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Russia 091008
Basic Political Developments Reuters: PRESS DIGEST - Russia - Oct 8 News.am: CIS Summit opens in Chisinau Moldpress: Chisinau hosts summit of CIS foreign ministers RIA: Lavrov to attend meeting of CIS ministers in Chisinau Itar-Tass: CIS FMs to gather in Chisinau to discuss prep for CIS summit Upstreamonlie: Russia supports dollar for trade debate RIA: Russia says missile defense buildup affects disarmament efforts The Georgian Times: Clinton raps Russian failure to prosecute journalists` killers Itar-Tass: RF ready to assist Iraq with restoration works Reuters: Kazakhstan committed to WTO entry with Russia BBC: UK minister meets Moscow relative RIA: British minister discovers long-lost great aunt in Russia RIA: Russian warships resume patrols off Somali coast UPI: Saudis consider Russian air defense system RIA: Russia has 5 arms deals with Libya – Rosoboronexport Defence.professional: Russia's Rosoboronexport Expects Breakthrough in Arab
Arms Market RIA: Final trials of Russia's Nerpa sub threatened by lack of funds Barentsobsrver: Sub modernization delayed Barentsobserver: Sub-fire in Severodvinsk RIA: Russia Airborne Troops chief gets reprimand for abuse of office Barentsobserver: New Commander of the Northern Fleet? Itar-Tass: Four foreign poaching boats detained off Sakhalin coast Georgian Daily: Moscow’s Plans for Storing EU Nuclear Wastes Disturbing on
Many Grounds Russia Today: Russian race crime role reversal - ethnic group awaits verdict Georgian Daily: Migrants from Central Asia and Caucasus Returning to Islam as
a Result of Their Experiencesin Russia Itar-Tass: Serviceman of DefMin injured in attack in Chechnya Itar-Tass: Gunman killed in shootout in Chechnya The Moscow Times: Dzhabrailov Quits as Senator 2 Years Early RIA: Ingush president says "worried" by lack of militant activity Itar-Tass: Two killed in bomb blast at railway station in Sverdlovsk region Emportal: Moscow and Serbia, Belgrade and Russia - Social and Political
Connections from 16th to 18th Century Bloomberg: Russia’s Economic Decline Forces Putin to Walk Capitalist Path FT.com: Reshuffle signals Medvedev’s confidence - Dmitry Medvedev has taken
a step towards putting his own stamp on the Kremlin with the appointment of two speechwriters.
Russia Today: Rusnano looking to place Russia on the high technology cutting edge
Reuters: Reform Tsar Struggles to Take Russia Into Nanoworld NPR: Russia's Motor City Braces For Widespread Layoffs
The Independent: Russian teens to be tested for drugs at school RIA: Moscow land transport to become disabled-friendly in 3 years Russia Profile: Business of Letters - Statistics Show that the Russian Book Market
Is Growing while the Number of Consumers is Shrinking Christian Today: Baptist leaders fined for street evangelism in Russia
National Economic Trends RBC: Russia's budget receives less tax allocations Interfax: Russian international reserves down $1.2 bln in week Agrimarket: Grain harvest in Russia to exceed the level of 90 mln tones Agrimarket: Russia exported nearly 9.8 mln tonnes of grains during 8 months of
2009 Businessneweurope: MOSCOW BLOG: Its official - the crisis is over
Business, Energy or Environmental regulations or discussions Bloomberg: OAO Gazprom, Evraz Group SA: Russia’s Stock-Market Preview Bloomberg: Russian Stocks Rally Most in World, Led by Raspadskaya, Sberbank Reuters: Russian markets -- Factors to Watch on October 8 Reuters: Russia gold output seen rising 11.1 pct – lobby Reuters: Chinalco could participate in RUSAL's HK IPO-paper UralSib: Coking coal price to reach $90/ton in 4Q09 The Moscow Times: RZD to Create New Company Magnit Gets Regulator OK To Offer More Shares Outside Russia RIA: Russia set to ban inefficient light bulbs from 2014 The Moscow Times: Billionaire Eyes Heating Reform - Prokhorov, who controls
25 power stations in the European part of the country, told The Moscow Times that urgent changes in the state’s approach toward the sector were needed.
Activity in the Oil and Gas sector (including regulatory) RIA: LUKoil ready to participate in Qurna oil project on Iraqi terms PR-Inside: Sakhalin II Project: Sakhalin Energy Signs an Additional Project
Finance Contract Ukrainian Journal: Government to intervene in dispute between Lukoil and
UkrTransNafta Petroleum Economist: Ukraine: EU needs no new pipelines; no dispute with
Gazprom expected Easy Bourse: 2nd UPDATE: New German Grid Legislation May Delay Nord
Stream VTB: Nord Stream project faces difficulties - new regulations in Germany limit
the profitability of gas pipeline operators in the country to 5% Reuters: UPDATE 2-GDF Suez hopes to enter Nord Stream by year end RBC: Transneft to launch bond flotation Alfa: Alliance Oil Group filed an application for $800 mln in credit from
Vnesheconombank Oila and Gas Eurasia: TNK-BP Leads Lisichansk Refinery to European Standards
Gazprom RIA: Gazprom chief negotiates terms of joint venture in Bolivia Itar-Tass: Gazprom interested in gas projects in Latin America RBC: Gazprom not to cut gas supplies to Ukraine in 2010 Kyiv Post: Gazprom won't reduce gas supply to Ukraine in 2010 Ukrainian Journal: Russia’s Gazprom vows to enforce agreement on 2010 natgas
purchases Russia Today: Naftogaz and Ukraine skating on thin ice over next Gazprom
payment Oil and Gas Eurasia: Russian NOCs abroad: Gazprom in Libya Oil and Gas Eurasia: Gazprom CEO Alexei Miller about Security of Supply and
Related Investments
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Full Text Articles
Basic Political Developments
Reuters: PRESS DIGEST - Russia - Oct 8http://www.reuters.com/article/rbssIntegratedOilGas/idUSL810110020091008
Thu Oct 8, 2009 3:09am EDT
MOSCOW, Oct 8 (Reuters) - The following are some of the leading stories in Russia's newspapers on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.
KOMMERSANT
www.kommersant.ru
- More than 500 people gathered for a rally in central Moscow on Wednesday to commemorate prominent journalist and outspoken Kremlin critic Anna Politkovkaya murdered three years ago, the paper writes.
- Officials in St. Petersburg plan to earn 6 billion roubles ($201.5 million) by selling real estate, including historical buildings, the daily writes.
- Kazakh state oil firms KazMunaiGas [KMG.UL] is seeking a strategic partner to invest in its Pavlodar oil refinery in return for guaranteed supplies of crude, in a deal that might possibly interest Russian companies such as Gazprom Neft (SIBN.MM: Quote, Profile, Research, Stock Buzz), the daily reports.
VEDOMOSTI
www.vedomosti.ru
- Russia's federal budget has not allocated money for the construction of Moscow's metro in 2010, the paper writes, citing officials.
- For the first time since 1998, imports of pharmaceuticals to Russia dropped by $460 million to $ 4.09 billion in the first half of 2009, the paper says citing analysts.
News.am: CIS Summit opens in Chisinau
http://news.am/en/news/6068.html
11:22 / 10/08/2009
The CIS Summit is to be opened in Chisinau, Moldova, today. The Presidents of Kazakhstan, Tajikistan and Turkmenistan are not participating in the Summit. The first two states will be represented by the Prime Ministers, and the third by the Vice-Premier. As regards Uzbekistan, it may be represented by the Uzbek Ambassador.
Ukrainian President’s Victor Yushchenko’s arrival in Chisinau has not yet been specified. The Ukrainian leader announced his wish to take part in the Summit.
The Armenian, Azerbaijani and Russian Presidents are to hold a meeting during the Summit to discuss the Nagorno-Karabakh peace process.
The key topic of the Summit is surviving the crisis at the regional and national levels.
The last CIS Summit was held in Chisinau on October 7, 2002.
Moldpress: Chisinau hosts summit of CIS foreign ministers http://www.moldpres.md/news/default.asp?Lang=en&ID=118610
Oct. 8, 2009 / [7361]
Chisinau, 8 October /MOLDPRES/ - The heads of diplomacies of all the 11 member states of the Commonwealth of Independent States (CIS) are expected in Chisinau today to participate in the summit of the CIS Council of Foreign Ministers in the afternoon.
According to the Foreign and European Integration Ministry, all the CIS foreign ministers have already arrived in Chisinau, except for the ones from Armenia, Kazakhstan and the Russian Federation. The latter are to arrive in the first half of the day, with the summit starting after 13:00.
The summit's agenda covers 20 up-to-date issues from various sectors. A special subject is Georgia's further cooperation with the commonwealth, after it gave in its CIS membership on 18 August 2009.
To ensure security and public order during the summit, the road traffic will be restricted in the centre of Chisinau, with the central zone being closed.
On 9 October, Chisinau will host the summit of CIS heads of states, which is expected to be attended by seven out of 11 CIS presidents. The other countries will be represented by prime ministers. Moldova holds the CIS chairmanship this year and is to hand it to the Russian Federation.
RIA: Lavrov to attend meeting of CIS ministers in Chisinauhttp://en.rian.ru/exsoviet/20091008/156387428.html
00:5908/10/2009
MOSCOW, October 8 (RIA Novosti) - Russian Foreign Minister Sergei Lavrov will pay a visit to Moldova on Thursday to meet with his counterparts from the Commonwealth of Independent States (CIS).
About 20 various multilateral cooperation issues are on the meeting's agenda, including those concerning further cooperation in "enhancing security and increasing the efficiency of joint border [protection] policies," the Russian Foreign Ministry said in a statement.
The ministers would also focus on migration issues and coordinate forthcoming top-level CIS events and meetings.
Itar-Tass: CIS FMs to gather in Chisinau to discuss prep for CIS summithttp://www.itar-tass.com/eng/level2.html?NewsID=14410137
08.10.2009, 05.16
MOSCOW, October 8 (Itar-Tass) - Russian Foreign Minister Sergei Lavrov is on Thursday leaving for a two-day working visit to Chisinau, which is hosting a meeting of the Council of CIS Foreign Ministers.
The CIS foreign ministers will gather for a meeting in the Moldovan capital on October 8 to discuss the preparation for the CIS summit, a source at the Moldovan Ministry for Foreign Affairs and European Integration told journalists.
The foreign ministers of eleven CIS countries will arrive in Chisinau for a meeting of the Council of Foreign Ministers of the CIS countries. Foreign Minister Sergei Lavrov will represent Russia.
The ministers will discuss about 20 issues. The Council of the CIS Foreign Ministers is to pass decisions on the internal life of the CIS, discuss ways of strengthening cooperation
in the settlement of migration processes and prevention of drugs trade as well as interaction within the CIS in increasing security and raising the efficiency of joint border policy.
The CIS foreign ministers will discuss a draft address of the Commonwealth leaders to the CIS peoples and the world public in connection with the celebrations of the 65th anniversary of Victory in the Great Patriotic War in 2010 and the status of veteran organizations in CIS countries.
The Council of the CIS foreign ministers will also consider a bloc of humanitarian and social issues. A plan for interaction in expanding the application of remote educational technologies will be submitted for the Council’s consideration. Besides, the CIS foreign ministers will work out additional measures in the provision of IT support for educational systems in the CIS territory.
Multilateral cooperation with Georgia within the CIS will be a separate item for discussion. Georgia suspended its CIS membership on August 18.
The Council of Foreign Ministers will discuss the CIS legal framework and will approve the program of a summit of the CIS heads of state to be held in Chisinau on October 9.
Upstreamonlie: Russia supports dollar for trade debatehttp://www.upstreamonline.com/live/article195217.ece
By Upstream staff
Russia’s Kremlin showed signs of encouraging a debate on dropping the US dollar as the main currency for oil trade today, although it said it had not heard of any talks so far.
"This theme has every right to exist, but I'm not aware of any concrete talks about this subject," Reuters cited economic aide Arkady Dvorkovich as saying to RIA news agency.
Thursday, 08 October, 2009, 08:37 GMT | last updated: Thursday, 08 October, 2009, 08:37 GMT
RIA: Russia says missile defense buildup affects disarmament effortshttp://en.rian.ru/world/20091008/156388642.html
04:1708/10/2009
NEW YORK, October 8 (RIA Novosti) - Unilateral buildup of strategic missile defense complicates the process of nuclear disarmament, Russia's envoy to the UN, Vitaly Churkin, said on Thursday.
The U.S. is currently creating its strategic missile defense system, and has deployed missile defense bases and radars in Alaska and California, stationary radars in Greenland, the U.K. and Japan. It also has a number of sea-based radar systems.
U.S. President Barack Obama in September delayed the deployment of a radar in the Czech Republic and interceptor missiles in Poland until 2015. According to the Obama administration's new plan, land-based missile-defense shields will not be implemented before 2015. Sea-based defenses will be operating in the Mediterranean up to 2015.
"It is hard to imagine a situation, in which a significant reduction of nuclear arms is made simultaneously with missile defense buildup, designed to give military advantage to one of the parties," he said at a session of the UN General Assembly's committee on disarmament and international security.
Churkin reiterated that "strategic defensive and strategic offensive weapons are intertwined."
"That is why we continue to consistently oppose unilateral efforts in missile defense buildup. We are convinced that such actions seriously complicate progress in nuclear disarmament," Churkin said.
U.S. President Barack Obama and Russian President Dmitry Medvedev agreed in July in Moscow on the outline of a deal to replace the 1991 Strategic Arms Reduction Treaty (START-1), which expires on December 5, including cutting their countries' nuclear arsenals to 1,500-1,675 operational warheads and delivery vehicles to 500-1,000.
Russia says the link between strategic defensive and offensive weapons should be fixed in a new Russian-U.S. strategic arms reduction treaty, which is currently being drafted.
Churkin said that while preparing the treaty "we presume that enhancing the nuclear non-proliferation regime and stepping up the nuclear disarmament process are possible only amid strategic stability and equal security guarantees."
According to a report published by the U.S. State Department in April, as of January 1 Russia had 3,909 nuclear warheads and 814 delivery vehicles, including ground-based intercontinental ballistic missiles (ICBM), submarine launched ballistic missiles (SLBM) and strategic bombers. The same report said the United States had 5,576 warheads and 1,198 delivery vehicles.
He added that Russia was set to submit to the General Assembly a draft resolution on confidence building measures concerning in military space activities.
"The Russian side is firmly convinced that the space should not become the arena of a military conflict," he said.
Speaking about the Conventional Forces in Europe (CFE) treaty, on which Russia imposed a unilateral moratorium in December 2007, the Russian diplomat said the West should undertake specific obligations if it wants the moratorium to be lifted.
Russia has repeatedly said it will resume its participation in the CFE if NATO countries ratify the adapted version of the treaty, signed on November 19, 1999 and so far ratified only by Russia, Ukraine, Belarus and Kazakhstan.
"It looks like our Western partners still expect Russia to make concessions in exchange to their promises to consider our concerns in future. We presume that instead of vague promises, the sides should make solid and explicit obligations in order to break the deadlock in the CFE talks," Churkin said.
Moscow considers the original CFE treaty, signed in December 1990 by 16 NATO countries and six Warsaw Pact members, to be discriminatory and outdated since it does not reflect the dissolution of the Eastern Bloc, the breakup of the Soviet Union, or recent NATO expansion.
Among other issues of security and stability in Europe, Churkin mentioned a pan-European security pact, proposed by the Russian President Dmitry Medvedev in June 2008.
"Russia invites all states and organizations, acting on the European continent, to take part in the joint work on the treaty. We need to agree on clear, modern and, above all, effective rules of the game," he said.
The Georgian Times: Clinton raps Russian failure to prosecute journalists` killers
http://www.geotimes.ge/index.php?m=home&newsid=18645
Hillary Clinton, set to make her first visit to Moscow next week as US secretary of state, on Wednesday rapped Russia`s failure to bring to justice the killers of journalists and rights activists.
The State Department said Clinton, who issued the critical statement on the third anniversary of the unsolved slaying of journalist Anna Politkovskaya, would raise US concerns about such violence with her Russian interlocutors.
Analyst Sarah Mendelson said meanwhile that President Barack Obama`s administration faces a hurdle to its goal of resetting ties with Russia because of what she called a `culture of impunity.`
In her statement, Clinton expressed alarm about a trend in which she said the killers of only one of 18 journalists murdered in Russia since 2000 have been convicted.
She mentioned the unsolved case of Politkovskaya, an investigative journalist for Novaya
Gazeta newspaper, who was shot outside her apartment building on October 7, 2006, and that of Paul Klebnikov, editor of the Russian edition of Forbes magazine who was gunned down outside his Moscow office on July 9, 2004.
She also mentioned the unsolved murder of Natalya Estemirova, a 50-year-old human rights activist, was shot dead after being kidnapped from outside her home in the Chechen capital Grozny on July 15.
`The failure to bring to justice the killers of these journalists undermines efforts to strengthen the rule of law, improve government accountability, and combat corruption,` Clinton said.
Rustavi2 2009.10.08 10:54
Itar-Tass: RF ready to assist Iraq with restoration works
http://www.itar-tass.com/eng/level2.html?NewsID=14409675&PageNum=0
07.10.2009, 20.58
CAIRO, October 7 (Itar-Tass) - Russia is ready to assist Iraq with restoration works, Russian Deputy Foreign Minister Alexander Saltanov said.
During a meeting with Iraqi Foreign Minister Hoshyar Zebari on Wednesday, Saltanov said, “Russian companies and agencies are ready to continue the work on restoring Iraq.”
“My visit is aimed at developing bilateral relations and continuing discussions that were started by Iraqi Prime Minister Nuri Al-Maliki in Moscow in April and by Russian Energy Minister Sergei Shmatko in Baghdad last month,” the Russian deputy foreign minister said.
Earlier, he conferred with the Iraqi prime minister who showed interest in developing cooperation with Russia in the energy and oil sector, as well as military-technical interaction.
Reuters: Kazakhstan committed to WTO entry with Russiahttp://in.reuters.com/article/worldNews/idINIndia-42995020091008
Thu Oct 8, 2009 8:43am IST
By Doug Palmer
WASHINGTON (Reuters) - Kazakhstan is committed to joining the World Trade Organization as part of a free-trade zone with Russia and Belarus, despite the confusion that has caused, the country's chief WTO negotiator said on Wednesday.
"That's the aspiration to which we are moving," Zhanar Aitzhanova, Kazakhstan's vice minister for industry and trade told Reuters in an interview.
But she stopped short of predicting when all three countries would be in a position to join.
"One thing I have drawn from my experience is never to make prognosis about the date of accession," Aitzhanova said.
"Not everything depends on acceding countries. A lot depends on our counterparts in the WTO accession process, such as the United States and the European Union. I think many things will depend on their political will too," she said.
All three former Soviet republics have been negotiating to join the WTO since the 1990s without success.
At a June 9 press conference with his Kazakh and Belorussian counterparts, Russian Prime Minster Vladimir Putin said the three countries would seek to join the world trade body as a free trade zone.
The move surprised both U.S. and European Union negotiators who days before had hoped at least Russia's longtime bid could be completed this year.
The decision added a new level of complexity to the talks, especially since all three countries signed an agreement saying they would join at the same time.
TWO TRACK PROCESS
But Aitzhanova said the move was the logical outgrowth of the three countries' decision to form a customs union beginning January 1 with a common external tariff, uniform customs procedures and a governing supra-national commission.
"There are almost 12 customs unions operating within the World Trade Organization. They're not contradictory but we have to agree on the terms that will be acceptable to World Trade Organization members," she said.
She described a two-track negotiating process for Russia, Kazakhstan and Belarus to join the WTO.
The three countries will negotiate as a customs union on issues such as tariffs and import licensing procedures where the new commission will have competence.
"But everything outside -- services, intellectual rights, sanitary and phytosanitary issues and technical regulations -- we'll be continuing our country-based negotiations and we'll have country-based commitments," she said.
Still, the goal of all three joining at the same time could be tricky because Russia is farther along in its negotiations than Kazakhstan and Belarus.
"We have to narrow the gap and Belarus has to narrow the gap in our accession speeds," Aitzhanova said.
Russia, Belarus and Kazakhstan are members of the Eurasian Economic Community along with Tajikistan and Kyrgyzstan, who have been invited to join the free-trade zone.
Forming a customs union with Russia and Belarus creates a single market of more than 160 million people and makes Kazakhstan a more attractive investment opportunity for foreign companies, Aitzhanova said.
(Reporting by Doug Palmer; Editing by Cynthia Osterman)
BBC: UK minister meets Moscow relative http://news.bbc.co.uk/2/hi/uk_news/8295394.stm
By Rupert Wingfield-Hayes BBC Moscow correspondent
Britain's young minister for energy and climate change, Ed Miliband, had come to Russia to talk about global warming. Little did he know he would end up meeting a long-lost member of his family.
It came in the middle of a phone-in programme on the popular Moscow radio station "Ekho Moskvy".
As the fresh-faced Mr Miliband prepared to answer questions on CO2 emissions and melting permafrost, the voice of an elderly woman came on the line.
"I am Sofia Davidovna Miliband, I am your relative; I am the only one left."
As the British minister looked on bemused, the host of the show cut her off - clearly worried she was a hoaxer.
But it was no hoax.
Iran expert
The British ambassador and dozens of invited guests (and the BBC) were left stranded at an embassy reception as Mr Miliband raced off to meet his long-lost kin.
It turns out that Sofia Davidovna Miliband is an 86-year-old academic.
She was once a leading expert on Iran at the Moscow School of Oriental Studies.
“ I've always slightly wondered about her ever since I was a kid, it was amazing for me to come face to face with her ” Ed Miliband
After much translation and a call to his mother in the UK, the British minister - whose brother David, is the UK's foreign secretary - worked out that his great-great grandfather was the brother of Sofia's grandfather.
Both of them had been born in the Jewish quarter of Warsaw in Poland.
Ed Miliband's grandfather fled Poland in the 1920s and ended up in Belgium. He fled again ahead of Hitler's invading army and made it to Britain on forged papers with his son, Ed and David Miliband's father.
Unknown to them another part of the Miliband clan had come east to Moscow.
Sofia Davidovna reportedly told him she was delighted.
She has no children and thought she was the last of the Milibands.
Little did she know that in faraway England there are not one, but two of them in the British cabinet.
Mr Miliband told BBC Radio 4's PM programme his relative was "an amazing woman".
"I did sort of vaguely know when I was a boy about her existence. The way I know about it, if you look on a library computer her name pops up.
"I've always slightly wondered about her ever since I was a kid, it was amazing for me to come face to face with her."
On meeting her, he said: "I think she was much less interested in what David or I do than in making the family connection and realising she wasn't the last Miliband around and that there was a branch of the family in Britain."
RIA: British minister discovers long-lost great aunt in Russiahttp://en.rian.ru/world/20091008/156392462.html
12:1108/10/2009
LONDON, October 8 (RIA Novosti) - British minister for energy and climate change Ed Miliband unexpectedly discovered a long-lost Russian relative during his recent visit to Moscow, British media reports have said.
Sofia Davidovna Miliband, 86, called the popular Moscow radio station Ekho Moskvy while Miliband was on air on Tuesday.
Miliband was just preparing to answer a journalist's question on CO2 emissions and melting permafrost, when a voice came on the line, saying: "I am Sofia Davidovna Miliband, I am your relative; I am the only one left," the BBC reported.
Both Miliband and the host of the show suspected a hoax. To resolve the issue, Miliband called his mother, who set the record straight.
Ed Miliband's great-great-grandfather and Sofia Miliband's grandfather were brothers, who, together with their families, lived in Warsaw in the early 20th century. Ed Miliband's grandfather Samuel left Poland for Belgium in 1920, and then, during the WWII Nazi occupation, moved to Britain together with his son Ralf, Ed Miliband's father.
Meanwhile the other half of the Miliband clan had come east - to Moscow.
Miliband found time to meet with his long-lost great aunt. It turned out that Sofia Davidovna was once a leading expert on Iran at the Moscow School of Oriental Studies. She has no children.
The minister told the BBC that his relative was "an amazing woman".
"I did sort of vaguely know when I was a boy about her existence," he said, adding "I've always slightly wondered about her ever since I was a kid, it was amazing for me to come face to face with her."
Sofia Davidovna will not have to wait long to meet another member of the Miliband clan. Ed's older brother David, the British foreign minister, is due to visit Moscow in the near future.
RIA: Russian warships resume patrols off Somali coasthttp://en.rian.ru/mlitary_news/20091008/156390289.html
09:1108/10/2009
VLADIVOSTOK, October 8 (RIA Novosti) - A Russian Pacific Fleet task force has resumed anti-piracy patrols in the Gulf of Aden after a five-day visit to the Seychelles, a fleet spokesman said on Thursday.
The task force - comprising the Admiral Tributs destroyer with two helicopters, a salvage tug, a tanker, and a naval infantry unit - escorts commercial ships, conducts aerial reconnaissance, and searches suspected pirate vessels.
"The Pacific Fleet's task force finished a visit to the Seychelles late on Tuesday and has already resumed patrols in the Gulf of Aden. It will soon escort another convoy of commercial ships from various countries protecting them from pirate attacks," Capt. 1st Rank Roman Martov said.
During the visit to the Seychelles, commanding officers from the task force met with the country's president, James Michel, who praised the efficiency of the Russian Navy in conducting anti-piracy missions.
Russia joined international anti-piracy efforts off Somali coast in October 2008.
Three Russian warships have so far participated in the mission - the Baltic Fleet's Neustrashimy (Fearless) frigate, and the Pacific Fleet's Admiral Vinogradov and Admiral Panteleyev destroyers.
The Pacific Fleet's warships have escorted over 100 Russian and foreign commercial ships and prevented several pirate attacks since January 2009.
The fleet will send a fourth task force, comprising a missile destroyer, two support ships and a naval infantry unit, to the Gulf of Aden after the Admiral Tributs finishes its mission in the region at the end of October.
There have been around 150 pirate attacks on commercial vessels in the region since the beginning of the year, with over 40 ships captured and at least 270 personnel taken hostage.
UPI: Saudis consider Russian air defense systemhttp://www.upi.com/Business_News/Security-Industry/2009/10/07/Saudis-consider-Russian-air-defense-system/UPI-61311254953058/
Published: Oct. 7, 2009 at 6:04 PM
RIYADH, Saudi Arabia, Oct. 7 (UPI) -- Saudi Arabia is considering buying Russia's most advanced air-defense system in a deal that Riyadh hopes may deter Moscow from selling a similar defense system to potentially nuclear Iran, experts argue.
Experts cited in a string of media reports from the region said Moscow and Riyadh were close to signing a deal on the purchase of Russia's S-400 anti-missile shield. The deal is valued between $4 billion and $7 billion.
The system is the latest version of the S-300 long-range surface-to-air missile system that Russia has been negotiating to sell to Iran.
"The Russians were selling the S-300 in large part because of the money. Now, a larger deal will be made with Saudi Arabia," said a World News report, citing an anonymous Egyptian intelligence official.
Diplomats in the Gulf, however, argue that strong Western and Israeli pressure, capped by a multibillion-dollar deal with Saudi Arabia, may sway Moscow against its initial designs to sell the surface-to-air missiles system to Iran.
Saudi Arabia, influenced by Sunni Islam, is threatened by the growing influence of Iran, dominated by Shiite Islam.
It is considered that the S-400 missile defense deal could be part of a much bigger arms deal with Russia. That would signal Riyadh's break from decades-old dependency on traditional arms supplying nations like Britain, France and the United States.
In late August, for example, Russia's Interfax news agency reported that a $2 billion weapons deal was in the making between Russia and Saudi Arabia. Under the deal, Russia would supply up to 150 combat helicopters, and equal number of T-90S tanks and infantry fighting vehicles.
This week The Financial Times reported that as part of the deal Saudi Arabia demanded guarantees that Russia would not send the S-300 system to Iran.
"The Saudis would rather this weapon system were not sold to Iran or (another possible buyer) Syria," Theodore Karasik, director of research at the Dubai-based think tank, was quoted saying by Russia Today.
It said Tehran was initially interested in the S-300 system in 2005 when a deal was signed. The equipment, however, has yet to reach Iran.
Saudi officials are increasingly worried that Western pressure has failed to sway Iran's development of nuclear know-how. It has repeatedly contested Iran's insistence that its nuclear ambitions are entirely peaceful.
"The pressure from the U.S. is a stick and the huge weapons deal prepared by the Saudis is a carrot," Director of Center for Analysis of Strategies and Technologies Ruslan Pukhov told Interfax news agency. "We all know Saudi Arabia buys weapons as a 'bribe' to the world's great powers in exchange for support," he added.
RIA: Russia has 5 arms deals with Libya – Rosoboronexporthttp://en.rian.ru/mlitary_news/20091007/156383869.html
18:0707/10/2009
TRIPOLI, October 7 (RIA Novosti) - Russia's state arms exporter Rosoboronexport said on Wednesday that Russia has five ongoing contracts with Libya in the sphere of military cooperation.
"The contracts involve military equipment for the Ground Forces and the Navy, including the modernization of T-72 tanks, and the general supply of spare parts for the above-mentioned branches of the Armed Forces," said Alexander Mikheyev, deputy general director of Rosoboronexport.
Mikheyev, who is heading the Russian delegation at the LAVEX-2009 air show in the Libyan capital, Tripoli, said Libya has already provided guarantees on payments under at least three contracts.
"We are also participating in a Libyan tender on the delivery of aircraft and air defense systems," he said.
According to the official, the Libyan military wants to have only the most advanced military equipment because neighboring countries, including Egypt, have recently bought new weaponry and strengthened their defense potentials.
Rosoboronexport General Director Anatoly Isaykin earlier said that Russia had signed two arms deals with Libya in 2009 and was working on new contracts for the supply of Russian weaponry to the North African nation.
The 4th Arab-African Aviation Exhibition and Conference - LAVEX-2009 - runs October 5-8.
Defence.professional: Russia's Rosoboronexport Expects Breakthrough in Arab Arms Market
http://www.defpro.com/news/details/10335/
11:13 GMT, October 7, 2009 Participation of the Rosoboronexport delegation in the Third Libyan Aviation Exhibition, LAVEX 2009, to be held from 5 until 8 October in Libya and to be accompanied by the 3rd Pan Arab-African Aviation Conference, will promote the systematic expansion of defence cooperation between Russia and Libya, and Russia and other states of the region.
“We expect significant shifts towards Russian weapons in regional arms markets in the near future,” Rosoboronexport Deputy Director General and head of the delegation Alexander Mikheev said. “Interest in Russian combat aircraft, air defence systems, and training aids, as well as other weapons, materiel, and special equipment grows, and we hope to secure new and to a certain extent breakthrough contracts.”
The Rosoboronexport exhibition stand is expected to be visited by officials from Libya, Algeria, Egypt, the UAE, and many other countries. Upcoming meetings will focus on a
wide scope of issues, ranging from procurements of cutting-edge combat systems to upgrades of arms and materiel delivered earlier. Russian weapon systems have been in service throughout the region for a long time and are highly appreciated. For instance, combat tactics of the Libyan Air Force are based on the employment of Russian- and Soviet-made hardware, while many Libyan pilots and technicians were trained in Soviet and Russian colleges. At the present time it is an excellent basis for developing close defence relations, inherent in true partners, even further.
The Rosoboronexport Corporation is a traditional participant in the Libyan air show. The Tripoli-based LAVEX 2009 Exhibition will display a wide range of Russian aircraft, weapons, air defence systems, and other hi-tech products, which are of great interest to Middle East and North African countries.
Special interest is generated by the Su-35 multi-role super-manoeuvrable fighter, boasting fifth-generation technologies that ensure its superiority over its rivals. The Su-35 features state-of-the-art avionics and a phased-array radar, capable of detecting targets at a greater range, tracking up to 30 targets, and simultaneously engaging eight targets. The aircraft’s super-manoeuvrability is provided by the new powerful thrust vector control (TVC) engine. At the same time in order to establish air superiority and attack any air-, ground-, and sea-based targets in any conditions by day and night, the aircraft is capable of carrying an awesome combat load of up to eight tons of guided and unguided air weapons, attached to 12 external stations.
The Yak-130 combat trainer, which will soon enter service with the Russian Air Force, is also the focus of attention of arms procurement experts. The aircraft will be employed to train pilots for Su- and MiG-family fighters, including cutting-edge Su-35s and MiG-35s. Given outstanding flight characteristics, the reliable electrical fly-by-wire system, and the advanced glazed cockpit, the Yak-130 ensures efficient and safe training in piloting modern and advanced aircraft, including foreign ones. The combat trainer is capable of operating from unpaved airfields. It has a service life of 10,000 flying hours, while its airframe is designed to remain operational for at least 30 years. In addition to that the Yak-130 can carry out air strikes in the course of low-intensity conflicts.
The Kamov Ka-52A Alligator reconnaissance/attack helicopter also generates considerable interest. In addition to impressive combat capabilities of an attack helicopter, the Ka-52A rotary-wing aircraft can fly reconnaissance and target designation missions, including laser illumination of targets, in the interests of interacting attack aircraft and ground-based weapon systems. The Alligator is fitted with the most advanced target detection and designation systems and is capable of carrying out automated low-level flights. In addition to that the Ka-52A can be employed to train and maintain flight skills of helicopter jockeys instead of a special training helicopter of the same type.
Russia is a traditional leader in developing and manufacturing air defence systems, which have time and again proved their high efficiency in providing area and point air defence. The cutting-edge S-400 Triumf long-range surface-to-air missile (SAM) system, designed to counter all existing and future airborne threats, is one of the most efficient systems.
Triumf SAM systems are capable of killing aerodynamic targets at a range of up to 250 km and ballistic targets at a range of up to 60 km within an altitude envelope of up to 27 km. This system can be integrated into any air defence system, just like the Pantsir-S1 self-propelled air defence system, capable of engaging targets with a minimal cross-section.
Other promising lines of defence cooperation will also be discussed at LAVEX 2009. Rosoboronexport will familiarise its partners with precision-guided air-to-air and air-to-surface aircraft missiles, guided air bombs, as well as a variety of radars, sights, simulators for air defence combat crews, avionics, and navigation, flight control, communications, and life support systems. Much attention will be focused on building airfields, establishing service centres and an integrated after-sale services system, as well as licensed-production and assembly facilities.
“Our participation in the Libyan exhibition will strengthen Russia’s relations with countries of the region both in the sphere of aircraft industry and other areas of defence cooperation. We stand every chance of succeeding given out vast experience in successful long-term cooperation,” Alexander Mikheev emphasised.
RIA: Final trials of Russia's Nerpa sub threatened by lack of fundshttp://en.rian.ru/mlitary_news/20091008/156391993.html
11:2008/10/2009
KHABAROVSK, October 8 (RIA Novosti) - Preparations for the final trials of Russia's Nerpa nuclear attack submarine before it is commissioned with the Navy could be hit by financial problems, the head of the Amur shipyard said on Thursday.
The Nerpa, which was damaged in a fatal accident during tests in November last year, has been docked at the Amur shipyard's Vostok repair facility in the town of Bolshoy Kamen in Primorye Territory since the end of new sea trials following repairs.
"The sea trials under the shipyard's supervision have been completed on time. The submarine returned to its current base for preparation for final tests, but we have run into some problems," said Nikolai Povzyk, the Amur shipyard general director.
"We have not yet received payments for work that has been already done, and today the electricity supply to the Vostok facility was cut [by a local electricity supplier] because we have not been able to pay our debts," the official said.
The shipyard was promised an estimated 1.9 billion rubles ($60 million) in government funds in the beginning of October to cover the cost of the repairs.
On November 8, 2008, while the Nerpa was undergoing sea trials, its onboard fire extinguishing system went off, releasing a deadly gas into the sleeping quarters. Three
crewmembers and 17 shipyard workers were killed. There were 208 people, 81 of them submariners, aboard the vessel at the time.
After induction into the Russian Navy, the Nerpa is expected to be leased to the Indian Navy by the end of 2009 under the name INS Chakra.
India reportedly paid $650 million for a 10-year lease of the 12,000-ton K-152 Nerpa, an Akula II class nuclear-powered attack submarine.
Akula II class vessels are considered the quietest and deadliest of all Russian nuclear-powered attack submarines.
Barentsobsrver; Sub modernization delayedhttp://www.barentsobserver.com/sub-modernization-delayed.4641012-58932.html
2009-10-08 It was scheduled to be ready by the end of 2009, but Zvezdochka shipyard says now that the submarine Novomoskovsk will first be transferred back to the Northern fleet by 2011.
In February, general director of the Zvezdochka shipyard Vladimir Nikitin, said the it was necessary to finish the repair of the three submarines Voronezh, Kaluga and Novomoskovsk during 2009. BarentsObserver wrote about the modernization schedules with reference to Itar-Tass.
Today, the same Niktin says to Itar-Tass that Novomoskovsk will be transferred back to the Northern fleet by 2011. – We will finish the scheduled repairs and modernization of the rocket carriers for this submarine-class, general director Nikitin says to Itar-Tass.
The repair and modernization of Novomoskovsk started in 2008.
Russia has seven Delta-Iv class strategic submarines, all within the Northern fleet. Four of them are in active service; one is converted to special operations; while two are in for overhaul at the Zvezdochka plant.
Barentsobserver: Sub-fire in Severodvinskhttp://www.barentsobserver.com/sub-fire-in-severodvinsk.4640734-58932.html
2009-10-07 A serious fire started during decommissioning work on the nuclear powered submarine Kazan, at the Zvezdochtka yard in Severodvinsk Tuesday afternoon.
The newspaper Argumenti i Fakti reports that the fire started at 17.35 and lasted for many hours. There are no reported victims and the Zvezdochtka yard assures in a press-release that there is no danger of radiation from the submarine.
The spent nuclear fuel from the submarine’s two reactors was unloaded in April this year. Kazan (K-403), a Yankee-class submarine, was commissioned in 1971 and served with intercontinental missiles for the Soviet Northern fleet until 1980. In 1980 the submarine was rebuilt and equipped with special hydro acoustic research systems. In 2004, the submarine was officially taken out of operation, and the decommissioning work goes on now.
In March this year, there was another fire in a submarine under decommissioning at Zvezdochtka. The fire in the submarine Orenburg started during work on cutting the hull of the submarine, as reported by BarentsObserver, with reference to a press-release posted at Zvezdochtka’s website.
Like Kazan that went on fire yesterday, Orenburg was also a special purpose submarine, a rebuilt Yankee class.
RIA: Russia Airborne Troops chief gets reprimand for abuse of office
http://en.rian.ru/mlitary_news/20091007/156384949.html
19:5007/10/2009
MOSCOW, October 7 (RIA Novosti) - Russian Airborne Troops commander Lt. Gen. Vladimir Shamanov has received an official warning following a probe into his involvement in illegal activities, the Defense Ministry said on Wednesday.
The probe was launched after the Russian media reported that Shamanov had ordered two elite teams of paratroopers to hinder an investigation at a company owned by his son-in-law, who is on the run from police on alleged murder charges.
"The Defense Ministry has finished an official investigation in relation to the Russian Airborne Troops commander Lt. Gen. Vladimir Shamanov," a spokesman for the ministry said, adding that the general had been warned over the abuse of office.
Although neither the paratroopers nor the general actually arrived at the offices of the company, the Novaya Gazeta daily made public recordings of the general's obscenity-littered telephone conversations with his subordinates, his son, who is on the board of directors of the company in question, and other people.
"I fully agree with the punishment and recognize the illegal nature of my actions. I believe that the minister's decision was just," Shamanov told RIA Novosti on Wednesday.
The general earlier defended his innocence in an interview with the Komsomolskaya Pravda daily, saying the telephone conversations were taken out of context and distorted the essence of what had been said.
Shamanov, a Hero of Russia and commander of the 76th Airborne Division during the second Chechen War, was appointed the new commander of the Russian Airborne Troops in May.
Barentsobserver: New Commander of the Northern Fleet?http://www.barentsobserver.com/new-commander-of-the-northern-fleet.4640937-58932.html
2009-10-07 Head of the Armed Forces in North-East Russia Vice Admiral Aleksandr Vitko has been appointed Commander of the Russian Northern Fleet, a Russian news agency reports.
According to the news agency Vostok Media, Vice Admiral Vitko today told a radio station on Kamchatka that he has been appointed new Commander of the Russian Fleet by President Dmitry Medvedev.
Vitko will leave Kamchatka in just a few days, he said to the radio station.
No other Russian media has so far had any reports about the change in leadership in Northern Fleet Head Quarters in Severomorsk.
The current Commander of the Northern Fleet, Admiral Nikolay Maksimov, was appointed in November 2007, as BarentsObserver then reported.
Itar-Tass: Four foreign poaching boats detained off Sakhalin coast
http://www.itar-tass.com/eng/level2.html?NewsID=14410659&PageNum=0
08.10.2009, 09.07
YUZHNO-SAKHALINSK, October 8 (Itar-Tass) - Four poaching boats, flying foreign flags, were detained by Russian borderguards off the Sakhalin coast over the past two days.
On Wednesday, borderguards cut short poaching by the Bansei schooner, registered at the port of Phnom Penh, Cambodia, as well as by the Amur trawler, flying the Panama flag, in the Aniva Bay and the Tatar Strait. The Amur had 26 tonnes of live crabs in its hold and fishing tackle for their catch, while the Bansei schooner had 600 kilos of frozen crabs and 1.5 tonnes of frozen Canadian Pollack.
An appropriate report on the incidents was transmitted on Thursday by the public relations group of the Sakhalin borderguard agency of the Russian Federal Security Service.
On October 6, borderguards also detained the Argo-1 fishing schooner, flying the Sierra Leone flag, with 25 tonnes of crabs and the Lucky schooner, flying the Cambodia flag, with 15 tonnes of crabs. While the Lucky was escorted to the Nevelsk port, its owner changed its name for the Green Ocean due to unknown reasons.
On Thursday, live crabs (over 50 tonnes) were released into sea from poaching ships in the presence of officers of the Sakhalin borderguard agency. The prevented damage to Russian marine biological resources topped 30 million roubles. Investigation is in progress on all detained boats whose crewmembers are Russian citizens.
Georgian Daily: Moscow’s Plans for Storing EU Nuclear Wastes Disturbing on Many Groundshttp://georgiandaily.com/index.php?option=com_content&task=view&id=15100&Itemid=65
October 07, 2009
Paul Goble
Moscow’s plans to store on a permanent basis nuclear waste from atomic energy stations in the European Union at a site near Krasnoyarsk is disturbing -- not only for the usual environmental and health risks but also because of the Russian government’s corruption and track record in nuclear power and because of the history of the site itself.
According to Sergey Putilov, an observer for the “Novaya Rodina” portal, the Russian government has agreed to provide permanent storage for nuclear waste from the atomic energy sites in Europe that are now being closed down as a result of EU policy in exchange for 20 billion US dollars (www.baznica.info/index.php?name=Pages&op=page&pid=5944).
Given the potential for environmental contamination and the certainty that most of the money will be “diverted” by Russian officials before being spent either on improved security at the site or protecting the people living nearby, Putilov suggests, that is not an enormous sum in exchange for which Russia will gain “the most radioactive tomb” in the world.
Moreover, there are problems involving the transportation of these nuclear wastes – they must pass through major cities as trains carrying them move from the western borders of the Russian Federation to the closed city of Krasnoyarsk-26 which is located 60 kilometers from the “opne” city of that name on the Yenisey River.
And there is the symbolism involved. The facility was built by slave laborers in the GULAG at Stalin’s direct order in January 1950 Thousands– there were 27,000 there in 1953, of whom 4,000 were women – worked and in many cases died to dig out the inside of a granite mountain to protect Soviet plutonium production against even a direct hit by a nuclear bomb.
There were so many victims of this effort, Putilov continues, that they were buried in mass graves, with little thought given to identifying who was buried where, something that the Russian-EU contract does nothing to rectify, even though many relatives of the victims would like to know where the bodies of their loved ones can be found.
The facility, which was christened Krasnoyarsk-26, was the third Soviet site for the production of nuclear weapons. (The more widely known Chelyabinsk-40 and Tomsk-7 preceded it.) And as in the case of the others, the last inmates of the GULAG were released only in 1964, eleven years after the death of the Soviet dictator.
During the Cold War, Soviet secrecy kept even those who lived nearby from knowing what was taking place. Now, approximately 97,000 people live in the area, but “only with the beginning of perestroika did people begin to receive more or less accurate information about the fact that they in fact are sitting on an atomic bomb,” with their futures very much at risk.
“However,” Putilov says, “the horrors of Soviet times can pale in comparison with the fate that Russian rulers have come up with for the residents of Krasnoyarsk-26 and all our country” because now, as a result of an agreement with the EU, even more radioactive materials will be placed in what may prove to be insecure storage.
Official explanations that everything that can be done to secure the site are accepted by many, although the latest wave of technogenic disasters like the Sayan-Shushen dam collapse are casting doubt on these claims. But the powers that be answer any question from local people, Putilov says, with the question: “Isn’t your pay high enough?”
The Russia-EU program is already well-launched, he notes. The nuclear waste at Krasnoyarsk-26 already has a total radioactivity equal to three billion curies. By next year, that figure is projected to rise to 10 billion curies. And by 2015 – six years from now – it will be more than 25 billion curies – a figure equal to “the explosive of 500 Chernobyls.”
Consequently, Putilov concludes ominously, “over the next ten to fifteen years,” Krasnoyarsk-26, as a result of a deal between Moscow and the European Union “may become the dirtiest place [in terms of the potential for the leakage of radioactivity] not just in Russia but in the world as a whole.”
Russia Today: Russian race crime role reversal - ethnic group awaits verdicthttp://russiatoday.com/Top_News/2009-10-08/ethnic-group-attack-trial.html/print
08 October, 2009, 09:18
A Moscow court is to deliver its verdict in the case of 2 Russian students attacked on the metro, allegedly by an organized group of ethnic minorities. Six defendants are accused of being part of the "Black Hawks" gang.
It’s a case gripping Moscow, in which members of ethnic minorities stand accused of launching a near-fatal attack on two white young men on a metro train.
The group apparently stabbed and shot the two while filming the attack on a mobile phone. Shouts such as “Allah Akhbar” and “Russian swines” can be heard on the recording.
The video was posted on the internet – leading to seven men being charged with the crime. One of the accused was shot dead while awaiting trial, causing speculation that this was no ordinary crime of violence.
Some say the attack was organized, and that the accused belong to a gang called the Black Hawks. But a lawyer for the accused says this theory is nonsense.
“I think the Black Hawks gang simply doesn’t exist. It was made up by nationalists and neo-Nazis and then picked up by the media,” says defense lawyer Tatiana Prilipko.
Race-hate crime is no stranger to Russia. In the first half of 2009, thirty-eight people were killed and 106 injured in xenophobic attacks. Victims are often nationals from former Soviet republics, Asians and Africans.
But this case is unprecedented in alleging a gang attack by members of ethnic minorities, who are usually the victims of such violence. A defense lawyer alleges the two men who were attacked came to the Metro after being invited on the Internet by someone posing as a victim of abuse by ethnic minorities.
“Although the prosecution comes under [the crime of] ‘hooliganism’, it really isn’t about that. The two sides met after keeping in touch on the internet. The meeting resulted in the attack. It’s just that this time it wasn’t in favor of the skinheads. I know for sure the victims were connected to skinhead organizations – although they deny it,” says another defense lawyer, Aga Manafov.
Combating racial hate crime has become a state priority, and a lawyer for one of the victims warns of a backlash if it’s not controlled.
“Those two young men were not the only victims of such gangs. If the authorities don’t protect the population, it’s no surprise the population will take matters into their own hands. This is absolutely legal and within the law, giving the right to citizens of self-defense,” says Sergey Stashevsky, lawyer for one of the victims of the alleged 'Black Hawks' attack.
The case has been delayed several times, and various far-right groups have been following it closely – as well as friends of the attackers. Many believe the outcome of this process will become a touchstone for the society.
The attack took place in the Moscow Metro – in a carriage full of people too scared to intervene. That such violence can occur in a public place like this, means that race attacks have now become not just a matter of concern for ethnic minorities and extremists, but a worry for everyone.
Georgian Daily: Migrants from Central Asia and Caucasus Returning to Islam as a Result of Their Experiencesin Russiahttp://georgiandaily.com/index.php?option=com_content&task=view&id=15096&Itemid=72
October 07, 2009
Paul Goble
The dramatic increase in the number of Muslims taking part in religious services in various Russian cities on Id al-Fitr this year reflects more an increase in religious awareness and activity among formerly “ethnic” Muslim migrants from Central Asia and the Caucasus than an upsurge in religious life among the faithful of Russia itself.
In this, Daniyal Isayev argues in an article entitled “Migrants and Islam: A Return to Truth Through Experience in an Alien Land,” immigrants from Central Asia and the Caucasus are following in the footsteps of their co-religionists in Western Europe who became more Islamic after leaving their homelands behind (www.islam.ru/pressclub/analitika/misvozwyt/).
If Isayev is correct in drawing this parallel, then Muslim migrants may present an even more serious problem than many Russians have assumed not only because their new religiosity may turn some of them to radicalism and violence but also because it may become a model for many of the more than 20 million “ethnic” Muslims in the Russian Federation itself.
“The sharp increase in the number of Muslims visiting mosques and observing religious requirements has become an unexpected surprise not only for the Moscow city powers that be but also for the leaders of the umma itself,” Isayev says, with thousands of Muslims praying in the streets around the mosques because they could not get inside.
That this was the case in Moscow, he continues, reflects the fact that there are only a handful of mosques for the roughly two million Muslims living there. But it was true in other cities as well. In Saratov, for example, where officials and imams had planned on 5,000 to 6,000 of the faithful, more than 50,000 turned up.
Why this increase now? Isayev asks rhetorically. He proposes the following answer: “It is completely obvious that such a remarkable growth of those taking part in prayers were not new Muslim converts but rather ‘ethnic’ Muslims who have begun to remember their faith and decided to visit the mosque on this holiday.”
But unlike many observers of the Muslim scene in Russia, Isayev does not stop there. Instead, he argues that “ethnic” Muslims who are citizens of the Russian Federation were a less important source of the increase than “ethnic” Muslims who had come to Russia as migrants from the former Soviet republics in Central Asia and the Caucasus.
Even the dramatic increase this year, he writes, would be “a drop in the bucket” compared to the total number of “ethnic” Muslims in Russia, most of whom, including “the enormous number of representatives of the middle generation (our fathers) and the younger generation (we ourselves)” have “not yet” had their Islamic faith reawakened.
Instead, he argues, the “sharp rise in the number of visitors to the mosques” this year reflected increased Muslim activism by “labor migrants from Central Asia and the Transcaucasus,” a development Isayev suggests Russians should have been prepared for because of what has happened in Western Europe already.
The explanation, he continues, is to be found “in the psychology and behavior of an individual cut off from his motherland.” In his homeland, such an individual may pray because it is customary, but once he moves abroad, he will begin to experience “a spiritual hunger,” a sense that he is alone in a hostile environment, and turn to Islam for sustenance and solace.
That is what has taken place in Europe. There, Isayev recounts, “the first generation of immigrants tried to show in every way their complete loyalty and inclusion in local society, including giving up parts of their identity. But the second and third generations experienced a revival of their religious values.
Those in the second and third generation spoke the language of their new countries without an accent, studied in European schools and had professional qualifications often the equal of those around them, and they supported the idea and ideals of European integration even more than the latter.
But then, Isayev continues, “many young Muslims began with bitterness to be convinced that they were caught between two worlds: an old motherland which did not need them, which they did not know and whose language they often spoke worse than the European one they had adopted,” and a new country which was not prepared to treat them as complete equals.
In such circumstances, “it is not surprising,” Isayev argues, that young Muslims “began a search for their identity and this inevitably led them to identification not with an already distant ‘motherland of their ancestors’ but rather with something incomparable more significant – with Islam.”
Exactly the same thing is taking place “today before our eyes with our brothers from Central Asia and the Transcaucasus who having lived and worked several years in a different cultural milieu are beginning suddenly to recognize that they are different, that they have better values and traditions and a purer relationship to girls, parents and the surrounding world.”
“Of course,” Isayev adds, “it is not appropriate to make generalizations here, many as life shows really are recalling that they are Muslims” in a more direct and intense way than they ever were before, the products of the kind of experience of strangeness that lies at the basis of most self-identifications.
Itar-Tass: Serviceman of DefMin injured in attack in Chechnya
http://www.itar-tass.com/eng/level2.html?NewsID=14410880&PageNum=0
08.10.2009, 10.58
GROZNY, October 8 (Itar-Tass) -- A serviceman of the Defence Ministry was injured as a result of firing on an observation post in Chechnya, ITAR-TASS learnt at the law enforcement bodies of the capital on Thursday.
“On Wednesday, at 19.40 Moscow time, unidentified people fired from automatic arms on a control-observation post where servicemen of the Defence Ministry were on duty. The fire was opened from a forest near the settlement Yandy of the Achkhoi-Martan region,” a law enforcer said. “ As a result, the company commander, senior lieutenant, got an injury. He was hospitalised.”
Itar-Tass: Gunman killed in shootout in Chechnya
http://www.itar-tass.com/eng/level2.html?NewsID=14410814&PageNum=0
08.10.2009, 10.39
GROZNY, October 8 (Itar-Tass) -- A participant in illegal armed formations was destroyed in an exchange of fire in Chechnya, ITAR-TASS learnt at the law enforcement bodies of the capital on Thursday.
On Wednesday, an armed clash of law enforcers with a gang of up to eight people occurred in a forest near the settlement Duba-Yurt of the Shali region during the holding of a search operation there.
“There are no victims among the personnel. During the shootout, a participant in illegal armed formations, a local resident, was neutralized,” a law enforcer said.
A Kalashnikov submachine-gun, a RGD-5 grenade and 180 cartridges were found at the site of the incident.
The Moscow Times: Dzhabrailov Quits as Senator 2 Years Early http://www.themoscowtimes.com/news/article/386965.html
08 October 2009By Maria Antonova
The Federation Council dismissed Chechen Senator Umar Dzhabrailov at his “personal request” Wednesday, two years before his term was to expire.
“I have done everything I could. … I see myself in a capacity that would be more useful for an active person,” Dzhabrailov told the Infox.ru web site. “And I think there should be a rotation of personnel. I served for six years in the Federation Council, that’s a long time.”
Dzhabrailov, a prominent Moscow businessman whose assets have included the hotel Radisson SAS Slavyanskaya and the Smolensky Passazh retail and office center, had been a senator since 2004, representing the executive branch of the Chechen government. He was reappointed in 2007 and his term was to last until 2011. Dzhabrailov was also deputy head of the International Affairs Committee and a member of the Russian delegation to the Parliamentary Assembly of the Council of Europe, which returned from Strasbourg on Friday.
Chechen President Ramzan Kadyrov’s spokesman, Alvi Karimov, confirmed that the initiative to leave the Federation Council came from Dzhabrailov, rather than from the Chechen authorities.
“Perhaps he wants to pay more attention to business,” he told The Moscow Times, adding that it was “too early” to talk about replacement candidates.
Dzhabrailov, known as one of the wealthiest people in Chechnya, was active in the hotel and real estate industries before his appointment. He was a business partner to American entrepreneur Paul Tatum, who was shot and killed in Moscow in 1996 after a highly public battle for control of hotel Radisson SAS Slavyanskaya. No one has been convicted in the killing.
The Radisson SAS Slavyanskaya complex eventually came under the control of the Moscow city government. Dzhabrailov ran for president in 2000, taking last place.
In an interview with Infox.ru earlier this year, Dzhabrailov complained that State Duma deputies have better working conditions than senators. “They have better parking, a better building, larger offices,” he said. “Their cafeteria is probably better, too.”
Dzhabrailov’s predecessor, Akhmar Zavgayev, requested dismissal from the Federation Council in 2003 after representing the Chechen administration for three years. He is now a Duma deputy.
The Federation Council started its fall session Wednesday. Dzhabrailov was not immediately available for comment.
RIA: Ingush president says "worried" by lack of militant activityhttp://en.rian.ru/russia/20091008/156389114.html
05:4108/10/2009
MAGAS, October 7 (RIA Novosti) - The leader of Russia's volatile southern republic of Ingushetia said in an interview with RIA Novosti that he is concerned by the recent "lull" in militant activity in the republic.
Ingushetia, one of Russia's poorest regions and situated in the mainly Muslim North Caucasus, is currently experiencing a relatively calm period after being hit by a series of high-profile attacks on troops, police and other officials.
"I am worried by this lull more than by the storm itself," said Yevkurov, who returned to the republic in August after being treated in Moscow for extensive injuries he sustained during a suicide car bomb attack on his motorcade in June.
He said that at least 30 suspected militants in the republic cannot be brought to justice due to lack of evidence.
Commenting on the recent government reshuffle, the president said that he has no candidacy to the post of prime minister yet.
On Monday Yevkurov dismissed the government due to corruption and the Cabinet's failure to tackle socio-economic problems. He appointed local Security Council chief Alexei Vorobyov as acting prime minister.
"It [the reshuffle] is not about [ex-prime minister] Rashid Gaisanov, an individual, it is about the unsatisfactory work of the government on the whole. That's why I had to take such measures - to sack the whole Cabinet," he said, adding that Gaisanov "made mistakes" while choosing his team.
He said that the reshuffle less than a week before regional elections will not harm the republic.
"Elections are elections, and the work of government is the work of government... So, this decision will have no negative impact on the elections," Yevkurov said.
He added that among the candidates for the October 11 elections, 47 people had criminal convictions, including for murder, and urged them to withdraw their candidacies.
Itar-Tass: Two killed in bomb blast at railway station in Sverdlovsk region
http://www.itar-tass.com/eng/level2.html?NewsID=14411035
08.10.2009, 11.35
YEKATERINBURG, October 8 (Itar-Tass) -- Two people were killed in a blast that went off at the Smychka railway station in the city of Nizhny Tagil, the Sverdlovsk region, on Thursday.
The blast occurred at 8.30 a.m. local time (6.30 a.m. Moscow time) on Thursday at the office of the chief of the railway station, chief police press officer for the Sverdlovsk region told Itar-Tass.
“According to him, the chief of the railway station was holding a traditional operative meeting at his office. During the meeting a 36-year-old local resident broke into the office. He came to settle scores with his wife, who worked as a duty employee at the railway station. He suspected his wife of adultery. Despite the presence of other people, the man provoked a scandal, and according to some reports, was brandishing a knife, when someone was trying to protect the woman, then he took out an explosive device and detonated it,” Gorelykh said.
According to him, chief of the railway station Vladimir Krugovov and the wife of the jealous husband died of deadly injuries as a result of the blast. A duty officer of the railway section Gleb Chabanov received a penetrating breast wound. “The culprit of the explosion was also severely wounded. The blast tore away his right hand. The ambulance brought him to a city hospital, where the police is guarding him,” Gorelykh said.
An investigating group is working at the blast site. A criminal case was instituted for murder with the use of explosives.
Emportal: Moscow and Serbia, Belgrade and Russia - Social and Political Connections from 16th to 18th Centuryhttp://www.emportal.rs/en/news/serbia/100732.html
08. October 2009. | 07:31
Source: Tanjug
The book Moscow and Serbia, Belgrade and Russia - Social and Political Connections from 16th to 18th Century, which talks about centuries of relations between the two countries, is extremely important for future generations, Russian Ambassador to Serbia Alexander Konuzin said Tuesday.
The book Moscow and Serbia, Belgrade and Russia - Social and Political Connections from 16th to 18th Century, which talks about centuries of relations between the two countries, is extremely important for future generations, Russian Ambassador to Serbia Alexander Konuzin said Tuesday.
At the presentation of the book, held at the Serbian Archives, Konuzin said that a distinctive characteristic of Serbia and Russia were their difficult histories and a large number lost monuments, which was why that collection of documents was so extremely important for future generations. The Russian ambassador remarked that the relations between Russia and Serbia had been going on for more than five centuries, and that it was important to have them documented, stating that the book was a small part of a beautiful structure, symbolizing the bonds between Russia and Serbia.
Serbian President Boris Tadic's advisor Trivo Indjic said that the right moment had been chosen to present the book, because 2009 is the year of the 65th anniversary of Belgrade's liberation from the Nazis, the greatest Russian and Serbian joint feat in history, and also Russian President Dmitry Medvedev is expected at the end of October. "This project sets another solid foundation for international cooperation," Indjic said.
Bloomberg: Russia’s Economic Decline Forces Putin to Walk Capitalist Pathhttp://www.bloomberg.com/apps/news?pid=20601085&sid=avvKXwETJKp4
By Alex Nicholson
Oct. 8 (Bloomberg) -- Russia’s economic decline is forcing the country to walk the walk after more than a decade of talk about dragging the largest energy exporter away from its oil dependency and reducing the footprint of the state.
“There is a genuine reform agenda, but it has been advanced because of economic necessity,” said Tom Mundy, a strategist at Renaissance Capital in Moscow. “We should welcome it; it brings transparency, it brings liquidity, it brings foreign investors back. But I think it’s something that is a result of the financial crisis.”
Prime Minister Vladimir Putin wants to use state asset sales to help plug next year’s budget deficit, which his government estimates at 6.8 percent of output, and use the privatization push to modernize derelict infrastructure. Last year’s 54 percent slump in oil prices, which pushed the economy into a 10.9 percent contraction in the second quarter, has forced the government to revive its commitment to renouncing its commodity reliance.
“The shock of the oil price collapse destroyed” Russia’s “complacency, and ‘‘the government has a renewed desire to advance a more radical reform program,’’ Troika Dialog, the country’s oldest investment bank, said in a note.
River, Sea, Air
Russia wants to generate 70 billion rubles ($2.4 billion) next year, 10 times the original target, by selling all or part of state stakes in 450 enterprises, Economy Minister Elvira Nabiullina said on Oct. 6. Sales will consist mainly of river and sea terminals.
First Deputy Prime Minister Igor Shuvalov said on Sept. 22 the government may offer as much as 20 percent of OAO Sovcomflot, the shipper that merged with OAO Novoship in 2007.
Next year’s sales won’t include OAO Rosneft, which has 15 percent of shares freely traded, OAO Sberbank, the biggest lender, or rail monopoly OAO Russian Railways.
This isn’t the first time Russia is selling assets. In the 1990s some of the biggest companies were auctioned to hand- picked businessmen, later to become oligarchs, at knockdown prices after a so-called loans-for-shares plan to prop up late President Boris Yeltsin’s government.
History Lesson
Putin, who was president between 2000 and 2008, oversaw the expansion of state domination in the oil industry and created holding companies in the aerospace, shipbuilding and nanotechnology sectors.
Russia’s last major asset sale was in 2007, when VTB Group, the second-largest bank, raised $8 billion in the biggest initial offering of the year. Rosneft’s IPO a year earlier raised $10.6 billion.
The government has about 5,500 enterprises that can be converted into joint stock companies and sold starting as early as this year, Shuvalov said on Sept. 21.
State corporate ownership stood at 45 percent at the start of the year, according to a February report by the Moscow-based Institute of Contemporary Development.
Putin, who stewarded eight years of unprecedented economic growth as president, said on Sept. 29 the government will continue its modernization course unhindered by fiscal or political developments.
‘No Return’
‘‘There will be no return to the past,” Putin told investors in Moscow. “Russia will remain a liberal market economy.”
President Dmitry Medvedev, in his “Go Russia” open letter of Sept. 10, said the country’s raw-material reliance is “humiliating” and “primitive,” adding that “achieving leadership by relying on oil and gas markets is impossible.”
While political leaders declare their determination to change course, some economists remain skeptical about how wedded the government will be to its diversification push if energy prices recover.
“Oil revenues will dictate the pace of this program,” said Chris Weafer, chief strategist at UralSib in Moscow.
Russia’s 2010 budget is based on an average oil price of $58 a barrel, rising to $59 in 2011 and $60 in 2012. Crude oil was at $69.86 a barrel yesterday. Energy export prices could be higher than the government forecasts, Putin said on Sept. 18.
‘Back Burner’
Medvedev, who until 2008 chaired gas monopoly OAO Gazprom, said last week a fair price for oil is between $80 and $90 a barrel, Kommersant reported.
“If the oil price improves and the budget deficit declines, then the incentive to push these reforms quickly will be mitigated,” Mundy said. “But you would need a sustained high oil price for a long time for this to be pushed on to the back burner again.”
The plan has two stages, with the first next year designed to generate funds to reduce Russia’s first deficit since its 1998 default, according to a Sept. 30 Economist Intelligence Unit report. The second stage, lasting several years, will target industries where private ownership will improve efficiency.
That allows the state to adjust the pace to market demand.
“The state intends to test the water with these smaller lots,” Weafer said. “If they are successful and the appetite is good, they will follow it through with a more substantive divestment program in 2011.”
Russia will only “conduct these sales if the market is favorable and we will receive the revenue we are counting on,” Nabiullina said. “We won’t sell cheaply.”
“This is a government with long time horizons and a very strong balance sheet,” said Rory MacFarquhar at Goldman Sachs Group Inc. in an e-mail. “Russia can afford to wait for better valuations.”
With assistance from Paul Abelsky in Moscow. Editors: Tasneem Brogger, Chris Kirkham
Last Updated: October 7, 2009 16:00 EDT
FT.com: Reshuffle signals Medvedev’s confidencehttp://www.ft.com/cms/s/0/ba419dae-b360-11de-ae8d-00144feab49a.html
By Charles Clover in Moscow
Published: October 7 2009 18:10 | Last updated: October 7 2009 18:10
Dmitry Medvedev has taken a step towards putting his own stamp on the Kremlin with the appointment of two speechwriters.
The Russian president has avoided sacking anyone in the reshuffle, but in the murky world of Kremlinology it is nonetheless big news, a signal of increasing confidence amplified by press reports hinting at a further reshuffle of officials.
Mr Medvedev’s new head speechwriter, Eva Vasilevskaya, previously worked with him when he was first deputy prime minister and has been a member of his speechwriting team since he came to the Kremlin. She will play a central role in drafting the annual address to the general assembly, expected in late October or early November, the most important speech of the year for Mr Medvedev.
Alexei Chadaev, a conservative political commentator, is expected shortly to be named as a speechwriter working alongside the Kremlin’s first deputy chief of staff, Vladislav Surkov, who oversees management of the Kremlin’s domestic political machine. Mr Chadaev is known for a public criticism of Mr Surkov’s ideology in January. Yet to be confirmed, his appointment has been widely reported by Moscow papers with close links to the Kremlin and people in the Kremlin have confirmed that background checks are being carried out.
The reshuffle underlines a new ideological direction Mr Medvedev appears to be taking, away from that of his predecessor and mentor, Vladimir Putin, prime minister, who remains the hegemonic figure in Russian politics. Until now Mr Medvedev has made only a handful of appointments, mostly federal governors, and overwhelmingly those surrounding him are Mr Putin’s former staff.
The appointments have been accompanied by press speculation that Zhakhan Polliev, speechwriter for Mr Putin as well as Boris Yeltsin, is being marginalised and may leave the Kremlin, though she retains her post as deputy to the president.
“Changing speechwriters is a fairly important event,” says Dmitry Badovski, deputy director of the Moscow-based Institute of Social Systems. “A speechwriter is a special role. It means someone closer to the inner circle than just a functional team. It’s someone you trust. It means Medvedev needs someone who speaks his internal language.”
Mr Medvedev has had to play a delicate balancing act since coming to power last year. Mr Putin hand-picked the president as his successor in 2008, after being forbidden from a third presidential term by Russia’s constitution. Without alienating Mr Putin, Mr Medvedev has nonetheless sought to carve himself a distinct political identity.
In September, Mr Medvedev published a manifesto-like article on the website Gazeta.ru, calling for Russia to strive for a more modern economy and more open political system. It was seen as implicitly criticising the political clampdown of the Putin presidency of 2000-2008.
Both men have expressed interest in running for president in 2012, which has led to speculation that a rift may be developing that could be exacerbated if Mr Medvedev installed a new team in the Kremlin.
The Moscow daily newspaper Vedomosti on Wednesday indicated this might already be happening, citing a “Kremlin source” that the president’s chief of staff, Sergei Narishkin, one of the most powerful Putin-era officials in the Kremlin, was likely to leave soon. Another official told the Financial Times, however, that this was “conjecture”.
Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Russia Today: Rusnano looking to place Russia on the high technology cutting edge http://www.russiatoday.com/Business/2009-10-08/rusnano-looking-place-russia.html/print
08 October, 2009, 09:39
The Head of Rusnano, Anatoly Chubais, says more innovation companies will come to market over the next few months, as his organisation looks to address framework issues for promoting Russia as a major high tech centre.
Several Russian innovation companies are planning to hold IPOs in the next few months, with Russia’s MICEX stock exchange setting up a trading floor for High Tech companies following the US Nasdaq exchange. The news came at the second international nano-technology forum in Moscow.
The first company to float will be the Human Stem Cell Institute. It will issue twenty per cent of its shares in the next two months.
Anatoly Chubais, the head of Rusnano, one of the organizers of the Innovation Exchange, spoke with RT.
“We had the first meeting of the coordination council of the Russian Market for Innovation and Investment on Wednesday. We plan to hold the first IPOs over the next few months. One of them is the Human Stem Cell Institute, and we have several others in the pipeline.
President Medvedev says Russia has the world’s largest nanotechnology investment program – what are the key sectors you are investing in, what kind of projects. There is
no need to identify the key sectors. We ourselves still don’t realize what nanotechnology can give us. We know for sure there will be a technological revolution in lighting systems and we need to invest. We are moving also into solar power. But it’s dangerous to exclude something – saying, no, this is risky. The most important thing is not to miss anything.
The sector sounds very risky. Should the government risk public money or should it simply be making life easier for investors. For example, modernize the patent laws, increase funding in universities, reviving Russian science
Here in Russia we have a lot of results from Research & Development in Nanotechnology, but we have few patents and even less business. We’ve almost lost the patent culture. And the reason is clear. If there is no business that wants to acquire the results – so why bother with patent laws. .The patent problem exists. But it’s not the root of the problem. It’s one of the obstacles to deal with. We are now preparing some radical measures in the field of intellectual property.”
Reuters: Reform Tsar Struggles to Take Russia Into Nanoworldhttp://abcnews.go.com/Technology/wireStory?id=8771190
By Gleb BryanskiOctober 7, 2009
MOSCOW (Reuters) - Russian economic reform architect Anatoly Chubais hopes to marshal oligarch investment into establishing Russia as a world leader in high-tech nanoscience, helping wean his country off dependency on raw material sales.
Chubais has a reputation for getting seemingly impossible things done. Skeptics, however, say Russian science is hindered by bureaucracy and by a lack of small companies capable of translating scientific ideas quickly into commercial production.
As economist, Chubais presided over the selloff of Soviet state property that produced the country's super-wealthy oligarchs and as a politician helped revive Boris Yeltsin's popularity to win a second term as president in 1996. More recently, he dismantled and privatized power generation.
Chubais sees the economic crisis as a "unique chance" for Russia to break away from its dependency on oil and gas, with its fluctuating revenues, into the new world of nanoscience
"I will tell you a secret," Chubais told a news conference. "I have at least two or three meetings a week with our Forbes list of oligarchs. Half of those I have spoken with have decided to channel their money into the innovative economy."
Russia, which inherited a strong scientific tradition from the Soviet Union, has gradually been losing its edge as many prominent scientists have emigrated abroad, seeking better pay and a more favorable environment for research.
Chubais now heads Rusnano, a state corporation blessed with $6 billion of budget funds and charged with achieving $30 billion worth of production with the use of nanotechnologies by 2015. He says the sector is a place to invest after the crisis.
"Those who saved their money, regained consciousness, wiped the sweat off their foreheads, where will they invest next?" Chubais said at the second nanotechnologies fair in Moscow.
"In oil? At $150 per barrel, of course. At $70? No."
PERPETUUM MOBILE
Rusnano defines the nanotechnology projects it is prepared to finance as involving technology that handles substances at a nanolevel, or a scale of about one billionth of a meter, to inject new qualities to the substance.
Even Chubais admits his drive stumbles over the lack of business acumen prevalent among Russian scientists, most of whom were educated in Soviet-era institutions and have little or no familiarity with the basic rules of investment.
"There are too many authors of ideas. Our phones burst with calls from people who say they have invented a new perpetuum mobile," Chubais said. Only a handful of those were able to draft a proper business plan, he added.
Rusnano's guide, 'Seven steps to create a business', made reference to books such as 'Business plan for dummies' for potential applicants and introduced basic investment concepts such as "cash flow" or "rate of return."
The corporation says it receives over 40 applications every month. But since its creation at the height of the oil-fueled economic boom in 2007, Rusnano has approved financing for only 36 projects, worth $1.7 billion.
NOT ONLY LIGHT IN THE WINDOW
Thomas Fries, president of Germany's FRT, which manufactures high-precision measurement tools, wants to set up a production line and run a research lab in Russia. He has applied to Rusnano for funding.
"We started talking with Rosnano one-and-a-half years ago and everyone was very keen, but up to today nothing has happened. I don't really know the reason," he said, standing in the middle of the German pavilion, one of the fair's biggest.
Investors say the main hurdle is the lack of small and medium-sized enterprises able to put ideas into production. The Russian part of the fair, represented mostly by large state firms or Soviet-era research centers, served as evidence.
"You don't need $5 billion to develop an idea. You need the right partners. There are hardly any small and medium-sized enterprises in Russia that can help scientists do that," said Frank Sicking from Germany's VDI Technology Center.
The younger generation of Russians, inspired by success stories such as Finnish technology firm Optogan, founded by a group of young Russian researchers, is aware that the world outside Russia may offer brighter opportunities.
"If there is money in the United States, it will be made there. If there is money in Russia, it will be made in Russia," said Moscow university student Nikolai Klyenov, who developed a high-sensitive broadband detector with a group of friends.
"I would not say that Rusnano is the only light in the window," he said.
(Writing by Gleb Bryanski)
Copyright 2009 Reuters News Service. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
NPR: Russia's Motor City Braces For Widespread Layoffshttp://www.npr.org/templates/story/story.php?storyId=113583218
by Anne Garrels
October 8, 2009
Russia will experience the first massive layoffs in its own auto industry meltdown when popular carmaker AvtoVAZ lays off 25,000 employees — more than a quarter of its staff — in mid-December.
AvtoVAZ management has yet to announce which workers will be let go, saying only that the first cut will be those who are at or near pension age: 55 for women, 60 for men.
The announcement came despite efforts to protect the company from bankruptcy. This summer, Russia's government, which indirectly owns 25 percent of AvtoVAZ, provided $1 billion in emergency support to avoid what Prime Minister Vladimir Putin described as "the General Motors scenario."
A Failing Business Model
The Russian city of Togliatti is home to the AvtoVAZ plant that produces the Lada, one of the most popular cars in Russia. The city was built in the late 1960s around the company. Today, 1 of every 7 residents in Togliatti works for AvtoVAZ.
Metalworker Vladimir Potamashnev, 38, now only earns the equivalent of $250 a month, which he says is not enough to feed and clothe his family.
He blames Putin for focusing on oil and gas at the expense of Russian industry.
"I once believed in Putin and [President Dmitry] Medvedev, but no longer," Potamashnev says. "We sit on oil and gas, and they think that's just fine."
The overall global economic crisis laid bare long-standing problems at the plant, which produces outdated models that cannot compete with foreign imports.
Togliatti salesman Alexander Koblov says the plant needs to improve quality.
"All too often the doors don't close correctly," Koblov says. "And the plastic is poor. And, of course, we need new designs."
Sergei Tselikov, a leading industry analyst, says Putin approved new management of AvtoVAZ four years ago, but he says the company has failed to come up with a long-term strategy to save the plant and the city.
"Management is not from the automobile industry, and there continues to be a huge turnover at the top," Tselikov says. "They are lurching month to month with no real plans for the future."
On Friday, Putin demanded that Renault and Nissan, the company's two largest foreign shareholders, help modernize the plant. He has threatened to review their status if they do not comply.
A Citywide Ripple Effect
Piotr Zolotariov, head of Togliatti's local independent trade union, says that he expects the situation will get worse.
"The local government doesn't have taxes to repair roads or fix lights," Zolotariov says.
"There are problems with the water supply. The infrastructure is wearing out. We see much more crime — more drugs than ever before. The best and the brightest who could save the city are fleeing."
Tselikov estimates that for every job lost at the plant, another will be lost in related businesses, bringing the total new unemployed to as many as 70,000.
Officials hope public service jobs can cover some of those numbers — but most people do not see how the city can cope with this unprecedented crisis.
"Everyone is already feeling the effect of the pay cuts, and now everyone is wondering if they will even have a job," says Victoria Melnikov, who works at a clothing store. My parents work at AvtoVAZ. If they lose their jobs, what will they live on?" she said.
"No one knows what is going on."
Anatoly Ivanov, a Togliatti city council member, says the situation is potentially explosive.
"Will there be strikes? Will there be violence? Will workers close the main highways like they did in Pikalyovo last summer?" Ivanov asks. "It's very possible it could reach that point, and the security services are poised to stop this."
Nikolai Chubenko moved to Togliatti to build the plant in 1968. Today, at 60, he has no idea how he and his family will survive if he is among those cut.
"Some Russian economists say the crisis is over, but we see it's just beginning," Chubenko says. "Everyone is just waiting."
The Independent: Russian teens to be tested for drugs at schoolhttp://www.independent.co.uk/life-style/health-and-families/russian-teens-to-be-tested-for-drugs-at-school-1799405.html
Thursday, 8 October 2009
(AFP) -
Russian teenagers will be tested for drugs during their regular medical examinations at school, Russia's anti-narcotics agency chief said Wednesday.
Russian President Dmitry Medvedev proposed the mandatory drug screenings last month, warning that addiction was a threat to national security.
"We are not shocked when we draw blood to test the level of white or red blood cells," the head of the anti-drugs agency, Viktor Ivanov, told a news conference.
The drug test "will be just one more analysis, that's it," he said. The results will then be given to the parents.
Medvedev said last month experts estimate that between 2.0 and 2.5 million people use drugs in Russia.
"The greatest danger is that two thirds of them are young people, less than 30 years old," the Russian president said at the time.
RIA: Moscow land transport to become disabled-friendly in 3 yearshttp://en.rian.ru/society/20091008/156387785.html
02:0608/10/2009
MOSCOW, October 8 (RIA Novosti) - All ground public transport in Moscow will become wheelchair-friendly in the next two or three years, Moscow's first deputy mayor has told an online news conference.
Some 60% of all trams, buses and trolleybuses in Moscow are suitable for wheelchair-bound and elderly people.
In the next two or three years, all ground public transport will be wheelchair-accessible and have low floor and ramps, Pyotr Biryukov said on Wednesday.
During his conference, Biryukov spoke about other social issues that the Russian capital currently faces, including the problem of stray animals. A year ago, there were an estimated 30,000 stray cats and dogs in Moscow, and their number increases by 2,000-5,000 animals annually.
He said that Moscow now has 18 animal shelters able to provide space for 25,000 animals, but they are only half full.
He called on animal activists to help city authorities in catching stray animals and taking them to animal shelters.
October 7, 2009Russia Profile: Business of Lettershttp://www.russiaprofile.org/page.php?pageid=Business&articleid=a1254891218&print=yes
By Roland OliphantRussia Profile
Statistics Show that the Russian Book Market Is Growing while the Number of Consumers is Shrinking
Although Russians are still ranked as one of the most literate nations in the world, ever fewer of them actually buy books.
The numbers look good: over the past several years, publishers have begun releasing more titles and printing more copies of them. According to the Russian Chamber of Books—Russia’s national library and also the agency responsible for statistics
concerning the Russian publishing industry—in 2006 Russian publishers put out more than 100,000 different titles (of all kinds—both books and pamphlets) for the first time in Russian history. By 2008 that figure had reached 123,336 titles, including 105,093 books. The national print run was 760.44 million, 590.36 million of which were books (a book is defined as a non-periodical publication of more than 48 pages. A pamphlet is from five to 48 pages.)
But the picture painted by such statistics is crude at best, warns Konstantin Sukhorukov, the head of the Book Chamber’s Bibliography and Scientific Collection and editor of the Bibliography journal. And if they are used to describe a “profitable and dynamic industry,” they are misleading.
The Book Chamber’s statistics are based on the size of its collection as the national book depository, and the printing figures publishers provide. “These figures only show how many titles are produced and how many copies are printed; they can show how many of these are produced by commercial versus non-commercial operations, but they certainly do not show how many have been sold,” he said. “We often get criticized by representatives of the book industry for producing misleadingly optimistic figures. But the truth is, we can’t talk about the ‘market’ with any certainty, because there is no one in Russia responsible for book trade statistics.”
One factor blurring the image is the number of commercial versus non-commercial organizations. Like most industries, the landscape of Russian publishing changed unrecognizably with the fall of the Soviet Union, when the state-owned publishing houses that had monopolized the industry were broken up in the early 1990s. They were replaced by a host of smaller firms, and today it is estimated that there are some 5,000 publishing houses—that is, commercial organizations—in the country. (A report produced by the Federal Service for Press and Mass Communications and the Anglo-Russian culture and arts foundation Academica Rossica said “over 5,000.” The Book Chamber, however, estimates that not more than 4,000 to 5,000 of those who have publishing licenses actually produce anything).
But add in the universities, scientific institutions, museums, libraries and various branches of government that maintain their own publishing units, and the number of organizations publishing in one form or another is around 25,000 to 35,000, estimated Sukhorukov. Furthermore, Russian publishers tend to operate across the former Soviet Union wherever there is a substantial Russian-language market. Eksmo, for example, has distribution centers in Russia, Ukraine and Kazakhstan. That makes it difficult to talk about the industry inside one particular state’s borders.
Yet despite all these caveats, it does look as if the market is growing. Retail and wholesale prices rose some 15 percent in 2009 compared to 2008. Niche sectors have done particularly well, with students and other consumers of specialist literature continuing to buy up-to-date editions rather than rely on hand-me-downs and ill-equipped libraries. “That’s a tendency we’ve seen for several years, and despite the crisis it seems to be continuing,” said Sokhorukov.
The end of the book hunger
A number of dramatic shifts occurred in Russian publishing in the early 1990s. The break-up of the state publishing houses opened the field for smaller, independent firms, and a great many appeared. These new publishers had a huge demand to meet. By the end of the Soviet Union, what the American scholars John and Carol Garrad had dubbed “book hunger” had reached epidemic proportions. The lifting of censorship restrictions sparked a frenzy in printing, as the new publishers scrambled to meet the demand of a readership starved of hitherto forbidden or simply unavailable literature. There was an especially fierce dash to bring foreign works to market, securing translations and (sometimes) the rights to them.
Not all followed the trend. Eksmo, today the largest Russian publisher, tracks its success to its “bet on Russia.” “The foreign authors who then dominated the market were mostly bad translations, and often did not even have the rights to publication,” says Eksmo’s official history. “The turning point came when the publishing house began working with Russian writers.”
While the number of publishing houses proliferated, the number of books collapsed. But that was not as paradoxical, or as catastrophic, as one might think. Practicality no longer required the publication of reams of party-authorized material. And, once the initial “book hunger” was quenched, it never quite returned. Gone is the almost complete reliance on the book for both entertainment, information and escape. The newspaper and magazine market has exploded; the Internet is increasingly accessible (though with only around 30 percent of penetration, it remains out of reach for many); there is a wide choice of radio and television stations. Reliable supplies and alternative ways of getting hold of literature (like the Internet) mean that the phenomenon of the “sensational” book that would fly off the shelves declined. That not only affected demand, but caused profound cultural change. “The book itself has quite a different function in our society in comparison with Soviet times,” Sukhorukov said.
Made in Moscow
Despite the large number of independent publishers, the market is increasingly consolidated. Of the 4,000 to 5,000 estimated commercial operations, the top 25 publishers account for 65,000 or more titles annually—at least 50 percent of all production. At the very top sits Eksmo, which claims to account for some 15 percent of the Russian book market and edged ahead of its nearest rival, AST, in the past couple of years. The biggest operators tend to have diverse operations. Eksmo and AST both publish fiction, academic and professional works, and children’s books, all fields that require different business models. Others have found success through specialization. Flamingo, also in the top 25, has maintained its focus on children’s books since it was founded in 1990. At the other end of the scale are extremely small outfits, often with only two or three staff who produce only a couple of titles a year, usually in some specialized scientific or academic field.
But the biggest imbalances in the industry are geographic. The publishing industry is heavily concentrated in Moscow, where some 60 percent of all titles are published, and ninety percent of the national print run is produced. At one time the price of a book could be almost directly correlated with its distance away from Moscow, thanks to transport costs and the costs incurred by each wholesaler and retailer added to the supply chain. Nowadays prices still fluctuate regionally, but far more erratically.
Unlike in the West, the practice of publishers printing a recommended retail price on a book’s cover is rare. And the lack of fixed prices or any other regulation means that regional differences in supply and demand, and input costs like staff wages and shop rental space, can freely feed into the retail price of a book. A rule of thumb would say that it reverses the previous trend—in the capital, retail space, staff wages, demand and prices in general are much higher than in the regions. But that rule does not hold fast. “The same title in Moscow could cost twice or half as much elsewhere,” said Sukhorukov. “And that variation is not only between regions, but between bookshops in the same city.”
Demography bites
But despite all this, more titles are now published, and more copies of them printed, than at any time during the Soviet Union. The quantity continues to grow year by year, and, as far as can be told, demand is holding up despite the effects of the financial crisis. But the book trade is now threatened by a more relentless enemy: time.
Publishers (and traditionalists) everywhere lament the decline in the reading population. It can be attributed to all manner of modern evils—the rise of the Internet, computer games, light entertainment, the pressures and demands of modern life, a general decline of culture and literacy. But the trend is clear. Fewer people are reading, and fewer children are becoming readers.
Should something be done to address the “problem”? A look at world literacy rankings suggests that the panic about declining culture may well be imagined. The United Nations Development Program report for 2007 to 2008 estimated Russia’s literacy rate at 99.4 percent; ahead of the United States and Britain, and alongside several other former Soviet republics. Indeed, the upper ranks of the literacy league are dominated by countries that were once part of the Soviet Union (Russia shares 11th place with Armenia, Ukraine and Uzbekistan). Books may have lost the role they had in Soviet society, but the legacy seems to endure.
Publishers, of course, are more concerned about customers than readers, and they are not quite the same thing. Russians may be amongst the most literate people in the world, but only around half of them actually buy books. That decline is aggravated by Russia’s ongoing demographic crisis. The country’s population is shrinking at a rate of some 1 million a year, and not only are older readers being lost at an alarming speed, but fewer children are being born to replace them.
There’s not much the publishers can do about that, of course, but the rate of decline is such that if it cannot be reversed, the publishing houses may find themselves forced to compete for a shrinking market. That’s a long-term threat, and by no means unique to publishing, but it is a serious one.
There are other problems; copyright protection, long the scourge of the film industry, is also difficult to enforce in literature. There will be no return to the “book famine” of the last years of the Soviet Union, but in some regions it is still difficult to get access to high quality, modern works. At the moment, however, these are peripheral.
It is probably sensible to expect the top publishing houses—particularly Eksmo and AST—to continue to extend their domination of the market. They are better positioned to ride out what is left of the economic crisis, and their long reach allows them to sell all over the country. In the long term, they will also be more resilient to the pressures of the population decline.
Christian Today: Baptist leaders fined for street evangelism in Russiahttp://www.christiantoday.com/article/baptist.leaders.fined.for.street.evangelism.in.russia/24336.htm
Two Baptist preachers in Kaliningrad have been fined after their community “sang psalms and spoke about Christ” in the street, said a news report.by Gretta Curtis, Christian PostPosted: Thursday, October 8, 2009, 8:56 (BST)
Norway-based Forum 18 News service reported that the two preachers - Mikhail Alentyev and Aleksandr Legotin were fined on 25 September by magistrate at Gusev Municipal court for holding a public demonstration.
Legotin insisted that because the Baptists had held a religious service and not a demonstration, the legal requirement to notify the authorities in advance should not have applied. “We follow the law very carefully,” he told Forum 18.
“And under the Universal Declaration [of Human Rights] we have the right to freedom of conscience – the law should be doing the opposite, protecting us from such arbitrariness,” he said.
All public gatherings – whether political or religious – must be sanctioned by the municipal authorities in advance, a Kaliningrad police source speaking on condition of anonymity told Forum 18 on 1 October.
“But they didn't have permission and they had no intention of getting it!” he remarked, clearly irritated by the Baptists' actions, while admitting they had not disturbed public order.
Asked why permission is necessary, the source replied, “That's the law in Russia!” and pointed to Article 20.2 of the Administrative Violations Code. Forum 18 said the policeman declined to comment further.
Mr Alentyev commented to Forum 18 that his 30-strong Gusev congregation “knows from experience” that the local authorities will block its public evangelism even if they do submit advance notification.
The community belongs to the Baptist Council of Churches, which broke away from the Soviet-recognised Baptist Union in 1961 in protest at regulations preventing missionary activity and religious instruction to children. Its communities refuse on principle to register with the authorities in post-Soviet countries.
As the Gusev Baptists preached, sang, played musical instruments and handed out gospels in the town's centre during their end of August evangelism week, they were disrupted by police four times.
"They said, 'What right do you have to do this? Permission? No? Then down to the police station!'" recalled Alentyev, who was detained there for an hour on 3 September.
When likewise detained, Legotin tried to point to religious freedom guarantees in international and national law, as well as the 1993 Russian Constitution, he told Forum 18, but one police officer retorted, "You have the law, we have instructions!" He also said that police accused the Baptists of being extremists.
According to an 18 September Council of Churches report, police officers shouted at and ridiculed the Gusev preachers, and threatened to shut them in a cellar when they refused to sign statements.
Legotin and Alentyev both told Forum 18 this is the first year they have been obstructed by the Kaliningrad authorities. According to the Council of Churches report, police detained and interrogated preachers in Polessk in July. Ten days later, Legotin and a second preacher were summoned to the municipal public prosecutor's office and told they were banned from conducting religious activity in the district without state registration.
In January, police disrupted evangelisation by some 25 Baptists, including Legotin, in Domnovo village (Pravdinsk District). All were detained by police, who took their names, home and work addresses, and interviewed minors without their parents. They also accused the Baptists of receiving funds from abroad and "parasitism" ["tuneyadstvo"], an allegation commonly levelled at religious believers and dissidents during the Soviet period.
Legotin rejects this charge. "I have two jobs," he told Forum 18. "We all work."
Council of Churches communities consistently encounter state opposition when they conduct public religious activity. According to their 23 May report, a female police
officer in civilian clothes and several unidentified men broke up evangelisation at Losevo village market in Voronezh Region on 20 May, warning that if the Baptists did not leave they would be beaten. The preachers later received death threats from locals, and one of their cars was set alight.
Forum 18 said similar attacks have taken place in other regions in previous years, targeting the Baptists and other Churches not recognised by the Russian authorities.
Earlier this year, Russia’s Ministry of Justice established a new body called the Expert Council on Religious Studies that is said to have “unprecedented powers” to suggest policies to control religious groups, according to the US Commission on International Religious Freedom (USCIRF).
USCIRF chair Leonard Leo believed the chair of the Expert Council, Aleksandr Dvorkin, is said to be Russia’s most prominent “anti-cult” activists; and under the leadership by Dvorkin, he said some fear that the Council will close registered organizations, such as the Evangelical Protestant community, and unregistered minority religious communities like the Council of Churches Baptists.
The move prompted USCIRF to add Russia to its watch list for the first time despite having monitored the country’s religious freedom for ten years.
National Economic Trends
RBC: Russia's budget receives less tax allocations
http://www.rbcnews.com/free/20091008115554.shtml
RBC, 08.10.2009, Moscow 11:55:54.The Russian Federal Tax Service allocated RUB 2.195 trillion (approx. USD 73.7bn) to the federal budget in January-September 2009, 32 percent less than in the corresponding period of 2008. According to the regulator, the value added tax accounted for the greatest share of allocations - 41 percent, while the mining tax accounted for 31 percent, the unified social tax for 17 percent, and income tax for 7 percent.
The federal budget received 4.2 times less money (RUB 143bn or approx. USD 4.8bn) from the corporate profit tax in the first nine months of the year, due primarily to a greater number of organizations that incurred losses in the new economic conditions, as well as a decrease in the tax rate from 6.5 percent to 2 percent.
Allocations from the mining tax amounted to RUB 680.5bn (approx. USD 22.85bn), including RUB 613.2bn (approx. USD 20.59bn) from the oil production tax, which is 1.9 times less than in January-September 2008. This decrease may be traced to a considerable drop in oil price - from USD 106.3 in December 2007 to USD 50.7 in December 2008.
Interfax: Russian international reserves down $1.2 bln in weekhttp://www.interfax.com/3/521761/news.aspx
MOSCOW. October 8 (Interfax) - Russia's international reserves down$1.2 billion to $411.5 billion in the week to October 2, the CentralBank said on Thursday. The reserves stood at $412.7 billion on September 25. They consist of highly liquid financial assets at the disposal ofthe CB and Russian government, including foreign currency, monetarygold, special drawing rights, the reserve position at the IMF and otherreserve assets.
Agrimarket: Grain harvest in Russia to exceed the level of 90 mln toneshttp://www.agrimarket.info/showart.php?id=83982
10/08/2009 10:33 Dmitry Medvedev, the President of Russia, declared that in the current year Russia will g\harvest over 90 mln tonnes of grains, according to estimations of experts. Such volumes will completely satisfy domestic consumption requirements and allow keeping the export potential. According to the President, the country also depends on imports of maize seed material in the sphere of maize production. The Russian Federation should organize production capacities of seed material of the crops, cultivated in the country, added D.Medvedev.
Agrimarket: Russia exported nearly 9.8 mln tonnes of grains during 8 months of 2009http://www.agrimarket.info/showart.php?id=83962
10/08/2009 09:02 According to the Federal customs service of the Russian Federation, during January-August of 2009, Russia exported 9.76 mln tonnes of wheat and meslin at the general sum of 1.61 bln USD, an increase of 2.5 times compared to the same period of the previous year. At the same time, during the same period, Russia supplied 8.66 mln tonnes of wheat at the sum of 1.41 bln USD to far-abroad countries, and 1.1 mln tonnes – to the CIS countries (196 mln USD). According to the customs data, during January-August of 2009, the share of exports of foodstuffs from Russia to far-abroad countries totaled 2.7% (in January-August of 2008 – 0.8%). The cost of foodstuff supply volumes increased by 1.8 times compared to January-
August of 2008, and the physical volumes – by 3 times, at the expense of wheat, barley, sunflower seed and sunflower oil exports.
Businessneweurope: MOSCOW BLOG: Its official - the crisis is overhttp://www.businessneweurope.eu/storyf1814/MOSCOW_BLOG_Its_official__the_crisis_is_over
bne October 8, 2009
Its official: the crisis is over. At least that is what Stephen Jennings, CEO of Renaissance Capital told his staff in a recent memo that was leaked to the press.
It must certainly look that way to the (surviving) employees of the bank as they were all put back on their pre-crisis salaries and bonuses in September - something that Jennings could afford after the market capitalisation of Russian stock market officially doubled as of the end of September.
"The dream may have gone, but we are still all about making money," says one Renaissance Capitalstaff, referring to the arrival of oligarch Mikhail Prokhorov in the bank's shareholders' capital.
However, Jennings rallying call to staffers is not frivolous. Macroeconomic indicators across the board are improving on a monthly basis.
Deputy CBR chairman Alexei Ulyukaev summed it up nicely at the VTB Capital investment conference just over a week ago: "The economy is showing some signs of recovery, but it is still fragile, so the Central Bank of Russia has acted to support this growth."
He was referring to the announcement that the CBR had just decided to cut overnight rates by an unexpectedly large 50bp in an effort to make money cheaper and more accessible to struggling companies.
The CBR says it can make such a bold move as inflation has surprised on the downside giving the central bank more room to loosen monetary policy and fill the economy with badly needed cash. Indeed, the Russian economy has seen deflation for the last couple of the months and analysts and the government are marking down their end of year expectation for inflation which will now almost certainly coming less than the 11.6% the state bodies were predicting at the start of the year.
As each weak passes another indicator comes out to point to a more rosy prognosis. At the start of the year the few journalists that were looking for upbeat stories had little else other than the fact that supermarket company Magnit had seen earnings growth up by a
third year-on-year in February. Now the evidence that the economy is starting to function again is becoming increasingly more solid. To cite two of the more important indicators: VTB's two PMI indices that track services and GDP growth are both back over 50 - the level that indicates growth. And in September bank lending saw an increase across the whole banking sector -- not only in state banks that had been ordered to lend by the Kremli, as banks and borrowers adapted to the new conditions during the revival.
Even the deputy Prime Minister and Finance Minister Alexei Kudrin - who is probably the most cautious commentator on Russia's prospects - has moved up the point when the Russian economy returns to pre-crisis size by a year to 2012.
This optimism is spreading out slowly into the forecasts. Renaissance Capital recently upgraded its prediction for economic growth in 2010 to 4%, which is ahead of consensus. And the predictions for the end of year level for the RTS index is also climbing: Uralsib just cut their equity market risk factor which increases their target for the index up to 1,355.
And the bond market are already flying with analysts flat out calling this a rally. Ruble bond markets are setting new post-crisis highs on a weekly basis, while yields are falling fast. even the flood of new issuers – as bonds are the only source of funds on the market for most companies -- has not damped spirits; banks have to do something with all their liquidity they have built up and they certainly aren’t going to be foolish enough to lend it to anyone.
This is all starting to look a little bit like 1999.
In the aftermath of the August 17, 1998 financial crash most analysts and commentators were in a state of shell shock. The IMF was predicting a return to hyperinflation and none of the economists expected Russia to recovery for years. However, by the second half of 1999 it was becoming increasing clear that the economy was moving and it was obvious by 2000 when the economy soared by 10% -- its fastest rate of growth ever. Everyone missed the effect that devaluation would have on re-monetarizing the economy and cutting cost for the cash-cow oil companies that primed the pump with copious amounts of cash.
So the obvious question to ask now is if Russia is about to put in another strong bounce back?
To the outside world Russia still looks like it is in deep trouble. Standard & Poor's lead bank analyst Ekaterina Trofimova put the willies up the market a few weeks ago with a paper that said the real level of Russian bad banking debt is closer to 40% of total loan book - well ahead of the official 5.5% as of August and a level that could well cause the much talked about "second wave" of the crisis.
Trouble is Trofimova is talking about the wider problem of "troubled debt" rather than the more strictly defined non-performing loans. These are credits that are in trouble and
have been restructured (so are not counted in the NPL figures) and are "performing" just not at 100%. These credits are a big problem for the banking sector, but they are not the same as debt that pays nothing and can never be recovered.
If you are going to go down this road you need to qualify the number 40% with just "how" troubled this debt is - which she didn't do. Anecdotal evidence suggests that banks are actually coping with dealing with this bad debt a lot better than anyone could hope for.
Pytor Aven, chairman of Alfa Bank also spoke at the VTB conference and said the bank was expecting to end the year with 10% NPLs and maybe even a small profit. This should have been head line news for business journalists as in about May Alfa already had the worst NPLs of any big bank in the sector - with 10.2% NPLs - which scarred everyone as it could have collapsed and started a systemic meltdown.
However, the word on the street is that the bank has been "very aggressive" in collecting debt (just ask Oleg Deripaska or the people at Telenor what this means) and obviously has improved its position enormously if it is still reporting the same levels of bad debt it did at the start of the year. Indeed Aven was one of the most outspoken ravens of disaster predicting the sector NPLs would reach 35% forcing the government to start a mass recapitalisation of the sector - some 10%-15% worse than his very well respected chief economist Natalia Orlova was predicting at the same time. Today Aven appears positive sanguine about the state of the banking sector.
In 1999 the beneficial effects of devaluation caused the V shaped return to health, but that wont work this time. So what is going on?
The reason the Russian economy fell so hard so fast is unlike their peers in the west who merely slowed their businesses down, Russia's crisis-weary owners all brought their companies to a complete standstill at the same time.
Troika said in a recent note: "Our estimates based on end use show that the decline in inventories may explain most of the fall in 1H09 (9.1% of the total 10.4%)."
However, as orders are still coming in we have clearly reached the point where everyone has run out of stock and so needed to start making new things to restock inventories, "which will significantly stimulate GDP in 2H09 and early 2010," says Troika.
Going back over all this and the stars are all starting to align for 2010. There is loads of cash in the banking sector. Ulyukaev says the net foreign currency exposure of the banking sector in 2008 was minus $1bn, but now it is plus $40bn - more than the average liquidity of the entire sector for most of the last five years.
At the same time the only reason companies were not working was they choose to stop working, but as economic recovery gathers strength they can all start working again as at the end of the day and unlike 1998 Russia has seen almost no major bankruptcies of
significant companies.
The dramatic slowdown in GDP growth ended the problem of "economic overheating" which was beginning to be discussed at the start of 2008 before it every became a real problem and has at a stroke killed off high inflation which was Russia's major economic problem going into 2008.
Falling inflation also means the CBR can dramatic loosen monetary policy and reduce rates to make interest rates real for the first time, while in the more developed world central banks will have to start raising interest rates as soon as they start their exit strategies from the emergency stimulus packages or they will face inflation problems.
Likewise, Russia can also continue cutting taxes as the economy recovers thanks to its low external debt exposure and large foreign reserves (which have recovered from a low of $340bn in the midst of the crisis to about $415bn now), while again the rest of the world will soon have to start raising taxes to pay off the massive borrowing it has just done.
The big bugbear in all this is if oil prices collapse again. The current $70 a barrel means Russia Inc remains in profit, but Kudrin predicts that oil prices will fall to around the $58 he has in the budget. While it is a mugs game predicting oil prices beyond tomorrow, some analysts are now talking about $100 oil as soon as the end of next year, while the oil futures market is also pricing oil at current levels or higher in the medium term.
And there is the problem: even if things are going well inside Russia it still remains incredibly vulnerable to the state of the global economy and this is because unlike places like China and India it has ignored developing its own market and diversifying the economy. However, if recent comments from the likes of Prime Minister Vladimir Putin are anything to go by at least the Kremlin gets it now.
Business, Energy or Environmental regulations or discussions
Bloomberg: OAO Gazprom, Evraz Group SA: Russia’s Stock-Market Previewhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNkhHKh_lucg
By Anna Shiryaevskaya
Oct. 8 (Bloomberg) -- The following shares may have unusual price changes in Russian trading. Stock symbols are in parentheses, and prices are from the previous close unless otherwise noted.
The 30-stock Micex Index advanced 0.5 percent to 1,226.17, the highest since September 2008. The dollar-denominated RTS Index gained 1.3 percent to 1,287.37.
OAO Gazprom (GAZP RX): E.ON AG is in talks with its Norwegian natural gas suppliers and OAO Gazprom to defer some fuel purchases so it can buy cheaper gas on
the spot market, Chief Executive Officer Wulf Bernotat said. Gazprom, the world’s largest natural gas producer, dropped 0.5 percent to 174.05 rubles in Moscow.
Evraz Group SA (EVR LI): Vnesheconombank, Russia’s state- run development bank, plans tomorrow to discuss extending the terms for loans it made to Evraz Group SA and five other companies, the government said today in a statement. The steelmaker dropped 1.1 percent to $26.50.
To contact the reporter on this story: Anna Shiryaevskaya in London at [email protected].
Last Updated: October 7, 2009 22:00 EDT
Bloomberg: Russian Stocks Rally Most in World, Led by Raspadskaya, Sberbankhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=alqhr9.WqUO0
By Stephen Kirkland
Oct. 8 (Bloomberg) -- Russian stocks rose the most among equity markets worldwide, with the Micex climbing 2.1 percent as of 11:18 a.m. in Moscow. OAO Raspadskaya rallied 5.5 percent after the company reported the price of washed coal increased about 69 percent and Deutsche Bank AG upgraded its price estimate for the stock, lifting its forecast for coking coal 66- 115 percent for 2010-2012. OAO Sberbank advanced 2.8 percent.
Last Updated: October 8, 2009 03:24 EDT
Reuters: Russian markets -- Factors to Watch on October 8http://in.reuters.com/article/oilRpt/idINL88801020091008
Thu Oct 8, 2009 11:32am IST MOSCOW, Oct 8 (Reuters) - Here are events and news storiesthat could move Russian markets on Thursday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to [email protected]): Aton: Expects a positive opening to trade as oil ticks upalong with U.S. futures. The next resistance level on the MICEXindex is 1,240 points, with support at 1,215 points. Olma: Markets are looking up. Strong results from U.S.aluminium giant Alcoa Inc (AA.N: Quote, Profile, Research) after markets closed onWednesday could have a positive influence on Russian metalcompany stocks, and even on the market as a whole. Alor: Favours Polyus Gold (PLZL.MM: Quote, Profile, Research) today, with the preciousmetal it produces trading at all-time highs. EVENTS [RU-DIA] (All times GMT): * CHISINAU - Meeting of CIS foreign ministers
* MOSCOW - Russian President Dmitry Medvedev to hold talkswith Defence Minister Anatoly Serdyukov * MOSCOW - Russia's cabinet presidium to discuss dairymarket regulation * MOSCOW - Top Kremlin aide Arkady Dvorkovich and RussianEconomy Minister Elvira Nabiullina hold press conference onstate energy-saving projects - 0600 * SAMARA, Russia - First Deputy Prime Minister Igor Shuvalovto visit Russian carmaker AvtoVAZ (AVAZ.MM: Quote, Profile, Research) to discuss thecompany's restructuring problems * MOSCOW - Russian foreign ministry spokesman AndreiNesterenko gives briefing - 1100 * MOSCOW - Court to hear case brought by Josef Stalin'sgrandson against liberal newspaper Novaya Gazeta for allegeddefamation of Stalin's name * VILNIUS - Lithuania-Russia intergovernmental councilmeeting (to Oct. 9) * ALMATY - Kazakhstan International Oil & Gas Exhibition andConference (to Oct. 9). LINK: www.kioge.kz/en/ * MOSCOW - Russia's Housing Reform Fund to place on demand1.5 billion roubles of temporarily free cash in deposits withcommercial banks * MOSCOW - The central bank to offer 5 billion roubles ofSeries 11 OBR bills RU0A0JQBU7=MM at top-up auction IN THE PAPERS [PRESS/RU]: Chinese metals conglomerate Chinalco may be interested inacquiring a stake in United Company RUSAL when the indebtedRussian aluminium giant lists shares in Hong Kong, Vedomostibusiness daily reports on its front page. [ID:nL895542] But Indonesia may seek a new partner to replacecash-strapped UC RUSAL in developing an alumina project in WestKalimantan, Kommersant business daily reports. To see a Reutersstory: [ID:nJAK452204]. Kazakh state concern KazMunaiGas [KMG.UL] is seeking astrategic partner to invest in its Pavlodar oil refinery inreturn for guaranteed supplies of crude, in a deal that mightpossibly interest Russian companies such as Gazprom Neft(SIBN.MM: Quote, Profile, Research), Kommersant also reports. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS:Russia rouble rally continues, c.bank intervenes [ID:nL7550590]Reform tsar struggles to take Russia into nano [ID:nL6375120]Opposition despairs as Moscow tightens the screws [ID:nL5683191]Putin marks birthday with writers, church praise [ID:nL7531124]Ukraine's Russian gas bills tough, may cut imports[ID:nL7170777] COMPANIES/MARKETS:Deripaska's firm to start paying debt in 2010 [ID:nL7591413]Russian Railways says won't list shares next year [ID:nL7360110]Magnit to roadshow share sale end-Oct-sources [ID:nL7675789]Russia's Mosenergo H1 net more than doubles [ID:nL7646991] ENERGY:Turkmenistan plans renewal of gas flows to Russia [ID:nL7152944]Russia LUKOIL delays refinery maintenance to Nov [ID:nL7241852]
Kashagan development cost rises by $7 bln [ID:nL7584642]Tengiz to raise oil output to 36-42 mln T by 2016 [ID:nL7569119] COMMODITIES:Indonesia may seek new partner for Antam-RUSAL JV[ID:nJAK452204]Russian beet sugar refining down 5.7 pct yr/yr [ID:nL7362288]Russia '09 grain crop fcst raised to 96-97.5 mln T[ID:nL7523005] MARKETS CLOSE/LATEST: RTS .IRTS 1,287.37 +1.32 pct MSCI Russia .MIRU00000PUS 737.24 +0.23 pct MSCI Emerging Markets .MSCIEF 931.75 +0.31 pct Russia 30-year EurobondRU011428878= yield: 5.470/5.426 pct EMBI+ Russia 11EMJ 244 basis points over Rouble/dollar RUBUTSTN=MCX 29.7649 Rouble/euro EURRUBTN=MCX 43.7050 NYMEX crude CLc1 $70.14 +$0.57 ICE Brent crude LCOc1 $67.86 +$0.66 For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU] Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE]
Reuters: Russia gold output seen rising 11.1 pct – lobby http://www.lse.co.uk/FinanceNews.asp?shareprice=&ArticleCode=fmj64ff6gx9qpg7&ArticleHeadline=Russia_2009_gold_output_seen_rising_111_pct__lobby
Thu, 8th Oct 2009 09:18
MOSCOW, Oct 8 (Reuters ) - Russia's main gold industry lobby on Thursday revised up its 2009 forecast for the country's output of the metal to 205 tonnes from a previous estimate of 190 tonnes.
The Russian Gold Industrialists' Union said in a statement the increase would be due mainly to the launch of large mining projects in the country's east.
The revised output forecast is 11.1 percent higher than the 184.49 tonnes of gold that Russia produced last year.
(Reporting by Aleksandras Budrys) Keywords: GOLD RUSSIA/FORECAST
([email protected]; +7 495 775 1242; Reuters Messaging: [email protected])
Reuters: Chinalco could participate in RUSAL's HK IPO-paperhttp://www.forbes.com/feeds/afx/2009/10/08/afx6979320.html
10.08.09, 02:44 AM EDT
MOSCOW, Oct 8 (Reuters) - Chinese metals conglomerate Chinalco may be interested in acquiring a stake in UC RUSAL when the indebted Russian aluminium giant lists shares in Hong Kong, a Russian newspaper reported on Thursday.
Vedomosti business daily cited two unidentified banking sources as saying Chinalco was a potential partner for UC RUSAL as the world's largest aluminium producer and its majority owner, industrial magnate Oleg Deripaska, seek to pay off debts.
The newspaper cited a third source, close to UC RUSAL, as saying Chinalco was a possible investor. The Russian company itself was not immediately available for comment when contacted by Reuters.
Russian Prime Minister Vladimir Putin is due to visit China next week and is expected to sign a series of deals to boost business links between the two countries.
UC RUSAL, more than $16 billion in debt, has re-started plans for a stock listing in Hong Kong through which it hopes to raise between $1.5 billion and $2.5 billion by the end of this year, sources have told Reuters on condition of anonymity.
The company must first settle its debt restructuring plan with more than 70 international and Russian banks, the sources said. UC RUSAL has said it plans to complete this long-delayed process by the end of October.
Chinalco is the state-owned parent of Aluminum Corp of China Ltd ( ACH - news - people ), also known as Chalco.
A source in Russia told Reuters on Monday that Chalco would be the benchmark from which UC RUSAL would derive its valuation when it lists in Hong Kong.
(Writing by Robin Paxton; editing by Simon Jessop) Keywords: RUSAL CHINALCO/
([email protected]; +7 495 775 1242; Reuters Messaging: [email protected])
UralSib: Coking coal price to reach $90/ton in 4Q09
http://www.businessneweurope.eu/dispatch_text10121
UralSibOctober 8, 2009
Raspadskaya raises coal price 50% QoQ. Vedomosti reported this morning that Raspadskaya (RASP - Under Review) has raised the domestic coking coal concentrate price for 4Q09 by 50% QoQ to $90/ton (RUB2,700/ton) FCA (at the factory gate). According to Vedomosti, the Federal Antimonopoly Service (FAS) also agreed to Mechel's domestic coking coal concentrate price increase to $100/ton (RUB3,000/ton) in 4Q09. Belon last week announced a 60% QoQ increase in its coking-coal price to $100-$105/ton (RUB3,000-3,100/ton).
Spot coal prices at premium. Raspadskaya and Mechel's new prices came in line with our expectations and largely in line with Belon's recently disclosed price. The price difference is due to the companies' different coal grades; Zh grade for Belon, GZh and Zh for Raspadskaya, and K, KO, and OS for Mechel. This week Metal Expert reports that domestic coking-coal spot prices are currently at a 15-20% premium to 4Q09 contract prices for Zh and GZh grades, which may suggest further upside potential in 1Q10.
Positive news for integrated producers. The news is marginally positive for Raspadskaya and Mechel, as the new $90-100/ton price was expected and already priced in by the market. Meanwhile, the news is slightly negative for non-integrated steel producers Novolipetsk and Magnitogorsk, which initially expected only 15-20% growth in coking coal prices and may lose their cost advantage over integrated steelmakers such as Evraz. We are currently revising our recommendation on Raspadskaya to incorporate the new coal price levels for 2009 and 2010, which will result in an earnings upgrade for the sector. We currently have the stock Under Review. Michael Kavanagh,
The Moscow Times: RZD to Create New Company http://www.themoscowtimes.com/business/article/386976.html
08 October 2009The Moscow Times
Russian Railways, or RZD, said Wednesday that it had approved the creation of a new subsidiary that would handle long-distance trips.
Russian Railways will own a stake of 100 percent minus 1 share in Federal Passenger Company, and will capitalize it to the tune of 136.8 billion rubles ($4.59 billion).
Federal Passenger Company will receive 24,690 train wagons that are currently owned by RZD and will take all long-distance trips from RZD starting from April 1, 2010.
“The goal for creating this company is the organization of an effective business in transporting passengers long distances on the basis of cooperation between the company and the authorities,” RZD vice president Mikhail Akulov said.
The company aims for revenues of 165 billion rubles a year from 2010, and will get its financing from bank loans — with help from state guarantees.
OCTOBER 8, 2009, 2:25 A.M. ET
Magnit Gets Regulator OK To Offer More Shares Outside Russia http://online.wsj.com/article/BT-CO-20091008-701483.html
MOSCOW (Dow Jones)--Russian grocer OAO Magnit (MGNT.RS) said Thursday it has received official permission to list more of its shares on exchanges outside the country.
Magnit, which already trades in London and Moscow, is entitled to list a maximum of 30% of its shares outside Russia.
Russia's Federal Financial Markets Service said the company has permission to list a further 16.8 million shares abroad.
The grocer's global depository receipts -five of which represent one ordinary share - closed up 1.5% at $13.9 in London Wednesday.
Magnit has said it will determine the price for its new share issue after a preemptive rights period has been completed.
Company Web site: www.magnit-info.ru
-By Will Bland, Dow Jones Newswires; +7 495 937 8445; [email protected]
RIA: Russia set to ban inefficient light bulbs from 2014 http://en.rian.ru/russia/20091008/156392334.html
11:5508/10/2009MOSCOW, October 8 (RIA Novosti) - The Russian government is considering a ban on all incandescent light bulbs from January 1, 2014, the economics minister said on Thursday.
"We propose banning incandescent light bulbs of over 75 watts from January 1, 2013, and all incandescent light bulbs from January 1, 2014," Elvira Nabiullina said at a news conference.
The government earlier said it could ban incandescent bulbs over 100 watts from January 1, 2011.
Presidential economic aide Arkady Dvorkovich said that the government did not plan to fix the timescales in law.
"As to the second and third stages - in 2013 and 2014 - these dates, although in the law, will not be rigidly fixed," he said at the news conference. "We expect that we will do it in this timeframe, but we would like to look at it in the coming months as the first stage starts to work."
"But I think these terms are realistic," Dvorkovich added.
Nabiullina said the cost of Russia's transition to energy efficient bulbs was estimated at 100 billion rubles ($3.3 billion).
The Russian government is seeking to raise energy efficiency in the country, which is one of the highest users of energy per unit of GDP in the world.
Dvorkovich said a new law on energy efficiency would require legal entities to install energy meters at their buildings and offices until January 1, 2011 and private individuals until January 1, 2012.
Very few buildings in Russia have meters for gas, or cold or hot water, which is usually pumped in from combined heat and power plants.
The Moscow Times: Billionaire Eyes Heating Reform http://www.themoscowtimes.com/news/article/386973.html
08 October 2009By Nadia Popova
The government should set long-term prices for heat producers and use money earmarked for new power stations to modernize the country’s inefficient grid system, which would help keep costs down for consumers, billionaire Mikhail Prokhorov said.
As industrial production plummeted over the past year, electricity and heat producers have lobbied the government for leniency with their state-mandated investment programs, which were approved during the sector’s privatization.
But Prokhorov, who controls 25 power stations in the European part of the country, told The Moscow Times that urgent changes in the state’s approach toward the sector were needed.
“The reform of the electricity sector has been held. Now the time has come for changes to the centralized heating system,” Prokhorov said. “The changes are urgent.
“The government should allow the so-called territorial generating companies, or TGKs, to redirect investment planned for the construction of new power stations to build new heat grids and new boiler houses,” he said.
Most of the country’s heat grids are outdated and technologically exhausted, meaning up to 50 percent of heat can be lost between the generator and the consumer.
If generators are allowed to redirect their investments, consumers will pay significantly lower rates and power stations will become far more efficient, Prokhorov said.
“Building a new power station leads to higher tariffs for heat since the investments to build it have to be returned,” he said. “If a new grid is built and the capacity of the working power station is used more efficiently, tariffs will grow insignificantly because much less heat will be lost on the way to the consumer.”
Prokhorov offered his TGK-4 as an example.
“I have 5,000 kilometers of grids, which have been in use for 30 years on average,” he said. “So I have to build at least 290 kilometers of new grids per year. But with the tariffs set by the state I could only afford to replace 120 kilometers last year and will only replace 80 kilometers of the grid in 2009.”
The situation could be changed, for example, if some of the funds intended to build a 240-megawatt power station in Lipetsk, which is part of TGK-4, were redirected to replace grids.
“If that were done, prices for heat would only rise 13 percent next year, instead of 89 percent,” he said, referring to the local market. “The utilization of the power station will skyrocket to 70 percent from the current 40 percent.”
TGK-4 has sent the suggestions to the Energy Ministry, Prokhorov said, and he presented this approach to President Dmitry Medvedev at a Sept. 30 meeting of a state commission on the modernization and technological development of the economy.
Under the electricity sector privatizations from 2004 to 2008, state-run monopoly Unified Energy System sold off its assets to domestic and foreign investors, who took on obligations to modernize the country’s dilapidated electricity and heating industry by building new power stations.
A market for the electricity sector has been created and prices for half of the power generated in Russia have been liberalized. Heating rates, however, are still set annually by regional energy commissions controlled by the local administrations.
“When the tariff for the heat is changed every year and is mainly dependant on the will of the region’s governor, you can’t plan any long-term energy-efficient measures,” Prokhorov said. “Long-term heat tariff planning is badly needed for the sector.”
Separately, Prokhorov said TGK-4, based in the Tula region, was holding negotiations with a number of foreign investors to attract additional financing and acquire new technology.
“TGK-4 is working with a few potential partners, some of which want to buy a share in the company, while another wants to create a joint venture with us,” Prokhorov said. He declined to identify the companies.
Onexim Group, Prokhorov’s holding company, was involved in one of last year’s biggest corporate governance disputes after it backed out of a deal to buy out minority shareholders in TGK-4.
In May 2008, Onexim bought a 50.4 percent stake for 2.7 kopeks per share, which required the company to make a buyout offer to the minorities at that price.
But the firm’s shares plummeted last fall to as low as 1 kopek, and 40 percent of the firm’s minority shareholders decided to exercise the buyout right, requiring Onexim to pay a total of 21 billion rubles.
Onexim said in October that it did not have to buy the shares because TGK-4 had recently been placed on a list of natural monopolies, which meant that Cyprus-registered Onexim would have to get permission from the state before it could increase its stake.
Onexim has since issued dozens of lawsuits asking the court to call the initial deal invalid. Some of the lawsuits are still pending.
Activity in the Oil and Gas sector (including regulatory)
RIA: LUKoil ready to participate in Qurna oil project on Iraqi terms http://en.rian.ru/business/20091008/156392830.html
12:2908/10/2009MOSCOW, October 8 (RIA Novosti) - Russia's largest independent oil producer LUKoil is ready to participate in the West Qurna-1 oil project in Iraq on Baghdad's terms, CEO Vagit Alekperov said on Thursday.
"We have informed the Iraqi Oil Ministry that the consortium of LUKoil and Conoco Philips is prepared to hold direct negotiations on the West Qurna-1 project under the terms earlier announced by the Iraqi Oil Ministry," Alekperov said.
The Iraqi authorities held the first round of negotiations on West Qurna-1 in the summer of 2009. LUKoil's participation in the talks produced no results, with Alekperov saying that the project's terms were economically disadvantageous for the company.
Alekperov said LUKoil has now changed its opinion on West Qurna-1 following a detailed analysis.
Alekperov said the company was also participating in the second round of negotiations on the West Qurna-2 project, adding that the infrastructure of both West Qurna-1 and West Qurna-2 deposits required a single operator.
West Qurna is one of Iraq's biggest oil fields with estimated recoverable reserves of 11-15 billion barrels and production potential of about 1 million barrels per day.
LUKoil was involved in the development of the first phase of West Qurna and signed a contract with the Saddam Hussein regime to develop the second stage, but the deal was frozen in 2002. Iraq and LUKoil agreed in 2008 to establish a working group to amend the original contract on West Qurna-2.
West Qurna-2's proven recoverable reserves have been estimated at around 6 billion barrels of oil. Under the terms of the contract, output could amount to 4.8 billion barrels of oil and 56.4 billion cubic meters of associated gas. Investment in the project could reach $4 billion.
PR-Inside: Sakhalin II Project: Sakhalin Energy Signs an Additional Project Finance Contract http://www.pr-inside.com/sakhalin-ii-project-sakhalin-energy-signs-r1517753.htm
2009-10-08 08:00:03 – Tokyo, Oct 7, 2009 - (JCN Newswire) - Sakhalin Energy Investment Company Ltd. (SE), where Mitsubishi Corporation hold 10% share (the shareholder structure comprised of OAO Gazprom, Royal Dutch Shell plc, Mitsui & Co., Ltd., and Mitsubishi Corporation), has concluded an additional financing agreement of US$1.4 billion for the Sakhalin-2 Phase 2 project with the consortium of international commercial banks.Nippon Export and Investment Insurance (NEXI), an Export Credit Agency owned by the Japanese government, will provide Overseas United Loan Insurance (Investment and Loan Insurance for Natural Resources and Energy) which covers the loan granted by the consortium banks. Based on the additional financing agreement and associated documents, the consortium banks will provide additional loan of US$1.4 billion.
In this context, Mitsubishi Corporation, along with other Shareholders of SE, signed a sponsor guarantee agreement which will be effective until the completion of the project.
SE has already signed other financing agreement of US$5.3 billion in June 2008, the additional project finance contract of US$1.4 billion this time makes a total debt of US$6.7 billion. The funds will be used to finance the completion of the full scope works of the Sakhalin-2 Phase 2 project, including the ongoing drilling program for gas and oil production.
As a shareholder of SE, Mitsubishi Corporation considers this conclusion of the additional project financing as one of the meaningful milestones of Sakhalin-2 Project,
and will continuously support Sakhalin Energy to become a reliable energy supplier to all the customers and concerned stakeholders.
Sakhalin II is one of the world's largest integrated oil and gas development project, with estimated resource of approximately 4 billion barrels oil equivalent.
Sakhalin Energy Investment Company Ltd is the Joint Venture of Shareholders and is the Operator of the SakhalinⅡ project. Shareholder composition of the company is OAO Gazprom (50%+1share), Royal Dutch Shell plc (27.5%-1share), Mitsui & Co. Ltd (12.5%), and Mitsubishi Corporation (10%).
Project Financing is a finance scheme secured by the cash flow generated by the project, which is commonly used in the world's oil and gas industry. Sakhalin Energy Investment Company Ltd,　the Japan Bank for International Cooperation (JBIC) and a consortium of international commercial banks signed a Project Finance Contract of US$5.3 billion for the Phase2 project on 16th June 2008.
Ukrainian Journal: Government to intervene in dispute between Lukoil and UkrTransNaftahttp://www.ukrainianjournal.com/index.php?w=article&id=9216
Journal Staff ReportKIEV, Oct. 7 – The government will get involved in a dispute between Russian oil major Lukoil and UkrTransNafta, a state oil shipper, seeking to restart an oil refinery in Odessa, an official said Wednesday.
Lukoil stopped the refinery last week following the dispute with UkrTransNafta after the oil shipper had acted on a plan to start massive imports of Caspian Sea crude to one of Lukoil’s competitors.
Petroleum Economist: Ukraine: EU needs no new pipelines; no dispute with Gazprom expectedhttp://www.petroleum-economist.com/default.asp?page=14&PubID=46&ISS=25487&SID=722794
Ukraine is a reliable gas-trasit state, more gas pipeline capacity to Europe is not needed, says Naftogaz
By Derek Brower
Ukraine's gas-pipeline system is big enough to handle European demand, making multi-billion-dollar plans for new infrastructure redundant, the deputy chief of Naftogaz told WGC News in an interview yesterday.
Vadym Chuprun said falling gas demand in Europe means Ukraine's pipeline system now has 80bn cubic metres a year of spare capacity – surpassing the capacities of proposed pipelines, such as the Gazprom-sponsored Nord Stream and the EU-backed Nabucco, which are designed to bypass Ukraine.
Another official at Naftogaz, Ukraine's state-owned energy company, dismissed as a "lie" any notion that Ukraine's pipeline system is unreliable.
In January, gas exports through Ukraine to Europe stopped for several weeks during a dispute over Naftogaz's unpaid debts to Gazprom, leaving several countries in eastern Europe starved of their main energy source.
The debate over which company triggered the dispute is still causing acrimony. Naftogaz remains adamant that Gazprom was to blame and yesterday the company passed to WGC News documents it claimed would prove its case.
But Chuprun said another supply conflict was unlikely this January, when Ukraine has agreed to pay European-level prices for Gazprom's gas. Naftogaz settled all outstanding debts with the Russian gas exporter this week and would pay in full for its gas until the end of the year, Chuprun said.
The Russian company confirmed yesterday that it had received Naftogaz's payment for gas deliveries in September. However, despite Ukraine's guarantee to meet its gas payments, Naftogaz' finances remain precarious, say analysts.
Meanwhile, relations between Gazprom and Naftogaz have improved, Chuprun suggested. He said he had met Alexei Miller in Buenos Aires on Tuesday and the Gazprom chief told him his company was "completely satisfied with Naftogaz".
Chuprun later broke from his interview with WGC News to greet Alexander Medvedev, the head of Gazprom's export division, who arrived for an amicable meeting with Chuprun at Naftogaz' WGC headquarters.
However, Chuprun rejected any notion that Gazprom could seek control over some of Ukraine's gas-pipeline system.
That idea was recently put forward by former Gazprom chief and ex-ambassador to Ukraine, Viktor Chernomyrdin, who is now an adviser to Russia's President Dmitry Medvedev. Some European companies have also expressed an interest in managing parts of Ukraine's pipeline system.
"The entire gas transport system belongs to the state and it is illegal to privatise the system or rent out parts of it," Chuprun said.
The gas conflict in January was only the latest of a series of disputes between the two companies, which has alarmed Europeans about the reliability of Russian gas flows to Europe through Ukraine.
The proposed 31bn cm/y Nabucco pipeline would bypass Ukraine to import Central Asian and Mideast gas to Europe, while the 55bn cm/y Nord Stream would deliver Russian gas directly to Germany across the Baltic Sea. Gazprom's other planned project, South Stream, would also avoid Ukraine, delivering 63bn cm/y to eastern Europe across the Black Sea.
The combined cost of the projects could reach €40bn, according to some estimates.
Ukraine's transmission capacity stands at 210bn cm/y, with onward export capacity to Europe of 175bn cm/y. But Chuprun said falling demand in Europe means exports this year will amount to just 95bn cm/y, leaving 80bn cm/y of unused capacity.
Easy Bourse: 2nd UPDATE: New German Grid Legislation May Delay Nord Streamhttp://www.easybourse.com/bourse/actualite-financiere/2nd-update-new-german-grid-legislation-may-delay-nord-stream-FR0010208488-741969
Publié le 07 octobre 2009Dowjones
(updates with background) By Jacob Gronholt-Pedersen and Jan Hromadko Of DOW JONES NEWSWIRES MOSCOW -(Dow Jones)- New legislation in Germany regulating construction of new gas infrastructure could delay construction of the Nord Stream pipeline, Russian gas firm OAO Gazprom (GAZP.RS), a majority shareholder in the project, said Wednesday. "[Gazprom is] concerned about new rules regulating gas infrastructure in Germany, which may result in a delay of construction of the pipeline," the company said Wednesday following a meeting between Gazprom's Chief Executive Alexei Miller and Dutch energy company N.V. Nederlandse Gasunie's Marcel Kramer. While a Gazprom spokesman was unable to clarify what legislation the statement referred to, Gasunie said it was a reference to new German regulation which lowers return rates on new investments on infrastructure projects within Germany. "This means that new infrastructure to accommodate gas from the Nord Stream pipeline could be delayed," a Gasunie spokesman said. From 2010, Germany's gas pipeline networks will be regulated according to the so-called "incentive based" benchmarking regime, under which the regulator determines the most efficient operator. The regulator has also set maximum rates of return on investment and revenue ceilings for gas grid operators. Many of the network operators, including Gasunie, have complained that the regulation practices in Germany are eroding investment returns, and that the reduced incentives to invest in new infrastructure jeopardize security of supply. "Bottlenecks are inevitable, (if) new gas flows - for example through Nord Stream -
(aren't) accommodated by new infrastructure," said Gasunie's Kramer. The regulator also last week lowered grid access fees for Germany's 10 natural gas transmission grid operators by 25% on average from Oct. 1. Grid access fees are the price network operators charge their customers to access their grid. Germany's largest gas grid operator E.ON AG (EOAN.XE) has said the reduced grid access fees would result in considerable cost pressure. Nord Stream AG, the project operator, meanwhile said the pipeline is on schedule, with governmental authorization to lay the pipeline due by the end of the year. "Nord Stream AG is not subject to these regulations. Our project is on time and budget, we expect all permits by the end of 2009," a Nord Stream AG spokesman said. Gazprom holds 51% in Nord Stream AG, which is scheduled to start deliveries of up to 55 billion cubic meters of Russian gas a year to North European consumers from 2011. Germany's Wintershall - a subsidiary of BASF AG - and E.ON AG (EOAN.XE) each have 20%, with the remaining 9% belonging to Nederlandse Gasunie NV. French energy firm GDF Suez SA (GSZ.FR) is expected to join the project. Company Web site: www.gazprom.ru -By Jacob Gronholt-Pedersen and Jan Hromadko, Dow Jones Newswires; +7 495 937 8445. [email protected] Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=FpQ0NIK%2FP%2FueIlsPUWEzPw%3D%3D. You can use this link on the day this article is published and the following day.
VTB: Nord Stream project faces difficulties
http://www.businessneweurope.eu/dispatch_text10121
VTB CapitalOctober 8, 2009
new regulations in Germany limit the profitability of gas pipeline operators in the country to 5% - neutral for Gazprom
News: According to Vedomosti, the launch of Gazprom's gas pipeline project Nord Stream might be postponed due to the introduction of new regulations in Germany, which limit the profitability of gas pipeline operators in the country to 5%. The paper speculates that 5% might be not enough to motivate the company's operators to build a gas pipeline from Gazprom's pipeline to endcustomers. Gazprom expects the Nord Stream project to be launched at the end of 2011.
Our View: There are a number of issues over building the Nord Stream pipeline, including environmental, which Gazprom intends to resolve by the end of this year. We believe that, in addition to the environmental issues, the company will use its negotiating power to resolve any possible problems with German operators. Even if Gazprom were to postpone the launch of Nord Stream by 1-2 years, that would not significantly affect its
operating performance. Considering the latest fall in demand all over the world, Gazprom has sufficient capacity to transport the volumes requested. Lev Snykov
Reuters: UPDATE 2-GDF Suez hopes to enter Nord Stream by year endhttp://in.reuters.com/article/oilRpt/idINN0748334320091007
Thu Oct 8, 2009 2:58am IST
* Nord Stream talks seen complete by year end
* Gazprom to retain 51 pct majority stake in pipe
* European gas pricing could harm future demand (Recasts, adds further comments, details; adds byline)
By Robert Campbell
BUENOS AIRES, Oct 7 (Reuters) - France's GDF Suez (GSZ.PA: Quote, Profile, Research) hopes to wrap up talks to join the Nord Stream natural gas pipeline by the year end and sees no obstacles to completing the transaction on time, a senior executive said on Wednesday.
GDF would acquire its stake in the pipeline project from German firms in the venture, allowing Russian gas giant Gazprom (GAZP.MM: Quote, Profile, Research) to maintain its 51 percent shareholding, GDF's Vice Chairman Jean-Francois Cirelli told reporters at the World Gas Conference.
"At this time there are no big questions or obstacles to completing the deal by year end," Cirelli said.
Sources familiar with the discussions told Reuters earlier this month that GDF was negotiating to take a 9 percent stake in the pipeline project.
German utility E.ON Ruhrgas (EONGn.DE: Quote, Profile, Research) is the other main backer of the pipeline, which connects Russian gas fields with Western European markets by following a route in the Baltic Sea.
Nord Stream will carry 55 million cubic meters of gas annually to Germany when it begins operations in 2012. The line has proven controversial as Germany's neighbors have worried it could give Russia more leverage over energy supplies into Eastern and Central Europe.
WEAK PRICES A PROBLEM
Cirelli warned that gas producers will have to be more accommodating with pricing if the present divergence between oil-linked long-term contract prices and the spot market persists.
"We want cooperation with producer countries because if they don't want a modification (of pricing policies) ... then we may be faced with a question of volumes."
European gas sales have been slammed by the global economic slowdown. E.ON Ruhrgas, one of Europe's leading gas distributor said it expected sales volumes of the fuel to decline 7 percent this year.
Algerian Oil Minister Chakib Khelil told reporters on Wednesday the North African nation had sold 10 percent less gas than in 2008 and had deliberately curtailed liquefied natural gas production to reduce the amount of gas headed to market.
"(There is) a disconnect between the price of oil and the price of gas. In our view this disconnect could continue at least through the end of 2010 and maybe longer," Cirelli said.
Cirelli added that the weak spot gas price was already depressing investment in new production capacity despite the long-term need for heavy capital spending over the next decade to support anticipated growth in global gas demand. (Reporting by Robert Campbell; Editing by David Gregorio)
RBC: Transneft to launch bond flotation
http://www.rbcnews.com/free/20091008114341.shtml
RBC, 08.10.2009, Moscow 11:43:41.Transneft will begin the flotation of series 02 bonds worth a total of RUB 35bn (approx. USD 1.17bn) on October 13, the company said in a statement.
The issue of and circular for the nonconvertible interest-bearing uncertificated series 02 bonds of Transneft subject to mandatory centralized custody were registered by the Federal Financial Markets Service on August 25, 2009. The issuer is set to float 35m bonds with a face value of RUB 1,000 (approx. USD 33.58) each.
Alfa: Alliance Oil Group filed an application for $800 mln in credit from Vnesheconombankhttp://www.businessneweurope.eu/dispatch_text10121
AlfaOctober 8, 2009
The company plans to use these funds for the modernization of the Khabarovsk refinery. An engineering review of the project is currently nearing completion. Various western banks will take part in financing the project. The project is being underwritten by the
Government Export Insurance Agency of Spain, but the funds will be transmitted through Vnesheconombank.
Early in March, Vnesheconombank and CESE signed a memorandum of understanding to the effect that the funds borrowed by Alliance Oil will be paid to the Spanish engineering firm Tecnicas Reunidas for the purchase and installation of equipment for the Khabarovsk refinery.Ekaterina Leonova
Oila and Gas Eurasia: TNK-BP Leads Lisichansk Refinery to European Standard s http://www.oilandgaseurasia.com/articles/p/105/article/998/
The company invested over $400 million into refinery modernizationUkraine imported more than half of its oil products on the domestic market last year. While the Ukrainian companies produced 90% of the total 16 mln tons of fuel consumed in the country in 2005, this year their market share is only 45%, reports Kommersant Ukraine.
The decrease in production by the national oil refinery companies was owed to the government’s regulations driving the cut in prices on the domestic market at the expense of import stimulation. At the same time many oil refinery companies managed not only to survive but to go on with production, making a cutback sensibly.
“The strategic model to supply the oil products for the developing Ukrainian market is an optimum import and own production balance”, comments Sergei Lizunov, President of TNK Commerce, Ukrainian TNK-BP Division. In the middle of August the company focusing on the refinery facilities projects implementation at Lisichansk Oil Refinery Plant announced its plans to stop production of gasoline A-80 in favor of more demanded A-92 and A-95. In the opinion of Mr. Lizunov, “in one year and a half the notion of A-80 should become obsolete”. According to RBK Ukraine, the consumption of this type of gasoline has been decreasing in the country by one third per year in recent years.
The decision of the company can be considered a timely one. It is assumed that the sales of oil products that do not meet Euro-4 standards (including low-octane gasoline) will not be allowed starting from 2011. The move forward, encouraging the shaping of the quality fuel market, was possible due to larger high-octane types of gasoline share of the product balance thanks to optimization of octanizing unit performance.
Lisichansk refinery (LINIK) is considered the newest in Ukraine: its first units were launched on 17 October 1976. This facility is graded as fuel-oriented refinery with deep refining and petrochemical segment. Initially the refinery was initially designed to provide oil products for Ukraine’s industrial eastern regions, as well as to the southern regions of Russia. In Soviet times, the refinery was the largest in Eastern Europe, boasting 23.7 mln tpa of oil refinery run in 1991.However, in early independence years the throughput began dwindling rapidly (general trend throughout the former USSR), reaching the historic minimum of 531,300 tpa in
1999 due to slashed oil supplies from Russia. The situation on the dying facility changed rapidly with the change of the owner – in 2000 Ukraine’s government inked the dotted line, selling the control stake in the refinery (67.41% to Russia’s TNK. After Russia’s TNK and British Petroleum merged into TNK-BP, Lisichansk refinery (LINOS) became the new company’s asset in Ukraine. Subsequently Open JSC LINOS was transformed into Closed JSC LINIK.
Several issues had to be solved if the company was to sustain severe competition from the Russian and Belarusian refiners:– boosting the refining depth and process flow flexibility, expanding the production range;– ensuring compliance of refinery’s products to European quality regulations in the context of constant tightening of EU standards;– implementation of a large-scale program targeting boosting environmental safety of the products and environment protection;– ensuring compliance to industrial safety standards (at the time the refinery was known for high depreciation of the equipment and high accident rate).
This required practically full modernisation and upgrading of the refinery as process flow inherited from the Soviet days was inadequate for solving the piled problems.
From 2000 TNK-BP invested over $400 mln into the refinery, installing six new units. The modernisation resulted in Lisichansk refinery becoming the first in Ukraine unit (from 2005) that produces more gasoline than fuel oil. The load of primary distillation unit more doubled, reaching 85%, while refining depth edged up by 2% to 63%. In mid-2009 this index reached 70.8%.
Currently Lisichansk refinery capacity stands at some 8 mln tpa. The feedstock crude is delivered via Samara-Lisichansk pipeline, one-third is supplied by the railway.
The refinery includes: two enlarged integrated primary distillation units ELOU-AVT-8; two catalytic reforming units L-35/11-1000 и LCh-35/11-1000; two diesel fuel hydrotreatment units LCh-24-2000; TS-1 jet fuel production unit (Mericat-II technology); elemental sulphur production unit; catcracking unit G-43-107М/1 with MTBE production block (methyl-tert-butyl ether, high-octane gasoline additive); NK-70°С fraction isomerisation unit; hydrogen production unit; EP-300 ethylene production unit; polypropylene production; bitumen production unit; internal power station.
Lisichansk refinery process flow is as follows:Crude oil is supplied for primary distillation at the enlarged integrated units ELOU-AVT-8 No. 2 and 3. End product of primary distillation units is fed into secondary treatment cycle: catalytic reforming units L-35/11-1000 and LCh-35/11-1000, diesel fuel hydrotreatment unit LCh-24-2000 No. 1 and 2, polypropylene production unit EP-300, catcracking unit G-43-107М/1.
Propane-propylene cut of catcracking unit is fed into propylene polymerisation unit. The process flow covers production options for homopolymer, static polymer, heteropolymer with ethylene and thermopolymer. Lisichansk refinery is the only Ukrainian producer of polypropylene.
Hydrogen sulphide, which is produced in the process of diesel fuel stripping at diesel fuel hydrotreatment units and VGO stripping at catcracking unit, is used as feedstock for 60,000 tpa double-flow sulphur production unit.
Bitumen production quality parameters can be adjusted according to the clients’ requests. This is the only CIS “multi-programmable” bitumen production facility.All implemented modernisation projects in one way or another aim at boosting the units’ energy saving features. There is a separate programme “Energy saving”, which has already resulted in:– installation of steam condensate stripper, which cut down fuel and thermal energy consumption in DM water preparation process;– energy-saving modernisation of nitrogen production unit;– fume flue gas sensors installed at all process furnaces and power station boilers; – better fuel utilisation resulted in lower fuel consumption levels.
The refinery experts continuously change auxiliary equipment to low-energy versions of the same.In the fall 2003 TNK-BP management decided to implement at Lisichansk refinery the integrated HSEQ (Health, Safety, Environment and Quality) management system.
The refinery exports over a half of the produced polypropylene (up to 50,000 tpa). This product (licensed by Highmont) is bought by European and Asia Minor countries. Small amount of polypropylene is supplied to Russia.Virtually all produced light and heavy oil products consumed domestically, the refinery exports only surplus diesel fuel, which appears from time to time.CJSC LINIK is one of Ukraine’s leading producers of motor gasoline with below-150ppm sulphur and Euro-4 premium quality diesel fuel with below-50ppm sulphur content. Throughout the production process, oil products quality is controlled by LINIK testing centre, which pioneered certification to ISO/IEC 17025 standard in Ukraine.
The centre operates the latest computerised equipment from leading producers such as Waukesha (USA), Koehler (USA), Herzog (Germany), Mettler Toledo (Germany), Trace (Italy).The refinery’s crude oil and oil products tankage facilities consist of 187 tanks with total capacity of 1.3 mln. m³.In 2009 TNK-BP followed its long-term strategy on developing oil products retail network in Ukraine. The company acquired from Gepard group two tank farms and 36 fuel stations in Kyiv and Kyiv region.Presently TNK-BP owns 50 fuel stations in Ukraine (six in Lugansk region and 44 in Kyiv region). In the next few years the company plans to expand its network to 100
proprietary and 300 franchise stations. The priority regions here are Kyiv, Dnipropetrivsk and Donetsk.
TNK-BP are the leaders of Ukrainian market for introducing new standards of fuel station servicing. These include: terminal location, its design, equipment and quality of the service. The company was first in Ukraine to announce the change from “fuelling station” concept to “fuelling complex” concept, in line with the standards of the holding. The company was first in Ukraine to announce the change from “fuelling station” concept to “fuelling complex” concept, in line with the standards of the holding.
In 2009 TNK-BP plans to invest $41.3 mln in Lisichansk refinery. Main investment directions are the projects on industrial and environmental safety, labour protection ($9.5 mln), change of obsolete equipment and catalysts ($18.0 mln), change of control systems and production safety systems ($5.3 mln) and acquisition of quality control equipment ($ 2.2 mln). In 2008 the company invested in the refinery $54 mln; bulk of the money was invested in scheduled refinery maintenance and in sustaining industrial and environmental safety of the asset.
The base strategy of the company stays unchanged, says president of TNK-BP Commerce Sergey Lizunov. It targets improving economic efficiency and competitive edge of Lisichansk refinery, as well as retention and consolidation of the achieved positions long-term. The company will expand in individual wholesale and retail segments in high-priority regions of the country. This year, the accent is on supporting the Lisichansk refining operations.Last year’s record high oil prices changed the refinery’s process flow, including into the feedstock bucket a number of alternatives such as VGO of straight-run gasoil.
TNK-BP analysts forecast that in 2009 average oil prices will hover at about $50/bl. In this scenario, Lisichansk refinery will be able to take up extra 600,000-700,000 t VGO, says Sergey Lizunov. In this case the total refining feedstock would top 4.5 mln tpa. In case oil price growth outstrips VGO price dynamics, the company would boost VGO acquisition.
Gazprom
RIA: Gazprom chief negotiates terms of joint venture in Boliviahttp://en.rian.ru/business/20091008/156389917.html
07:4808/10/2009
BUENOS AIRES, October 8 (RIA Novosti) Gazprom chief, Alexei Miller, met on Wednesday with his Bolivian colleagues to discuss the establishment of a prospecting joint venture.
In mid-September Gazprom and Total have signed a memorandum with Bolivian company YPFB on gas exploration and extraction, and the possible creation of a joint venture in Bolivia.
"We have managed to agree on the time frame for the joint venture," Miller told journalists on the sidelines of the International Gas Congress currently underway in the Bolivian capital, Buenos Aires.
Gazprom's press service confirmed that Miller met with Bolivian Minister of Hydrocarbons and Energy Oscar Coca and YPFB chief Carlos Villegas on Wednesday.
Miller said Russia could take part in the engineering of a 8,000-km trans-continental gas pipeline to link Argentina, Bolivia, Brazil, Venezuela, Paraguay and Uruguay. The project's estimated costs are expected to top $23 billion.
Bolivia is second in Latin America after Venezuela in terms of natural gas reserves (1.5 trillion cubic meters) and has a high gas-bearing potential.
Gazprom and YPFB signed a memorandum of understanding in February 2007 for prospecting and infrastructure projects as well as the training of staff.
The blocks selected by Gazprom experts - Sunchal, Acero and Carohuaicho - are located in southeastern Bolivia within the gas-bearing Subandino Sur basin. Experts estimate they contain up to 300 billion cubic meters of gas.
Itar-Tass: Gazprom interested in gas projects in Latin Americahttp://www.itar-tass.com/eng/level2.html?NewsID=14410053&PageNum=0
08.10.2009, 02.50
BUENOS AIRERS, October 8 (Itar-Tass) - A Gazprom delegation is attending the 24th World Gas Conference in Buenos Aires. Alexei Miller, the chairman of the board of directors of the Russian gas monopoly, told reporters on Wednesday that Gazprom was discussing specific issues of cooperation in the Latin American gas market.
He said that more global problems and projects were being discussed in Buenos Aires than at the previous world gas conference in Amsterdam in 2006.
“While staying in Argentina we have a meaningful discussion of cooperation issues linked to the Latin American gas market. We were pleasantly surprised by prospects of cooperation, that are concrete and meaningful, with companies that are already players in the Latin American gas markets,” the Gazprom head said.
“We are already working with Venezuela and have laid down a good foundation for a start of talks with Bolivia. Argentina’s market is undoubtedly interesting, especially in view of the increasing demand in electric energy,” Miller went on to say.
He added that geological prospecting was the subject of talks with Venezuela and Bolivia.
Other projects in Latin America include gas transportation systems and liquefied natural gas.
Alexei Miller said that talks were under way for setting up a joint venture in Bolivia with the French Oil Company Total.
Miller said Gazprom had what to offer in a project for building a gas pipeline from Bolivia to Argentina. “We will see how this project will develop,” he said.
RBC: Gazprom not to cut gas supplies to Ukraine in 2010
http://www.rbcnews.com/free/20091008104505.shtml
RBC, 08.10.2009, Kiev 10:45:05.Gazprom does not plan to decrease its natural gas supplies to Ukraine in 2010, chairman of the executive board Alexei Miller announced at a briefing today. "Ukraine should continue to fulfill its obligations - whatever is written in the existing agreement," RBC Ukraine reported today.
Miller also reiterated that Ukraine had paid in full for gas supplies in September. "We see that Ukraine is fulfilling its obligations and hope that there will be no problems in the future with either Gazprom or Russia. We believe that Kiev can, indeed must, pay for gas in full; it has all the resources," the Russian energy giant's head stated.
According to the agreement signed on January 19, 2009, Ukraine is expected to purchase 52bn cubic meters of gas in 2010. Meanwhile, Naftogaz of Ukraine discussed the possibility of lower purchases, and Gazprom supposedly agreed to cut supplies by 20 percent to 41.6bn cubic meters. Ukrainian Prime Minister Yulia Timoshenko, however, announced that the republic would be able to buy between 27 and 33bn cubic meters of gas, "depending on the economic situation."
Kyiv Post: Gazprom won't reduce gas supply to Ukraine in 2010http://www.kyivpost.com/business/50263
Yesterday, 23:04 | Interfax-UkraineCompany's chief executive believes Ukraine must pay for gas in full - it does have money.
Buenos Aires, October 7 (Interfax) - Russia's Gazprom will not reduce the volume of natural gas it has pledged to supply to Ukraine under a contract, the company's chief executive said on Wednesday.
"Let Ukraine meet its contractual commitments. What's written in the contract will go ahead," Alexei Miller told reporters.
On Tuesday, Ukraine paid for the gas it received in September, and did so to the full and on time, Miller said. "We expect that this will continue to be done," he said.
"We can see that Ukraine is meeting its contractual commitments. We hope that there will be no problems in its relations with Gazprom and with Russia. We believe that Ukraine can and must pay for gas to the full - it does have money," Miller said.
"Every month Ukraine tells us about what difficulties there arise but every month it pays," he said.
He pointed out that Ukrainian national oil and gas company Naftogaz Ukrainy is a state-owned company. "Ukraine has considerable gold and foreign currency reserves, the country has received loans from the IMF [International Monetary Fund], and it took account of the need to pay for Russian gas in obtaining them," he said.
Miller also said Ukraine's gas transmission system needs modernizing. "There is understanding in Ukraine that modernizing the gas transmission system is a problem that needs solving. Apparently, it is in the new political situation in Ukraine that any moves will be made to that end," he said.
Ukrainian Journal: Russia’s Gazprom vows to enforce agreement on 2010 natgas purchaseshttp://www.ukrainianjournal.com/index.php?w=article&id=9217
Journal Staff ReportMOSCOW, Oct. 7 – Russian gas giant Gazprom on Wednesday pledged to enforce an agreement according to which Ukraine has to import 52 billion cubic meters of gas in 2010, almost twice as much as the country needs.
Ukraine has been persistently seeking to change the agreement to reduce the imports to between 25 billion cubic meters and 32 billion cubic meters, without a penalty.
Russia Today: Naftogaz and Ukraine skating on thin ice over next Gazprom paymenthttp://www.russiatoday.com/Business/2009-10-08/naftogaz-ukraine-skating-thin.html/print
08 October, 2009, 09:04
European power giant GDF says it will increase its gas reserves, after Ukraine admitted it would have trouble paying its next Gazprom bill and fears of another round of gas disputes mount.
Ukraine’s Prime Minister says they scraped together quote "every last penny" on Wednesday to pay Russian gas deliveries for September. The country’s near bankrupt. It survives on IMF handouts.
The firm charged with paying Gazprom is Ukraine energy holding Naftogaz. Much of its leadership was due at the industry's biggest event, the World Gas Conference, but stayed at home to deal with the mess.
Gazprom CEO, Aleksey Miller, says they were noticeable by their absence.
“This morning we toured the conference exhibitions. The Chinese, the Brazilians, were all there, but the Naftogaz stand was empty. All their efforts must be going in to settle their debt.”
Naftogaz Deputy Chairman, Vadim Chuprun, did make the trip. He blames the government in Kiev. Ahead of presidential elections in January, it won't charge voters enough to cover Gazprom. He says the next Gazprom bill will have it looking for cash.
“It's going to be tough to find the money for Russian gas this month. Their price is $200 per thousand cubic meters, we have to sell it on to consumers for $100. From September the first that was due to go up to 120, but the state changed its mind.”
Ukraine transits 80% of Russia’s gas to Europe. When Kiev blocked transit after a similar payment spat last winter, thousands of European families had their heating stopped.
The largest blue fuel supplier in the EU is now preparing for the worst, according to Jean-Francois Cirelli, Chief Operating Officer of GDF Suez.
“Well naturally we want to increase our reserves. It’s very important for consumers to have supplies of gas. We managed to do that over the last year, but it’s not an easy task.”
Gas demand peaks in winter. An ice rink installed by Gazprom’s stand in Buenos Aires is a chilly reminder: get ready for the cold, and the Russia-Ukraine gas war that can come with it.
Gazprom's CEO has been locked in this room all day with European gas leaders. He needs to convince them another winter supply cut will be the fault of Naftogaz. One thing is certain, Russia, Ukraine and Europe are now skating on thin ice.
Oil and Gas Eurasia: Russian NOCs abroad: Gazprom in Liby a http://www.oilandgaseurasia.com/articles/p/105/article/995/
Russian companies are increasingly making an impact on Africa’s oil and gas scene, particularly in North Africa and Nigeria. With Gazprom undertaking an aggressive exploration campaign in Libya.
Oil & Gas Eurasia conducted an interview with Gazprom’s press service on behalf of Petroleum Africa which printed the interview in English in its September issue. Oil&Gas Eurasia: Has the economic crisis had an impact on Gazprom’s operations in Libya?Gazprom: Evidently, recession on the global market impacts every global business, Gazprom is no exception. At the same time, prior to the crisis Gazprom did take some pre-emptive action, which ensured our present adaptation to a changed market environment, provided sufficient cash-flow for financing the key projects, and boosted efficiency and earning ratio of the core business directions. Also, since we make conservative long-term forecasts for natural gas demand on the key markets, our strategic goals and projects, including these located in Libya, are resistant to the crisis.
OGE: What are the advantages of working in Libya compared to other African states?Gazprom: Certainly, being a global energy company, Gazprom does consider options for joining oil and gas projects in Africa. The company has its largest business presence in such countries as Algeria, Libya, and Nigeria. From our point of view, business expansion in each of the named states has certain advantages. Gazprom is ready for constructive dialogue and effective cooperation with all African partners.About Libya – the country is highly attractive from an upstream development point of view as it has a large resource base, low cost of oil production, closeness to European markets, and well-developed infrastructure.
OGE: Has Gazprom swapped assets with ENI, has the company received any assets in this deal?Gazprom: Gazprom and ENI are in talks on the issue, the deal will be closed shortly.
OGE: Have you completed processing and interpretation of seismic data collected on Libya’s licensed sites No. 64 and No. 19 in 2008 and 2009?Gazprom: In the exploration work on Libya-based licensed sites, Gazprom Libya uses the latest globally-accepted seismic prospecting technologies. In December 2008 the seismic ship GeoChallenger owned by CGGVeritas successfully completed the 3D seismic exploration at the offshore site 19. The project required exploration of over 5,000 sq km.On the licensed site No. 64 (onshore, Ghadames basin), WesternGeco company used VIVID 3D Sparse Q-Land technology for seismic prospecting, processing 3,405 sq km of data with reduction range of 25 and some 890 sq km of data with reduction range of 50.Currently CGGVeritas and WesternGeco processing centers in Tripoli are finishing the processing of 3D seismic data received in field-based seismic operations. Also, our interpretative center Gazprom Libya B.V. has completed fundamental work on collection and compilation of regional geologic and geophysical information (creation of the regional geological database), constructing geologic and tectonic models for the large part of Pelagian basin, analysis of the properties and specific features of the hydrocarbon system for the site No. 19. Acquired results have been handed over to Beicip Franlab for the basin modelling stage. Similar work on constructing geologic and tectonic model of the large (over 80,000 sq km) part of the Ghadames basin is being done for the licensed site No. 64.By the end of the year the company shall complete processing and interpretation of
seismic data on the sites 19 and 64 (PreSTM interpretation of 3D cube/PreSDM 3D processing, PreSDM interactive analysis and interpretation of 3D cube), which will be used to select preferred drilling locations.
OGE: Has the drilling tender for site 64 been closed? Which company placed the winning bid?Gazprom: No final decision has been made so far.
OGE: Drilling of the offshore wells at the site No. 19 has been pencilled for early 2010 – has Gazprom’s program for exploration of the onshore site No. 64 been planned for the same period?Gazprom: Drilling at both licensing sites will commence summer 2010.
OGE: What specific challenges does Gazprom Libya face now on the two blocks? What are the short-term plans?Gazprom: The multicultural team of Libya’s office of Gazprom Libya B.V. – some 40 people, working as a single unit with Gazprom’s Moscow-based experts, successfully solves the tasks linked to operation of Gazprom projects in Libya.Currently we’re preparing for the drilling stage, which is planned for both licensing sites, as has been said, for summer 2010. We have inked a lease contract for a semi-submersible rig which will be drilling at the offshore site No. 19, and are completing selection of the drilling contractor for the site No. 64 onshore. Contracts on supplying well casing and wellhead equipment have already been signed.The company has also selected contractors for offshore work, which includes supplying auxiliary ships for rig maintenance, helicopter support, logistics base for reception and storage of materials and equipment, etc. We have also launched tenders on provision of services related to exploration drilling (drilling solution service, geophysics, telemetry, well packing, etc.)
OGE: What is the preliminary estimated potential of Site 64? What are the anticipated reserves of Site 19?Gazprom: The total reserves of Site 64 are estimated at 20 million tons of oil. The share of the Gazprom Group is 9.8%. The total reserves of Site 19 has reached some 300 Bcm of natural gas; here Gazprom Group’s share is 10%.It should be noted that this estimate was calculated prior to massive seismic exploration work on the licensed sites. The preliminary results of processing and interpretation of the seismic data provide an optimistic viewpoint on their real potential. We hope that successful exploration drilling will confirm our estimates.
OGE: Does Gazprom plan to initiate social assistance programs in Libya? If yes, which?Gazprom: The companies of Gazprom Group always join different social programs and charitable contributions in regions of operation. In particular, Gazprom Libya provides regular sponsorship help to a number of orphanages in Tripoli. The company is also one of the sponsors of Libya’s Folklore Art Festival. Considering the local traditions, the company regularly joins the actions during Islamic holidays by local charitable funds on supporting the needy families. Gazprom Libya receives many acknowledgements of
gratitude, including those from the local authorities and from Libya’s National Oil Corporation (NOC).
OGE: What is the status of plans for a joint venture with NOC for the modernization of the existing and installation of new refining facilities? Are there plans for a new Gazprom-assisted project on a gas-transportation system?Gazprom: Gazprom and NOC continue searching for mutually beneficial projects in Libya within the agreements reached during the last year’s visit of Gazprom head Alexei Miller to Tripoli.According to the Memorandum signed at the time between Gazprom and NOC, the two sides are studying options for implementing joint projects on exploration and development of gas and oil fields in Libya – gas processing, installation of new facilities for gas liquefaction and oil refining, design and installation of power engineering facilities working on natural gas, and cooperation in other fields of energy segment.
OGE: How is the work is going on oil concessions С96 and С97 (As Sarah field and others), where Gazprom holds a share?Gazprom: Geologic exploration work goes on; we also implement the measures on reducing the production drop rate for the concession C96 while ensuring a production boost for concession C97.In June 2009, 66 wells were operating on the C96 and C97 concessions, producing a month’s total of 2.701 million barrels of oil and 72.89 Mmcm of natural gas.
Oil and Gas Eurasia: Gazprom CEO Alexei Miller about Security of Supply and Related Investmentshttp://www.oilandgaseurasia.com/articles/p/105/article/1000/
5–9 October 2009, Buenos Aires, ArgentinaLadies and Gentlemen! According to the United Nations, by 2030 the world population will grow by nearly one-fourth – up to 8.3 billion people.Simultaneously, there will be an increase in energy consumption per capita, to be contributed primarily by the most populated countries – China, India, Brazil and Indonesia. These countries are experiencing a rapid process of industrialization, urbanization and automobile use. Energy consumption will be growing on the back of limited opportunities for boosting oil output, narrow bounds for developing the nuclear energy sector and an extremely low contribution from new, alternative non-hydrocarbon energy. All this offers excellent prospects for the gas industry. Most estimates are fairly consistent that in the foreseeable future mankind won’t be able to do without fossil fuels. Natural gas will be the most eco-friendly hydrocarbon that will be used on a broader basis, including for power generation purposes and as a vehicle fuel. If the 20th century was our “oil century,” then the 21st century stands to be our “natural gas century.”Gazprom is a global leader in supplying the world with natural gas. Our company owns the world’s richest natural gas reserves that, at the start of 2009, were estimated at 33.1 trillion cubic meters.
The company’s resource base is undergoing continuous development. We are successfully performing geological exploration – over the last four years, gas reserve additions through geological exploration have stably surpassed the volume of gas production. Furthermore, last year Gazprom obtained licenses for a number of strategically important fields in Russia with aggregate reserves averaging four trillion cubic meters. At the same time, work is successfully underway in obtaining new licenses for promising areas abroad. We believe that Gazprom’s efforts targeted at replenishing and expanding our resource base are a crucial aspect of the system we use to provide energy security for all of our customers for decades to come.Our efforts to develop production capacity also contribute to reinforcing the fundamentals of the global gas industry. Gazprom is a global leader in gas production, accounting for 17 percent of global gas production and standing as the largest gas exporter.Available production capacities enable us to extract up to 600 billion cubic meters of gas per annum, which gives my company the opportunity to flexibly respond to gas demand changes and reliably fulfill all of our gas supply contracts.Gazprom owns and operates the world’s largest gas transmission system with a length of approximately 160 thousand kilometers.Russia’s gas supply system is the center of the integrated gas transmission facility that was constructed in the Soviet Union on territory stretching from Siberia and Turkmenistan to the western borders of Belarus and Ukraine from the 1970s to 1980s.Thanks to centralized management, infrastructural diversity and parallel transmission routes, the Unified Gas Supply System of Russia has a substantial reliability margin and a high maneuvering capability.Due to continuous upgrades and development of gas transmission capacities, Gazprom today secures the highest reliability of gas transmission by its trunklines and can offer the most attractive business opportunities to our partners from Central Asia and the Caspian region.Finally, the fourth special quality — Gazprom has the world’s largest portfolio of long-term gas supply contracts. According to these contracts, some of which are in effect until 2035, around three trillion cubic meters of gas will be supplied in the years to come.In terms of long-standing mutual interests and the need to finance enduring investment cycles, long-term business arrangements can offer a competitive advantage translated into stability.Today, cooperation in the energy sector between Gazprom and hydrocarbon consuming countries is based on the balance between interest and market risks shared among producers and prominent wholesale importers. Such cooperation is feasible due to the existing system of long-term contracts.The operating track-record of this system, whereby producers bear the technological and price risks and large importers bear gas offtake risks under the ‘take-or-pay’ obligations, points to its reliability and viability in the future. This system also serves as a dependable and non-alternative instrument for funding extremely capital-intensive and venture projects aimed at creating gas production and transportation capacities. Finally, this system guarantees the sustainability of gas supply for importers and consumers, and is a crucial element of energy security.
During periods of temporary reduction of gas demand in major markets, the most important factors to ensure stability are observance of pricing principles and gas delivery and offtake rules, including ‘take-or-pay’ obligations.Investment sufficiency has been named in the IGU’s Triennium Work Report as one of the top priorities. Our approach is well known. Gazprom invests enough to fulfill its long-term obligations.For instance, Gazprom’s investment program for this year is RUB 761.5 billion, which is approximately USD 25.5 billion. This means that our investments in 2009, a year of global financial crisis, will exceed the yearly average indicator for the three years since our last meeting in Amsterdam. Those who have signed long-term contracts may be confident even in crisis about the sufficiency of investments for securing deliveries in the next economic cycle.At the same time, we are investing in important energy security projects. In addition to enhancing our existing gas transmission system and developing our resource base and production capacities, we are working on creating new export corridors.To reduce transit risks and enhance the reliability and flexibility of gas exports, Gazprom is implementing two new gas transmission projects – Nord Stream and South Stream.The Nord Stream gas pipeline, with a full capacity of 55 billion cubic meters per annum, will run under the Baltic Sea and link Russia and Northern Europe’s gas transmission networks. This pipeline’s first line is due to begin operation in 2011. The South Stream gas pipeline system, with a full capacity of 63 billion cubic meters, will traverse the Black Sea, run across Bulgaria, Hungary, Greece and Serbia, and transmit Russian gas to Southeastern Europe no later than 2015. New gas pipelines will enable us to not only diversify Russian gas export routes and reduce transit risks, but also generate extra opportunities to increase gas deliveries.Gazprom’s efforts to develop an underground gas storage system in Russia and abroad would provide a significant safety margin to ensure reliable gas supply to consumers even during seasonal peak periods, which is of principle importance.Gazprom’s most important contribution to enhancing security of global gas supply is through its creation of new gas production regions in Russia. Among these regions are the Yamal Peninsula, Arctic shelf, Eastern Siberia and the Far East. The eastward vector is a special priority of our strategy. As for Yamal, Gazprom has begun developing the Bovanenkovskoye field, the biggest on the Peninsula in terms of gas reserves. We have also begun constructing the Bovanenkovo – Ukhta gas transmission system. Gas production from the field is projected at 115 billion cubic meters per annum, to be increased to 140 billion cubic meters in the long term.Another region of Gazprom’s strategic interest is the Russian Arctic shelf. The region contains immense hydrocarbon resources, which would enable us to establish a new oil and gas production province. Shtokman field development will become Gazprom’s pilot project on the Arctic shelf.Shaping of the gas industry has begun in eastern Russia. A strategic task in the region is to arrange new gas production centers interlinked by a system of gas trunklines in the Krasnoyarsk Krai, Irkutsk Oblast, Yakutia, Kamchatka and Sakhalin. The plan is to produce some 110 billion cubic meters of gas in these regions by 2020, which is comparable to the annual volume of Russian gas exports to Western Europe. Gazprom
is executing specific projects in each of the new gas production centers I just mentioned. Eastern Siberia and Far East resources under development will meet growing energy demand in Russian regions and Asia-Pacific countries.In the Russian power industry, there is a term referred to as the ‘guaranteeing supplier’. If applied to the gas market, over the past 30 to 40 years Gazprom has become a guarantor of reliable gas supplies to Europe.The large-scale development of gas production in the Eastern part of Russia will enable Gazprom to make a substantial contribution to the energy balance in the whole Asia and Pacific Region. Our LNG plans include producing 80–90 million tons of LNG by 2020, which will account for up to 25 percent of the share of the global market, depending on the pace of projects implementation abroad. Once these plans are fulfilled, Gazprom will also become a ‘guaranteeing supplier’ on a worldwide scale. Sustainable development of the gas industry requires that the interests of suppliers and consumers be harmonized. This is the very goal Gazprom is pursuing by advocating for international joint projects and the creation of transnational production chains linking upstream and downstream operations to create a full cycle. To help make natural gas supplies secure, suppliers and consumers can participate in activities across the entire value added chain in the gas industry.Cooperation of this kind may be best exemplified by our partnership with Germany’s BASF and E.ON. Joint operations include production (Yuzhno-Russkoye field), transmission (Nord Stream gas pipeline) and end consumer relations (gas supplies via WINGAS, a joint venture with BASF, and projects with E.ON in the power sector).Gazprom is developing the Achimov deposits of the Urengoyskoye field with Wintershall. We are gaining experience in developing deep fields with a complex geological structure. Retaining 100 percent of license rights, Gazprom will use this joint-operation model as a basis for Shtokman field Phase I development with France’s Total and Norway’s Statoil.Once Dutch Gasunie became a shareholder in Nord Stream AG, a company dealing with construction, operation and management of the Nord Stream gas pipeline, the project status changed from bilateral, Russian-German, to pan-European. This is particularly evident if we bear in mind that 14 companies from seven European countries are now involved in this project’s execution, including through procurement contracts.South Stream is another international project. The offshore section of the pipeline will be a joint business with Italy’s ENI and possibly France’s EDF. The onshore section will be built by joint ventures established by project participants.By setting up joint projects with European partners, Gazprom creates a common energy space on the European continent.Implementation of the Eastern Gas Program has provided Russian and foreign companies with a unique opportunity for collaboration. As part of the Sakhalin II project , Gazprom, Shell, Mitsui and Mitsubishi constructed Russia’s first LNG plant. Foreign partners have made a significant investment and technological contribution to implementation of this project.Our foreign partners are very interested in executing an integrated LNG project on the basis of the northeastern group of fields on the Yamal Peninsula.
Joint projects, including those based on asset swap deals, strengthen trust among the market players and ensure adequate reaction to market fluctuations and changes in extra-market conditions. This is another important factor of gas market safety. We should combine efforts to meet challenges the industry is facing and lay groundwork for further development. We believe that a variety of forms of cooperation and coordination among market players is a positive factor.Therefore, Gazprom actively takes part in many joint initiatives of gas producing countries. In particular, Gazprom actively supports the activities of the Gas Exporting Countries Forum. This organization, which has been considered an informal association until recently, is currently engaged in forming a permanent organizational structure. The Forum headquarters will be located in the Qatar capital Doha. Major objectives include joint analysis of supply and demand trends of the global gas market, pricing issues, investment programs and coordination of major projects.However, coordination of activities among major gas exporters is not enough. Further integration of efforts made by natural gas market stakeholders is needed. Despite the obvious benefits of natural gas compared to other fuels, one should not think that the role of gas in the global energy balance is guaranteed. We believe that all of us who are interested in developing the natural gas industry, namely the International Gas Union, should be more active in shaping the world energy development model. So far, the main goal pushed forward by some politicians amount to nothing more than just a decrease in hydrocarbons consumption. Meanwhile, millions of our consumers will be at the mercy of a costly model of future energy consumption, a model that they will have to pay for.At the same time, calculations prove that a high demand for an environmentally friendly economy may be reached without prejudice to hydrocarbon energy, but owing to it.Thus, replacement of nearly half of the existing coal-fired power generating facilities in Europe with up-to-date gas-fired combined-cycle power stations will cut СО2 emissions in the same amount and will cost only one third of the price of that of wind power generation. Natural gas is the most reliable energy source in terms of energy security during peak load periods when compared to any other source of energy, including nuclear, solar, wind and hydro energy. Nobody can guarantee maintaining peak loads with energy produced from renewable sources.When determining the balance between environmental and energy interests, it is important for us to convey to the public that it is necessary to be aware of all factors. For example, a potential reduction in СО2 emissions stipulated by vehicle conversion from oil products to natural gas is not so tangible, if compared to the power industry. Using natural gas in engines will relieve us not only from toxic gasoline and diesel engine exhaust, but also from using fertile land for producing biodiesel fuel in lieu of food. Gas may and should be used in vehicle engines in a compressed form or as a synthetic engine fuel. Thus, natural gas will make another contribution to sustainable development.Another essential issue we have to face together, particularly within the International Gas Union, is forming the global gas balance as a basic principle for long-term planning across the entire gas industry.Finally, I would like to mention the initiative announced by Russian President Dmitry Medvedev to work out and adopt a new international energy treaty to effectively protect
the interests of those countries that produce and consume energy resources and to prevent future transit crises. I hope that during the Conference we will hold a substantive and constructive discussion on all the key issues of the world gas industry in order to operate under present-day conditions.Being the world’s largest company, Gazprom is ready to effectively work in a new environment, to evolve and to keep moving forward!-Gazprom
