Russia 101105

Basic Political Developments EU demands supplement to Polish-Russian gas deal - The European

Commission’s reservations as to the deal concern the transit operations of the Yamal pipeline’s Polish section, through which gas from Russia is fed to other countries. In accordance with EU regulations, the pipeline operator must be independent, with all interested parties in the EU having access to the line, not just Gazprom, the Russian monopoly operator.

Krishna to attend RIC Foreign Ministers meet in China - The 10th Foreign Ministers' meeting among China, Russia and India will be held in Wuhan, the capital city of central China's Hubei Province, from November 14 to 15, Chinese Foreign Ministry announced here today.Russian Foreign Minister Sergei Lavrov and Indian External Affairs Minister S M Krishna will attend the meeting at the invitation of their Chinese counterpart Yang Jiechi, Chinese Foreign Ministry spokesman Hong Lei said.

Telephone conversation with Nursultan Nazarbayev - Dmitry Medvedev had a telephone conversation with President of Kazakhstan Nursultan Nazarbayev.

Four Russian citizens detained in Georgia for spyingo Georgia arrests 4 Russian citizens on spy chargeso Georgian interior ministry identifies 13 detained for espionage for Russia -

The Georgian interior ministry on Friday identified 13 of the detainees rounded up last month for allegedly spying for Russia. Of the 13 identified detainees, six served as pilots of the Georgian air force, according to a press release issued right prior to the press briefing at the ministry headquarters.

o 'Russian Spy Ring' Arrests In Georgia - Four Russian citizens are among 13 people arrested in Georgia on suspicion of spying for Russia, according to Georgian interior ministry officials.

Russia to buy Kyrgyzstan 16,000 tons of food - Russia will provide Kyrgyzstan eight million dollars, which will be procured 16,000 tons of food. On this, as reported by Interfax, said the Russian ambassador in Bishkek, Valentin Vlasov.

CIS Executive Secretary Sergei Lebedev arrives in Baku - Lebedev is the head of CIS observation mission. The Executive Secretary will meet with chairman of the Central Election Commission Mazahir Panahov, hold meetings in the Foreign Ministry and other bodies, visit election commissions.

Russian president thanks Japan PM for invitation to APEC summito Message to Prime Minister of Japan Naoto Kano Medvedev thanks Japan PM for invitation to APEC summit

Moscow urges NATO to change Afghan tactics - Moscow has urged NATO to change its Afghan tactics. The Russian ambassador to the Untied Nations Vitaly Churkin has described it as ineffective, adding that antiterrorist efforts should basically aim at wiping out extremists.

o Russian-led alliance urges NATO-led forces to stop pushing Afghan terrorists to the north - Russia's U.N. Ambassador Vitaly Churkin,

speaking on behalf of the Moscow-led Collective Security Treaty Organization, said the alliance believes that anti-terrorism efforts should be aimed primarily at eliminating terrorists and extremists.

o Afghanistan: Russia Will No Longer Be Deterred by Past Sins Russia closes its airspace to PIA flights - Russia has closed its airspace for

Pakistan’s national flag carrier because of PIA’s failure to get the required authorisation timely renewed.

On the lists of passengers of the crashed plane in Cuba no Russian citizens o FACTBOX-Cuban air crashes often involve Russian planes

Kaveri engine flight-tested in Moscow - An Ilyushin-76 cargo aircraft was modified as a flying-test bed for the trial, with the Kaveri engine replacing one of its four engines.

o India flight tests indigenous jet engine in Moscow - The engine flew for over an hour up to an altitude of 600 metres at a speed of 0.6 Mach on board an Ilyushin-76 cargo aircraft, which was modified as a flying-test bed for the trial

The crew of a Latvian company kidnapped in Sudan, no Russians among the hostages - Russian Embassy

o Margelov: the situation with the pilots in Darfur will become clear in the next few hours

o Three Russian pilots kidnapped in Darfuro Russian pilots kidnapped in Darfur - The UN World Food Programme, for

which the pilots work, confirmed the news. The governor of South Darfur, Abdel Hamid Kasha, told Reuters that it was not known who the kidnappers were and that they were being pursued.

o The Russian Embassy in Sudan checks messages about the kidnapping of pilots

Report: Former CIA spy plans guilty plea for payments for past service to Russia - Attorneys for Harold "Jim" Nicholson filed notice Wednesday that the 59-year-old will plead guilty to a federal indictment accusing him of conspiring to act as an agent of a foreign government and laundering money, The Oregonian newspaper said.

Russia ranked 65th in UN Human Development Report Russian cruise-ship crew approaching six weeks in limbo - Workers aboard a

popular Arctic cruise ship have been stranded for almost six weeks since the vessel was seized in St. John's, N.L. The International Transport Workers Federation says the Russian owner of the ship owes $340,000 in wages to 52 crew members, most of whom are Russian.

Shelter for members of illegal armed groups, and caches of ammunition found in Dagestan

Two billion rubles to be spent for demining Chechen farmland - reported on the website of the Government of Chechnya. This amount does not include costs for transportation and disposal of explosive ordnance.

o Moscow to give Chechen residents $16 mln in compensation in 2010 - The Russian government will have allocated about 500 million rubles ($16.2 million) by the end of 2010 to compensate residents of Chechnya

affected by anti-terrorism operations this year, the head of the Chechen government said on Thursday.

Two Chechen journalists win ‘freedom award’ at Istanbul fair Penkova appointed press secretary to Moscow mayor - She has been employed

with the Russian president’s administration since April 1999, ascending from chief specialist to deputy head of the Kremlin press service.

Medvedev, Putin arrive for Chernomyrdin's memorial service o Chernomyrdin to be buried at Moscow’s Novodevichye Cemetery

Putin's Korean 'Son-in-Law' Quits Moscow Job - A Korean man identified only by his surname Yoon who was reported to be dating Russian Prime Minister Vladimir Putin's daughter has quit the Moscow office of Samsung Electronics after only a month in the job.

Cup for $500,000, Faberge Wedding Boost Sotheby’s Russian Sale Russia prods Afghan, Japanese wounds - By M K Bhadrakumar Musings of a Russophile: What Is To Be Done? - Weekly column by Frederick

Andresen

National Economic Trends

Business, Energy or Environmental regulations or discussions Mail.ru Sets Initial Offering Price at $27.70 Per GDR UPDATE 1-Russia's Mail.ru prices IPO at $27.7 per share BHP Buyout Offer Confused Potash Corp. Investors, CEO Testifies Russian group in talks over PotashCorp bid Renault in ‘Last-Chance Saloon’ in Growth Markets With AvtoVAZ Renault in ‘Last-Chance Saloon’ in Growth Markets With AvtoVAZ FUNDS: Russian asset management's coming-out party - Frustrated by the slow

growth of the mutual fund business at home, Russian asset managers are launching a string of new EU-compliant mutual funds that can be sold to retail investors around world who want a piece of the emerging market story.

Activity in the Oil and Gas sector (including regulatory) Med Crude-Urals rises in south on Lukoil refinery needs Lukoil launches quickfire tap to hit 10 year sweet spot Energized Lukoil Resets Priorities Following Conoco Pullout

Gazprom SeverEnergia Sale Demonstrates Improving Relationship With Novatek - Russian

gas export monopoly Gazprom has agreed to sell a controlling stake in SeverEnergia to its oil subsidiary Gazprom Neft and private gas player Novatek for US$1.5bn.

Feasibility study for the Bulgarian section of the South Stream gas pipeline will be commissioned

A New Gas Deal - Paweł Kowal on the new gas agreement with Russia

------------------------------------------------------------------------------------------

Full Text Articles

Basic Political Developments

EU demands supplement to Polish-Russian gas dealhttp://www.thenews.pl/business/artykul142889_eu-demands-supplement-to-polish-russian-gas-deal.html

05.11.2010 09:37 The EU’s Energy Commissioner, Gunther Oettinger has stated that the recently signed gas deal between Poland and Russia needs to be complemented by an annexe on transit tariffs and available gas capacity.

The move is a U-turn on an earlier decision by the European Commission that the deal was in line with EU regulations.

In a joint conference with Oettinger in Brussels, Thursday, Poland’s deputy PM and economy minister Waldemar Pawlak did not give a definite answer as to when the contract would be amended.

Earlier, the Polish party to the deal assured that the contract was in line with the European Commission’s regulations, with deputy treasury minister Mikolaj Budzanowski hoping that “[Poland’s] clarification [regarding the deal] had dispelled the Commission’s doubts.”

The European Commission’s reservations as to the deal concern the transit operations of the Yamal pipeline’s Polish section, through which gas from Russia is fed to other countries.

In accordance with EU regulations, the pipeline operator must be independent, with all interested parties in the EU having access to the line, not just Gazprom, the Russian monopoly operator.

In Poland the operator, as stipulated by EuRoPolGaz in the recently signed deal, is Gaz-System. Both companies uphold the opinion that the operating agreement was signed without any reservations from the Polish Energy Regulatory Office, and that the deal was in line with the European Commission’s expectations. (jb)

Source: IAR

Krishna to attend RIC Foreign Ministers meet in Chinahttp://ibnlive.in.com/generalnewsfeed/news/krishna-to-attend-ric-foreign-ministers-meet-in-china/469718.html

PTI | 08:11 PM,Nov 04,2010

K J M Varma Beijing, Nov 4 (PTI) External Affairs Minister S M Krishna would be visiting China later this month to take part in the meeting of foreign ministers from Russia, India and China (RIC), where strategic and other issues will be discussed.The 10th Foreign Ministers' meeting among China, Russia and India will be held in Wuhan, the capital city of central China's Hubei Province, from November 14 to 15, Chinese Foreign Ministry announced here today.Russian Foreign Minister Sergei Lavrov and Indian External Affairs Minister S M Krishna will attend the meeting at the invitation of their Chinese counterpart Yang Jiechi, Chinese Foreign Ministry spokesman Hong Lei said.Indian officials here said that Krishna would have bilateral meetings with both Yang and Lavrov.The RIC, which was formed with lot of fanfare, is now overshadowed by the Brazil-Russia-India-China (BRIC) -- the latter emerged as an influential international grouping as it consisted some of the fastest developing economies.The issues relating to the RIC and BRIC groupings figured in the talks between Chinese President Hu Jintao and Russian President Dmitry Medvedev during the Russian leader's visit here in September.After their meeting, Chinese officials said that RIC grouping would continue to strengthen dialogue among China, Russia and India and would make joint efforts to create sound environment both in the Asia-Pacific region and globally.Besides the strategic issues, RIC focussed on issues relating to disaster relief, agriculture and public health, deepening communication among academic, industrial and business circles as well as promote multi-lateral cooperation and democratic international relations, they said.The last meeting of the RIC foreign ministers was held in Bangalore in October 2009 during which the three countries discussed a host of issues, including issues relating to terrorism, climate change and reducing the impact of global recession.

Telephone conversation with Nursultan Nazarbayevhttp://eng.kremlin.ru/news/1253

November 4, 2010, 14:30

Dmitry Medvedev had a telephone conversation with President of Kazakhstan Nursultan Nazarbayev.

The two leaders discussed the organisation and drawing up of the agenda for the forthcoming OSCE Summit to be held in Kazakhstan on December 1–2, 2010.

Mr Medvedev and Mr Nazarbyev also exchanged opinions on topical issues pertaining to bilateral cooperation on regional and international initiatives. Both sides expressed their satisfaction with the high level of coordination in these spheres.

November 4, 2010, 14:30

Four Russian citizens detained in Georgia for spying

http://rian.ru/world/20101105/292833304.html

05/11/2010 11:58MOSCOW, November 5 - RIA Novosti. Among those 13 people detained in Georgia on charges of spying, four are citizens of Russia, Reuters reported citing the Georgian Interior Ministry.Previously reported that in Georgia arrested 20 suspects of spying for Russia. Georgian Interior Ministry has promised to November 5 a special briefing on the subject.

Georgia arrests 4 Russian citizens on spy chargeshttp://www.reuters.com/article/idUSLDE6A40CO20101105

4:53am EDT

TBILISI, Nov 5 (Reuters) - Four Russian citizens and nine Georgians have been arrested in Georgia on suspicion of spying for Russia, two years after the ex-Soviet neighbours fought a brief war, the Georgian Interior Ministry said on Friday.

The announcement followed reports last week that 20 people had been arrested on suspicion of passing secret information to Russia. (Reporting by Margarita Antidze; Writing by Matt Robinson; Editing by Charles Dick)

Georgian interior ministry identifies 13 detained for espionage for Russiahttp://news.xinhuanet.com/english2010/world/2010-11/05/c_13593038.htm

2010-11-05 17:03:50

TBILISI, Nov. 5 (Xinhua) -- The Georgian interior ministry on Friday identified 13 of the detainees rounded up last month for allegedly spying for Russia.

A senior ministry official is to brief the press about the operation that had rounded up the detainees.

Of the 13 identified detainees, six served as pilots of the Georgian air force, according to a press release issued right prior to the press briefing at the ministry headquarters.

If convicted, these detainees may face sentences of 10-20 years of imprisonment in accordance with the Georgian criminal code article 314.

According to sources from the ministry, eight of the detainees are of Georgian nationality, four of Russian nationality and one of dual Georgian and Russian nationalities:

Bakur Kiguradze, founder of NGO Globalization Institute

Viacheslav Pluzhnikov, Georgian Air Force pilot

Gabriel Ustalishvili, Georgian Air Force pilot

David Meskhidze, Georgian Air Force pilot

Gela Kakabadze, Georgian Air Force pilot

Gocha Diasamidze, Georgian Air Force pilot

Tariel Abashidze, Georgian Air Force pilot

Ruslan Galogre, businessman

Eduard Abdulaev, sailor

Armen Gevorkian, director of company Saybolt Georgia

Ruben Shikoian, deputy director of company Saybolt Georgia

Petre Devrishadze, businessman

Iuri Skrilnikov, liaison for the Main Intelligence Division of the Ministry of Defense of the Russian Federation.

'Russian Spy Ring' Arrests In Georgia http://news.sky.com/skynews/Home/World-News/Georgia-Says-Four-Russian-Citizens-Among-13-Arrested-For-Spying-For-Russia/Article/201011115795580?lpos=World_News_Top_Stories_Header_4&lid=ARTICLE_15795580_Georgia_Says_Four_Russian_Citizens_Among_13_Arrested_For_Spying_For_Russia

Four Russian citizens are among 13 people arrested in Georgia on suspicion of spying for Russia, according to Georgian interior ministry officials.

The four Russian citizens and nine Georgians were arrested two years after the ex-Soviet neighbours fought a brief war.

The announcement followed recent reports that 20 people had been arrested on suspicion of passing secret information to Russia.

Russia to buy Kyrgyzstan 16,000 tons of food

http://www.lenta.ru/news/2010/11/04/help/

GOOGLE TRANSLATIONFriday, 05.11.2010, 09:04:38

Russia will provide Kyrgyzstan eight million dollars, which will be procured 16,000 tons of food. On this, as reported by Interfax, said the Russian ambassador in Bishkek, Valentin Vlasov.The program is designed to support people in Kyrgyzstan who have suffered as a result of ethnic clashes in the south in the summer of 2010. Of the promised aid five million dollars, according to Vlasov, will be allocated through UN programs. "Thus, the total assistance provided to Russia in Kyrgyzstan in spring 2010, will be 25 million dollars", - said the Russian ambassador.In June, UN Secretary General Ban Ki-moon said that his organization intends to raise aid to Kyrgyzstan $ 71 million.Kyrgyz President Otunbayeva estimated costs of restoring the economy of cities and south of the country of 450 million dollars. It was reported that the U.S. intends to allocate $ 32 million. Their assistance and promised to France.Earlier, citing the press service of the Kyrgyz government announced that international financial institutions for various programs, including restoration of the south of Kyrgyzstan, will allocate 1.1 billion dollars.The clashes between Kyrgyz and Uzbeks in Osh city began June 11, 2010, and later was engulfed in turmoil and Jalalabad. According to official figures, killed more than 300 people. It was reported that from Kyrgyzstan to Uzbekistan, fled to 100 thousand people (about 76,000 and then returned to the country).Russia planned to provide massive financial assistance to Kyrgyzstan and to unrest in the south. Back in early 2009 reported that Moscow will provide a grant Kyrgyzstan $ 150 million and a credit of $ 300 million.

CIS Executive Secretary Sergei Lebedev arrives in Bakuhttp://en.apa.az/news.php?id=133652

[ 05 Nov 2010 10:56 ] Baku. Lachin Sultanova – APA. Executive Secretary of the Commonwealth of Independent States (CIS) Sergei Lebedev arrived in Baku, head of CIS observation

mission office Yevgeni Sloboda told APA.

Lebedev is the head of CIS observation mission. The Executive Secretary will meet with

chairman of the Central Election Commission Mazahir Panahov, hold meetings in the Foreign Ministry and other bodies, visit election commissions.

He will stay in Azerbaijan by the end of the elections. The mission includes about 400 observers. The mission will issue a statement on the elections on November 8.

Russian president thanks Japan PM for invitation to APEC summithttp://news.xinhuanet.com/english2010/world/2010-11/04/c_13591571.htm

2010-11-04 22:02:31

MOSCOW, Nov. 4 (Xinhua) -- Russian President Dmitry Medvedev thanked Japan's Prime Minister Naoto Kan Thursday for an invitation to the 18th meeting of the Asia-Pacific Economic Cooperation (APEC) forum, due in Yokohama next week.

Medvedev's letter to Kan was released on the Kremlin's website, in which the president said he was going to participate in the discussions actively.

"I share the view about the importance of APEC's role in expanding multilateral political and economic interaction in the Asia-Pacific region aimed at looking for efficient responses to modern challenges," Medvedev said in his letter.

However, Medvedev didn't mention the recent disputes over four disputed Pacific islands, known as the Northern Territories in Japan and the Southern Kurils in Russia, focusing instead on the joint search of ways to economic recovery after the global crisis.

Moscow and Tokyo exchanged emotional statements this week after Medvedev visited the island of Kunashir that has been claimed by Japan along with three other Kuril islands. Japan recalled its ambassador from Moscow on the height of this spat.

Russia and Japan have long been at odds due to the territorial dispute over the islands, which has blocked a peace treaty between the two countries since the end of World War II.

The four disputed Pacific islands were occupied by Soviet troops in 1945 and are currently held by Russia.

Message to Prime Minister of Japan Naoto Kanhttp://eng.kremlin.ru/news/1255

November 4, 2010, 14:40

Dmitry Medvedev sent a response message to Prime Minister of Japan Naoto Kan thanking him for the invitation to take part in the 18th APEC Economic Leaders’ Meeting in Yokohama on November 13–14, 2010.

The Russian President’s message reads, in part:

“I fully share the belief in APEC’s importance in expanding multilateral political and economic cooperation in the Asia-Pacific region as part of the effort to find effective responses to modern challenges.

I intend to actively participate in discussions on the main theme of Japan’s presidency, Change and Action. I hope that the forum will prompt its participants to adopt a set of joint measures to overcome the effects of the global financial crisis and to develop an optimal model of APEC region’s development in the post-crisis period with an emphasis on economic and social security.

I am confident that the summit will make a tangible contribution to sustainable growth of the economies participating in the forum.”

November 4, 2010, 14:40

Medvedev thanks Japan PM for invitation to APEC summit

http://www.itar-tass.com/eng/level2.html?NewsID=15654453

04.11.2010, 16.39

MOSCOW, November 4 (Itar-Tass) - Russian President Dmitry Medvedev has sent a reply message to Japan's Premier Naoto Kan with expression of gratitude for the invitation to take part in the18th meeting of the leaders of the economies of the Asia-Pacific Economic Cooperation (APEC) forum, which is due to be held in Yokohama from November 13 to 14, this year, the Kremlin press service announced.

The message points out, in part, as follows:

"I share the point of view about the importance of the APEC role in giving greater scope to multilateral political and economic interaction in the Asia-Pacific Region in the interests of looking for effective answers to the challenges of our times.

"I intend actively to participate in a discussion within the scope of the main theme of Japan's presidency (in APEC) 'Changes and Actions'. I count on succeeding in reaching out to a package of joint measures with a view to overcoming the consequences of the global financial and economic downturn, and in working out an optimum model of

development in the APEC area in the post-recession period with emphasis on the ensurance of economic and social security.

"I am confident that activities within the framework of the summit will tangibly contribute to ensuring sustainable growth of the economies of the (APEC) forum".

The annual (informal) summit of the APEC will be attended by the leaders of 21 APEC countries and territories. Among them will be, in particular, the top leaders of Russia, China, the United States, Japan, South Korea, and Southeast Asian nations.

Russia has been participating in the forum since 1997 and will for the first time play host to an APEC summit in Vladivostok, on the Russkiy (Russian) Island, in 2012.

APEC countries account for about 60 percent of the world's gross domestic product (GDP), 50 percent of the world's foreign trade, and 40 percent of the world population. APEC countries' aggregate GDP is estimated at $16, 000, 000 million.

Moscow urges NATO to change Afghan tacticshttp://english.ruvr.ru/2010/11/05/31758938.html

Nov 5, 2010 10:32 Moscow TimeMoscow has urged NATO to change its Afghan tactics. The Russian ambassador to the Untied Nations Vitaly Churkin has described it as ineffective, adding that antiterrorist efforts should basically aim at wiping out extremists. By just forcing the militants out of the combat area NATO units allow the rebel fights to retain their fighting capacity and redeploy to other parts of the country, Churkin said. He also urged the NATO leaders and Kabul authorities to step up their struggle against the drug industry, given that drug trafficking is a main source of funding terrorist activities in Afghanistan.     

Russian-led alliance urges NATO-led forces to stop pushing Afghan terrorists to the northhttp://www.google.com/hostednews/canadianpress/article/ALeqM5hlzFuTw82Ni6cOgCS8M6lIvUiGBg?docId=5034522

By Edith M. Lederer (CP) – 10 hours ago

Russia and six former Soviet republics Thursday urged NATO-led forces in Afghanistan to end their "ineffective tactics" of pushing militants from combat zones in the south to other areas, including the once relatively peaceful north.

Russia's U.N. Ambassador Vitaly Churkin, speaking on behalf of the Moscow-led Collective Security Treaty Organization, said the alliance believes that anti-terrorism efforts should be aimed primarily at eliminating terrorists and extremists.

Churkin told the U.N. General Assembly that four of the organization's members — Kazakhstan, Kyrgyzstan, Uzbekistan and Takijistan — are in the central Asian region bordering Afghanistan and are concerned about the growing instability in the north.

Churkin said the campaign by international and Afghan forces against Taliban and al-Qaida strongholds is ineffective because it is "squeezing militants from the combat zones, which allows them to maintain their combat power and relocate to other parts of the country including northbound."

The General Assembly was debating the situation in Afghanistan ahead of the expected adoption of a nonbinding resolution renewing the international community's commitment to the Afghan government's plan for a phased transition to full responsibility for the country's security. The draft also expresses support for an Afghan government-led process of peace and reconciliation.

Germany's U.N. Ambassador Peter Wittig, who introduced the resolution, said with its adoption the 192 U.N. member states will "strongly renew the message of international solidarity with the Afghan people and underline that transition is not a synonym for withdrawal."

Russia's Churkin said the Afghan government's plans lay "a solid foundation" for the development of a peaceful, independent, prosperous and neutral state.

But he cautioned that much needs to be done, especially "suppressing terrorist and extremist threats, achieving durable national reconciliation, building competent Afghan security forces .... and curbing drug-related criminal activity."

The withdrawal of the NATO-led forces depends on implementation of its mandate to ensure security, suppress terrorist activity and create an effective Afghan army and police force, Churkin said.

He urged the Afghan government and international forces "to more vigorously fight against the Afghan narcotics industry, especially in the view of the undoubted fact that drug trafficking has become a major source of funding for terrorist activities in Afghanistan."

Last week, an unprecedented drug raid conducted jointly by U.S., Afghan and Russian agents near the border with Pakistan netted $56 million worth of heroin and morphine.

The joint drug bust reflected an improvement in relations between the former Cold War foes, two decades after U.S.-financed Afghan militias chased the Soviet military out of

the country. But Afghan President Hamid Karzai complained that he hadn't been informed in advance of Russia's participation.

Karzai telephoned Russian President Dmitry Medvedev on Wednesday and the Kremlin said in a statement that the Afghan leader called for closer co-operation with Moscow.

Churkin said the Collective Security Treaty Organization "can offer an invaluable service to the Afghan authorities and foreign military presences in their fight against (the) narcotics industry," adding that its interaction with NATO in combatting drug trafficking is "long overdue."

He said the Russian-led alliance has a drug prevention operation that has detected and shut down a number of drug smuggling routes from Afghanistan and international and regional channels to deliver synthetic drugs from Europe. It has also stopped activities of clandestine laboratories and prevented drug precursors from getting into illicit circulation, Churkin said.

Afghanistan: Russia Will No Longer Be Deterred by Past Sinshttp://www.eurasianet.org/node/62307

November 4, 2010 - 1:19pm, by Aunohita Mojumdar

Russia’s recent involvement in an anti-drug operation in Afghanistan indicates that the exigencies of the present crisis outweigh the burdens of past actions for Moscow. While Russian leaders appear ready to take Kabul’s feelings into account, the Kremlin is no longer willing to let its past sins keep Russia on the sidelines in Afghanistan.

The participation of Russian forces in the October 28 raid on a drug lab in Nangarhar Province touched a raw nerve among Afghans, even though US and Afghan troops also participated. Shortly after the raid became public, President Hamid Karzai sharply criticized Russian involvement, describing it as a “blatant violation of Afghanistan's sovereignty." Observers saw Karzai’s reaction as politically expedient, given the fact that the Soviet occupation of Afghanistan in late 1979 started the vicious cycle of civil strife that continues to spin. For Karzai, the reappearance of Russian forces on Afghan soil is fraught with political peril.

“The last thing President Karzai wants is for this incident itself to be seen as part of the occupation by foreign forces,” said Prakhar Sharma, who manages Yale University’s research projects in Afghanistan. Karzai was preempting a populist backlash because “the incident [raid] has symbolic value in that it says: ‘The Russians are back.’”

“There are some historical resonances,” concurred Candace Rondeaux, the International Crisis Group’s senior analyst in Kabul, “that could let the insurgency turn this event into something big. But Karzai has done more damage by blowing up this event.”

Karzai’s response resonated among a sizable portion of the Afghan public. “As an Afghan, I cannot think of it [the Russian involvement] as a legitimate action,” said Waliullah Rahmani, the Executive Director of the Kabul Center of Strategic Studies. “The Afghan people do not have good memories of the Russian forces. It is expected of countries that have a history of animosity in Afghanistan that they should respect the legitimate concerns of Afghanistan and not undermine its sovereignty.”

Rahmani, however, acknowledged that Moscow has reason to be concerned: Russia has an estimated 2.5 million heroin addicts and most of the narcotics entering the country originate in Afghanistan. For that reason, over 20 years since withdrawing its combat forces after an almost decade-long occupation of Afghanistan, Moscow has felt compelled to return. “In a globalized world, every country has legitimate roles and interests. Today’s Russia is not the Russia of Yeltsin,” he said.

Afghan leaders seem to acknowledge that the Kremlin has a role to play in Afghanistan. On November 3, Afghan officials initiated a phone call between Karzai and Russian President Dmitry Medvedev. The two leaders discussed enhanced Afghan-Russian cooperation on a range of issues, including counter-narcotics initiatives. A Russian Embassy statement added that the two leaders discussed the October 28 raid and noted that it was the first instance of cooperation among US, Russian and Afghan anti-drug agencies. Moscow for its part seems aware of Karzai’s point of view. The Russian ambassador in Kabul, Andrey Avetsiyan, told the local news agency Pajhwok that the harsh initial reaction from Afghan authorities to the raid was due to a lack of information.

Though interested in assuaging Afghan concerns, Russian officials have indicated that they remain prepared to take all necessary action to defend Russia’s state interests in the future, in particular on issues concerning drug production and trafficking. Over the past few months, Russia has repeatedly expressed chagrin at ineffective efforts by the Afghan government, along with the United States and its NATO allies, to curb Afghanistan’s drug problem.

Moscow maintains that Kabul, Washington and Brussels have let the drugs trade grow out of control in the nine years since US-led forces toppled the Taliban. But while criticizing the international community’s ad hoc counter-narcotics efforts, Moscow is simultaneously expanding cooperation bilaterally and multilaterally.

“The reality is that Russia remains a very big player, and Afghanistan’s relationship with Russia is going to be key in the future,” says Rondeaux of ICG.

“NATO has seen that and seen the ways in which it [Russia] can be helpful.” So has Washington. A June summit between Medvedev and US President Barack Obama ended with a joint statement focused overwhelmingly on anti-narcotics cooperation. In July, the United Nations Office on Drugs and Crime (UNODC) got a new head, Yuri Fedotov, a Russian.

Fedotov – a former ambassador to London – is expected to invigorate Moscow’s counter-narcotics policy in Afghanistan. In its most recent report on opium production in Afghanistan, released on September 30, the UNODC called for a “comprehensive strategy to rein-in the Afghan opium threat, including by strengthening the rule of law and security and spurring development efforts in Afghanistan.” Fedotov’s invocation for “a broader strategy” that combines stability and security with alternative development is in tune with the Russian view that the complex problem of Afghan narcotics requires a complex approach.

While Russia has been raising these issues at multilateral arenas, it now is starting to play a more assertive public role. Moscow’s outspoken anti-narcotics chief, Victor Ivanov, who made public the recent raid, spelled out the Russian approach during a March visit to Kabul.

A former KGB officer in Afghanistan during the Soviet occupation, Ivanov wants poppy eradication to include controversial aerial spraying; alternative livelihoods for poppy farmers; an exchange of information on drug trafficking and drug labs; and UN sanctions against drug lords. Afghan officials have resisted taking on drug lords and have vigorously opposed spraying.

Pushing for alternative livelihoods, during his visit, Ivanov challenged the assumption that poppy farmers would suffer as a result of eradication. “Most of the money goes to the drug mafia which organizes drug production,” he said. “Those who cultivate poppy work like slaves.”

Given the stakes in pushing for a harder counter-narcotics strategy, Moscow is unlikely to back off, despite the recent diplomatic hiccup. Ivanov has said the raids will continue. But Moscow may need to modify its approach to service Afghan sensitivities.

Editor's note: Aunohita Mojumdar is an Indian freelance journalist based in Kabul. She has reported on the South Asian region for the past 19 years.

Russia closes its airspace to PIA flightshttp://public.dawn.com/2010/11/05/russia-closes-its-airspace-to-pia-flights-2.html

Friday 5th November 2010 | Ziqa'ad 27, 1431

ISLAMABAD: Russia has closed its airspace for Pakistan’s national flag carrier because of PIA’s failure to get the required authorisation timely renewed.

The restriction came at a time when Russia had liberalised its airspace through historic relaxation of its airspace regulations.

The Public Relations Department of PIA confirmed the closure of the Russian airspace for the airline, but did not specify the reason.

However, sources told Dawn that PIA had not applied for renewal of permission in time and in a proper manner, leading to the ban.

Russian airspace, aviation sources say, is the shortest route for Europe and North America.

The move will result in 15 to 20 minutes of extra flying time for most of the flights from Pakistan to Europe, the United States and Canada and back and increase the cost of flights. About 80 flights a week using Russian airspace for overflight will be affected.

Although calculation of the increase in the cost of flights is a complicated matter, the extra flying time, conservative estimates show, will cost the financially-crippled carrier an additional Rs120 million a week in fuel expenses.

Prima facie it appears to be a case of negligence, but a senior pilot said it could be an action of commission rather than omission.

In the lists of passengers of the crashed plane in Cuba no Russian citizens

http://rian.ru/incidents/20101105/292785469.htmlGOOGLE TRANSLATION

05/11/2010 08:40HAVANA, Nov. 5 - RIA Novosti, Oleg Vyazmitinov. No Russian citizens among the passengers of the plane that crashed Thursday night in the heart of Cuba, told RIA Novosti Russia's ambassador to Cuba, Mikhail Kamynin."Held contacts with the Cuban Embassy competent agencies have confirmed that no Russian citizens were on board the crashed aircraft " - "the diplomat said.Aircraft ATR-72-212 Cuban airline Aerocaribbean, was flying from Santiago de Cuba - Havana, crashed on Thursday near the 17-42 near the town of Sancti Spiritus in the center of Cuba. On board were 61 passengers and 7 crew members, including 40 Cubans and 28 foreign nationals.According to the Institute of Civil Aviation of Cuba, among the foreign passengers were registered nine Argentines, seven Mexicans, three Dutch and two German nationals, two Austrian citizens and citizens of Spain, France, Italy, Japan and Venezuela.The authorities establish the circumstances of the incident, which created a special commission.The plane crashed near Guasimal (Guasimal) in the province of Sancti Spiritus in the center of the country. According to media reports the province, the accident occurred about 15 kilometers from the city of Sancti Spiritus, near the reservoir Szasz - the biggest in Cuba.

FACTBOX-Cuban air crashes often involve Russian planeshttp://www.reuters.com/article/idUSN0418430020101105

12:00am EDT

Nov 4 (Reuters) - An ATR-72-212 plane belonging to Cuba's state-owned Aero Caribbean airlines crashed in central Cuba after issuing an emergency call, state-run media said on Thursday.

There were at least 68 people on board but no initial reports of survivors.

Cuban passenger aircraft, many of them Russian-made, have been involved in a number of accidents over the last two decades. Victims have sometimes included foreign tourists.

The following is a brief list of Cuban plane crashes:

March 14, 2002 - A small Cuban tourist plane, a single-engine Russian Antonov-2, crashes into a reservoir in central Villa Clara province, killing all 16 people on board, including Canadian, British and German tourists.

Dec. 25, 1999 - A Russian-made Cubana de Aviacion jet crashes while approaching landing near the Venezuelan city of Valencia, killing all 22 people on board, according to Venezuelan authorities.

Dec. 21, 1999 - A Cubana DC-10 jet skids off the runway at Guatemala City's airport and slams into houses. Guatemala says 26 people were killed but Cuba puts the death toll at 18. Pilot error is blamed.

Aug. 29, 1998 - A Russian-made Tupolev of Cubana goes off the runway and explodes during an attempted takeoff from Quito airport in Ecuador, killing 81 people. Investigators blame human error.

July 11, 1997 - A Soviet-built twin-engined Antonov-24 suffers engine failure shortly after takeoff from the eastern Cuban city of Santiago de Cuba and plunges into the sea, killing all 44 people on board, including six Spaniards and two Brazilians.

Sept. 3, 1989 - In the worst Cubana disaster, a Soviet-made Ilyushin-62M passenger plane crashes near Havana after taking off for Italy, killing all 126 people on board. (Editing by Pascal Fletcher and John O'Callaghan)

Kaveri engine flight-tested in Moscow

http://www.hindu.com/2010/11/05/stories/2010110553871500.htm

Special Correspondent

CHENNAI: Indigenously designed and developed Kaveri engine that will power fighter aircraft, especially Light Combat Aircraft Tejas, was successfully flight-tested on Wednesday. The flight-test took place at the Gromov Flight Research Institute (GFRI) in Moscow., The engine is being developed by the Defence Research and Development Organisation (DRDO).

An Ilyushin-76 cargo aircraft was modified as a flying-test bed for the trial, with the Kaveri engine replacing one of its four engines.

The engine ran right from the take-off to the landing of the aircraft.

It flew for about an hour up to an altitude of 6,000 metres at a speed of 0.6 Mach.

Modifications

The modifications in the aircraft included instrumentation and integration of its mechanical, electrical and fuel systems. . A number of taxiing trials were done with the engine integrated with the aircraft before the flight. The data generated was transmitted to the ground station by telemetry.

“The engine's control, performance and health during the flight were found to be excellent. With this test, it has crossed a milestone in its development programme. Years of hard work have fructified,” said DRDO's Director of Public Interface Ravi Kumar Gupta.

The engine is being developed at the Gas Turbine Research Establishment (GTRE), a DRDO laboratory in Bangalore, with support from other DRDO laboratories, academic institutions and industries.

20 scientists

In the coming months, 50 to 60 flight tests will be done to mature the engine in terms of its reliability, safety and airworthiness. The trials will pave the way for further flight trials with fighter aircraft. A team of 20 scientists from the GTRE have been working with the GFRI for the trials.

The engine had completed component, safety and endurance tests both at the GTRE and facilities abroad, a DRDO press release said.

India flight tests indigenous jet engine in Moscowhttp://sify.com/news/india-flight-tests-indigenous-jet-engine-in-moscow-news-national-klewOhbbhei.html

2010-11-04 22:50:00

RC Jet on HobbyKingHigh Quality, Competitive Price. Buy Now & Earn Customer Rewards. HobbyKing.com

5 November 2010 Last updated at 08:43 GMT

Bangalore, Nov 4 (IANS) India successfully flight tested its indigenously designed and developed Kaveri jet engine in Russia, a senior defence official said Thursday.

'The maiden test was conducted during the flying test bed trials at Gromov Flight Research Institute in Moscow Wednesday,' state-run Defence Research and Development Organisation (DRDO) director Ravi Kumar Gupta said in a statement here.

The engine flew for over an hour up to an altitude of 600 metres at a speed of 0.6 Mach on board an Ilyushin-76 cargo aircraft, which was modified as a flying-test bed for the trial

The Mach number or unit is the speed of an aircraft measured in terms of the speed of sound. It is named after the Austrian physicist Ernst Mach.

The Kaveri engine has been in development over the last two decades at the Gas Turbine Research Establishment (GTRE) of the DRDO in this tech hub to power the indigenously built Light Combat Aircraft (LCA) Tejas by the state-run Aeronautical Development Agency (ADA) here for the Indian Air Force (IAF).

'The engine control, performance and health during the hour-long flight were excellent. The test is a major milestone in the jet engine development programme,' Gupta said.

Since the project's inception in 1989-90, the development cost escalated to a whopping Rs.3,000 crore (Rs.30 billion).

A team of 20 GTRE scientists has been working with the Russian flight research institute for the trials that will be continued in the coming months to mature the engine for reliability, safety and airworthiness.

'An additional 50-60 test flights will pave the way for further trials of the engine on board a fighter aircraft,' Gupta noted.

During the test flight, Kaveri replaced one of the four engines of the aircraft and was controlled by the pilot from the cockpit. The engine data was recorded in the aircraft and transmitted to the ground station by telemetry.

'Prior to the test flight, taxi trials were carried out by integrating the engine with the aircraft,' Gupta added.

During the prolonged development phase, the engine completed various stages, including component testing, safety tests, ground-based engine tests and endurance tests at the GTRE lab and test facilities abroad.

Kidnapped the crew of a Latvian company in Sudan, no Russians among the hostages - Russian Embassyhttp://www.itar-tass.com/level2.html?NewsID=15655690&PageNum=0GOOGLE TRANSLATION

05.11.2010, 12.09CAIRO, Nov. 5. Itar-Tass. The three pilots who were abducted in the province of Southern Darfur, are members of the Latvian airline, "GM Helicopter." This was reported by the head of the consular department of the Russian Embassy in Sudan, Eugene Arzhantsev. "Russians are not among the hostages," - he said.Helicopter pilots, who work under contract to the World Food Programme, have been seized by unknown assailants in Nyala / administrative center of the province / on Thursday night. The UN organizations confirmed the information.Earlier, Reuters reported citing a provincial governor Abdul Hamid Kasha reported that Nyala abducted three Russian helicopter pilots. Perhaps behind this kidnapping is the same separatist group, which is August 29 in Nyala abducted three Russian pilots working in the private Sudanese airline Badr Airlines.

Margelov: the situation with the pilots in Darfur will become clear in the next few hours

http://rian.ru/world/20101105/292838467.htmlGOOGLE TRANSLATION

MOSCOW, November 5 - RIA Novosti. In the coming hours the situation with three Russian-speaking stolen helicopter in South Darfur may become clearer, told RIA Novosti Russian president's special envoy for Sudan Margelov."We're trying to find out details of the abduction, the citizens understand what the country's stolen. While it is known that the Russian-speaking pilots, working through the World Food Program, captured in Nyala on Nov. 4 on his way to the airport," - he said.Margelov added that "in any case, this story is another warning to those who are going to go or work or relax in an exotic country."President's Special Representative noted that currently he holds the communication with the embassy. "There is a clarification of the circumstances of the abduction ... I hope that in the next few hours everything will be clear," - he added.On the abduction of the pilots, Reuters reported citing a statement of the provincial governor Abdel Hamid Musa Kasha.Meanwhile, the Russian Embassy in Sudan news agency reported that they do not have any information about the kidnapping of Russian pilots. Diplomatic mission trying to verify the data.

Three Russian pilots kidnapped in Darfurhttp://af.reuters.com/article/topNews/idAFJOE6A406820101105?feedType=RSS&feedName=topNews

Fri Nov 5, 2010 8:46am GMT

KHARTOUM (Reuters) - Three Russian helicopter pilots were kidnapped in the South Darfur capital Nyala, the South Darfur governor Abdel Hamid Kasha said on Friday.

The U.N. World Food Programme confirmed three pilots contracted to them had been kidnapped in Nyala on Thursday but could not give further details.

"Yesterday there were three Russian helicopter pilots kidnapped by unknown men and the security people are chasing them," Kasha told Reuters from Nyala, the centre of a spate of recent kidnaps for ransom.

Kasha said he believed the kidnappers were the same as those who abducted Russian airmen in Nyala in August.

The pilots were taken from a minibus in the centre of the town on Thursday about two hours before sundown, he said.

Russia directed rare criticism at ally Sudan for being unable to stop the kidnapping of foreigners for money in the war-torn Darfur region.

The United Nations estimates some 300,000 people have died since mostly non-Arab Darfur rebels took up arms in early 2003 demanding more of a share of wealth and power from central government.

The kidnaps for ransom targeting foreign workers in the aid and peacekeeping operations in Darfur began after the International Criminal Court issued an arrest warrant for President Omar Hassan al-Bashir for Darfur war crimes in 2009.

Russian pilots kidnapped in Darfurhttp://www.bbc.co.uk/news/world-africa-11700771

Three Russian pilots have been kidnapped in Darfur, in Sudan.

The UN World Food Programme, for which the pilots work, confirmed the news.

The governor of South Darfur, Abdel Hamid Kasha, told Reuters that it was not known who the kidnappers were and that they were being pursued.

This is the latest in a series of kidnappings of foreign aid workers in Darfur in recent months. Ransoms are usually demanded.

Since President Omar al-Bashir was indicted in 2009 by the International Criminal Court for war crimes allegedly committed in Darfur, the situation for humanitarian workers has greatly deteriorated.

About 300,000 people have died since fighting began in 2003, and some 2.7 million people have fled their homes as a result of the conflict.

Rebel movements in Darfur have been fighting government soldiers and Arab militias, backed by Khartoum.

The Russian Embassy in Sudan checks messages about the kidnapping of pilots

http://rian.ru/world/20101105/292822082.html

05/11/2010 11:22KHARTOUM, Nov. 5 - RIA Novosti. The Russian embassy in the Sudan does not have information about the kidnapping of Russian pilots. On the abduction in Sudan's South Darfur province, three Russian helicopter pilots reported Friday, citing the statement of the provincial governor Abdel Hamid Musa Kasha Reuters."While we have no information. We are trying to verify these data," - said the one of the embassy staffIn Sudan, the Ministry of Information was also told that while no official information on this point.Abductions of foreigners, including citizens of Russia, in South Darfur is not uncommon. Since August 29, not far from their place of residence in the provincial capital of Nyala town had been captured three Russian pilots. Russians who worked for a private airline Badr Airlines, which transports food and other civilian goods under the objectives of the Joint United Nations and the African Union operation in Darfur.A few days later Russian citizens were released. According to the governor, the border guard forces had exchanged fire with the kidnappers to free the Russians. As a result of collisions, some of the bandits were killed. According to him, the rest of the kidnappers were captured, and their continued involvement of the court will decide. In this case, Kasha said that the state government did not pay ransom for release of hostages.On the day of the abduction of Russian pilots from captivity in South Darfur was released American employee of humanitarian non-governmental organization Samaritan's Purse ("Samaritan Purse"). She was in the hands of the kidnappers more than 100 days.As stated shortly after the release of Russians porridge, local government intends to firmly respond to hostage-taking and "ready to use all methods, including the power to stop the activities of gangs, kidnapping of foreigners." According to the governor, the abduction of foreign citizens threaten the region's development and affect the image of Sudan as a whole.

Report: Former CIA spy plans guilty plea for payments for past service to Russiahttp://www.google.com/hostednews/canadianpress/article/ALeqM5hGJ011W-bCFoTI9cwJxHv5PJ-Vew?docId=5035326

By The Associated Press (CP) – 5 hours ago

PORTLAND, Ore. — The highest-ranking CIA officer ever convicted of espionage was expected to plead guilty to additional charges that he tried to collect money from old contacts in Russia while in prison, a newspaper reported Thursday.

Attorneys for Harold "Jim" Nicholson filed notice Wednesday that the 59-year-old will plead guilty to a federal indictment accusing him of conspiring to act as an agent of a foreign government and laundering money, The Oregonian newspaper said.

The government accused Nicholson of orchestrating a plot to use his son to sneak messages from a federal prison in Oregon to Russian intelligence officials and collect a "pension" for his illicit service to Russia in the 1990s.

If found guilty of collecting the proceeds, Jim Nicholson would become the first U.S. intelligence officer convicted twice of betraying his country.

Nicknamed "Batman" early in his 16-year career with the CIA, Nicholson has been kept in a lockdown unit known to inmates as the "hole."

A guilty plea by the former spy would spare his 26-year-old son, Nathan Nicholson, from having to testify against his father at a trial that was set to begin Monday.

Records show Jim Nicholson intends to plead guilty Monday before U.S. District Judge Anna Brown.

Nathan Nicholson pleaded guilty last year to his role in the plot. The government has said he travelled on three continents to collect payments from Russian officials still indebted to his father for his past espionage.

Federal prosecutors allege Jim Nicholson passed crumpled notes to Nathan during their visits at the medium-security prison at Sheridan instructing him to carry them to officials with the Russian Federation.

Nathan Nicholson travelled to San Francisco, Mexico City, Lima, Peru, and Nicosia, Cyprus, collecting cash from Russian officials — $47,000 in all, according to court records.

Prosecutors have suggested in court filings that Jim Nicholson sought money from the Russians to make the lives of his family easier during his imprisonment. Nicholson has

kept close contact with his parents, who live in Eugene, and his three grown children, two of whom live in Oregon.

Nicholson's troubles began in 1994, when he was the CIA's deputy chief of station in Kuala Lumpur, the capital of Malaysia. He was involved in a messy divorce, hoped to get custody of his children and needed money.

Authorities said he began selling U.S. secrets to Russian intelligence officials, trotting the globe to hand off documents. In exchange, the Russians paid him $300,000.

In 1995, Nicholson failed one of the CIA's routine polygraph exams. It showed he appeared to be deceptive on questions about his contacts with foreign intelligence officers.

The FBI and CIA quietly began to investigate Nicholson, who was sent back to the United States to teach spy tradecraft at the CIA's training centre in northern Virginia. Eventually, his agency moved him to a desk job at headquarters in Langley, where investigators spied on him.

They secretly captured videotape of Nicholson shooting photos of classified documents in his office. They arrested him Nov. 16, 1996, at Dulles International Airport, where authorities said he was carrying 10 rolls of film he intended to hand over to the Russians.

Nicholson faced charges that carried the death penalty. But he cut a deal, pleading guilty to conspiracy to commit espionage in exchange for a sentence that was expected to keep him in prison until 2017.

Copyright © 2010 The Canadian Press. All rights reserved.

Russia ranked 65th in UN Human Development Reporthttp://en.rian.ru/russia/20101104/161213432.html

21:31 04/11/2010

The United Nations ranked Russia 65th in its annual flagship report on comprehensive human development, which was published on Thursday.

The Human Development Report, issued annually by the UN Development Programme (UNDP), assesses the state of human development on the basis of health, education and income indicators, as an alternative to purely macroeconomic assessments of national progress.

Norway is leading in the UN rating, followed by Australia and New Zealand. Niger, the Democratic Republic of the Congo and Zimbabwe occupy the last three positions in the list.

The UN has divided the 169 countries in its list into four groups according to a level of human development: "very high," "high," "medium" and "low." Russia, which is listed among countries with a "high" level of human development, has managed to improve its ranking by 3 positions if compared with the 2005 list.

The UN has estimated an average life span in Russia at 67.2 years in 2010, an average education term at 8.8 years, and the GDP at $15,258 per capita (at 2008 prices).

Russia is ranked 42nd in a list representing the level of social and economic inequality, which is also topped by Norway, and 41st in a world ranking on gender equality.

Among former Soviet countries, only Estonia is listed as a state with a "very high" human development level, ranked 34th.

Lithuania (44th), Latvia (48th), Belarus (61st), Kazakhstan (66th), Azerbaijan (67th), Ukraine (67th), Georgia (74th) and Armenia (76th) are among the countries with a "high" level of human development.

The UN report concludes that "people today are generally healthier, wealthier and better educated than they were in 1970."

"The majority of developing countries have made dramatic but underestimated gains in health and education in recent decades, although severe inequalities within and between countries remain," the UN said on its website.

Progress made by many countries is "not directly linked with national economic growth, showing that impressive long-term gains can and have been made even without consistent economic performance."

UNITED NATIONS, November 4 (RIA Novosti) 

Russian cruise-ship crew approaching six weeks in limbo http://www.theglobeandmail.com/news/national/atlantic/russian-cruise-ship-crew-approaching-six-weeks-in-limbo/article1786082/

The Canadian Press

Published Thursday, Nov. 04, 2010 4:18PM EDT

Workers aboard a popular Arctic cruise ship have been stranded for almost six weeks since the vessel was seized in St. John's, N.L.

The International Transport Workers Federation says the Russian owner of the ship owes $340,000 in wages to 52 crew members, most of whom are Russian.

Workers are to be paid as part of continuing negotiations to sell the vessel Lyubov Orlova to a Norwegian company.

Canadian authorities seized the ship on Sept. 25 as part of a separate legal action launched by Cruise North Expeditions.

Union spokesman Gerard Bradbury says some crew members haven't been paid since April, others since June.

Their plight has been a big story in Russia, where the government has offered to fly crew members home starting Saturday.

Shelter for members of illegal armed groups, and caches of ammunition found in Dagestan

http://rian.ru/incidents/20101105/292790511.html

GOOGLE TRANSLATION05/11/2010 09:09MAKHACHKALA, November 5 - RIA Novosti. Siloviki Thursday in Dagestan have found shelter members of illegal armed groups, and caches of ammunition, told RIA Novosti on Friday a source in the Interior Ministry."During the operational-search activities in the five kilometers from the village Leninaul Kazbek district in the SEC" Friendship "found caches from which removed: three-shot grenade launcher RPG-7V, a substance similar to the plastid, weighing 300 grams, the two fuse from UZRGM grenades, a syringe volume of 5 milligrams of wires blue and white "- a spokesman said.In addition, on Thursday evening in the administrative territory of the village Karanayaul Kayakent district in the area "Pushkin-tau" investigators have found shelter members of illegal armed groups. His inspection will be performed on Friday.

Two billion rubles to be spent for demining Chechen farmland

http://www.lenta.ru/news/2010/11/04/minesweep/GOOGLE TRANSLATION

Friday, 05.11.2010, 9:52:11To work on mine lands selskohohyaystvennogo destination in the territory of Chechnya will be allocated 2.26 billion rubles. On this, as reported on the website of the Government of Chechnya, said the chairman of the Republican government Odes Baysultanov.This amount does not include costs for transportation and disposal of explosive ordnance. Documents on the allocation of funds have already been agreed with the Ministry of Defense and Emergency Situations Ministry and submitted to the Ministry of Finance.In 2009, representatives of the Chechen government said that mined in the republic are over 24 thousand hectares of land, most of which are farmland, and complained about the lack of funding and qualified staff. Fears were expressed that if the pace of work will not be increased, clearance may take several decades. In this case, mine clearance was estimated at 12 billion rubles.Carrying out the work also involves difficulties of a technical nature. So, in October 2010 in demining arable land state farm "Zarya" in the Grozny district of a mine blew a special machine "polyplasmia. Sappers

Moscow to give Chechen residents $16 mln in compensation in 2010http://en.rian.ru/russia/20101104/161211990.html

18:45 04/11/2010

The Russian government will have allocated about 500 million rubles ($16.2 million) by the end of 2010 to compensate residents of Chechnya affected by anti-terrorism operations this year, the head of the Chechen government said on Thursday.

Each family who lost its home as a result of military operations against militants in the volatile North Caucasus republic will receive 350,000 rubles (about $11,400), Prime Minister Odes Baisultanov told Chechen leader Ramzan Kadyrov.

The last of the payments will be made in the first half of 2011, he added.

According to the Chechen government, about 75,000 people have received compensations for their lost property since 2003, including 8,000 families this year.

Moscow officially ended its decade-long antiterrorism campaign against separatists in Chechnya in April 2009, but has since had to step up the fight against militants as skirmishes and attacks on police and other officials have continued.

The Kremlin has pledged to wage "a ruthless fight" against militant groups but also acknowledges the need to tackle unemployment, organized crime, clan rivalry and corruption as causes of the ongoing violence.

GROZNY, November 4 (RIA Novosti) 

Two Chechen journalists win ‘freedom award’ at Istanbul fairhttp://www.hurriyetdailynews.com/n.php?n=two-chechen-journalists-get-8216freedom-award8217-2010-11-04

Thursday, November 4, 2010VERCİHAN ZİFLİOĞLUISTANBUL – Hürriyet Daily News

The Geneva-based International Publishing Association, or IPA, gave its 2010 “Freedom To Publish” prize to two Chechen journalists in a ceremony on Tuesday.

Israpil Shovkhalov, the editor-in-chief of Chechen human rights magazine “Dosh” and Viktor Kogan-Yasny, the magazine’s publisher, were rewarded “for their exemplary courage in upholding the freedom to publish.” The award ceremony took place during the 29th TÜYAP Book Fair.

Speaking to Hürriyet Daily News & Economic Review, Shovkhalov said the international image of Chechens as “terrorists” remains a “great injustice” to the people.

“Our lives are in danger. We’ve been getting death threats. Our office [in Moscow] was raided [by security forces] countless times,” Shovkhalov said. “But we will continue our struggle. The world needs to know what is happening behind the curtains in the Caucasus.”

Abdulla Duduyev, the executive editor of the magazine, said they aim to shed light on unsolved murders and announce human rights violations.

Blaming “the Soviet Union and Russia” for pressuring the peoples of the Caucasus, Duduyev also said the 2006 murder of Anna Politkovskaya should be investigated.

“The importance of such a magazine and the fact that it has been published regularly over a relatively long period – almost eight years – should not be underestimated,” said Herman P. Spruijt, the IPA president.

“It has become an institution, an island of human dignity and a product of real news in a time when Russians, as well as members of the ethnic minorities in the Russian Federation, in a growing degree suffer from the power plays among authorities and ignorance from the main media outlets,” he said.

The English-language “Dosh,” meaning “Word,” is published by a team of nearly 40 journalists.

The IPA is an international federation that represents book and journal publishers.

Penkova appointed press secretary to Moscow mayor

http://www.itar-tass.com/eng/level2.html?NewsID=15655102&PageNum=0

05.11.2010, 00.29

MOSCOW, November 5 (Itar-Tass) -- Moscow’s new mayor Sergei Sobyanin on Thursday appointed Gulnara Penkova his press secretary and head of the Moscow government’s press service.

Penkova, born in Moscow, graduated from the Humanities Institute of Television and Radio Broadcasting in 1998, and the Diplomatic Academy of the Russian Foreign Ministry in 2000.

She has been employed with the Russian president’s administration since April 1999, ascending from chief specialist to deputy head of the Kremlin press service. She was among those who organized such events as the celebrations of the 300th anniversary of St. Petersburg, the Russia-European Union summit, the festivities on the occasion of the 60th and 65th anniversary of the victory in WWII, and some other international summit meetings.

She has state awards, including the Medal to Rank II Order For Merits to the Fatherland, Order of Friendship, and an honorary diploma of the Russian president. She is class 2 state counsellor of the Russian Federation.

Medvedev, Putin arrive for Chernomyrdin's memorial servicehttp://en.rian.ru/russia/20101105/161218205.html

10:47 05/11/2010

Russian President Dmitry Medvedev and Prime Minister Vladimir Putin along with representatives of socio-political and cultural circles arrived for the memorial service for former prime minister Viktor Chernomyrdin, who died early on Wednesday at the age of 72.

Chernomyrdin will lie in state in a government reception hall on Sparrow Hills, where currently the service is held.

"He served all his duties with honor, and perhaps the most difficult test for him was to lead the government in 1990s," Medvedev said adding that Chernomyrdin did all he could to solve economic problems and to make society come to comfort.

"His government held very difficult reforms in the country," Putin said. "Viktor Stepanovych [Chernomyrdin] was a strong politician."

Moscow Mayor Sergei Sobyanin, First Deputy Prime Minister Viktor Zubkov, Gazprom CEO Alexei Miller also arrived for the service along with the country's president and prime minister.

On Thursday the hall was opened to the public, who wanted to pay their final respects to Chernomyrdin.

The president praised Chernomyrdin in a Kremlin address on Wednesday and ordered a state commission to organize the funeral and to provide a live broadcast of the ceremony.

"He was a symbol of the new Russia; together with our new country he made many different decisions, sometimes painful, and served his Motherland his entire life," Medvedev said. "He was a warm-hearted man of great charm and simplicity, open to all. We will remember him."

After serving as prime minister under President Boris Yeltsin from 1992-1998, Chernomyrdin was appointed Russian ambassador to Ukraine in 2001, a post he held until 2009, when he was named the president's special envoy for economic cooperation with CIS countries.

MOSCOW, November 5 (RIA Novosti)

Chernomyrdin to be buried at Moscow’s Novodevichye Cemetery

http://www.itar-tass.com/eng/level2.html?NewsID=15655133

05.11.2010, 01.06

MOSCOW, November 5 (Itar-Tass) -- Russia’s former Prime Minister Viktor Chernomyrdin, who died at the age of 72 on Wednesday, November 3, will be buried at Moscow’s Novodevichye Cemetery on Friday.

Civil funeral ceremony will start at 10:00 a.m. Moscow time at the Government Reception House on Vorobyevy Hills. The ceremony will be attended by state officials, politicians, public figures and people of arts and sciences. A state commission established by a decree of Russian President Dmitry Medvedev is in charge of the organisation of the funeral. The Russian President had confirmed his participation.

Russian Prime Minister Vladimir Putin has expressed his condolences over Chernomyrdin’s death.

From 11:00 to 12:00 a.m. Moscow time, Metropolitan Juvenal will conduct the requiem service in the Assumption Church of the New Maidens' Convent while Patriarch Kirill will lead the funeral service at the nearby Novodevichy cemetery during the late former Prime Minister's entombment, the Patriarch's press service told Itar-Tass.

Chernomyrdin will be buried near the tomb of his late wife, Valentina, who died in March 2010.

The funerals will be televised live.

The official mourning ceremony for Viktor Chernomyrdin began on Thursday at the Government Reception House. Many people have come here to pay last tribute to Russia’s outstanding politician. Among those who have attended the ceremony were speaker of the Federation Council, or upper house of the Russian parliament Sergei Mironov, cosmonauts Valentina Tereshkova and Alexander Klimuk, former speaker of the State Duma lower parliament house Gennady Seleznyov, Chernomyrdin’s colleague from Gazprom Rem Vyakhirev, former chairman of the USSR Council of Ministers Nikolai Ryzhkov, Russia’s former Deputy Prime Minister Oleg Sysuyev, former chairman of the Central Bank of Russia Sergei Dubinin, head of the VGTRK TV and radio company Oleg Dobrodeyev and his predecessor on the post Oleg Poptsov, ambassador from CIS and foreign countries, etc.

Special envoy of Russian President on economic cooperation with CIS countries, former Russian Prime Minister, former Russian Ambassador to Ukraine Viktor Chernomyrdin, died on the night of November 3 after a long illness. He was 72 years old.

A whole epoch in Russia’s modern history is linked with the name of Chernomyrdin. A political heavyweight, a prominent citizen of his country, he was one of the most authoritative and recognisable public figures. Chernomyrdin still holds the national record for the length of stay on the post of prime minister. He was the first to take this post the new Russia after the collapse of the Soviet Union and headed the office for almost six years: from December 1992 until March 1998. The dire turmoil of the post-Soviet history, the change of socio-economic system, the first Chechen campaign in October of 1993, Budennovsk and many other events, which became a trial for the country and Russians occurred during the period of his premiership.

Chernomyrdin remained prime minister until his sudden dismissal on March 23, 1998. Following the 1998 Russian financial crisis in August, Yeltsin re-appointed Chernomyrdin as prime minister, and attempted to designate him as his successor. However, the Duma twice refused to confirm Chernomyrdin as the head of the government. Rather than to risk the third rejection and thus to force the dissolution of the parliament and political crisis, the President opted to propose a more popular Yevgeny Primakov as the new Prime Minister.

For eight years Chernomyrdin served as Ambassador of the Russian Federation to Ukraine, during the years of the “orange” regime of Viktor Yushchenko in power. A mission of the RF president’s Special Representative for the resolution of the situation during the NATO bombing of Yugoslavia in the spring of 1999 became a prologue to his diplomatic service. After returning from Kiev in 2009 he was appointed an advisor to the president.

Chernomyrdin was born in 1938 in the village of Cherny Otrog of the Saraktash district of the Orenburg region. In 1966 he graduated from the Kuibyshev Polytechnic Institute in the specialty of process engineer, in 1972 – from the Economics Department of the All-Union Correspondence Polytechnical Institute as an engineer-economist. He began his career in 1957 at the Orsk oil refinery plant in the Orenburg region, where he worked as a mechanic, machinist, operator, chief of a technological unit. From 1985 to 1989 he was the last Minister of Gas Industry of the USSR. In 1989-92 - President of the country's first state gas concern Gazprom, and in 1999-2000 - head of the board of directors of Gazprom.

Chernomyrdin is known in Russia and Russian-speaking countries for his unique language style, containing numerous malapropisms and syntactically incorrect speech. Many of his sayings became aphorisms and idioms in Russian language, the most famous being his expression “We wanted the best, but it turned out as always.” He will be buried beside his wife in Novodevichy Cemetery on 5 November 2010, and his funeral will be broadcast live on Russian federal TV channels.

Putin's Korean 'Son-in-Law' Quits Moscow Jobhttp://english.chosun.com/site/data/html_dir/2010/11/05/2010110500742.html

A Korean man identified only by his surname Yoon who was reported to be dating Russian Prime Minister Vladimir Putin's daughter has quit the Moscow office of Samsung Electronics after only a month in the job.

A Samsung spokesman said Wednesday, "Yoon quit voluntarily due to concerns about his personal safety after word spread that he was dating Prime Minister Putin's daughter Yekaterina Vladimirova."

"As rumors spread about Yoon's relationship with Putin's daughter, concerns were raised about possible attacks from terrorist groups," the spokesman said. Yoon had apparently been accompanied by a Russian bodyguard when going outdoors on a few occasions. He is said to have been dating Putin's daughter for many years and there have been rumors of an impending marriage.

Yoon told the ChosunBiz by telephone that he is no longer able to talk to Katya Putin as she appears to have been spirited away to safety.

englishnews@chosun.com / Nov. 05, 2010 11:04 KST

Cup for $500,000, Faberge Wedding Boost Sotheby’s Russian Sale http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ajBBKx6Q.jt0

By Katya Kazakina

Nov. 5 (Bloomberg) -- A Soviet realist painting depicting two female workers raising a red flag over Moscow fetched $1.5 million at Sotheby’s in New York today.

Painted in 1950 by Yuri Pimenov, the optimistic 8.4-foot- tall canvas “First of May Celebration” led the $14.4 million sale of Russian art and Faberge objects.

Pimenov’s canvas, which went to an anonymous buyer bidding by telephone, sold for three times the presale low estimate and set an auction record for the artist.

While 30 percent of Russian art lots failed to find buyers, many of those that sold doubled and tripled their presale estimates, igniting bidding wars.

Aleksey Kravchenko’s canvas “Indian Fairytale,” created in the 1920s and inspired by a trip to India and Sri Lanka, fetched $1.48 million, nearly reaching its presale high estimate. Prices include a buyer’s commission.

A group of red-robed lamas depicted on paper by Alexandre Iacovleff in 1932 sold for $782,500. That set an auction record for the artist, who made frequent expeditions in Asia and Africa.

The sale’s second part included 83 lots of Faberge and Russian enamels from an anonymous private collection; only eight lots failed to find buyers.

Drink Up

The session’s top lot, an ornate Russian drinking vessel known as a “kovsh,” took in $518,500, more than doubling its presale low estimate. Made with gilded silver and enamel, it depicts in tiny detail a wedding feast, including the bride’s crown and dress ornament.

Another kovsh, shaped as a bird with a golden beak and made by Faberge, fetched $242,500, more than four times its $60,000 low estimate.

Half of the buyers were Russian and half were American, said Karen Kettering, Sotheby’s vice president of Russian works of art.

To contact the reporter of this story: Katya Kazakina in New York at kkazakina@bloomberg.net.

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.

Last Updated: November 4, 2010 18:05 EDT

Russia prods Afghan, Japanese woundshttp://www.atimes.com/atimes/Central_Asia/LK06Ag01.html

By M K Bhadrakumar

Any Russian babushka sitting in a city park would admonish that picking scabs is a bad thing and if the scabs feel tight or itchy, find distraction in a book or puzzle. Yet Moscow twice within a week picked at its war wounds - a relatively new scab from the Afghan jihad of the 1980s and a much older one left over from World War II. They were neither tight nor itchy, yet Moscow scratched them.

The Russian decision to participate in a commando operation led by United States forces against drug traffickers in Afghanistan last Thursday and the first-ever visit by a Russian head of state to the Kurile islands on Monday were precipitate moves that risked unpleasant consequences.

Russian servicemen stepping on Afghan soil from where they departed in unhappy circumstances on February 15, 1989, or ratcheting up tensions with Japan over a simmering 65-year-old territorial dispute suffused with strong emotions and national pride is always risky. The Russian move needs to be seen against a geopolitical backdrop that is perhaps as tumultuous in Russia's diplomatic history as the 1945 Yalta summit: the Kremlin maneuvering to take Russia to a nascent partnership with the North Atlantic Treaty Organization (NATO), something unthinkable a few months ago.

After some initial confusion, Kabul and Tokyo grasped the Kremlin's complex motivations. And they let the dust settle down. Afghan President Hamid Karzai had reacted angrily and warned of serious consequences, but quickly realized that Moscow meant no harm to him or to the Afghan nation.

Karzai telephoned Medvedev on Wednesday and not only supported Russia's participation in the recent anti-drugs operation but also called for "further expanding joint efforts in this area and increasing coordination levels ... [and] for further intensification of cooperation with Russia and increasing its role in resolving problems in Afghanistan, as well as the region as a whole."

Japan's reaction has been strikingly similar. An eruption of anger over Medvedev's visit to the disputed territory and the recall its envoy in Moscow. Then Tokyo calmly reconfirmed the scheduled meeting between Prime Minister Naoto Kan and Medvedev on the sidelines of the Asia-Pacific (APEC) summit meeting at Yokohama on November 13-14. Interestingly, Kan instructed the Japanese ambassador in Moscow to "increase his

gathering of information and analysis of the development of the situation in Russia". In Tokyo's perception, the Kremlin was grandstanding.

Medvedev wrote to Kan on Thursday that he intended to "actively participate'' in the main theme of Japan's APEC presidency, Change and Action, and expressed confidence that the Yokohama summit would provide "an optimal model of ... development ... with an emphasis on economic and social security… [and] make a tangible contribution to sustainable growth in the economies of participating in the forum."

Russian participation in the commando raid in Afghanistan took place when the troubled Afghan-Russian relationship was fast mending. Medvedev successfully hosted a summit in the Black Sea resort of Sochi in August to discuss Afghanistan, which Karzai attended. The discussions even focused on Russian-Afghan trade and economic ties. Kabul was willing to leave the bitter memories of Soviet occupation behind and see Russia as a benefactor and a factor of stability. Medvedev won Karzai's friendship.

As regards the second "scab", Moscow provoked Japan by scheduling Medvedev's visit when the two countries were focusing on strengthening their economic ties, with Japan stepping up its imports of oil, natural gas and other resources from Russia and the latter importing Japanese cars and other products. Moscow precipitated the tensions hardly 10 days ahead of the APEC summit, which Russia is attending for the first time.

Soviet troops seized the 1,300-kilometer volcanic archipelago of the Kurile Islands and merged it with Russia's Sakhalin region in the final stages of World War II after Japan had sued for peace with the Allies. Japan calls the islands its "Northern Territories", rejects Russia's claim and has refused to conclude a peace treaty with Russia even 65 years after the war ended. Medvedev's visit to the Kuriles changed nothing about the territorial dispute.

In sum, Russia acted toward Afghanistan and Japan with a deliberateness that betrays deeper policy calculations. Russian motives are transparent in Afghanistan. The commando operation targeted drug traffickers, but its backdrop is Russia and NATO getting ready for improved relations. Russia and NATO are expected to sign a clutch of agreements relating to Afghanistan in the coming period relating to the transportation of NATO's military cargo to Afghanistan via Russian territory by air, road and rail; supply of Russian helicopters to Afghanistan; and providing training of Afghan pilots, special forces and military as well as counter-terrorism and counter-narcotic units by Russian instructors.

Russia is pitching hard that the US and NATO have much to gain out of involving Russia in the war. The narrative is that "the situation in Afghanistan will be even worse if Russia and NATO do not work together. What's more, it's in their mutual interests to join forces ... Moscow has no choice but to support NATO. Even a partial withdrawal of NATO troops before local forces are fully trained ... would spell catastrophe for Russia."

The Afghan anti-narcotic operation involving Russian agents couldn't have been timed

better - three weeks ahead of the NATO summit in Lisbon where the war and Russia's role figure on the agenda. Moscow tried to use the drug-trafficking problem to catapult itself from the margins to the center stage of NATO's debates over Afghanistan. It helped define Russia's place and role on the issue of Afghanistan.

Keeping the scabs moist Moscow's relations with NATO are improving, but it so far has kept a safe distance from the alliance's Afghan agenda and instead tried to be a "balancer" or "alternative" to NATO - a trapeze act that Moscow handled astutely. Karzai grasps the surge in Russian aspirations aiming to revive its influence in Afghanistan even as the war is exhausting the US and NATO and the search for a political settlement quickens.

On the other hand, Moscow uses its developing cooperation with NATO over Afghanistan to crowbar its way on the far more vital question of participation in the alliance's missile defense system (which is proposed to be linked to the US's system).

The flurry of diplomatic activity this week has been breathtaking. NATO secretary general Anders Fogh Rasmussen arrived in Moscow on Tuesday to present the proposal for Russia's participation in the alliance's missile defense system. Rasmussen had just visited Berlin to consult German Chancellor Angela Merkel who was fresh from a trilateral summit in October with Medvedev and French President Nicolas Sarkozy that focused on European security and Russia's role in it.

Meanwhile, German Foreign Minister Foreign Minister Guido Westerwelle and NATO's supreme commander in Europe US Admiral James Stavridis also arrived in Moscow, while on the sidelines of the Association of Southeast Asian Nations meet in Hanoi last week, Russian Foreign Minister Sergei Lavrov met with US Secretary of State Hillary Clinton, and Russian Defense Minister Anatoly Serdyukov was hosted in the Pentagon for the first time, in September.

The Russian news agency said there was "an 'all-hands-on-deck' kind of atmosphere in Moscow" this week. Expectations run high that a momentous phase in Russia's ties with the West is probably commencing.

This is where the Kremlin feels the compulsion to balance its ties with Beijing. At a time when Moscow has all the need for Japanese money for modernization, when its foreign policy priority is to integrate Russia into the global community and when Silicon Valley apparently holds the key to Russia's "innovation" comes this manifestly provocative act to pressure and humiliate one of the US's key allies.

But then, China is also currently locked in a row with Japan over territorial claims. Perhaps there isn't any Russian-Chinese conspiracy as such to needle Japan and to keep the Japan-US alliance in check and thereby undermine US influence in the Asia-Pacific. But Moscow's jab at the scab of its territorial dispute with Japan pleases Beijing. Moscow showed up Japanese foreign policy as being in disarray and that with its economy in deep stagnation, Tokyo is too weak to do anything other than complain.

Russia asserted its status as an Asian power but Moscow also signaled to Beijing that the potential surge in its NATO ties by no means comes at the expense of Sino-Russian strategic partnership. A Chinese Foreign Ministry spokesman called the Russian-Japanese row a "bilateral issue" (ie, Washington should stay clear of it) which should be solved through "a friendly dialogue".

Moscow has strengthened Beijing's hand in any upcoming negotiations with Japan over the East China Sea. The Global Times daily quoted a Chinese scholar as saying, "Japan cannot afford to have tensions with China and Russia at the same time. It's time for Japanese politicians to reflect on their diplomacy and sort out a solution."

Besides, by highlighting its territorial dispute with Japan, Moscow may also have underscored that involvement of Tokyo in the alliance's missile defense system would be contrary to the spirit of Russia-NATO ties and the reset of US-Russia ties. All-in-all, therefore, while the Afghan anti-drug operation underscored the Russian capacity and readiness to be seen as a useful ally for NATO, by highlighting its territorial dispute with Tokyo, Moscow reaffirmed that strategic cooperation with China would nonetheless remain a core vector of its foreign policy.

In short, Moscow intends to keep its Afghan and Japanese scabs moist. The babushka will advise that a little skin massage and a bit of moisturizer rubbed into the scab is always good to help blood circulation so that the wound heals properly.

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

Musings of a Russophile: What Is To Be Done?http://en.rian.ru/columnists/20101105/161218671.html

11:54 05/11/2010

Weekly column by Frederick Andresen

How to actually succeed in Russian business is the question. While it does not require sleeping on a bed of nails, as the hero in Nikolai Chernyshevsky’s famous novel What Is To Be Done did to prove his dedication to his Marxist ideals, it does require a clear and serious intent, dedication, perseverance, and many other things.

In a land historically devoid of the predictability of law, the cement of society is built on personal relationships. This takes time. That interwoven matrix is complex. That is why one never makes commitments he cannot deliver. It is deeds, not words that count. Character is more important than contracts. Once that trust develops, I found the Russians reliable, resourceful, dedicated, and extremely hard-working. New leadership can develop out of the growing pool of forward-looking younger men and women.

After you understand the system and the relational foundation of Russian society, the pathway is reasonably predictable. You learn quickly how to pick your friends. You may make mistakes, but learn from them and move on. Unfortunately, my biggest problem was dealing with Americans who somehow felt the rules that constrained their ambitions at home did not apply in Russia. In the end, most of them learned the hard way. Some returned home posing as experts. Some returned disillusioned and broke. In Russia, like anywhere else in my experience, honesty, intelligence, reliability, and good hard work are respected and gain the kind of reputation on which solid business is built.

Having said all that, in dealing with Russians sometimes it helps to think of two dogs. Even if you have to fake it, never be the bottom dog in Russia. In the Grand Inquisitor chapter of his famed The Brothers Karamazov, Dostoevsky stressed along with “mystery and miracle,” the Russian respect for “authority.” You never want to be in the submissive position. You lose respect. You also don’t want to be the dominant aggressor. You growl a lot but get little done. You must assume the authority to be equal, never submissive. One joke illustrates this differently. Two sailors, one a Russian and the other Ukrainian, were walking down the street in Sevastopol and on the sidewalk they find a ten-dollar bill. The Russian says, “Great, let’s share this like brothers.” The Ukrainian however says, “No, let’s split it 50/50.” Partnership can be subjective.

What about crime? There are precautions one must take. Yes, business disagreements are settled differently sometimes. That gets the headlines, but it is the exception, not the rule. The streets are safer than in many American cities. Moscow is cleaner than New York. In the Metros the Russians are more polite and less odiferous than in Paris. I remember one Russian’s answer to the question from a reporter about the Mafia. The Russian answered, “You say sixty percent of Russia today is controlled by organized crime? Believe me, that is an improvement. Before, it was 100 percent.” I don’t belittle the issue. But, I never let it slow me down. You can steer around it.

William Lytle Schurz was an unforgettable professor of mine at Thunderbird School of Global Management, my graduate school. He stated incredulously to us at the time, just a few years after Stalin’s death, that Russians and Americans were more alike than any two peoples on earth. He said they were both people of the soil; they both loved their country, were an egalitarian lot, could laugh at themselves, and were hard workers. He was right. Americans and Russians make good partners. They are straight-speaking, self-confident, and work well as a team. When both the Russian and American understand the other’s personality and culture, good teamwork and mutual benefit can be achieved. Look at the space program for example. 

If Alexis de Tocqueville was the visionary of the 1830s, I think Daniel Yergin and Thane Gustafson fill that role for the present. Their book, Russia 2010, although published in 1993, is still in tune with Russia’s almost daily unfolding. I studied that book when first in Russia and the experience convinced me of one of their three projected possibilities for the future of the new Russia. In between the “Two Headed Eagle” and the “Time of Troubles,” the other extremes presented by the authors, lays my choice called “Muddling

Down.” In the end, the writers are convinced of Capitalism Russian-Style, which will be shaped by the individual path it takes. From what I have experienced, I tend to agree.

One of the perplexing answers to “What is to be done?” comes from Viktor Chernomyrdin, the Russian prime minister in the 1990s, whose death this week aroused a remarkable wave of sympathy from all over  Russia and condolences from around the globe. In 1993, Chernomyrdin  said, “We hoped for the best, but it turned out like always.” Or another of his historical remarks, “If one considers what could have been done, and then what we did do over this long time, one can conclude that something was done.” Really?

The column is about the ideas and stories generated from the 20 years the author spent living and doing business in Russia. Often about conflict and resolution, these tales at times reveal the “third side of the Russian coin.” Based on direct involvement and from observations at a safe distance, the author relates his experiences with respect, satire and humor.

Frederick Andresen is an international businessman and writer with a lifetime of intercultural experience in Asia and for the last twenty years in Russia. He now lives in California and is President of the Los Angeles/St. Petersburg Sister City.  While still involved in Russian business, he also devotes time to the arts and his writing, being author of “Walking on Ice, An American Businessman in Russia” and historical novellas.

National Economic Trends

Business, Energy or Environmental regulations or discussions

Mail.ru Sets Initial Offering Price at $27.70 Per GDRhttp://noir.bloomberg.com/apps/news?pid=newsarchive&sid=axO74KUL18M8

By David Altaner

Nov. 5 (Bloomberg) -- Mail.ru Group Ltd. said it set an initial public offering price at $27.70 per global depositary receipt.

To contact the editor responsible for this story: David Altaner at daltaner@bloomberg.net

Last Updated: November 5, 2010 03:03 EDT

UPDATE 1-Russia's Mail.ru prices IPO at $27.7 per sharehttp://www.reuters.com/article/idUSLDE6A31SA20101105

3:24am EDT

LONDON/MOSCOW, Nov 5 (Reuters) - Russian Facebook investor Mail.ru priced its London listing at $27.7 per share on Friday, the top of its price guidance, raising $912 million for the internet firm.

Mail.ru said it had sold 32.93 million shares in the initial public offering (IPO), representing a 17 percent stake in the company prior to an overallotment option.

Books on the listing were covered on the first day of bookbuilding and closed a day early due to strong demand. The book was 20 times oversubscribed at top end of range, according to one financial market source.

Demand came mostly from U.S. and British technology focused funds, a source close to the offer said.

The listing values the company at $5.71 billion, making it Europe's largest listed internet business. (Reporting by Kylie MacLellan in London, Maria Kiselyova and Olga Popova in Moscow)

BHP Buyout Offer Confused Potash Corp. Investors, CEO Testifieshttp://www.businessweek.com/news/2010-11-05/bhp-buyout-offer-confused-potash-corp-investors-ceo-testifies.html

November 05, 2010, 12:03 AM EDT

By Andrew M. Harris

Nov. 5 (Bloomberg) -- BHP Billiton Ltd.’s hostile bid for Potash Corp. of Saskatchewan Inc. has confused the fertilizer producer’s investors “since day one,” the Canadian company’s chief executive officer told a U.S. judge.

CEO Bill Doyle was the first witness in a federal court hearing in Chicago yesterday in which Potash Corp., the world’s largest producer of fertilizer, seeks an order blocking BHP’s $40 billion takeover plan.

The hearing came a day after the Canadian government said BHP’s $130-a-share buyout wouldn’t provide a “net benefit” to Canada and stopped the sale, giving BHP 30 days to appeal. U.S. District Judge David H. Coar in Chicago allowed the hearing to go forward while Melbourne-based BHP seeks to overturn the Canadian decision.

BHP, the world’s biggest mining company, has denied Saskatoon-based Potash Corp.’s allegations that it made misleading public statements about plans to develop a rival potash mine near Jansen, Saskatchewan, and asked Coar to dismiss the case. BHP said it

has complied with U.S. disclosure requirements and that investors, not the courts, should resolve the dispute.

Saskatchewan’s provincial government opposes the transaction, saying it would cost the province jobs and tax revenue.

Potash Reserves

About 93 percent of the world’s potash production is dedicated to creating water-soluble potassium fertilizer, and about 80 percent of the world’s reserves are in Russia, Belarus and Canada.

With a projected production capacity of 8 million tons a year by 2025, the Jansen mine, if completed, would be the largest single source of the potassium-based mineral. Potash Corp.’s six mines produce about 12 million tons a year, Doyle said.

Potash Corp. has suggested that BHP is using the threat of the mine to drive down Potash Corp.’s share price.

Doyle called the scale of the Jansen plan “illogical” because there isn’t demand for so much potash. He said Jansen, as described, “made no economic sense” because it would cost as much as $10 billion to develop and would flood the market, depressing the mineral’s price.

“I would say our shareholders have been confused since day one,” about BHP’s intentions, Doyle told Thomas Moloney, an attorney for the Australian company during cross-examination. “I think it’s a smoke screen.”

BHP Chief

Andrew Mackenzie, BHP’s chief for the unit that produces diamonds, coal, aluminum and potash, testified that his company was fully behind the project.

Mackenzie recounted for Coar how his company had started acquiring land for potash production, first in joint ventures with companies in Manitoba and Saskatchewan in 2006, then by acquiring Saskatchewan’s Anglo Potash Ltd. and with it the Jansen lands in 2008.

“The strategy has always been build and buy, not one or the other, Mackenzie told Potash Corp. attorney Daniel Reidy under cross-examination.

Reidy confronted the BHP executive with copies of intra- company e-mail messages showing that CEO Marius Kloppers questioned the cost of the mine plans and that the company had scaled down the project so that the initial production goal was only 2 million tons a year, with provisions for first doubling production capacity, then doubling it again.

‘Normal Debate’

“This is normal debate between a CEO and his direct reports,” Mackenzie said. “We challenge each other.”

Doyle told the court of an Aug. 12 meeting with Kloppers at the Four Seasons hotel in Chicago at which the BHP CEO first related the plan to acquire a controlling interest in Potash Corp. for $130 a share and gave the Canadian company four days to respond.

“It was a totally unacceptable offer,” Doyle said.

Moloney confronted Doyle about statements he has made about the worldwide need to develop new sources of Potash by about 2020.

The timeframe was only an approximation, Doyle replied. “It’s very hard to predict the future,” he said. Creating new mines is less costly if the developer can make use of existing infrastructure, he said.

“BHP is the largest mining company in the world,” Moloney reminded the CEO.

“They are, but they’re not in the potash business,” Doyle replied.

Two economists, testifying for BHP, said the alleged misstatements had had no demonstrable effect on the price of Potash stock.

Coar said will hear final arguments on Nov. 8.

The case is Potash Corp. of Saskatchewan Inc. v. BHP Billiton Ltd., 10-cv-06024, U.S. District Court, Northern District of Illinois (Chicago).

--With assistance from Christopher Donville in Vancouver. Editors: Andrew Dunn, Michael Hytha.

To contact the reporter on this story: Andrew M. Harris in Chicago at aharris16@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Russian group in talks over PotashCorp bidhttp://www.ft.com/cms/s/0/922e7540-e810-11df-b158-00144feab49a.html?ftcamp=rss#axzz14O9koPxH

By Catherine Belton in Moscow

Published: November 4 2010 13:42 | Last updated: November 4 2010 20:01

Phosagro, Russia’s biggest phosphate producer, said on Thursday it was in “intensive talks” on launching an alternative bid for Canada’s PotashCorp, a day after the Canadian government rejected BHP Billiton’s $38.6bn hostile bid for the company.

Phosagro, chaired by a one-time mentor to Vladimir Putin, the former Russian prime minister, said it was considering taking part in a deal to buy shares in PotashCorp and was in talks with the Russian government as well as with Russian and foreign banks.

But analysts, industry participants and bankers said they were sceptical that any deal would get off the ground.

The privately held company, which analysts estimate to be worth between $3bn and $7bn, is a minnow compared with the $43bn market capitalisation of PotashCorp, and would need to raise a big sum in state financing and find partners to join it in a bid consortium, they said.

One banker familiar with the situation said it was not likely that the company would be able to put enough money together.

“It would be impossible to do it without equity partners,” the banker said.

Phosagro said it would only comment on the potential shape of the deal after November 15.

The company, which is Russia’s third biggest potash producer, has been lobbying the Russian government to throw its backing behind a Russian bid and help propel financing from state banks.

Vladimir Litvinenko, Phosagro’s chairman, who serves as rector of the St Petersburg mining institute where Mr Putin defended a doctoral thesis in 1997, appealed to the prime minister in a letter dated October 20 to support the acquisition, saying it would give Russia control of more than 70 per cent of the potash trade and hand the Russian leadership “a serious geo-political instrument”.

The contents of the letter were first disclosed by Vedomosti, the FT’s Russian sister paper, on Wednesday, and were confirmed by a person familiar with the letter.

Dmitry Peskov, Mr Putin’s spokesman, declined to comment on the appeal, adding that it was unlikely Mr Putin would be involved in raising financing for a private company.

Troika Dialog, the Moscow investment bank, said in a research note that a Russian bid would only be possible if Phosagro were able to do it in conjunction with UralKali, the Russian potash group.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Renault in ‘Last-Chance Saloon’ in Growth Markets With AvtoVAZ http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=awdkWESmf2Lk

By Laurence Frost

Nov. 5 (Bloomberg) -- Carlos Ghosn’s negotiations to take control of OAO AvtoVAZ may be the Renault-Nissan alliance’s final opportunity to grab the leading position in one of the four largest growth markets.

“It’s their last-chance saloon for getting into emerging markets in a meaningful fashion,”, said Erich Hauser, an analyst with Credit Suisse in London. “If they get Russia right, they’ll be starting from a position of strength.”

Ghosn, who heads Renault SA and Nissan Motor Co., needs Russia because mature markets are stagnating and the remaining three biggest emerging markets already have dominant overseas carmakers. Volkswagen AG is the biggest in China, Fiat SpA is largest in Brazil and Suzuki Motor Corp. leads in India.

The CEO estimates Russian auto sales will reach 4 million by 2015 and he aims for 40 percent of those deliveries by taking over AvtoVAZ and expanding production by 700,000 vehicles. Nine- month sales gained 18 percent to 1.32 million, according to data from the country’s Association of European Businesses.

Renault-Nissan is in talks with Moscow brokerage Troika Dialog and state-owned Russian Technologies Corp., which each hold 25 percent of AvtoVAZ, to take a controlling stake in Russia’s largest carmaker at the urging of Russian Prime Minister Vladimir Putin, Ghosn said this week. Renault-Nissan currently owns 25 percent, valued at 12.4 billion rubles ($410 million) at yesterday’s close.

‘Russian Roulette’

“Renault-Nissan gets political backing, a strong Russian brand and arguably a license to dominate the market,” said Max Warburton, a London-based Sanford C. Bernstein analyst who has an “outperform” recommendation on Renault. “Ghosn’s investment looked like Russian roulette in 2009 but could prove pretty lucrative in coming years.”

The Russian auto market, after plunging 50 percent last year, is recovering with the help of government incentives and may overtake Germany to become Europe’s biggest by 2015, analysts predict. Renault-Nissan is in pole position to harness that growth in tandem with AvtoVAZ, whose Lada badge adorns one in every four cars sold in Russia today.

Boulogne Billancourt, France-based Renault’s plan to dominate Russian sales after receiving the government’s blessing follows a playbook rivals used to gain leading footprints in other emerging markets.

China, Brazil

Wolfsburg, Germany-based VW owes its lead in China to a successful encounter with a visiting Chinese delegation in the 1970s, said Christoph Stuermer, a Frankfurt-based analyst at IHS Automotive. Europe’s biggest carmaker now claims more than 11 percent of Chinese vehicle sales, according to IHS data. Suzuki, once invited to rescue Indian carmaker Maruti, now dominates that market with a 36 percent share.

Renault plant investments in Brazil and Argentina have not loosened Fiat SpA’s grip on the Latin American market, with a 24 percent market share, compared with less than 5 percent for Renault-Nissan, according to IHS. The alliance is the sixth- biggest carmaker in China and 10th largest in India.

AvtoVAZ leads the Russian market with a 28 percent share, while Renault-Nissan has 9 percent. Ghosn’s potential empire would have a commanding 37 percent of sales.

“Renault hasn’t done very well in India, and Brazil is dominated by VW and Fiat,” said Philippe Houchois, an analyst at UBS AG in London, who has a “buy” rating on Renault. “That leaves Russia as the only large emerging market where they still have potential to do something big.”

New Lada

Renault and its 43 percent-owned Japanese affiliate are already upgrading AvtoVAZ’s sprawling Togliatti plant with a new production line that will raise capacity to 900,000 cars and begin assembling a new Lada model in 2012, based on Renault’s no-frills Logan range. Renault and Nissan vehicles will follow later that year.

The AvtoVAZ revamp “could easily deliver operating margins in excess of 10 percent” on revenue of 5.2 billion euros ($7.4 billion), lifting Renault’s earnings by 50 cents per share on the basis of its current 25 percent stake, Warburton estimated.

The investment also brings risks, as Renault pushes to improve efficiency at AvtoVAZ. The French carmaker’s managers were marginalized once before, until the sales collapse led to the ouster of its last Russian CEO. Russia’s sales subsidies may also mask AvtoVAZ’s urgent need for new models across the board.

“How it will look after incentives run out is anyone’s guess,” Hauser at Credit Suisse said. “I struggle to see how they can continue to sell any of the current Lada product for another five years.”

Early Resistance

Ghosn until recently resisted Putin’s calls to increase the AvtoVAZ stake Renault bought for $1 billion in 2008. Instead of providing more cash, the French carmaker contributed equipment and technology worth more than $300 million. Renault also declined to raise its holding even as the Russian government injected 40 billion rubles ($1.3 billion) into AvtoVAZ to pay off debt accrued during the 2009 crisis.

Renault spokeswoman Axelle de Ladonchamps declined to comment on the details of the negotiations. French daily Liberation reported Nov. 2 Russia threatened to dilute Renault’s existing stake unless Ghosn bought a bigger holding. Most of AvtoVAZ’s crisis debt is held by Moscow in the form of notes that can be converted into stock.

The proposal to raise the alliance’s holding to 50 percent plus one share came from Putin, Ghosn said after talks between the two men in Moscow this week.

“A government invitation like this one cannot be ignored,” Stuermer said. Doing business with a sovereign state “might make things more complicated early on, but when it’s firmly bedded down it can be the start of a very long and profitable relationship.”

To contact the reporter on this story: Laurence Frost in Paris at lfrost4@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Last Updated: November 4, 2010 19:01 EDT

FUNDS: Russian asset management's coming-out party http://www.businessneweurope.eu/storyf2387/FUNDS_Russian_asset_managements_comingout_party

Ben Aris in Moscow November 5, 2010

Frustrated by the slow growth of the mutual fund business at home, Russian asset managers are launching a string of new EU-compliant mutual funds that can be sold to retail investors around world who want a piece of the emerging market story.

The launch of the new funds are a result of the push-me-pull-you forces at play in the international equity markets at the moment. Developed world stock market lost about

20% of their value in the last decade, according to Morning Star, a fund ratings agency, and they are likely to lose more in the coming decade. On the other side of the jump, emerging markets made triple-digit returns over the same period – and the Russia stock market was the best performing major market in the world, up over 740% - and will quadruple in size over the next two decades, according to a recent report by Goldman Sachs. Emerging markets are hot, but until now they have been predominantly the preserve of institutional investors. That is about to change.

"One of the things that we have learned from the crisis is diversification is good, especially geographic diversification of investors," says Anton Rakhmanov, head of Troika Dialog's asset management division, which is in the process of launching several new funds that will be available to small investors in the West.

To target these retail investors, Russian funds have been busily applying for UCITS (Undertakings for Collective Investment in Transferable Securities) status. This is a classification established in 1985 by the EU and offers investors an extremely high degree of investor protection, making them especially suitable for small investors and can be sold through high street banks, insurance companies and the network of independent financial advisors from London to Madrid.

The Stockholm-based East Capital is the granddaddy of emerging Europe's UCITS retail funds. The company set up its flagship Russian fund in the spring of 1998 and today has about half a million investors with a total of €4.6bn under management. As little as €20 will buy a piece of the action and the fund is sold in 14 countries: seven out of 10 investors into East Capital's funds are retail investors. "It is clear that the appetite for emerging Europe is back, as inflows have been picking up," says Karine Hirn, one of the co-founders of East Capital. "Having an exposure to emerging markets used to be only reserved to a few with higher risk appetite, but it is becoming a must now in most investors' portfolios because of the somewhat uncertain and gloomy future of Western capital markets and economies."

Now the big boys are moving in. The latest entry to the game is Renaissance Asset Managers (RAM), which launched a family of funds in October that cover emerging Europe and Africa. RAM is part of the Renaissance Group that includes investment bank Renaissance Capital and was set up by veteran Russian banker Steven Jennings. Amongst its funds are two emerging Europe funds that invest into Russia and its neighbours, as well as a bank fund and an infrastructure fund, with a Russian debt fund in the works. All RAM's funds have the UCITS stamp of approval and the company is in the process of getting "passports" for each of the individual countries in Western Europe. (After a fund meets the EU's UCITS criteria, the asset manager still needs to apply to regulators in each country where it wants to offer the fund.) Most of the funds will go on sale to retail investors in the New Year, although they are already available to institutional investors. "The emerging markets – and especially Eastern Europe and Africa – are coming of age and we are the start of next super cycle," says Plamen Monovski, chief investment officer of RAM. "The markets are volatile, but even in the worst non-crisis year, the worst performance was a gain of 20%. And there were only two crises in the last 13 years."

Mutual fund pioneer Troika Dialog, which launched its first fund in 1997, has a slightly different perspective. Rather than go after the relatively wealthy small western investors, Rakhmanov wants to expand his firm's offerings to enable existing Russian investors the ability to diversify into other emerging markets and so are offering international funds that invest into the Bric story among others. The move was made possible only three months ago when the rules on Russian mutual funds (known as PIFs in Russian) were changed to allow then to take on exposure to foreign securities. Rakhmanov expects to get UCITS certification for his funds by the end of the year.

Pension pains

Diversifying the investor base makes good sense, but to a large extent Troika has been forced to broaden its base because of the glacial pace of reforms to Russia's pension system.

Russian funds currently have a total of about $5bn under management (much of it with Troika) against a total market capitalisation of Russia's stock market on the order of $1.5 trillion. "The asset management business remains very young in Russia," says Rakhmanov. "The total assets under management are equivalent to about 2% of GDP, compared to somewhere like Poland where mutual funds are equivalent to 20% of GDP and even more in the West. Russia is still making baby steps towards reform."

Poland is already at the endpoint of where the reforms should lead. A third of the money invested on the Polish exchange comes from foreign investors, a third is from local institutional investors and funds, and the last third is from individual investors. It is this diversity of investors, all with different time horizons, that give some stability to the Polish market and make it such a useful source of capital for local firms. In Russia, everyone in the stock market is a speculator - that is why the market is so volatile.

Rakhmanov places the blame for the slow progress at the feet of the government. Much hoopla has surrounded the Kremlin's efforts to turn Moscow into an International Financial Centre (IFC), but managers like Rakhmanov complain it is all top down and so far there has been no attention paid to reforming Russia's pension system, which is a key ingredient to the success of the plan.

The first attempt to reform the pension system in the last 1990s was fluffed. New pension funds were introduced and part of the money that workers pay as state pension contributions was made "investable." However, as oligarchs simply bought off their factory foremen to get their workers to invest into their banks' schemes, the entire reform effort was wasted and almost none of the investable money ended up in private funds. The result is there is no investment culture and ordinary Russians have no experience of investing, so most just don't bother. The IFC project will never get off the ground until the average Russian becomes an active participant in the domestic capital markets. "Reform needs to go in two directions – pension and mutual funds," says Rakhmanov.

"We need local investors for the long term, which will reduce the volatility. The markets least affected [by crises] are those with the most domestic investors."

Activity in the Oil and Gas sector (including regulatory)

Med Crude-Urals rises in south on Lukoil refinery needshttp://af.reuters.com/article/energyOilNews/idAFLDE6A32HQ20101104

Thu Nov 4, 2010 6:07pm GMT * Urals rises in Med, edges down in north * Margins edge up but still weak LONDON, Nov 4 (Reuters) - Urals crude differentialsstrengthened in the Mediterranean on Thursday as Lukoil bid forscarce resources to feed its refining system. "It is a bullish market in the Med," one trader said, addingthat Lukoil was bidding as high as dated minus 80 cents for a18-22 cargo, up from a deal at minus $1 on Tuesday. Other activity in the window was poor due to a long Russianweekend starting with holidays on Thursday and Friday. Shell offered a cargo in north-west Europe at minus $1.25but failed to find buyers, traders said. That was 5 cents lowerthan the last deal at minus $1.20 for a Nov. 13-17 cargo onWednesday. Urals, the main export grade of the world's largest energyproducer, fell as low as minus $2 to dated during the French oilstrike last month due to supply glut fears. But the grade has recovered steeply in the past week afterthe end of the strike and a release of a tight supply schedulefrom Russia for November, both for the Mediterranean and theBaltic. In other grades, traders said there was still no clarity onwhether key Azeri Light players have managed to ship somebarrels from the region as they did in October, when up to fivelarge cargoes were sent to Asia, supporting the grade. Urals margins for complex refineries in the Mediterraneanedged up to $2.16 a barrel on Wednesday but were remained farbelow the average of the past year of $2.74 and of the past 15days of $3.89. <REF/MARGIN1> (Reporting by Dmitry Zhdannikov; editing by Jane Baird)

Lukoil launches quickfire tap to hit 10 year sweet spot http://www.euroweek.com/Article/2711093/Channel/2007/Lukoil-launches-quickfire-tap-to-hit-10-year-sweet-spot.html

Issue: 1179 - 5 November 2010

Lukoil sold a $800m 10 year note last Friday and tapped it on Thursday this week for another $200m. It is the third quasi-sovereign Russian borrower to issue a Eurobond in a fortnight, after Alrosa and Sovcomflot. ..

Energized Lukoil Resets Priorities Following Conoco Pullout http://www.energyintel.com/DocumentDetail.asp?Try=Yes&document_id=693414&publication_id=31

Copyright © 2010 Energy Intelligence Group, Inc.  (click for details)Friday, November 5, 2010

SummaryLukoil, Russia's leading private-sector oil company, is working on a new 10-year plan to reset its priorities following the withdrawal earlier this year of ConocoPhillips as its strategic partner.

Gazprom

SeverEnergia Sale Demonstrates Improving Relationship With Novatekhttp://www.oilandgasinsight.com/file/93909/severenergia-sale-demonstrates-improving-relationship-with-novatek.html

November 2010 | Industry News Russian gas export monopoly Gazprom has agreed to sell a controlling stake in SeverEnergia to its oil subsidiary Gazprom Neft and private gas player Novatek for US$1.5bn.

Feasibility study for the Bulgarian section of the South Stream gas pipeline will be commissionedhttp://www.sofiaecho.com/2010/11/05/987774_bulgaria-russia-to-call-tender-for-south-stream-feasibility-study

Fri, Nov 05 2010 00:03 CETState-held Bulgarian Energy Holding (BEH) and Russian gas major Gazprom have agreed to launch a tender for selecting the company which will carry out the feasibility

study for the Bulgarian section of the South Stream gas pipeline, BEH said on November 4 2010.

The decision comes shortly before the visit by Russia's prime minister Vladimir Putin to Sofia, scheduled for November 13, and a week after the two companies sealed a contract for carrying out the procedure.

The tender documents were scheduled to be published on November 5 on BEH's website.

On October 26, Gazprom pledged to carry out the feasibility study "quickly".

The process of developing the South Stream project was accelerated in the middle of October when the Gazprom head Alexei Miller visited Bulgaria, saying that the two countries would launch in November the rollout of a planned joint venture, which will be in charge of the Bulgarian part of the gas pipeline.

Bulgaria will take part in the JV through BEH, which has been awaiting restructuring for more than a year.

Earlier in November, Putin and Bulgarian counterpart Boiko Borisov arranged by telephone that the joint venture would be set up by November 15 on an equal equity basis, with part of Bulgaria's existing gas transmission system to be connected to the new pipelines.

The South Stream project is scheduled to be operational by December 30 2015, pumping 15.6 billion cubic metres of gas annually, and to shift to a full capacity of 63 billion cubic metres in 2018.

A New Gas Deal

http://www.krakowpost.com/article/2430

Aleksandra Lefek | 4th November 2010

Paweł Kowal on the new gas agreement with Russia

Over the past weeks, both Poland and Russia have been striving to come to an agreement over the transport of natural gas between the countries, and the results may finally be settled this weekend. This afternoon, the European Commission announced that it would assess the new Polish-Russian gas deal within 48 hours, to see if it is compatible with European Union law.

On 17 October, following many hours of talks in Moscow, Poland and Russia finally reached an agreement on a draft contract for the delivery of gas to Poland and increased the agreed upon amounts to two billion cubic metres annually.

According to the deal, Gazprom will supply PGNiG (Polish Petroleum and Gas Mining), the largest Polish oil and gas exploration and production company, until 2022 (previously signed until 2037) for domestic use, and until 2019 for transit to other European consumers.

For it to go into effect, the agreement had to be signed by the Polish and Russian governments. In addition, the legally binding agreement had to be annexed by PGNiG and a subsidiary of Gazprom, Gazprom Export. Finally, the agreement has to receive the blessing of the European Commission.

“The agreement should be signed before Russian President Dmitry Medvedev's visit to Poland in December,” Polish Economic Minister Waldemar Pawlak had promised last Wednesday.

On 18 October, Mr. Paweł Kowal, a member of the European Parliament (PiS), when asked why it is necessary for Poland to sign a new gad deal with Russia, said: “Yesterday, an arrangement from Moscow showed that it is possible to sign a contract until 2022, simultaneously slightly increasing the volume of the natural gas delivered to Poland. Binding oneself by an agreement to 2037 would be economically unjustified for Poland, particularly in the situation of the completion of the Gozoportu structure in Świnoujście in 2014, and future gas mining potential.”

He also said that paradoxically the European Commission, rather than the Polish government, supported Poland’s raison d'être.

Poland reached a preliminary agreement with Russian gas monopoly Gazprom last year in January, but the contract has not been signed due to worries that it is incompatible with European Union regulations.

Mr. Kowal stated that leaving the contract valid until 2022 will allow Poland to decide at the time whether the geological predictions indicating a high potential for “blue fuel” in Poland will be confirmed.

Earlier during the negotiation of the Polish-Russian gas agreement, Mirosław Maliszewski, a member of Parliament (Polish Peasant Party) accused PiS of using this agreement as part of their political arguments during a press conference at the Sejm.

To the question as to why PiS is opposed to this agreement, and the solutions acceptable to PiS, Kowal answered, “[PiS] had consistently opposed the Polish-Russian gas agreement in its previous shape from the beginning.

“First of all, the reason was that the period of the contract was too long, but also that is was not in line with EU law.” He explained that “the limited access of third parties to the Yamal gas pipeline was an open infringement of European Union regulations”. Finally, he also added that “arrangements concerning fees for the transit of the raw materials through Polish territory as well as the issue of discontinuing overdue transit payments by

the Polish side from the Russian side raised doubts”.

Mr. Kowal said that his party mainly opposed the legal arrangements contained in the contract, but overall agreed that it is necessary for Poland to regulate the issue of gas supplies immediately. This would provide corporations with economic safety, but most importantly, gas in polish houses.According to the European Union regulation, the owner and manager of the transit pipeline cannot belong to the same company. It is possible that Russia was trying to create a Polish precedent to contravene the EU’s anti-monopoly legislation and hoped to protect Gazprom’s interests in Europe.

When asked if Russia has chosen Poland as a ground for testing European common energy policy, Mr. Kowal said that he doesn’t think that Poland is any training ground for testing by Russia. He mentioned that Poland has a good transit geographical position and fairly large internal mining industry.Over 70 percent of Polish energy needs to consist of imports, 95 percent of which must be provided by Russia and countries belonging to the Commonwealth of Independent States. The other 30 percent comes from domestic production, coal in particular.“Despite everything, Poland is less susceptible to pressures than Finland, Slovakia, Bulgaria, Lithuania, Latvia and Estonia, which import their entire gas supplies from Russia,” Kowal added.“Poland is in a very good position for negotiation, since Russia cannot reduce supplies of gas to Poland overnight and [thereby] threaten the energy security of its chief European trading partner, Germany.”