Russia 101020

Basic Political Developments Medvedev to take part in Munich security talks - "It is expected that the focus of

attention will be Medvedev's initiative concerning the signing of a European security agreement, which is intended to fix in a legally binding form a principle of indivisibility of security in the area from Vancouver to Vladivostok," the source said. According to the source, Medvedev is also expected to discuss nuclear non-proliferation, the strengthening of control over armaments, and the impact of the global economic crisis on international security with participants in Wednesday's talks.

o Medvedev to meet Munich Conference participants - The meeting will involve some current and former politicians of the United States, Germany and a number of European countries, such as Zbigniew Brzezinski, Adam Rotfeld and Carl Bildt.

o Medvedev to meet with participants in Munich conference - Kremlin analysts believe that "The forthcoming visiting session of the Munich Conference in Moscow will contribute to deepening debates on a reform of the European security architecture, to keeping them within a constructive vein, and on this basis to giving greater scope to cooperation among countries in the Euro-Atlantic area in efforts to counteract the entire spectrum of new challenges and threats to security".

o Foreign Minister Sergey Lavrov Converses with Swedish Foreign Minister Carl Bildt - Themes relating to the Russia-Sweden interaction within international regional structures in Northern Europe were thoroughly examined – including preparations for a ministerial session of the Arctic Council in Nuuk, Greenland, in May 2011, during which Sweden will take over the chairmanship of this organization.

o Munich security conference holds Moscow session Russia's WTO accession may be completed within 12 months- Obama adviser: He

also told reporters in Moscow after talks with First Deputy Prime Minister Igor Shuvalov that Russia and the United States had acknowledged the necessity of solutions that would help Moscow join the WTO despite its sour relations with Washington's ally Georgia.

o U.S. says "end is in sight" on Russia's WTO bid - President Barack Obama's economic advisor said on Wednesday that Washingtion is very encouraged by progress in talks on Russia's World Trade Organization bid and hopes Moscow will complete WTO accession within a year.

Senators seek data on secret U.S.-Russia missile talks - Six Republican senators have asked Secretary of State Hillary Rodham Clinton to provide documents on secret talks between U.S. and Russian officials on missile defenses, amid conflicting reports that a deal with Moscow is close to completion.

Russian hi-tech experts to visit U.S. - During the meeting, Rosnano chief Anatoly Chubais will deliver a report on cooperation between Rosnano, venture funds based in the Silicon Valley and U.S. high-tech companies.

Russia seeks control of Canadian nuclear company working in U.S. - The Russian investment would bring about 100 new jobs, said Fletcher Newton, the Denver-based executive vice-president of strategic affairs for Uranium One.

Indonesia set to continue buying arms from Russia - Purnomo Yusgiantoro spoke after an official transfer of three Russian-made Mi-35P combat helicopters to Indonesia.

Russia expects victory in Temelín tender, Russian deputy PM says - Russia expects the Czech-Russian consortium of Skoda JS-Atomstroyexport to win the tender for the completion of Czech nuclear power plant Temelin, Russian Deputy Prime Minister Alexander Zhukov told CTK after a meeting of the Czech-Russian inter-government commission in Moscow yesterday.

Ukraine, Russia, EU likely to meet on gas transit this week - A three-party meeting between Ukraine, Russia and the EU on the modernization of Ukraine's gas transit system may be held in Brussels on November 22, 2010, the EU delegation to Ukraine told RBC today.

Azarov wants new gas agreement with Russia - The prime minister is expected to broach the topic directly in talks with his Russian counterpart Vladimir Putin, who is scheduled to arrive in Kyiv on Oct. 27 for talks. Putin has opposed renegotiating Russia's 2009 gas agreement with Ukraine.

Georgian FM accuses Russia of refusing to fulfill its obligations - The Georgian Foreign Ministry regarded the Russian Foreign Ministry's statement on the implementation of the Medvedev-Sarkozy agreement by Moscow as Russia's another cynical attempt not to fulfill its obligations under the international law.

o Georgia Slams Moscow’s ‘Cynical’ Stance on Six-Point Agreement CIS defense ministers to meet in Ukraine - Delegations from Azerbaijan,

Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine are expected to take part in the meeting.

Russian defense minister to attend CIS meeting in Crimea - "In line with the meeting's agenda, over 20 issues are to be considered pertaining to various areas of interaction between the CIS defense ministries," Serdyukov's spokeswoman Irina Kovalchuk told Interfax-AVN.

CIS, Baltics railway officials to discuss coordination - The coordination of passenger and freight transportation by rail along international routes will be discussed here on Wednesday at the 53rd session of the Railway Transport Council (RTC) by the executives of railway companies of the Commonwealth of Independent States (CIS) and the Baltics.

Armenian prime minister says Armenian-Russian intergovernmental commission is effective

o Russian-Armenian interregional ties to be modernized Pacific Fleet ready for “Yury Dolgoruky” - Russia’s Pacific Fleet is ready to take

the country’s newest nuclear submarine “Yury Dolgoruky” into service as soon as all tests with the Bulava missile are completed, a Russian military analyst said.

Russian Soyuz rocket launches six US communications satellites

Return home of impounded ship crew delayed by a week Russian Mission Control to change ISS orbit Russian Chief of Staff visits Serbia - Russian Chief of Staff Gen. Nikolai

Makarov arrived on Oct. 19 on a two-day visit to Serbia during which he discussed improving military and technical cooperation with Serbia's top military officials.

Repatriation of Russian sailors from Canada delayed - The repatriation of sailors from a Russian expedition vessel detained in the Canadian port of St. John's over debts has been postponed for at least a week, an International Transport Workers Federation (ITF) official has said.

Putin to attend int'l Pure Water-2010 forum Wednesday Police operations officer killed in Ingushetia - In the Republic of Ingushetia,

unidentified attackers, firing at point-blank range, gunned down Rustam Kartoyev, a police operations officer of the Malgobek city police department, at about 20:30, Moscow time, on Tuesday.

Police officer gunned down in southern Russia - Regional police in the province of Ingushetia west of Chechnya said Wednesday that the officer was gunned down the previous night in the town of Malgobek.

Hundreds evacuated over false bomb threat in northern Russia - More than 600 people have been evacuated from an apartment block in Russia's northern city of Archangelsk after a false report of a bomb, a spokesman for the local emergencies service has said.

Probable organizer of Grozny attack named by Chechen government - The Chechen Interior Ministry blames the Grozny attack on Tuesday morning on Hussein Gakayev, a new terrorist leader of the region.

New Russian Quran Interpretation Unveilled - The newest version of Quran interpretation in the Russian language was unveilled in a ceremony in the capital city of Moscow.

Moscow City Court bans ultra-left opposition movement as 'extremist' - The Moscow City Court has banned the Russian ultra-left Army of People's Will (AVN) opposition movement for being an "extremist organization."

Russian Press at a Glance, Wednesday, October 20, 2010o Tuesday’s terrorist attack on the Chechen parliament in Grozny, which

killed at least six people, including suicide bombers, and injured 17 others, is a sign that post-war stability in the republic remains fragile.

o During a meeting with French and German leaders in France’s Deauville, Russian President Dmitry Medvedev said he would attend the NATO summit in Lisbon on November 20. The Russian leader will participate in a Russia-NATO summit for the first time since the August 2008 war between Russia and Georgia over South Ossetia.

o Russia has begun withdrawing its troops from the village of Perev at the Georgian border with South Ossetia, where Russian soldiers have been stationed since the August 2008 Russian-Georgian war. Tbilisi has described the move as a Georgian diplomatic victory, while some experts link Moscow’s decision with the forthcoming Russia-NATO summit.

o Experts consider the government’s budget forecast for 2011-2013 too optimistic, saying that the level of consumer inflation may be 1.5 times higher and GDP growth two times lower than expected in 2011.(Nezavisimaya Gazeta)

o Russian Finance Minister Alexei Kudrin has pledged that Russia would fully meet its domestic borrowing plans this year, contradicting expectations that high oil prices will reduce the need for debt issuance.(The Moscow Times)

o Russia may increase oil re-export duties for Belarus to 85-90 percent from an average of 55-58 percent in order to compensate the budget losses when oil export duties will be abolished following the introduction of a common economic space between Russia, Belarus and Kazakhstan. (Vremya Novostei, Vedomosti)

o Vladimir Potanin’s Interros Holding has terminated a cooperation agreement with aluminum giant RusAL, calling for an end to “destructive actions” toward Norilsk Nickel, in which both sides hold a 25 percent stake. The announcement came two days before the Thursday emergency shareholder meeting of the mining company, which will determine the makeup of the board of directors - the source of the conflict between Interros and Oleg Deripaska's RusAl.(Moscow Times, Vedomosti)

o State-run monopoly Russian Railways (RZhD) is planning to sell its subsidiaries for more than 150 billion rubles ($4.88 billion) in 2010-2012, an RZhD vice-president said on Tuesday.(Vremya Novostei)

o A Moscow court has rejected a request by investment fund Hermitage Capital to regain control over three subsidiaries that the fund's lawyer Sergei Magnitsky suspected had been used by the police to steal government money.   At least 200,000 migrant workers from Kyrgyzstan may arrive in Russia in the near future as the republic’s labor market remains stagnated following violent inter-ethnic clashes that hit the country this summer.(Nezavisimaya Gazeta)

o The ruling United Russia party emerged as the apparent winner in a race with its pro-Kremlin rival to create a pro-modernization movement called Go Russia after Prime Minister Vladimir Putin indirectly gave the green light to its project Tuesday. (The Moscow Times)

o Moscow authorities have proposed to charge drivers a fee for entering the city center. They believe this would encourage people to use public transportation and decrease traffic jams. (Vedomosti)

o About 6,000 young activists from the Russian pro-Kremlin environmental protection movement Mestniye (Locals) staged a meeting on Bolotnaya Square in downtown Moscow, demanding the modernization of industrial enterprises in order to protect the environment. Some analysts view the

move as an attempt by authorities to cover the growing activity of independent ecological movements. (Kommersant)

o English Premier League leaders Chelsea defeated Spartak Moscow 2:0 in the Champions League match at Moscow’s Luzhniki Stadium on Tuesday. Yuri Zhirkov, who signed for Chelsea from Spartak’s archrivals CSKA Moscow in 2009, scored the crucial first goal.(Vremya Novostei, Kommersant, Rossiiskaya Gazeta)

Reform must, and will, come to Russia: Yukos' imprisoned leader sees a new political generation coming, one unable to accept the current power elite's corruption. - By Mikhail B. Khodorkovsky

National Economic Trends Nezavisimaya Gazeta: Economy, politics and demography – Russia’s three

challenges $100 Oil Needed for Budget Duma to examine next year’s budget United Russia is only faction that unequivocally supports budget Putin puts Russia's 2011 inflation at 6.3 pct

Business, Energy or Environmental regulations or discussions Severstal, Rosneft, Polyus, Lukoil: Russian Stocks Preview 'BIG THREE' TELECOMS TO VOLUNTARILY CUT PRICES FOR INT'L &

RUSSIAN ROAMING SIGNIFICANTLY, ARTEMYEV TELLS PUTIN Russian Mobile Operators Agree To Slash Roaming Tariffs Russian Bridge Builder Mostotrest Seeks $496 Million in IPO JPMorgan, Troika Dialog, TKB Capital, Deutsche to lead Mostotrest's Moscow

debut VW and Gaz in contract manufacturing talks Jennings, Partners Owe Renaissance $695 Million, Vedomosti Says Motorola’s exit leaves Putin red-faced The Amsterdam Court of Appeal said Tuesday that the sale of Yukos Finance BV,

a Dutch corporation, by the Russian administrator violated international law because the shares do not fall within Yukos Oil’s Russian bankruptcy. (Bloomberg)

Oil output may decline by almost half over the next decade if the government does not offer tax breaks to spur development and crude prices tumble, Vedomosti said Tuesday, citing an Energy Ministry report. (Bloomberg)

Prime Minister Vladimir Putin said Tuesday that the 2011 inflation rate might be 6.3 percent and country can “practically” do without poultry imports starting from next year, Interfax reported. (Bloomberg)

Russian Railways will increase investment this year to 315 billion rubles ($10.3 billion) from 270.5 billion rubles on rising income, CEO Vladimir Yakunin said Tuesday. (Bloomberg)

Goldman Sachs has hired Clemens Grafe as its chief Russia economist, two people said Tuesday.  (Bloomberg)

Activity in the Oil and Gas sector (including regulatory) Finance ministry sheds light on proposed oil industry tax reform - An added

income tax may be introduced starting in 2012, provided that crude export duties and the mining tax remain in place, Deputy Finance Minister Sergei Shatalov told journalists yesterday. The duties and the mining tax could still be revised downwards, however, so that the tax burden on oil companies would not be increased.

Moscow to lower oil export taxes - Russia is preparing to introduce a new profit-based tax on new oilfields from 2012, Sergei Shatalov, the deputy finance minister said, in a move that could quell fears of production decline due to the current tax regime.

UPDATE 1-Russia may add profit-based oil tax in 2012-minister: New profit-based oil tax for new fields seen from 2012; Export duties and mineral extraction tax at reduced levels; Ministry wants to raise, equalize tax on oil products; Tax could be 85-90 pct of rate for crude export

SOCAR has upgraded infrastructure to expand gas exports to Russia and Iran TNK-BP Venture Will Bid for Three Iraqi Gas Fields, Times Says Petroneft Sale Raises $43M Med Crude-Urals weakens more as new cargoes tendered

Gazprom Gazprom Redirects LNG - Gazprom said Tuesday that it was redirecting to Asia

liquefied natural gas contracted for the United States from its Sakhalin-2 project on the Pacific coast, after rising U.S. production from shale rocks and an economic slowdown discouraged fuel imports.

Gazprom increases gas supply to Turkey during repair of Iranian pipeline Kirinskoye development heads subsea - Gazprom has opted for a subsea

production system to develop the Kirinskoye field under the Sakhalin III project off north-east Russia.

GAZPROM NEFT RAS NET PROFITS DIP 6% TO 40.024 BLN RUBLES IN Q1-Q3

Gazprom Neft Pushes Into Lubricants - Gazprom Neft said Tuesday that it began construction on facilities for the mixing, packaging, storage and shipment of automobile and industrial lubricants to capture a greater share of the eastern Russian and Kazakh markets.

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Full Text Articles

Basic Political Developments

Medvedev to take part in Munich security talkshttp://en.rian.ru/world/20101020/161017294.html01:49 20/10/2010

Russian President Dmitry Medvedev will discuss a "broad range of issues of the Euro-Atlantic agenda" with participants in the 46th Munich Security Conference on Wednesday, a Kremlin source said.

"It is expected that the focus of attention will be Medvedev's initiative concerning the signing of a European security agreement, which is intended to fix in a legally binding form a principle of indivisibility of security in the area from Vancouver to Vladivostok," the source said.

Medvedev proposed drawing up a new European security pact in June 2008, and Russia published a draft of the treaty in December 2009, sending copies to heads of state and international organizations, including NATO. However, the proposal has been met coolly by Western powers.

NATO Secretary General Anders Fogh Rasmussen has repeatedly said that NATO wants Russia to be part of a missile defense plan for Europe, but Russia says a serious assessment of missile risks should be carried out before starting on the project.

According to the source, Medvedev is also expected to discuss nuclear non-proliferation, the strengthening of control over armaments, and the impact of the global economic crisis on international security with participants in Wednesday's talks.

The Russian president will also address the issue of European security during the Russia-NATO summit, which will take place on November 20 within the NATO Lisbon summit.

MOSCOW, October 20 (RIA Novosti)

Medvedev to meet Munich Conference participantshttp://english.ruvr.ru/2010/10/19/27060928.html

Oct 19, 2010 17:46 Moscow Time

Russian President Dmitry Medvedev will meet with participants of the Munich Security Conference as part of their visiting session to Moscow.

The meeting will involve some current and former politicians of the United States, Germany and a number of European countries, such as Zbigniew Brzezinski, Adam Rotfeld and Carl Bildt.

Set up in 1962, the Munich Conference is an international forum drawing politicians, scientists and public figures from over 40 countries.

This time, they are expected to focus on Dmitry Medvedev’s initiative on a new European security treaty outlining the principles of indivisible security from Vancouver to Vladivostok.

The Moscow meeting will also highlight a range of pressing issues, such as strengthening control over armaments, the non-proliferation strategy, and the aftermath of the global financial crisis in terms of international stability.

Medvedev to meet with participants in Munich conference

http://www.itar-tass.com/eng/level2.html?NewsID=15605503&PageNum=0

20.10.2010, 00.58

MOSCOW, October 20 (Itar-Tass) - President Dmitry Medvedev will meet with a group of participants in a visiting session of the Munich Conference on Security Policy on Wednesday.

It has become known from informed sources in the Kremlin that current and former statesmen and political figures of the United States, Germany, and a number of European countries, leading experts on international relations, members of the business community and media people will be present at the meeting. Zbigniew Brzezinski, Adam Rothfeld, and Carl Bildt are also expected to take part in the meeting.

The Munich Conference was founded in 1962 by German publisher Ewald von Kleist as a get-together of Defence Ministry officials of NATO member-countries.

Nowadays the Conference is an international forum that draws politicians, diplomats, military men, businessmen, science people and public figures from more than 40 countries.

The present Munich Conference visiting session from October 19 to 20 is held in the Russian capital for the first time on the initiative of its chairman Wolfgang Ischinger. This is a second such session. The first one was held in Washington at the end of 2009.

A Kremlin source said, "During the forthcoming meeting, those present are to exchange views on a wide range of items that are on the Euro-Atlantic agenda". They are expected to focus on Dmitry Medvedev's initiative aimed at concluding a European Security Treaty, which is intended to consolidate in a legally binding form the principle of the indivisibility of security throughout the area stretching from Vancouver to Vladivostok.

Participants in the meeting are also to discuss other matters of current importance concerning European security architecture -- with due regard for the results of the Russo-French-German summit held in Deauville from October 18 to19, as well as the

forthcoming summits of NATO in Lisbon in November and of the Organization for Security and Cooperation in Europe in Astana early in December.

Those present at the upcoming meeting are also expected to discuss such important multilateral-cooperation matters as enhancement of arms control, disarmament and non-proliferation problems, and the consequences of the world financial and economic downturn for international stability and security.

Kremlin analysts believe that "The forthcoming visiting session of the Munich Conference in Moscow will contribute to deepening debates on a reform of the European security architecture, to keeping them within a constructive vein, and on this basis to giving greater scope to cooperation among countries in the Euro-Atlantic area in efforts to counteract the entire spectrum of new challenges and threats to security".

PRESS RELEASE

Foreign Minister Sergey Lavrov Converses with Swedish Foreign Minister Carl Bildt

http://www.ln.mid.ru/brp_4.nsf/e78a48070f128a7b43256999005bcbb3/83b8938bedc9311fc32577c200293a10?

OpenDocument

1447-19-10-2010

Minister of Foreign Affairs of the Russian Federation Sergey Lavrov held on 19th October in Moscow a conversation with Sweden’s Minister for Foreign Affairs Carl Bildt, who is in Russia to take part in a Munich Security Conference Core Group Meeting.

The heads of the foreign affairs agencies discussed in detail the current issues in Russian-Swedish bilateral cooperation and a schedule of possible political contacts.

Themes relating to the Russia-Sweden interaction within international regional structures in Northern Europe were thoroughly examined – including preparations for a ministerial session of the Arctic Council in Nuuk, Greenland, in May 2011, during which Sweden will take over the chairmanship of this organization.

Considerable attention was paid to discussing international issues with emphasis on security in the Euro-Atlantic space and Russia-EU relations. There

was an exchange of views on a number of regional problems, including the situation in Afghanistan.

October 19, 2010

Munich security conference holds Moscow sessionhttp://english.ruvr.ru/2010/10/19/27096186.html

Isakova YelizavetaOct 19, 2010 18:56 Moscow Time

The Munich Conference has begun its off-site session in Moscow. The delegates will consider the Kremlin’s proposal for a new treaty on Euro-Atlantic security.

The Russian participants include Foreign Minister Sergei Lavrov, Security Council Secretary Nikolai Patrushev and Vice Premier Sergei Ivanov. President Dmitry Medvedev will be hosting delegates and guests of the conference in his residence tomorrow.

Held since 1962, the Munich Conference is one of the world’s most authoritative annual security forums, which brings together top state and government officials, foreign and defense ministers, MPs and prominent analysts.

Although Russia has been present at all Munich security forums over the past 20 years, the first Russian official to address it was the then President Vladimir Putin in 2007. His speech was widely commented on in Western political circles and mass media.

In February 2010, Foreign Minister Sergei Lavrov travelled to Munich for a regular conference to spell out the Kremlin’s position on energy security and nuclear arms control.

Addressing the Moscow forum on Tuesday, Mr. Lavrov spoke about relations between Russia and NATO, cooperation on Afghanistan and ways of bolstering security in Europe and the Asia-Pacific region.

On the eve of the meeting, Chairman of the Munich Security Conference Wolfgang Ischinger said he considers Moscow not as a former enemy, but as the future strategic partner. Holding a visiting session in Moscow illustrates his words perfectly well, just as Russia’s future role in the system of Euro-Atlantic security.

This is acknowledged not only in Europe, but also in the US, according to head of the Center for German Studies at the Institute of Europe Vladislav Belov.

Everyone is aware that Moscow cannot be ignored and dismissed as far as security issues are concerned, while NATO and OSCE fail to ensure integrated safety and security. Although Russian President Dmitry Medvedev’s initiative concerning a new European security treaty is extremely complicated in terms of giving it concrete substance, all necessary forums are operating to define the way Russia should be assimilated into the new system to meet the interests of its partners as well, Vladislav Belov said.

The current two-day visiting session of the Munich Security Conference in Moscow was held behind closed doors. Its results will be summed up at a news conference set for Wednesday, October 20th.

http://www.securityconference.de/index.php?&L=1

Russia's WTO accession may be completed within 12 months- Obama adviserhttp://en.rian.ru/world/20101020/161019742.html

09:53 20/10/2010

Russia's accession to the World Trade Organization may be completed within a year, Lawrence H. Summers, an economic adviser to U.S. President Barak Obama, said on Wednesday.

He also told reporters in Moscow after talks with First Deputy Prime Minister Igor Shuvalov that Russia and the United States had acknowledged the necessity of solutions that would help Moscow join the WTO despite its sour relations with Washington's ally Georgia.

MOSCOW, October 20 (RIA Novosti)

U.S. says "end is in sight" on Russia's WTO bidhttp://www.reuters.com/article/idUSLDE69I1K520101020

1:47am EDT

MOSCOW, Oct 20 (Reuters) - President Barack Obama's economic advisor said on Wednesday that Washingtion is very encouraged by progress in talks on Russia's World Trade Organization bid and hopes Moscow will complete WTO accession within a year.

"We are certainly hopeful that well before 12 months from now, this process (Russia's WTO accession) will have been completed," Larry Summers said. "I can now say the end is in sight."

Summers, who in September said he would step down as director of the White House National Economic Council, told reporters in Moscow that work remains to be done on Russia's 18-year-old bid to join the global trade rules body.

(Reporting by Guy Faulconbridge; editing by Steve Gutterman)

Senators seek data on secret U.S.-Russia missile talkshttp://www.washingtontimes.com/news/2010/oct/19/senators-seek-data-secret-us-russia-missile-talks/

By Bill Gertz

The Washington Times

8:21 p.m., Tuesday, October 19, 2010

Six Republican senators have asked Secretary of State Hillary Rodham Clinton to provide documents on secret talks between U.S. and Russian officials on missile defenses, amid conflicting reports that a deal with Moscow is close to completion.

"We are writing to request information pertaining to press reports suggesting the imminent conclusion of a missile defense agreement between Russia and the United States," the senators stated in the letter sent Monday.

The senators asked Mrs. Clinton to turn over for review documents and transcripts of talks at the Arms Control and International Security Working Group headed by Undersecretary of State Ellen Tauscher and Russian Deputy Foreign Minister Sergey Ryabkov.

The group of senators, led by Sen. Jeff Sessions, Alabama Republican, suggested in the letter that a failure to provide the documents could affect the upcoming Senate debate on the ratification of the New START, the strategic arms treaty with Russia signed in April.

"Senators must be assured that these talks and potential missile defense agreements will not limit U.S. and allied missile defense development and deployment in any fashion whatsoever," they stated.

• Click here to view the letter (PDF file)

The senators also stated that, under Section 33 of the 1961 Arms Control and Disarmament Act, the administration cannot limit missile defenses with the Russians without following rules for treaties outlined in the law.

State Department spokesman P.J. Crowley said in response to the letter that "we are not pursuing a missile defense agreement with Russia."

A classified U.S.-Russia joint assessment of ballistic missile "challenges" should be completed by the end of the year that will "analyze the ballistic missile challenges of the 21st century," Mr. Crowley said, noting that it "will not affect our ballistic missile defense policy, which is a response to the evolving threat we see from the Middle East and Northeast Asia."

"The purpose of the joint assessment is to increase our mutual understanding of the ballistic missile threat," Mr. Crowley said. "There is nothing in these discussions that contemplates limits on missile defense, but rather cooperation between the U.S. and Russia."

A Senate aide said many senators fear the administration is secretly working with Moscow on a deal that will constrain U.S. defenses at a time when missile threats are growing.

"The concern is that the administration is not being honest and forthcoming about the discussions that are going on," the aide said.

Missile defense limits in New START are a major point of debate between treaty opponents and advocates. The new treaty contains a limit on using existing intercontinental ballistic missile silos for future missile defense interceptors.

The Obama administration has said the treaty will impose no limits on U.S. missile defenses.

Russia has said that strategic missile limits cannot be addressed apart from strategic defenses and that Moscow will withdraw from the treaty if the United States expands its current system. The limited missile defense system includes long-range interceptors in Alaska and California, radar and tracking systems around the world, and plans for future shorter-range defenses in Europe.

State Department officials have denied the Tauscher-Ryabkov talks are secret but have shared few details of the talks either in public or with members of Congress. The officials also have denied there were "backroom deals" on the matter with the Russians as part of the START negotiations.

The Washington Times reported June 17 that the U.S. officials had presented a draft agreement on missile defenses to the Russians in the Tauscher-Ryabkov talks.

Days later, Mrs. Clinton told a Senate hearing that "there is no secret deal" on missile defenses and no "plan to limit U.S. missile defenses, either in this treaty or in any other way."

However, she did not address whether a draft agreement was presented in the Tauscher-Ryabkov talks.

The Russians added to the confusion. On July 8, Lt. Gen. Alexander Burutin, deputy chief of the general staff, said work on an agreement "is in progress." Hours later, he issued a contradictory statement, saying "no drafting of a new document [on missile defense] is being conducted."

Then on Oct. 1, Russian Foreign Minister Sergey Lavrov told the official government newspaper Rossiiskaya Gazeta that the United States and Russia were close to reaching an agreement on the risks of missile proliferation. "The document should be ready soon," he said.

The foreign minister said that, based on the risk assessment, "we will be able to talk about taking the next step and finding a common way … to parry such risks" through diplomatic, political, economic and perhaps military means.

In addition to Mr. Sessions, the letter was signed by Republican Sens. James M. Inhofe of Oklahoma, David Vitter of Louisiana, John Cornyn of Texas, Roger Wicker of Mississippi and John Thune of South Dakota.

Asked by Mr. Inhofe this past summer about a missile defense pact, Mrs. Clinton did not answer directly in her written answers to questions posed to the Senate Armed Services Committee.

"Within the Arms Control and International Security Working Group, the Obama Administration has provided briefings to, and discussed U.S. missile defense (BMD) policy, plans, and programs with the Russian government," Mrs. Clinton said in a June 17 response.

According to Mrs. Clinton, the Tauscher-Ryabkov talks included discussions of missile defense cooperation, confidence-building and transparency measures, along with data exchange proposals on ballistic missile and space launches tracked by U.S. and Russian early warning systems.

© Copyright 2010 The Washington Times, LLC. Click here for reprint permission.

Russian hi-tech experts to visit U.S.http://en.rian.ru/russia/20101020/161018627.html

06:23 20/10/2010

A delegation of experts from Russia's Rosnano hi-tech government corporation will visit the United States on October 20-22, Rosnano said on its website.

The visit will take place within a meeting of the U.S.-Russia Business Council (USRBC) scheduled to take place on October 20-21 in San Francisco.

Innovations, their role in the modernization of Russia's economy and Russian-U.S. cooperation in the high-tech sphere will be a focus of talks between Rosnano officials and their U.S. colleagues.

During the meeting, Rosnano chief Anatoly Chubais will deliver a report on cooperation between Rosnano, venture funds based in the Silicon Valley and U.S. high-tech companies.

Russian President Medvedev, who seeks to diversify the Russian economy by reducing its dependence on oil and gas exports, has made developing hi-tech sectors and encouraging research the focal point of his economic agenda.

The Russian government approved in March 2006 a program to create technoparks to incorporate high-tech enterprises in the sectors of nano- and bio-information, and other types of technology, as well as scientific research organizations, educational institutions and other related ventures.

Skolkovo, dubbed Russia's Silicon Valley, is being built from scratch just 20 kilometers west of Moscow. The hub will focus on five research areas: energy, information technologies, communication, biomedical research and nuclear technologies.

MOSCOW, October 20 (RIA Novosti)

Russia seeks control of Canadian nuclear company working in U.S. http://www.thespec.com/news/world/article/268874--russia-seeks-control-of-canadian-nuclear-company-working-in-u-s

DENVER Russia’s government is trying to enter the U.S. nuclear industry, poised to spend $1.5 billion to acquire a controlling share of Uranium One, a Canadian company operating in the Rocky Mountain region.

“It is a normal commercial operation, not something that is operating on any political guidance,” Russian Ambassador Sergey Kislyak said Tuesday.

“It doesn’t matter whether it is uranium, or steel, or oil or gas,” Kislyak said. “What is important is that the positive ties between our two countries seem to be getting more and more expanded. Politically, that is very important.”

U.S. Treasury and nuclear regulatory officials must approve the deal, and some Republican lawmakers have objected.

The Russian investment would bring about 100 new jobs, said Fletcher Newton, the Denver-based executive vice-president of strategic affairs for Uranium One.

The deal would give Russian government-owned Atomredmetzoloto (ARMZ) a 51 per cent share of Uranium One.

Uranium One is starting an in-situ mining project next year in Wyoming.

ARMZ is the world’s fifth largest uranium producer, operating mines in Russia and Kazakhstan.

ARMZ methods will be “significantly more environmentally friendly” than the mining and milling operations of Cotter Corp. and other private, U.S.-owned companies, said Newton, who is headed to Moscow this week.

Colorado-based Cotter is mired in a conflict with Colorado regulators over required cleanups at a shuttered mill in Cañon City and a defunct mine west of Denver near a drinking-water supply reservoir.

U.S. Treasury and Nuclear Regulatory Commission officials are looking into the transaction.

A Russian-run company “cannot just take over facilities, take uranium out of the ground and ship it overseas,” said NRC spokesperson Dave McIntyre. “There are protections in place. What do they intend to do with it? We would need to approve any export of uranium once it is milled. We want the environment standards done at least as well as our regulations require.”

Four Republican lawmakers have sent a letter to Treasury Secretary Tim Geithner raising concerns that the deal could lead to U.S. uranium reaching Iran.

For years, Russia has supplied from 16 to 33 per cent of the uranium used at U.S. nuclear power plants under a program that converted uranium from Russian nuclear weapons.

That program is coming to an end, Kislyak said. Production of fuel for nuclear plants “now can be done on the normal commercial basis. Where the production is going to be is for the economic operators to decide.”

Nuclear power plants produce about 20 percent of the electricity Americans consume. Both the U.S. and Russia, where nuclear plants generate about 17 percent of its electricity, are planning to construct several new plants.

Uranium One will not export any uranium mined in the Rocky Mountain region, Newton said. The plan is to sell it to U.S. utilities that have been depending on imports.

And, given Russia’s “significant financial resources,” Newton said, U.S. federal and state environmental regulators “will likely be very happy to see Russia standing behind Uranium One on its responsibilities for environmental stewardship.”

Uranium One currently employs about 40 people in Denver and 120 in Wyoming.

Russia’s investment, including $600 million in cash “will enable us to increase those employment levels – more jobs both in Colorado and Wyoming,” Newton said.

McClatchy-Tribune news service

Indonesia set to continue buying arms from Russiahttp://en.rian.ru/mlitary_news/20101020/161021169.html

12:08 20/10/2010

JAKARTA, October 20 (RIA Novosti) - Indonesia will continue its military-technical cooperation with Russia, the country's defense minister said on Wednesday.

Purnomo Yusgiantoro spoke after an official transfer of three Russian-made Mi-35P combat helicopters to Indonesia.

"We will continue our military-technical cooperation with Russia," the minister said, noting the high quality and reliability of Russian-made military equipment.

With the addition of the three Mi-35s, the fleet of Russian-made helicopters in service with the Indonesian Armed Forces now comprises five Mi-35 attack helicopters and six Mi-17V5 multipurpose helicopters.

Under a $300 million contract, signed in 2007, Russia recently completed the delivery of three Su-30MK2 and three Su-27SKM fighters to Jakarta in addition to two Su-27SK and two Su-30MK fighters purchased in 2003.

"Our current priority is to create a full-size squadron of Su fighter jets comprising 16 aircraft," Yusgiantoro said.

There are several other prospective areas of military-technical cooperation both countries were eager to pursue, Yusgiantoro said, without elaborating.

According to media reports, Russia and South Korea are competing in the second round of a tender for the supply of two submarines to Indonesia.

Jakarta became one of Russia's main arms customers in 1999 when the United States tightened an embargo on arms sales to the country over alleged human rights violations.

Russia expects victory in Temelín tender, Russian deputy PM sayshttp://www.praguemonitor.com/2010/10/20/russia-expects-victory-temel%C3%ADn-tender-russian-deputy-pm-says

ČTK | 20 October 2010

Moscow, Oct 19 (CTK) - Russia expects the Czech-Russian consortium of Skoda JS-Atomstroyexport to win the tender for the completion of Czech nuclear power plant Temelin, Russian Deputy Prime Minister Alexander Zhukov told CTK after a meeting of the Czech-Russian inter-government commission in Moscow yesterday.

The other bidders in the tender are US company Westinghouse and France's Areva. The future contract is estimated to be worth up to Kc500bn.

However, Czech power producer CEZ is currently considering postponing the Temelin tender, its spokesman Ladislav Kriz has said recently. According to Prime Minister Petr Necas, the decision is up to the government.

According to the bid submitted by Atomstroyexport and Skoda JS, most of the equipment for the completion of Temelin should be supplied by Czech companies, Zhukov noted. This is a very advantageous offer, he added.

"We have assured the Russian part that only quality, security and price and nothing else will be decisive," Czech Industry and Trade Minister Martin Kocourek, who headed the Czech delegation at the Moscow talks, said.

According to Vaclav Bartuska, the Czech government commissioner for the completion of Temelin, the winner of the tender should be selected in 2013. Originally, CEZ planned to sign a contract with the winner at the beginning of 2012.

During the talks in Moscow, the Czech delegation was assured that no cuts in supplies of Russian oil and gas were threatening, as happened in the past.

Russia will supply gas and oil to the Czech Republic without problems and in harmony with all agreements, Zhukova said. All problems concerning oil supplies that occurred two years ago have been resolved, he added.

According to Zhukov, Russia offers very favourable conditions for Czech companies at present and a number of large projects are already under way. The interest of Czech businesses is a proof of Russia's attractiveness, he said.

Czech-Russian trade has been growing in the past years up to an all-time high of nearly EUR13bn in 2008. Czech exports to Russia grew eight times over eight years. Last year, however, bilateral trade decreased by almost two fifths owing to the global crisis.

Preliminary results for the previous months of this year are signal an increase in turnover by more than one fifth against last year.

"This year's figures will not reach the record from 2008 but the trend towards an improvement is obvious," Kocourek said.

Czech-Russian trade has not decreased due to a deterioration of relations but due to the global crisis, Kocourek added.

The Czech Republic is drafting a memorandum to join the programme of modernisation of Russia. "We want to join other advanced countries that have taken part in the initiative as soon as possible. I hope it be within a few months," Kocourek said.

During his visit to Moscow, Kocourek has also signed a memorandum on cooperation with Tatarstan that is to support activities of Czech companies in Tatarstan.Russia expects victory in Temelin tender

Ukraine, Russia, EU likely to meet on gas transit this week

http://www.rbcnews.com/free/20101020121618.shtml

      RBC, 20.10.2010, Kiev 12:16:18.A three-party meeting between Ukraine, Russia and the EU on the modernization of Ukraine's gas transit system may be held in Brussels on November 22, 2010, the EU delegation to Ukraine told RBC today. Although no firm date has been announced so far, the meeting is likely to be held during the Ukraine-EU summit, the source explained.

      Ukraine's Prime Minister Nikolai Azarov announced at a government meeting today that the European Commission had accepted the nation's proposal to hold a trilateral meeting on the gas transit system. Furthermore, the Russian-Ukrainian committee on economic cooperation will meet in Kiev on October 27, 2010, with energy issues to take center stage at the meeting.

Azarov wants new gas agreement with Russiahttp://www.kyivpost.com/news/politics/detail/86902/

Today at 06:45 | Staff reports The Government continue talks with the Russian side on revision of its 2009 gas agreement, Prime Minister Mykola Azarov said on Oct. 19 during a meeting in Kherson with region officials.

"The Russians think it to be especially profitable for them, and it means that it is exceptionally unprofitable for us. But the time has not come yet. We will try to come to an agreement, we will review the agreement," Azarov said.

The prime minister is expected to broach the topic directly in talks with his Russian counterpart Vladimir Putin, who is scheduled to arrive in Kyiv on Oct. 27 for talks. Putin has opposed renegotiating Russia's 2009 gas agreement with Ukraine.

During his trip Kherson, Azarov attended a ceremony for World War II veterans, congratulating them again on the the 65th anniversary of victory in the war.

Read more: http://www.kyivpost.com/news/politics/detail/86902/#ixzz12se0IlwnOctober 20, 2010 11:39

Georgian FM accuses Russia of refusing to fulfill its obligationshttp://en.trend.az/news/politics/1769242.html

20.10.2010 13:12

Georgia, Tbilisi, Oct. 20 / Trend N.Kirtzkhalia /

The Georgian Foreign Ministry regarded the Russian Foreign Ministry's statement on the implementation of the Medvedev-Sarkozy agreement by Moscow as Russia's another cynical attempt not to fulfill its obligations under the international law.

The statement issued by the Russian Foreign Ministry said that the withdrawal of the Russian troops from the Perevi village means the Russia's non-fulfillment of the Sarkozy-Medvedev agreement has been resolved. The Russian border guards securely protect the border of South Ossetia and Abkhazia through the bilateral agreements.

"This statement is yet another cynical attempt of the Russian Federation to evade its obligations undertaken under the international law. The Russian Federation is trying to present the withdrawal of the belligerent troops from the Perevi village as full implementation of the ceasefire agreement dated Aug.12, 2008. The reality is that the 20 percent of the territory of sovereign Georgia is still under the Russian occupation and several military bases and about 10,000 troops were placed in the occupied territories. Gross violation of human rights is observed in the occupied territories and hundred thousands of refugees and IDPs cannot adequately and safely return to their homes. However, the Russian Federation continues to block entry of the international forces, including the European Union Monitoring Mission and the import of humanitarian goods to the occupied territories," the ministry stated.  

Given this, Russia's efforts to present its step as the fulfillment of its commitments to international obligations, are doomed to fail, the Georgian Foreign Ministry reported.

Georgia Slams Moscow’s ‘Cynical’ Stance on Six-Point Agreementhttp://www.civil.ge/eng/article.php?id=22769

Civil Georgia, Tbilisi / 20 Oct.'10 / 12:06

Sarkozy calls for non-use of force commitment;

Russia said that with removal of its outpost from the village of Perevi the issue of "alleged non-compliance" with EU-mediated ceasefire agreement by Moscow had been "definitively closed."

“We hope that this move of the Russian side, aimed at reducing tensions on the borders of Georgia and South Ossetia, will receive adequate and constructive response from the Georgian side and the international community,” the Russian Foreign Ministry said in a statement on October 19.

Tbilisi said Russia’s statement was “yet another cynical attempt” to avoid full implementation of its commitments under the August 12, 2008 six-point ceasefire agreement, which, among other issues, envisages pull back of the Russian troops on the pre-August war positions.

Georgia says that withdrawal from Perevi is only a tiny part of Russia’s commitments and, as Georgian Deputy Foreign Minister, Giga Bokeria put it, Perevi was only less than 1% of Georgia’s occupied territories.

Russia’s attempt to portray withdrawal from Perevi as a full implementation of its commitments “is doom for a failure,” the Georgian Foreign Ministry said and added that the international community had already made it clear that Russia should fully comply with the agreement.

EU foreign policy chief, Catherine Ashton, welcomed Russia’s withdrawal from Perevi and said in a statement on October 18: “I look forward to further progress towards the full implementation of the EU-brokered Six Point Agreement of 12 August 2008 and its Implementing Measures of 8 September 2008.”

French President, Nicolas Sarkozy, thanked his Russia counterpart, Dmitry Medvedev, at a meeting in French seaside town of Deauville on October 19 for withdrawal from the village of Perevi and said it was “a significant step” and “a significant progress.”

Speaking at a joint news conference with the Russian President and German Chancellor, Angela Merkel, in Deauville, Sarkozy also said that it would be good if Russia agreed on allowing international monitors to enter Abkhazia and South Ossetia.

At the same news conference Sarkozy, who mediated the August 12 six-point accord and its follow-up September 8, 2008 agreement, called on Georgia to undertake non-use of force commitment. The French President did not elaborate further on the issue.

Russia has long been insisting that Tbilisi should sign non-use of treaties with Sokhumi and Tskhinvali, or at least should make unilateral written declaration on non-use of force. Georgia says that such commitment has already been undertaken under the six-point ceasefire agreement and there is no need for a separate treaty. Tbilisi is also against of signing such treaty with Tskhinvali and Sokhumi and says that even if such agreement is signed Russia should be part of the treaty and not, as Tbilisi puts it, “Russia’s proxy regimes” in Tskhinvali and Sokhumi. Tbilisi also insists that such treaty with Moscow should also envisage establishment of new international security arrangement in Abkhazia and South Ossetia, which eventually should lead to “complete de-occupation” of these two regions.

The issue is part of and one of the most contentious points in the Geneva talks.

The U.S. delegation in the Geneva talks mainly shares Tbilisi’s position saying that the six-point ceasefire agreement already “establishes the sides’ commitment to the non-use of force", which makes an additional, separate agreement “unnecessary”. According to the U.S. position on the matter, voiced after the eleventh round of Geneva talks in June 2010, another non-use of force agreement has to be “among the relevant parties, including the Russian Federation” and it should reflect concerns of all parties.

CIS defense ministers to meet in Ukrainehttp://en.rian.ru/exsoviet/20101020/161020872.html

11:46 20/10/2010

A CIS defense ministers meeting will be held on Wednesday in Crimea, Ukraine, the Russian defense minister's press secretary said.

The meeting will be headed by Russian Defense Minister Anatoly Serdyukov.

Delegations from Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine are expected to take part in the meeting.

"According to the agenda of the meeting, it is planned that over 20 issues of cooperation between military departments of the Commonwealth State will be discussed," Irina Kovalchuk said.

The ministers will analyze the results of implementing of a military cooperation concept between CIS countries up to 2010 and results of work of the of CIS Defense Ministers Council working bodies in 2010.

 

MOSCOW, October 20 (RIA Novosti)

Russian defense minister to attend CIS meeting in Crimea

http://www.interfax.com/newsinf.asp?id=196595

MOSCOW. Oct 20 (Interfax-AVN) - Russian Defense Minister Anatoly Serdyukov on Wednesday left for Livadia in Ukraine's Crimea to attend a CIS defense ministers' meeting.

"In line with the meeting's agenda, over 20 issues are to be considered pertaining to various areas of interaction between the CIS defense ministries," Serdyukov's spokeswoman Irina Kovalchuk told Interfax-AVN.

Considering the importance of the development of integration processes in the military sphere, the defense ministers will analyze the implementation of the CIS military cooperation concept for CIS member states designed for the period up to 2010 and performance of the working bodies of the CIS Council of Defense Ministers in 2010, she said.

The CIS, or Commonwealth of Independent States, is made up of Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.

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CIS, Baltics railway officials to discuss coordination

http://www.itar-tass.com/eng/level2.html?NewsID=15605648&PageNum=0

20.10.2010, 07.42

VILNIUS, October 20 (Itar-Tass) - The coordination of passenger and freight transportation by rail along international routes will be discussed here on Wednesday at the 53rd session of the Railway Transport Council (RTC) by the executives of railway companies of the Commonwealth of Independent States (CIS) and the Baltics.

Lithuanian Minister of Railways Egidius Masiulis said, "The widely representative forum will promote a solution to important matters of international transportation by rail, the ensurance of the railway transport reliability, and the creation of competitive conditions for passenger and freight transportation".

Apart from plenary meetings, there will be conferences of expert working groups on current problems of railway transportation. "I hope that the upcoming sharing of experience will help create favourable conditions for the transit of freight and a search for novel solutions that are important for the development of cooperation between Europe and Asia in the area of transport," Masiulis pointed out.

Those present at the session are also to discuss practical matters, such as specifically, management, accounting and mutual settlement in multilateral use of freight cars, and the creation of a technical standard for broad gauge (1,520 mm).

The RTC was set up in 1992. The Council is presided over by Vladimir Yakunin, chief of the Russian Railways Company (RZD). He said the Council, which brings together the member-countries of the CIS and the Baltics, «is the first real example of integration within the framework of the railway business community".

The Council comprises the railway administrations of CIS countries and the Baltics, and those of Bulgaria, Georgia, Latvia, and Finland as associated members. The state-run railway companies of Lithuania and Estonia are Council members with a deliberative voice.

Armenian prime minister says Armenian-Russian intergovernmental commission is effectivehttp://www.arka.am/eng/economy/2010/10/20/21986.html

YEREVAN, October 20, /ARKA/. Armenian prime minister Tigran Sarkisian said the Armenian -Russian intergovernmental commission that will convene its regular meeting in Russian Yekateriburg later this week, was working effectively.

‘From my viewpoint the commission is a very effective instrument of work between our governments and this instrument is used in our bilateral relations with other partners,’ he said during a meeting with Russian journalists in Yerevan.

He said this efficiency is reflected in an opportunity to sum up the work, done during the preceding time span and detect the existing problems. He said also the commission’s agenda includes issues which need additional elaboration and reconciliation of positions.

‘From this perspective I think the commission is a very effective mechanism and it is good that our agenda is full of different and interesting issues. This time we have about ten issues which is evidence that it is a working instrument for coordination of our efforts and preparation of agreements, arrangements and memoranda,’ Tigran Sarkisian said. He then underlined the role of its Russian cochairman, Igor Levitin, who is Russia’s transport minister.

Tigran Sarkisian said also there is no word yet about modernization of Armenian economy, but the government has come forward with a set of priorities, like diversification of economy, improvement of business environment and investment climate so that to make Armenia an attractive hub for investments.

He said other priorities are Information Technology and innovations, including education.

“Our eventual goal is to build a knowledge-based economy and society. This is the wording that we can use in reference to Armenian economy and it could hardly be called

modernization. We have a long row of enterprises which should be shut down and replaced by new enterprises. I think investments should go to those companies which use knowledge and intellect as raw material,’ he said.

Russian-Armenian interregional ties to be modernizedhttp://www.aysor.am/en/news/2010/10/20/russia-armenia/Wednesday, October 20

First Deputy Minister of Territorial Administration Vache Terteryan met with Head of Representation of the Russian Federal Agency Rossotrudnichestvo Viktor Krivopuskov at the Ministry of Territorial Administration Monday.

The meeting addressed further development of interregional and innovation cooperation between Russian and Armenian regions in light of preparation for XII session of Russian-Armenian intergovernmental commission on economic cooperation scheduled to be held between October 21 and 23 in Yekaterinburg, Representation of the Russian Federal Agency Rossotrudnichestvo reported.

The parties agreed to hold a forum of governors of Armenia and Russia in March 2011with participation of businessmen, including those from Diaspora.

First-ever Russian-Armenian interregional exhibition of industrial innovations will be also held in Karen Demirchyan Sports and Concerts Complex in March 2011.

TODAY, 13:05

Aysor.am

20/10/2010 12:30

Pacific Fleet ready for “Yury Dolgoruky”http://www.barentsobserver.com/pacific-fleet-ready-for-yury-dolgoruky.4832764-116321.html

2010-10-20 Russia’s Pacific Fleet is ready to take the country’s newest nuclear submarine “Yury Dolgoruky” into service as soon as all tests with the Bulava missile are completed, a Russian military analyst said.

According to Igor Korotchenko, member of the Ministry of Defense’s Public Council, the naval base in Vilyuchinsk on the Kamchatka Peninsula is prepared to receive the first of

Russia’s new fourth generation nuclear submarine, the Borey-class “Yury Dolgoruky”, which currently is undergoing final sea tests in Arctic Waters.

- Prior to the arrival of “Yury Dolgoruky” in Vilyuchinsk, all piers and main facilities at the base have been rebuilt, new security and communications systems have been introduced, and the training center has been modernized, Korotchenko said according to RIA Novosti.

Korotchenko said that other submarines of the new class can be put into service in the Pacific Fleet after commissioning and required testing.

The naval base in Vilyuchinsk currently has four strategic nuclear submarines of the Delta III-class.

“Yury Dolgoruky” is expected to enter service with the Russian Navy in the near future, pending on the outcome of the testing of the new Bulava sea-launched ballistic missile – the submarine’s main weapon. So far, only the re-built Typhoon-class “Dmitry Donskoy” submarine has been doing tests launches of the missile. The next test launch is planned for November, and if it turns out to be a success, “Yury Dolgoruky” will probably launch its first missile later this year.

Three other Borey class nuclear submarines, the Alexander Nevsky, the Vladimir Monomakh, and Svyatitel Nikolai (St. Nicholas) are in different stages of completion. Russia is planning to build eight of these subs by 2015.

Russian Soyuz rocket launches six US communications satelliteshttp://www.brahmand.com/news/Russian-Soyuz-rocket-launches-six-US-communications-satellites/5217/3/13.html

Posted On: Oct 20, 2010

BAIKONUR (BNS): Russia’s Soyuz-2.1a carrier rocket has successfully launched a constellation of six communications satellites for US-based mobile satellite phone and data services provider, Globalstar Inc.

The launch took place from the Baikonur Cosmodrome in Kazakhstan at 21.10 Moscow time (1710 GMT) on Tuesday.

The Soyuz rocket, equipped with a new Fregat upper stage booster, successfully placed all the Globalstar satellites into orbit, Russian space agency Roscosmos said. The spacecraft were deployed during a two-step process – with separation occurring at 1 hr. 38 min. and 1 hr. 40 min. into the mission.

The Globalstar is a low-Earth orbit satellite-based communications system built by the French-Italian manufacturer Thales Alenia Space (TAS).

The satellites, weighing 700 kg each, provide high-quality satellite voice and data services across North America, and to over 120 countries worldwide.

Globalstar Inc plans to put in orbit a total of 24 such satellites in the next few years.

Return home of impounded ship crew delayed by a weekhttp://english.ruvr.ru/2010/10/20/27166971.html

Oct 20, 2010 10:29 Moscow TimeA return home of the Russian crew of the Liubov Orlova motor ship, impounded at Saint John’s seaport in Canada, was scheduled for this Wednesday, but has been postponed by at least one week. The ship with a crew of 49 Russian nationals and 2 Ukrainians was impounded on September 25th at the suit of the freighter for a debt of 251,000 dollars. Russian diplomats will take care of repatriating the crewmembers. The crew has sufficient on board reserves of foodstuffs, water and fuel.

Russian Mission Control to change ISS orbithttp://english.ruvr.ru/2010/10/20/27167019.html

Oct 20, 2010 10:32 Moscow TimeThe Russian Space Mission Control Centre are going to change the ISS orbit later today to ensure favourable dockings with the new Russian cargo spacecraft Progress and the US shuttle Discovery. The Russian cargo spaceship is due to blast off on the 27th of this month, while Discovery will take off on November 1st. The ISS is now descending by a daily 150 metres to 200 metres. The ISS orbit is also occasionally changed so the orbital complex could avoid clashing with space debris, namely small meteorites and the wreckage of old satellites and spacecraft. 

Russian Chief of Staff visits Serbiahttp://www.emg.rs/en/news/serbia/136017.html

20. October 2010. | 06:08

Source: Beta

Russian Chief of Staff Gen. Nikolai Makarov arrived on Oct. 19 on a two-day visit to Serbia during which he discussed improving military and technical cooperation with Serbia's top military officials.

Russian Chief of Staff Gen. Nikolai Makarov arrived on Oct. 19 on a two-day visit to Serbia during which he discussed improving military and technical cooperation with Serbia's top military officials.

After meeting Serbian Chief of Staff Gen. Miloje Miletic, Makarov said that relations between the two states "need to be elevated to a higher level" after a 10-year interruption in military ties.

"Military and technical cooperation between our countries has not been developing at an enviable pace, and I think that there is a lot of room for progress in this area. Our delegation has come to Belgrade after 10 years precisely for this reason," Makarov said, adding that tighter cooperation between the two armed forces is necessary, especially with regard to the modernization of Serbia's Soviet-era military hardware.

Miletic also announced cooperation in boosting the skills of Serbia's top brass, organizing training courses for Serbian officers in Russia in special forces and anti-terrorists tactics, intelligence gathering, and scouting, as well as cooperation in emergency management and the exchange of officers for military exercises in both countries.

Repatriation of Russian sailors from Canada delayedhttp://en.rian.ru/russia/20101020/161018381.html

05:18 20/10/2010

The repatriation of sailors from a Russian expedition vessel detained in the Canadian port of St. John's over debts has been postponed for at least a week, an International Transport Workers Federation (ITF) official has said.

The Lyubov Orlova ship, crewed by 49 Russian nationals and two Ukrainians, was seized in the Newfoundland port in late September following a suit by a haulage contractor over a $251,000 debt.

As a result of Russian diplomatic efforts, the sailors were expected to return home on Wednesday. However, the repatriation was delayed.

"The first group of sailors will fly home not earlier than October 27," Pyotr Osichansky said without elaborating on the causes of the delay.

Sixteen to twenty sailors will not be repatriated together with the others - they will remain on board the ship to assure its security, Osichansky said, adding that the ship's crew had enough food and water.

VLADIVOSTOK, October 20 (RIA Novosti)

Putin to attend int'l Pure Water-2010 forum Wednesday

http://www.itar-tass.com/eng/level2.html?NewsID=15605502&PageNum=0

20.10.2010, 03.12

MOSCOW, October 20 (Itar-Tass) - Prime Minister Vladimir Putin on Wednesday will attend an International Pure Water-2010 forum the theme of which is "Water is Global Development Resource", a government press service official said.

Participants in the forum are to discuss scientific, technical and organizational aspects of the development of the water conservancy sector, its legal regulation, and the formation of a favourable climate to attract investments in the advanced water and nature conservancy technologies. Much attention will be devoted to a discussion of international water-related problems -- the conservation, purification and effective use of national water resources.

The forum's exhibition programme, in which 34 companies and organizations will take part, will feature innovative development efforts towards solving the problems of the water conservancy sector of Russia and the world, the press service official pointed out.

As regards international matters, the forum is called upon to help Russian and foreign companies to establish mutually beneficial cooperation in the area of water-supply and water-saving, inform the world community of Russia's position on matters concerning the protection and careful use of water.

The forum has drawn more than 1,000 participants from Russia and from over 40 other countries. There will be officials of the UNESCO, the European Union, the League of Arab States, the World Bank, the European Bank for Reconstruction and Development, as well as businessmen from Germany, Italy, Canada, Latvia, Singapore, France, and Japan.

The non-profit partnership "Russian Water Society (RWS)" is the organizer of the forum. Svetlana Orlova, Deputy Speaker of the Federation Council upper house of the Russian parliament, who is heading the RWS, said, "The participating companies present their proposals on projects to improve the quality of water, work out more advanced water purification technologies, and discuss effective uses of water resources". "It is also planned to sign a number of agreements aimed at improving water quality and at rendering the nation healthier," Orlova emphasized.

On the Russian side, the forum will be attended, along with the Prime Minister, by Boris Gryzlov, Speaker of the State Duma lower house of parliament, Vice-Premier Alexander

Zhukov, the Ministers of Regional Development, Economic Development, Natural Resources and Ecology, and directors of a number of Federal agencies, representatives of Russia's regions, the management of water conservancy sector enterprises, and company executives who specialize in innovative water-supply, disposal, and purification technologies.

The present forum will be already a second one. The first forum was held in November 2009, with representatives of 47 countries participating.

Police operations officer killed in Ingushetia

http://www.itar-tass.com/eng/level2.html?NewsID=15605520&PageNum=0

20.10.2010, 01.30

NAZRAN, October 20 (Itar-Tass) - In the Republic of Ingushetia, unidentified attackers, firing at point-blank range, gunned down Rustam Kartoyev, a police operations officer of the Malgobek city police department, at about 20:30, Moscow time, on Tuesday.

The attack victim died of wounds in hosptial later on. An investigation is under way in connection with the fact of attack, a republican Interior Ministry source has told Itar-Tass.

Police officer gunned down in southern Russiahttp://www.ajc.com/news/nation-world/police-officer-gunned-down-685978.html

4:13 a.m. Wednesday, October 20, 2010

ROSTOV-ON-DON, Russia — Police say unidentified gunmen shot and killed a police officer in a southern Russian province hours after other Islamic insurgents raided Chechnya's regional parliament.

Regional police in the province of Ingushetia west of Chechnya said Wednesday that the officer was gunned down the previous night in the town of Malgobek.

The shooting followed Tuesday's attack on parliament in Chechnya's regional capital, Grozny, by three Islamic insurgents who killed two police officers and a parliamentary aide and wounded 17 others before blowing themselves up.

The brazen suicide raid defied the Kremlin's claim that stability has returned to Chechnya.

Russia's North Caucasus has been plagued by attacks by Islamic militants.

Hundreds evacuated over false bomb threat in northern Russiahttp://en.rian.ru/crime/20101020/161017553.html

02:56 20/10/2010

More than 600 people have been evacuated from an apartment block in Russia's northern city of Archangelsk after a false report of a bomb, a spokesman for the local emergencies service has said.

Late on Tuesday, emergencies officials received an anonymous call claiming that a bomb had been planted in the nine-storey building, the spokesman said.

Police rushed to the site, and a total of 600 people, including 150 children, have been evacuated as a result.

However, no explosives have been found in the building during an inspection.

"Those evacuated are returning to their flats," the spokesman said, adding that a search for the telephone terrorist is under way.

ARKHANGELSK, October 20 (RIA Novosti)

Probable organizer of Grozny attack named by Chechen governmenthttp://rt.com/Top_News/2010-10-20/grozny-terror-attack-gakayev.html/print

20 October, 2010, 10:24

The Chechen Interior Ministry blames the Grozny attack on Tuesday morning on Hussein Gakayev, a new terrorist leader of the region.

Gakaev recently left the group of terrorists headed by Doku Umarov, and is supposedly trying to show Al-Qaeda that he is capable of heading terrorist groups.

Umarov is Number One on the list of people wanted by the Russian Federal Security Service, as he is the one who took the responsibility for the terrorist attacks in the Moscow Metro in March, 2010, that left 40 people dead. Doku Umarov was called an international terrorist, also linked with Al-Qaeda by US authorities.

On Tuesday morning four militants drove into the parking zone of the Parliament of the Chechen Republic, following a car of one of the Parliament members. The militants opened fire, killing several security guides, broke into the building, where they got blocked.

Both Ramzan Kadyrov, the head of the Chechen Republic, and Rashid Nurgaliev, the Russian Interior Minister, reported the anti-terrorist operation to be short and successful. All the militants were killed, their bodies yet to be identified.

The terrorists killed three people during the attack, including two militiamen and one civilian, and injured another seventeen people.

There have been contradictory reports about the attack in Grozny. There was information, later denied, that one of the militants escaped with hostages. It was also falsely reported that the building was mined, and that one of the Parliament members was injured.

The whole area around the place of attack is being cleaned, and today the Chechen parliament resumes its normal working hours.

Victims of the attack and their families will be receiving compensation from the government.

The security measures throughout Chechnya and on the borders with other republics have been tightened.

Many terror attacks that have recently taken place in Russia were associated with international terrorist groups. Just a few months after the Moscow attacks, an explosion took place in the city of Pyatigorsk, with 30 people injured. Another major attack occurred in September, 2010, in Vladikavkaz, when a suicide bomber drove a car into the city’s central market, leaving 19 people dead and another 200 injured.

In addition, Russian security forces not long ago arrested Aidar Khabibullin, who was spreading extremist literature just outside Moscow. He is the leader of an international terror group based in Turkey.

New Russian Quran Interpretation Unveilledhttp://abna.ir/data.asp?lang=3&id=209719

The newest version of Quran interpretation in the Russian language was unveilled in a ceremony in the capital city of Moscow.

(AhlulBayt News Agency) - The Qatari daily Alshaqrgh reported that the new Quran interpretation in Russian was compiled by Shamel Alaedinof, a Russian preacher graduated from Egypt's Alazhar University.

The author has adopted a particular method with the aim of putting emphasis on Muslim proximity by applying an eclectic approach. He adresses the younger generation and tries

to convey the holy Quran’s spritual concepts and meanings without partiality to his Russian speaking readers.

Shamel Alaedinof has studied Islamic sciences at Alazhar University for 17 years. He now serves as the imam and preacher of a mosque in Moscow and is actively involved in religious affairs. He has been in touch with people coming from various social strata in order to promote the profound philosophical concepts of the holy Quran.

End item/ 129

Moscow City Court bans ultra-left opposition movement as 'extremist'http://en.rian.ru/russia/20101020/161016927.html

00:45 20/10/2010

The Moscow City Court has banned the Russian ultra-left Army of People's Will (AVN) opposition movement for being an "extremist organization."

The movement, created a decade ago, calls for constitutional amendments giving voters more control over the actions of their politicians. Their goal is to establish a system under which the president and the Federation Council, Russia's upper house of parliament, are "directly responsible to the people" by being given state awards for good deeds and prison sentences for failures.

The Moscow City Court has ruled that AVN's ideology includes unlawful calls for forced changes to the Russian constitution.

AVN leader Yury Mukhin previously received a two-year conditional sentence for inciting extremist activities.

Mukhin has dismissed the ruling, saying that the AVN's only goal is the holding of a referendum on the constitutional amendments.

AVN representatives said they would appeal against the decision in the Russian Supreme Court.

 

MOSCOW, October 20 (RIA Novosti)

Russian Press at a Glance, Wednesday, October 20, 2010http://en.rian.ru/papers/20101020/161019325.html

08:51 20/10/2010

POLITICS

Tuesday’s terrorist attack on the Chechen parliament in Grozny, which killed at least six people, including suicide bombers, and injured 17 others, is a sign that post-war stability in the republic remains fragile.(Moscow Times, Vremya Novostei, Kommersant, Vedomosti, Nezavisimaya Gazeta)

During a meeting with French and German leaders in France’s Deauville, Russian President Dmitry Medvedev said he would attend the NATO summit in Lisbon on November 20. The Russian leader will participate in a Russia-NATO summit for the first time since the August 2008 war between Russia and Georgia over South Ossetia. (Vremya Novostei, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

Russia has begun withdrawing its troops from the village of Perev at the Georgian border with South Ossetia, where Russian soldiers have been stationed since the August 2008 Russian-Georgian war. Tbilisi has described the move as a Georgian diplomatic victory, while some experts link Moscow’s decision with the forthcoming Russia-NATO summit.(Kommersant)

ECONOMY

Experts consider the government’s budget forecast for 2011-2013 too optimistic, saying that the level of consumer inflation may be 1.5 times higher and GDP growth two times lower than expected in 2011.(Nezavisimaya Gazeta)

Russian Finance Minister Alexei Kudrin has pledged that Russia would fully meet its domestic borrowing plans this year, contradicting expectations that high oil prices will reduce the need for debt issuance.(The Moscow Times)

OIL&GAS

Russia may increase oil re-export duties for Belarus to 85-90 percent from an average of 55-58 percent in order to compensate the budget losses when oil export duties will be abolished following the introduction of a common economic space between Russia, Belarus and Kazakhstan. (Vremya Novostei, Vedomosti)

BUSINESS

Vladimir Potanin’s Interros Holding has terminated a cooperation agreement with aluminum giant RusAL, calling for an end to “destructive actions” toward Norilsk Nickel, in which both sides hold a 25 percent stake. The announcement came two days

before the Thursday emergency shareholder meeting of the mining company, which will determine the makeup of the board of directors - the source of the conflict between Interros and Oleg Deripaska's RusAl.(Moscow Times, Vedomosti)

State-run monopoly Russian Railways (RZhD) is planning to sell its subsidiaries for more than 150 billion rubles ($4.88 billion) in 2010-2012, an RZhD vice-president said on Tuesday.(Vremya Novostei)

 

INVESTMENT

A Moscow court has rejected a request by investment fund Hermitage Capital to regain control over three subsidiaries that the fund's lawyer Sergei Magnitsky suspected had been used by the police to steal government money.   

SOCIETY

At least 200,000 migrant workers from Kyrgyzstan may arrive in Russia in the near future as the republic’s labor market remains stagnated following violent inter-ethnic clashes that hit the country this summer.(Nezavisimaya Gazeta)

The ruling United Russia party emerged as the apparent winner in a race with its pro-Kremlin rival to create a pro-modernization movement called Go Russia after Prime Minister Vladimir Putin indirectly gave the green light to its project Tuesday. (The Moscow Times)

Moscow authorities have proposed to charge drivers a fee for entering the city center. They believe this would encourage people to use public transportation and decrease traffic jams. (Vedomosti)

About 6,000 young activists from the Russian pro-Kremlin environmental protection movement Mestniye (Locals) staged a meeting on Bolotnaya Square in downtown Moscow, demanding the modernization of industrial enterprises in order to protect the environment. Some analysts view the move as an attempt by authorities to cover the growing activity of independent ecological movements. (Kommersant)

SPORTS

English Premier League leaders Chelsea defeated Spartak Moscow 2:0 in the Champions

League match at Moscow’s Luzhniki Stadium on Tuesday. Yuri Zhirkov, who signed for Chelsea from Spartak’s archrivals CSKA Moscow in 2009, scored the crucial first goal.(Vremya Novostei, Kommersant, Rossiiskaya Gazeta)

Reform must, and will, come to Russia http://www.latimes.com/news/opinion/commentary/la-oe-khodorkovsky-trial-russia-20101020,0,4205820.story

Yukos' imprisoned leader sees a new political generation coming, one unable to accept the current power elite's corruption.

By Mikhail B. Khodorkovsky

October 20, 2010

I am a member of the last generation of Soviet people — those who were born and came of age in the USSR. In 1990, the final year of the Soviet Union's existence, I was 27 years old. The next generation — of which the first of my sons, born in 1985, is part — only knows about "those times" from our stories.

Growing up, an ordinary young man from the outskirts of Moscow from a family of engineers who worked at a Soviet factory, I believed the things that were said on television, written in the newspapers and taught in school. I wanted, like my parents, to work at a factory and serve my country. I wanted to go further than my father, to become a factory director. Like a third of my peers, I studied at a technical institute, and like 90% of them, I was a member of the Young Communist League.

It seemed to me, as it did to everyone else, that the USSR would exist forever. Nobody believed that everything could change in an instant, but that is what happened. In the past two decades, it can be said that Russia has been born anew and has finished with the "socialist choice."

Many trials and tribulations awaited us. Having found freedom, we had to defend our choice in the brutal internal conflicts of 1991-93. Things came no easier in the economic sphere. The USSR, having fallen to pieces, buried all of the country's production systems under its wreckage. During the interregnum, specialists left and equipment broke down.

As I became the manager and then co-owner of a huge energy company, production volume in the oil industry nationally fell to 300 million metric tons a year from 600 million metric tons. But our company, Yukos, managed to achieve excellent economic results. In fact, from 1996 to 2003, oil production doubled to 80 million metric tons, wages quintupled and debt was repaid.

We met daunting challenges, including those brought on by Russia's 1998 financial collapse, when the price of oil fell below the cost of production. In addition to 150,000 employees, I was responsible for the populations of more than two dozen cities and settlements. It's easy to be bold when you've got nothing to lose. But I believe that several million people supported the changes that I put through and that changed their lives as a result.

We staked our claim on efficiency. We reduced costs and competed aggressively. In place of the monster we inherited, one that engaged in everything from beer production to construction, we created a professional oil production company. We spun off all of Yukos' noncore businesses into independent firms, helping employees become owners.

At the same time, we spurred creation of many jobs in what was then a new industry in Russia, Internet services and programming. We retrained thousands of schoolteachers through the Federation of Internet Education, a nonprofit, nongovernment organization.

We emerged from the crisis as the best oil company in Russia, with good public support. It felt as if Russia was irreversibly moving in the direction of a modern democracy and European values. Along with operating businesses, I began to get actively involved in socio-political projects such as education. I established a foundation to support nonprofits and human rights groups, and I also provided funding to opposition parties.

Now, I am in my seventh year in jail.

Vladimir Putin and the former colleagues-in-service brought by him into all the structures of power decided that they had no need for the independent opposition that I supported; they had no need for independent television and no need for real discussions of draft laws in parliament. In short, they opposed everything we were working to achieve all these years.

I could not agree with this, and tried as best I could to resist. What happened next is well known: In 2003, I was arrested on contrived charges of fraud, the perfectly well-working company Yukos was dismembered and annihilated, and its pieces became desirable prizes for the vanquisher's friends. I was convicted and sentenced to prison.

Throughout my troubles, I have had considerable support from outside Russia, including a Senate resolution co-sponsored by John McCain, Joe Biden and Barack Obama in 2005, which said I had not received "fair, transparent and impartial treatment" from the Russian justice system.

But that has made little difference. As my sentence was drawing to an end, additional charges were brought against me in an attempt to ensure I would not be freed anytime soon. The charges are so absurd that even government ministers have rejected them in court. The second trial is ending with my final statements in about 10 days. But nobody expects that there will be an acquittal when the verdict is handed down later this year. Acquittals don't happen in the Yukos case.

I understand Russia's current power elite; they came of age at a time when change was dangerous. If the roof is not leaking today, they don't worry that it will in the future. They believe that the oil and gas bonanza will go on forever and that no real reforms need to be enacted, just some make-believe for the TV cameras. They accept corruption, embrace archaic ideas and are united in their desire to keep talented, creative people off the public stage. A modern, innovation-driven economic model is the antithesis of their hierarchical approach.

It is precisely these kinds of mistakes that led to the death of the Soviet Union.

There is a new generation of Russian politicians waiting in the wings, people who are ready to accept the world as it really is: rapidly globalizing and dynamic. These people are ready for real political competition; they believe in an open societal discussion of ideas, strive to win the support of fellow citizens who actually have thought through their positions on the issues and drawn conclusions about the proper course. Members of this new political establishment realize the need for working state and civic institutions that include an independent judiciary, parliament and media. They are ready to run a modern, complex mechanism of state, and not to try to simplify it down to a primitive "vertical" of executive power.

This is why the conservative "old" leadership is very much afraid of a real transfer of power to the "new" generation.

Russia is approaching the very same point that the USSR found itself in back in the second half of the 1980s. Then there arose a crisis of the communist ideology as the planned economy of "real socialism" revealed its strategic inefficiency. For Russia, the second decade of the 21st century will become a period of crisis for a system built on corruption and hands-on control. Insightful Russians with initiative, knowing how to look to the future, understand this already.

In my youth, the leaders of the USSR had no desire whatsoever to leave power. But history obliged them to do so just the same. Today's Russian theoreticians and practitioners of "vertically corrupt management" have no intention of going anywhere.

But they will have to. I know. I've seen it before.

Mikhail B. Khodorkovsky, the former head of the Russian oil company Yukos, has been in prison since being arrested in 2003.

Copyright © 2010, Los Angeles Times

National Economic Trends

Nezavisimaya Gazeta: Economy, politics and demography – Russia’s three challenges http://www.focus-fen.net/index.php?id=n233053

20 October 2010 | 08:35 | FOCUS News AgencyHome / WorldMoscow. Price growth in 2011 may be 1.5 times bigger that the expected, while the GDP growth – twice lower, independent experts warned yesterday, saying that the budget prognoses for 2011-2013 are too optimistic, Russian Nezavisimaya Gazeta reports.The major economic risks for Russia for the next three years are the growing social engagements and the budget deficit, the conservation of the economic lagging and the worsening demographic index.Russia is facing serious risks – economic, political and demographic.Experts believe that government’s prognoses are too far from the real situation in the country.

$100 Oil Needed for Budget http://www.themoscowtimes.com/business/article/100-oil-needed-for-budget/420629.html

20 October 2010

Russia needs the price of oil to average at $100 per barrel to balance its state budget, Erik Berglof, chief economist at the European Bank for Reconstruction and Development, said Tuesday in London.  

The country last year posted its first budget deficit since 1999. It will take three to four years to get rid of the budget deficit, Berglof said.

The government expects to run a fiscal shortfall of 5.3 percent this year and aims to balance state finances by 2015, based on the projected average oil price of $70 a barrel. The country posted a budget deficit of 5.9 percent of gross domestic product last year. Urals crude, the top export earner, has averaged $76.29 this year.

(Bloomberg)

Duma to examine next year’s budgethttp://english.ruvr.ru/2010/10/20/27167007.html

Oct 20, 2010 10:31 Moscow TimeThe State Duma, the Russian Parliament’s lower house, is getting down to examining the draft federal budget for 2011, and for the planning period of 2012 and 2013. The MPs are due to approve the concept, the basic parameters, and a forecast for Russia’s socio-economic development for 2012 and 2013. Revenue is due to make up 8.8 trillion roubles; expenditures will reach 10.6 trillion roubles. The deficit will thus make up 1.8

trillion roubles, which is less than this year’s respective figure. The 2011 federal budget was drafted on the assumed oil cost of 75 dollars per barrel. Russia’s budget policy generally seeks the achievement of socio-economic stability in the country and transit to sustainable growth.

United Russia is only faction that unequivocally supports budget

http://www.itar-tass.com/eng/level2.html?NewsID=15605645&PageNum=0

20.10.2010, 09.10

MOSCOW, October 20 (Itar-Tass) - United Russia is the only faction at the State Duma lower house of the Russian parliament which gives unequivocal support to the draft budget-2011, whose first reading is due on Wednesday.

Three Opposition factions presented a number of recommendations, having challenged its modernization and welfare elements, as well as the effectiveness of the measures to support the agricultural sector.

Speaking about the position of the United Russia faction at the upcoming voting, their leader, house speaker Boris Gryzlov said it would "support budget-2011-2013 in general."

"We took a most active part in its initial ("zero") reading, i.e. we actually worked with the government as one team," Gryzlov said.

Earlier, deputy head of the United Russia faction Tatyana Yakovleva told Itar-Tass that "the draft budget-2011 can be described as optimistic, reparative and post-crisis; there's a light in the end of the "deficit tunnel."

"The part of the budget that covers the government's welfare policy commitments cannot be truncated, as in the previous year. It plans a phased increase in pensions. Starting from February 1, 2011, they will grow by 8 percent. As a result, the average monthly pension will exceed 8,800 roubles," Yakovleva said.

Chairman of the house committee on education Grigory Balykhin said the consolidated budget of education would exceed 2 trillion roubles for the first time in 2011. The federal budget increases the spending on education from 4.37 to 5.3 percent. However, the lawmaker called for boosting the government support of pre-school education.

"We must specify the guidelines of this support. It can be subsidies to build nursery schools or the money to support the best teachers. The construction and renovation of dormitories remain the biggest problem. With the introduction of the EGE (single state examination) as entrance examination by colleges, the need for hostels will increase. The draft budget 2011-2013 must envisions the necessary funding for it," Balykin thinks.

Head of the committee on economic policy and entrepreneurship Yevgeny Fyodorov called for "increasing the revenue from the privatization of state property by selling government stakes in authorized capitals of economic entities."

These measures will help the government decrease the budget deficit, he said.

"In addition, to expedite the restructuring and modernization - based on a new technological mode -- and stimulate investments, it is necessary to find the opportunity to increase the funding of the innovative development guidelines and modernization of the economy," he said.

As usual, the Opposition's view of the main financial document is largely skeptical. Communist leader Gennady Zyuganov claimed at the meeting with Prime Minister Vladimir Putin on October 19 that "there's still a hole in the budget and that obviously, there's not enough money on agriculture."

In the opinion of the Communist faction, it is necessary to dramatically increase the spending on education.

Zyuganov expressed concern over the fact that the budget's health care section conditions the payment of sick leave money on the length of service.

Liberal-democrats do not plan to support the draft budget either. "Most likely, we'll vote against," LDPR faction leader Igor Lebedev said.

The decision was made after the meeting between the faction and Finance Minister Alexei Kudrin. It follows from his answers that after the implementation of the proposed budget, Russian citizens will not fare any better, according to Lebedev.

The Just Russia faction intends to propose an alternative draft budget.

"We've drawn up a realistic budget and will present it at the State Duma's session on October 20," deputy chairwoman of the Party's faction Oksana Dmitriyeva said. The document has been discussed with Just Russia leader, speaker of the Federation Council upper house of the Russian parliament Sergei Mironov.

Mironov scrutinized the final version of the alternative draft budget and coordinated its key parameters, according to the lawmaker.

She reminded that last year, her Party also presented an alternative budget. Just Russia's prognosis in last year's budget proved to be much more accurate than the government's estimates.

"We calculated the main budget parameters on the assumption that the oil price will be around 70 dollars per barrel, while the government predicted it would be at 58 dollars.

The average yearly price of a barrel of oil made up 75 dollars, and as a result, Just Russia's estimate of budget revenue proved to be accurate, whereas the Finance Ministry's prognosis differed from it by 30 percent, according to Dmitriyeva.

Just Russia faction leader Nikolai Levichev said "there is the impression that the carefully balanced budget's role is that of a conservative mechanism to preserve the anti-crisis stability. "There is no impression that it is a budget of modernization," he said.

Putin puts Russia's 2011 inflation at 6.3 pcthttp://english.peopledaily.com.cn/90001/90777/90853/7171285.html

08:39, October 20, 2010Russian Prime Minister Vladimir Putin predicted Tuesday inflation in the country would reach 6.3 percent in 2011.

When meeting with leader of Russian Communist Party Gennady Zyuganov to discuss the draft budget for 2011-2013, Putin said gross domestic product (GDP) of the country was expected to reach 50.4 trillion rubles next year (1.7 trillion U.S. dollars).

He also estimated 2011 budgetary deficit at around 3.6 percent with federal budget spending reaching 10.7 trillion rubles (349 billion dollars).

"In this context, we are standing out against the so-called developed countries. It is our own-made competitive advantage," said Putin as quoted by Russian media.

On the same day, Russian Deputy Prime Minister and Finance Minister Alexei Kudrin also said Russia has planned to reduce the inflation rate to 5.5 percent in 2013, adding that this year the inflation would be around 8 percent or slightly more.

According to Kudrin, last year's 8.8-percent inflation in total has been among the lowest since 1992.

Latest report from the International Monetary Fund released earlier this month forecast that inflation in Russia would reach 6. 6 percent in 2010 and 7.4 percent in 2011.

Source: Xinhua

Business, Energy or Environmental regulations or discussions

Severstal, Rosneft, Polyus, Lukoil: Russian Stocks Preview http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=arloK2D3Meu0

By Maria Levitov

Oct. 20 (Bloomberg) -- The following companies may have unusual price changes in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.

Russia’s Micex Index fell 0.7 percent to 1,490.49. The dollar-denominated RTS Index fell 0.8 percent to 1,570.59.

OAO Severstal (CHMF RX): Severstal’s gold-mining unit is seeking regulatory approval for a $1 billion initial public offering in London, according to three people with knowledge of the plan. Severstal, a Russian steelmaker, fell 2.1 percent to 454.22 rubles.

OAO Rosneft (ROSN RX): Russia may introduce a profit-based tax for the oil industry from 2012, Interfax reported, citing Deputy Finance Minister Sergei Shatalov. Rosneft, Russia’s largest oil producer, fell 0.5 percent to 208.82 rubles.

OAO Polyus Gold (PLZL RX): Gold futures fell the most since July as an unexpected interest-rate increase by China spurred gains for the dollar, curbing demand for bullion as an alternative investment. Polyus, Russia’s biggest gold-miner, fell 2.1 percent to 1,555.80 rubles.

OAO Lukoil (LKOH RX): Oil is likely to trade in the low-to mid-$80 range next year, Daniel Yergin, chairman of IHS- Cambridge Energy Research Associates, said at a conference in Naples, Florida. Lukoil fell 1.5 percent to 1,753.49 rubles.

To contact the reporter on this story: Maria Levitov in Moscow at mlevitov@bloomberg.net

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net

Last Updated: October 19, 2010 22:00 EDT

10/20 11:29   'BIG THREE' TELECOMS TO VOLUNTARILY CUT PRICES FOR INT'L & RUSSIAN ROAMING SIGNIFICANTLY, ARTEMYEV TELLS PUTINhttp://www.interfax.com/newsinf.asp?id=196595

OCTOBER 20, 2010, 4:11 A.M. ET

Russian Mobile Operators Agree To Slash Roaming Tariffs http://online.wsj.com/article/BT-CO-20101020-702656.html

MOSCOW (Dow Jones)--Russia's big three mobile operators, VimpelCom Ltd. (VIP), OAO Mobile TeleSystems (MBT) and Megafon, have agreed to lower tariffs for roaming in Russia and the CIS, the head of the country's antimonopoly agency said Wednesday.

No later than Dec. 1, the mobile operators will "significantly lower tariffs" for roaming in Russia and the Commonwealth of Independent States, Igor Artemyev, head of the Federal Antimonopoly Service, said in a meeting with Prime Minister Vladimir Putin.

Tariffs could be as much as halved for calls and quartered for mobile Internet, while for text messages the rate could be about a third of current tariffs, Putin said at the meeting.

-By Jacob Gronholt-Pedersen and Nadia Popova, Dow Jones Newswires; +7 495 232 9197; jacob.pedersen@dowjones.com

Russian Bridge Builder Mostotrest Seeks $496 Million in IPO http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aUekzbn36I9o

By Brad Cook

Oct. 20 (Bloomberg) -- OAO Mostotrest, a Russian road and bridge builder, is seeking to raise as much as $496 million in an initial public offering to fund upgrades and expand capacity.

Mostotrest is seeking to sell 62.1 million shares for $6.25 to $8 each, the company said in an e-mailed statement today. Deutsche Bank AG and Troika Dialog are managing the sale.

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

Last Updated: October 20, 2010 00:37 EDT

JPMorgan, Troika Dialog, TKB Capital, Deutsche to lead Mostotrest's Moscow debuthttp://www.tradingmarkets.com/news/stock-alert/db_jpm_jpmorgan-troika-dialog-tkb-capital-deutsche-to-lead-mostotrest-s-moscow-debut-1242197.html

Posted on: Wed, 20 Oct 2010 03:38:40 EDTOct 20, 2010 (M2 EQUITYBITES via COMTEX) --

20 October 2010 - Russian construction firm Mostotrest has hired JPMorgan (NYSE: JPM | PowerRating), Deutsche Bank (ETR:DBK), Troika Dialog and TKB Capital to lead its listing in Moscow.

The company said today it has priced its initial public offering (IPO) at between USD6.25 (EUR4.54) and USD8.00 per share hoping to generate between USD388m and USD496m in proceeds.

The final pricing is due on 2 November.

Comments on this story may be sent to info@m2.com

VW and Gaz in contract manufacturing talkshttp://www.ft.com/cms/s/0/b1bb70c0-dbae-11df-a1df-00144feabdc0.html

By John Reed in London

Published: October 19 2010 19:36 | Last updated: October 19 2010 19:36

Volkswagen is in advanced talks with Gaz, the Russian carmaker owned by the tycoon Oleg Deripaska, to assemble vehicles under contract in Nizhny Novgorod.

The two companies are discussing a deal that could see Gaz assemble as many as 150,000 vehicles a year for VW, according to two people briefed on the talks.

The discussions have touched on both cars and light commercial vehicles made by VW’s own brand and its Skoda marque.

If the talks succeed, VW would significantly increase its sales and market share at a time when Russia’s car market – one of the world’s fastest-growing before the financial crisis – is reviving.

The cars would be assembled from completely knocked-down (CKD) components on a production line Gaz bought from Chrysler in 2006. VW already produces cars at a greenfield plant in Kaluga, south-west of Moscow, which was opened in 2007.

VW sold nearly 92,000 vehicles in Russia in January to September, a 28 per cent rise on a year ago, according to the Association of European Businesses. This put it behind Russia’s biggest producer Avtovaz and its 25 per cent shareholder Renault, and General Motors.

Last month, after a visit by Martin Winterkorn, VW’s chief executive, to Russian prime minister Vladimir Putin, the German carmaker confirmed that his company and Gaz had discussed contract manufacturing. He did not discuss the volumes or timing of a possible deal, but said that VW aimed to increase its annual sales in Russia to 360,000 by 2017-18.

VW told the Financial Times on Tuesday that it was looking to expand further in Russia, which it described as a “strategic automotive market”.

However, the carmaker said its decision on Gaz depended on the outcome of changes to rules governing CKD car production now under discussion by the government, which wants foreign carmakers to increase their local content and, in so doing, boost Russia’s supply industry.

Gaz declined to comment on the talks.

Gaz is Russia’s largest producer of light commercial vehicles. However, it has struggled to build a viable passenger car business since the glory days of the Volga, its flagship Soviet-era brand.

Last year, Gaz was aligned with a bid by Canadian supplier group Magna International and Russia’s Sberbank to buy control of GM’s European Opel business and build its cars in Nizhny Novgorod. The project had German and Russian government support, but failed after GM decided to keep Opel.

Last month, Siegfried Wolf, Magna’s former co-CEO who spearheaded the bid, stepped down to become chairman of Russian Machines, the automotive arm of Basic Element, Mr Deripaska’s group.

Should Gaz move into contract manufacturing, Mr Wolf’s skills would be useful. Magna’s Magna Steyr facility in Graz, Austria, is seen as an industry leader in assembling vehicles on contract.

Jennings, Partners Owe Renaissance $695 Million, Vedomosti Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aCM5mLZpbzKg

By Stephen Bierman

Oct. 20 (Bloomberg) -- Renaissance Capital founder Stephen Jennings and partners borrowed more than $700 million from the Russian investment bank to buy assets in Africa, Vedomosti reported, citing unidentified people familiar with the matter.

Jennings is repaying the debt according to plan, the Moscow-based newspaper reported, citing an unidentified person close to billionaire Mikhail Prokhorov’s Onexim Group, which bought half of RenCap in 2008, after the loans were made.

Onexim knew of the loans before it agreed to acquire its stake in RenCap in September 2008 and made ending the practice a condition of the deal, Vedomosti said. RenCap had $695 million of debt to shareholders and affiliated parties as of June 30, Vedomosti said, citing financial statements Renaissance Financial Holdings Ltd. financial statements.

Preston Mendenhall, a spokesman for Renaissance in Moscow, didn’t reply immediately to phone and e-mail message seeking comment. Igor Petrov, a spokesman for Onexim in Moscow, couldn’t be reached immediately when Bloomberg called seeking comment.

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.

Last Updated: October 20, 2010 01:25 EDT

Motorola’s exit leaves Putin red-facedhttp://blogs.ft.com/beyond-brics/2010/10/19/motorolas-exit-leaves-putin-red-faced/

October 19, 2010 7:00pm

by Courtney Weaver

After an arduous 17 years in Russia, Motorola is finally throwing in the towel - and for good reason. Once the country’s leading mobile phone producer, Motorola saw its market share drop from 20 per cent to 1 per cent in a few years, while it became embroiled in a local scandal.

Motorola’s exit is another reminder of why multinationals get so nervous investing in Russia - and it comes in the very week when the government launched a new drive for foreign investors.

Motorola’s troubles date back to 2006 when a $20m-shipment of its phones to local retailer Yevroset was seized by the interior ministry’s economic crimes department. The phones were first declared contraband, then counterfeit, and finally, when the other two claims were disproved, a health hazard.

People working in the Russian handset industry at the time attribute to the raid to a conflict between the economic crimes department and Yevroset, the recipient of the shipment. But it was Motorola’s reputation that suffered thanks to the health claims.

Motorola says it is leaving Russia because of its tiny market share. Certainly, its operation is so small that it won’t be difficult to wind down. But a pull-out now maybe rather hard for the government to accept.

On Monday Vladimir Putin tried to charm foreign chief executives including Robert Dudley of BP and James Turley of Ernst & Young with promises to improve the country’s environment for foreign investments.

The normally-defensive Putin told Reuters:

We understand that Russia needs direct private foreign investment… The government is striving to make really open and attractive investment conditions.

The same day Putin announced liberal point-man and Deputy Prime Minister Igor Shuvalov would become a personal “investment ombudsman” for foreign investors, Russian newswire Interfax reported.

“Foreign investors can go straight to the ombudsman with their needs, proposals and ideas,” Putin soothed.

Investors would be hard-pressed to find a better intermediary than Shuvalov, but the Motorola story will continue to haunt the Kremlin. For every investor that waits four years to exit Russia, there will be another that leaves even sooner.

For the Record http://www.themoscowtimes.com/business/article/for-the-record/420631.html

20 October 2010

The Amsterdam Court of Appeal said Tuesday that the sale of Yukos Finance BV, a Dutch corporation, by the Russian administrator violated international law because the shares do not fall within Yukos Oil’s Russian bankruptcy. (Bloomberg)

Oil output may decline by almost half over the next decade if the government does not offer tax breaks to spur development and crude prices tumble, Vedomosti said Tuesday, citing an Energy Ministry report. (Bloomberg)

Prime Minister Vladimir Putin said Tuesday that the 2011 inflation rate might be 6.3 percent and country can “practically” do without poultry imports starting from next year, Interfax reported. (Bloomberg)

Russian Railways will increase investment this year to 315 billion rubles ($10.3 billion) from 270.5 billion rubles on rising income, CEO Vladimir Yakunin said Tuesday. (Bloomberg)

Goldman Sachs has hired Clemens Grafe as its chief Russia economist, two people said Tuesday.  (Bloomberg)

Activity in the Oil and Gas sector (including regulatory)

Finance ministry sheds light on proposed oil industry tax reform

http://www.rbcnews.com/free/20101020103710.shtml

      RBC, 20.10.2010, Moscow 10:37:10.An added income tax may be introduced starting in 2012, provided that crude export duties and the mining tax remain in place, Deputy Finance Minister Sergei Shatalov told journalists yesterday. The duties and the mining tax could still be revised downwards, however, so that the tax burden on oil companies would not be increased.

      Earlier, Finance Minister Alexei Kudrin announced plans to switch the oil and gas sector over to the added income tax, but the change may apply only to new fields.

      Ministries and agencies concerned have been involved in discussions on a tax system revision for the oil industry for quite some time. In July 2010, the Energy Ministry came up with a tax reform draft that implied a single tax on added income and the abolishment of export duties and mining taxes.

Moscow to lower oil export taxeshttp://www.ft.com/cms/s/0/146b3de0-dba5-11df-a1df-00144feabdc0.html

By Catherine Belton in Moscow

Published: October 20 2010 04:12 | Last updated: October 20 2010 04:12

Russia is preparing to introduce a new profit-based tax on new oilfields from 2012, Sergei Shatalov, the deputy finance minister said, in a move that could quell fears of production decline due to the current tax regime.

The plan would also lower oil export duties and mineral extraction taxes, Mr Shatalov said.

To compensate for the lower taxation on new fields, the ministry could raise export duties on oil products to equal 85 to 90 per cent of the current crude export duty from 2011, Mr Shatalov said.

Oil industry experts hailed the announcement as the first sign the finance ministry is moving to ease the tax burden on upstream development.

“If this is implemented, the oil industry will end up with close to the amount of money it needs to maintain the industry,” said one expert familiar with the discussions. “If they don’t do something there just won’t be enough cash for investment to maintain the industry going forward.”

Existing fields in west Siberia are already declining at rates of 1 to 1.5 per cent, while the industry argues that new investment in greenfield development to offset the decline is impossible under the current ad hoc system of tax breaks for new fields.

Tax holidays for new fields in east Siberia that had helped push overall production up to a record high were partially withdrawn in July. Before they were instated in 2009, Russian crude production had declined for the first time in a decade.

The energy ministry has proposed that export duties be significantly lowered for all fields from the current 65 per cent rate taken from all oil exports above $25 per barrel, according to one person familiar with the proposal.

The energy ministry proposal would also free new fields, including Rosneft’s vast Vankor project and offshore fields in the Caspian, from the mineral extraction tax, while levying a profits-based tax on these new fields instead.

In exchange for the lower export duties on crude exports, the rate of export duties on oil products would be raised, compensating the government in full.

“The government ends up with almost the same revenue,” the expert said. “But this will energise new field development and make them economic, while there will be no longer an incentive to export poor quality oil products.”

The Russian oil industry has been lobbying for a switch to a profit-based regime for production for more than a year, arguing that the current system of tax breaks for new fields is too unpredictable to allow investment decisions to be made.

The finance ministry until now, however, has been digging in its heels arguing it can’t afford to lose any revenue from the industry at a time when it is trying to rein in a budget deficit. It has also questioned whether a profit-based system would incentivise oil companies to return to the transfer pricing schemes of the 1990s when they artificially lowered the tax base.

The finance ministry has until the end of the year to finalise a new tax regime for the oil industry.

UPDATE 1-Russia may add profit-based oil tax in 2012-ministerhttp://uk.reuters.com/article/idUKLDE69I2F220101019

Tue, Oct 19 2010

* New profit-based oil tax for new fields seen from 2012

* Export duties and mineral extraction tax at reduced levels

* Ministry wants to raise, equalize tax on oil products

* Tax could be 85-90 pct of rate for crude export

(Adds details)

By Daria Korsunskaya

MOSCOW, Oct 19 (Reuters) - Russia is preparing to introduce a new profit-based tax on oil from new fields starting in 2012, which will also be subject to reduced export duties and mineral extraction taxes, a Deputy Finance Minister said on Tuesday.

The ministry may raise the export tax on oil products to equal 85-90 percent of the crude oil export duty from 2011, Sergei Shatalov told journalists.

"In all likelihood the export duty and the mineral extraction tax (MET) will stay, but at lower levels than now. In exchange, we will introduce this other tax," said Shatalov, referring to the introduction of a profit-based tax for new deposits.

The Finance Ministry had previously said that a new tax regime, which will move away from the practice of taxing different oil fields at varying levels, would likely be in place by 2012-2013. [ID:nLDE60L0ME]

For the first six months of the year, oil companies producing from greenfields in East Siberia were exempt from paying export duties on crude, but the stimulus measure was partially withdrawn from July. [ID:nLDE65F1Y8]

Russia, currently the only country pumping more than 10 million barrels a day, returned to oil production growth in 2009 after recording its first decline in a decade the previous year.

The long-promised zero export duty on East Siberia, whose beneficiaries included state-controlled sector leader Rosneft (ROSN.MM: Quote, Profile, Research), TNK-BP

(TNBPI.RTS: Quote, Profile, Research) and Surgutneftegaz (SNGS.MM: Quote, Profile, Research), was designed to spur investment in hard-to-access regions.

Companies currently pay an export tax on heavy oil products equal to around 40 percent of the export rate for crude oil. The export tax on light products equals 70 percent of the crude export tax.

But Shatalov said that the government was ready to do away with these "subsidies".

"Of course not all at once, but we are talking about applying the same export tax to light and dark products. We have to look at the basket, but it could be around 85-90 percent of the export duty on crude," said Shatalov. (Reporting by Daria Korsunsakaya; writing by Jessica Bachman; editing by Sue Thomas)

SOCAR has upgraded infrastructure to expand gas exports to Russia and Iranhttp://abc.az/eng/news_20_10_2010_48818.html

Baku, Fineko/abc.az. State Oil Company of Azerbaijan (SOCAR) has announced completion of repair and recovery work in infrastructure to expand gas exports to Iran and Russia.

According to SOCAR, its sub-company Azeriqaz finished reconstruction of a 3 736 m section of 1 220 mm pipeline Astara-Gazimagomed designed to increase gas export to Iran.

Repairs of the 400 m crossing across the Velvelchay River on 1 220 mm gas pipeline Mozdok-Gazimagomed, via which natural gas is exported to Russia, has been completed as well. Siyazan compressor station was subjected to parallel upgrade.

As a result, SOCAR is able to execute a contract with Russian monopoly Gazprom, envisaging an increase in Azeri gas export to Russia since 2011 from 1 billion up to 2 billion cu m a year.

At that, SOCAR has not launched yet negotiations on planned long-term export contract with Iran’s NIGEC, and reconstruction of infrastructure was carried out within preparation for them.

20.10.2010 09:10

TNK-BP Venture Will Bid for Three Iraqi Gas Fields, Times Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=arQQhxtOW4K4

By Alan Purkiss

Oct. 20 (Bloomberg) -- TNK-BP Holding is one of the companies competing for a share of Iraq’s gas reserves in an auction to be held in Baghdad today, the London-based Times reported.

The company, owned jointly by BP Plc and four Russian billionaires, is one of 13 to have qualified to bid for three Iraqi gas fields; others are Total SA of France and Italy’s Eni SpA, the newspaper said.

To contact the reporter on this story: Alan Purkiss in London on apurkiss@bloomberg.net.

To contact the editor responsible for this story: Colin Keatinge in London at ckeatinge@bloomberg.net.

Last Updated: October 20, 2010 01:25 EDT

Petroneft Sale Raises $43M http://www.themoscowtimes.com/business/article/petroneft-sale-raises-43m/420616.html

20 October 2010Bloomberg

Petroneft Resources, a London-listed company producing oil in Russia’s Tomsk region, said Tuesday that it raised about $43 million by selling shares to boost exploration.

Petroneft agreed on the terms of a conditional placing of 63.125 million shares at 43 pence apiece, the Dublin-based company said in a statement. The shares will trade on London’s AIM market and the ESM Market of the Irish Stock Exchange.

“We can generate significant cash flow, target significant proven plus probable reserve growth and take advantage of exciting potential acquisition and new venture opportunities,” chief executive Dennis Francis said in the statement.

The exploration program for 2010-11 targets 132 million barrels of proven and probable reserves, the company said.

Output will reach 4,000 barrels of oil equivalent per day this year, before rising to 12,000 bpd by the end of 2012, the statement said. The company plans to drill 17 new

production wells in 2011 and the same number the year after.

“Petroneft is one of the more expensive exploration and production plays in the CIS, but the threefold reserve upgrade potential more than compensates for this,” Luis Saenz, a

London-based director of international sales at Otkritie Financial Corporation, said by e-mail.

Med Crude-Urals weakens more as new cargoes tenderedhttp://af.reuters.com/article/energyOilNews/idAFLDE69I2H420101019

Tue Oct 19, 2010 5:19pm GMT * Urals in northwest Europe falls to minus $1.50 * South also weak as French strike continues * Market ignores jump in margins to above $6/barrel LONDON, Oct 19 (Reuters) - Urals crude differentialsweakened in northwest Europe on Tuesday as a Russian firmtendered two fresh cargoes and a French oil strike kept themarket under pressure despite a jump in margins, traders said. "In theory, Urals should not be hit as badly as it is todaybecause physically there is not much Russian crude stuck in FosLavera at the moment," a major Russian crude oil buyer said. "But instead Urals has bottomed out and it is not clear whenprices could recover... I would keep an eye on the arbitrage tothe U.S. because on paper it looks quite close," he added. In the window, Vitol sold a late October-early Novembercargo to BP at minus $1.50 to dated in northwest Europe, downfrom the last public deal at minus $1.30, traders said. In the Mediterranean, Lukoil bid at minus $2 but found nosellers, traders said. The last deal was done at minus $1.70. Russia's Surgut offered to sell two cargoes ex-Primorsk inearly November with results due later this week. In France, fuel shortages hit motorists as refinery strikesat all of France's 12 plants went into an eighth day and the keyMediterranean port of Fos-Lavera remained blocked for a 23ndday. [ID:nLDE69I0A7] Some 47 oil tankers remained blocked at Fos-Lavera nearMarseille and strikers blocked oil product barges on River Rhineon the French border near Strasbourg [ID:nLDE69I1U3] On Monday, trading sources said six vessels including crudeoil and chemical tankers have been diverted to otherdestinations from Fos-Lavera but on Tuesday traders said theydid not expect many other cargoes to follow suit. "Those who have been queuing since the beginning areunlikely to be evacuated," the first trader said. "There is a lot of CPC Blend being stuck in Lavera so intheory that grade should come under pressure but we have notseen in yet," he said adding that new CPC barrels should starttrading any day. Urals margins for complex refineries in the Mediterranean

jumped to $6.01 per barrel -- close to record levels seen inmid-May and up from $5.12 on Monday and much higher than theaverage of the past year of $2.62, Reuters models showed.<REF/MARGIN1> (Reporting by Dmitry Zhdannikov; editing by William Hardy)

Gazprom

Gazprom Redirects LNG http://www.themoscowtimes.com/business/article/gazprom-redirects-lng/420630.html

20 October 2010

Gazprom said Tuesday that it was redirecting to Asia liquefied natural gas contracted for the United States from its Sakhalin-2 project on the Pacific coast, after rising U.S. production from shale rocks and an economic slowdown discouraged fuel imports.

Volumes contracted for the United States were sold to China and India, Yelena Burmistrova, Gazprom Export’s managing director for oil, petroleum and petrochemicals, said in an interview with the Gazprom Export corporate newsletter.

Gazprom Global LNG bought some 900,000 metric tons of LNG for supplies to the United States and is still redirecting the volumes, she said.

(Bloomberg)

Gazprom increases gas supply to Turkey during repair of Iranian pipelinehttp://www.steelguru.com/russian_news/Gazprom_increases_gas_supply_to_Turkey_during_repair_of_Iranian_pipeline/170836.html

Wednesday, 20 Oct 2010Interfax reported that Following the temporary suspension of gas supply form Iran to Turkey for technical reasons, Gazprom has been asked to increase its supply of Russian natural gas through the Blue Stream pipeline while repairs on the Iranian pipeline are underway.

Gazprom told Interfax that it, following a Turkish request, had increase its total daily exports of gas to Turkey from 32 million to 40 million cubic meters on October 17. Turkish company Botas made a request for 42 million cubic meters on October 18.

Gazprom said "The Company Botas earlier requested an increase in supplies above the

maximum daily obligations. When technical feasibly, Gazprom has always meets of its consumers and supplied larger deliveries of natural gas."

(Sourced from Interfax)

Kirinskoye development heads subseahttp://www.offshore-mag.com/index/article-display/3032999456/articles/offshore/subsea/russia/2010/10/kirinskoye-development.html

Published: Oct 19, 2010

Offshore staff MOSCOW -- Gazprom has opted for a subsea production system to develop the Kirinskoye field under the Sakhalin III project off north-east Russia.

This will be the country’s first all-subsea development, the company claims. Vladimir Vovk, Head of the Directorate for Offshore Fields Development Technology, said he was confident that subsea production in this area will be safe and economically viable. 

“Subsea production technologies are reliable, feasible, and environmentally safe, as evidenced by accident-free operation in various regions of the World Ocean over many years,” said Vovk.

He added that in Russia’s freezing far-northern seas, where navigation is only possible for three to four months, subsea systems may be the only option. The Shtokman gas-condensate field development in the Barents Sea envisages use of subsea production technologies. They will also be applied in field developments offshore the Yamal region, and likely in the Russian sector of the Caspian Sea. 

10/20 11:17   GAZPROM NEFT RAS NET PROFITS DIP 6% TO 40.024 BLN RUBLES IN Q1-Q3

http://www.interfax.com/

10/19/2010

Gazprom Neft Pushes Into Lubricants http://www.themoscowtimes.com/business/article/gazprom-neft-pushes-into-lubricants/420609.html

20 October 2010By Derek Andersen

Gazprom Neft said Tuesday that it began construction on facilities for the mixing, packaging, storage and shipment of automobile and industrial lubricants to capture a greater share of the eastern Russian and Kazakh markets.

The $65 million facilities are at the Omsk Lubricant Plant, which is part of the Omsk Oil refinery, Gazprom Neft said in a statement.

The new facilities will expand the production of SibiMotor economy-class motor oil for automobiles and Gazprom Neft-brand industrial lubricant. Production of premium G-Energy motor oil — now made in Italy and unavailable in Russia — will be partially carried out there as well.

Total production of lubricants at the plant will rise from the current level of 65,000 tons to 120,000 tons per year.

New storage capacity for both raw materials and finished products and packaging lines are expected to be in service before the end of next year. New blending facilities with a capacity of 70,000 tons will be finished within a year after that.

Gazprom Neft will invest 2 billion rubles ($65 million) in the project by its completion, it said in the statement. The company plans to occupy 20 percent of the lubricant market in the Asian part of Russia and 30 percent of the market in Kazakhstan by 2015.

Gazprom Neft accounted for 15 percent of the Russian lubricant market last year, having sold 425,000 tons of the products.

Pavel Sprokov, development director of the Kortes research agency, characterized the market for lubricants as "limited." He said consumption of all automobile products is growing in Kazakhstan more than in Russia.

In Russia, economic recovery and a state program to encourage the purchase of new cars is having a beneficial effect on the market for automobile products, Sprokov added.

The Russian program, introduced at the beginning of this year, offers owners of cars 10 years old or older a payment of 50,000 rubles (about $1,600) toward the purchase of a new car, in exchange for taking the old car out of use.

At the beginning of this year, of 19.6 million cars on Russian roads, 56.9 percent of the total were more than 10 years old.

The Omsk Oil Refinery has also opened a unit for the production of polymer-modified asphalt binder and asphalt emulsion, two important components of paving asphalt, Gazprom Neft said Tuesday.

The new products will incorporate technical improvements that will allow them to remain stable to temperatures as low as minus 30 degrees Celsius and have a service life of seven

to 10 years, while costing less than 1 percent per kilometer more to use than traditional products.

The Sibur company will supply the polymer to make the substances, Gazprom Neft said. The unit's capacity is 10,000 tons of asphalt binder and 3,000 tons of emulsion.

20.10.2010

Gazprom Marketing & Trading Inks "Groundbreaking" Deal in Chinahttp://www.oilandgaseurasia.com/news/p/0/news/9221

Gazprom Marketing and Trading has agreed to purchase all Primary Carbon Emissions Certificates ("CERs") from a successfully registered CDM 26 MW Wind Power Project Fujian Zhangpu Liuao, owned by Datang group located in Zhangpu County, Fujian Province, People’s Republic of China, the company reported in a news release.

The CER purchase from the proposed project is expected to generate an estimated emission reduction of 125,623 tons of CO2e by the end of 2012.

The proposed Wind Power Project has been fully operational since December 2008 and was successfully registered as a CDM project on February 2010.

The implementation of the proposed project will achieve CO2 emission reductions by replacing electricity generated by fossil fuel fired power plants.

The purpose of the proposed project is to generate zero emission wind power and deliver it to East China Power Grid (ECPG). The annual output of the proposed project is estimated to be 51,950MWh.

Annual estimation of emission reductions is 47,867 of tCO2e. The project activity is expected to generate an estimated emission reduction of 335,069 tCO2e during the first 7 years crediting period of the project (June 2009 – May 2016).

"Today's agreement will provide more liquidity to our portfolio of Carbon products and will therefore help us deliver more value to our global clients," GM&T Singapore Managing Director  Arthur Tait, said.

"We hope that this is the first of many deals that we arrange with Datang group and Beijing Exchange as well as with Chinese key counterparties.”

Copyright 2010, Gazprom Marketing and Trading. All rights reserved.