Russia 100812

Basic Political Developments Wheat, Corn Stockpiles Dwindle as Russia Drought Curbs Output - Wheat

stockpiles may slip to a two-year low as demand rises and a drought damages Russia’s crop, according to 17 analysts in a Bloomberg survey. Inventories of corn, used to feed livestock and make fuel, probably will drop to the lowest level since 2008, even as output tops a record, the survey shows. The U.S. Department of Agriculture will update its forecasts later today.

USDA to gauge Russia drought impact on world crops - After weeks of unrelenting heat forced Moscow to halt wheat exports for the rest of this year and sent prices surging more than 90 percent since June to a two-year high, traders are now looking to the U.S. Agriculture Department's monthly report as the most authoritative gauge of market fundamentals.

A regime of emergency drought on the whole territory of the Sverdlovsk region introduced

Russia not to send observers to Kyrgyz elections - Russia will not send its observers to Kyrgyzstan to monitor the republic’s parliamentary elections due on October 10th, according to head of the Russian Central Election Commission (CEC) Vladimir Churov.

Russia won’t sell S-300 Favorit missile to Azerbaijan - “Such bargain can change the balance of forces between Armenia and Azerbaijan. If it’s struck, Armenia may also obtain missiles, possibly produced by Iran,” Anatoly Tsyganok, head of military forecast center said when commenting on the ongoing reports on purchase of S-300 Favorit to the amount of $300 mln by Azerbaijan.

Lenta.ru: Russian S-300 appeared in Abkhazia back in 2008 – Kommersant Sea border guards from 5 nations start joint maneuvers - Russian, US, Japanese,

South Korean and Chinese border guard ships will take part in joint maneuvers as part of a 5-day border guard forum of the countries of the northern part of the Pacific Ocean that opens in Vladivostok (Russian Far East). The Russian delegation is headed by deputy head of Russian Federal Security Service’s navy Viktor Trufanov.

NORAD praises results of joint air defense drills with Russia -"This exercise is one milestone in working together in other future efforts. Our folks are proud to be a part of such an important event and are passionate about partaking in efforts to protect our borders," Air Force Lt. Col. John Oberst was quoted as saying on the NORAD Website.

Russia's Commander-in-Chief of Fleet comes to Denmark - Russia’s Commander-in-Chief of the Baltic Fleet Vice-Admiral Viktor Chirkov comes on Thursday to Denmark to take part in the celebration of the 500th anniversary of the Royal Danish Navy and in a meeting of Europe’s council of commanders-in-chief.

Jakarta Post: More Russian fighter jets to arrive in September - The Air Force is expecting the arrival of three new Russian fighter jets Sukhoi SU-27SKM on early September. Air Force chief of staff Vice Marshall Imam Sufaat told Antara news agency that two of the jets would arrive in early September and another in the third week of the month.

Russia-Germany research expedition to the Sea of Japan U.S. unsurprised with Russia's missile deployment in Abkhazia Clinton Sees GOP Backing For START Treaty Blockage of U.S.-Russia civil nuke deal unlikely WILDFIRES IN RUSSIA

o Wildfires in Russia, Canada create poisonous ring around planet o Over 500 wildfires still not extinguished in Russiao Radiation levels are 'normal' in Russia - Radiation levels have not risen in

Russia as a result of fires, including in districts contaminated after the 1986 Chernobyl nuclear disaster, the Russian meteorological service Roshydromet said. The oxygen content in the Moscow air is almost 4 times lower than normal

o Wildfires in Russia reduced by halfo Fire battle continues as new wave of smoke expected in Moscow o Smog unlikely in Moscow in coming couple of days – experto More criticism for Luzhkov - Moscow Region governor Boris Gromov has

joined the chorus of complaints over the way in which Moscow city authorities have handled the wildfire crisis.

o Embassies Go Back to Work o Saudis set to be evacuated from Russia - The Saudi Embassy in Moscow

has tried contacting all its citizens living in Russia in a bid to evacuate them following severe wildfires in the country.

o Finland offers assistance to Russia in putting out wildfireso Armenia sent 400 containers of humanitarian aid to Russiao Russia's peatland fires seen burning for months - Some of Russia's smog-

causing peatland fires are likely to burn for months, part of a global problem of drained marshes that emit climate-warming greenhouse gases, experts said on Wednesday.

o The area of fire in the Chelyabinsk Reserve Taganay "increased to 2.5 ha o In the Ryazan region sent a column of fire special equipment YURTS

MOE o Russian Fires Threaten To Stir Chernobyl Radiationo Fears grow as fires hit Chernobyl

NORTH CAUCASUS o UPDATE 1-Chechen rebels claim small blast near Gazprom HQo Medvedev Sacks Daghestan Internal Affairs Minister o Medvedev Fires Dagestan's Top Cop o The house of the Imam of the local mosque was torched in Dagestan -

Five people, including three children were killed in a fire in the village Huchada Shamilsk district of Dagestan.

o WSJ: Chechen Rebel Digs In, Suggesting Rift in Insurgency New Inquiry in Magnitsky Case - Interior Minister Rashid Nurgaliyev said he

knew nothing about online videos accusing senior police officers linked to the death of Hermitage Capital lawyer Sergei Magnitsky of possible corruption.

Detained assailant on Moscow police dies in hospital of gun wounds (Update 3) - … the suspect who died in the hospital was born in 1988 and was a resident of Makhachkala, the capital of the Russian North Caucasus republic of Dagestan.

One policeman shot, two wounded in south-east Moscow Fire at Perm gunpowder plant put out, no victims US to insist detained Khorokhorin is extradited from France - The United States

of America will insist France extradites Vladislav Khorokhorin, who was detained there for distribution of stolen information on credit cards, the US law enforcement authorities said on Wednesday. He lives in Moscow, but is a citizen of Israel and Ukraine, the United States Department of Justice said.

Russia to remember victims of the Kursk submarine accident Rossiiskaya Gazeta/Russia Today: The secrets that drowned with Kursk - The

sunken nuclear submarine will never reveal the reason for the accidentRussia Today TV nominated for Int’l Emmy Award

Russian government rolls dice again on free gaming zones Azov gamble fails to pay off RUSSIA: "A plan of organisational and operational search measures" - Russian

state officials have repeatedly refused to explain why and by whom moves against Jehovah's Witnesses and readers of the works of Muslim theologian Said Nursi were initiated.

National Economic Trends Bloomberg: RenCap's Mundy Says Russian Heat Wave Sapping Growth: Video RenCap: Weekly inflation accelerates, heat wave to blame RenCap: CPI acceleration is unavoidable; no government regulation of food

prices yet RenCap: Russias wildfires rage on: Response and implications RenCap: Russian economic growth at 5.2% in 2Q10 Danske Bank: Russia GDP growth rate set to ease in H2 10

July import growth still strong at 35.6% y-o-y UPDATE 1-Russia may export no more than 4.5 mln T grain-AgMin - Exports in

2010/11 estimated at 2.0-4.5 million T; Exports between July 1 and Aug. 15 estimated at 2.8 million T

Russia: pessimistic forecast for grain production to total 60 mln tones

Business, Energy or Environmental regulations or discussions Ruble Weakens 0.6% to 30.4620 Versus Dollar at Start of Trading UPDATE 1-Highland Gold to hit 2010 production target New law requires greater disclosure from electricity grids Telecommunications Ministry postpones distribution of 4G frequencies Vimpelcom Ltd eyes Italy's Wind, Egypt's Orascom-paper VimpelCom May Buy Italian Mobile Operator Wind, Kommersant Says UPDATE 1-Danone agrees $470 mln Wimm-Bill-Dann stake sale Danone to Sell Back Wimm Bill Dann Stake for $470 Million Wimm-Bill-Dann Foods Announces Agreement to Acquire Danone’s

Shareholding Russian ports’ throughput up 9% in Jan-Jul, to 305m tons

Activity in the Oil and Gas sector (including regulatory) Lukoil denies gasoline sales to Iran Exxon’s Sakhalin-1 to Start Output From Odoptu in September Rosneft Says Yukos Affair Not Over Approval Given to TNK-BP’s First Kyoto Protocol Project

Gazprom Gazprom Neft suspends fuel supplies to Kyrgyzstan - Gazprom Neft has

suspended oil and oil products supplies to Kyrgyzstan and expects Rosneft to provide support in developing business and splitting risks in the politically unstable country, the RBC Daily newspaper reported today.

Gazprom Neft said Wednesday that it restarted a processing unit at its largest refinery in August, following a fire at the facility in Omsk earlier this year.

Alexei Miller to be questioned - Ukrainian lawyer Yuri Dry required to interrogate the head of Gazprom Alexei Miller and his deputy Valery Golubev as witnesses in a criminal case concerning the illegal clearance of natural gas.

Gazprom zarubezhneftegaz Responds to the “Call of the Sea” - Gazprom zarubezhneftegaz is one of the largest Gazprom affiliates exploring and developing fields outside of Russia. In the 12 years since it was founded, the company has accumulated vast experience in both onshore and, to a great extent, offshore projects.

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Full Text Articles

Basic Political Developments

Wheat, Corn Stockpiles Dwindle as Russia Drought Curbs Output http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a886vJMPxUVc

By Jeff Wilson and Whitney McFerron

Aug. 12 (Bloomberg) -- The world’s appetite for meat, flour and ethanol is expanding faster than the supply of the crops needed to produce them, eroding inventories and increasing the chance of accelerating food prices.

Wheat stockpiles may slip to a two-year low as demand rises and a drought damages Russia’s crop, according to 17 analysts in a Bloomberg survey. Inventories of corn, used to feed livestock and make fuel, probably will drop to the lowest level since 2008, even as output tops a record, the survey shows. The U.S. Department of Agriculture will update its forecasts later today.

Russia’s worst dry spell in 50 years sent Chicago wheat futures to a 23-month high on Aug. 6. Corn prices are up 24 percent in the past year, as ethanol mills use 35 percent of

the grain produced in the U.S., the world’s largest exporter, and rising global incomes lead to more beef and pork consumption.

“The world doesn’t have enough exportable supplies to meet demand” for wheat and feed grains, said John Macintosh, 61, a vice president at Rand Financial Services Inc. in Chicago who has been trading agricultural commodities since he was with Continental Grain in 1973.

Russia, the world’s third-largest wheat exporter, plans to ban shipments starting Aug. 15 after concluding that its grain harvest may plunge 38 percent this year to 60 million metric tons. Dmitry Rylko, a director at the Moscow-based Institute for Agricultural Market Studies, said yesterday that the estimate may be cut further because of the worsening drought.

Food-Price Concern

While wheat prices have dropped 11 percent in the past four sessions to $7.25 a bushel on the Chicago Board of Trade, they’re still up 58 percent since the end of May. In 2008, record crop prices led to food riots and export bans from Haiti to Egypt.

World food prices rose for the first time in three months in July on higher costs for cereals and sugar, the United Nations’ Food and Agriculture Organization said on July 29. The USDA said July 23 that meat prices will rise faster than expected this year at 2 percent to 3 percent.

Premier Foods Plc, the St. Albans, England-based maker of the Hovis brand, said Aug. 5 that higher wheat costs mean an “inevitable increase” in bread prices.

Another food crisis is possible if wheat drives the prices higher for other staples, according to Franciscus Welirang, chairman of the Flour Mills Association in Indonesia, the nation’s largest buyer of the grain.

“There will be a domino reaction, and we expect corn demand will rise, pushing prices higher, and feed industries will buy more corn and soybeans,” Welirang said on Aug. 6. “It’s the end of cheap wheat.”

Ample Inventories

The wheat rally will need to last longer to boost costs for consumers, according to Bill Lapp, the president of Advanced Economic Solutions in Omaha, Nebraska, and the former chief economist for ConAgra Foods Inc.

“I don’t think it’s going to immediately pass through,” Lapp said Aug. 5. “It’s been a dramatic increase, but you have end users who have at least some inventory, and probably more coverage than they had two years ago,” he said. In February 2008, Chicago wheat futures jumped to a record $13.495 a bushel.

“We’re going from an incredibly burdensome supply down to just above normal, so this is not a shortage,” said Rich Nelson, the director of research at commodity broker Allendale Inc. in McHenry, Illinois.

The USDA probably will cut its estimate of world wheat inventories before the next harvest to 178.78 million tons from last month’s forecast of 187.05 million, according to the Bloomberg survey. A year earlier, stockpiles were 193.02 million.

Fewer Exports

“Russia is going to cut back on exporting,” which will boost demand for supplies from the U.S., Canada and the European Union, said Alan Brugler, the president of Brugler Marketing & Management LLC in Omaha, Nebraska.

“The trade is guessing that the Russian wheat crop is anywhere from 20 percent to 40 percent devastated,” Allendale’s Nelson said. “At this point, we don’t know what it’s going to be. They’re into harvest in key drought areas right now.”

A prolonged drought may further erode supplies by damaging next year’s crop.

“It has the potential to be very explosive the next five weeks because by then we will know if Russia gets enough rain to plant its winter-grain crops,” Rand Financial’s Macintosh said. “It will take a miracle for Russia to get enough rain to get winter crops fully established” before freezing temperatures arrive at the end of September, he said.

“Russia is not going to let any food out of the region,” he said. “Wheat, barley, corn, oilseeds, hay or potatoes that were going to be harvested from July to October have been severely damaged. No one is prepared for this shortfall.”

Corn Stockpiles Drop

World corn inventories before next year’s harvest probably will slip to 137.94 million tons, down 1.2 percent from a year earlier and the first decline since 2007, according to the Bloomberg survey.

Last month, the USDA cut its estimate to 141.08 million, citing a jump in U.S. ethanol use to 4.7 billion bushels, or 35 percent of estimated production of 13.245 billion bushels. Global feed use was estimated in July at 492.9 million tons, up 1.3 percent from a year earlier.

Meat and dairy demand has grown more than any other major commodity group since 1980, according to the FAO. Global meat consumption totaled 41.2 pounds per capita in 2005, a 37 percent increase from 30 pounds in 1980. Developing countries including China and Brazil are eating twice as much as in 1980, at 30.9 pounds per capita, the FAO said.

Feed Use

In the U.S., it takes 11.9 bushels of corn, 143 pounds soybean meal and 33 pounds of dried distillers grains to feed a hog from birth to slaughter, said Altin Kalo, a commodity analyst for Steiner Consulting Group in Manchester, New Hampshire. Cattle eat 49.3 bushels of corn, 1.025 tons of dried distillers grains and 0.362 tons hay to reach an 820-pound carcass weight, Kalo said.

“The big wildcard is what the USDA is going to show for corn production,” Brugler said. “It’s going to be a big number.”

The U.S. probably will harvest 13.255 billion bushels of the grain, more than the government’s July estimate of 13.245 billion and above last year’s estimated record of 13.11 billion, according to the Bloomberg survey.

“It’s probably going to be the highest number of the year,” Brugler said. The USDA is “probably going to find more ears per acre than they did last year, with record high ears per acre.”

To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net; Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

Last Updated: August 11, 2010 20:00 EDT

USDA to gauge Russia drought impact on world cropshttp://www.reuters.com/article/idUSTRE67B0CZ20100812

12:32am EDT

By Charles Abbott

WASHINGTON (Reuters) - The U.S. government is set to forecast a bigger decline in world wheat stocks and a modest drop in global production as Russia's worst drought in over a century halts exports and threatens to whither the next crop.

After weeks of unrelenting heat forced Moscow to halt wheat exports for the rest of this year and sent prices surging more than 90 percent since June to a two-year high, traders are now looking to the U.S. Agriculture Department's monthly report as the most authoritative gauge of market fundamentals.

It is expected to cut its forecast of the world wheat crop by 11 million tonnes or 1.6 percent from last month's report, according to a Reuters poll of traders. It would be the third downgrade in three months by USDA, which often is cautious about sweeping revisions.

Since May, USDA has trimmed its forecast by 11 million tonnes, to 661 million tonnes for 2010/11. For the first time in three years, the world would eat more wheat than it grows. As a result, reserves would fall to 187 million tonnes, down 3 percent, by the end of 2010/11, USDA estimated in July.

The August report is also the first estimate of U.S. corn and soybean yields and output based on field surveys. Record-large crops are expected but traders are consumed with only one question: how much worse can it get for wheat?

TRADERS FOCUS ON DROUGHT IN RUSSIA

"There is going to be a primary focus on the world balance sheet," said Shawn McCambridge, grains analyst for Prudential Bache Commodities in Chicago.

Traders expect a Russian wheat crop of 46.5 million tonnes, compared to USDA's estimate in July of 53 million tonnes. Russia harvested 61.7 million tonnes in 2009 and exported 17.5 million tonnes. Moscow has banned grain exports from Aug 15-Dec 31. Russia ordinarily is the No 3 wheat exporter.

The drought also is ravaging Ukraine and Kazakhstan and raised fear of a global food crisis like 2007-08 when prices soared and tens of millions of people were unable to buy enough to eat.

Most analysts are skeptical of a looming food crisis. They say wheat shortfalls in Russia will be stauched by surpluses in other major nations after three years of bumper crops.

The United States, the world's biggest wheat exporter, has nearly a four-month supply of wheat. With a hefty crop this year, the surplus could grow to a half-year supply.

U.S. WILL TAKE ADVANTAGE OF WHEAT SALES OPENING

"It's a windfall for U.S. wheat farmers. They are going to get a substantial premium on prices they were looking at a month ago," said McMinimy.

On the domestic side, traders said they expected USDA to estimate a record corn crop of 13.279 billion bushels was likely and a near-record 3.357 billion bushels of soybeans. The estimates are based on interviews of farmers, field surveys and satellite imaging among various sources.

The U.S. wheat surplus will drop to 962 million bushels at the end of 2010/11, 12 percent lower than now forecast, due to larger exports, said traders.

(Graphics by Jasmin Melvin; Editing by Russell Blinch)

A regime of emergency drought on the whole territory of the Sverdlovsk region introduced

http://www.rian.ru/hs_news/20100812/264314432.html

GOOGLE TRANSLATION08/12/2010 9:03 YEKATERINBURG, August 12 - RIA Novosti. Emergency regime imposed by drought throughout the Sverdlovsk region, farmers' losses amounted to more than 500 million rubles, according to the press service of the Ministry of Agriculture and Food of the region. Sverdlovsk region, like many regions of Russia, this year is experiencing an abnormally hot summer. Due to high temperatures, which were already holding more than a month, remains a difficult situation with the forest and peat fires: in the region, according to Wednesday morning, burning more than 20,000 hectares of forest, recorded about 15 foci of burning peat. Hot weather and little precipitation otstutstvie adverse effects on farmland. Moisture reserves are at a critical level, the growth of perennial grasses have virtually stopped. Most of the dry summer affected the south-western and southern areas: Artinskaya, Krasnoufimsk, Achitsky, Nizhneserginsky, Sysert and Kamensky, which account for 18% of cultivated land area. Losses from the effects of drought in these six areas ranged from 20% to 60%. Total human losses from planned crop production accounted for 12% -15%. Earlier, emergency drought was declared in only two areas - Artinskaya and Krasnoufimsk, where the level of moisture in the half-meter layer ranges from 15 to 27 millimeters. Mode emergency is declared, when the moisture level not exceeding 30 millimeters. Resolution on the introduction of a drought emergency throughout the territory of the region's governments signed the Commission under the chairmanship of Anatoly Gredin Wednesday. "At the moment, the heads of municipalities of the region to prepare a submission on the material loss suffered in connection with emergency management. This information should be submitted before August 16," - said in a statement. According to information from these documents would be decided on the amount of financial assistance allocated from the budget of the Sverdlovsk region producers affected agricultural products.

Russia not to send observers to Kyrgyz electionshttp://english.ruvr.ru/2010/08/12/15454894.html

Aug 12, 2010 12:13 Moscow TimeRussia will not send its observers to Kyrgyzstan to monitor the republic’s parliamentary elections due on October 10th, according to head of the Russian Central Election Commission (CEC) Vladimir Churov.

Addressing a news conference, the official said that on that day, the CEC personnel will be engaged in activities concerning the Unified Election Day.

Over 7,000 regional elections are planned to be held throughout Russia on October 10th.

Russia won’t sell S-300 Favorit missile to Azerbaijanhttp://www.panarmenian.net/eng/world/news/52093/Russia_wont_sell_S300_Favorit_missile_to_Azerbaijan

August 12, 2010 - 11:27 AMT 06:27 GMT

PanARMENIAN.Net - Russia is unlikely to sell S-300 Favorit missile to Azerbaijan, as it can lead to escalation of the Nagorno Karabakh conflict, according to Anatoly Tsyganok, head of military forecast center.

“Such bargain can change the balance of forces between Armenia and Azerbaijan. If it’s struck, Armenia may also obtain missiles, possibly produced by Iran,” he said when commenting on the ongoing reports on purchase of S-300 Favorit to the amount of $300 mln by Azerbaijan.

Commenting on reaction to come from Russia, Tsyganok said the 2008 scenario can hardly be repeated. “The situation is different. Although Armenia is Russia’s strategic partner, Russia will interfere in the military conflict between Armenia and Azerbaijan only in case the latter strikes Russian base in Gyumri. Anyway, I don’t think Azerbaijan will dare such attack,” he concluded.

Russian S-300 appeared in Abkhazia back in 2008 http://www.lenta.ru/news/2010/08/12/pvo/

Air defense system with S-300 was launched by Russian forces in Abkhazia back in 2008, immediately after the conflict in South Ossetia, writes Kommersant. The newspaper quoted Defense Minister of Abkhazia Merab Kishmaria, who declared that in matters of air safety, Russian and Abkhaz military cooperate "long and closely." "Russian air defense system is deployed in Abkhazia today. This need was caused by the constant threat from Georgia in connection with the fact that so far between Abkhazia and Georgia did not sign a peace agreement," - said Kishmaria. The fact that the C-300 in Abkhazia is the news and said the U.S. State Department spokesman Philip Crawley. "We know that Russia has already deployed the S-300 missiles in Abkhazia earlier. In Abkhazia, these systems are deployed in over two years. We can not say they have launched a new complex there or not. We suspect it is. The situation itself is not new event, such systems have been placed there some time ago "- RIA Novosti quoted the statement made by Crowley at the briefing on August 11. Chief editor of "National Defense" Igor Korotchenko believes that the deployment of S-300 in the region should provide for Georgia deterrent to build the Air Force. According Korotchenko, Georgian Air Force currently comprise a small number of Su-25 attack helicopters and Mi-24. In addition, according to the expert, S-300 in Abkhazia may serve

as cover for the Olympic facilities in Sochi - formerly the closest to the capital of Olympics-2014 position of defense located near Novorossiysk. Deployment of C-300 in Abkhazia said the day Aug. 11 Air Force Commander Col. Gen. Alexander Zelin said. According to him, the system solves the problem of air defense territories of Abkhazia and South Ossetia. " The Abkhaz side, first denied, then confirmed the information about the deployment of Russian air defense systems on its territory. Kommersant attributed this to the fact that information on the deployment of S-300 could be kept secret from the civilian officials of Abkhazia.

Sea border guards from 5 nations start joint maneuvershttp://english.ruvr.ru/2010/08/12/15421895.html

Aug 12, 2010 08:35 Moscow Time

Russian, US, Japanese, South Korean and Chinese border guard ships will take part in joint maneuvers as part of a 5-day border guard forum of the countries of the northern part of the Pacific Ocean that opens in Vladivostok (Russian Far East). The Russian delegation is headed by deputy head of Russian Federal Security Service’s navy Viktor Trufanov.

The guards will train to cooperate in tracing and saving ships that send “SOS” signals and combating crime on seas.

The program also includes sport events and sightseeing Vladivostok.

NORAD praises results of joint air defense drills with Russiahttp://en.rian.ru/mlitary_news/20100812/160168080.html07:47 12/08/2010

Officers of the North American Aerospace Defense Command (NORAD) say they are satisfied with the results of joint anti-terrorism drills with the Russian Air Force and hope for further cooperation.

The exercise, dubbed Vigilant Eagle, was carried out on August 6-11, and involved Russian, Canadian and U.S. air force personnel operating from command centers at the Elmendorf airbase in Alaska, and in Khabarovsk, Russia.

"This exercise is one milestone in working together in other future efforts. Our folks are proud to be a part of such an important event and are passionate about partaking in efforts to protect our borders," Air Force Lt. Col. John Oberst was quoted as saying on the NORAD Website.

The exercise scenario, put together by NORAD and U.S. Northern Command, created a situation requiring both the Russian Air Force and NORAD to launch or divert fighter aircraft to investigate and follow a U.S. flagged Golfstream 4 plane on an international flight that has been taken over by terrorists.

"What we are practicing today is the communication procedures between NORAD, plus U.S. civilian air traffic control agencies and our Russian counterparts so that we can pass on information to them about air terrorism events to allow them to posture their forces to respond in kind," Canadian Forces Col. Todd Balfe, Alaska NORAD Region deputy commander, said.

The drills involved U.S. AWACS E-3B and Russian A-50 airborne warning and control aircraft, Russian MiG-31 and Su-27 fighters and U.S. F-22 interceptors, along with refueling aircraft from both countries.

The exercise was carried out under a cooperative military agreement between Russia and the United States, which tasks NORAD, the bi-national U.S. and Canadian command, and the Russian Air Force to conduct a live-fly exercise for up to five days.

WASHINGTON, August 12 (RIA Novosti)

Russia's Commander-in-Chief of Fleet comes to Denmark

http://www.itar-tass.com/eng/level2.html?NewsID=15397791&PageNum=0

12.08.2010, 01.50

COPENHAGEN, August 12 (Itar-Tass) -- Russia’s Commander-in-Chief of the Baltic Fleet Vice-Admiral Viktor Chirkov comes on Thursday to Denmark to take part in the celebration of the 500th anniversary of the Royal Danish Navy and in a meeting of Europe’s council of commanders-in-chief.

This will be a non-formal meeting of NATO and EU commanders-in-chief, where they discuss mutual understanding and cooperation. The council meetings have been organised since 1990, while the council itself was officially founded in Stockholm in 2007. The council has five working groups which meet annually.

The Baltic Fleet’s large landing ship Kaliningrad will take part in the celebration ceremonies. The ship will host a cocktail reception on the day.

Over the celebration, Russian navy will be able to visit local museums, tour the channels and go to the famous Tivoli Gardens.

The Kaliningrad will invite guests and visitors on board over August 14-15.

Jakarta Post: More Russian fighter jets to arrive in Septemberhttp://www.thejakartapost.com/news/2010/08/12/more-russian-fighter-jets-arrive-september.html

The Jakarta Post, Jakarta | Thu, 08/12/2010 2:21 PM | National

The Air Force is expecting the arrival of three new Russian fighter jets Sukhoi SU-27SKM on early September.

Air Force chief of staff Vice Marshall Imam Sufaat told Antara news agency that two of the jets would arrive in early September and another in the third week of the month.

Imam said that the jets would arrive in Hasanuddin Air Force Base in Makassar, South Sulawesi to be assembled and tested there.

The jets are among six Sukhoi fighters jets bought in 2007. Three Sukhoi SU-30MK2 fighters already arrived in 2008 and 2009.

The six will bring the total number of Indonesia's Sukhoi fleet to 10.

Russia has provided Indonesia with a US$1 billion-credit scheme to finance this and other military purchases from the European military giant, including 22 helicopters, 20 amphibious tanks and two submarines.

Russia-Germany research expedition to the Sea of Japanhttp://english.ruvr.ru/2010/08/12/15425376.html

Aug 12, 2010 10:04 Moscow Time

Twenty two oceanologists from Russia and their nine colleagues from Germany have boarded the research vessel Akademik Lavrentyev to explore deepwater wildlife in the Japanese Sea.

The researchers are expected to use special equipment to see species at a depth of 3,500 meters. The Akademik Lavrentyev research vessel was built in Finland in 1984 and offers special labs to carry out deepwater research.

U.S. unsurprised with Russia's missile deployment in Abkhaziahttp://en.rian.ru/world/20100812/160167247.html

04:55 12/08/2010

Washington is not surprised with the reports that Russia deployed S-300 air-defense systems on the territory of former Georgian republic of Abkhazia, the U.S. Department of State said.

Russian Air Force head Col. Gen. Alexander Zelin said on Wednesday S-300 systems had been placed in Abkhazia to protect the airspace of Abkhazia and South Ossetia. He did not say how many S-300s were deployed.

"I believe it's our understanding that Russia has had S-300 missiles in Abkhazia for the past two years," Philip Crowley, the department's assistant secretary, told a daily press briefing.

"There have been systems in Abkhazia for two years. We can't confirm whether they [Russia] have added to those systems or not... this is by itself is not necessarily a new development. That system has been in place for some time," he added.

The Georgian Foreign Ministry described the Russian move as "extremely dangerous and provocative" and threatening "not only the Black Sea region, but European security as a whole."

Russia recognized Abkhazia and South Ossetia two weeks after a five-day war with Georgia in August 2008, which began when Georgian forces attacked South Ossetia in an attempt to bring it back under central control.

Russia signed agreements with South Ossetia and Abkhazia earlier this year on establishing permanent military bases in the republics.

The bases are located in Gudauta, on Abkhazia's Black Sea coast, and in South Ossetia's capital, Tskhinvali. Each base hosts up to 1,700 servicemen, T-62 tanks, light armored vehicles, air defense systems and a variety of aircraft.

WASHINGTON, August 12 (RIA Novosti)

Clinton Sees GOP Backing For START Treatyhttp://www.npr.org/templates/story/story.php?storyId=129136821

by Michele Kelemen

August 12, 2010Secretary of State Hillary Clinton is sounding more confident that enough Republicans will support a new arms control treaty with Russia.

The Strategic Arms Reduction Treaty is central to the Obama administration's reset of relations with Moscow and its overall nuclear strategy, but the ratification process has been an uphill battle. Clinton is making a final push.

"When the Senate returns, they must act," Clinton told reporters at the State Department on Wednesday.

Clinton argued that U.S. national security interests are at stake.

"There is an urgency to ratify this treaty, because we currently lack verification measures with Russia," Clinton said. "Our ability to know and understand changes in Russia's nuclear arsenal will erode without the treaty."

The treaty would cut each side's deployed nuclear forces to 1,550 warheads, down from roughly 2,200 each now.

President Obama and Russian President Dmitry Medvedev signed the new START agreement in April. Since then, advocates have lined up a long and impressive list of bipartisan supporters, from former secretaries of state and defense to former officials who oversaw U.S. nuclear forces. Still, facing opposition, the Senate Foreign Relations Committee put off a vote until mid-September.

The ranking Republican on the committee, Richard Lugar of Indiana, has been trying to help shepherd the new START treaty through the Senate. But other Republicans on the committee, including Bob Corker of Tennessee, have raised concerns that the pact could limit U.S. missile defense plans and the U.S. ability to modernize its nuclear arsenal.

Clinton denies that and has promised Republicans that the U.S. will invest $80 billion over the next decade to maintain U.S. nuclear security. But Corker says there is still a $10 billion funding shortfall.

"Look, we can reduce the amount of warheads we have as long as we know that they work, right? Right now, we are in a situation where the life of these warheads and the life of some of our delivery systems are being depleted," Corker said in an interview with NPR. "So, there has to be additional investment made to modernize those."

Corker is also working on a Senate resolution that would make clear that the new START treaty wouldn't limit U.S. missile defense.

"We are working toward getting the language right, we are working toward getting the appropriate commitments on modernization," he said, adding the administration shouldn't "rush this."

The congressional agenda is likely to be crowded this fall, and advocates of the treaty fear the new START could fall victim to party politics.

Clinton argued it is too important to "get caught up in election-year politics." In the past, she noted, arms-control treaties have been passed with broad bipartisan support.

"I believe that the vast majority of senators will judge this treaty on the merits," Clinton said.

Blockage of U.S.-Russia civil nuke deal unlikelyhttp://www.kyivpost.com/news/russia/detail/78006/

Today at 08:32 | Associated Press Whatever their misgivings about Russia, members of Congress appear unlikely to block a deal that would allow U.S. companies to export nuclear technology to America's former Cold War rival.

The probable smooth passage of the civil nuclear agreement stands in contrast to the unexpectedly rocky road facing a separate treaty to reduce U.S. and Russian atomic arsenals.

The difference has as much to do with American politics as with the agreements themselves.

Passage of the nuclear arms pact, known as New START, would be seen as a triumph for President Barack Obama. In the rarefied U.S. political environment, opposition Republicans are reluctant to hand Obama a victory, especially with congressional elections approaching in November.

But Obama cannot claim much credit for the civil nuclear agreement, which was negotiated under his Republican predecessor, George W. Bush.

The civil agreement also has support from lawmakers from both major parties whose districts include businesses that could benefit from U.S. nuclear exports to Russia.

And the process of getting it approved is much simpler. It will take effect unless Congress votes to block it, an unlikely occurrence. The nuclear arms agreement will not be ratified unless two-thirds of the Senate votes to support it.

So if Congress, facing a crowded end-of-year agenda, does not act on either plan, the civil agreement effectively passes, while New START stalls.

Sen. Jon Kyl has been the pivotal Republican on the New Start agreement. He wants the administration to increase the money allocated for maintaining the U.S. nuclear arsenal. Other Republicans are waiting to see what Kyl will do before they commit.

But on the civil nuclear agreement, Kyl has been largely silent. He told reporters recently that he had misgivings about it, but did not elaborate. He said he did not want to distract attention from the New START debate.

The civil nuclear agreement would allow the United States and Russia to exchange nuclear energy technology, engage in joint commercial nuclear power ventures and collaborate on nonproliferation goals. Moscow hopes it will lead to major contracts for its nuclear industry.

The agreement was first submitted to Congress in May 2008. The Bush administration angrily withdrew the deal shortly after Russia's invasion of Georgia two months later.

The Obama administration resubmitted the deal in May as relations improved with Moscow. It is also seen as a reward for Russia's improved cooperation on reining in Iran's nuclear ambitions.

So far, few lawmakers have objected. While a resolution of disapproval sponsored by some Democrats and Republicans in the House of Representatives has been introduced, it looks unlikely to gain traction.

Opponents have said that Russia should not be rewarded while it continues to help Iran build a nuclear power plant and train Iranian physicists. But that objection was blunted when Russia agreed in June to support U.N. sanctions against Iran.Barring congressional action, the agreement will take effect after 90 days in which Congress is in session. That would likely fall in October.

Read more: http://www.kyivpost.com/news/russia/detail/78006/#ixzz0wMs0fY1Z

WILDFIRES IN RUSSIA

Wildfires in Russia, Canada create poisonous ring around planethttp://en.rian.ru/Environment/20100812/160170089.html

12:03 12/08/2010

MOSCOW, August 12 (RIA Novosti) - Raging forest fires in central Russia, Siberia and western Canada have created an enormous cloud of pollutants covering the northern hemisphere, according to NASA.

Carbon monoxide, one of the most poisonous gases released into the atmosphere from forest fires, has been detected well outside the territories of Russia and Canada.

NASA's Aqua satellite, equipped with an atmospheric infrared sounder (AIRS), has noted a change in the concentrations carbon monoxide at an altitude of 5.5 kilometers (3.4 miles).

Scientists working with the AIRS said earlier that carbon monoxide concentration over European Russia alone, where thousands of hectares of wildfires are raging, increases by some 700,000 tons every day.

Pollutants from Russia and Canada have now formed a ring around the planet and are moving north.

NASA's Aqua and Terra, which is equipped with a thermal emission and reflection radiometer, registered 494 hotspots from fires across Russia on August 11, compared with 582 just a day earlier.

A scorching heat wave has gripped much of European Russia since mid-June, which coupled with the worst drought since the 1970s has made the countryside particularly susceptible to wildfires.

Thousands of emergency workers and military personnel have been working round the clock for almost three weeks to fight the fires in 22 regions, which have so far killed more than 50 people and left over 3,500 homeless. The immediate economic cost of the fires has been estimated at $15 billion.

August 12, 2010 12:02

Over 500 wildfires still not extinguished in Russiahttp://www.interfax.com/newsinf.asp?id=182606

MOSCOW. Aug 12 (Interfax) - More than 500 forest and peat fires triggered by abnormally high temperatures are still burning across parts of Russia as of Thursday morning, although the exact figures given by the Emergency Situations Ministry and the Federal Forestry Agency differ.

The Emergency Situations Ministry said that 224 wildfires had been put out over the past 24 hours and 562 fires covering over 81,000 hectares continued to burn.

"As many as 236 wildfires have broken out in the past 24 hours, 224 fires have been extinguished, and 562 are still alive covering an area of 81,015 hectares, including 367 fires that have been contained," the ministry told Interfax.

This figure includes 66 major fires covering 53,285 hectares, including 40 peat fires.

As many as 165,714 people and 26,500 pieces of machinery, including 39 aircraft, are engaged in fighting the fires. Another 551 people and 100 pieces of machinery from foreign countries, including 13 aircraft (six planes and seven helicopters), are helping in the efforts.

In all, this year, a total of 26,039 fires covering an area of 816,500 hectares have broken out in Russia, the ministry said.

Meanwhile, the Federal Forestry Agency told Interfax on Thursday that firefighters have put out more than 50 wildfires over the past 24 hours, cutting the overall number of fires to 545.

va ap

Radiation levels are 'normal' in Russiahttp://www.kyivpost.com/news/russia/detail/78017/

Today at 10:24 | Interfax-Ukraine Radiation levels have not risen in Russia as a result of fires, including in districts contaminated after the 1986 Chernobyl nuclear disaster, the Russian meteorological service Roshydromet said.

"We have been intensively monitoring radiation levels - now more often than ever. No rises have been registered in radiation or background pollution levels as a result of fires," Roshydromet deputy director Valery Dyadyuchenko told Interfax on Thursday.

Read more: http://www.kyivpost.com/news/russia/detail/78017/#ixzz0wNRcnbez

The oxygen content in the Moscow air is almost 4 times lower than normal

http://www.rian.ru/hs_news/20100812/264326321.htmlGOOGLE TRANSLATION

08/12/2010 9:45 MOSCOW, August 12 - RIA Novosti. Ecological situation in the Moscow region on Thursday to remain unfavorable - the oxygen content in air below normal in 3.7 times, and the air temperature remains much higher than normal, according to Internet portal "Meteonovosti. "Under such conditions, developing a weather hypoxia of the brain, which leads to a dramatic reduction of attention, it is especially necessary to consider the people whose work involves public safety," - the report says.

Wildfires in Russia reduced by halfhttp://english.ruvr.ru/2010/08/12/15422710.html

Aug 12, 2010 09:34 Moscow Time

The total area of wildfires in Russia has been substantially reduced. Over the past few days, the area hit by flames in the Central and Volga federal districts has halved but the situation remains grave in the Ryazan, Nizhny Novgorod, Vladimir and Moscow regions and the Mari El Republic, according to official reports. Authorities in the Moscow region began flooding burning peat bogs. The region will receive 300 million rubles from the federal budget for fire precautions. The smog over Moscow has dissipated but the Emergency Situations Ministry warns that winds blowing from the east and southeast may send up new plumes of smoke on Thursday night.   

Fire battle continues as new wave of smoke expected in Moscow http://rt.com/Top_News/2010-08-12/fire-moscow-smog-russia.html/print

12 August, 2010, 09:26

Moscow is bracing itself for another uncomfortable cloud of smog. Experts warn that after a brief respite, a new wave of noxious smoke is likely to engulf the city.

While Muscovites are enjoying fresh air in the capital, a burst of new blazes is expected to come late Thursday and Friday. The new fires are expected to be less intense than other recent infernos.

Doctors predict a rise in respiratory diseases in the coming autumn and winter, as smoke and heat in the city have weakened peoples’ immune systems.

”During this month-and-a-half, when the body usually accumulates life resources, we have exhausted them,” chief doctor of the Russian Federation Gennady Onishchenko was quoted by Kommersant newspaper as saying. “We will not be able to avoid a seasonal rise in flu and respiratory diseases.”

Rescue teams from a number of countries, including Ukraine, Belarus, Latvia, the USA and France are helping Russia to extinguish raging blaze.

While for some in Russia, the destruction is already being swept away, for others it is sweeping towards them.

It has been Sergey’s job to protect one of the forests in Central Russia for years, but this summer has become his worst nightmare.

“The most dangerous thing is when the tree tops are burning and the flames move at an incredibly fast pace,” he told RT.

Thousands of volunteers have joined in to help fight the flames, widening fire breaks between damaged and unharmed trees and dampening the smoking earth.

“It has to be said the work we have been doing here helps the effort tremendously,” Sergey added.

The battle has been going on for weeks with over 50 dead, hundreds injured, and thousands homeless.

While the struggle to contain the flames below continues, hundreds of tonnes of water are being dropped by emergency services every day by helicopters and specially adapted aircraft.

However, Sergey, who will still be here once the flames are finally put out, is scared there might not be much left to protect.

August 12, 2010 10:03

Smog unlikely in Moscow in coming couple of days – experthttp://www.interfax.com/newsinf.asp?id=182575

MOSCOW. Aug12 (Interfax) - Northeastery winds, which will prevail in Moscow on Thursday and Friday, will not bring smoke from peat fires burning in the Moscow region, a source in Moscow's HydroMeteoBureau weather monitoring service told Interfax.

"Rains will hardly fall, but 'dry' thunder storms with moderate winds are likely. Temperatures will rise to 33 degrees later in the day," the source said.

Northeastery winds will blow at a speed of not more than 7 meters per second.

Short rains may fall between 5 a.m. and 9 a.m. on Friday. Thunder storms are likely with winds blowing at a speed of up to 15 meters per second. Two millimeters of precipitation are likely to fall during the night with temperatures dropping to 18-22 degrees, he said.

"Temperatures are expected go up to 30-323 degrees again on Friday. The winds will not change direction. Rains are possible," the source said.

Sd

More criticism for Luzhkovhttp://www.mn.ru/local/20100812/187979143.html

Source Andy Potts at 12/08/2010

Moscow Region governor Boris Gromov has joined the chorus of complaints over the way in which Moscow city authorities have handled the wildfire crisis.

He launched a tirade against the attitude of Moscow’s leadership at a meeting of firefighters on Thursday, RIA Novosti reported.

“The attitude of some leaders in Moscow is amazing when, against a background of a difficult situation, they try to bluff and accusing the Moscow Region and me personally of being unable to make decisions in the battle against the fires.”

Embassies Go Back to Work http://www.themoscowtimes.com/news/article/embassies-go-back-to-work/412206.html

12 August 2010By Alexandra Odynova

As Moscow's sky remained nearly smog-free for a second day, all embassies representing European Union countries resumed their operations in full Wednesday, said the head of the EU’s delegation to Russia, Fernando Valenzuela.

Embassy work was interrupted late last week when Austria, the Czech Republic and Poland, as well as Israel and Canada, began evacuating diplomats because of a thick smog from peat bog and forest fires that blanketed the city. The German Embassy, initially reported to have closed down altogether, said Tuesday that it was working “on a reduced level.”

"All the EU embassies are open and working normally," Valenzuela told reporters.

But he added that some of them had to change their working hours because of the environmental situation in Moscow, so visa applicants are advised to call in advance. He did not elaborate.

Valenzuela also said August is vacation time for many diplomats, so some personnel may be away from the city.

Israel's consular department said in a statement Wednesday that it had fully resumed operations, suspended Monday because of the smog.

Strong winds cleared the Moscow sky of toxic fog on Tuesday and Wednesday, but weather forecasters cautioned that the smog might return as early as Thursday if the wind dies.

"The forest fires have not disappeared," said Roman Vilfand, director of the federal weather bureau, Interfax reported.

About 100 employees of the U.S. Embassy are authorized to leave Moscow for up to 30 days if they want, U.S. State Department spokesman Philip Crowley told reporters in Washington on Wednesday, according to a transcript on the department's web site.

The State Department has advised U.S. citizens to think twice about visiting Moscow because of the smog. The warning expires Sept. 5.

Crowley also said U.S. Ambassador John Beyrle had released $50,000 to assist Russians affected by the fires.

EU members have recommended that their citizens avoid visiting fire-affected regions in Russia, Valenzuela said, adding that each country determines its own policy on the matter.

"In some cases, the information is simply factual; in other cases they are advising not to travel now to the affected areas," he said. "And in other cases they advise not to travel [to Russia], at least for those people with … health conditions."

Belgium, Britain, Denmark, Germany, Italy, Romania and Sweden are among the countries that have advised their citizens to abstain from trips to Moscow and the Moscow region.

The fires were ignited in part by a record heat wave, and the temperature in Moscow hovered around 36 degrees Celsius on Wednesday.

The Emergency Situations Ministry said Wednesday that the total area covered by blazes nationwide had dropped from 1,740 square kilometers to 927 square kilometers.

The death toll from the fires climbed by one to 53 on Wednesday, with another 58 people being treated in hospitals, the ministry said.

Saudis set to be evacuated from Russiahttp://arabnews.com/saudiarabia/article100332.ece

By FATIMA SIDIYA | ARAB NEWS

Published: Aug 11, 2010 23:53 Updated: Aug 12, 2010 01:08

JEDDAH: The Saudi Embassy in Moscow has tried contacting all its citizens living in Russia in a bid to evacuate them following severe wildfires in the country.

It is also trying to get in touch with students currently on vacation in the Kingdom to tell them not to return to the Russian capital.

A letter obtained by Arab News said the embassy has had difficulty contacting Saudis living in Russia because they did not register or update their contact information.

“Due to the bad weather, especially in Moscow, we would like you to contact the embassy immediately to reassure us of your safety and so we can provide you with the latest guidance,” it said.

“For those who are outside Russia on vacation or otherwise, we advise you not to travel to Moscow. We would like you also to stay in touch with the embassy for any updates or instructions,” it added.

The Saudi ambassador in Russia Ali Hassan Ja’afar told Arab News that Custodian of the Two Holy Mosques King Abdullah had ordered an evacuation of Saudis living in Russia.

Saudi Arabian Airlines is expected to send an airplane to Moscow Thursday morning. It will arrive at Riyadh later the same day.

At least 80 Saudis, including students, families of embassy employees and employees from the military attaché's office will move from Moscow to Riyadh.

Only two students have asked for exemption so they can continue their studies. They were granted permission as they live in low-risk areas.

The ambassador confirmed that he and a few other staff would remain in Moscow. There are over 500 fires spreading in around 20 regions in Russia.

Finland offers assistance to Russia in putting out wildfires

http://www.itar-tass.com/eng/level2.html?NewsID=15397856&PageNum=0

12.08.2010, 03.21

HELSINKI, August 12 (Itar-Tass) -- Finland offered assistance to Russia in fighting wildfires, the press service of the country’s government said.

“Finland has offered equipment and experts to fight wildfires,” the press service said. “The equipment is hoses and pumps, but it is important to have assistance from the experts who know how to fight fires in woods and at peat fields.”

“If Russia accepts the offer, the equipment will be delivered without delay to the border and further on to the regions appointed by Russia’s government,” the source said.

The Russian Federation and Finland have an agreement on mutual assistance in emergency situations, and fires are included in the list of the natural calamities there.

Several days earlier, Finland’s meteorologists and their counterparts in Russia started to monitor jointly the development of the fires and smoke. The Finns are concerned about the spread of fires into their territory.

“The situation at the Russian-Finnish border is not as bad as in Central Russia,” Finnish meteorologists said.

Armenia sent 400 containers of humanitarian aid to Russia

http://news.am/eng/news/27571.html

August 12, 2010 | 10:20

The Armenian side handed over 400 containers of humanitarian aid to Russians who suffered from wildfires during the ceremony held in Yerevan on August 11.  

All the funds collected in a campaign organized by the All-Armenian international youth center will be sent to the regions of Nizhny Novgorod and Voronezh. Over 1000 young people participated in the campaign.

The All-Armenian international youth center was founded in 2008 to consolidate Armenian youth. Being politically independent, the organization attaches major significance to strengthening of the Armenian-Russian relations.

Russia's peatland fires seen burning for monthshttp://uk.reuters.com/article/idUKTRE67A3H120100812

8:30am BST

By Alister Doyle, Environment Correspondent

OSLO (Reuters) - Some of Russia's smog-causing peatland fires are likely to burn for months, part of a global problem of drained marshes that emit climate-warming greenhouse gases, experts said on Wednesday.

Novel carbon markets could offer a long-term fix for peat bogs, from Indonesia to South Africa, if negotiators of a U.N. climate treaty can agree ways to pay to safeguard marshes that are often drained to make way for farms, roads or homes.

"Peat fires continue underground and...they will not be extinguished in Russia before winter rains and snow set in," said Hans Joosten, professor of peatland studies and paleoecology at the University of Greifswald in Germany.

To put out fires "you must inundate the area completely," he said, adding that one peat fire in South Africa near the border with Botswana, for instance, had smoldered for 5 years. Peat is formed from partly decayed vegetation.

Environmental group Wetlands International estimated 80 to 90 percent of the smog in Moscow was from peatland fires near the capital, rather than forest fires linked to what weather officials call Russia's hottest summer in a millennium.

"In Russia, peat fires can sometimes last under snow cover through the winter," said Ilkka Vanha-Majamaa, a scientist at the Finnish Forestry Research Institute.

Water dumped from planes, part of Russia's response, is rarely enough to halt peat fires, said Alex Kaat, spokesman for Wetlands International. Moscow has pledged more action to extinguish the blazes.

"Russia promised the same after peat fires in 2002 and nothing was done," Kaat said, saying past efforts to use water from the Volga River to soak peatlands had been half-hearted.

"CATASTROPHIC FIRES" WARNING

Russia has the largest national carbon emissions from peatland destruction after Indonesia, according to Wetlands International.

And the U.N. panel of climate experts warned Moscow of problems of global warming and peat in its last report in 2007.

"During dry years, catastrophic fires are expected on drained peatlands in European Russia," it said, calling for a restoration of water supplies to reverse drainage.

Peat releases carbon dioxide, the main greenhouse gas, as it dries out. Peat is also often cut and used as a low-grade fuel.

Joosten, who is also secretary general of the International Mire Conservation Group, said there were 500,000 sq km (193,100 sq miles) of drained peatlands in the world -- the size of Spain. "To my mind that is 500,000 sq km too much," he said.

Wetlands International estimates that drained peatlands account for 6 percent of carbon dioxide emissions from human sources. The U.N. climate panel says global warming stokes desertification, wildfires, floods and rising sea levels.

Joosten said current projects for re-wetting peatlands in Belarus and Ukraine were attracting interest from investors in voluntary carbon dioxide markets. But such credits were worth only a few euros per tonne of avoided emissions.

A problem is in agreeing how much a peat bog emits.

A hectare (2.47 acres) of drained peatland in central Europe, used for agriculture, probably emits about 25 tonnes of carbon dioxide a year from continuing decay, Joosten said.

But natural peat marshes emit methane, another powerful greenhouse gas, so protecting peat does not eliminate emissions. Joosten estimated an intact hectare of wet peat emits the equivalent of 10-15 tonnes of carbon dioxide annually.

For Reuters latest environment blogs, click on: blogs.reuters.com/environment/

12.08.10 08:24

The area of fire in the Chelyabinsk Reserve Taganay "increased to 2.5 ha

http://www.interfax-russia.ru/Ural/news.asp?id=166239&sec=1672

Chelyabinsk. August 12. Interfax-Ural - In the national park "Taganay" in the Chelyabinsk region of the active area of burning of forest litter in the past day increased slightly, the press center GU Emergencies Ministry in the region. "At the national park" Taganay "forest fire raging on now. The area of active burning is 2,5 hectares. The total area traversed by the fire, about 100 hectares," - said in a statement. As of Wednesday, the area of active burning was 2 ha.

12.08.10 09:01

In the Ryazan region sent a column of fire special equipment YURTS MOE http://www.interfax-russia.ru/South/news.asp?id=166253&sec=1672

Rostov-on-Don. August 12. Interfax-South - Column vyskoprohodimoy fire Spectechnique Southern Regional Centre (YURTS) Emergency Ministry went to put out fires in the Ryazan region. "To enhance fire-fighting groups in the Ryazan region YURTS Emergencies Ministry has formed a column of fire Highly specialized equipment, which consists of 20 units in its structure as 64 specialists," - told Interfax-Yug "the press service YURTS Emergencies Ministry. According to the source agency, the convoy set off at 8:30 am Thursday from the 495 spastsentra Emergency Ministry of the village Kovalevka Rostov region. The convoy of fire specials GU Emergencies Ministry in Stavropol, Krasnodar edge, Rostov Region and the Republic of Adygea.

Russian Fires Threaten To Stir Chernobyl Radiationhttp://www.rferl.org/content/Russian_Fires_Threaten_To_Stir_Chernobyl_Radiation/2125461.html

August 12, 2010 Wildfires are said to be threatening to stir radioactive particles left over from the 1986 Chernobyl nuclear disaster back into the air over western Russia.

The Emergency Situations Ministry said at least six wildfires were spotted and extinguished this week in the Bryansk region.

That region is the part of Russia that suffered the most when the Chernobyl nuclear power plant's reactor No. 4 exploded, spewing radioactive clouds over much of western Soviet Union and northern Europe.

The ministry also had reported sporadic wildfires last week, but said all were put out.

Ministry spokeswoman Irina Yegorushkina said that radiation experts from Moscow determined there has been no increase in radiation levels in the Bryansk area, on the border of Belarus and Ukraine.

Emergency Situations Minister Sergei Shoigu acknowledged the danger last week, but said on August 11 that the situation was not as difficult as in the areas around Moscow, where clouds of smog from the fires have polluted the air.

Hundreds of wildfires sparked by the hottest summer ever recorded in Russia have engulfed large areas of western Russia.

compiled from agency reports

Fears grow as fires hit Chernobyl http://www.mirror.co.uk/news/top-stories/2010/08/12/fears-grow-as-fires-hit-chernobyl-115875-22482063/

12/08/2010

RADIATION

Russia's fire crisis worsened yesterday as officials admitted hundreds of acres contaminated by the 1986 Chernobyl nuclear disaster have been hit by blazes.

Ecologists said radiation from about 9,750 acres could be released into the atmosphere in smoke and ash. A Bryansk University environmentalist said doses could be small but harmful. Anton Korsakov said: "There is a higher threat of cancers and embryo mutations, especially if a woman's pregnant."

About 165,000 workers are battling more than 600 blazes caused by its hottest summer. It has led to thick air pollution in Moscow and doubled the death rate to 700 a day.

NORTH CAUCASUS

UPDATE 1-Chechen rebels claim small blast near Gazprom HQhttp://in.reuters.com/article/governmentFilingsNews/idINLDE67B0AL20100812

12:17pm IST

(Adds rebel quote, context, Gazprom no comment)

MOSCOW, Aug 12 (Reuters) - Chechen rebels claimed responsibility on Thursday for a small explosion three days ago near the Moscow headquarters of Russia's state-controlled gas giant Gazprom (GAZP.MM: Quote, Profile, Research).

"The aim of this operation was to show Kremlin businessmen... that the war is not over," Chechen rebel leader Doku Umarov said in a statement posted on the www.kavkazcenter.com Islamist website. "On the contrary: it has come to your homes and your comfortable offices".

A home-made bomb containing an estimated 3-5 kilos (6-11 pounds) of TNT exploded on Aug. 9 on the roof of a garage several hundred metres from the headquarters of Gazprom, Russia's biggest company, according to local media.

No-one was hurt and the incident had passed largely unnoticed until the rebel claim of responsibility on Thursday. A Gazprom spokesman declined to comment.

Umarov said in his statement that Gazprom had been targeted to show that the Kremlin had failed to defeat Chechen insurgents in two wars since the 1991 fall of the Soviet Union.

A decade after driving the separatists from power in Chechnya, Russia's leaders are struggling to contain an Islamist insurgency along the country's southern flank.

As the self-styled Emir of the Caucasus, 46-year-old Umarov has sought to create a pan-Caucasus state independent from Russia and governed by sharia law, which would include Chechnya and other nearby mainly Muslim provinces in Russia's south.

Umarov, Russia's most wanted man, has threatened to attack energy pipelines and power stations as part of an "economic war" on Russia. On July 21, militants stormed and bombed a hydro-electric power station in the Muslim republic of Kabardino-Balkaria, putting it out of action for two years.

Umarov also claimed responsibility for twin suicide bombings that killed 40 people on Moscow's metro in March and the derailment of a Moscow-St. Petersburg train that killed 26 in November. (Reporting by Alexei Anishchuk, writing by Guy Faulconbridge, editing by Michael Stott)

Medvedev Sacks Daghestan Internal Affairs Minister http://www.rferl.org/content/Medvedev_Sacks_Daghestan_Internal_Affairs_Minister/2125467.html

August 12, 2010 Russian President Dmitry Medvedev has dismissed the internal affairs minister of the North Caucasus republic of Daghestan.

The Kremlin said in a statement late on August 11 that Medvedev "fired General Ali Magomedov from the Internal Affairs Ministry and named Colonel Abdurashid Magomedov as his successor."

RIA Novosti news agency reported that Daghestan's leader Magomedsalam Magomedov called for more Russian troops and resources, saying that "more than 300 people suffered from the terrorists this year and police casualties doubled from last year."

Daghestan is among the most volatile republics in the North Caucasus.

compiled from agency reports

Medvedev Fires Dagestan's Top Cop http://www.themoscowtimes.com/news/article/medvedev-fires-dagestans-top-cop/412193.html

12 August 2010The Moscow Times

President Dmitry Medvedev fired Dagestan's interior minister on Wednesday, hours after the head of the local Makhachkala-TV television ompany was shot dead in Makhachkala.

Medvedev replaced Ali Magomedov, who had headed the ministry since July 2009, with his deputy Abdurashid Magomedov, the Kremlin said in a statement.

The shuffle took place shortly after Magomedvagif Sultanmagomedov, a former senior cleric in the republic's Spiritual Board of Muslims, a pro-government administrative body regulating religious activities, was attacked by unknown assailants in his car on the first day of Ramadan, the sacred month of fasting in Islam, Interfax reported. He died in a hospital.

An unidentified man who was also injured in the attack was hospitalized in serious condition.

Police have opened an investigation.

Dagestan has been a hotbed of violent crime and extremism since the collapse of the Soviet Union. The situation has rapidly deteriorated over the past three years, with suicide terrorist bombers becoming active in Dagestan and hitting targets as far away as Moscow, including the metro suicide bombings in March.

The house of the Imam of the local mosque was torched in Dagestan

http://www.dni.ru/incidents/2010/8/12/197025.html

8:05 / 12.8.2010 Five people, including three children were killed in a fire in the village Huchada Shamilsk district of Dagestan. According to preliminary reports, the fire was caused by arson. According to the press service of the Russian Ministry of Emergency Management Chief of Dagestan, the fire broke out in a private house about three o'clock in the morning and after an hour and half was extinguished by local residents. In the fire killed the landlord and his wife, both born in 1983 and their three children, 2006, 2008 and 2009 of birth, "Interfax". "According to preliminary data, it was arson, killed the owner worked the imam of the local mosque," - said the representative of Ministry of Emergencies. The exact cause of the fire experts will install MOE and forensic institution "Fire Test Laboratory.

AUGUST 12, 2010

Chechen Rebel Digs In, Suggesting Rift in Insurgency http://online.wsj.com/article/SB10001424052748703309704575413352252227936.html?mod=googlenews_wsj

By GREGORY L. WHITE And RICHARD BOUDREAUX

MOSCOW—The Chechen rebellion was faltering when its new commander, Doku Umarov, dispatched a video by courier from his hideout in southern Russia to his allies abroad.

His message, in late 2007, shocked many Chechens who had been fighting since the early 1990s to free their tiny Caucasus mountain republic from Russian rule. In the video, Mr. Umarov declared he had dissolved Chechnya's borders and created a Caucasus Emirate—an Islamic state spanning a swath of Russia's restive southern border. The enemy, he said, wasn't just Russia but also the U.S., Britain, Israel and "all those who wage war against Muslims."

A pair of conflicting videos last week from Mr. Umarov indicate the shift may be a source of turmoil within the Chechen rebellion.

During the three years Mr. Umarov has led it, the insurgency has shifted from a movement for independence from Moscow to an embrace of global jihad, prompting the U.S. to join Russia in officially declaring him a terrorist.

Terrorists have struck an average of once a day in Russia since Mr. Umarov took over, reaching into its heartland and killing more than 900 people. He has claimed responsibility for the worst attacks, including twin suicide bombings in the Moscow subway in March.

Mr. Umarov says his decision to embrace global jihad was "the will of God" and reflected an Islamist "awakening" that arose among his rank-and-file fighters.

Russia's campaign against the separatists, killing thousands of Chechen fighters and civilians, has hardened the rebels, marginalized moderates and broadened the appeal of Islamic extremism among Muslims in the impoverished region, some independent analysts and human-rights groups say.

In last week's first video, the 46-year-old Mr. Umarov said he was in poor health and retiring in favor of a "younger, more energetic" successor, Aslambek Vadalov.

Although Mr. Umarov didn't say so, Mr. Vadalov is believed to represent a nationalist wing of the movement that favors a renewed focus on independence, opposes attacks on civilians and has no ties to Islamist groups. Mr. Vadalov didn't speak in the video, which appeared on insurgent websites and YouTube.

A few days later, Mr. Umarov in a second video reversed himself. "Given the current situation in the Caucasus, I believe that it is impossible to resign from my post," Mr. Umarov said. He sat alone, his arm resting on the barrel of an automatic rifle. "My health is good, and I will work to kill the enemies of Allah," he said.

Some analysts see the about-face as a sign that Islamic militants who value Mr. Umarov as a figurehead opposed his resignation. At the least, "these colliding statements indicate a split in the underground," says Alexei Malasheknko, a specialist on the Caucasus at the Carnegie Moscow Center.

Mr. Umarov joined the violent separatist struggle well before Russian leader Vladimir Putin came to power in 1999 and launched an invasion of Chechnya. As the conflict dragged on, Mr. Umarov evolved from a young field commander who by his own admission didn't know how to pray to the self-proclaimed emir of his notional Islamic state.

Mr. Umarov, born in Chechnya in 1964, trained as a construction engineer.

He was one of the youngest separatist commanders, former rebel officials recall. Akhmed Zakayev—a Soviet-trained Shakespearian actor who was then a senior rebel commander and is now president of the Chechen separatist government in exile—says he saw "absolutely nothing distinguishing" in the young officer but nonetheless recommended him for promotions and medals. "We needed to develop the next generation," he says.

In 1995, the separatists struck outside Chechnya's borders, taking hundreds hostage at a hospital in southern Russia. The Russians killed Chechen seaparatist President Dzhokhar Dudayev in an airstrike but eventually agreed to a peace deal, pulling most troops out in 1996. The republic descended into lawlessness as warlords battled one another.

A split developed between Islamic fundamentalists backed by advisers from the Middle East and less-religious separatists whose primary goal was Chechen independence. Mr. Umarov supported the new separatist president, Aslan Maskhadov, as he struggled to stem the Islamists' growing influence.

Internal divisions were quicklyforgotten when Mr. Putin, then prime minister, ordered Russian troops back into Chechnya in late 1999. The rebels were driven out of Grozny, Chechnya's capital. Mr. Umarov's jaw was shattered as he and other fighters fled the city across a mine field.

The Islamists had been steadily gaining influence, but Mr. Umarov rejected their message, say people who spoke to him at the time. "Umarov said he didn't want Chechnya to be 'the point of the spear aimed at the Christian world' "—a phrase coined by the Islamists, Mr. Zakayev says.

Some in Moscow viewed Mr. Umarov as a moderate.

But room for compromise was diminishing rapidly. Russian forces drove the separatists into the mountains or exile.

The separatists struck deep into Russia with an attack on a Moscow theater in 2002. A rebel siege of a school in Beslan in 2004 killed more than 330 Russians, most of them children, and cemented the Kremlin's refusal to negotiate.

Mr. Maskhadov, the separatist Chechen president who was seeking talks with Moscow, was killed a few months later in a shootout with Russian troops. Abdul-Khakim Sadullayev, an Islamic scholar named to succeed him, said the separatists would make no new peace offers.

Chechen authorities installed by the Kremlin joined in the crackdown. Relatives of the separatists, including Mr. Umarov's wife and infant son, were kidnapped in what human-rights groups called a campaign by security forces to bring about a surrender. Some were released, including Mr. Umarov's wife and son. Others disappeared. The Kremlin-backed Chechen leadership denies involvement in the kidnappings.

Mr. Umarov had distanced himself from the brutal attacks on Russian targets outside Chechnya. But the abductions of his relatives changed things.

"I was naive before," he told Britain's Channel 4 television in an interview from a rebel camp in mid-2005. He said he had lost hope that Western governments would pressure the Kremlin to end the crackdown. As a result, he said, "our tactics will change, the war will change."

In 2006, when Mr. Umarov became president of the separatist government, his first public statement contained no Islamist rhetoric. He vowed to mount attacks in "many regions of Russia" but to target "exclusively military and police institutions."

Russian officials didn't sound especially worried. The underground "has lost almost all of its leaders," Interior Minister Rashid Nurgaliev said in late 2006.

One year later, Mr. Umarov abandoned his anti-Islamist stance, unnerving Moscow as well as some of his former colleagues. Mr. Zakayev said in an interview in April that he felt betrayed by Mr. Umarov's video declaration that he was forming the Caucasus Emirate and imposing Sharia law.

Mr. Zakayev and other exiled separatist leaders accused Mr. Umarov of treason.

Many separatist fighters have backed Mr. Umarov. A video released by Mr. Umarov in April 2008 showed him sitting in the woods with a group of field commanders, endorsing jihad in a mix of Arabic and Russian as birds chirp in the trees.

In embracing Islamist rhetoric, Mr. Umarov gave up his reservations about targeting civilians. "For me, there is no civilian population in Russia," he said in an interview on a separatist website.

Terror attacks spread soon after Mr. Umarov declared his emirate. Within days, a bomb exploded on a bus in the southern Russian city of Togliatti, killing eight people. Prosecutors attributed the attack to the insurgents.

By last year, suicide bombings had become a fixture of life in the Caucasus.

Write to Gregory L. White at greg.white@wsj.com and Richard Boudreaux at richard.boudreaux@wsj.com

New Inquiry in Magnitsky Case http://www.themoscowtimes.com/news/article/new-inquiry-in-magnitsky-case/412191.html

12 August 2010By Alexander Bratersky

Interior Minister Rashid Nurgaliyev said he knew nothing about online videos accusing senior police officers linked to the death of Hermitage Capital lawyer Sergei Magnitsky of possible corruption.

But Nurgaliyev said he had ordered his ministry's internal affairs department to examine whether the officers had committed wrongdoing, forcing the department to take up a case that it had refused to consider in June.

Videos accusing police investigators Pavel Karpov and Artyom Kuznetsov of spending sums that far exceeded their modest salaries surfaced online in June and July, respectively. The Russian- and English-language videos, which became YouTube hits with several hundred thousand views, claimed that the expenses of Kuznetsov's family in 2007 and 2008 amounted to $3 million, despite his monthly salary of $535, and that Karpov's family had spent $1 million.

Both families own luxury cars and expensive real estate, according to the videos sponsored by Hermitage founder William Browder and Magnitsky's former boss, Jamison Firestone.

“I have no such information,” Nurgaliyev said when asked to comment on the videos late Tuesday, RIA-Novosti reported.

But Nurgaliyev indicated that he was aware of the corruption allegations against the two officers from other sources. “I have given an order to the internal affairs department to examine them," he said.

Firestone said Nurgaliyev was informed about the “impunity” of the two officers during a meeting with European Home Affairs Commissioner Cecilia Malmström in May.

An internal affairs department spokesman, Alexander Moskovkin, confirmed on Wednesday that investigators were looking into the case, but he gave no time frame for the inquiry, Interfax reported.

Firestone, in an e-mailed statement, said he had asked the internal affairs department to open an investigation into Karpov's and Kuznetsov's incomes in June, but the department told him that it was not authorized to conduct such a probe.

In July, prosecutor Alexander Burov rejected a similar request for an investigation from lawyer and activist Alexei Navalny, saying “no specific data on possible crimes” was provided.

Burov was actively involved in the tax case that prompted Magnitsky's arrest and always sided during court hearings with Karpov and Kuznetsov, the same people he was later assigned to investigate, Navalny said.

Magnitsky, 37, died of heart failure in pretrial detention in November. His supporters say his arrest was punishment by corrupt Interior Ministry officials whom he attempted to expose.

Detained assailant on Moscow police dies in hospital of gun wounds (Update 3)http://en.rian.ru/russia/20100812/160168539.html

09:04 12/08/2010

One of the assailants on a police patrol in southwest Moscow died in the hospital from gunshot wounds, a police spokesman said on Thursday.

Two suspects opened fire from automatic weapons on a police patrol on the Profsoyuznaya Street at 0:40 Moscow time (20:40 GMT, Wednesday) killing one and wounding two policemen. The policemen returned fire wounding one of the assailants while another fled the scene in a Lada car.

"We have just received information that the detained individual wounded in the altercation, who was suspected of killing a policeman on Profsoyuznaya Street, has died," the spokesman said.

He added that the suspect who died in the hospital was born in 1988 and was a resident of Makhachkala, the capital of the Russian North Caucasus republic of Dagestan.

The identity of the other suspect was established, who is Zakir Ismailov, also a resident of Dagestan, and investigators believe he was wounded in the shootout as well, the spokesman said.

A search for the second suspect is ongoing.

Moscow's chief investigator, Anatoly Bagmet, said the suspects were stopped by a police patrol as they were trying to steal a Honda Civic car.

"One of the suspects fired a shot at a policeman, who unfortunately died," he said adding that the suspected criminals used guns with silencers.

Moscow's police chief Vladimir Kolokoltsev said one of the wounded policemen is a trainee and he suffered a serious gun wound. Another policeman, he said, was wounded in the shoulder and his life is not in danger.

Kolokoltsev added that the policeman who was killed in the shootout was married and had two children.

"I want to say once again that criminals are waging a war on the streets of Moscow but policemen continue working in such extreme situations and continue fulfilling their duty," Kolokoltsev said.

Police are monitoring Moscow hospitals as they believe that the remaining suspect is wounded and will eventually seek medical assistance.

The last time a policeman was shot dead in the Russian capital was in March of this year.

Police officer Denis Klimovich was shot dead, when he and his colleague stopped a BMW car and asked to see the driver's identification. His colleague, Konstantin Bykov, was seriously injured in the incident. The suspected killer was arrested several days later.

MOSCOW, August 12 (RIA Novosti)

One policeman shot, two wounded in south-east Moscow

http://www.itar-tass.com/eng/level2.html?NewsID=15398030

12.08.2010, 02.10

MOSCOW, August 12 (Itar-Tass) -- One policeman was killed and two got wounded in a fire exchange in south-eastern part of Moscow, the press service of Russia’s Interior Ministry said on Thursday.

The crime was committed very early Thursday morning.

“The scene is cordoned off,” the source said.

Patrolling police had a conflict with several people.

“A fire exchange started, and a policeman was shot and his two colleagues were wounded and taken to hospital,” the source said.

One criminal was detained; his details are not published yet.

“The other criminal is wanted, all police are involved in the operation,” the press service said.

Fire at Perm gunpowder plant put out, no victims

http://www.itar-tass.com/eng/level2.html?NewsID=15398550

12.08.2010, 11.13

PERM, August 12 (Itar-Tass) - The fire broke through at the Perm gunpowder plant in the early hours of Thursday, no victims were reported, the Perm region emergencies department told Itar-Tass on Thursday.

“At 03:28 Moscow time production pipelines at the open trestle were depressurised that caused inflammation of petroleum products at the area of 300 square meters,” the source said.

Fourteen vehicles and 79 people were engaged in fighting the third category fire.

“No fatalities or victims were reported. There was no destruction on the plant’s territory as well,” the source said.

US to insist detained Khorokhorin is extradited from France

http://www.itar-tass.com/eng/level2.html?NewsID=15397906&PageNum=0

12.08.2010, 05.26

WASHINGTON, August 12 (Itar-Tass) -- The United States of America will insist France extradites Vladislav Khorokhorin, who was detained there for distribution of stolen information on credit cards, the US law enforcement authorities said on Wednesday. He lives in Moscow, but is a citizen of Israel and Ukraine, the United States Department of Justice said.

Khorokhorin, who is 27, was detained on August 7 in Nice as he attempted to fly to Moscow, the source said. The arrest was made at the request of the American side. On Wednesday, Washington D.C.’s Jury presented charges of fraud with access information to bank accounts and of stealing personal data.

Khorokhorin organised a web site to sell data of stolen cards, the source said. He used the Internet forums to find clients there. The US started a secret investigation.

The network, organised by the authors of the CarderPlanet, and Khorokhorin is one of them, is the world’s most sophisticated organisation in the Internet for financial crime, the United States Secret Service said. This network was involved in most cases of stealing financial information, which were reported to law enforcement authorities, the source said.

If extradited, Khorokhorkin may be sentenced in the US to ten years' imprisonment and a fine of 250,000 dollars.

Russia to remember victims of the Kursk submarine accident

http://www.itar-tass.com/eng/level2.html?NewsID=15397756&PageNum=0

12.08.2010, 00.28

MOSCOW, August 12 (Itar-Tass) -- Russians will remember the sailors who died ten years ago over the accident at the Kursk submarine. The tragedy took 118 lives.

Mourning ceremonies will be organised at all fleets of Russia’s Navy. Flags will be at half-mast, there will be a minute of silence to remember the crew of the nuclear-powered cruise missile submarine Kursk.

The North Fleet will organise a ceremony of “laying wreaths on the water in the Barents Sea, and the Fleet commanders and relatives of the victims are expected to take part,” the fleet’s press service said.

In Moscow, a ceremony will be organised at the Central Army Museum.

On August 12, 2000 at 11:28 local time (07:28 UTC), there was an explosion while preparing to fire the torpedoes. The report to date is that this was due to the failure and explosion of one of the Kursk's hydrogen peroxide-fuelled torpedoes. The investigation commission stated the exact time of the tragedy. The sailors died within the period between several seconds to 6-8 hours following the explosion, and by the time the

submarine was spotted on August 13, it was impossible to rescue the 23 sailors who remained onboard.

Rossiiskaya Gazeta/Russia Today: The secrets that drowned with Kursk http://rt.com/Top_News/Press/eng.html

The sunken nuclear submarine will never reveal the reason for the accident

Ivan Egorov

Today marks 10 years since one of the most tragic catastrophes in Russia’s modern history. On August 12, nuclear submarine missile cruiser Kursk, with 118 crew members on board, perished in the Barents Sea during exercises of the Northern Fleet.

Just days after the newest submarine, with one of the best crews had sunk, multiple rumors and speculations began to appear regarding the reasons for the accident. Ten year later, the Western press, as well as the Russian, are once again addressing the loss of the nuclear ship and are once again questioning the results of the General Prosecution’s official investigation, in which no guilty party was found. And of course, the relatives of the deceased seamen could never come to terms with losing their husbands, fathers, and sons.

So, what are the unquestionable facts? On August 10, 2000, nuclear powered submarine Kursk was released for training with the Northern Fleet. On the morning of August 12, it had launched a dummy Granit cruise missile at the fleet, headed by the aircraft carrier Admiral Kuznetsov and the fleet’s flagship, nuclear cruiser Petr Veliky (Peter the Great). A few hours later, the submarine was supposed to finish off the alleged adversary with dummy torpedoes.

However, at the scheduled time, instead of a torpedo movement, the acoustic sensor operator of Petr Veliky had registered a blast, after which the ship was notably shaken. After hearing the report about the blast, Petr Veliky Commander, First Rank Captain Vladimir Kasatonov, did not consider it to be anything significant. Northern Fleet Commander Vyacheslav Popov, who was also aboard the cruiser, questioned as to what had happened. The response he got was: “radar antenna was turned on”.

In reality, the turbulence felt on the cruiser came from the explosions on the Kursk, which was 40 kilometers away from Petr Veliky.

What are some of the versions of what happened? The official version is based on the investigation results of the General Prosecutor’s Office.

A training torpedo, which was already in the torpedo launching tube and was prepared for the launch, had exploded. As a result of the explosion with a force equivalent to 300 kilograms of TNT, the entire crew of the first compartment of the submarine was killed. The manhole plate of the torpedo launcher and its tail traveled at the speed of 600-800 meters per second, destroying everything in their path. The remaining torpedoes blew up

136 seconds later. After this, the underwater crew of the submarine’s forward compartments was killed as a result of the explosion wave and the inflowing outside water. It should be mentioned that if a similar explosion took place in the air, then a cloud of smoke at least the size of a football field would have covered the sky. In this case, the explosion wave entered the submarine like a piston, tearing the firm bulkhead like paper.

The author of this article began dealing with the long arm of coincidence of the destruction of Kursk since the moment the official report was released on August 13; that “the vessel is lying on the seabed”, and until the moment the remains of the missile carrier were recovered and it was stationed at the Roslyakovo dock. Throughout this entire time, I have been updating the official website Kursk.strana.ru, where the latest information on the rescue operations was published online. Later, I spent a year writing for another publication about the course of the investigation. In 2004, an unexpected suggestion was made to write a screenplay and film a movie based on Prosecutor General Vladimir Ustinov’s book “Pravda o Kurske” (“The Truth About Kursk”). During our first meeting, I confessed to him that I don’t fully believe the official version of events, in which no responsible party for the catastrophe had been identified, and believe that the Prosecutor General’s Office is hiding something. Senior Investigator of High Priority Cases of the Main Military Prosecutor’s Office (GVP) Artur Egiev did not try to convince me about anything, and instead brought all 118 case files and another couple of dozen files with video addendums and said: “This is everything, you can study this and make your conclusions”. I once again found myself being skeptical – the case could have been falsified. Yes, it could have, agreed Egiev, but only if it was led by a single person. In this case, there was a brigade of almost 50 investigators, inspections were conducted by hundreds of experts from various organizations – from military to forensic and civil – and almost 1,000 witnesses were called to testify. If anyone had lied about something, then sooner or later the truth would have surfaced.

From then on, I had been going to the GVP on a daily basis – I was reading the case files, watching the videos, and drawing conclusions. Incidentally, the files, labeled “secret”, did not in any way relate to the secrets of the investigation – it was “ordinary” naval information, related to the specifics of training, which is typically classified as “secret”.

Initially, a criminal case was opened under the article on violation of ship navigation rules, which caused the collision and the loss of the boat, but by late August it became clear that the nearest Russian ship was 40 kilometers away from Kursk. Eighteen other versions remained, including one in which a torpedo is launched from a foreign vessel or a collision with a foreign vessel takes place, another assumes a mine that has been idle since the days of WWII had exploded, and one of the latest versions included an emergency situation on board, but no one took it seriously.

The primary was the American version. It was supported by the fact that a few weeks prior, Kursk returned from military service in the Mediterranean Sea. That was the time when NATO had its bombing campaign against Serbia. And Kursk did not only pass the Gibraltar Strait unnoticed twice, while it was literally loaded with anti-submarine equipment, but also managed to monitor America’s carrier fleet, while being literally just

under the aircraft carrier. After this, a number of American naval commanders were released from their posts. They say that Kursk and Commander Lyachin nearly became a personal enemy of the US Navy. Therefore, it was logical to assume that Russians were being avenged.

How did investigators of the Prosecutor General’s Office respond? At that time, when bodies were brought to surface, pieces of the first section of the submarine were lifted at the same time – several tons of debris, in which not a single piece of a foreign vessel, torpedo or explosive material was found. The collision version remained – American submarine Memphis, which was clearly damaged, appeared in Norway on August 18. “[It’s comparable to] a collision between a Zaporozhets and KAMAZ,” commented the designer of Kursk, Igor Baranov. The tonnage of our submarine was twice greater than that of the American submarine, and in case of a collision, Memphis would not only have been damaged – it would have crumbled. Moreover, the body of Kursk was designed in such a way that it could sustain a small nuclear explosion, not to mention an ordinary torpedo launch.

After the submarine was brought to the surface, every one saw the convincing hole near the fourth section. This prompted a conclusion that this was the place of impact from a torpedo. Following inspections it was revealed that there was not an outside impact on the body, and the hole was the result of a massive explosion, due to which the pressure hull had literally folded like a harmonica. Due to the deformation, our rescue vessels from Rudnitsky could not stick to the emergency manhole in the ninth sector – swaying in the water between the open sea and the cabin.

As for the version in which the surviving seamen in the ninth sector lived for several days and could have been rescued, investigators and forensic experts give a definite answer – they could not have.

After the explosion, 23 people survived in the stern of the boat. They were headed by Captain Lt. Dmitry Kolesnikov. Together with the other survivors, he made a decision: to remain in the 9th compartment, which had not lost its symmetry, and wait for help. “Looks as though we don’t have much chance. About 10-20 percent,” Dmitry Kolesnikov wrote in the dark. The last passage is dated 15:15, August 12 – that is four hours after the explosion. Why didn’t they get out? Investigators say that they most likely did not have enough time. Another tragic event took place in the 9th compartment – the regeneration plate, which makes oxygen from carbon dioxide, exploded upon making contact with water. This happened right in Kolesnikov’s hands, who died on the spot. According to forensic experts, the remaining officers died seconds later from carbon monoxide poisoning.

The criminal case had other things that were impossible to falsify. For example, why didn’t the emergency buoy surface and Kursk was not immediately rescued? As it turned out, the buoy activation key, which is located in one of the posts inside the submarine, was not only inactive – it was simply never installed. Most investigators put their hopes in the log-books and on-board recorders. The log-books were found, but not a word was

mentioned about the accident. Kursk’s so-called black box was also found – the twisted recorder Snegir. Experts did the impossible – they were able to reconstruct tape that rested for a year in the water at the depth of 100 meters.

The last recording was a report about successful shootings with Granit, later the tape reel included recordings of music and sounds of Killer Whales, which were broadcast in the interior communication system, instead of (as it should have had) recordings of all the commands that were made aboard. Many other small and bigger violations were identified, but, according to investigators, they all had nothing to do with the catastrophe and had in no way affected it. Therefore, no one blamed the crew.

So, what is the reason for the deaths, if Americans and the crew are not responsible? The reason is the explosion of a practical 650-millimeter torpedo, or to be more exact, an oxidizer tank. Why are investigators confident that this is the case? Because fragments of the tale part of this ill-fated torpedo were found, as well as the torn oxidizer tank, in which the initial explosion took place. In the course of several months, the Forensic Institute of FSB had conducted explosion tests. An analogous torpedo was thrown from great heights onto concrete slabs, with fire underneath. Several kilograms of explosives were placed under the oxidizer tank. The results were the same – no explosion took place. Experts concluded that the tank could not have been affected from the outside – the explosion could only have taken place inside.

But, neither investigators nor experts could answer the main question of what caused the explosion. Assumptions have been made about the human factor: from the moment it submerged, Kursk had not used the torpedo. But, it is hard to imagine that the crew could not have possibly neglected to monitor the capricious torpedo and not use hydrogen peroxide, especially because there had been a minor flagship division of submarines on board, which knew the torpedo like the back of their hand. Perhaps, it could have been a manufacturing defect. Perhaps, something went wrong when loading the torpedo launcher. The mystery of August 12, 2000 will remain unsolved on the bottom of the Barents Sea.

Declassified Information

Ten years ago, when the investigation was ongoing, information on three emergency situations, encountered by the seamen who were participating in the operation to bring the deceased officers and the submarine back to surface, became public.

Today, the tragedies that had nearly happened at the depths of the sea can be revealed. Not many know this, but during the rescue mission, the lifting of the submarine out of the water and inspections on the Roslyakov dock, the distressed vessel had almost claimed the lives of several more people.

The first time this happened was when our divers were working on the hull of Kursk. When the operation to bring the bodies to the surface began, and it became clear that the

divers were unable to fit into the manhole of the 9th compartment, the decision was made to cut an access hole in the 8th sector, through which the boat was to be entered. The first person to descend to Kursk was Commander of the 328th expeditionary detachment of the Naval Forces, Hero of Russia, Andrey Zvyagnitsev. During the underwater cutting, a small oxygen bubble suddenly burst. Seemingly, that is not a terrible thing – but this mini-explosion was enough to damage the respiratory capsule in the diving helmet. Sea water started to immediately enter the helmet – which was happening at the depth of 100 meters and with the temperature of about 4 degrees Celsius. The water had already reached his eye level, when Zvyagintsev managed to swim to the diving bell. Five minutes later, after restoring the capsule, the diver returned to Kursk. Foreign colleagues on board of the rescue boat were in shock.

The cleanup of debris in the twisted compartments had almost ended tragically. No one could imagine that after such a massive explosion, undetonated parts of torpedoes still remained on Kursk. One FSB bomb specialist by chance saw how investigators were cleaning the path before them, and pushing some pieces of junk that looked like foam with their feet. He quickly realized that this was an explosive. All work was immediately stopped. Indeed, several dozen of kilograms of explosives were found. The next day, a 250 kg warhead with an igniting set was found. Investigators were saved by the fact that it was not loaded.

Read the article on the newspaper's site

Russia Today TV nominated for Int’l Emmy Award

http://www.itar-tass.com/eng/level2.html?NewsID=15398010

12.08.2010, 06.59

NEW YORK, August 12 (Itar-Tass) -- The Russia Today TV channel is nominated for the prestigious International Emmy Award. Seven more candidates will compete with the Russia Today in the News and Current Affairs nomination.

There are seven countries represented in the nomination – Argentina, Brazil, the UK, Qatar, Canada, China and Russia. The winner will be announced at a ceremony due in New York on September 27.

The Russian channel was included in the list of nominees for their coverage of the US President Barack Obama’s visit to Russia. The channel’s interesting broadcast on July 6 and 7 of the past year was round the clock. The information on the meetings of the presidents was combined with experts’ views from Europe and America, the International Academy of Television Arts & Sciences said.

The International Academy of Television Arts & Sciences is an organization of global broadcasters, with members from nearly 70 countries and over 400 companies. Sixty percent of the Board of Directors come from countries outside of the United States, and represents the world's largest production, distribution and broadcast companies. The Academy was founded in 1969.

Russian government rolls dice again on free gaming zoneshttp://en.rian.ru/russia/20100812/160169120.html

10:30 12/08/2010

The Russian government is considering moving one of its special zones allocated for legal gambling, following the failure of Azov City due to a lack of infrastructure, Vedomosti reported on Thursday.

The paper quotes sources in the gaming business in the area who claim the local Krasnodar Region governor, Aleksander Tkachyov, wrote to President Dmitry Medvedev several weeks ago proposing to move the gambling zone to the nearby resort city of Anapa on the Black Sea coast.

Tkachyov said the move was needed as Azov City was too far from population centers and would not appeal to investors or gamblers. The president has instructed the government to study the proposal.

The then President Vladimir Putin proposed a ban on gambling except in four special zones in remote parts of Russia in October 2006, which came into force in July 2009 when he was prime minister. The four areas where gaming is permitted are Azov City on the borders of the Krasnodar Territory and Rostov Region, a zone in the Altai Mountains, Amber in Russia's exclave Kaliningrad Region and a zone in the Primorye Region of Russia's Far East.

"Since the law has been working it's become increasingly clear that no one wants to go to these zones, but Anapa has a modern airport, beaches and tourists," says Duma Deputy Gleb Khor of the United Russia party.

He has introduced an amendment on the gaming law bill to the Duma which envisages removing the Rostov Region from the list of approved gaming areas. In addition, his amendment proposes suspending the ban on gambling for ten years from the date it was introduced. The amendment has already been approved by the Duma Economic Policy Committee.

Vedomosti says no decision has been made on the Krasnodar governor's proposals, and neither have measures been discussed for compensating those investors who have already

sunk cash into Azov City. The area is the closest to completion of the four approved gaming zones, with investors having already sunk $10 million into casinos.

"We're in shock, and we don't understand," says Aleksander Odintsov, Director of the Odis group, which has rented a 1.5 hectare site in Azov City and had plans to invest 12 billion rubles in a gambling hall there. "There have been rumors, but they've said nothing officially, although we are in continual dialogue with the authorities."

MOSCOW, August 12 (RIA Novosti)

Azov gamble fails to pay offhttp://www.mn.ru/russia/20100812/187979160.html

Source Andy Potts at 12/08/2010

Russia is considering another roll of the dice in its bid to establish four sanctioned gambling zones around the country.

The Azov City resort, planned to be a Las Vegas-style centre in the south of Russia, is set to cash its remaining chips after a lack of infrastructure failed to attract casinos or punters, Vedomosti reported.

Now a new plan would see the site moved to the Black Sea resort of Anapa, already a popular holiday destination.

Gambling has been illegal in Russia since July 2009, but the four planned gambling centres have not captured the imaginations of investors of gamblers.

RUSSIA: "A plan of organisational and operational search measures"http://www.forum18.org/Archive.php?article_id=1478

By Felix Corley, Forum 18 News Service <http://www.forum18.org>, and Geraldine Fagan, Forum 18 News Service <http://www.forum18.org>

Russian state officials have repeatedly refused to explain why and by whom moves against Jehovah's Witnesses and readers of the works of Muslim theologian Said Nursi were initiated. Forum 18 News Service notes that internal government documents, from a wide geographic spread of regions, reveal that the campaign is co-ordinated at a high level. Both Jehovah's Witnesses and Nursi readers have been targeted in ways that suggest that their believers and communities are closely watched by the police and FSB security service – both within and outside their communities. One police document cites "a plan of organisational and operational search measures to expose, warn and stop the illegal activity of representatives of the religious organisation the Jehovah's Witnesses". Another document refers to an Interior Ministry directive "with the aims of securing law

and order, anti-terrorist protection and security at especially important and government sites, and aggression in countering the intrusion of xenophobia, and racial and religious extremism". A further document reveals that police shared "operational information" about a named Jehovah's Witness with a Russian Orthodox Church diocese. Private employers and public libraries have also been ordered to co-operate in the campaign.

 

With the repeated refusal by Russian state officials to explain why and by whom moves against Jehovah's Witnesses and readers of the works of Muslim theologian Said Nursi were initiated, members of those communities can only guess their motivation. The broad range of agencies involved – including courts, the police, the FSB security service, and prosecutor's offices - is clear from official statements and court judgments. An examination by Forum 18 News Service of internal government documents concerning the Jehovah's Witnesses, however, reveals that the campaign against them is co-ordinated at a high level - and relies on Soviet-style intrusive surveillance.

One document from the southern resort of Sochi points to close FSB scrutiny of the Jehovah's Witnesses' Russian headquarters far to the north in St Petersburg. It also indicates that the state knew of Jehovah's Witness plans for a public protest before they were revealed to anyone outside the religious community. Other documents show that the security agencies collect extensive information about individual Jehovah's Witnesses, as well as their group activity. By routinely referring to the Jehovah's Witnesses as a "destructive religious organisation" or "religious organisation of extremist orientation" even though they are legally registered in Russia, the documents also support the Jehovah's Witnesses' view that the authorities want a complete ban on their organisation, not just its religious literature.

Adding a new twist to Soviet-style tactics, one document also reveals that police shared "operational information" about a named Jehovah's Witness with a Russian Orthodox Church diocese, and sought two diocese's views on Jehovah's Witness beliefs and practices.

The campaign

Jehovah's Witnesses have long suspected that the ongoing action against them is co-ordinated from above rather than independent initiatives by local officials (see F18News 25 March 2010 http://www.forum18.org/Archive.php?article_id=1426).

In the space of three weeks in spring 2009, prosecutor's offices conducted more than 500 check-ups on Jehovah's Witness communities across Russia, looking for errors in their statutes, records of decisions, registration and property documents, as well as checking whether their activity was in accordance with their statutes. Later that year, prosecutors in various parts of Russia initiated court cases to ban specific Jehovah's Witness literature as "extremist".

This led to the key December 2009 Supreme Court ruling, upholding an earlier decision by Rostov-on-Don Regional Court outlawing 34 Jehovah's Witness titles as extremist and dissolving the local Jehovah's Witness religious organisation in Taganrog (see F18News 8 December 2009 http://www.forum18.org/Archive.php?article_id=1385).

Since that decision, Jehovah's Witnesses who spread their faith on the street or door to door have faced increased police interrogations, threats and fines (see F18News 26 July 2010 http://www.forum18.org/Archive.php?article_id=1469).

Forum 18 has repeatedly asked the Interior Ministry, the FSB security service, the General Prosecutor's Office and other state agencies why the campaign was launched. Officials refuse or fail to comment, refer Forum 18 to other state agencies or to court judgments, or deny that any centralised state campaign is underway.

For example, Forum 18 has received no response to written questions sent on 8 June to Sergei Ignatchenko, spokesperson for the FSB in Moscow, as to why the campaign was launched, what role the FSB played in it, and what danger to the Russian Federation the FSB sees in Jehovah's Witness activity.

FSB surveillance

The extent of FSB surveillance of the Russian Jehovah's Witness headquarters in St Petersburg and a close interest in their plans for a public protest against state harassment is revealed in an order from Sochi (Krasnodar Region) in Russia's far south.

In the undated order, apparently issued in late February 2010, Colonel Andrei Polyakov, Deputy Head of the Sochi Transport Police within the Interior Ministry, informed 14 different Transport Police offices in and around the Black Sea port of Sochi about a "complex of measures" – unspecified – being taken by Krasnodar Regional FSB "to halt the illegal activity of functionaries of the destructive religious organisation, the Jehovah's Witnesses", received by his agency on 25 February.

The FSB information detailed the various court cases ruling items of Jehovah's Witness literature extremist. As a result, it said, the Jehovah's Witness headquarters in St Petersburg had "unleashed wide-scale propaganda" among Jehovah's Witnesses about the "repressions" which they were suffering. The order also maintains that "data in hand testify to heightened conspiratorial measures by Jehovists [a Soviet-era pejorative term]" to hold meetings, congresses and build Kingdom Halls – all entirely legal activity, Forum 18 notes.

The FSB added that the Jehovah's Witness headquarters had instructed followers to remove literature, documents, membership lists and computers from Kingdom Halls, and "recommended that literature be distributed among adepts' homes." The order also claimed that Jehovah's Witnesses were trying to re-register communally owned property in the names of loyal individuals.

Jehovah's Witness spokesperson Grigory Martynov has since confirmed to Forum 18 that Jehovah's Witness organisations have stopped using those titles outlawed as extremist at Kingdom Halls in an effort to comply with the ban. Russian law regards mass distribution and storage for mass distribution of banned titles as offences, at least formally allowing individuals to possess personal copies.

The FSB information also said that it knew of plans – drawn up in collaboration with the Jehovah's Witness headquarters in New York – for Russian Jehovah's Witnesses to undertake a nationwide information campaign from 26-28 February 2010 "to draw public attention to the 'persecutions' of the organisation on the part of the Russian authorities". It said they intended to distribute a leaflet named: "Is history repeating itself questions to Russians" - correctly titled, but without punctuation. The FSB also quoted what it said were lines of arguments Jehovah's Witnesses would use in presenting the public with the leaflet (including "More than 300,000 Russians share JW beliefs", and "JWs have existed in Russia for more than 100 years").

"Conspiratorial measures"

"Heightened conspiratorial measures" were claimed by the FSB to surround preparation for the campaign, with ordinary Jehovah's Witnesses to be told of it only on the day it was to be launched.

In order to minimise state disruption to the campaign, ordinary Jehovah's Witnesses were indeed told of its precise nature only on 26 February, Jehovah's Witness spokesperson Grigory Martynov confirmed to Forum 18 on 10 August.

The FSB also cited information that Jehovah's Witness congresses planned to begin on 1 March and would study the book "Come Follow Me". It pointed out that this book was ruled extremist by the December 2009 Supreme Court verdict, and accused the Jehovah's Witnesses of trying to pressure the Russian authorities and present them in a bad light.

"Illegal activity" by Jehovah's Witnesses – such as "organising and conducting any illegal protests or distribution of extremist literature" - was ordered to be reported immediately to the FSB.

Transport Police Colonel Polyakov ordered the 14 Transport Police offices to notify the Regional FSB, as well as his agency, of any such actions.

The Sochi Transport Police order did not reveal how the FSB knew of Jehovah's Witness plans for a public campaign before it had begun, or the title of the leaflet that they were preparing to publish before it had become publicly available. That the title was given with no punctuation may indicate that the FSB heard rather than saw it.

Close scrutiny

Two other documents from the ordinary police, like the Transport Police part of the

Interior Ministry, reveal the extent of information gathering about individual Jehovah's Witnesses and their community activity.

In an instruction that appears to have been typed on 9 October 2009 but not sent until 9 March 2010, A. Shtobbe, head of police for the Closed [due to a naval base] Administrative Zone of Fokino in the far eastern Primorye Region, wrote to the head of Teploenergo, the local heating company, calling for tighter security measures. He was ordered to check the "religious views" of job applicants thoroughly and to "take a decision" on members of "religious organisations of extremist orientation", without violating their rights. "Conduct a check-up of employees and staff for membership of the religious organisation of extremist orientation, the Jehovah's Witnesses," instruct three of the orders. "On learning of this given category of persons, pay particular attention to information coming from them to the collective."

Shtobbe also explains that his instruction is being issued in response to a directive from the Interior Ministry "with the aims of securing law and order, anti-terrorist protection and security at especially important and government sites, and aggression in countering the intrusion of xenophobia, and racial and religious extremism".

Following the instruction, Yury Baikin and Olga Cherevko, two of four Jehovah's Witnesses who work at Teploenergo, were asked by their work supervisor to sign a document about terrorism. The pair refused, saying they had nothing to do with either extremism or terrorism.

"A plan of organisational and operational search measures"

In south-western Siberia, a 17 March 2010 Kemerovo Regional Police circular to all local police chiefs, signed by Deputy Police Chief Aleksei Kozhevin, orders subordinates to find out personal details and other information on Jehovah's Witnesses. The circular, which Forum 18 has seen, cites "a plan of organisational and operational search measures to expose, warn and stop the illegal activity of representatives of the religious organisation the Jehovah's Witnesses". The plan had been approved on 5 February by the head of Kemerovo Regional Police, Lieutenant General Aleksandr Elin, and on 10 February by Major General Vladimir Panov.

As part of the plan, local police for every district were ordered to undertake "a survey of citizens by courtyard and flat" to establish what Jehovah's Witness individuals or groups are active.

Information was to be collected on where Jehovah's Witnesses hold meetings, whether registered or "illegally functioning" communities distribute literature, "leaders, elders and adepts (parishioners)", listing names and full details, including telephone numbers and publications they distribute, with copies wherever possible.

The information was to be supplied by 19 March, within two days of the order, to the Regional Police Department for the Organisation of the Activity of Local Police, and to

the Subdivision for the Affairs of Minors within the Public Order Police. Local police chiefs were ordered to present this information every three months.

"Jehovah's Witnesses are sort of extremist"

When Forum 18 called the number given on the instruction for reporting information on 8 June, the woman who answered the phone said it was the Department for Crime Prevention. She said she had heard of the February decrees approving the plan but had not seen them. She referred all enquiries to the Police's Counterextremism Centre "as the Jehovah's Witnesses are sort of extremist". Reached the same day, however, the Centre referred Forum 18 to the Public Order Police, where an official who would not give his name refused to say how many offices had submitted information on Jehovah's Witnesses in their area and what the Police had done with this information.

Reached on 10 June, the duty officer at Kemerovo Regional FSB security service consulted inaudibly with colleagues for some time when Forum 18 asked why it had drawn up a plan to take measures against a religious community which is not illegal. "Where did you get this document?" the officer – who would not give his name – then asked. He said no information could be given by phone, but denied that his organisation was closed to scrutiny. "We are open," he claimed, before putting the phone down.

Such close surveillance of individual Jehovah's Witnesses and communities may account for how traffic police were, for example, able to identify three minibuses of Jehovah's Witnesses to be stopped and searched on the border of Krasnodar and Stavropol Regions on 9 July. If such information gathering also extends to readers of the works of Said Nursi, it may account for how police were able to target a reader on 22 June as he got out of a train at Novosibirsk station (see F18News 27 July 2010 http://www.forum18.org/Archive.php?article_id=1470).

Officials seek Orthodox Church's help

Despite the constitutional separation of the state from religious organisations, police have on occasion sought the views of local Russian Orthodox dioceses about the Jehovah's Witnesses' beliefs and activity, documents seen by Forum 18 reveal.

On 26 August 2009, Police Colonel Vladimir Shkaev, Head of Kamyshlov Police in Sverdlovsk Region, on the Asian side of the Ural Mountains, wrote to the local diocesan Russian Orthodox Archbishop Dimitry (Kapalin) of Tobolsk and Tyumen, informing him that ten days earlier "operational information" about an "initial verification" had come in about a named local Jehovah's Witness. Colonel Shkaev asked the archbishop's blessing for the diocesan Missionary Department to provide information about the "existence within your diocese of sects of a totalitarian orientation". Of "particular interest" was information about the "possible involvement" of the named Jehovah's Witness in "destructive activity directed against the Orthodox Church on the territory of your diocese".

At the request of the regional police Counterextremism Department, the Russian Orthodox diocese of Kemerovo and Novokuznetsk, in south-western Siberia, produced an assessment of the statutes of the local Jehovah's Witness religious organisation in the city of Kemerovo. Its mostly theological analysis was produced under the diocese's February 2007 co-operation agreement with Kemerovo regional administration. Posted on the website of prominent anti-cultist Aleksandr Dvorkin's St Irenaeus of Lyons Informational Consultation Centre on 24 May 2010, the nine-page assessment refutes the Jehovah's Witnesses' self-identification as Christians, and states that the Jehovah's Witness interpretation of Scripture is "very far not only from traditional interpretations, but also from the laws of logic". As the Jehovah's Witnesses' main aim is to promote and increase circulation of their literature, it claims in conclusion, the entire organisation is not religious at all, but "bears all the hallmarks of a commercial cult".

So far there has been no sign that either of these state moves to co-opt the opposition of the Russian Orthodox Church has had any impact on local Jehovah's Witnesses, Grigory Martynov of the Jehovah's Witnesses told Forum 18 on 10 August.

Library books controlled

As many Jehovah's Witness titles were banned and entered onto the Federal List of Extremist Materials, various state agencies moved to limit public access to them. Under a 29 March 2010 instruction to public libraries issued by Vladimir Zaitsev, general director of the Russian National Library, library holdings which feature on the Federal List are to be marked with a special symbol – an exclamation mark within a circle – to indicate that access to them is restricted. While such titles may still be stored in libraries, they may not be copied or exhibited, and are to be read within designated reading rooms.

Also according to the instruction, persons wishing to read a library holding on the Federal List must first fill out a form requesting the publication and confirming that they have been warned that it is on the List and not subject to mass distribution.

Russia's supervisory body for information technology and mass communications, Roskomnadzor, announced on 30 April that it has annulled permission to import "The Watchtower" and "Awake!" publications (see F18News 27 July 2010 http://www.forum18.org/Archive.php?article_id=1470). (END)

For more background, see Forum 18's Russia religious freedom survey at http://www.forum18.org/Archive.php?article_id=1196.

Analysis of the background to Russian policy on "religious extremism" is available in two articles: - 'How the battle with "religious extremism" began' (F18News 27 April 2009 http://www.forum18.org/Archive.php?article_id=1287 - and - 'The battle with "religious extremism" - a return to past methods?' (F18News 28 April 2009 http://www.forum18.org/Archive.php?article_id=1288).

A personal commentary by Irina Budkina, Editor of the

http://www.samstar.ru Old Believer website, about continuing denial of equality to Russia's religious minorities, is at F18News 26 May 2005 http://www.forum18.org/Archive.php?article_id=570.

A personal commentary by Alexander Verkhovsky, Director of the SOVA Center for Information and Analysis http://www.sova-center.ru, about the systemic problems of Russian anti-extremism legislation, is at F18News 19 July 2010 http://www.forum18.org/Archive.php?article_id=1468.

Reports on freedom of thought, conscience and belief in Russia can be found at http://www.forum18.org/Archive.php?query=&religion=all&country=10.

A compilation of Organisation for Security and Co-operation in Europe (OSCE) freedom of religion or belief commitments can be found at http://www.forum18.org/Archive.php?article_id=1351.

National Economic Trends

RenCap's Mundy Says Russian Heat Wave Sapping Growth: Video http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aFvukYIR5F9c

Aug. 12 (Bloomberg) -- Thomas Mundy, a strategist at Renaissance Capital, talks about the outlook for the Russian economy as the country counts the costs of a record heat wave and drought.

Mundy speaks from Moscow with Linzie Janis on Bloomberg Television's "Global Connection." (Source: Bloomberg)

Running time 02:44

-0- Aug/12/2010 07:08 GMT

Last Updated: August 12, 2010 03:08 EDT

RenCap: Weekly inflation accelerates, heat wave to blame http://www.businessneweurope.eu/dispatch_text12499

Renaissance CapitalAugust 12, 2010

Yesterday (11 Aug) Rosstat reported weekly (for 3-9 Aug) consumer inflation at 0.2%,

after holding at 0.1% for 20 weeks.

YtD consumer inflation is 5.0%. Last year August was the first month when inflation settled at zero and held there for the next three months. Thus, inflation on a YoY comparison stopped declining and we expect the indicator rise further rise.

Consumer prices have begun to react to the abnormal heat in Russia. During 3-9 Aug many of the prices of products influenced by grain prices (either as feed or as a raw material) surged. The increases offset the seasonal effect of a decline in fruit and vegetable prices. During the period, prices for vegetables fell more than 2.0%; milk rose 1.2%; butter was up 0.8%; flour rose 2.4%; and, bread increased 0.3-0.4%.

Prices of other items whose production may have been effected by the drought also significantly rose. Reuters recently reported the buckwheat supply would fall this year. The price of buckwheat continued to rise and surged 7.0% last week.

The sugar supply is likely to be lower as we expect Russias beet harvest to fall in 2010 as well. Around 40% (1.744mnt of 5.057mnt) of Russian sugar is made from imported raw sugar. The price of sugar on the global market has risen 16% since the beginning of July. As a result, consumers paid 6.6% MoM for sugar in July and this week it is up 0.8%.

The results indicate that some of the effects of the drought have not yet surfaced and we think we will be able to more accurately estimate the effect of the drought on inflation in autumn. Thus, we think it will take time for inflation to stabilise and we do not expect inflation to be back on its previous track in the near future.

Anton Nikitin

RenCap: CPI acceleration is unavoidable; no government regulation of food prices yet

http://www.businessneweurope.eu/dispatch_text12499

Renaissance CapitalAugust 12, 2010

Event: According to a report in Kommersant yesterday (11 Aug), in the past couple of weeks most food producers have informed retailers about planned price increases. The flour price will increase 30%, pasta 25%, and cereals 20-60% by September-October. There is a deficit of flour on the market, as grain producers have stopped delivering supplies that were previously contracted at low prices. Dairy producers have also reported 5-10% price increases; sugar prices are up 18% on a lower sugar production outlook, related to a poor sugar beet harvest due to the heat; and egg prices will rise soon,

according to the article. Food producers have recently started to experience significant input-cost inflation (due to the low grain harvest in Russia and 70-100% grain-price growth since early May), and will try to pass this cost growth on to consumers. On 9 Aug, Prime Minister Vladimir Putin announced the most recent official forecast of the Russian grain harvest at 60-65mnt in 2010 (down from 70-75mnt forecast previously). Domestic grain prices seem to have stabilised and have even fallen slightly (down 10-12%) following Putin's announcement of a grain export ban from 15 Aug to 31 Dec.

Action: Positive for Russian food retailers (X5 Retail Group, Magnit, Dixy, Seventh Continent), in our view.

Rationale: We reiterate our view that higher food prices will translate into a higher LfL basket for retailers. With the same margins, they should be able to generate higher revenue and EBITDA in nominal terms, we believe. We do not see potential government regulation of food prices as a significant threat to retailers margins. The Federal Antimonopoly Committee already monitors food prices in each region, and recently reported that there are no unjustified price hikes. We think that government regulation may only be introduced for basic food products (the cheapest bread and cereals, milk and meat, which are low-margin products for food retailers), and that any potential price caps would only be short term.

Ulyana Lenvalskaya

RenCap: Russias wildfires rage on: Response and implications

http://www.businessneweurope.eu/dispatch_text12499

Renaissance CapitalAugust 12, 2010

Background. As of Monday (9 Aug), crews were fighting 557 fires on 174,035 hectares (ha) of land, and there are an estimated 162,000 people involved in efforts (directly or otherwise) to contain the fires across Russia. So far this year, 747,000 have been affected which is an area roughly 3x the size of Luxembourg. Since the fires started, over 50 people are reported to have died, and many are falling ill because of poor air quality. Over the weekend, carbon monoxide levels in Moscow were 6.6x the acceptable norm, and the head of Moscows health department has said that the average death rate in the city has doubled, to about 700 per day currently from between 360-380 normally. Doctors are still reported to be recommending that, if possible, people should consider seeking refuge outside of Moscow, which explains Moscows very congested airports at the moment.

Flights from Moscow reached a record level on Sunday (8 Aug), with 104,000 people flying out of the capital, which beats the previous record of 101,000 according to Russias Federal Air Transportation Agency.

Government response. So far the government has pledged $166mn to rebuild homes damaged by the fires and Finance Minister Alexei Kudrin has, conservatively in our view, estimated the cost of the damage at $200mn. The government has also pledged to spend more on fire-fighting. On Monday, the government backed a plan to spend $1.8bn on state-of-the-art firefighting equipment and trucks for the Emergency Situations Ministry. Emergency Situations Minister Sergei Shoigu has also proposed the creation of emergency response centres across Russia to deal with future disasters. The ministry has also asked the government to back a bill allowing it to recruit volunteer fire-fighters.

Public reaction. Despite their best efforts to manage public opinion, by physically being at the scene of the fires in the case of Prime Minister Vladimir Putin, or cutting short his summer holiday in the case of President Dmitry Medvedev, the government is coming under criticism for the way it has responded to the crisis. The public is increasingly looking to the large handouts that the government has promised to the victims of the fires and to government policies that are widely believed to have exacerbated the situation.

Forestry Code. Under particular scrutiny is the Forestry Code, which came into force in Jan 2007. The controversial act passed responsibility for forest supervision away from the state and onto local authorities or individual tenants in or around forested areas. These private tenants included wood-processing companies and real estate developers with little experience in forestry management. The new code effectively eliminated the forest-protection system that was built up in the Soviet era, cutting back on the number of specialist forest rangers and replacing them, essentially, with workers with no relevant experience.

Poor equipment and training. Public opinion has become increasingly critical of the manner in which the fires are being fought, principally because of a lack of equipment and properly trained fire-fighters. There are estimated to be 162,000 people fighting the fires, but comparatively few are trained fire-fighters, and those that are have been trained typically to deal with house and factory fires. As the German publication, Der Spiegel, has highlighted, Russia has fewer professional firefighters than Germany (22,000 vs 27,000) and a very limited volunteer system.

Implications for the government. With public opinion largely critical of the governments reaction to the crisis, we examine a number of longer-term implications for the government as a result of the fires: 1) the extent to which the authorities are or are not seen to be in touch with public opinion; 2) whether the publics perception of the governments position of authority has been harmed; 3) the extent to which the fires question the progress the government has made in modernising the country; and 4) the impact of higher grain prices as a result of the current drought.

1. Extent to which authorities are seen to be in touch with public opinion At a time when Russia is still recovering from the worst economic crisis in a decade, the fires are doing much to highlight the wide gap in living standards between the perceived Moscow elite and the average Russian citizen. The Jamestown Foundation, a US-based think-tank, rightly highlights that this impression fuels a broader discontent, which was reflected last

week in the protests in a northern Moscow suburb over the proposed destruction of Khimki forest to build an $8bn highway. The protest, however, appear likely to fall on deaf ears. According to an opinion poll by the Levada Center as many as 85% of Russians think that the authorities should listen to the protesters, while only 29% believe that they actually do so. In this context, it is worth noting the recent resignation of Ella Pamfilova from her post as chair of the Presidential Council for Civil Society Institution and Human Rights, due to her frustration at an apparent lack of support from President Medvedev. Of course, Russia is a very long way from mass protest, but in the run-up to the 2012 president elections both President Medvedev and Prime Minister Putin are likely to be very sensitive to anything that damages their popularity ratings, in our view.

2. Whether the governments image of authority has been harmed The governments response to the crisis calls into question the so-called power vertical system that Prime Minister Putin espouses. Generous financial handouts, visits to fire-affected regions, and instructions to heads of municipalities who have lost public confidence to tender their resignation, while befitting his patriarchal image have done little to alter the perception that the government is not totally in control. Indeed, there is increasing evidence that it is precisely because of the power vertical system and because the government took autonomy away from regional authorities that they have been so ineffective at fighting the fires.

3. The extent to which the fires question the progress the government has made in modernising the country. The fact that the fires are still burning, or indeed that they were allowed to happen at all, focuses attention on what is a now a widening disconnect between the rhetoric of President Medvedevs reform agenda and the reality of public services that have received little investment through transition. Russia observers are very willing to give President Medvedev credit for improving relations with the US, for pushing for the development of the economy through innovation, and for addressing corruption and bureaucracy. However, it is clear to us that the rhetoric has not yet filtered down to actions to protect Russias citizens from real disasters.

4. The impact of higher grain prices as a result of the current drought Alongside the fires is the ban on the export of grain announced last week by Prime Minister Putin as a result of prices that have shot up sharply because of the heat-wave and subsequent drought. Although the move may make sense to balance domestic supply/demand, we believe it does little to support Russias reputation as a reliable supplier of commodities, and does much to weaken Russias case for WTO accession.

Investor reaction We do not believe that the fires should harm investors sentiment towards Russia in the short term. Trading volumes are typically low in August as most Russians go on holiday. The last time Moscow experienced similar air quality conditions was during the peat-bog fires of 2002, and while the current toxic air quality is likely to cause some economic disruption, there is little evidence that it will affect investor sentiment. In Aug 2002, the RTS Index underperformed the S&P by 1%, which is clearly extremely modest, particularly so in August, which experienced swings of -40% in 1998, and -18% in 2008 when the Georgian war started.

However, over the longer term, we believe investors should consider the governments response to the fires, particularly in the run up to the presidential elections of 2012.

Sectors to consider We believe the consumer and retail sector has been most affected by the current high temperatures across Russia. Within the sector, we think it makes sense to look at pharmaceuticals that are not impacted by the potential increase in inflation because of higher grain prices as a result of the ongoing drought. Looking through the sector: 1) Food retailers such as Magnit and X5 should benefit from rising inflation, in our view, although we note that valuations already look quite punchy. 2) The outlook for grain producers is mixed as the grain price surge will have to compensate for loss of output. Instead of Russian grain producers, we would look at Ukrainian names such as Kernel and MHP because they are more efficient than the Russian names, and the impact of the drought in Ukraine is lower than in Russia. 3) We would avoid food processors of eggs, flour, meat and dairy. We suggest easing exposure to Cherkizovo and WBD on the risk of margin deterioration or sales decline, if their price increases lead to a drop in consumer demand. CEDC and Synergy could also come under pressure on the back of higher grain prices, but to a lesser extent than WBD and Cherkizovo, as vodka companies are less exposed to grain-related input costs. We prefer Synergy over CEDC on valuations and a stronger 2Q10 trading update. 4) As noted above we view pharmaceuticals as the most immune sector to rising inflation. We prefer Protek over Pharmstandard on valuations.

RenCap: Russian economic growth at 5.2% in 2Q10

http://www.businessneweurope.eu/dispatch_text12499

Renaissance CapitalAugust 12, 2010

Yesterday (11 Aug), Rosstat provided the first estimate of economic growth in 2Q10. At 5.2% YoY (up from 2.9% YoY in 1Q), Russias GDP is in line with our expectations for 2Q10. We forecasted, based on our leading GDP indicator estimate, growth would reach 5.3% YoY. The main factor supporting growth is the low-base effect - during the crisis GDP declined the most (10.9% YoY) in 2Q09. As this is the first estimate, the released data do not provide any further detail regarding GDP in individual sectors, but we expect industrial output and retail trade to be among the largest contributors to economic growth in 2Q10. According to Rosstat, industrial production was around 10% higher than a year before. Retail trade expanded almost 5% YoY.

The outlook for 3Q10 is gloomier due to the drought and heat wave in Russia. Not only is agriculture suffering, but also other sectors that closed for unexpected vacations in August (such as auto production). The highest share of agriculture in output, above 8.5% in 2007-2009, is usually in the third quarter. Therefore, the effect of the drought may

have a material effect on Russias economic performance profile in 3Q10 and we currently estimate it at 2.6% YoY.

Anton Nikitin

Danske Bank: Russia GDP growth rate set to ease in H2 10 Danske BankAugust 11, 2010

•Russian GDP for Q2 10 came in below consensus at 5.2%, driven by consumption and exports.

•We expect GDP growth to lose steam during H2 10, as consumption is the only remaining growth driver.

•Considering 2011 growth, there is still the possibility of an upside surprise if investments gain momentum.

Assessment and outlook Russian Q2 GDP growth came in at 5.2%, below consensus (5.7%) but close to our expectation (5.3%). However, it accelerated significantly from 2.9% y/y growth in Q1 10. The growth was apparently driven by the trade balance surplus and consumption.

Despite the acceleration in GDP growth in Q2, we remain bearish on Russian growth prospects for 2010, as we see a serious lack of growth drivers. The trade balance is unlikely to support GDP growth for the rest of the year as import growth gains pace, and there is no sign of a significant recovery in investments. Thus, consumption is the only remaining growth driver, and consumption possibilities are limited to wage growth as the consumer loan base is still declining in real terms. In addition, the heat wave and thick smog in Moscow is likely to affect consumption in July-August, as the city of Moscow alone accounts for nearly 20% of total retail sales in Russia.

However, we expect a rapid recovery in bank lending in Q4 10 driven by loans to households. This should boost consumption in 2011, and we remain optimistic on recovery in investments in H2 11 as well. All in all, we see H2 10 as being the biggest struggle for the Russian economy in recovering from the severe drop in GDP in 2009. We keep our GDP growth forecasts unchanged at 3.6% for 2010 and 4.1% for 2011.

July import growth still strong at 35.6% y-o-y

http://www.businessneweurope.eu/dispatch_text12499

Alfa BankAugust 12, 2010

The Russian Customs Service reported strong import growth of 35.6% y-o-y in July, putting the jump in imports in 7M10 at 29.8% y-o-y, which is similar to the pre-crisis growth rate.

As of April 2010, Import growth has remained at above 30%. We view the substantial increase in import volumes as confirmation that: 1) stimulating final consumption by government social spending is not an efficient way to support local producers, and; 2) local companies did not receive any competitive advantage during the 2008 FOREX crisis. The recent acceleration in price growth is reinforcing the lack of competitiveness. As a result, we expect that import growth will contribute to a decline in the current account surplus to risky levels, increasing negative market sentiment on the ruble exchange rate.

Natalia Orlova

UPDATE 1-Russia may export no more than 4.5 mln T grain-AgMinhttp://www.forexpros.com/news/forex-news/update-1-russia-may-export-no-more-than-4.5-mln-t-grain-agmin-154109

2010-08-12 08:24:45 GMT (Reuters)

* Exports in 2010/11 estimated at 2.0-4.5 million T

* Exports between July 1 and Aug. 15 estimated at 2.8 million T

(Releads, adds details, background)

By Denis Dyomkin

TAGANROG, Russia, Aug 12 (Reuters) - Drought-hit Russia may export no more than 4.5 million tonnes of grain in the 2010/11 crop year, and may have no grain available to export after a ban expires on Dec. 31, Agriculture Ministry data showed on Thursday.

"With a crop of 60-65 million tonnes exports may be 2.0-4.5 million tonnes," the ministry said in a presentation.

It said that Russia may export 2.8 million tonnes of grain, including 1.6 million tonnes in July and the remainder until Aug. 15 when the ban it imposed on grain exports to Dec. 31 becomes effective.

This indicates that under a worst-case scenario the former No.3 wheat exporter may have no grain available for exports from Aug. 15. The 2010/11 crop year started on July 1.

Russia's Prime Minister Vladimir Putin said on Monday the ban on grain exports might be extended beyond Dec. 31, as a fall in this year's crop could be worse than expected due to a severe drought.

Putin said that Russia was expected to have a supply of 90 million tonnes, which included 60 million tonnes of output, 21 million tonnes of carryover stocks and 9.5 million tonnes of the government intervention stocks.

He said this was sufficient to cover Russia's estimated domestic consumption this year of 78 million tonnes.

However, the country's carryover stocks, estimated between 21.7 million and 24 million tonnes as of July 1 already include 9.5 million tonnes of the government's intervention stocks, according to analysts and producers.

That means that Russia's grain supply this year could be as low as 81.7-84 million tonnes which leaves a surplus of only 3.7-6.0 million tonnes -- not enough for carryover stocks and allowing practically no new exports.

The drought-reduced wheat crop in Russia will give the United States the chance to sell some of its mounting wheat surplus, Agriculture Secretary Tom Vilsack said on Wednesday.

(Writing by Aleksandras Budrys; editing by Sue Thomas)

Russia: pessimistic forecast for grain production to total 60 mln toneshttp://www.agrimarket.info/showart.php?id=96577

 08/12/2010 09:43  

Elena Skrynnik, the Minister of Agriculture of the Russian Federation, announced that in the current year, the new pessimistic grain production forecast totals 60 mln tonnes, but the grain volumes will satisfy the domestic requirements.

The mutual forecast with the Federal Service of Russia for Hydrometeorology and Monitoring of the Environment (Roshydromet) is rather pessimistic. The optimistic forecast forms the volumes of 65-67 mln tonnes, the pessimistic – 60 mln tonnes, said the Minister.

But all measures, which the government assumes to date, allow to hope that Russian agrarians will completely satisfy the domestic demands in grains, stated the Minister.

E.Skrynnik announced that all Federal Districts provide the harvesting campaign, except of the Siberian Federal District. As of to date, the country harvested 40 mln tonnes of

grains throughout 50% of the general sowing areas, said the Head of the Ministry of Agriculture.

Business, Energy or Environmental regulations or discussions

Ruble Weakens 0.6% to 30.4620 Versus Dollar at Start of Trading http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aWHO_pOsIDDc

By Denis Maternovsky

Aug. 12 (Bloomberg) -- The ruble weakened for a fourth day, depreciating 0.6 percent to 30.4620 versus the U.S. dollar, and was little changed at 39.3246 against the euro by 10:04 a.m. in Moscow.

Last Updated: August 12, 2010 02:05 EDT

UPDATE 1-Highland Gold to hit 2010 production targethttp://af.reuters.com/article/metalsNews/idAFLDE66I07120100812

Thu Aug 12, 2010 6:30am GMT

* Says on track to produce 200,000-210,000 oz in 2010

* Mnogovershinnoye/Novoshirokinskoye mines up 10 percent

MOSCOW, Aug 12 (Reuters) - Russia's Highland Gold Mining said on Thursday it was on track to meet full-year production targets of 200,000-210,000 ounces after recording gains from its newest mine.

The company, part owned by billionaire Roman Abramovich, said first-half production from its main Mnogovershinnoye mine and the new Novoshirokinskoye mine was up a combined 10 percent on the previous year.

It added that it had substantially increased its exploration budget, starting work on new projects in Russia and Kyrgyzstan.

Highland is also part-owned by Canadian miner Barrick Gold. It swung to a profit last year at a time of record gold prices, and said in April it was looking to acquire a new asset in 2010.

Gold, a safe haven for investors in troubled market conditions, hit record prices of $1,264 an ounce in June, and remains relatively strong at $1,198.

(Reporting by John Bowker; Editing by Michael Shields)

New law requires greater disclosure from electricity grids

http://www.businessneweurope.eu/dispatch_text12499

Renaissance CapitalAugust 12, 2010

Event: Speaking at a government meeting on Monday (9 Aug), Deputy Prime Minister Igor Sechin announced that the government has signed a new law that significantly increases the level of disclosure required from monopoly businesses in the power sector - i.e. the high-voltage transmission company (FSK),electricity distribution companies (MRSK) and the system operator. The law establishes regular timeframes for the public disclosure of data, including the composition of operating costs and parameters for the calculation of allowed financial returns on the regulatory asset base (RAB).

According to Sechin, "This decree is eagerly awaited by the markets and we expect it will be welcomed." Action: Positive for MRSKs and the FSK, in our view.

Rationale: For us, there are two important conclusions to be drawn from the enactment of this law and from Sechin's comments. First, we judge that Sechin is absolutely correct when he says that investors will welcome the improvement in transparency and hence predictability that this law will bring. These are important aspects of any shareholder company, but particularly for regulated monopoly businesses, where the establishment of investor confidence is crucial to reducing companies' cost of capital. Second, the deputy prime minister's comments show no hint of the lack of commitment to rateof- return price regulation for the grids that was apparent in comments from the economy minister in early June. RAB tariffs remain, it seems, firmly on the government's agenda.

Vladimir Sklyar

Telecommunications Ministry postpones distribution of 4G frequencies http://www.businessneweurope.eu/dispatch_text12499

VTB Capital12 August 2010

News: According to Vedomostis unnamed sources in the Government Commission on Radio Frequencies, the meeting at which it was planned to discuss the possibility of granting frequencies for Osnova Telecom and RusEnergoTelecom has been postponed indefinitely. Vedomosti also quotes an unnamed source close to the Commission as saying that there was a request from the Government administration to the

Telecommunications Minister to explain the reasons for distributing 4G frequencies in a closed process.

Our View: The news is positive for the Big Three operators as it reduces the risk of 4G frequencies being distributed unfairly. Importantly, the fact that the Government administration sent a letter might imply that the Big Three operators could find sources of influence during the ongoing discussion about 4G frequencies. We shall continue to monitor how the situation with the frequencies develops until it has been resolved.

Victor Klimovich

Vimpelcom Ltd eyes Italy's Wind, Egypt's Orascom-paperhttp://in.reuters.com/article/telcommunicationsServicesSector/idINLDE67B02G20100812

10:34am IST

MOSCOW, Aug 12 (Reuters) - Telecoms group Vimpelcom Ltd (VIP.N: Quote, Profile, Research) may buy Italy's No.3 mobile operator Wind and 51 percent of Egypt's Orascom Telecom (ORTE.CA: Quote, Profile, Research) from tycoon Naguib Sawiris, paying with cash and shares, Kommersant reported on Thursday.

Sawiris and his partners may get around 20-23 percent of voting shares in Vimpelcom Ltd. which currently has a market value of $22.6 billion, Kommersant quoted an unnamed source familiar with Vimpelcom's plans as saying.

The deal, worth an estimated $6.5 billion without debt, may be closed soon, the business daily wrote citing another unspecified source.

A spokeswoman from Vimpelcom declined comment to Reuters.

According to Kommersant, Vimpelcom's main shareholders, Norway's Telenor (TEL.OL: Quote, Profile, Research) and Russia's Alfa Group would see their stakes decrease to 27 percent and 35 percent of voting shares respectively, from 36.03 percent and 44.65 percent. (Reporting by Dmitry Sergeyev and Maria Kiselyova; Editing by Anshuman Daga)

VimpelCom May Buy Italian Mobile Operator Wind, Kommersant Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aXsP3tMN_aqU

By Ilya Khrennikov

Aug. 12 (Bloomberg) -- VimpelCom Ltd. is in talks with Egyptian billionaire Naguib Sawiris on acquiring Wind Telecomunicazioni SpA, Italy’s third-largest mobile operator, Kommersant reported, citing two people familiar with the matter.

VimpelCom may also buy 51 percent of Orascom Telecom Holding SAE, which owns mobile phone companies in Asia and Africa, from Sawiris, the Moscow-based newspaper reported.

VimpelCom, which operates mainly in Russia and other former Soviet republics, may pay largely with stock for the companies in a deal that may be valued at $6.5 billion, the newspaper said.

Click here for web link

To contact the reporter on this story: Ilya Khrennikov at ikhrennikov@bloomberg.net

Last Updated: August 12, 2010 00:12 EDT

UPDATE 1-Danone agrees $470 mln Wimm-Bill-Dann stake salehttp://in.reuters.com/article/mergersNews/idINLDE67B05L20100812

11:53am IST

* Danone to sell stake for $470 million

* Move follows deal with Wimm-Bill-Dann's rival, Unimilk

(Adds Wimm-Bill-Dann comment)

PARIS, Aug 12 (Reuters) - French food group Danone (DANO.PA: Quote, Profile, Research) will sell back its 18.4 percent stake in Wimm-Bill-Dann (WBD.N: Quote, Profile, Research) to the Russian juice and dairy group for $470 million, it said on Thursday.

Danone had said it would rethink its options for the holding after unveiling a deal with Unimilk (KUNMI.RTS: Quote, Profile, Research) in June aimed at expanding in the fast-growing Russian dairy market. Wimm-Bill-Dann said then it was ready to buy the stake back. [ID:nLDE65H035]

"The sale will become effective and close upon Danone having received the necessary regulatory approvals for the merger of its CIS (Commonwealth of Independent States) operations with Unimilk," Danone said in a statement.

The world's biggest yoghurt maker said in June that the combination of its and Unimilk's fresh dairy business in Russia, Ukraine, Kazakhstan and Belarus would create a business with annual sales of about 1.5 billion euros ($1.95 billion).

Danone said it would hold 57.5 percent and Russia's Unimilk 42.5 percent, with the deal expected to close towards the end of the year. [ID:nLDE65H035]

Wimm-Bill-Dann, which also makes juice and baby food, said the transaction involved both local shares (WBDF.MM: Quote, Profile, Research) and American Depositary Receipts and will be funded from its own resources. ($1=.7681 Euro) (Reporting by James Regan; additional reporting by Maria Kiselyova in Moscow; editing by Dmitry Sergeyev and Michael Shields)

Danone to Sell Back Wimm Bill Dann Stake for $470 Million http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aZENea0XwKiU

By David Whitehouse

Aug. 12 (Bloomberg) -- Groupe Danone SA has agreed to sell its 18.4 percent stake in OAO Wimm-Bill-Dann back to the Russian company for $470 million.

Danone published its statement on Hugin.

Last Updated: August 12, 2010 00:34 EDT

August 12, 2010 01:00 AM   Eastern Daylight Time

Wimm-Bill-Dann Foods Announces Agreement to Acquire Danone’s Shareholding http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100811005927&newsLang=en

MOSCOW--(BUSINESS WIRE)--Wimm-Bill-Dann Foods OJSC [NYSE: WBD] today announced that the Company has reached an agreement to purchase Danone’s 18.4% shareholding in Wimm-Bill-Dann Foods OJSC for the total consideration of US$470 million. The stake includes both local shares and ADRs. The transaction will be funded from existing resources and will not require additional financing.

The sale of the shares by Danone is conditional upon the appropriate governmental approvals of the merger of Danone’s Fresh Dairy Product businesses in the CIS region and Unimilk.

Commenting on the announcement, Tony Maher, CEO of Wimm-Bill-Dann Foods, said: “We are very pleased to announce the acquisition of Danone’s stake in our company. This agreement represents the amicable conclusion of Danone’s investment in our company, an investment Danone has held since our IPO in February 2002. This announcement and the outright purchase of our own shares reflect our confidence in the fundamentals of the business and our strategy for the future.”

Russia n ports’ throughput up 9% in Jan-Jul, to 305m tons http://www.blackseagrain.net/about-ukragroconsult/news-temp/russian-ports2019-throughput-up-9-in-jan-jul-to-305m-tons

The seven-month volume of trade flows passing via the ports of Russia rose by 9%, compared with the same period last year, to 305.18 million tons, the ASOP, Association of Sea Commercial Ports’ statement said.

During the period, transshipment of dry cargo increased by 11.6%, to 122.18 million tons, including: coal – to 38.86 million tons (+5.8%), containerized cargo – by 34.5% (18.32m tons), ferrous metals – to 17.02 million tons  (+6.5%), grains – to 12.27 million tons (+8.8%), mineral fertilizers – to 7.26 million tons (+33, 5%), timber cargo, 4.14 million tons (+15.5%).

The volume of handled liquid cargo amounted to 183 million tons (+7.4%), including: crude oil - 123.41 million tons (+5,5%), petroleum products - 58.66 million tons (+11.9%).

In Jan-Jul, Russian ports handled 237.6 million tons of outbound goods, a 9.4-percent gain over the same period last year. The volume of inbound cargo rose by 33.6%, to 20.7 million tons, transit volumes fell 1.0% to 25.83 million tons, while short sea trade showed the last year’s level, 21.04 million tons.

The North-West regional stevedores transshipped 130.91 million tons of cargo, a 3,3-percent gain vs last year’s figure. The volume includes 46,78m tons of handled dry cargo (+9.7%), liquid cargo - 84,12m tons (the 2009’s level). The Big Port of St. Petersburg demonstrated a 14.3-percent increase to 31.46 million tons, the port of Kaliningrad’s throughput rose by 21.2%, to 8.67 million tons, the port of Ust-Luga - by 21.7%, to 6, 55 million tons, the port of Archangelsk - by 9.7%, to 6.71 million tons.

In seven recent months, the South Basin’s seaports showed a 3-percent gain, to 106.54 million tons in the seven recent months. The volume of dry cargo there increased by 9.4% to 38.77 million tons, bulk cargo volumes lost 0.3% to 67.78 million tons. Stevedoring companies operating at Tuapse Port transshipped 11.3 million tons of cargo (+5.8%), at Port Kavkaz - 5.79 million tons (+28.3%).  Novorossiysk port’s throughput fell by 1.1% y-o-y, to 71.25 million tons.

Ports of the Far East posted good results in Jan-Jul, increasing freight turnover by 36.1%, to 67.73 million tons. The seven-month volume includes 36.63 million tons of dry cargo

(+16.5%) and 31.1 million tons of liquid cargo, up 1, 7 times as much from January-July in 2009.

The regional stevedores transshipped 14.51 million tons (+9.1%) at Vanino Port, at Vladivostok Port - by 19.1%, (9.67m tons), at Nakhodka - by 1.4%, to 9.4 million tons. Vostochny Port’s operators boosted freight turnover as much as 1.9 times, to 20.35 million tons, thanks to the launch of Kozmino crude transshipment complex, Sakhalin Port’s stevedores – by 1.8 times, to 11.71 million tons due to commissioning of a handling complex for oil and gas in the Prigorodny.

In 2009, freight traffic through Russian seaports, according to ASOP, rose by 9.2%, to 496.4 million tons.

Association of Commercial Sea Ports (ASOP) was founded in 1987. Currently ASOP unites more than 50 Russian organizations and enterprises of maritime transport. The Association integrates merchant seaports, forwarding and agency companies, research institutes and maritime transport schools. The outcome data of the Russian port complex is based on statistical reports, covering all stevedoring companies operating in the country.

Activity in the Oil and Gas sector (including regulatory)

Lukoil denies gasoline sales to Iranhttp://english.ruvr.ru/2010/08/12/15422672.html

Aug 12, 2010 09:21 Moscow TimeRussia’s oil giant Lukoil is supplying no gasoline to Iran, a statement released by the company’s press-service says. There appeared reports in the media last week that Lukoil had resumed gasoline sales into Iran, with more than 250,000 barrels of gasoline discharged at Bandar Abbas port and more shipments expected at the end of this week. A Lukoil spokesman said that the company and its subsidiaries were not engaged in the supply of refined products to Iranand added that in spring Lukoil stopped supplying Iran with gasoline amid international sanctions against Tehran. 

Exxon’s Sakhalin-1 to Start Output From Odoptu in Septemberhttp://www.businessweek.com/news/2010-08-11/exxon-s-sakhalin-1-to-start-output-from-odoptu-in-september.html

August 11, 2010, 5:58 PM EDT

By Stephen Bierman

Aug. 11 (Bloomberg) -- Exxon Mobil Corp. will at the end of next month begin oil production from Sakhalin-1’s Odoptu field off Russia’s Pacific coast, spokeswoman Dilyara Sydykova said.

The field will add 30,000 barrels a day of oil to Russia’s balance during the month, according to a report released today by the International Energy Agency.

The Exxon-led project is also doing maintenance this month at the producing Chayvo field, Sydykova said today.

The Sakhalin-1 partners include OAO Rosneft, Russia’s largest oil producer, and ONGC Videsh Ltd., which each own 20 percent. Japan’s Sakhalin Oil & Gas Development Co. owns 30 percent and Exxon, the operator, holds 30 percent.

--Editors: Jonas Bergman, Raj Rajendran

To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.

Rosneft Says Yukos Affair Not Over http://www.themoscowtimes.com/news/article/rosneft-says-yukos-affair-not-over/412187.html

12 August 2010Bloomberg

State-owned Rosneft said it aimed to get back the $430 million paid out to Yukos Capital earlier this week following a protracted lawsuit between the firms.

"Rosneft has complied with the Dutch court's decision but is expecting to regain control over the disbursed funds," the company said Wednesday in a press release.

Rosneft was obliged to pay Yukos Capital, a former subsidiary of defunct oil firm Yukos, $430 million worth of arbitration awards after the court denied it the right to appeal the case in June.

The awards are related to loans Yukos Capital made to Yuganskneftegaz in 2004, which were subsequently defaulted upon. YNG had been Yukos Oil Company's principal production subsidiary, but it was acquired by state-run Rosneft in 2004.

Rosneft, however, said the $430 million is actually owed to companies registered in the British Virgin Islands, which Rosneft claims ownership over and are involved in lawsuits against Yukos Capital.

"Rosneft anticipates that it will gain control over the companies registered in the British Virgin Islands and their assets," the press statement said.

It also noted that Yukos Capital managers had pledged to not hide or disburse the funds until a final decision is made regarding ownership of the companies.

Yukos Capital said in August that the courts had refused to recognize Rosneft's ownership over the British Islands-registered companies.

Approval Given to TNK-BP’s First Kyoto Protocol Projecthttp://www.yourindustrynews.com/approval+given+to+tnk-bp%E2%80%99s+first+kyoto+protocol+project_52819.html

Wednesday, Aug 11, 2010

In July 2010, the Samotlor gas gathering project was endorsed by Sberbank’s Expert Council, which gave it the highest score among the 35 projects competing for the right to sell Emission Reduction Units under the Kyoto protocol. In April 2010, a mandatory independent expert review (verification) of the reduction in greenhouse gas emissions was completed by Bureau Veritas Certification.

“TNK-BP views the Kyoto Protocol mechanism as an important step towards enhancing efficient utilization of associated gas. Last year we signed an ERU sale and purchase agreement with BNP Paribas within the framework of the Samotlor associated gas utilization project. In addition, TNK-BP is developing two projects in the Orenburg Region designed to cut greenhouse gas emissions under the Kyoto Protocol. Successful collaboration in this area will be a powerful incentive for attracting investment into the Russian economy”, said TNK-BP’s Deputy Executive Director, Gas Business Development, Alastair Ferguson.

Information for Editors

The goal of the Samotlor gas gathering project is to separate and compress low-pressure associated gas in five newly-built vacuum compressor stations and supply it for further processing. This will reduce the amount of associated gas flared at the Samotlor field and lower greenhouse gas emissions into the atmosphere.

TNK-BP is the third largest oil company in Russia, owned on a parity basis by BP and the AAR consortium (Alfa Group / Access Industries / Renova). TNK-BP also owns around 50% of Slavneft, a Russian oil and gas company. TNK-BP accounts for roughly

16% of Russian oil production (including the share in Slavneft). The company’s total proved reserves under the SEC—LOF (life of field) criteria were 8.586 billion barrels of oil equivalent as of 31 December 2009.

Source: TNK-BP

Gazprom

Gazprom Neft suspends fuel supplies to Kyrgyzstan

http://www.rbcnews.com/free/20100812114522.shtml

      RBC, 12.08.2010, Moscow 11:45:22.Gazprom Neft has suspended oil and oil products supplies to Kyrgyzstan and expects Rosneft to provide support in developing business and splitting risks in the politically unstable country, the RBC Daily newspaper reported today. According to the publication, Gazprom Neft has been operating in Kyrgyzstan since 2006, when it purchased over 100 gasoline stations for $99m. At the time, the deal spurred numerous protests within the republic's business society, which believed that the Russian oil company got the filling stations at a much lower price than their actual market value.

      Meanwhile, after the recent events in Kyrgyzstan, Gazprom Neft suspended fuel supplies to the republic, primarily due to Kyrgyz partners reselling Russian fuel to third countries.

      According to a source close to Gazprom Neft, the oil arm of the Russian energy giant is working in Central Asia for political reasons, often despite the business's unprofitability. Considering this, Gazprom Neft is currently looking to Rosneft for partnership.

http://www.themoscowtimes.com/business/article/for-the-record/412217.html

Gazprom Neft said Wednesday that it restarted a processing unit at its largest refinery in August, following a fire at the facility in Omsk earlier this year. (Bloomberg)

Alexei Miller to be questioned

http://www.kommersant.ru/doc.aspx?DocsID=1485868Газета «Коммерсантъ»       №   146 (4446)   от   12.08.2010  

GOOGLE TRANSLATION

/ / Head of Gazprom's wish to bring in Ukraine as a witnessUkrainian lawyer Yuri Dry required to interrogate the head of Gazprom Alexei Miller and his deputy Valery Golubev as witnesses in a criminal case concerning the illegal clearance of natural gas. In its application to the security service of Ukraine lawyer accuses the leaders of Gazprom, not only in the design of the transfer of debt Rosukrenergo, but the pressure on Naftogaz of Ukraine and State Customs Committee to implement controversial 11 billion cubic meters. m. of gas.

On Tuesday, the lawyer of former deputy head of the State Customs Committee of Ukraine Anatoly Makarenko, who was arrested in a criminal case under part 2 of Art. 367 of the Criminal Code (negligence, has involved serious consequences), Yuri Dry appealed to the Security Service of Ukraine (SBU) with the petition. It Ukrainian lawyer asked in for questioning as witnesses, top managers of Gazprom Alexei Miller and Valery Golubev on the circumstances and conditions of contract formation associated with gas Rosukrenergo…

№ 7 (July - August 2010)

Gazprom zarubezhneftegaz Responds to the “Call of the Sea”http://www.oilandgaseurasia.com/articles/p/123/article/1250/

Gazprom zarubezhneftegaz is one of the largest Gazprom affiliates exploring and developing fields outside of Russia. In the 12 years since it was founded, the company has accumulated vast experience in both onshore and, to a great extent, offshore projects.

By Ivan Nikolayev

Today, Gazprom zarubezhneftegaz actively explores hydrocarbon fields near Vietnamese and Indian shores. Also, the company recently has implemented the first stage of an exploration project near the Venezuelan coast.

Vietnam

   In late May 2008, during his visit to Hanoi Gazprom CEO Alexei Miller reached an agreement to develop four new Vietnamese offshore hydrocarbon areas. During his meeting with Vietnamese President Nguen Min Chiet, Miller also discussed the opportunities the company had to participate in developing a general gasification network for Vietnam as well as projects in third countries. During the visit, an agreement for further cooperation between Gazprom and Petrovietnam was signed. The document provides for geological surveys and the further development of four new offshore blocks in Vietnam. Vietgazprom JV will be the operator responsible for developing these blocks.

   Pursuant to the contract dated Sept. 11, 2000 the Joint Venture Vietgazprom founded by Gazprom and Petrovietnam (Gazprom zarubezhneftegaz will represent Gazprom’s interests) is conducting geological surveys in the Vietnamese offshore Block 112. August 2007 saw tests performed on a wildcat well in Bao Vang (Golden Panther) Area in Bak Bo Bay, which resulted in a commercial flow of natural gas. This resulted in the discovery of a new gas and condensate field in Bao Vang with proven production from two reservoirs.

   Currently work is being performed in several aspects. First, Vietgazprom is conducting exploration drilling in the newly discovered field and detailing its parameters. Second, in 2008–2009 2D and 3D data acquisition surveys were completed in Block 112 and its nearshore area.

   In February 2009, Gazprom received licenses to implement oil and gas contracts for Blocks 129, 130, 131 and 132 of the Vietnamese continental shelf in South Konshon Basin. In summer 2009, Vietgazprom began 2D seismic survey of these blocks. A total of 20,000 kilometers is scheduled for survey.

   Finally, in October 2008 PetroVietnam and Gazprom signed a memorandum for founding a new Gazpromviet joint venture to enable the two companies to participate in oil and gas projects in Russia and other countries. Again Gazprom zarubezhneftegaz will be Gazprom’s representative in this JV.

India

   Russia and India have long-term relations in the energy industry dating from the time Soviet and Russian experts helped India to discover gas and oil fields with resources amounting to dozens of billion tons.

   While India’s Mumbai offshore region has been quite thoroughly studied, the Bay of Bengal, where Gazprom is being given the chance to work, has not been investigated. Geologically it is a very complicated area, but it is highly promising in terms of hydrocarbon resources.

   In late 2000, Gazprom signed a Production Share Agreement (PSA) with the government of India and the State Gas Authority of India Ltd. (GAIL) on Block 26 in Bay of Bengal.

   Block 26 is located within India’s continental shelf and is a part of the Bengal Oil and Gas Province. This block covers 10,425 square kilometers, and has marine depths of 40-150 meters while prospective oil and gas pay zones are located at depths up to 6,500 meters.

   Gazprom zarubezhneftegaz will function as the Russian party's agent in implementing the agreement via a specially-founded Gazprom Project Office.Meanwhile, two exploration wells have been drilled in the block within the framework of

Stages 1 and 2 of the Minimal Geological Survey Program to be implemented at Block 26. In 2009, within the framework of Stage 3 of the program 2D data were acquired along 1,600 linear kilometers. Currently a third wildcat, 3,200 meters deep, is being completed.

Venezuela

   One of Gazprom zarubezhneftegaz’ more outstanding projects is its geological exploration in Venezuela. In October 2005, Gazprom added one more line to its list of offshore projects by winning the bid to explore the Rafael Urdaneta offshore area within investment blocks Urumaco-1 and Urumaco-2.

   Gazprom zarubezhneftegaz was given charge of key responsibilities related to licensing procedures and founding the special operating companies (UrdanetaGazprom 1 SA and UrdanetaGazprom 2 SA). It took just a year and a half (until spring 2007) to fulfil the required procedures to register the companies in Venezuela, draft the feasibility study and Minimum Geological Exploration Program as well as fulfill Stage 1 of this program – data acquisition in the contractual area with 500 linear kilometers. The data obtained were submitted to Gazprom for interpretation and further processing.

Worldwide Presence

   The geography of Gazprom zarubezhneftegaz’ activities includes plenty of projects in addition to the above. Three more large projects are being implemented in Central Asian countries. In the western part of Uzbekistan, gas is being produced at Shakhpakhty field. Here the company is conducting full scale geological surveys in seven investment blocks on Ustyurt Plato. Two more large projects in Central Asia in Kyrgyzstan and Tajikistan are entering their active implementation stages.

   In 2006, Gazprom and Kyrgyzstan signed Memorandum of Intention to Found a Russian/Kyrgyz Joint Venture in Oil Industry, and in May 2007 the government of Kyrgyzstan signed an Agreement for General Concepts of Subsoil Geological Survey of the prospective oil and gas areas of Kyrgyzstan.

   In Tajikistan, Gazprom zarubezhneftegaz fulfilled 3D data acquisition in the Sarikamysh and Sargazon areas. Before the current year is out, drilling on a deep wildcat well (5,000-7,000 meters) will begin at Sarikamysh.

   It should be noted that Central Asia is one of the most interesting and perspective regions in the world in terms of potential hydrocarbon reserves. Its central position with respect to various sales markets attracts investors and it is no coincidence that the world’s giants are eager to set stakes here. Gazprom is no exception. Gazprom zarubezhneftegaz is also negotiating to extend its activities to projects in Turkmenistan, Pakistan and other countries in the region.

   Still, executives at Gazprom zarubezhneftegaz are also making long-term plans. Within the framework of meetings of intergovernmental commissions, business councils,

conferences, exhibitions and other All-Russia and international forums, contacts are being established with potential partners in hydrocarbon field development and equipment supply and service contracts in the oil and gas industry.

   Just last year, the company engaged in a series of negotiations with its eye on  potential cooperation with the governments of Uruguay, Sri Lanka and Bangladesh.