/EUR1, and sterling from $1.63/GBP1 to $1.67/GBP1. In light of this, the reserves increase appears small, therefore we estimate corresponding weekly FX purchases and the change in correspondent accounts to be negative at $3.4bn.
During the period, the dual-currency basket strengthened against the rouble and its exchange rate floated inside RUB35.6-36.0/basket. Anecdotal evidence suggests the CBR did not intervene either on the sides or inside the corridor, thus this change is attributed to a decrease in correspondent accounts.
Most commercial banks had disposed of their FX correspondent account holdings with the CBR by the end of September. The only entity that has continued allocating funds to those accounts is the National Clearing Centre (NCC). According to official data, turnover in its correspondent account was $25bn in October implying around a $1.25bn change in correspondent accounts per trading day, on average.
Last week, we saw no reason for the near-$2.5-3.0bn positive change in international reserves: we think it reflected an increase in the NCC account. Our estimates of November CBR purchases showed $8bn, in line with CBR data, implying that by the end of the month the NCC withdrew the funds.
Bloomberg: Ruble Gains Most in a Month as Oil Price Rebounds Toward $71
By Denis Maternovsky
Dec. 11 (Bloomberg) -- The ruble headed for its biggest gain in a month as the price of oil rebounded toward $71 a barrel.
The currency added 0.9 percent to 30.1575 per dollar by 10:41 a.m. in Moscow, trimming this week’s drop to 2.5 percent, the worst week since July.
Oil, Russia’s chief export, has more than doubled since February, boosting the earnings outlook for the world’s biggest energy exporter and supporting the ruble. Crude advanced for the first time in eight days as China’s industrial production and crude refining output increased, adding to signs of an economic rebound in the world’s second largest energy user.
Crude last traded at $70.79 a barrel in Singapore after falling yesterday to $70.54 yesterday, the lowest close since Oct. 7.
The ruble appreciated 0.9 percent, the most since Aug. 13, to 44.4293 per euro. The movements against the dollar and the euro left the ruble at 36.5770, a weekly low, against the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters.
The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged Jan. 22 to defend.
To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@
Last Updated: December 11, 2009 03:34 EST
RBC: Gov't to cover social benefits deficit with anti-crisis money
RBC, 11.12.2009, Moscow 11:41:56.The Russian government will earmark RUB 15.5bn (approx. USD 505.05m) that it initially planned to spend on anti-crisis measures in 2009 to cover the deficit of the Social Insurance Fund, Russia's Deputy Prime Minister Alexander Zhukov told the government's presidium yesterday evening. He explained that the financing would be channeled to cover expenses on maternity and disability benefits, as the crisis forced many people with fairly high incomes to go on sick leave.
RBC: Finance Ministry downgrades budget deficit estimate
RBC, 11.12.2009, Moscow 10:37:48.The Finance Ministry has slashed its budget deficit estimate for 2009 to 6.9 percent from the 8.3 percent predicted earlier, Russia's Deputy Prime Minister, Finance Minister Alexei Kudrin told the government presidium yesterday. With subordinated loans extended to Vnesheconombank and other banks for recapitalization purposes factored in, the deficit will advance slightly - to 7.3 percent, Kudrin said. While in April 2009 the ministry was guided by a forecast of 8.3 percent in performing the budget, with the average oil price for the year anticipated at $41 a barrel, the current average oil price is upwards of $60 a barrel. Furthermore, a certain amount of funds reserved for recapitalization purposes will not be used.
Bloomberg: Russia’s Economy Shrank 8.9% in Third Quarter, Government Says
By Alex Nicholson
Dec. 11 (Bloomberg) -- Russia’s economic decline abated in the third quarter as companies began restocking inventories depleted during a record slump in the first half of the year.
Gross domestic product fell 8.9 percent from a year earlier, in line with the government’s estimate, after a 10.9 percent contraction in the second quarter, the State Statistics Service said on its Web site today. On the quarter, output grew a non-seasonally adjusted 13.8 percent.
“A major driver of Russia’s sharp contraction was the inventory correction and we are seeing the end of that,” said Vladimir Osakovsky, an economist at UniCredit Bank in Moscow, before the data was released. “Any improvement in Russia’s overall economic performance is linked to this process.”
Almost 9 percentage points of the 10.4 percent plunge in output in the first half was because of “a massive inventory adjustment,” says Martin Gilman, former head of the Moscow office of the International Monetary Fund, and OAO Gazprom, the world’s No. 1 gas producer, accounted for most of the slump. European consumers tapped stored gas as the delayed effect of dearer oil drove up gas prices at the start of the year.
Gazprom said last month that sales volumes to Europe and other export markets fell 24 percent in the first half from a year earlier as the economic slowdown eroded demand. Since July, Gazprom’s exports were higher than in the same periods of 2007 and 2008, the company said.
Rate Cuts
The price of Urals crude oil has rebounded 70 percent this year as global demand for commodities recovered. Energy, including oil and gas, accounts for about 70 percent of Russia’s export earnings.
The recovery may be slow. Nine interest rate cuts since April failed to spur bank lending and rekindle growth in industry and a slump in manufacturing deepened last month after export demand sagged.
VTB Capital’s Purchasing Managers’ Index fell to 49.1 from 49.6 in October. The index, which is based on a survey of 300 purchasing executives, in September rose above 50, signaling the industry’s first expansion in 14 months.
A contraction in industrial output accelerated in October to 11.2 percent from 9.5 in the previous month, the statistics service said last month.
“Industry hasn’t returned to stable growth,” Finance Minister Alexei Kudrin said this week. “There are still problems.”
Anti-Crisis Spending
Lenders’ corporate loan books fell 0.5 percent in October, after declining 0.7 percent in September, according to data published on the central bank’s Web site Dec. 3. Lending to consumers dropped 0.7 percent for a ninth consecutive monthly decline.
The contraction this year may have been as much as 3 percentage points deeper without anti-crisis spending, Deputy Economy Minister Andrei Klepach said on Dec. 10. The economy will probably shrink between 8.5 percent and 8.7 percent this year, he said.
As of Nov. 1, the government had spent 784 billion rubles ($26 billion) of 1.14 trillion rubles earmarked for stimulus measures, Deputy Finance Minister Tatiana Nesterenko said the same day.
Next year “there will be growth, but it will be growth after a big fall,” Kudrin said. The recovery will be complicated as governments retract stimulus programs and raise interest rates. “In the next two to three years this will be a factor that increases the cost of money and slows growth.”
To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@.
Last Updated: December 11, 2009 03:59 EST
The Moscow Times: New Leading Indicator Sees Q4 Growth
11 December 2009
The Moscow Times
The economy will grow a seasonally adjusted 2.3 percent in the fourth quarter, while falling back 2.6 percent in the first quarter of 2010, according to a new leading indicator created by Renaissance Capital and the New Economic School.
“Year-on-year real GDP is expected to decline 5.7 percent this quarter and increase 6.4 percent in the first quarter of 2010,” Renaissance Capital said in a report presenting the indicator.
GDP will grow 2 percent quarter on quarter in the fourth quarter of 2009, Deputy Economic Development Minister Andrei Klepach said earlier this month, while the ministry forecasts 1.6 percent growth in 2010 year on year.
The indicator uses 108 official economic indexes, including consumer and producer price indexes, stock indexes, trade balance and oil prices, to forecast growth in GDP for the coming period.
Much of the data used in the indicator comes from the State Statistics Service, or Rosstat, part of the Economic Development Ministry. “We use Rosstat estimates on certain sectors and investment data. These are the things that are less affected by the political context,” said Konstantin Styrin, a professor at the New Economic School.
But the leading indicator will only make forecasts for the quarter ahead because the turbulent economy makes more distant forecasting impossible.
“The leading indicator is always one of the most-watched reference points for investors in developed economies, and I hope that this series will prove itself over time to be an accurate predictor of the trend in the Russian economy,” said Chris Weafer, chief strategist at UralSib. “It will, however, take about a year of observations for investors to know just how reliable it actually is.”
Reuters: ANALYSIS - Russia's debt time bomb brought into focus by Dubai
Fri Dec 11, 2009 8:45am IST
By John Bowker and Melissa Akin
MOSCOW (Reuters) - Russian companies are sitting on a multi-billion dollar debt time bomb after allowing overseas borrowings to rise since April, heedless of default fears that dogged them in early 2009.
Bankers say a failure to complete restructurings may hamper Russia's ability to borrow in the future and the absence of clearly defined negotiation guidelines between Russian and western lenders raises the risk of future defaults.
Currency and commodity markets have been unexpectedly benign for Russia since June, helping to stave off a widely forecast debt disaster, but Dubai World's debt woes have served as a reminder that the problem has merely been postponed.
Conglomerate Dubai World said last month it would need a repayment freeze on some $26 billion of debt after a downturn in the global property market left it unable to service borrowings.
"There is a need for restructuring for a lot of Russian companies. We all hope the market will continue to get better, but the rouble lost 2 percent (after the Dubai World announcement) so nobody can predict what will happen," said Roman Malovitskiy, a debt restructuring lawyer at Moscow's Egorov, Puginsky, Afanasiev & Partners.
Russian foreign non-government debt rose to $441.2 billion in October from $420.7 billion in April as businesses continued to borrow against a backdrop of falling interest rates and the rise of the rouble against the dollar.
UBS is forecasting a rise next year to around $500 billion after Russia returns to market with a sovereign Eurobond which should set a new, lower benchmark interest rate for Russian borrowers. Central bank data shows that $153 billion is repayable by non-government enterprises and banks by 2010.
Appetite for Russian debt by foreign banks has also been driving the trend, meaning both sides are to blame.
Most have failed to address their debt through restructuring talks that began feverishly in the early months of 2009. Only aluminium giant UC RUSAL -- which agreed a $7.4 billion deal with around 70 international lenders last week -- and steel and coking coal producer Mechel's $2.6 billion package are the exceptions.
"There were only two names that went beyond standstill. What happened to (the rest)? The debt is still hanging like a black cloud over us," says one senior Moscow-based banker, who asked not to be named.
The far larger group of companies yet to complete deals include examples from a shopping basket of sectors.
Evraz is one steelmaker to have over-borrowed during the boomtime, Daimler-backed truck-maker KAMAZ is in talks with lenders and has warned that it may have to rely on state support, and business media provider RBC will be one of a string of firms to be rescued by billionaire Mikhail Prokhorov if talks are successful.
"It is easier to assume for some companies, either through good modelling or wishful thinking, that when the cycle changes the company will make money again ... (But) the problem has been postponed," said Renaissance Capital analyst Petr Grishin.
MOSCOW RULES
Some Western bankers and lawyers warn that while debt negotiations in the past have proceeded in good faith, legal principles and global best practice are not in place in Russia to ensure key elements of successful restructuring.
A solution could be to draw up a set of guidelines that would be recognised by both Russian and Western banks -- which sources have dubbed 'Moscow Rules' after the Soviet era spy code made famous in John le Carre novels.
The idea is based on guidelines for British debt talks known as the Insolvency Principles or "London rules", approved by the World Bank, Bank of England and British Bankers Association.
"I strongly recommend we have it for Russia -- we do not have proper rules of play. In practice we have, but it you would prefer it to be written down," Malovitsky said, adding that one restructuring deal he worked on was initially dogged by tension between foreign and Western lenders.
"There were misunderstandings between Russian and foreign creditors as they had different targets," he said.
The rules would likely need government backing to have teeth and to ensure the co-operation of Russia's largest banks, which are state-controlled.
The Moscow senior banker said Russian entities need to understand "what it will do for the long term economic environment and the availability of credit" if they cannot pull off a debt recovery.
(Reporting by John Bowker and Melissa Akin, Editing by Sitaraman Shankar)
(For more news on Reuters Money visit reutersmoney.in)
Business, Energy or Environmental regulations or discussions
Bloomberg: AvtoVAZ, Irkut, Mobile TeleSystems: Russian Equity Preview
By Lyubov Pronina
Dec. 11 (Bloomberg) -- The following companies may have unusual price changes in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.
The 30-stock Micex Index rose 0.2 percent to 1,304.61. The dollar-denominated RTS Index gained 0.2 percent to 1,351.98.
OAO AvtoVAZ (AVAZ RX): The Russian government approved giving the largest domestic car-maker 12 billion rubles ($394.4 million) in state support, Interfax reported. AvtoVAZ rose 0.3 percent to 15.328 rubles.
OAO Irkut (IRKT RX): The Russian airplane-maker’s parent company United Aircraft Corp. will receive 45.2 billion rubles in government support, Interfax reported. Irkut shares rose 0.6 percent to 7.794 rubles.
OAO Mobile TeleSystems (MTSI RM): Russian mobile-phone operators Dec. 14 will receive frequencies for 3G services in Moscow, Interfax reported. Mobile TeleSystems fell 0.4 percent to 223.80 rubles.
To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@
Last Updated: December 10, 2009 22:00 EST
BNE: Arkhangelsk diamond deposits worth $12bn
bne
December 11, 2009
The diamond deposits in Arkhangelsk Oblast are worth $12bn. Preparations are done for start-up of excavations on one of the largest deposits.
Infrastructure is now being developed around the Griba diamond deposit, which is valued to 4-6 billion USD, Arhperspectiva.ru reports.
New roads, bridges, fuel deposits and a base camp have already been built, and next year construction of enrichment facilities are planned to start in the area.
Another diamond mine in Arkhangelsk Oblast, the Lomonosov mine, last year contributed with 42 million RUB of tax revenues for the regional budget, BarentsObserver reported.
Fri Dec 11, 2009 2:40am IST
Belarussian President Alexander Lukashenko signed a decree approving the sale of state-controlled BPS Bank to Russia's biggest lender, Sberbank (SBER03.MM: Quote, Profile, Research), for slightly over $280 million. [ID:nGEE5B90TB]
Alfa: Sberbank announces launch of re-branding program
Alfa
December 11, 2009
On Monday, December 14, Sberbank will launch a re-branding program. The corporate color and logo will both be modified. The bank will need to re-style more than 20,000 of its branches by 2014 in line with its switch from a product- to a client-oriented strategy in order to increase market share in retail lending. The bank has already decreased the time it takes to issue new retail loans, started to issue credit cards and announced plans to begin express lending to retail clients.
Sberbank has not disclosed the amount of money it will spend on re-branding. According to media reports, re-styling could cost RUB1 mln per branch, so total spending could reach RUB20 bln, which equals approximately 20% of the bank's expected non-staff-related costs this year. This money, however, will not all be spent at once; rather, it will be spread out over 2010-2014 as individual branches are renovated. According to our calculations, the program could increase the bank's non-staff-related expenses by 2.5% a year, in line with its recent announcement that cost/income ratio will increase slightly from the current 34.4% to 40%.
VTB Capital: Russian Railways limits coal handling volumes at ports in Russian Far East
VTB Capital
December 11, 2009
large queues driven by seasonally slower handling - coal exports became problematic - systematic problem for coal exporters
News: According to Vedomosti, Russian Railways has imposed limits on the volumes of coal, coke and ferrous metals handled at three ports in the Russian Far East (Vostochny, Vladivostok and Nakhodka).
Our View: The measure has been driven by the slow cargo handling at ports and therefore large queues of trains waiting to unload there. According to data from Russian Railways, the queue length at ports in the Russian Far East is currently 194 trains, including 97 with coals. The news on railway traffic jams in the Russian Far East is not surprising as this problem is partly attributable to a seasonal factor (it is much more complicated to handle coal during the winter season) and has already been in place since November. Having said that, this once again clearly shows that the poor infrastructure is one of biggest enemies of Russia coal miners. The problem has a negative impact on the volumes of coal exported by miners which use ports in the Russian Far East (Mechel, Evraz and SUEK). Having said that, this problem has a systemic nature, with companies going through it every year and, in our view, should not be considered as anything strongly negative. We also believe that in the light of limited ports capacities Mechel, which operates Posiet port, might have an advantage in terms of its ability to export coal. Alexander Pukhaev
Citi: Norilsk Nickel - Closer to Chita Copper and Positive 2009 Production Guidance
Citi
December 11, 2009
CEO comments - Norilsk CEO, Vladimir Strzhalkovsky, spoke with the press yesterday, dwelling on production strategy and near-term guidance. We view the comments as largely positive as they suggest the company will go ahead with production expansion in Russia outside of its core operations in Taimyr.
Chita project to go ahead - The project aimed at copper, molybdenum and precious metals mining will go ahead with USD3.5bn budgeted in capex, of which USD1bn will go towards the construction of a 220km rail link. The rail capex will be mostly funded from the federal investment fund. The project includes two deposits, Bystrinskoe (contains 2 million tonnes of copper) and Bugdainskoe (600kt of molybdenum) under Russian reserves. The deposits also contain gold, silver, lead and iron ore. We estimate the company could mine up to 25 million tonnes of ore from these deposits at full capacity which could be reached in 2015-2016, and produce 60ktpa of copper in concentrate.
2009 production guidance - The CEO stated the company will produce 285kt of Ni, 406kt of Cu, 2.9moz of Pd and 695koz of Pt in 2009. We view the announcement as positive since these forecasts exceed our own forecasts by 5% for all metals with the exception of Cu, where they are in line.
Debt financing - The company will raise debt in 2010 as USD3bn will come due that year, of which more than half will be in June. We believe debt management should be under control given our EBITDA forecast of USD3bn in 2009 and 4.5bn in 2010.
Mikhail Seleznev, CFA
Troika: CTC Media and Rodnyansky seemingly settle dispute
Troika
December 11, 2009
CTC Media and Alexander Rodnyansky have reached a peaceful resolution in their dispute, Vedomosti reports. The parties yesterday signed a memorandum of understanding, which is to be approved by the BoD at a December 17 meeting. This is what we had expected when the news that CTC Media had filed a lawsuit hit the newswires. As reported by the press, an agreement was reached that Rodnyansky's option programs will be cut by 30%. This means that if he exercises his SARs today, instead of getting $89 mln, he would receive $62 mln. According to Vedomosti, a decision has yet to be made on how the SARs will be settled; the company has the option to issue shares or pay in cash.
In our view, the settlement is likely to take place soon in cash, but this is more likely to affect 2010 results than 2009 financials. If CTC Media pays $62 mln, it would lower its 2010 EBITDA by 27%, we estimate (from $232 mln to $170 mln). The negative effect on our target price would be just 2% (the revised target price would still imply upside of almost 45%). The company has enough cash to settle this obligation, as it had $113 mln at end 3Q09. Also, CTC Media settling this obligation in cash would not change our view that it could very well start paying dividends in 2010. Even assuming this payment is made, the company would still have cash of $220 mln on its balance sheet at end 2010 and no debt, we estimate. This news is positive for CTC Media and we reiterate our BUY recommendation. It should remove the overhang in the stock.
: Alfa and Telenor would eye developing markets
By Andrew Parker in London
Published: December 11 2009 02:00 | Last updated: December 11 2009 02:00
A proposed mobile phone venture between Russia's Alfa group and Norway's Telenor would look at expanding in Asia and Africa, according to one of its prospective shareholders.
Alexey Reznikovich, the head of Altimo, Alfa's telecommunications investment arm, said the new operator would look at opportunities in developing markets, including Indonesia and Nigeria.
The proposed entity should consider merging with a mobile company in emerging markets, he said.
Altimo has struck a deal with Telenor, the Norwegian mobile operator, to form a venture that will control businesses in Russia and the Ukraine in a bid to end a bitter feud between the two companies.
Telenor and Altimo are leading shareholders in VimpelCom, Russia's second-largest mobile operator, and Kyivstar, Ukraine's largest wireless provider, but the two investors have had big differences over strategy.
In October, Telenor and Altimo outlined plans to combine their stakes in VimpelCom and Kyivstar in a new vehicle that is scheduled to list in New York early next year.
Altimo will hold 43.9 per cent of the voting shares in the company, which could be valued at more than $23bn, and Telenor will have 35.4 per cent.
Altimo has 44 per cent of the voting shares in VimpelCom and Telenor has 29.9 per cent. Telenor owns 56.5 per cent of Kyivstar and Altimo has 43.5 per cent.
VimpelCom already has mobile operations in Cambodia and Vietnam, and Mr Reznikovich said the New York-listed company should look to increase its presence in Asia by expanding into countries including Indonesia and Thailand.
He added that the company should also consider African countries such as Ethiopia, Nigeria and Zambia. "I believe the best approach towards Africa could be a potential merger or acquisition with one of the large players in the African market," he said.
MTN, Africa's largest wireless company, is looking at overseas expansion. In September, the South African group abandoned merger talks with Bharti Airtel, the Indian operator.
Mr Reznikovich said the venture with Telenor included a dispute resolution mechanismto resolve differences over expansion strategy.
The risk for Telenor is that the new company expands into markets where the Norwegian mobile operator is already present, such as Thailand.
Mr Reznikovich also said that Altimo would sell its telecoms investments when they stopped growing in five years or more. "As soon as the telecoms market is saturated and there is no growth, we will exit," he said. Altimo's other mobile assets include minority stakes in Turkcell, Turkey's leading mobile operator, and MegaFon, Russia's third-largest operator.
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.
Bloomberg: Usmanov Increases Stake in Facebook Investor, Vedomosti Says
By Ilya Khrennikov
Dec. 11 (Bloomberg) -- Russian billionaire Alisher Usmanov raised his stake in Digital Sky Technologies, an investment company that owns 3.5 percent of Facebook Inc., Vedomosti reported, citing AF Telecom, Usmanov’s media company.
Digital Sky also controls the Russian social networking site Odnoklassniki, and internet portal Mail.ru.
Last Updated: December 11, 2009 01:48 EST
Troika: Usmanov continues to oppose MegaFon's merger with Turkcell
Troika
December 11, 2009
Vedomosti reports that Alisher Usmanov, whose company controls more than 31% of MegaFon, has secured a legal opinion from a law institute which asserts that the transfer of stakes of MegaFon's two other shareholders, Altimo (25.1%) and TeliaSonera (43.8%), into a foreign registered company (which would also include their stakes in Turkcell) would contradict Russian law as it would mean the transfer of control over one of Russia's designated "strategic" companies into foreign hands. Although both Altimo and TeliaSonera have less than 51%, they would jointly exercise control over the company. All such deals, under Russian law, are subject to government approval, namely by Prime Minister Vladimir Putin. The legal opinion is currently being examined by the Telecommunications Ministry.
In our opinion, Usmanov's concerns are likely to be heard as state owned companies are interested in MegaFon. For example, Svyazinvest has previously voiced an interest in expanding into the mobile sector by buying a major player, and the market has speculated that this would most likely be MegaFon. We believe that the government is unlikely to give the green light to two deals leading to the loss of control over two of Russia's largest mobile companies: VimpelCom and MegaFon. Most likely only VimpelCom will get the go ahead to become a part of the Bermuda registered VimpelCom Ltd as the shareholder conflict in that company was beginning to bode ill for Russia's investment risk perception, while the MegaFon situation is far from being such.
Alfa: Russian government to buy roughly $700 mln of Sistema Shyam TeleServices stock
Alfa
December 11, 2009
According to various press reports, Sistema Shyam TeleServices's (SSTL) shareholders approved an additional share issue of 891.3 mln shares. Of this amount, 662.75 mln shares, representing a 19.8% stake, will be issued to the Russian government at 49.31 rupees per share ($1.06/share). SSTL will also issue up to 228.55 mln shares to its Indian shareholders at 10 rupees per share.
After the additional share issue, Sistema's stake in the Indian operator is expected to decrease to 54.22% from the current 73.71%, while the share of Indian investors is expected to increase to 24.57% from 23.79%. Roughly 2.5% of SSTL's shares will remain in free float. Under Indian law, foreign investors must not own more than 74% of the company.
These terms are in line with the terms previously disclosed in the press.
Elena Mills
Reuters: TIMELINE-Russian banks struggle with bad loans
Thu, Dec 10 2009
MOSCOW, Dec 10 (Reuters) - Russian banks have yet to see a
peak of bad loans which are forcing them to channel $28 billion
into provisions this year, wiping out profits in the banking
sector.
Following is a chronology of recent key events in the
sector:
MAY
May 19 - Problem loans could soar to 35 to 50 percent of
total lending in Russia, Ukraine and Kazakhstan, Standard &
Poor's says. [ID:nLJ957879]
JUNE
June 1 - Russian banks may need to be recapitalised with
around 1.3 trillion roubles ($43.25 billion) in 2009, Moody's
says. [ID:nL1554029]
June 5 - President Dmitry Medvedev rules out creating a "bad
bank" to clean up bad loans. [ID:nL534983]
June 19 - VTB says bad debts could rise to $9 billion by
June 2010. [ID:nLJ543168]
June 29 - VTB says will likely make a loss this year.
[ID:nLT624294] [ID:nLT718543] [ID:nLT16910]
June 30 - Alfa Bank President Pyotr Aven says defaults may
hit $130 billion in the next 12 months. [ID:nLU501949]
- Russian banks require $20 billion to $80 billion in
additional capital within a year as NPLs will reach 15 to 40
percent of banks' loan portfolios by year-end, Fitch says.
[ID:nLU368648]
JULY
July 9 - Russia says it will spend 150 billion roubles in
2009 and 310 billion in 2010 on recapitalising banks via OFZ
treasury bills. [ID:nL9317896]
July 14 - Sberbank restructures 6.5 percent of its corporate
loan portfolio and 5 percent of retail loans. [ID:nLE295374]
July 22 - Oleg Vyugin, chairman of MDM bank, says bad loan
levels are already 10 percent in the banking system
[ID:nLM83854]
AUGUST
Aug 27 - Sberbank will complete and sell real estate
projects it has accumulated as non-performing loans rise and it
forecloses on pledged assets [ID:nLR76657]
Aug 28 - Russian officials cut forecasts for banks' bad
loans to less than 10 percent by the year-end and said state
help for the sector could be scaled back. [ID:nLR695672]
SEPTEMBER
Sept 7 - VTB sells 41.5 pct of new share issue for 180.03
billion roubles ($5.7 billion) to the state. [ID:nL0449822]
Sept 16 - Russian companies have restructured the lion's
share of problem debts but the issue will stay on the 2010
agenda, the local head of Raiffeisen says.
[ID:nLG149961]
Sept 21 - Sberbank says it expects provisions to
rise above the forecast of 10 percent in 2009 [ID:nNLP502374]
Sept 30 - Central bank chairman Sergei Ignatyev says the
Russian banking system as a whole will likely end 2009 in the
black, and Russia's Alfa Bank backtracks from an earlier gloomy
prognosis and says "there is no danger of catastrophe" for the
financial system. [ID:nLU343674]
OCTOBER
Oct 15 - Russia's top 20 banks had restructured about 26
percent of loans to their largest borrowers by Sept. 1
[ID:nLF592601]
Oct 21 - Russia's central bank has conducted a series of
banking stress tests which showed no major threat to the system
[ID:nLL682825]
- VTB posted a net loss of 11.0 billion roubles
($374.8 million) in Q2 2009, while signalling the worst is over.
[ID:nLL696643]
Oct 29 - Moody's expects bad loans at Russian banks to rise
to 20 percent of the total portfolio this year and to 25 percent
in 2010 [ID:nL012582]
Oct 30 - The Russian government will more than halve the
funds aimed at supporting banks in 2010 to 100 billion roubles
[ID:nLU657368]
NOVEMBER
Nov 20 - Moody's sees VTB, Sberbank loan losses at 16-27 pct
[ID:nLK587383]
Nov 23 - Russia cenbanker says bad loan growth yet to peak
[ID:nGEE5AM2LM]
DECEMBER
Dec 9 - The share of bad loans in Russian banks' portfolios
may stop growing by the second half of 2010, and total loan
losses may reach 14 percent of banks' portfolios by 2012,
Standard & Poor's ratings agency said. [ID:nGEE5B8194]
(Compiled by Dmitry Sergeyev; Editing by Toby Chopra)
Activity in the Oil and Gas sector (including regulatory)
Reuters: Russia to trim Jan oil export duty to $266-268/T
Fri Dec 11, 2009 8:12am GMT
MOSCOW, Dec 11 (Reuters) - Russia is likely to trim its oil export duty in January to between $266 and $268 per tonne from $271 in the current month to correspond with a slight drop in oil prices, Finance Ministry and Reuters calculations showed.
The export duty, a major factor in the financial results of Russia's oil companies, is based on monitoring of international prices for Russia's benchmark Urals crude blend URL-E. The January duty will be based on prices from Nov. 15 to Dec. 14.
Finance Ministry official Alexander Sakovich said on Friday the average price of Urals between Nov. 15 and Dec. 10 was $75.66 per barrel, though the price is currently just below $70.
"If the price stays at a level of $68-72 until the end of the monitoring period, the final average price of the barrel could total $74.93-75.31," he told Reuters.
Reuters calculations, based on custom tariff regulations and the average oil price estimate, show the January crude oil export duty is likely to be set at $266-268 per tonne.
Export duties on light refined products, such as gasoline and gas oil, are likely to total $192-193 per tonne, down slightly from the current level of $194.9 per tonne.
On heavy refined products, such as fuel oil, the January tariff will be set at around $103-104, compared with $105 per tonne in December.
Exports from 13 oilfields in East Siberia won exemption from export duties indefinitely from Dec. 1. [ID:nGEE5AQ0QQ]
These include the Vankor field run by state-controlled industry leader Rosneft (ROSN.MM: Quote, Profile, Research), the Verkhnechonskoye field owned by TNK-BP (TNBPI.RTS: Quote, Profile, Research) (BP.L: Quote, Profile, Research) and the Talakan field belonging to Surgutneftegaz (SNGS.MM: Quote, Profile, Research).
The government will officially announce January duties at the end of December. (Reporting by Katya Golubkova, writing by Robin Paxton)
RIA: Russia could cut oil export duty to $266-268 per ton in January
11:5011/12/2009
MOSCOW, December 11 (RIA Novosti) -- Russia could slightly reduce oil export duty on its Urals blend from the current $271 to $266-268 per metric ton starting in January, a Finance Ministry official said.
Alexander Sakovich, head of the ministry's integrated analysis department, said the average oil price was $75.66 per barrel from November 15 through December 10.
"If the price keeps within a $68-72 band, the monitoring price for the period will be $74.93-75.31 per barrel," Sakovich said.
Based on the export duty calculation formula, the maximum rate could be set at $266-268 per metric ton from January 1.
In that case, duty on light petroleum products will fall to $192-193 per ton from the current $194.9 per ton, and duty on heavy petroleum products to $103-104 per metric ton from the current $105 per metric ton, he said.
On March 1, as world oil prices stabilized at $43 per barrel, Russian oil export duty was raised to $115.3 per ton. In April it fell to $110. In the subsequent months, oil export duty rose after a rally on oil markets, was lowered by $10 in November, and raised by $40 in December.
Last year, the government moved from a bimonthly to a monthly duty adjustment procedure to respond more swiftly to changes in world oil prices.
Official Wire: Lukoil Projects $60-65 Oil In 2010
|Published on December 11, 2009 |
by EU News Network
( and OfficialWire)
MOSCOW, RUSSIA
Russia's Lukoil is projecting its 2010 plans on a baseline price of $60-$65 per barrel of oil on the international market.
During an interview Thursday on Russia's Vesti Teleradiokompaniia television channel Lukoil Vice President Leonid Fedun said, "2010 will also be a complicated year. We are being very conservative in laying out pricing scenarios. We figure that the price of oil will be somewhere between $60 and $65 per barrel. It is necessary for this reason to observe the strictest of financial discipline. At the same time, we are not perfectly confident that a second wave of crisis won't develop at the beginning or in the middle of the year, so we are being very cautious."
Lukoil, Russia's largest oil company and its largest producer of oil, has been severely impacted by the global recession. With its headquarters in Moscow, Lukoil is the world's second largest public company after ExxonMobil in terms of proven oil and natural gas reserves.
Fedun said that despite the company's cautious prognosis for oil's 2010 prices Lukoil will press forward with all its development projects nevertheless, including the development of Russia's offshore Caspian Korchagin deposits.
DECEMBER 11, 2009, 1:35 A.M. ET
WSJ: ONGC to Raise Funds to Refinance Debt for Imperial Buy
By RAKESH SHARMA
NEW DELHI -- State-run Oil and Natural Gas Corp., India's largest oil explorer by capacity, said it will raise $1 billion to refinance the debt it took on to acquire U.K.-based Imperial Energy Corp.
ONGC's overseas investment arm, ONGC Videsh Ltd., purchased Imperial Energy in January for GBP1.4 billion as part of its strategy to acquire oil and gas assets for stable cash flows from proved and probable reserves, as well as long-term growth.
To part-fund the acquisition, ONGC Videsh raised 48.55 billion rupees ($1.04 billion) selling commercial papers at a yield of 8.15%. The commercial paper is due for repayment Jan. 8, 2010.
"We will do it (the fund raising) very shortly...in a month," ONGC's finance director, D.K. Sarraf, said, without giving a reason for the refinancing.
ONGC plans to raise $200 million through foreign currency loans and $800 million through bonds and commercial paper, Mr. Sarraf said.
ONGC Videsh has increased output at Imperial Energy to 11,500 barrels a day from 6,000 barrels a day in January, R.S. Sharma, ONGC chairman, said in September.
Imperial's interests comprise seven blocks in the Tomsk region of western Siberia, Russia.
Write to Rakesh Sharma at rakesh.sharma@
GLG: Rosneft to face up to difficult conditions in East Siberia
December 10, 2009
• Analysis by: Michael Lynch
• Analysis of: Rosneft Sees 2010 Output Growth Rate Higher Than 2009
• Published at:
Summary
State-controlled OAO Rosneft plans to develop further production in Vankor field. The company is producing at the rate of 2.2 million bbl/day up slightly from 2008.
The increase is related to the start up of Vancor last August. Vancor, located in East Siberia, Russia's new oil frontier, will replace declining production from aging fields in West Siberia. Vancor crude oil production is expected to reach a plateau of 500,000 bbl/day in 2014. Export duty for 13 fields in the region will be zero.
Analysis
For the last several years, crude oil production in Russia has been supported by redevelopment of old fields in West Siberia that were put on the line during the Soviet era. Today, much of that increase has disappeared as these redeveloped fields now approach total depletion. Oil from these fields was relatively easy to produce. Capital costs were high but operating costs low. East Siberia is a completely different type of oil province. Little infrastructure exists with few roads and no electric power. Winter temperatures are far below zero. A pipeline under construction to East Asian markets will be longer than the distance from New York to San Francisco and may cost over $20 billion when all stages are completed which is not expected before 2020. Capital cost of the crude oil is twice as much as in the more hospitable West. Operating costs are much higher too because of the extreme cold. Vankor is accessible by automobiles only in winter when the roads are frozen. In summer, transportation is by helicopter. Transportation of casing, tubing and drilling tools is difficult in all seasons. Still the fields are large and there appear to be far more than the 13 discovered to date. When large quantities of oil from East Siberia finally reach the Asian markets, the extraction and transportation costs may exceed $75/bbl.
Your Oil and gas News: Three million tons of crude oil produced from Vankor Field
Thursday, Dec 10, 2009
By December 09 three million tons of crude oil have been produced from Vankor Field in Krasnoyarsk Region, developed by ZAO Vankorneft – a Rosneft subsidiary.
Current Vankor production is getting close to 30 thousand tons of oil per day with an expectation to exceed this level by the year end.
Since the beginning of commercial oil production on August 21 this year the number of producing wells was increased from 48 to 61, the number of injectors – from 40 to 44. The increase of production rates is ensured by commissioning of new oil and gas treatment facilities, application of advanced oil recovery methods and expansion of operating well stock.
The first million of tons of Vankor oil was produced in September, the second came in October 2009. The plan is to be extracting more than 25 million tons of oil per year at the peak level of crude oil production.
Source: Rosneft
Upstreamonline: Metal fatigue blamed for pipe blast
Metal fatigue has been blamed for a pipeline blast in Russia's Yamalo-Nenets region.
Upstream staff Thursday, 10 December, 2009, 15:02 GMT
Local media reports said that oil covered about 100 square metres of land after the explosion on the Rosneft-owned link last week.
The barents Observer quoted local Emergency Management Service officials as saying the accident was most probably caused by metal fatigue.
No one was hurt in the incident and fire fighters managed to extinguish a fire which broke out on the pipeline.
Published: 10 December 2009 | Last updated: 10 December 2009
Domain-B: ONGC to raise $1 billion to refinance Imperial Energy deal news
11 December 2009
Oil and Natural Gas Corporation Ltd. (ONGC) will raise $1 billion to refinance the debt that ONGC Videsh (OVL), the overseas arm of state-run oil explorer had taken to fund the acquisition of UK's Imperial Energy.
ONGC plans to raise $200 million through foreign currency loans and $800 million through bonds and commercial paper, ONGC's finance director D K Sarraf told Dow Jones Newswires today.
The oil and gas explorer plans to do the fundraising in a month.
ONGC had successfully made a $1.9 billion bid for London-listed Imperial Energy in December 2008, after fending off rivals like China's Sinopec and KNOC of Korea. (See: ONGC completes acquisition of Imperial Energy)
With 10,000 barrels per day of current production, Imperial has a growing portfolio of oil and gas interests in Russia's West Siberia region and has recoverable reserves of around 900,000 barrels.
It also has oil assets in the Tomsk region of western Siberia in Russia and north-central Kazakhstan.
Rigzone: TNK-BP to Boost Investment Program Up to $4B
TNK-BP 12/10/2009
URL:
The investment program of TNK-BP will be increased up to $4 billion in 2010, Viktor Vekselberg, Executive Director of TNK-BP, said to journalists.
"We will increase our investment program up to approximately $4 billion," he said.
According to him, the production growth of the company in 2010 will amount to 2-2.5%. "We are going to increase our production of hydrocarbons by 2–2.5% in oil equivalent," said he.
Mr. Vekselberg noted that the main major projects of the company in 2010 will include the Verkhnechonskoe field and fields in the Yamalo-Nenets Autonomous Area. "The Yamal projects will involve our partners in Slavneft. Our Yamal projects demonstrate good coordination between state-controlled and private companies," added he.
The Executive Director of TNK-BP said, "Mr. Sechin (Vice Prime Minister - ANI) held several meetings participated by Rosneft and Transneft for preparing a comprehensive and complex program aimed at development of fields on Yamal and pipeline construction. Yamal may become a new oil production province in the nearest 5-6 years."
Apart from that, he mentioned that in 2010 TNK-BP will develop the Uvat project in the Tyumen Region with good prospects of oil production enhancement.
Mr. Vekselberg mentioned organic growth of the company's oil production in future, which will not prevent TNK-BP from purchasing new assets. "We are looking for opportunities to purchase assets abroad," said Mr. Vekselberg, referring, in particular, to the plans of the Russian consortium in Venezuela with participation of TNK-BP.
BarentsObserver: Foreign companies lose interest in Russian hydrocarbons
2009-12-11
Russian oil and gas resources are of decreasing interest to foreign companies, Russian Minister of Natural Resources Yuri Trutnev admits. He now intends to liberalize the foreigners’ access to the Russian resources.
Minister Trutnev in an interview with newspaper Vremya Novostey underlines that foreign investments in the oil and gas sector is in Russia’s interests. –All the world is looking for energy resources, including for alternative [energy], but we [instead] put our fields in the bag and do not give anything to anyone, Trutnev said.
He believes the lower level of exploration and field investments eventually could lead to “serious problems” for Russia. According to new figures from the Ministry of Natural Resources, the level of hydrocarbon exploration has over the last year dropped ten percent, reports.
Money Morning: Why Russia’s Oil Fields Will Soon Be Crawling with Westerners
By Kent Moors, Ph.D., Contributing Writer, Money Morning
Western oil majors are about to help Moscow solve its energy problem. And that could be a boon for investors.
The traditional Russian oil fields in Western Siberia are well past peak production. Some satellite fields in the region remain, but the extraction gains will be marginal.
My sources in Russia's Ministry of Natural Resources and Ecology (MNRE), the government entity responsible for distribution and oversight of development leases, now acknowledge that the country's overall crude oil production could decline by more than 7% over the next several years.
That's a staggering total. And the Kremlin is not about to accept such an extraction rate decline, especially now that prices are rebounding on the global market.
Officials from Prime Minister Vladimir Putin on down are pushing a bold plan to move into three regions known to have significant resources:
• North of the Arctic Circle.
• Eastern Siberia.
• Out Onto the Continental Shelf.
All three are very expensive areas in which to work and will require billions in exploration and production (E&P), capital expenditures (capex) and new technology.
That has led to Russian administrators talking for the first time in years about allowing more foreign investment into the sector. There will be opportunities for production companies, especially those prepared to develop smaller fields (those below the "strategic" level of 50 million tons, or 365 million barrels, for which new laws require Russian majority ownership).
But the real opportunities will emerge elsewhere.
A Ton of New Business for Oil Field Services
To pull off this massive production shift into regions that are difficult to develop, Russia will need considerable help in oilfield services (OFS) - everything from seismic and geological to drilling, well maintenance and workover provisions, wellhead operations and technical support.
As Moscow readies major new pipeline systems to the Pacific coast - bypassing the Bosporus and increasing flow to expanding port facilities on the Black and Baltic Seas - it needs to rev up new production as quickly as possible. That will require OFS provision.
A lot of it.
Russia will experience significant financial and credit constriction well into 2010, since the international crisis hit there later than elsewhere. Thereafter, however, new production will need to be coming on line, especially since Moscow depends upon the export of hydrocarbons for over 60% of its budget revenue.
That sets the stage for a dramatic increase in OFS demand.
In fact, the Russian OFS sector will experience significant growth over the next decade, clearly outstripping the ability of domestic providers to keep pace. This has already surfaced as a problem in the Duma, the national parliament.
Some political forces are worried that actions of the last several years, in which the state progressively came to take control of oil and gas production within the country, may be undone by an inability to service the government-owned and administered extraction companies. As a consequence, some legislative moves have begun to limit foreign access to the Russian OFS market.
Some politics will play out here, but more bark than bite.
The Kremlin reaction has been cool to such moves in the legislature. Officials recognize that they need the technology and cannot match that need with domestic services in the short-term. Nor do they have the investment available to develop the OFS sector in a few years.
New programs have been introduced to increase local production of rigs and offshore platforms, and the country retains much of its OFS infrastructure. But the manufacturing steps are too little, too late, and the infrastructure is hardly competitive with the technical sophistication of outside providers. The Russian government and the major operating companies it controls - Rosneft Oil Co. (PINK: RNFTF) and OAO Gazprom (OTC ADR: OGZPY) - require foreign help.
Western OFS Providers See the Major Opening
The Russian approach now is to favor outside service companies while discouraging majority ownership of the actual production.
That does not help a major vertically integrated oil company seeking reserves to book. But it fits quite nicely with how OFS providers operate. The know-how and technical base being brought in will also help the Russian sector upgrade its own activities. Given the increasing need for OFS services, the risk of government barriers to foreign involvement is quite low.
Major companies such as U.S.-based Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI) have been in Russia for some time and have developed a market presence to benefit from the sector expansion. Foreign companies in the aggregate currently do not control more than 15% of the total Russian OFS market. That means there is upward movement remaining before any political reaction becomes a genuine issue.
Even then, acquisitions of local companies may improve the situation even more. Once we reach this time next year, as one of my Russian contacts recently told me, "there will be more business than the companies can handle."
Investors can ride the outside companies into the market. However, there is another way to participate in the moves to come.
A significant consolidation has been underway in the Russian OFS sector. Two large and rapidly expanding holdings have emerged. Both have undergone initial public stock offerings (IPOs) on the London Stock Exchange (LSE), where they now regularly trade. This is becoming the norm among developing market oil-related companies, with London emerging as the preferred place to raise operating cash.
Eurasia Drilling Co. Ltd. and Integra Group together now control the largest OFS base in Russia. They are certain to become involved in additional merger-and-acquisition (M&A) activity, become preferred joint venture partners for foreign players and continue to receive governmental preferential treatment (since the Kremlin wants to consolidate as much ongoing OFS work as possible in Russian hands).
Rather than competing with them, there is considerable flexibility developing. As a British OFS colleague of mine observed during a Moscow chat last month, "there are no Russian companies capable of servicing the sector, regardless of how large those companies become."
Gazprom
Barentsobserver: Gazprom progress in Yamal
2009-12-11
The development of infrastructure and field operations in the Yamal Peninsula has reached a level, which makes possible a launch of the Bovanenkovo field ahead of schedules, Gazprom deputy Aleksandr Ananenkov said when visiting the gas-rich area this week.
Mr. Ananenkov, who today headed a field development meeting in Labytnangi (Nenets Autonomous Okrug), believes the project has progressed to such a level that production could start up ahead of schedules, it that should be necessary, a press release from Gazprom reads.
Gazprom earlier this year announced that it was postponing the launch of the giant Bovanenkovo project because of the increasingly strained economical situation. The company has experienced a major cut in gas demands following the financial crisis, and been forced to make subsequent reductions in production.
As reported by BarentsObserver, the revised start-up time for the project is 2012.
In the meeting in Labytnangi, Mr. Ananenkov said that all nine project drilling rigs will be ready for operations already in the beginning of 2010. Also the Obskaya-Bovanenkovo railway line will be completed in early 2010.
Of the 1100 km long Ukhta-Bovanenkovo gas pipeline, a total of 340 km have been built, and that includes the about 70 km distance across the Baydarata Bay, the Gazprom representative said.
Bloomberg: Gazprom May Delay Yamal Start
11 December 2009
Bloomberg
Gazprom may start production on the Yamal Peninsula north of the Arctic Circle earlier than planned, depending on demand, Gazprom deputy CEO Alexander Ananenkov said Thursday.
Construction at Bovanenkovo, which will be the first field to start pumping gas, is advancing “at a fast rate,” Ananenkov said in an e-mailed statement. Seven out of nine drilling rigs delivered to the site are already operational, the company said.
Gazprom said in June that output from Bovanenkovo may be delayed by a year to the third quarter of 2012 as the global recession eroded demand. The company now expects gas consumption in Europe to pick up in two to three years, deputy CEO Alexander Medvedev said in November.
Output from the Bovanenkovo deposit alone may eventually reach 140 billion cubic meters a year, equivalent to about 25 percent of Gazprom’s total output in 2008, the company estimates.
The International Energy Agency warned last month of an “acute glut” in gas supply worldwide in the next few years because of rising production in the U.S. and Canada. Supplies are set to outpace annual demand growth of 2.5 percent between 2010 and 2015, the IEA said in its annual World Energy Outlook. Total, Europe’s third-largest oil and gas company, said Dec. 8 that global demand for gas will recover to precrisis levels by 2015.
VTB Capital: Gazprom might double dividend payments in 2011
VTB Capital
December 11, 2009
2011 dividends might amount to USD 0.14 per share - but the company is still not a 'dividend player'
News: According to Vedomosti, Gazprom's budget supposes dividend payments of RUB 44bn (USD 1.5bn) in 2010, RUB 97bn (USD 3.2bn) in 2011 and RUB 112bn (USD 3.7bn) in 2012. The paper speculates that the budgeted dividends amount to 17.5% of the company's estimated RAS net profit in the respective periods.
Our View: Should the company pay the dividends stated in the article, it would imply per share dividend yields of USD 0.06 in 2010, USD 0.14 in 2011 and USD 0.16 in 2012. While the dividend payment dynamics might be promising, at the current price this still implies minor dividend yields (1.1% in 2010, 2.6% in 2011 and 2.9% in 2012). Thus, we believe that Gazprom is not a 'dividend player' and in order to receive a solid dividend income it would be better to look at the preferred shares of TNK-BP and Surgutneftegaz. Lev Snykov
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