Russia 090727 Basic Political Developments Russia Welcomes North Korea's Move On Nuclear Talks – Report: Russia welcomes North Korea's suggestion it could re-enter talks over its nuclear weapons program, a source in the Russian Foreign Ministry was quoted as saying Monday. Russia, US to resume arms talks in September - The fifth round of talks between Russia and the US on a deal to cut their nuclear weapons and finalise a successor to the Strategic Arms Reduction Treaty (START) will be held in early September in Geneva. Senate warns against concessions on nuclear treaty - The Senate is making it clear to the Obama administration that it will look askance at concessions, particularly on missile defense, that the United States might make to conclude a new nuclear arms reduction treaty with Russia. President Triet lauds great co-operation with Russia - Lavrov proposed that the two countries discuss a trade- investment action plan through 2012 to remove project difficulties at the next meeting of the inter- governmental committee. Russia admits violation in Ukraine base incident - Russia made a rare admission on Sunday that it had violated Ukrainian law by trying to transport cruise missiles outside its Black Sea naval base of Sevastopol, Russian news agency RIA reported. Russian diplomat to leave Kyiv on Tuesday - Vladimir Lysenko, an official with the Russian embassy in Ukraine, who, according to media reports, is being deported from Ukraine is leaving Kyiv on Tuesday. Russian diplomat’s extradition from Ukraine to have consequences - “Such initiatives don’t reflect the viewpoint of the entire executive branch. It means that those standing behind them are trying to play the Russian card pursuing their internal political goals,” Lavrov emphasized.
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Russia 090727
Basic Political Developments Russia Welcomes North Korea's Move On Nuclear Talks – Report: Russia
welcomes North Korea's suggestion it could re-enter talks over its nuclear weapons program, a source in the Russian Foreign Ministry was quoted as saying Monday.
Russia, US to resume arms talks in September - The fifth round of talks between Russia and the US on a deal to cut their nuclear weapons and finalise a successor to the Strategic Arms Reduction Treaty (START) will be held in early September in Geneva.
Senate warns against concessions on nuclear treaty - The Senate is making it clear to the Obama administration that it will look askance at concessions, particularly on missile defense, that the United States might make to conclude a new nuclear arms reduction treaty with Russia.
President Triet lauds great co-operation with Russia - Lavrov proposed that the two countries discuss a trade-investment action plan through 2012 to remove project difficulties at the next meeting of the inter-governmental committee.
Russia admits violation in Ukraine base incident - Russia made a rare admission on Sunday that it had violated Ukrainian law by trying to transport cruise missiles outside its Black Sea naval base of Sevastopol, Russian news agency RIA reported.
Russian diplomat to leave Kyiv on Tuesday - Vladimir Lysenko, an official with the Russian embassy in Ukraine, who, according to media reports, is being deported from Ukraine is leaving Kyiv on Tuesday.
Russian diplomat’s extradition from Ukraine to have consequences - “Such initiatives don’t reflect the viewpoint of the entire executive branch. It means that those standing behind them are trying to play the Russian card pursuing their internal political goals,” Lavrov emphasized.
Moscow Patriarch Kirill not to meet with representatives of Ukrainian Orthodox Church
Patriarch Kirill arrives in Kiev Patriarch Kirill met at Kiev airport by Ukraine Church Head, MPs Russian Church leader starts 10-day tour of Ukraine Russia patriarch to go on 10-day visit in Ukraine Russian patriarch visits Ukraine - Some Ukrainian Orthodox believers think
Patriarch Kirill's visit is aimed primarily at boosting political Russian influence in their country.
Plans move ahead for highway around Black Sea - Russia is the ninth country to approve plans to build a highway encircling the Black Sea, Gazeta.ru writes, as Russian Transportation Minister Igor Levitin submitted the interstate memorandum to the government on Thursday.
Kyrgyz opposition in Russia after disputed vote - Kyrgyzstan's opposition leader headed to Russia on Monday seeking to win Moscow's support in his standoff with President Kurmanbek Bakiyev following last week's disputed election in the Central Asian nation.
Moldova hopes to receive $150Mln loan from Russia in August-September –Voronin
Moldova President Vornin: No Link Between Russian Loan, Influence Lukashenko supports high-grade Customs Union - The President of Belarus
considers the Customs Union can significantly strengthen the role of the post-Soviet territory in world globalization.
Russia's Medvedev OKs setting up EurAsEC bailout fund - The EurAsEC bailout fund, which will be run by the Eurasian Development Bank, is expected to total U.S. $10 billion. The first installment of Russia's $7.5 billion contribution is expected to amount to $750 million.
Russian general: increasing amounts of drugs are smuggled to Estonia EU Ambassador Says Russia at Risk - Russia risks being a Third World-style raw
material exporter mired in economic crisis unless it boosts democracy and the rule of law, European Union Ambassador to Russia Marc Franco said in an interview.
Russia, China Conclude Joint Military Exercise Human Rights Runaround - For years, the victims of Russia’s counterterrorist
operations and their families have sought justice through the only effective and legal channel, the European Court of Human Rights in Strasbourg. The Russian government loses roughly 95 percent of the cases that reach the court, the human rights watchdog of the Council of Europe. Russian cases made up nearly a third of the court’s case load last year, costing the Kremlin millions of euros in compensation for human rights violations.
Police to Pass on UN Offer - Foreign Minister Sergei Lavrov said Sunday that investigators would turn down an offer from a group of UN human rights experts to help investigate the killing of Memorial activist Natalya Estemirova earlier this month.
Chechen Separatists To Halt Attacks On Police – Report Akhmad Zakaev says he recognizes legitimacy of Chechnya President Ramzan
Kadyrov ‘Black Issa’ killed in Russian FSB directorate’s operation in Chechen Republic Policemen who died in Grozny are senior officers of Chechnya’s Interior High power explosive goes off in N Caucasus region of Ingushetia - A high power
explosive went off on the Kavkaz federal automobile road in the North Caucasus region of Ingushetia Sunday night.
Medvedev Embraces Russian Image as Bear - The Russian bear needs to be attractive to be respected by the rest of the world, and it cannot become stronger without good foreign relations, President Dmitry Medvedev said in an interview broadcast Sunday.
Medvedev Outlines Vision Of 'Modern Bear' - "Our image must be one with which our partners can be comfortable," Medvedev said in an interview to NTV television.Russian bear must be modern to be attractive: Medvedev
Russian Navy ends first stage of Nerpa sub trials in Far East - The first stage of new sea trials of Russia's Nerpa nuclear attack submarine, which was damaged in a fatal accident in previous tests, has been successfully completed, the Amur shipyard said on Monday.
Russia to start building 2 vessels for Black Sea Fleet in 2010 - Russia will start building a surface ship and submarine for its Black Sea Fleet in 2010, the Russian Navy's commander said on Sunday.
Spotlight on Russia’s Role in Climate Control - Most of the Russian Federation, after all, is pretty chilly, and the building stock — much of it byproducts of Soviet-era design — is profoundly inefficient.
A Strong Hand in Banking Could Backfire - A visit to Sberbank headquarters by Prime Minister Vladimir Putin last week may have been more cordial than some of his recent corporate appearances, but the message was little changed.
MT: The White Elephant Called Bulava - By Alexei Nikolsky Russia marks Navy Day Navy Day marked in Russia for the 70th time Sunday Vladivostok Celebrates the Russian Navy Day In Spite of Medvedev's Optimism Russian Military Is Facing Severe Crisis -
David Eshel Trunov in City Duma Race Court Allows Bobylev Arrest - Moscow’s Tverskoi District Court on Friday
sanctioned the arrest of Sergei Bobylev, a co-owner of Sunrise, one of Russia’s largest computer retail chains.
Russia frees crime boss wanted by U.S.: report - Russia has released a suspected organized crime boss who is wanted by the United States for alleged fraud and racketeering, the Financial Times reported on Monday, citing his lawyer.
Nekrasov, Mogilevich Possibly Released After Arrests Expired Bureaucratic mess strips natives of citizenship - Thousands of Russians find
themselves stripped of all rights and benefits in their own country because their names get lost in a paper trail while they try to replace their internal passports.
Adoptions from Russia losing popularity in the US – official
National Economic Trends Russia May Borrow $52 Billion for 2010 Deficit, Vedomosti Says Russia plans bankruptcy law reform – FT Macroeconomic indicators - Russia industrial production in H1 dips by 14.8pct
YoY Russia daily c.bank swap limit at 5 bln rbls Russia c.bank injects 31.3 bln roubles via repos Average Russian pension will increase by one-fifth to 7,781 roubles by the end of
2010, Rossiiskaya Gazeta reports.
Business, Energy or Environmental regulations or discussions Severstal, Evraz, Aeroflot, Mechel: Russian Equity Preview Russia’s rich move money out - In 2008 Russia’s rich almost doubled their
transfers abroad compared to the previous year with overall investment into foreign economies totaling $25.6 billion.
Ministry Sees High Capacity Price Cap - The Energy Ministry has suggested a price cap of 500,000 rubles ($16,000) per megawatt of capacity at newly built power stations in western Russia and 600,000 rubles ($19,000) for the stations located in Siberia.
Utilities - new capacity market proposal highlights Group E4 Secured Contract for Construction of New Power Plant in Ugra Putin Receptive as Steel Firms Appeal Steel Sector: Lots of hot air, no tangible support UC Rusal is close to completing restructuring of US$7.4bn of foreign debt Russian Railways to lose if steel scrap tariff is reduced EBRD to lend Freight One $100m Chelyabinsk Output Down Russia reports 24.6% gold output growth in 1H09 Alrosa to Reduce Rough Prices to Jump Start Sales, Report Claims Bank VTB cuts lending rates for strategic enterprises VTB gets prime real estate in lieu of debt-paper Sberbank Capital Takes Mosmart Stake Kazakh bank BTA says Sberbank talks continue Potash producers: All key potash producers conclude contracts with India Uralkali Signs India Deal Perm's Mineral Fertilizers lowers net profit by 20% in H1 GM-AvtoVAZ plant in south Russia resumes work after holiday AvtoVAZ Workers Plan Salary Protest - AvtoVAZ workers will hold a
demonstration Aug. 6, five days after Russia’s biggest carmaker suspends production for a month, to protest against pay cuts of 50 percent that the company plans in response to slumping sales.
Kopeyka Seeks 2 Billion Rubles From Sberbank to Refinance Bonds Russian meat and poultry prices rise 27 Jul 2009 - Russian meat prices have
grown 5% on the average following the results of the first half of 2009. Knauf starts building €110m gypsum board plant Russia has fastest hotel construction rate in Europe, report says
Activity in the Oil and Gas sector (including regulatory) Domestic Oil Prices Down - Domestic oil prices for August delivery were fixed
10 percent down versus July on Friday at 7,800 rubles to 8,200 rubles ($251-$263.9) per ton, traders said citing crude oversupply.
Trutnev Wants Easier Access for Foreigners - Emboldened by a sevenfold surge in crude prices from 2002 to over $147 a barrel in July 2008, the country had passed laws to curb foreign participation in tapping its mineral resources.
Mitsubishi, Mitsui Interested in Acquiring Sakhalin-3 Stakes LUKoil to Return to Ghana - LUKoil and U.S.-based Vanco Energy may be ready
to resume operations on a deepwater block off the Ghanaian coast next month after repairs to their drilling ship, Vanco Energy vice president Jeffrey Mitchell said Thursday.
Tatneft to enter Belarusian market Tatneft postpones launch date for Nizhnekamsk refinery Blocks Offered in Three Russian Regions and Awarded in Two Regions
Gazprom Putin Dodges Miller’s Idea on Import Tariffs Gazprom proposes gas import tariffs
Gazprom almost fully buys production of local producers - Gazprom OJSC buys 90 percent of equipment and other production from Russian enterprises, head of gas concern, Alexei Miller, said during a working meting with Russian Prime-Minister Vladimir Putin, Vesti TV channel said.
Prime Minister Vladimir Putin held a meeting with Deputy Chairman of the Board of Directors, Chairman of Gazprom's Management Committee, Alexei Miller
PGNIG CEO welcomes possible Gazprom deal extension Yamal pipeline laying proceeds Gazprom places USD 1.25 billion and EUR 850 million in LPN Gazprom May Invest Less Gazprom 2010 capex to be RUB645 bln Gazprom Neft Repays Loan
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Full Text Articles
Basic Political Developments
Russia Welcomes North Korea's Move On Nuclear Talks - Reporthttp://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200907270440dowjonesdjonline000104&title=russia-welcomes-north-koreas-move-on-nuclear-talks---report
MOSCOW (AFP)--Russia welcomes North Korea's suggestion it could re-enter talks over its nuclear weapons program, a source in the Russian Foreign Ministry was quoted as saying Monday.
"This is a step in the right direction," the unnamed Russian diplomat said, quoted by the ITAR-TASS state news agency.
Earlier Monday the North Korean Foreign Ministry said it was open to a new format for disarmament negotiations, while reiterating it was opposed to returning to the six-party talks that it quit earlier this year.
"There is a specific and reserved form of dialogue that can address the current situation," a North Korean Foreign Ministry spokesman said. The reclusive communist state didn't specify what format it meant, but some analysts believe it is seeking direct talks with the U.S. to replace the six-party format.
Russia was a participant in the stalled six-party talks aimed at convincing Pyongyang to give up its nuclear program in exchange for economic aid, together with the U.S., China, Japan and the two Koreas.
Russia has long resisted U.S. calls for tougher action against Pyongyang, but earlier this year it supported a U.N. Security Council resolution that imposed new sanctions on the country after it tested a nuclear weapon.
(END) Dow Jones Newswires 07-27-090440ET Copyright (c) 2009 Dow Jones & Company, Inc.
Russia, US to resume arms talks in Septemberhttp://timesofindia.indiatimes.com/NEWS/World/Rest-of-World/Russia-US-to-resume-arms-talks-in-September/articleshow/4824356.cms
PTI 27 July 2009, 10:03am ISTMOSCOW: The fifth round of talks between Russia and the US on a deal to cut their nuclear weapons and finalise a successor to the Strategic Arms Reduction Treaty (START) will be held in early September in Geneva.
Russian Foreign Ministry sources said the September negotiations were agreed upon at the July 6 meeting between Russian President Dmitri Medvedev and visiting US President Barack Obama.
The sides arranged to hold the next round of talks at the end of August or at the beginning of September in Geneva, sources said.
The START successor treaty intends to cut the number of deployed nuclear warheads on each side to 1,500-1,675 from levels above 2,200.
The 1991 deal expires on December 5, so Moscow and Washington are expecting to replace it with a 10-year agreement.
Russia, however, has voiced disagreement with the US plans to deploy anti-missile defense systems in Poland and the Czech Republic.
Senate warns against concessions on nuclear treatyhttp://www.google.com/hostednews/ap/article/ALeqM5iLxDjhE67P2IVhWnnDg9gLlTccawD99MM4T00
By JIM ABRAMS (AP) – 43 minutes ago
WASHINGTON — The Senate is making it clear to the Obama administration that it will look askance at concessions, particularly on missile defense, that the United States might make to conclude a new nuclear arms reduction treaty with Russia.
In several resolutions included in a defense budget bill passed late Thursday, the Senate went on record endorsing a missile defense system being considered for Eastern Europe
that Russia detests, and warning against any arms treaty with Russia that puts limits on that system.
President Barack Obama and Russian President Dmitry Medvedev, meeting in Moscow earlier this month, set a goal of reducing strategic warheads by about a third, to a range of 1,500 to 1,675. The intent would be to come up with a nuclear arms reduction pact to replace the Strategic Arms Reduction Treaty (START), which expires Dec. 5.
But treaties must be ratified by 67 senators or two-thirds of those present, giving the Senate's 40 Republicans, with their traditional advocacy of a strong nuclear deterrent, rare leverage.
Sens. Jon Kyl, R-Ariz., and Jeff Sessions, R-Ala., won voice approval Thursday of a nonbinding "sense of the Senate" resolution that the START follow-on treaty not include limits on ballistic missile defense, space capabilities or advanced conventional weapons. It also called on the president to report on the administration's plans to enhance the safety, security and reliability of U.S. nuclear weapons.
On another voice vote, the Senate endorsed a resolution by Sessions and Sen. Joe Lieberman, I-Conn., expressing support for a ground-based midcourse missile defense (GMD) system in Poland and the Czech Republic. Alternative sites should be considered only if they are equally capable of protecting the United States and Europe from future long-range Iranian missiles, it said.
Lieberman said the resolutions "are our way of sending a message both to the administration and to the Russians." He said he is open to options other than Poland and the Czech Republic as sites for a missile defense system, including missile defense cooperation with Russia, but "not at the cost of in any way diminishing our security."
Obama has made no final decision on proceeding with the Poland-Czech plan, proposed during the George W. Bush administration. Russian leaders say deployment of a missile defense system in Eastern Europe is a direct threat to their country. They suggested that progress on an arms agreement could hinge on the U.S. giving up its missile defense plan.
Sessions said he was concerned the administration was pursuing alternatives to the Poland-Czech proposal "as part of a grand strategy to reset relations with Russia and conclude a follow-on to the START nuclear reduction agreement."
He said he was baffled by Russian "bluster."
"Perhaps this is a way they think they can extract concessions from the United States as a bargaining chip," Sessions said.
Conservatives would not be overly concerned about the numbers in a new arms reduction treaty if the administration doesn't look like it is abandoning missile defense and other
areas such as weapons development, said Stephen Flanagan, an international security specialist at the Center for Strategic and International Studies.
Another factor is that the urgency Cold War arms talks had no longer exists, said Gary Schmitt, director of advanced strategic studies at the American Enterprise Institute.
"The Obama administration can overestimate how much momentum there is for doing anything in this area," Schmitt said.
Schmitt said senators will question any treaty that comes to them before the Pentagon completes a congressionally mandated Nuclear Posture Review. That report on nuclear threats and deterrent capabilities is due by the end of 2010.
"There are chances of ratification," said Ariel Cohen, senior research fellow and Russia expert at the Heritage Foundation, "provided the administration does not capitulate" on the European defense system.
In 1999, during the Clinton administration, the Senate rejected the Comprehensive Nuclear Test Ban Treaty after its supporters couldn't muster even a simple majority.
Senators contended the treaty, which the United States informally abides by, lacked adequate means of verification. Obama has expressed interest in trying to get it ratified by the Senate.
Copyright © 2009 The Associated Press. All rights reserved.
President Triet lauds great co-operation with Russiahttp://vietnamnews.vnagency.com.vn/showarticle.php?num=03POL270709
(27-07-2009)
HA NOI — The Government and people of Viet Nam treasure and wish to further develop relations with Russia, President Nguyen Minh Triet has said.
The President made the statement on Saturday while receiving Russian Foreign Minister Sergei Lavrov, who is on an official visit to Viet Nam, adding that Russia was an important strategic partner and a faithful friend to Viet Nam.
The two sides expressed their pleasure at the development of the relationship between Viet Nam and Russia, especially in the fields of politics, security and national defence, education and training, science and technology, and economy and trade.
President Triet invited President Dmitry Medvedev to pay an official visit to Viet Nam.
For his part, Lavrov said President Medvedev and Prime Minister Vladimir Putin had both valued Viet Nam-Russia relations in the past, adding that he hoped the two countries would actively implement the agreements signed during President Triet’s visit to Russia in October last year.
He went on to say that Russia wanted to accelerate the signing of a co-operative agreement between the two countries’ State Banks.
While receiving the Russian Foreign Minister on Saturday, Prime Minister Nguyen Tan Dung said Viet Nam attached importance to the development of its strategic partnership with Russia.
He said that the Vietnamese State and people would try to promote trade, create favourable conditions for the import of Vietnamese products to Russia and attract Russian investors to Viet Nam.
PM Dung suggested that the two countries remove obstacles to bolster co-operation in energy, telecommunications and science and technology.
He also asked Russian authorities at all levels to create favourable conditions for Vietnamese people residing in their country, especially Vietnamese traders at Cherkyzovo Market in Moscow, which was closed on July 1st.
Lavrov said the two sides had agreed to further promote Viet Nam-Russia relations to create good conditions for Russian investors in Viet Nam, intensify the import of Vietnamese products to Russia, and promote activities to celebrate the 60th anniversary of diplomatic ties between Viet Nam and Russia in 2010.
He proposed that the two countries discuss a trade-investment action plan through 2012 to remove project difficulties at the next meeting of the inter-governmental committee.
He also reaffirmed the Russian Government’s support for the Vietnamese community working and studying in Russia, especially for those who do business at Cherkyzovo Market.
Energy co-operation
At a meeting with Viet Nam’s Deputy Prime Minister and Minister of Foreign Affairs Pham Gia Khiem, Lavrov agreed with Khiem that Viet Nam-Russia bilateral relations had developed remarkably, especially in exchanges of high-ranking delegations.
Khiem thanked the Russian Foreign Ministry, Russian diplomatic missions in New York and other international organisations for their close co-ordination with their Vietnamese counterparts in dealing with international and regional issues during the time that Viet Nam has been a non-permanent member of the United Nations Security Council.
Lavrov spoke highly of Viet Nam’s role at multilateral forums, especially at regional organisations such as the Association of Southeast Asian Nations (ASEAN), the Asia-Europe Meeting (ASEM) and the Asia-Pacific Economic Co-operation (APEC).
He expressed his wish that Russia and Viet Nam would continue to co-operate closely in the international arena for the sake of peace and world development.
The two also discussed the socio-political situation in each country, measures against the economic crisis and other international and regional issues of mutual concern.
They agreed to boost bilateral trade and investment relations. Khiem said Viet Nam encouraged Russian investors to join in large energy, infrastructure and high- tech projects in Viet Nam.
Both sides praised the effectiveness of bilateral co-operation in the energy sector, particularly the exploration and exploitation of gas and oil in the Viet Nam’s continental shelf.
After the meeting, the two witnessed the signing of a memorandum of understanding on co-operation between the Vietnamese Ministry of Science and Technology and Russia’s State Atomic Energy Corporation (ROSATOM).
Vietnamese officials also requested the Russian Government to create favourable conditions for overseas Vietnamese who work and study in Russia, especially during the current world economic crisis.
Khiem and Lavrov agreed on activities to celebrate the 60th anniversary of Viet Nam-Russia diplomatic relations to be held in 2010.
Khiem presented the Friendship Medal from the Vietnamese President to Lavrov in recognition of his active contribution to strengthening and developing the traditional relationship and strategic partnership between Viet Nam and Russia. — VNS
Russia admits violation in Ukraine base incidenthttp://www.reuters.com/article/newsMaps/idUSTRE56P0JK20090726
Sun Jul 26, 2009 7:33am EDT
MOSCOW (Reuters) - Russia made a rare admission on Sunday that it had violated Ukrainian law by trying to transport cruise missiles outside its Black Sea naval base of Sevastopol, Russian news agency RIA reported.
Earlier this month, Ukrainian police blocked a convoy of Russian trucks from leaving the base to transport missiles through the Ukrainian city, adding to tensions between the two ex-Soviet states.
"We acknowledged there were violations of basic agreements on basing the Russian Black Sea fleet in Sevastopol," RIA quoted Russian navy commander Admiral Vladimir Vysotsky as saying.
"We believe those were serious violations," he said. "Those responsible will be punished, quite heavily at that."
Vysotsky, who was in Sevastopol to mark Russia's annual Navy Day, said the paperwork dealing with the convoy had not been not done properly.
Moscow leases a base for its Black Sea Fleet in Sevastopol, a port in the Crimea peninsula populated mainly by ethnic Russians. The status of the base has been a thorn in relations between Moscow and Kiev since Ukraine's independence in 1991.
Ukraine, which has committed itself to closer ties with the West and whose President Viktor Yushchenko is pressing for NATO membership, wants Russia to close the base in 2017 as stipulated by existing agreements.
Russia sees NATO expansion up to its borders as a threat to its security and was troubled by joint Ukrainian-NATO naval exercises last July in the Black Sea.
Tensions hit a peak the following month, when Russia sent warships from the base to Georgia during its five-day war with the Caucasus state. Yushchenko backed Georgia in the conflict.
The two sides have traded accusations over a series of incidents concerning the base and in the past have been reluctant to acknowledge any guilt.
Relations are also marred by disputes over Russia's gas supply to Ukraine and its transit to Europe.
(Writing by Oleg Shchedrov; editing by Andrew Roche)
Russian diplomat to leave Kyiv on Tuesdayhttp://www.kyivpost.com/nation/45955
Today, 11:22 | Interfax-Ukraine
Vladimir Lysenko, an official with the Russian embassy in Ukraine, who, according to media reports, is being deported from Ukraine is leaving Kyiv on Tuesday.
"I am leaving for Moscow tomorrow," Lysenko said in an interview with Interfax on Monday.
When asked what he thinks about the prevention of conflicts that the Black Sea Fleet command frequently has with the Ukrainian authorities, Lysenko said: "Russia has always called on Ukraine to sit down at the negotiation table and discuss all issues. We are hoping that our call will be heard."
Lysenko pointed out that conflicts should be resolved through negotiation.
According to earlier reports, the Ukrainian Foreign Ministry has demanded that Lysenko, who is in charge of Black Sea Fleet issues, leave Ukraine by July 29.
According to Ukrainian sources, Lysenko, will not be declared persona non grata in Ukraine.
Russian Foreign Minister Sergei Lavrov earlier called the reports on the deportation of the Russian diplomat "pure provocation" and warned Ukraine that Russia will take measures to respond to this step.
"Diplomacy is a mutual art, and therefore such measures cannot go without a response," he said.
Russian diplomat’s extradition from Ukraine to have consequences
http://www.itar-tass.com/eng/level2.html?NewsID=14178070&PageNum=0
HANOI, July 25 (Itar-Tass) - Russian Foreign Minister Sergei Lavrov said on Saturday that the extradition of a Russian diplomat from Ukraine didn’t reflect the viewpoint of the entire executive branch in that country.
“Such initiatives don’t reflect the viewpoint of the entire executive branch. It means that those standing behind them are trying to play the Russian card pursuing their internal political goals,” Lavrov emphasized.
“It’s sad,” the minister added.
“I don’t see any reason which could explain this decision. Therefore, I regard it exclusively as another step in a succession of unfriendly acts taken against Russia by the current leadership in Kiev,” Lavrov said.
“We are studying this matter carefully, there will be certain consequences. But this is not our choice,” the Russian foreign minister stressed.
“At the same time we know for sure that not all bodies of executive power in Ukraine are sharing this approach. Therefore, such initiatives don’t reflect the approach of the entire executive branch in that country,” Lavrov said in conclusion.
Moscow Patriarch Kirill not to meet with representatives of Ukrainian Orthodox Churchhttp://www.kyivpost.com/nation/45956
Today, 11:21 | Ukrainian News
Patriarch of Moscow and All-Russia Kirill does not intend to meet with the representatives of the Ukrainian Orthodox Church of Kyiv's Patriarchate, he told the press.
As Ukrainian News earlier reported, the Ukrainian Orthodox Church has said its ready to hold official meeting with the representatives of the Russian Orthodox Church to discuss the overcoming of current problems between the two churches.
27 July 2009, 11:40
Patriarch Kirill arrives in Kievhttp://www.interfax-religion.com/?act=news&div=6244
Kiev, July 27, Interfax - Patriarch Kirill of Moscow and All Russia arrived in Kiev Monday morning.
The airliner with a delegation of the Russian Orthodox Church landed at about 9 a.m. at Borispol airport.
In his visit to Ukraine the Patriarch is accompanied by hierarchs from the Moscow Patriarchate, officials from the Holy Synod as well as journalists of key Russian TV channels, news agencies and printed press.
From the airport the Patriarch headed for the Hill of St. Vladimir where he is expected to conduct a liturgy in honor of St. Vladimir and from there to the Kiev Laura on the Caves monastery where he will conduct a session of the Holy Synod of the Russian Orthodox Church.
The Patriarch will meet Ukrainian President Viktor Yuschenko on Monday after which he plans to visit the Tomb of the Unknown Soldier and the Monument to the Victims of Holodomor.
Patriarch Kirill met at Kiev airport by Ukraine Church Head, MPs
http://www.itar-tass.com/eng/level2.html?NewsID=14181321
KIEV, July 27 (Itar-Tass) - Patriarch of Moscow and All-Russia Kirill on Monday arrived in Ukraine on a 10-day pastoral visit. Head of the Ukrainian Orthodox Church Metropolitan Vladimir, deputies of the Ukrainian parliament, leader of the Party of Regions Viktor Yanukovich, Russian diplomats met the Russian patriarch at Kiev’s Borispol airport. Girls in the Ukrainian national costumes with bread and salt and a bouquet of white roses welcomed the Patriarch at the planeside.
The flags of Ukraine and the Patriarchal Standard were hoisted. From the airport the Russian Patriarch will go to the Vladimirskaya Hill where he will hold the first prayer service at the monument to Prince Vladimir – the Baptiser of Rus.
Patriarch Kirill is for the first time visiting Ukraine in the capacity of the Russian Orthodox Church (ROC) Head. It is his second foreign visit. Aster meeting the Ecumenical Patriarch of Constantinople, Kirill arrived in Ukraine where the ROC history started and where almost half of ROC congregation lives.
During the trip the ROC Head will visit 10 cities. He will visit the central, eastern, western eparchies, as well as the Crimea. The Russian Patriarch will visit ancient churches and churches under construction, will hold divine services, meet students of the Ecclesiastical Academy and will speak live on television.
The programme includes meetings with the Ukrainian leadership – President Viktor Yushchenko and Prime Minister Yulia Timoshenko. Literally one day before the arrival of the Russian Patriarch Yushchenko again made a statement expressing the desire to establish the Ukrainian national church independent from the ROC. “The big historical truth and justice for Ukraine will be the establishment of the united Local Orthodox Church,” the Ukrainian president said in an address to the nation on he occasion of the “Day of Baptism of Rus-Ukraine.”
The Patriarch’s visit also has a cultural component. The republic’s culture establishments during his trip will receive certificates for getting the complete set of works and letters of writer Nikolai Gogol. This Russian-Ukrainian is published by the ROC Publishers on the year of the 200th anniversary since the great Russian poet’s birth.
The Ukrainian television channel Inter will show live broadcasts of the main events linked with the Russian Patriarch’s visit. TV viewers of Russia and Ukraine will see divine services in all three Ukrainian Lavras – the Kiev Pechersk Lavra, Svyatogorsk Lavra and Pochayevsk Lavra. A live television show is planned for the evening of July 28 with the participation of the Russian patriarch and renowned culture and arts workers, as well as representatives of science and sports of Russia, Belarus and Ukraine.
The Kiev Pechersk Lavra, also known as the Kiev Monastery of the Caves, is a historic Orthodox Christian monastery in Kiev, Ukraine. Since its foundation as the cave monastery in 1015 the Lavra has been a preeminent centre of the Eastern Orthodox
Christianity in Eastern Europe. Together with the Saint-Sophia Cathedral, it is inscribed as a UNESCO World Heritage Site. It was named one of the Seven Wonders of Ukraine on August 21, 2007, based on voting by experts and the Internet community.
Currently, the jurisdiction over the site is divided between the state museum, National Kiev-Pechersk Historical-Cultural Preserve, and the Ukrainian Orthodox Church as the site of the chief monastery of that Church and the residence of its leader, Metropolitan Volodymyr.
The Kiev Pechersk Lavra is also one of the largest Ukrainian museums in Kiev. The exposition is the actual ensemble of the Upper (Near Caves) and Lower (Far Caves) Lavra territories that houses more than 100 architectural relics of the past. The collection within the churches and caves include articles of precious metal, prints, higher clergy portraits and rare church hierarchy photographs. The main exposition contains articles from 16 to early 20th centuries which include chalices, crucifixes, and textiles from 16-19th centuries with needlework and embroidery of Ukrainian masters. The remainder of collection consists of pieces from Lavra’s Printing House and Lavra’s Icon Painting Workshop. The museum also provides tours to the catacombs, which contain mummified remains of Orthodox saints or their relics.
Russian Church leader starts 10-day tour of Ukrainehttp://en.rian.ru/russia/20090727/155636278.html
MOSCOW, July 27 (RIA Novosti) - Patriarch Kirill, the head of the Russian Orthodox Church, embarked on a 10-day visit to Ukraine on Monday.
In the capital Kiev, Kirill will visit holy sites and meet with President Viktor Yushchenko before touring eastern and western Ukraine, and the Crimean peninsula.
Ukraine is a predominantly Orthodox country, but the Orthodox Church in Ukraine is divided, with the Moscow Patriarchy controlling the larger branch of Ukrainian Orthodoxy. Yushchenko, who has pursued pro-Western policies and sought to reduce Russian influence in the country, has advocated unifying Ukrainian Orthodox churches under the Kiev Patriarchate.
Several dozen protesters gathered outside the airport in Kiev as Krill arrived. Clad in yellow and blue clothes, the colors of Ukraine's national flag, they held up banners saying: "We serve to God, not the Kremlin," and "Ukraine needs its own church."
Patriarch Kirill will visit the Kiev Laura, one of the oldest monasteries in Ukraine and Russia, lay flowers at a statue of St. Prince Vladimir, who converted to Christianity in 988 and baptized the medieval state of Rus, and pay tribute to the victims of Soviet-era famine Holodomor, which the Ukrainian authorities say was genocide of the Ukrainian people.
Kirill will stay in Kiev, which he calls "the southern capital of Russian Orthodoxy," until Wednesday and will hold two services in the laura, meet with Ukrainian church officials and believers, and give a live television interview.
The patriarch is likely to receive a warm welcome in the Russian-speaking east, but nationalist groups in Ukraine's west have protested against what they call the patriarch's treatment of Ukraine as part of Russia.
Speaking to Ukrainian journalists ahead of the visit, Kirill said this would be a pastoral, rather than political, visit.
"My goal is to pray with the Ukrainian people. This may seem odd or hypocritical, or even untrue to some people. But this is what I plan to do," he said.
The visit will be the longest foreign trip so far by Patriarch Kirill, who was elected to replace the late Alexy II in February.
Russia patriarch to go on 10-day visit in Ukrainehttp://www.itar-tass.com/eng/level2.html?NewsID=14180649
MOSCOW, July 27 (Itar-Tass) -- Patriarch of Moscow and All Russia Kirill will go on a 10-day visit in Ukraine on Monday. This is Kirill’s first visit in the capacity of the patriarch of the Russian Orthodox Church, which has many eparchies in Ukraine.
The goal of the visit is the pastoral communication with Ukrainian Orthodox Christians. The patriarch said before the visit that he “is looking forward to meetings with Ukrainian believers and the visit to Kiev, a great ancient city on the Dnepr River.” “Our Church was originated here and laid down the foundation of the Eastern Slavic Orthodox civilisation, and we are its inheritors,” the patriarch said in an interview with the Ukrainian church press.
The number of dioceses of the Moscow Patriarchate in Ukraine makes more than 11,000 that is a little bit fewer than in Russia.
During the pastoral trip the Russian patriarch will visit ten Ukrainian cities. He will visit central, eastern and western eparchies, as well as the Crimea.
At first the supreme hierarch of the Russian Orthodox Church will visit Chersonese, where Russian Grand Prince Vladimir was baptised into Christianity. The Russian patriarch will lead a divine liturgy in this ancient town. The patriarch will visit ancient churches and churches under construction, hold religious services there and will meet with theological students of the Ecclesiastical Academy and will preach in live televised programs.
For the first time, Kirill will head a meeting of the Holy Synod of the Russian Orthodox Church in Kiev.
The Russian patriarch is also expected to meet with the Ukrainian top officials. Meanwhile, on the eve of Kirill’s visit to Ukraine President Yushchenko stated again about the intentions to create a national Ukrainian church, which will be independent from the Russian Orthodox Church. “The creation of a unified local Orthodox church will be a great historical truth and justice for Ukraine,” Yushchenko said in an address to the Ukrainian people.
The current visit of the Russian patriarch envisages the cultural program. During visits to Ukrainian cultural organisations the patriarch will grant certificates for receiving the full collection of works and letter of Great Russian writer Nikolai Gogol. This Russian-Ukrainian edition was published in the publishing house of the Russian Orthodox Church on occasion of the 200th anniversary of the worldwide known Russian writer.
The Ukrainian TV channel Inter will broadcast live the main events during the visit of the Russian patriarch. TV viewers in Russia and Ukraine will be able to watch religious services in all three Ukrainian lauras – the Kiev-Pecherskaya Laura, the Svyatogorsk Dormition Laura and the Pochaev Laura. The patriarch will participate in a live TV program involving well-known figures of culture and arts, scientists and athletes from Russia, Belarus and Ukraine in the evening on July 28.
Russian patriarch visits Ukraine http://news.bbc.co.uk/2/hi/europe/8169849.stm
Monday, 27 July 2009 02:35 UKBy Steven Eke BBC News
Patriarch Kirill, the head of the Russian Orthodox Church, is starting a visit to neighbouring Ukraine.
He will meet the country's President Viktor Yushchenko in Kiev, before travelling to the east of the country.
Like Russia, Ukraine is a predominantly Orthodox country, but the Orthodox Church itself in Ukraine is split.
Some Ukrainian Orthodox believers think Patriarch Kirill's visit is aimed primarily at boosting political Russian influence in their country.
Patriarch Kirill will start by visiting the holiest sites in the Ukrainian capital, Kiev, and then travel to the industrial heartlands of eastern Ukraine.
What makes this trip so controversial is Patriarch Kirill's vision.
He is a relative newcomer to the post, having been elected in February.
He has articulated a vision of Orthodoxy's future, in which the Russian Orthodox Church holds the dominant, first position among the scattered branches of Orthodoxy.
This makes the visit highly sensitive.
Divisions
It raises questions of spheres of religious and political influence, which often cross what are the region's relatively new state borders.
After 1991, when Ukraine gained its independence, the Orthodox church there split, with the Moscow patriarchate controlling the larger branch of Ukrainian Orthodoxy.
Meanwhile, believers from the smaller Ukrainian Orthodox Church of the Kiev Patriarchate think the Russian-backed church does not support Ukrainian independence, culture or language.
Furthermore, there are political divisions inside Ukraine.
In Russian-speaking eastern Ukraine, Patriarch Kirill will be seen as the head of one big family.
But in western Ukraine, nationalist groups have protested against what they say is his treatment of Ukraine as his own country.
President Yushchenko says he wants unity of the Orthodox churches.
Moscow arguably wants church unity on its terms.
The Russian Orthodox Church, after all, has a powerful role at the heart of Russia, aimed both at strengthening the state, and restoring its influence abroad.
Plans move ahead for highway around Black Seahttp://www.mosnews.com/money/2009/07/24/blackseahiway/
24 Jul, 03:27 PM
Russia is the ninth country to approve plans to build a highway encircling the Black Sea, Gazeta.ru writes, as Russian Transportation Minister Igor Levitin submitted the interstate
memorandum to the government on Thursday. The plan was introduced by Russia in 2006 and was signed by eight countries before it. It requires the approval of three more of the states located on the sea.
The 7140-kilometer Black Sea Ring Highway will connect Turkey, Georgia, Russia, Ukraine, Moldova, Romania, Bulgaria and Greece. Additional branches will lead to Armenia, Azerbaijan, Albania and Serbia. The highway will have a minimum of four lanes in all places and will make any point on the shore of the Black Sea accessible from Russia by car.
A significant part of the work on the highway will consist of upgrading and connecting existing roadways. Roads now being built in the area of Sochi, for use in the 2014 Olympics, are to be incorporated into the highway. When completed, the highway will be able to accommodate trucks weighing 11.5 metric tons.
The estimated cost of the highway is $1 billion. There is as yet no completion date set. Georgia has signed the memorandum on the construction of the highway, but it did not participate in a meeting on the project in Greece earlier this year.
Kyrgyz opposition in Russia after disputed votehttp://www.reuters.com/article/latestCrisis/idUSLR115290
Mon Jul 27, 2009 9:12am EDT
* Kyrgyzstan opposition leader in Russia
* Opposition gearing up for nationwide protests
By Olga Dzyubenko
BISHKEK, July 27 (Reuters) - Kyrgyzstan's opposition leader headed to Russia on Monday seeking to win Moscow's support in his standoff with President Kurmanbek Bakiyev following last week's disputed election in the Central Asian nation.
The ex-Soviet republic is at the heart of Russia-U.S. rivalry in the vast region stretching between Afghanistan, Iran, China and Russia. Courted by both Moscow and Washington, it now hosts a Russian and a U.S. military air base.
The July 23 election, condemned as rigged by the opposition and criticised by Western observers, has stirred up tensions in the Muslim country at a time when the West is concerned with the spread of Islamist militancy from Afghanistan.
Officials results gave Bakiyev 76 percent of the vote while opposition challenger Almazbek Atambayev got 8 percent.
On Monday, Atambayev flew to Moscow to discuss the vote.
"He has gone to Moscow ... to talk about what happened in Kyrgyzstan on July 23," said Bakyt Beshimov, Atambayev's campaign chief. "They are holding discussions."
Russia largely supports Bakiyev's rule and has made it clear it is in favour of his re-election, particularly after he agreed this month to discuss allowing Russia to open another military facility in Kyrgyzstan.
The election, criticised by the European Union, also puts the United States in a potentially awkward position in Central Asia after Washington agreed to pay $180 million this year to keep open its air base in Kyrgyzstan.
Russian President Dmitry Medvedev has yet to congratulate Bakiyev on his victory. Neither Russia nor the United States has explicitly commented on the conduct of the election.
The opposition says the vote was illegitimate and is gearing up for nationwide protests from Wednesday.
The Organisation for Security and Cooperation in Europe has backed opposition concerns, saying its monitors witnessed widespread cases of ballot box stuffing and multiple voting.
Kyrgyzstan is key to efforts by the United States and Russia to maintain stability in Central Asia -- a region where officials say that Taliban-linked militants are increasingly active.
The impoverished nation has a history of unrest that has worried both Russia and the West. In 2005, violent protests toppled its previous president and brought Bakiyev to power. Over past months, Kyrgyz forces have engaged in a series of gun battles with militants in the southern Ferghana valley.
The authorities have promised to crack down on any illegal forms of protest on Wednesday. "If they do not have permission then we will act within the framework of law," said an Interior Ministry spokesman. "We will prevent all unlawful actions." (Writing by Maria Golovnina; Editing by Kevin Liffey)
Moldova hopes to receive $150Mln loan from Russia in August-September –Voroninhttp://www.interfax.com/3/507594/news.aspx
CHISINAU. July 26 (Interfax) - Moldova hopes that Russia willdisburse the first tranche of a loan to it in the near future. "We expect to receive the first $150 million tranche as early asAugust-September," Moldovan President Vladimir Voronin told Interfax. He said that the question of Russia extending a $500 million loan
to Moldova was discussed during his recent visit to Moscow where heattended the horse race for the president's cup. "I have already spoken of the specifics of the loan. Unlike certaininternational organizations Russia did not put forward any strictconditions or demand any political price for this support. This is aseparate but very important contribution of Russia in the Moldovaneconomy," Voronin said. He added that in order to avoid politicizing the issue the detailsof disbursing and using the loan will be discussed after the Moldovanparliamentary elections due on July 29.
Moldova President Vornin: No Link Between Russian Loan, Influencehttp://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200907270501dowjonesdjonline000123&title=moldova-president-vorninno-link-between-russian-loaninfluence
MOSCOW (AFP)--Moldova hasn't fallen under Russian influence despite receiving a $500 million loan pledge from Moscow, its president said in an interview Monday, as his Communist Party faces a key election test.
"Russia did not put forward any tough conditions...and did not demand any political price for this support," Moldovan President Vladimir Voronin told the Russian daily newspaper Vremya Novostei.
Last month Voronin traveled to Moscow and met with Prime Minister Vladimir Putin, who said Russia was ready to loan up to $500 million to the impoverished former Soviet republic. The loan prompted speculation Moscow wanted to boost its influence in Moldova, a small country wedged between Ukraine and Romania, ahead of parliamentary elections there.
Moldovans go to the polls Wednesday in a fresh parliamentary election after the previous one in April led to bloody riots, instigated by angry protesters who accused Voronin's Communists of widespread voting fraud.
In the newspaper interview, Voronin criticized "extremists" who he said were behind the riots, and accused unnamed forces of seeking to eliminate Moldova's independence.
"They want to paralyze the country at any price and place it under an international protectorate with the prospect of its disappearance from the world's political map," he said.
Voronin didn't specify who he meant. He has previously lashed out at supporters of Moldova's reunification with neighbouring Romania, a member of the European Union that shares a common language and deep historical ties with Moldova.
Voronin has led Moldova, which is Europe's poorest country, since 2001 but must step down this year after serving the maximum two terms permitted by the country's constitution.
His successor is to be chosen by the next parliament.
(END) Dow Jones Newswires 07-27-090501ET Copyright (c) 2009 Dow Jones & Company, Inc.
Lukashenko supports high-grade Customs Unionhttp://eng.gazeta.kz/art.asp?aid=135056
[12:20] 27.07.2009, Kazakhstan Today
The President of Belarus, Alexander Lukashenko, supports high-grade with no artificial restrictions Customs Union. A. Lukashenko stated on Thursday at the meeting with chairmen of foreign representations, "Kazakhstan Today" agency reports citing Belarus news agency BELTA.
According to A. Lukashenko, Belarus is still interested in development of integration processes on the post-Soviet territory.
The President of Belarus considers the Customs Union can significantly strengthen the role of the post-Soviet territory in world globalization.
As informed earlier, the uniform custom duties of the Customs Union of Kazakhstan, Russia and Belarus were accepted at the session of the Interstate Council of the member countries of the Eurasian Economic Community (EurAsEC) taken place in the beginning of June of 2009 in Moscow. According to the Prime Minister of the Russian Federation, Vladimir Putin, the uniform custom duties have been accepted and will come into operation on January 1, 2010.
The project will be submitted for approval of the EurAsEC Interstate Council at the level of the leaders of the states.
Russia's Medvedev OKs setting up EurAsEC bailout fundhttp://www.prime-tass.com/news/show.asp?topicid=68&id=461331
MOSCOW, Jul 27 (Prime-Tass) -- Russian President Dmitry Medvedev has signed into law a bill ratifying an agreement to set up a financial bailout fund for the Eurasian Economic Community (EurAsEC), the president's press service said Monday, ITAR-TASS reported.
The EurAsEC comprises Russia, Kazakhstan, Belarus, Kyrgyzstan, and Tajikistan.
The EurAsEC bailout fund, which will be run by the Eurasian Development Bank, is expected to total U.S. $10 billion. The first installment of Russia's $7.5 billion contribution is expected to amount to $750 million.
Russian general: increasing amounts of drugs are smuggled to Estoniahttp://www.baltic-course.com/eng/markets_and_companies/?doc=16234
Juhan Tere, BC, Tallinn, 25.07.2009.
The Chief of the Russian Border Guarding Service, army general Vladimir Pronitshev stated that illegal smuggling of drugs, cigarettes and of alcohol has grown from Russia, writes the National Broadcasting/LETA.
He noted that illegal immigration from Russia to the European Union and to Estonia has also grown.
Pronitshev noted that citizens of Afghanistan are prepared to pay 5,000 – 6,000 U.S. dollars to be able to escape the war and get to the European Union. Estonian border guards have caught citizens of Afghanistan who do not have the right to enter Estonia in the Koidula border crossing point as well as while they are about to embark a ship to Stockholm.
Minister of internal affairs of Estonia Marko Pomerants noted that Estonia for illegal immigrants is foremost a country from which they wish to move forward.
EU Ambassador Says Russia at Riskhttp://www.themoscowtimes.com/article/1009/42/379859.htm
27 July 2009 By Michael Stott / Reuters
Russia risks being a Third World-style raw material exporter mired in economic crisis unless it boosts democracy and the rule of law, European Union Ambassador to Russia Marc Franco said in an interview.
Franco, the outgoing head of the European Commission delegation to Russia, said that during his five years the relationship with Moscow had suffered “standstill, if not a regression” and many reforms of the 1990s had been reversed.
“My stay here coincided with the second term of President [Vladimir] Putin,” said Franco, 62. “Rightly or wrongly, I have the impression that in that period many reforms of the Yeltsin era seem to have been turned back.”
But he expressed optimism that in the long term a new generation of Russians would prevent a return to Soviet-style authoritarianism and reassert citizens’ rights — essential for the country to grow a modern, knowledge-based economy.
Asked whether it was impossible for the country to get out of economic crisis without political reform, Franco replied: “The simple reply to that would be yes. … Russia still has many characteristics of a Third World economy, exporting raw materials and importing finished products.”
“I am not sure you need fully fledged democracy to export oil, gas and nickel, but you do need it to build up a 21st-century, knowledge-based economy. That is impossible without a full realization of the rule of law.”
The EU is Russia’s biggest trade and investment partner, but flourishing business ties have not been matched in the political realm, where disputes over Russia’s alleged use of gas as a diplomatic weapon, its treatment of neighboring states and its record on human rights and democracy have soured the mood.
Asked what needed to change in Russia, Franco said it would be presumptuous to give recipes but added, “Where the problem in Russia starts is in a not-sufficiently developed and aware civil society and a lack of freedom of expression in media.”
“I do believe — no matter which country we are talking about — that you cannot have rule of law … without the basic elements of democracy, implying free elections and a vibrant civil society supported by a free press.”
Franco, a Belgian economist who has worked for the European Commission since 1978, said he felt comfortable making his observations — unusually direct for a head of mission here — because they did not contradict “what President Medvedev says.”
Medvedev has made the rule of law, the fight against corruption and the pursuit of a more open political system priorities for his presidency, although many diplomats and analysts complain that the results so far have been meager.
Aside from the reform agenda, a more urgent priority for the Kremlin is to combat a deep recession gripping Russia.
Franco said deep economic crises threaten governments anywhere but added that in Russia “the existing regime is to a large extent based on a social contract,” under which the administration guarantees prosperity in exchange for a leading role in the economy and a dominant role in society.
“The Russian government can only maintain its credibility and stability provided it can ensure that ‘Russia Incorporated’ functions or can be expected to function soon,” he said.
Russia, China Conclude Joint Military Exercise http://www.rttnews.com/ArticleView.aspx?Id=1016205
7/27/2009 1:17 AM ET
(RTTNews) - Russia and China concluded Sunday a five-day massive military exercise along their common border, establishing real combat cooperation, Russia's commander of the joint Sino-Russian exercises Peace Mission 2009 said.
The military exercise involved nearly 2,600 army and air force personnel with special forces from both sides, backed by over 60 military aircraft and helicopter gunships as well as other special reconnaissance equipment.
The military maneuvers, held in Peoples Liberation Army (PLA)'s Taonan tactical training base in north-eastern Chinese province of Jilin and Russia's far eastern city of Khabarovsk, coincided with the 60th anniversary of diplomatic relations between China and Russia under the framework of the Shanghai Cooperation Organization (SCO).
Ties between the two armies have shown significant development in recent years, marked by frequent exchanges of high-level visits, and effective communications at various levels.
"We became friends in the course of the joint work, and it is very easy for us to settle all issues. We have established real combat cooperation. We are military professionals and do not notice differences in the languages," Deputy Commander in Chief of the Ground Troops Alexander Studenikin said after the joint exercise concluded.Expressing his satisfaction on the level of exercise, Studenikin said, as the head in the exercises on the Russian side, he was pleased with them. He said in Chinese that the exercise was of "very good."
On his part, China's Deputy Chief of the General Staff Ma Xiaotian said cooperation between the two armies has been consolidated, and thus, the agreements recently reached by the leaders are carried out.
The two country's chiefs have already held twelve round of consultations on important defense and security issues, the Chinese military official said.
The joint arms exercise were aimed at honing the skills of security forces to take on terrorists and ethnic separatists and to jointly counter other security threats existing in the region. Combat training and cooperation are organized during peace time to be ready to react to attacks.
by RTT Staff Writer
For comments and feedback: contact [email protected]
Human Rights Runaroundhttp://www.themoscowtimes.com/article/1016/42/379833.htm
27 July 2009By Ella Asoyan
For years, the victims of Russia’s counterterrorist operations and their families have sought justice through the only effective and legal channel, the European Court of Human Rights in Strasbourg. The Russian government loses roughly 95 percent of the cases that reach the court, the human rights watchdog of the Council of Europe. Russian cases made up nearly a third of the court’s case load last year, costing the Kremlin millions of euros in compensation for human rights violations.
Not surprisingly, the Kremlin views the European court as a thorn in its side — and not just a financial one. While stoically paying victims’ families to the last euro cent, the Russian government has ignored the court’s demands that authorities curb human rights abuses, fully investigate crimes and bring the culprits to justice. Noncompliance with the court could eventually cost the country its seat on the Council of Europe, but now the Kremlin has come up with a solution.
This month, the government announced a new bill that aims to create a venue for victims of counterterrorist operations or terrorist acts to seek compensation within the Russian justice system. The European court requires that plaintiffs exhaust all available domestic legal venues before submitting their cases in Strasbourg. But there are no guarantees so far that the Russian court would use the same criteria to accept cases or deliver the same compensation as its European counterpart. There are also concerns that victims would face longer delays and even more pressure from authorities to withdraw their cases.
Georgy Matyushkin, Russia’s representative to the European Court of Human Rights, believes that cases already submitted to the court would be retracted and sent back for review by Russian courts. This includes thousands of cases that deal with counterterrorist operations in the North Caucasus, particularly in Chechnya. The law could also prevent any future cases from reaching the European court.
Simply put, the new law has the potential to cut off the world from knowing about the impunity and lawlessness in the North Caucasus.
It’s a sad coincidence that this bill was announced in the same week that Chechnya lost its most vocal human rights campaigner, Natalya Estemirova. Her murder severed the
lifeline for many Chechens who depended on her to investigate abuses in the republic and report them to the world.
From the Grozny office of the human rights group Memorial, Estemirova painstakingly documented the worst of the worst crimes in Chechnya — abductions, torture and extrajudicial executions by federal and local security services and law enforcement, all of which occurred during and after the decade-long counterterrorist operation there.
Estemirova was the conduit of brutally honest information about gross human rights violations in Chechnya to the outside world. She documented and compiled evidence in many cases that ended up in the European Court. She also recorded ongoing violence and new cases, preparing to release another report on the human rights violations in Chechnya, in which she incriminated the Chechen authorities.
Out of concern for the safety of its staff in Grozny, Memorial suspended its work in Chechnya. The net effect of Estemirova’s murder has been to increase the isolation of Chechens, who face violence on a daily basis — human rights abuses that are condoned by the Kremlin and perpetuated by the authorities in Chechnya. The Strasbourg court remained one of their last outlets to inform the world about their grim situation.
According to Memorial, there are up to 5,000 people missing from the second Chechen war alone. So far, the European Court of Human Rights has made rulings on only several dozen of these cases because of a severe backlog.
By passing a law that would keep thousands of cases from potentially reaching the Strasbourg court, Russia would save millions of dollars in compensation that it wouldn’t have to pay. More important, however, the Kremlin is hoping that this law will allow Russia to be dropped from Council of Europe’s list of the worst human rights offenders.
Ella Asoyan is a program officer with the American Committee for Peace in the Caucasus at Freedom House.
Police to Pass on UN Offer
http://www.themoscowtimes.com/article/1010/42/379858.htm
Foreign Minister Sergei Lavrov said Sunday that investigators would turn down an offer from a group of UN human rights experts to help investigate the killing of Memorial activist Natalya Estemirova earlier this month.
“I think everyone understands that the investigation will be based on Russian laws. And I think everyone also understands that such high-profile murders will be investigated under the close watch of the government’s leaders,” he said, Interfax reported. (MT)
Chechen Separatists To Halt Attacks On Police – Reporthttp://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200907270045dowjonesdjonline000005&title=chechen-separatists-to-halt-attacks-on-police-report
MOSCOW (AFP)--Chechen separatists will halt attacks on police starting this weekend, their emissary Akhmed Zakayev was quoted as saying by Russia's Kommersant newspaper on Monday.
"From Aug. 1, our fighters will not use arms against Chechen police except for self-defense," he said.
The decision had been made recently in Berlin at a meeting between exiled Chechen lawmakers and members of the Russian region's self-proclaimed government, the envoy said.
A new meeting is set to be held in the coming days in London to try to bring peace to the mountainous southern region.
"I hope Chechens will never fire on each other again," Zakayev said.
The report came after seven people were killed and four others were wounded Sunday in a suicide attack outside a concert hall in the Chechen capital, Grozny, according to officials.
Chechnya's Kremlin-backed President Ramzan Kadyrov said July 7 he would negotiate for Zakayev's return, saying it was key to stabilizing the turbulent region.
A close ally of separatist president Aslan Maskhadov, who was killed in 2005, Zakayev has been living in exile in London since 2002. The U.K. granted him political asylum a year later.
(END) Dow Jones Newswires 07-27-090045ET Copyright (c) 2009 Dow Jones & Company, Inc.
Akhmad Zakaev says he recognizes legitimacy of Chechnya President Ramzan Kadyrovhttp://en.apa.az/news.php?id=105445
[ 27 Jul 2009 11:43 ] London – APA. Head of government of the unrecognized Ichkeria Republic Akhmad
Zakaev declared that the resistance forces will stop armed struggle against Chechen
police as from August 1. Akhmad Zakaev told the Kommersant about it, APA reports. He said the decision was made at the government’s meeting after talks with chairman of Chechen parliament Dukvakh Abdurrahmanov. Zakaev said the ceasefire will be effective from August 1.“I hope after that the Chechens will never fire at one another,” he said.Dukvakh Abdurrahmanov said the results of the talks were in line with President Ramzan Kadyrov’s program on revival of the republic.Two-day talks between Akhmad Zakaev and Dukvakh Abdurrahmanov in Oslo ended on Friday. Zakaev told Russian service of BBC that he recognized legitimacy of the present authorities and was ready to cooperate with them.“I am satisfied with the meeting, at least a process has begun and I hope this process will bring to the long-expected political stability in Chechnya,” he said.Zakaev said his returning to Chechnya had not been discussed.“Mr. Abdurrahmanov and I should thoroughly discuss with our colleagues the issues debated in Oslo,” he said.The Kommersant writes that the meeting will take place in London within ten days and several persons from all parties will participate in the talks.
‘Black Issa’ killed in Russian FSB directorate’s operation in Chechen Republic http://www.axisglobe.com/article.asp?article=1870
26.07.2009
The leader an illegal armed group Issa Izerkhanov, known also as the Black Issa, was killed yesterday in the course of a special operation in the Chechen Republic, news agency RIA Novosti reports, referring to the Public Relations Centre of the Federal Security Service (FSB) of the Russian Federation. "In the course of a special operation carried out from 06:00 till 11:00 on July 25, at 7, Taramova Street, in the village of Ghoity of Urus-Martan area of the Chechen Republic, all members of the the bandit group [headed by Izerkhanov], six persons in total, who rendered fierce armed resistance, received injuries not compatible to life", is said in the press-release of the FSB of the Russian Federation."Currently five members of the gang have been identified, including the gang leader Issa Izerkhanov. Automatic weapons, a plenty of ammunition and explosives have been withdrawn from the site of operation,” FSB notes.Izerkhanov was in federal search in Russia for participation in terrorist activity and jailbreaks, according to FSB. He headed an illegal armed group since March 2008, was repeatedly sent by Chechen separatist leader Dokku Umarov to Grozny area for carrying out of subversive and terrorist acts, news agency adds.The operation against Izerkhanov’s group was taking place from July 19 till July 25 and was carried out by the FSB directorate in Chechen Republic with power support by the Ministry of Interior of Chechen Republic.Russian authorities say security forces have killed six separatists in a siege in a Chechen village and that two insurgents have been killed in neighbouring Ingushetia, news agencies are reporting today.
Policemen who died in Grozny are senior officers of Chechnya’s Interiorhttp://www.itar-tass.com/eng/level2.html?NewsID=14180166&PageNum=0
GROZNY, July 26 (Itar-Tass) – Explosion committed by a suicide bomber in Chechnya’s capital Grozny Sunday night carried away the lives of four high-rank police officials, sources at Chechnya’s Investigations Committee said.
“The senior police officers who died today are the chief of public security in Grozny’s Leninsky district, the chief of the same district’s detention center, a deputy chief of public security forces in Chechnya, who had the colonel’s rank, and a lieutenant-colonel from the Interior Ministry’s department for coordination,” the source said.
“All of them were assigned to a security cordon near the building of the Grozny Theatrical and Concert Center on Griboyedov Street,” he said.
“Eyewitnesses said they didn’t let a man, who later committed the explosion, get into the building where a performance was due to begin at 17:00 hours,” the source said.
He also confirmed an earlier report saying that one more person died of the same explosion while being rushed to hospital.
“At this moment, another two wounded persons are staying at city hospital No. 9,” the source said.
High power explosive goes off in N Caucasus region of Ingushetia
http://www.itar-tass.com/eng/level2.html?NewsID=14180187&PageNum=0
MOSCOW, July 26 (Itar-Tass) – A high power explosive went off on the Kavkaz federal automobile road in the North Caucasus region of Ingushetia Sunday night.
The explosion occurred at the moment when a car carrying police officers was passing by but no one was killed or injured by a lucky chance, the regional Interior Ministry said.
The incident took place at around 20:23 local time near the town of Gazi-Yurt. The explosion produced a crater 40 centimeter in diameter.
Early information indicates the explosive had the power equivalent of a kilogram of TNT and was stuffed with incapacitation elements.
Experts say it might have a remote control device.
At the time of reporting a group of operatives was taking steps towards identifying and detaining the criminals.
Medvedev Embraces Russian Image as Bearhttp://www.themoscowtimes.com/article/1010/42/379843.htm
27 July 2009Combined Reports
The Russian bear needs to be attractive to be respected by the rest of the world, and it cannot become stronger without good foreign relations, President Dmitry Medvedev said in an interview broadcast Sunday.
“Our image needs to be comfortable for those who deal with us,” Medvedev told NTV television. “We should not be prickly and hard to approach, but at the same time we should be able to give a firm response when circumstances call for it,” he said.
The Kremlin provided a transcript of the interview ahead of the broadcast.
Asked whether he felt uncomfortable with Russia’s image as a bear, Medvedev — whose own surname derives from the word — said, “It’s an image close to my heart.”
In a message to nationalists at home, Medvedev said better ties with the West were in Russia’s interests and that prosperity at home would help the country’s image abroad. “If we want to present the right image to the world, we need to resolve our pressing problems, above all our social and economic problems,” he said.
“We are striving to create a modern, competitive country,” he added. “We can only create such a country if we have normal ties with the world.”
The government should also continue working on implementing new rules and measures aimed at fighting corruption, Medvedev said in the interview.
“We have a national plan. We have a package of anti-corruption laws. I have recently signed a changed version of rules for state officials’ behavior, so in this sense everything is built,” Medvedev said. “Now, the most important thing is to learn how to use it, not to be afraid to implement these documents, to make these documents work. This is the most complicated.”
Medvedev has made modernizing the economy and introducing the rule of law his top priorities, and he has said the economic crisis has only emphasized the need for these changes.
He told NTV that creating closer ties with the West was a long-term strategy. “We cannot produce certain technologies, certain services ourselves … even if we create the most developed society and the most powerful economy,” he said.
As part of his rapprochement with the West, Medvedev has engaged with U.S. President Barack Obama in “resetting” relations between Moscow and Washington.
There are limits to how far Russia will compromise for better relations with the United States, he said.
“We watch without jealousy as other states build their relations with our international partners, including such an important partner as the United States,” he said.
“But we don’t think it is correct to drag other states into military and political alliances against the will of their people,” he said, referring to Ukraine and Georgia.
(Reuters, Bloomberg)
July 26, 2009
Medvedev Outlines Vision Of 'Modern Bear' http://www.rferl.org/content/Medvedev_Outlines_Vision_Of_Modern_Bear/1785817.html
MOSCOW (Reuters) -- The Russian bear must show an attractive, reassuring face to the world to win respect and influence, must never be prickly or jealous in cultivating its partners, but must respond firmly if circumstances demand.
Such is President Dmitry Medvedev's view of Russia's historic bear image, so often used against it by rivals seeking to portray Moscow as brutish and ill-humored.
"Our image must be one with which our partners can be comfortable," Medvedev said in an interview to NTV television.
"We should not be prickly and hard to approach, but at the same time we should be able to give a firm response when circumstances call for it," he added.
Asked whether he felt uncomfortable with the bear image, Medvedev, whose own family name derives from the word "bear," said, "It's an image close to my heart."
Long Shadow
Medvedev took over last year from Vladimir Putin, whose eight-year presidency coincided with a strong economic boom on the back of high energy prices and a rebirth of national pride in the country which lost the Cold War.
Putin, now Russia's prime minister, remains more popular than Medvedev and his philosophy of distrust of the West is still popular among many Russians.
In a message to nationalists at home, Medvedev said better ties with the West were in Russia's interests and prosperity at home would help the country's image abroad.
"If we want to present the right image to the world, we need to resolve our pressing
problems, above all our social and economic problems," Medvedev said.
"We are striving to create a modern, competitive country," he added. "We can only create such a country if we have normal ties with the world."
Long-Term Strategy
Medvedev says modernizing the Russian economy, eradicating corruption, the promise of successive Russian and Soviet leaders, and introducing the rule of law are his top priorities.
He told NTV creating closer ties with the West was a long-term strategy. "We cannot produce certain technologies, certain services ourselves...even if we create the most developed society and the most powerful economy," he said.
As part of his rapprochement with the West, Medvedev has engaged with U.S. President Barack Obama in "resetting" relations between Moscow and Washington.
Russia and the United States are working on a new nuclear arms cuts pact and cooperating in the movement of U.S. troops in Afghanistan. Medvedev has also praised better cooperation with the United States on Iran and North Korea.
But despite this new atmosphere, both sides still have a long way to go to agree on issues like prospective NATO membership for ex-Soviet states, U.S. missile-defense plans in Europe, and Russia's military action in Georgia last year.
The West is also highly critical of Moscow on its human rights policies.
'Not Correct' To 'Drag' Others Into Alliances
In a move that has irked Moscow, U.S. Vice-President Joe Biden followed Obama's visit to Russia earlier this month with a tour of Russian neighbors Georgia and Ukraine, pledging Washington's support to their quest for NATO membership.
Medvedev said there were limits to how far Russia would compromise for better relations with the United States.
"We watch without jealousy as other states build their relations with our international partners, including such an important partner as the United States," he said.
"But we don't think it is correct to drag other states into military and political alliances against the will of their people," he said, referring to Ukraine and Georgia.
Russian bear must be modern to be attractive: Medvedevhttp://www.washingtonpost.com/wp-dyn/content/article/2009/07/26/AR2009072600696_2.html
By Oleg ShchedrovReuters Sunday, July 26, 2009; 7:35 AM
MOSCOW (Reuters) - The Russian bear needs to be attractive to be respected by the rest of the world and it cannot become stronger without good foreign relations, President Dmitry Medvedev said on Sunday.
"Our image needs to be comfortable for those who deal with us," Medvedev said in an interview to NTV television due to be broadcast at 1500 GMT.
"We should not be prickly and hard to approach, but at the same time we should be able to give a firm response when circumstances call for it," he added, according to a transcript provided by the Kremlin.
Asked whether he felt uncomfortable with Russia's image of a bear, Medvedev, whose own family name derives from the word "bear" said: "It's an image close to my heart."
Medvedev took over last year from Vladimir Putin, whose eight-year presidency coincided with a strong economic boom on the back of high energy prices and a rebirth of national pride in the country which lost the Cold War.
Putin's assertive foreign policy, his drive to revive Russia's military might and his stand-off with the West over a range of issues from Kosovo to Iran has revived fears of a return to Cold War-era confrontation.
The global economic crisis has hit Russia hard, driving oil prices from over $140 per barrel a year ago to just over $60 now and amplifying fears in the West that Russia could choose to isolate itself in hard times.
Putin, now Russia's prime minister, remains more popular than Medvedev and his philosophy of distrust of the West is still popular among many Russians.
In a message to nationalists at home, Medvedev said better ties with the West were in Russia's interests and prosperity at home would help the country's image abroad.
"If we want to present the right image to the world, we need to resolve our pressing problems, above all our social and economic problems," Medvedev said.
"We are striving to create a modern, competitive country," he added. "We can only create such a country if we have normal ties with the world."
LONG-TERM STRATEGY
Medvedev has made modernising the Russian economy and introducing the rule of law his top priorities. He has said the economic crisis has only emphasized the need for these changes.
He told NTV creating closer ties with the West was a long-term strategy. "We cannot produce certain technologies, certain services ourselves ... even if we create the most developed society and the most powerful economy," he said.
As part of his rapprochement with the West, Medvedev has engaged with U.S. President Barack Obama in "resetting" relations between Moscow and Washington.
Russia and the United States are working on a new nuclear arms cuts pact and cooperating in the movement of U.S. troops in Afghanistan. Medvedev has also praised better cooperation with the United States on Iran and North Korea.
But despite this new atmosphere, both sides still have a long way to go to agree on issues like prospective NATO membership for ex-Soviet states, U.S. missile defense plans in Europe and Russia's military action in Georgia last year.
In a move that has irked Moscow, U.S. Vice-President Joe Biden followed Obama's visit to Russia earlier this month with a tour of Georgia and Ukraine, pledging Washington's support to their quest for NATO membership.
Medvedev said there were limits to how far Russia would compromise for better relations with the United States.
"We watch without jealousy as other states build their relations with our international partners, including such an important partner as the United States," he said.
"But we don't think it is correct to drag other states into military and political alliances against the will of their people," he said, referring to Ukraine and Georgia.
(Editing by Philippa Fletcher)
Russian Navy ends first stage of Nerpa sub trials in Far Easthttp://en.rian.ru/mlitary_news/20090727/155635393.html
KHABAROVSK, July 27 (RIA Novosti) - The first stage of new sea trials of Russia's Nerpa nuclear attack submarine, which was damaged in a fatal accident in previous tests, has been successfully completed, the Amur shipyard said on Monday.
The vessel resumed sea trials on July 10 in the Sea of Japan following extensive repairs.
"The first set of sea trials has been successfully completed according to schedule," a shipyard official told RIA Novosti.
"The sub is back at the in Bolshoy Kamen in the Primorye Territory, and it is getting ready for the second stage of the scheduled testing," the official said, adding that some equipment for performance checking and adjustment work will be installed on board the submarine.
On November 8, 2008, while the Nerpa was undergoing sea trials in the Sea of Japan, its on-board fire suppression system went off, releasing a deadly gas into the sleeping quarters. Three crewmembers and 17 shipyard workers were killed. There were 208 people, 81 of them submariners, on board the vessel at the time.
Following the repairs, which cost an estimated 1.9 billion rubles ($60 million), the submarine was cleared for final sea trials before being commissioned with the Russian Navy, and will be leased to the Indian Navy by the end of 2009.
India reportedly paid $650 million for a 10-year lease of the 12,000-ton K-152 Nerpa, an Akula II class nuclear-powered attack submarine.
Akula II class vessels are considered the quietest and deadliest of all Russian nuclear-powered attack submarines.
Russia to start building 2 vessels for Black Sea Fleet in 2010http://www.kyivpost.com/world/45951
Today, 10:09 | Interfax-UkraineRussia will start building a surface ship and submarine for its Black Sea Fleet in 2010, the Russian Navy's commander said on Sunday.
"There are resources for this today, all the studies have been made," Adm. Vladimir Vysotsky told reporters in Sevastopol, a Ukrainian port the Black Sea Fleet uses as one of its bases. "No matter what the economic developments are this program will be carried out."
Spotlight on Russia’s Role in Climate Control http://www.nytimes.com/2009/07/27/business/energy-environment/27iht-green27.html?pagewanted=2&_r=1
By TOM ZELLER Jr.Published: July 26, 2009
NEW YORK — Earlier this month, President Dmitri A. Medvedev of Russia and leaders of various Russian districts gathered in Arkhangelsk, near the shores of the White Sea, to
discuss the country’s still-recovering economy and where energy — in all its manifestations — fits into the bigger picture.
“While dealing with the problems of today, the challenges of the future must be addressed as well, so we also need to think about the kind of energy resources that will ultimately be the staple of the future power industry,” Mr. Medvedev said in his opening remarks.
“Currently, this does not seem like a problem that is relevant now or in the near future, but we must nevertheless analyze how alternative sources of energy may be introduced.
“We need to promote these alternative sources of energy, because sooner or later, they will replace today’s traditional hydrocarbons, as sad as that may sound to us.”
Sad indeed. Russia, after all, is one of the planet’s most prodigious suppliers of fossil fuels and an intense consumer of energy in its own right. It is the largest exporter of natural gas, and the second largest supplier of oil. Meanwhile, its energy intensity — an economic concept used to describe, roughly, the amount of energy a country burns through to achieve a unit of gross domestic product — is double that of the United States, more than double the world’s average, and three times as much as in Japan and most countries in Europe.
The reasons for this are fairly obvious. Most of the Russian Federation, after all, is pretty chilly, and the building stock — much of it byproducts of Soviet-era design — is profoundly inefficient. A substantial portion of the economy, too, continues to be driven by energy-intensive heavy industry and manufacturing (as opposed to the less-intensive services industry).
With per capita emissions in the country steadily rising, Russia is expected, in the absence of any change, to rival the United States as the top per capita emitter within the next 20 years.
And yet, for all that, Russia has remained rather out of view amid the furious global hunt for an agreement — any agreement — on just how to fairly distribute the economic burden of greenhouse gas reduction and, perhaps, curb the steady march of global warming. Developing countries like China and India, whose blossoming economies are expected to spew ever-larger amounts of carbon dioxide into the atmosphere, take top billing in the endless wrangle with rich countries over who should cut what and by how much.
But as the clock ticks toward the climate talks this December in Copenhagen, where a successor to the Kyoto protocol will be hammered out or lost to discord, Russia’s role as a wild card — both as a signatory to any treaty and as a looming emitter in its own right — is often overlooked.
“No climate deal will likely succeed without real participation from Russia,” said Andrew Light, the director of the Center for Global Ethics at George Mason University in Virginia and a senior fellow focusing on climate and energy policy at the Center for American Progress, a research institute in Washington.
“They’re in this weird position because they essentially get a free pass, based on the benchmark year chosen by the Kyoto protocol,” he said.
That is, under Kyoto, countries agreed to aim for emissions reductions from levels measured in 1990. The Russian economy collapsed in 1992 — and its emissions profile collapsed with it.
“Russia will not even come close to hitting those 1990 levels again until 2020,” Mr. Light said.
So, when Russia joined Kyoto in late 2004, not only was the treaty finally made real (it had languished in the absence of big-emitter signatories like the United States), but also Russia found itself with a windfall of emissions credits. The somewhat optimistic thinking was that Russia could use proceeds from the sale of the unneeded credits — worth billions of euros — to pursue efficiency upgrades of its own.
The combination of a ready supply of cheap fossil fuels and a struggling economy, however, have tended to keep topics like energy efficiency, as well as the development of clean energy sources like wind and geothermal power — both with significant potential in Russia — on the back burner. “Russia has so much in terms of oil and gas resources, it’s hard to focus on the renewables,” said Isabel Murray, the Russia program manager for the Office of Global Energy Dialogue at the International Energy Agency in Paris.
But that, Ms. Murray and other experts say, is slowly starting to change.
Beyond the meeting in Arkhangelsk, a new energy efficiency bill has gone through a first reading in the Russian Parliament, Ms. Murray said.
“That’s going to happen,” she said, adding that Russia recognizes that its stated goal of increasing fossil fuel exports is contingent on developing efficiency and renewable energy strategies.
“In the end, if they use more renewables domestically, they can export more” fossil fuels, she said. “It’s sort of a no-brainer.”
Meanwhile, a visit to Moscow earlier this month by President Barack Obama — though largely concerned with economic and security issues — concluded with the formation of a working group focused on energy, leaving Russia and climate experts cautiously optimistic.
“The Russian government is now promoting renewable and alternative energy sources, including nuclear power, and has considerable leverage if it wants to speed up progress in this area,” said Toby T. Gati, who specializes in political, economic and trade developments in Russia and the former Soviet states for the law firm Akin, Gump, Strauss, Hauer & Feld.
“However, for that to happen,” Ms. Gati said in an e-mail message, “new laws which give incentives to private investments will be required, as well as large government investments to jump-start growth in the renewable energy sector.”
The maturity of that sector took a step forward earlier this month, when RusHydro — one of the biggest Russian power companies generating electricity from a number of renewable sources, including water flows, wind, geothermal and tidal power — was listed on the London Stock Exchange.
Speaking at a news conference for the listing, RusHydro’s chairman, Vasily Zubakin, said the company was poised to take advantage of global climate policy that could arise from the Copenhagen talks.
That the country is increasingly being coaxed into the debate is, according to Ms. Gati, an encouraging sign.
“I am really glad that — finally — we are paying attention to what Russia is doing in this area,” Ms. Gati said, adding that she had long puzzled over why so much attention had been focused on countries like China, and so little on Russia — “one of the most inefficient users of energy.”
A Strong Hand in Banking Could Backfirehttp://www.moscowtimes.ru/article/600/42/379864.htm
27 July 2009 By Ira Iosebashvili / The Moscow Times
A visit to Sberbank headquarters by Prime Minister Vladimir Putin last week may have been more cordial than some of his recent corporate appearances, but the message was little changed.
After touring the facilities, meeting with senior executives and grilling Sberbank head German Gref on the methods used to size up a prospective borrower’s credit worthiness, Putin got down to business. That is, telling business how business should be done.
Sberbank should improve the quality of its loans but not “close its coffers,” Putin told bankers.
“It’s very easy to just shut the box, it is harder to work with clients and understand which of them are reliable,” Putin said.
New regulations, however, will cap the amount of interest Sberbank can charge at 14 percent, Putin said — down from the bank’s current rate of 15 percent to 16 percent.
“The level of 14 percent a year [interest on loans] is quite acceptable in current conditions,” Putin said. The new level represents a 3 percentage point premium over the Central Bank’s benchmark refinancing rate, now at 11 percent.
The directive is just the latest in a series of encroachments that have seen the government and the Central Bank take an increasingly active role in micromanaging the financial system. The state has tried to promote lending — all the while maintaining one of the highest refinancing rates among developed economies in a bid to stem capital outflows.
But such a policy could be shortsighted, as it hinders banks’ risk-management strategies and could ultimately destabilize the financial system if it results in too many bad loans being made.
Interest rates at some banks reach as high as 20 percent, drawing the ire of borrowers and now government officials. Banks, in turn, have justified charging high interest by citing the risk inherent in lending money during a major economic downturn.
After Putin gave his decree, Gref contradicted the prime minister, saying interest rates at 14 percent were not realistic.
Gref said the Central Bank offers funding to the sector through collateral-free loans at rates of 12 percent to 13 percent. “That is the real cost of money. Then you need to add the bank’s margin of at least 3 percent, and the result is that minimum [rates on commercial loans] are 15 to 16 percent,” he said.
In April, Putin gave an order requiring that all banks receiving government assistance lend out just as much as they receive and obliging them to keep lending rates no higher than 3 percentage points above the refinancing rate.
In a bid to spur lending and encourage banks to give out more affordable loans, the Central Bank has cut interest rates by 200 basis points since April, sending the benchmark refinancing rate to 11 percent. It has encouraged banks to lower its rates to reflect the discount.
Earlier this month, Central Bank First Deputy Chairman Gennady Melikyan said lenders had “reached an agreement” that no new deposits will be offered at interest rates above 18 percent beginning next month. Those who did not cooperate would face limited access to Central Bank cash and other funding instruments, Melikyan said.
Amid the ruble’s weakness earlier this year, the bank applied a similar policy on cash and loans secured by bonds or other collateral to limit bets on the currency’s devaluation.
Analysts were not surprised by the state’s move, although some said the long-term consequences would be hard to predict.
“The worldwide financial system has been going through a very unusual period. Governments have taken control of banks in many countries,” said Roland Nash, chief strategist at Renaissance Capital. And keep in mind, Putin was saying this to Sberbank, in which the government holds a 51 percent stake.”
Interests rates should reflect the risk a bank has to assume, and 14 percent might not factor in every type of customer, Nash said.
“If you’re lending to Gazprom, then of course 14 percent is too high. But if you’re lending to an IT startup out of Barnaul, then 14 percent might not be high enough,” he said.
And while capping interest rates could cut into Sberbank’s profitability, it could also bring positive long-term consequences for the lender.
“If you can convince a monopoly like Sberbank to go out and lend, it could kick-start the economy, which would ultimately help Sberbank in the end,” Nash said.
Other market watchers said the state’s actions could have an effect that would be very different from the intended one.
The government is trying to manage the crisis in “manual mode,” said Natalya Orlova, chief economist at Alfa Bank. “But lower interest rates mean riskier loans, and if banks cannot reuse their money they could just reduce their exposure to the Central Bank.
“This could result in a contraction of the banking system,” she said.
Despite this, Sberbank’s stock is still one of the best bets in the sector, Orlova said.
“In terms of equity exposure, it makes sense to be on the safe side,” Orlova said. “If there is instability in the banking system, it will obviously be better supported than other banks.”
Investors were bullish on Sberbank’s stock last week, bidding it up 7.5 percent even though the company reported a 92 percent drop in year-on-year profit to 5.3 billion rubles ($170.6 million).
The 30-stock MICEX Index closed the week up nearly 4.2 percent at 1,026.95, while the dollar-denominated RTS finished up 4.15 percent at 1,012.
The White Elephant Called Bulavahttp://www.themoscowtimes.com/article/1016/42/379830.htm
27 July 2009 By Alexei NikolskyOn Wednesday, Yury Solomonov, general director and chief designer of the Moscow Institute of Thermal Technology, resigned as a result of a series of unsuccessful test launches of the Bulava, the Navy’s new intercontinental missile. The Bulava has been fully successful in only four out of 11 test launches since 2004. The latest failure was on July 15, when the missile self-destructed 20 seconds after launch from the submerged Dmitry Donskoi submarine in the White Sea.
Solomonov’s resignation is unprecedented for the Russian military, and it speaks to the seriousness of the Bulava failure not only from an economic perspective — the armed forces has spent $10 billion on what is by far its most expensive program — but also to the country’s prestige as it negotiates with the United States on a new arms reduction treaty to replace START I.
The Soviet Union and Russia have traditionally lagged behind the United States in terms of developing advanced ballistic missiles. It is therefore understandable that developing a new generation of missiles — particularly during a severe economic crisis — would be a difficult task.
The Bulava is based on the land-based Topol-M missile, which was also designed by the Moscow Institute of Thermal Technology under Solomonov’s direction and first deployed in 1997. The Bulava is intended to carry 10 nuclear warheads on one missile and is the first attempt to develop an intercontinental naval missile manufactured completely from Russian-made components.
It would have been surprising if the Russian armed forces, which can’t supply its soldiers with bullet-proof vests or even modern army boots, would have been able to develop the Bulava without the kind of serious setbacks it has incurred.
But the numerous failures of the Bulava by no means imply that the project will be canceled. In fact, on Sunday chief Navy commander Vladimir Vysotsky expressed confidence that the Bulava would eventually be incorporated into the Navy, RIA-Novosti reported. In all likelihood, once the exact reasons for the last test failures are determined — probably toward the end of the year — test launches of the Bulava will be resumed.
The current and future leaders of Russia should draw conclusions from the Bulava. It is a stark reminder that new advanced weapons systems take decades to develop and cost billions of dollars. When the country’s leaders make the decision to invest in these types of heavy weapons programs, they must consider all the possible consequences. It is clear, however, that this was not done for the Bulava.
The decision to develop a new submarine to carry a new multiwarhead missile was made largely because START II prohibited land-based missiles of this category. But START II
was terminated in 2001 after the United States withdrew from the Anti-Ballistic Missile Treaty of 1972.
The money that was spent on Bulava could have been better spent on repairing submarines fitted with other missiles and on the upkeep of warships, which had to be decreased significantly because of a lack of funds. In addition, the armed forces could have invested the same amount of money into the development of a new generation of land-based missiles.
Alexei Nikolsky is a reporter at Vedomosti, where this comment appeared. Richard Lourie is on vacation.
Russia marks Navy Dayhttp://www.russiatoday.ru/Art_and_Fun/2009-07-26/russia-marks-navy-day.html/print
26 July, 2009, 22:06
Although Russia has been a navy power for more than three centuries, it was not until 1939 that it got a special date to celebrate its seafaring might. On Sunday, Russia marks the 70th anniversary of its naval forces.
In Russia, the Navy Day is traditionally celebrated on the last Sunday of July.
The history of the Russian Navy dates back to the 17th century and now Russia maintains five fleets: on the Pacific Ocean in the Far East, on the Arctic Ocean in the north, on the Baltic Sea in the westernmost Kaliningrad region, and in the Black and the Caspian Seas in the south.
In Moscow, some 500 marines mark the day, mostly in the capital’s parks. And in the southern city of Novorossiysk, which is also one of the country's key ports, the festivities include a military parade.
Navy Day marked in Russia for the 70th time Sundayhttp://www.itar-tass.com/eng/level2.html?NewsID=14179279&PageNum=0
MOSCOW, July 26 (Itar-Tass) - The Navy Day is marked in the Russian Federation (RF) on Sunday. According to tradition, it is celebrated on the last Sunday of July.
The holiday was instituted 70 years ago by a Government Decision dated June 22, 1939. A Presidential Decree of May 31, 2006, defined the holiday as a memorable day in the country's Armed Forces.
The center of festivities in Moscow will be the Kolomenskoye museum estate on a Moskva River embankment. Over there, in one of summer palace estates, Peter the Great during his childhood years used to stage play battles and dreamt of creating a regular naval fleet in Russia.
Sunday's sports-and-theatricalised performance will involve navy men and fleet veterans. Naval reviews, aquatic sports events, and other festive activities will take place in a number of Russia's cities as well as at other basing points of ships and units of the Navy.
The Navy is reckoned one of Russia's armed services that is designed to defend the Fatherland at the maritime theater of operations. The present-day Navy possesses great nuclear missile might, high mobility of naval and air task forces, high cruising capacity, and ability to operate in various parts of the World ocean.
This year Russian naval ships have accomplished a number of responsible missions during international exercieses, such as the Indra-2009, BLACKSEAFOR, Frukus - 2009, as well as the operational strategic exercises of the Russian armed forces, the Kavkaz (Caucasus) - 2009.
The real capabilities of the Russian Navy were demonstrated at the Internaitonal naval show in St Petersburg at the end of June.
A cruise by the striking ship force of the RF Northern Fleet to the North-Eastern Atlantic and the Mediterranean, and the ongoing patrolling by RF Pacific Fleet ships near the shores of the Horn of Africa are among the Russian Navy's main activities of the year.
Vladivostok Celebrates the Russian Navy Dayhttp://vostokmedia.com/n51540.html
10:25, 27.07.2009Festive events dedicated to the Navy Day lasted until late hours
VLADIVOSTOK. July 27. VOSTOK-MEDIA – Celebrations of Russian Navy Day took place in Vladivostok. Primorsky Krai Governor Sergey Darkin, Vladivostok’s Mayor Igor Pushkarev as well as deputies of the Legislative Assembly of Primorsky Krai and City Duma participated in the festive event. The ceremony of laying wreaths and flowers to the eternal light The Red Banner Pacific Fleet memorial opened the solemn events in the regional center. After the laying of wreath the celebrations moved to the Russian Pacific Fleet marine. Neptune and his retinue greeted the record number of guests and residents of Vladivostok, following which there was a theatrical show culminated in the traditional demonstration of military capability and military strength of the Fleet. Driving out of infantry fighting machines from a large landing ship and precise soldiers’ interaction during releasing of the territory from exercise enemy made a special impression on guests and residents of Vladivostok. The most entertaining part of the celebrations was the military parade of the Pacific Fleet ships. The military parade featured different surface ships and two nuclear-submarines submarines. The festive events dedicated to the Russian Navy Day lasted until the late hours. The holiday ended up with display of fireworks
In Spite of Medvedev's Optimism Russian Military Is Facing Severe Crisishttp://www.defense-update.com/analysis/russian_military_crisis_240709.html
David Eshel
In a desperate effort to pacify the highly suspicious and perturbed Russian officer corps, President Dmitry Medvedev told high-ranking officers, last week, that the planned parameters of the state military orders will not be changed but remain on its present budget level. But analysts consider Russian President Medvedev likened to a 'general without an army', as most top posts are still dominated by Prime Minister Vladimir Putin's people, who de-facto carry out his policy.
There are some reports, coming from sources close to the President, that Medvedev seems to be gaining some political strength lately. This is probably based on a poll by the independent Levada Center in Moscow, which found that 19 percent of Russians believe that Medvedev actually pursues an independent policy. However this report remained short-lived, as another poll clearly indicated that the president acts entirely under the control of Vladmir Putin and his key entourage. Medvedev has no resources and no team manning key posts to pursue an independent military strategy for the Russian Federation in 2009. Senior military analysts, quoting officials at the Kremlin, claim that Medvedev might chair sessions of the Security Council, but Putin actually controls the siloviki," meaning the military and security services. And according to latest insider reports - these are still under a deep, if not catastrophic, crisis.
On paper the Kremlin has allocated plans of military orders totaling 1,300 RUB (billion Russian Rubbles), of which 332 billion RUB will be acquisitions of new military hardware. However, analysts estimate that these figures were set before the world economic crisis eradicated such planning all over the world and Russia would not be excluded from this trend. Aging weapons, poor maintenance and 'rank-and-file officers who don't want to do anything' mean the Russian military was on the verge of a 'catastrophic crisis' and if forced into action would most probably have to rely on the use of strategic nuclear weapons, which seem be the only ones still fully operational. Such a somber assessment came recently not from a junior coop-seeking reporter, but from the top itself, none other that Russian Chief of the General Staff and First Deputy Defense Minister Army-General Nikolai Makarov. (left photo) The General warned, among others, that the Russian air force is not procuring sufficient numbers of new modern aircraft and has fewer servicable aircraft, manned by insufficiently combat-trained pilots, which are incapable of conducting modern era combat operations.
In charge of training and the wide-scale military reform plan, initially conceived by then President Vladimir Putin personally, General Makarov, now under full strain of the present crisis, has sought to discharge hundreds of thousands of, what he believes to be, redundant senior officers. However, the effort immediately met with strong political opposition, particularly from a special Duma, or parliamentary, working group
committee. Indeed, Putin's ambitious agenda for military reform, announced officially in October 2008 by then Defense Minister Serduykov is already facing countless revisions and delays due to the growing global financial crisis, which is hitting Russian economy hard.
The original fiscal planning envisaged spending one trillion rubles (about $30 billion) in 2009 rising to four trillion rubles ($121 billion) by 2011. This budget was necessary to restart military equipment production to modernize the Russian armed forces. Under the new financial constraints such figures must remain within the realm of 'wishful thinking'.
Hardest hit already, are large sectors within Russia’s defense industry. The sense of growing crisis is noticeably deepening, as reports increase about the number of companies struggling to survive under the current economic climate. Especially hard hit are the companies that already struggle for export sales in a highly competitive international marketplace.
Within the regular army the crisis is becoming even more noticeable. The ground forces command planned to disband 23 all-arms divisions and 12 all-arms brigades, to be reformed into 39 combat-ready 'all-arms brigades', resulting in a considerable manpower cut and leaner, more efficient organization. However, without a wide-scale modernization and comprehensive training, such reforms will have little operational effect.
An example of this dilemma could illustrate the present state of Russia's tank crisis.
Russia's is the only army in the world using two types of main battle tank: the T-80 (T-80U) powered by a gas turbine and the diesel-powered T-90 (T-90S). Both have the same weight, size and identical combat characteristics. In addition, the Russian military units still use long obsolete vehicles, such as T-72, T-64, T-62 and even the T-55, some have not been modernized for decades.
Russian tank commanders are longing for the new T-95, an entirely new battle tank, with new running gear, power plant, armaments, fire control, reconnaissance and target identification facilities, promised to undergo final field tests and enter service during 2009, but rumors of the new tank have been circulating for over 15 years. The Kremlin has promised two units, the elite units, Kantemirovskaya and Tamanskaya tank divisions to be equipped by 2010 with the new tanks, but analysts have grave doubts on its implementation.
The present crisis seems far from over and no distinctive change is really in sight. Based on reliable insider assessments, new modern standard weaponry currently accounts for no more than 10 percent of the total inventory, with the first target being to raise this to one third, and only by 2020 should be expected to attain the magical figure of 70 percent! Even optimistic President Medvedev told the Defense Ministry, that large-scale rearmament cannot be expected to commence before 2011.
In order to redress the prevailing gloomy situation, efforts have been made to highlight recent achievements in some of the domains, which can be paraded openly to the skeptic Russian public and the world. Among those placed at the top were the introduction in 2008 of three divisions of mobile missile systems and two silo-based Topol-M launchers which were placed on combat duty, sea trials in Severodvinsk began of the new Yuriy Dolgorukiy nuclear submarine, Russia's orbital grouping for its armed forces has increased by 14 percent and a modern radar station at Armavir has been developed, using the Voronezh-DM Missile Attack Warning System, Air Defense forces have already been strengthened by another S-400 Triumph surface-to-air missile system. Development of the sea-launched ballistic missile (SLBM), Bulava, has run into serious problems, but Moscow seems determined to continue the program, with the first Borey submarine scheduled to be deployed in either 2010 or 2011.
Trunov in City Duma Race
http://www.themoscowtimes.com/article/1010/42/379858.htm
Igor Trunov, a prominent lawyer and leader of the Moscow branch of the liberal Right Cause party, said Sunday that he would run for a seat in the Moscow City Duma this fall as an independent candidate, RIA-Novosti reported.
The party decided last week not to participate in the election. The leadership of the party was split over whether to critique Mayor Yury Luzhkov or stick to a more conciliatory line. (MT)
Court Allows Bobylev Arrest
http://www.themoscowtimes.com/article/1010/42/379858.htm
Moscow’s Tverskoi District Court on Friday sanctioned the arrest of Sergei Bobylev, a co-owner of Sunrise, one of Russia’s largest computer retail chains.
Bobylev, detained on Tuesday, is accused of siphoning off assets from his companies while neglecting loans of millions of dollars to his creditors.
Sunrise officials maintain that the crackdown on Bobylev was backed by the family that owns the premises rented by Sunrise’s biggest store in central Moscow for not paying the rent in full. (MT)
Russia frees crime boss wanted by U.S.: reporthttp://news.yahoo.com/s/nm/20090727/wl_nm/us_russia_crime_1
MOSCOW (Reuters) – Russia has released a suspected organized crime boss who is wanted by the United States for alleged fraud and racketeering, the Financial Times reported on Monday, citing his lawyer.
Semion Mogilevich, who the U.S. Federal Bureau of Investigation says created a powerful crime group in Eastern Europe in the 1990s, was arrested in Russia in 2008 and accused of tax evasion at a major cosmetics retailer.
"I spoke with him on Friday after he was released. He is happy to be home," Mogilevich's lawyer in Israel, Zeev Gordon, was quoted as saying by the FT.
Mogilevich's lawyers repeatedly said their client was innocent and denied any links to the cosmetics chain Arbat Prestige, where prosecutors said the tax evasion took place.
Gordon said a Russian court had freed Mogilevich and an alleged associate, Vladimir Nekrasov, on bail because the terms under which he could be held had expired.
Gordon said the court had sent the prosecutors' tax fraud case back to investigators claiming it needed more work.
"There is no evidence against him," Gordon was quoted as saying by the FT. A spokeswoman for the Russian Prosecutor-General could not be reached for immediate comment.
The FBI says on its Web site that Mogilevich is wanted for racketeering, fraud and money laundering. Ukrainian-born Mogilevich has denied U.S. allegations that he is a crime boss.
When Mogilevich was arrested, analysts said the real motive could be linked to accusations that he was involved in the multi-billion-dollar gas trade between Russia and Ukraine.
Ukraine's Prime Minister Yulia Tymoshenko has accused Mogilevich of being behind RosUkrEnergo, an intermediary firm which sells gas to Ukraine. Mogilevich has previously denied through a lawyer any links to the firm.
(Reporting by Guy Faulconbridge, editing by Matthew Jones)
Nekrasov, Mogilevich Possibly Released After Arrests Expiredhttp://www.themoscowtimes.com/article/1010/42/379837.htm
27 July 2009T he Moscow Times
Former cosmetics king Vladimir Nekrasov and reputed crime boss Semyon Mogilevich, awaiting trial on tax evasion charges, might have been released from custody late last week, Kommersant reported Saturday, citing sources close to the investigation.
It was not possible to confirm the report Sunday.
Nekrasov, owner of the Arbat Prestige chain that was Russia’s largest cosmetics retailer, and his purported consultant, Mogilevich, were being tried in closed proceedings at Moscow’s Tushinksy District Court. But last month, the judge ordered the case be returned to prosecutors to correct mistakes.
The arrest order for Nekrasov and Mogilevich expired Friday, however, and investigators have failed to complete the paperwork on their case or to call for an extension of the arrests, Kommersant said.
Neither police nor the defense lawyers would confirm or deny their release, the newspaper reported.
Nekrasov is accused of evading taxes of more than $1.5 million. Mogilevich, wanted by the FBI on racketeering, wire fraud and money laundering charges since 2003, is accused of masterminding the tax evasion scheme. Arrested in January 2008 while dining together in an upscale Moscow restaurant, the two men deny any wrongdoing.
Mogilevich, also known as Sergei Shnaider, also has denied any involvement with Arbat Prestige.
In 2007, Arbat Prestige boasted 95 stores in Russia and Ukraine and sales of $475 million. The company is currently going through bankruptcy proceedings and is selling off its stores.
In May, the two men offered to post a bail of $7.5 million — five times more than the amount Nekrasov is accused of failing to pay in taxes — but the court denied the motion.
Bureaucratic mess strips natives of citizenshiphttp://www.russiatoday.com/Top_News/2009-07-27/bureaucratic-mess-strips-natives-of-citizenship.html
27 July, 2009, 10:46
Thousands of Russians find themselves stripped of all rights and benefits in their own country because their names get lost in a paper trail while they try to replace their internal passports.
Imagine one day being a citizen and enjoying the liberty of your country and then, overnight, being stripped of all your rights and benefits. That is what thousands of Russians are going through after their documents got lost in bureaucracy while trying to replace their passports.
Last year Oksana Nenich needed to replace her internal passport – Russia’s most important citizenship document.
When she went to apply, officials told her the old one was invalid and confiscated it. At once she had no right to work, travel or receive free medical care. Oksana became stateless in her own country, which stripped her young children of the right to Russian citizenship.
“My life has been destroyed. I am a non-person. I have no name, no registration. They did not explain what was wrong, or warn me, they just took it away,” says Oksana.
Oksana later found out that her passport was invalidated because her name was missing from the passport database. She now awaits a court decision to issue a new one.
Oksana’s story is so shocking that most people may assume it was a one-off freak incident but, in fact, all over Russia there are a multitude of so-called “former citizens”.
Immigration authorities say there are at least 80.000 people with illegitimate passports in Russia. They are a legacy of the immigration chaos that followed the collapse of the USSR, when the population of one country was divided up between 15 new states.
Some of these documents in question were issued under rules that no longer exist. Others were obtained for a fee through semi-legal middlemen. Many are the result of administrative errors by officials. Recently, authorities have been conducting a vigorous campaign to remove the illegal documents.
“Often the passport holder himself is not at fault. But we will not stop the operation. Also, among the eighty thousand are not just ethnic Russians. Some of these people paid bribes for these documents, others do not fit in with our way of life,” says Konstantin Poltoranin, spokesperson for the Federal Migration Service.
However, human rights groups say that in whatever way they obtained their passports, most "former citizens" are legally entitled to them, and they warn against a populist campaign to push out the alleged “fake” Russians.
“I am ashamed of a government that fights its own citizens,” says founder of human rights group Civil Assistance Svetlana Gannushkina.
From this year onwards, “former citizens” will be given temporary residence permits that will at least allow them to work as their new application is considered.
Unfortunately, this is too late for those who have already paid a hefty price for Russia’s passport process.
Adoptions from Russia losing popularity in the US – official http://www.mosnews.com/world/2009/07/27/popularadoption/
Today, 12:12 PM
The Americans are adopting fewer Russian orphans than they used to, a US official has said.
According to Michelle Bond, Deputy Assistant Secretary of State for Overseas Citizens Services, the number of adoptions from Russia to the US has sufficiently decreased, Interfax writes.
“At present Americans adopt around 1,800 Russian children per year,” Bond said at a briefing on Monday.
“In the 1990es the number used to be around 4,000 or 5,000 per year,” she said.
According to Bond, the decrease began after in 2000 the Russian government introduced obligatory certification of American agencies.
The issue of US adoptions from Russia is a sensitive one. Between 1996 and 2008, 15 Russian children adopted by Americans died, in 14 cases through the fault of their new parents.
“Recently, sixteen Russian children died in the United States,” Bond admitted.
“We see each of these cases as a tragedy, each is thoroughly investigated, and the guilty are punished,” Bond said.
In December 2008 an American court ruled Miles Harrison was not guilty of involuntary manslaughter of his 21-month-old adopted Russian son. Harrison left the child in his car unattended in hot weather, causing the child’s death from overheating. The acquittal was officially condemned by Russia’s Foreign Ministry.
Bond assured the audience the Russian consulate had full access to information about the adopted children's life in the US, and said the US and Russia were discussing possible ways to ease the cooperation.
She said the Americans adopted children from many countries, Russia being one of the popular choices because so many Russian children live in orphanages.
The number of orphans in Russia was estimated at 800,000 in October 2008. Of these children, 80 percent were so-called social orphans, rejected by their biological parents or taken from them by legal decision.
National Economic Trends
Russia May Borrow $52 Billion for 2010 Deficit, Vedomosti Sayshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=a9lxY5QzVAI0
By Paul Abelsky
July 27 (Bloomberg) -- Russia may borrow 1.61 trillion rubles ($52 billion) on the domestic and international capital markets next year to cover part of a 3.19 trillion-ruble budget deficit, Vedomosti reported.
The government may raise 649 billion rubles abroad and 962 billion rubles from domestic investors, the paper said, citing an unidentified Finance Ministry official. It will allocate 830 billion rubles of the funds to finance the deficit and the rest will be used to pay off sovereign debt, according to Vedomosti.
Spending next year will reach 9.82 trillion rubles, while revenue will be 6.64 trillion rubles, giving a deficit of 7.5 percent of gross domestic product, the paper said. The Finance Ministry today will submit a draft of the 2010 budget to the government.
Russia will cover the rest of the deficit by drawing on 682 billion rubles from the National Wellbeing Fund, equivalent to about a quarter of one of Russia’s two sovereign wealth funds, and transferring the remaining 1.67 trillion rubles from the Reserve Fund, Vedomosti said.
To contact the reporter on this story: Paul Abelsky in St. Petersburg at [email protected].
Last Updated: July 27, 2009 01:45 EDT
Russia plans bankruptcy law reform – FThttp://www.reuters.com/article/bankruptcyNews/idUSLR4001520090727
Sun Jul 26, 2009 11:23pm EDT
LONDON, July 27 (Reuters) - Russia plans to overhaul its bankruptcy laws to help crisis-hit companies survive financial restructuring without being broken up, the Financial Times quoted an adviser to President Dmitry Medvedev as saying.
Economic adviser Arkady Dvorkovich said less than 10 of 100 Russian companies that had gone through bankruptcy procedures had survived as going concerns.
He told the newspaper the government would present new bankruptcy legislation to the Duma to be passed into law by the end of the year.
"In future, the focus will be on creating efficient financial rehabilitation procedures, which are almost not used right now," the paper quoted Dvorkovich on Monday as saying.
It said the government was responding to fears for Russia's legions of debt-laden companies which face repayments of about $130 billion over the next year to domestic and foreign banks.
Medvedev and Prime Minister Vladimir Putin had made clear that their top priority was to prevent companies from closing and throwing employees out of work, it said.
Dvorkovich also dismissed suggestions from bankers that the level of non-performing loans in Russia could rise to 30 per cent of assets, the paper said, predicting the figure would rise only to 10-15 per cent.
He also urged banks to "continue working with companies to restructure loans and not to put companies into more difficult situations".
"With the expectation that the global recovery will start in 2010, it's quite rational to take this approach," Dvorkovich said. (Editing by Nick Macfie)
(London World Desk; +44 207 542 7919)
Macroeconomic indicators - Russia industrial production in H1 dips by 14.8pct YoYhttp://steelguru.com/news/index/2009/07/27/MTAzOTY2/Macroeconomic_indicators_-_Russia_industrial_production_in_H1_dips_by_14.8pct_YoY.html
Monday, 27 Jul 2009
Itar-Tass quoted the Federal State Statistics Service said industrial production in Russia dropped by 14.8%YoY in the H1 of the year from the same period of 2008.
Production in processing industries decreased by 21.3% natural gas production dropped by 20.8% to 274 billion cubic meters, coal production by 15.1% to 137 million tones and iron ore production by 20.8% to 42.4 million tonnes.
Production of ferrous metal rolled stock was down by 27% to 23.1 million tonnes and that of still pipes by 30.3% to 2.9 million tonnes. Productions of mineral fertilizers decrease by 22.4% to 7 million tonnes, synthetic rubber by 37.5% to 401,000 tonnes and automobile tyres by 44.8% to 11.6 million pieces.
Car production in January to June 2009 shrank by 60% to 289,000, truck production by 72.5% to 39,400, and bus production, by 63.5% to 13,200.
Production of metal-cutting machine-tools decreased by 62.4% to 944, production of household refrigerators and freezers went down by 38% to 1.131 million and production of washing machines fell by 28.5% to 919,000. Productions of computing equipment and parts for it drop by 51.6%.
(Sourced from Itar-Tass)
Russia daily c.bank swap limit at 5 bln rblshttp://www.forbes.com/feeds/afx/2009/07/27/afx6701831.html
07.27.09, 03:43 AM EDT
MOSCOW, July 27 (Reuters) - Russia set the daily limit for currency swap operations with the central bank at 5 billion roubles ($160.9 million) on Monday, the same as in the previous trading session.
Limits on how much foreign currency banks can swap for roubles in the central bank were introduced from Oct. 20 in a bid to hinder currency speculators. Operations which do not involve the central bank are unaffected. ($1=31.07 Rouble)
(Moscow Newsroom, +7495 775 12 42, [email protected])
Russia c.bank injects 31.3 bln roubles via reposhttp://www.iii.co.uk/news/?type=afxnews&articleid=7442037&action=article
MOSCOW, July 27 (Reuters) - The Russian central bank injected 31.3 billion roubles ($1.01 billion) of one-day funds into the banking system at a rate of 8.42 percent in its first auction of the day on Monday.
The minimum interest rate was set at 8.0 percent, and a maximum of 35 billion roubles had been on offer for the two repo auctions scheduled for the day.
Following are results of the latest auction, provided by the central bank on its Web site (www.cbr.ru): Date July 27 July 24 July 24Session 1st 2nd 1stAmount (bln rbls) 31.30 0.35 21.62Bids (bln rbls) 31.30 9.37 21.62Average rate 8.42 9.38 8.63
NOTE - For details of central bank repo tenders click here . ($1=31.07 Rouble) Keywords: RUSSIA REPOS/FIRST
(Moscow Newsroom; +7495 775 1242; [email protected])
http://www.forbes.com/feeds/afx/2009/07/27/afx6701922.html
www.rgt.ru
Average Russian pension will increase by one-fifth to 7,781 roubles by the end of 2010, Rossiiskaya Gazeta reports.
Business, Energy or Environmental regulations or discussions
Severstal, Evraz, Aeroflot, Mechel: Russian Equity Previewhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aWAylEvYYUcI
By Paul Abelsky
July 27 (Bloomberg) -- The following companies may have unusual price changes in Russia trading. Stock symbols are in parentheses, and share prices are from the previous close.
The 30-stock Micex Index fell 0.4 percent to 1,026.95 in Moscow. The dollar-based RTS Index added 3.8 percent to 1,012.62. The dollar-denominated Russian Depositary Index, a measure of global depositary receipts trading in London, fell 0.8 percent.
OAO Severstal (CHMF RX) and Evraz Group SA (EVR LI): Russia’s government is prepared to protect the country’s steel industry, Prime Minister Vladimir Putin said at a meeting of officials and owners of the country’s biggest steel, pipe and coal producers. Metals companies in Russia may receive preferential treatment in supplying the so-called natural monopolies, Putin said.
Severstal, Russia’s biggest steelmaker, fell 2.5 percent to 184.91 rubles. Evraz, the country’s second-largest producer, added 3.6 percent to $20.30 in London.
OAO Aeroflot (AFLT RX): Passengers on a plane operated by Russia’s biggest airline were evacuated after the jet’s left landing gear caught fire on arrival at Moscow’s Sheremetyevo airport on July 24. Aeroflot slid 0.9 percent to 31.50 rubles.
OAO Mechel (MTLR RX): The steel and coal producer controlled by billionaire Igor Zyuzin will start selling 5 billion rubles ($162 million) of bonds on July 30 as part of the company’s plans to sell 45 billion rubles of debt, Interfax reported. Mechel dropped 1.6 percent to 275.09 rubles.
To contact the reporter on this story: Paul Abelsky in St. Petersburg at [email protected].
Last Updated: July 27, 2009 00:02 EDT
Russia’s rich move money outhttp://www.russiatoday.com/Business/2009-07-27/russia-s-rich-move-money-out.html/print
27 July, 2009, 10:12
In 2008 Russia’s rich almost doubled their transfers abroad compared to the previous year with overall investment into foreign economies totaling $25.6 billion.
Wealthy Russians are taking money out of the country and placing it in what they believe are safer havens like real estate. Andrey Rozhkov, an analyst at CIG, says the current economic crisis is making Russians look for a better place to invest.
“Russians, who are worried about keeping their savings have found an alternative to the Russian economy, abroad. They are placing their money on the financial markets and into real estate. The increase is because of the crisis, as there are fewer assets into which you can invest now in Russia.”
Transfers were also used to pay for goods and services, or sent to far off relatives and the proportion of money used to purchase real estate doubled- from 4 % to 7 % in 2008.
However, CEO of Citgroup’s global transaction services, Francesco Vanni D’archirafi, says it’s a reasonable thing to diversify assets among different countries.
‘Diversification is very important for a good risk return profile for your investment portfolio, and diversification is not only across industry sectors, but also geographical diversification.”
$8.5 Billion dollars were put into foreign banks in countries like the Netherlands, Luxembourg, Switzerland and Monaco. While some pessimistic forecasts suggest money is leaving the country because Russians don’t trust in its ability to recover from the crisis, Francesco Vanni D’archirafi disagrees.
“I know Russians understand the potential of this country and I am sure they’re willing to invest in the future of this country so I don’t think that’s the cause.”
Time will tell if investors have made the right decision.
Ministry Sees High Capacity Price Caphttp://www.themoscowtimes.com/article/600/42/379851.htm
27 July 2009 By Nadia Popova / The Moscow Times
The Energy Ministry has suggested a price cap of 500,000 rubles ($16,000) per megawatt of capacity at newly built power stations in western Russia and 600,000 rubles ($19,000) for the stations located in Siberia.
The plan, set out in a draft of a government order, marks a significant jump from the previous levels permitted by regulators.
The document also defines for the first time a method for calculating the price for capacity, a measure generators have demanded since capacity auctions were first held in July last year.
At an annual auction held in December, generators make a proposal to the Market Council, an industry watchdog, outlining the price they intend to charge for the capacity of future power stations. The offer must be approved by the Market Council for the capacity to be sold on the market.
Mosenergo, Moscow’s utility, was allowed only 370,000 rubles per megawatt of capacity in December, compared with the 530,000 rubles it had requested. The Market Council turned down a proposal of 500,000 rubles per megawatt by OGK-1.
The Market Council will put the fair market price for capacity at 85 percent or 90 percent of capital and operational construction costs, as well as the costs for connection to the grid, the draft order said. Bids that exceed the limits will not be considered, the document said.
The order, which was placed on the Energy Ministry’s web site, is dated July 10, but major generators said Sunday that they hadn’t yet seen it.
Energy Ministry spokeswoman Irina Esipova could not be reached on her cell phone on Sunday.
“We consider as adequate the price limit and the method of calculations established by the order,” said Igor Mironov, the head of the Council of Electricity Producers and Strategic Investors. “We have asked for price limits to be fixed in official papers for a long time. And we also think that spelling out the rules in an official document is very helpful.”
Nadezhda Rukina, a spokeswomen at Integrated Energy Systems, billionaire Viktor Vekselberg’s power holding, said she couldn’t comment on the order because it was a draft document.
Spokeswomen at Gazprom Energy Holding, which manages the gas monopoly’s electricity assets, and OGK-1 said their companies’ management had not seen the document yet.
“Even though the real prices are likely to be lower than the limit, so high a limit tells us that the regulators are ready to provide for fair returns on investment in power station construction,” Rye, Man and Gore said in a note to investors Friday. “This makes the risks of building new capacity significantly lower.”
Utilities - new capacity market proposal highlights
http://www.businessneweurope.eu/dispatch_text9209
CitiJuly 27, 2009
The Energy Ministry has prepared a draft of the new government regulation on the long-term capacity market model, Interfax reported on Friday. According to the document, the first long-term competitive capacity supply auctions will be held by 25 December 2009, with a delivery date set starting 1 January 2011.
To remind, at present the capacity markets are not fully liberalised and operate in the transitional model. Newly built capacity gets a very low tariff, which is set below the construction costs of such new capacity. This year the Energy Ministry has been developing the new comprehensive market model which would allow gencos to compensate for their capex in new capacity and earn a positive return on invested capital.
According to the draft, the Energy Ministry proposes to cap the new capacity prices at Rbl 500,000/MW/month for the European price zone and Rbl 600,000/MW/month for Siberia, which will be inflated going forward by the CPI in Russia. For power plants built under the mandatory capex programmes, inputs for calculating capacity payments are set as follows: the construction costs are US$1,600/kW for gas-fired capacity and 2,250 for coal-fired capacity with a payback period of 15 years and return on capital of 8%. Our calculations show that the above-mentioned assumptions imply monthly payment of Rbl 474,003/MW/month for gas-fired capacity and Rbl 666,567/MW/month for coal-fired capacity.
Until 2020 all capacity will be divided between old and new (built after 2007) and each capacity group will receive its own price cap, which will be disclosed by the System Operator no later than 3 months before the price auctions. The differences between caps will be lowering each year. The results of the competitive auctions will be disclosed by the System Operator 15 days after the auctions. This effectively means that the old capacity will not receive adequate return on its capacity until 2020. For new nuclear and hydro power plants the capacity price will be regulated and set by the Federal Tariff Service. This piece of news appears to be negative for RusHydro (HYDR.MM; Rbl1.10; 2M), especially given its huge investment projects with negative NPV partially financed by new share placements.
We estimate fair capacity tariffs for the new capacity in a range of Rbl350,000-400,000/MW/month assuming 15% ROIC and construction costs of US$1,000/kW for gas-fired capacity and US$1,700/kW for coal-fired capacity. However, we are taking a conservative assumption on the reserve margins and assume that fair capacity tariffs would not be reached in the liberalised market. Our average capacity payments for new and old capacity are modelled at Rbl110,000/MW/month for the European part of Russia and Rbl290,000/MW/month for Siberia in three years post market liberalisation. We therefore view the news as positive for the sector as it ensures steady market liberalisation. However, we note that the actual capacity tariff will depend on the reserve margins in the system and indicated price caps should not be taken as guidance for actual tariffs. The news is also not supportive for RusHydro as it de-facto will continue to be
regulated.Alexander Korneev
Group E4 Secured Contract for Construction of New Power Plant in Ugrahttp://www.rusbiznews.com/news/n427.html
23.07.2009 — News
OJSC Fortum selected a contractor for the construction work on the Niagan GTPP project in Ugra. The contract worth 13 billion roubles (around 300 million Euro) went to a Russian engineering company Group E4.
Group E4 won the tender in August 2008 for the supply, installation, and commissioning of main equipment and the management of the Niagan GTPP project as a whole. It was then also that the company signed an agreement with Siemens for the production of turbines and generators for the plant.
The press service of OJSC Fortum informed RusBusinessNews that the site for the station is ready and that the construction work will begin in the summer 2009. More than 3000 people will work on the construction.
The Niagan GTPP will consist of three blocks 420 megawatt each. It is expected that the first block will be started up by the end of 2011. The total cost of the plant is estimated at 1.4 billion Euro. Resources obtained during the additional issue of shares of TGK-10 (previous company name of Fortum) in March 2008, bank loans, and bond loans will be used to finance the project.
Putin Receptive as Steel Firms Appealhttp://www.moscowtimes.ru/article/600/42/379862.htm
27 July 2009 By Nadia Popova / The Moscow Times
Prime Minister Vladimir Putin went to Magnitogorsk on Friday with an open ear, promising chiefs of the country’s top steelmakers that the government would defend them abroad and might pass a law requiring natural monopolies and state corporations to buy their products.
The steelmakers used the meeting, hosted this year by Magnitogorsk Iron & Steel Works, or MMK, to ask for a quicker refund of value-added tax payments, more state guarantees for their loans and higher import duties for their foreign competitors. Putin said he supported their suggestions.
The friendly atmosphere was also a marked change from the meeting held in Nizhny Novgorod exactly one year earlier, when Putin threatened to send a doctor to Mechel
owner Igor Zyuzin — who cited illness to skip the talks — amid an anti-monopoly service investigation into his coal and steel firm’s export pricing.
Zyuzin, who has since made peace with Putin and the Federal Anti-Monopoly Service, was present but made no public comments.
“The most serious attention should be paid to the protection of Russian producers on foreign markets,” Putin told 14 top executives of the major steel companies and their consumers, including pipe maker TMK, Rosneft, Transneft and Russian Railways.
“Our metals production is discriminated against in many countries,” Putin said. “We have to get our state bodies working to negate and prevent such anti-market constraints,” he said, apparently addressing Industry and Trade Minister Viktor Khristenko and Deputy Prime Minister Igor Sechin, who sat to the prime minister’s left and right.
Khristenko told the meeting that he expected new restrictive measures and anti-dumping investigations against Russian metals producers abroad, in addition to the 27 restrictions they now face in 11 countries.
“In part, it could be Iran and China,” he said.
Putin also stressed the need to support demand, which he said had fallen by 40 percent to 45 percent domestically and by 15 percent to 20 percent abroad. He did not specify over what period.
“The key problem for the metals industry today is the lack of demand on both the domestic and foreign markets,” he said.
Steelmakers may get preferential orders from natural monopolies and state corporations, Putin said. “A special law on that could be adopted,” he said.
The head of the Federal Anti-Monopoly Service, Igor Artemyev, said foreign carmakers producing in Russia should be pressured to buy from local steelmakers.
“The moment may have come when foreign automakers working in Russia could increase the volume of purchases from our steelmakers,” Artemyev told the meeting, Interfax reported. “Some political pressure on them could bring success to our carmakers.”
Deputy Economic Development Minister Andrei Klepach, the government’s top forecaster, told the meeting that last year’s high level of production would not be reached until after 2012, even under the ministry’s conservative forecast.
To help make ends meet in the meantime, steelmakers asked for quicker tax returns and protective measures.
MMK chairman Viktor Rashnikov requested a quicker refund of VAT payments on exports. Since Jan. 1, VAT has been refunded quarterly, after which an in-house tax audit is done. “In practice, it takes us as long as six months to get the return,” Rashnikov said.
Putin promised that the process would be sped up. “We will certainly work out a system where the criteria would be transparent and could be efficiently used” to return VAT, Putin said. “Your suggestions will be taken into consideration.”
The Finance Ministry has prepared a bill that would speed up the refunds to within 20 days from the current 90, Deputy Minister Alexander Novak told the meeting. The return period will be reduced for exporters that can get a bank guarantee on the sum of return, while the largest exporters would not be required to present the guarantee, Novak said.
Others sought more protection of the Russian steel market from foreign competition. Severstal CEO Alexei Mordashov asked the government to aid domestic steelmakers, as China and India protect their markets. Russia should keep import duties on some pipes and steel and favor domestic producers, Mordashov said.
TMK chairman Dmitry Pumpyansky asked for a one-year extension of import duties on some kinds of rolled steel and pipes. From Feb. 1, duties on 11 types of flat-rolled and plain steel and 46 varieties of pipe were raised by 10 percent or 15 percent for nine months.
Putin, again, largely concurred. “We shouldn’t feel shy about using the instruments of domestic market protection if we’re facing outright dumping,” he said.
Novolipetsk Steel chairman Vladimir Lisin said it was a necessity to cancel the duties on machinery not produced in Russia. “Why should we pay to import things just because it’s not made in Russia?” Lisin said, adding that the property tax on such machinery should also be canceled.
Putin said he disagreed with Lisin, however. “As for the zero duties on the machinery not produced in Russia, this is a present,” he said. “This is your property, not state property, and that is why it is a gift, and you have to use it efficiently.”
The prime minister also said state guarantees for loans would be extended, apparently addressing three state bankers — VTB first deputy chief Mikhail Kuzovlyov, Vneshekonombank deputy chief Anatoly Ballo and Sberbank vice president Kirill Levin — who were present.
Klepach, the deputy economic minister, also proposed that Vneshekonombank, or VEB, be given additional resources to provide loans for seven to 10 years at “acceptable” rates to fund steelmakers’ investments — or start subsidizing interest rates on such loans.
“Taking into account the state of the production capacities in the Russian metals industry, VEB is interested in financing steelmakers’ investment projects to implement new
technologies and produce metal with high added value,” spokeswoman Yekaterina Karasina said Sunday.
A VTB spokeswoman declined to comment on the meeting. A Sberbank spokeswoman was unavailable for comment.
VTB said in a statement Friday, however, that it began reducing its interest rates for loans to “strategically important enterprises” this month, on average by 2 percent to 3 percent.
Khristenko proposed that steel and pipe makers be given priority for Gazprom’s orders at home and abroad; that Russian Railways, or RZD, charge metals producers less to transport ferrous scrap; and that the country’s ports be modernized so they could service the deep-sea vessels required to export metal.
Putin backed the idea of modernizing ports and said the government would consider possible cuts in the railroad tariffs. The government will earmark 50 billion rubles ($1.6 billion) of budget funds to help RZD next year, he said.
But the proposed changes in transportation tariffs didn’t sit well with RZD chief Vladimir Yakunin.
“If we accepted the suggestion voiced here, Russian Railways would lose 4.5 billion rubles [$145 million] under this year’s prices,” Yakunin said. “With that, the metals industry would save 0.8 percent” in costs.
Spokespeople for Evraz, Mechel, Novolipetsk Steel, Severstal and TMK declined to comment on the meeting.
Later on Friday, Putin met Chelyabinsk Governor Pyotr Sumin and told him that he liked the metal producers’ attitudes, saying they “don’t snivel.” Magnitogorsk is located in the Chelyabinsk region, where many Russian steelmakers are based.
Putin also opened MMK’s massive plate-steel plant, known as Steel Mill-5,000, the company said in an e-mailed statement. The mill will make plates for the pipe industry, ship builders and for bridges.
Putin pressed a big red button to launch the mill and then signed the screen with a diagram of the machine: “Good luck, V. Putin.”
Steel Sector: Lots of hot air, no tangible support
http://www.businessneweurope.eu/dispatch_text9209
UralSibJuly 27, 2009
No surprises from PM this time. Russian major steelmakers met with Prime Minister Vladimir Putin in Magnitogorsk on Friday. Major steel consumers such as Gazprom, Transneft, and RZHD were also present, as were representatives from various ministries. The mood was positive, with many words of support; however, no significant decisions were taken. As we had expected, the state promised to aid steelmakers and to protect the Russian steel industry, though all present understood that it has fairly few reserves with which to provide strong support.
Positive rhetoric. The key takeaways from the meeting were:
Consideration of a law to support the industry and general protectionist measures such as import duties;
Moves to boost demand, 'Buy Russia' rhetoric. Railways, autos, and construction were mentioned as key sectors. The government said that railways may receive a $1.6bn subsidy, but RZhD said that it would cut rail purchases, leading to some confusion;
Severstal's Aleksey Mordashov requested aid/protection. Novolipetsk's Vladimir Lisin requested additional measures to stimulate demand. TMK's Dmitry Pumpyansky requested import duties on pipes and cheaper credit from state banks. Gazprom and Transneft said that pipe manufacturing capacity is insufficient in Russia (a plus for TMK);
Russian steel output is not expected to recover to 2008 levels until 2012;
Credit issues received less attention than protectionism and state subsidization;
VAT refunding is to be accelerated from 90 days to 20 days;
Mechel's upcoming RUB45 bln bond issue will be arranged by state-owned banks and may be supported by the state;
Gazprom and Transneft are likely to buy only Russian pipes for their projects;
Interest payments to state-owned banks on selected credit could be subsidized via the return of 66% of the CBR's base rate, although no final decision was made;
No specific new measures from the state to increase support for automakers and the construction industry were mentioned.
But steel consumers' capex cut. We view the comments from the meeting as marginally positive for the steelmaking industry. Although steelmakers had been expecting more real support from the state; they had wanted their main customers to be supported. The meeting was more positive for pipemakers, especially TMK, which benefited the most from the decisions taken. Despite all the positive talk, Gazprom and RZhD announced significant capex reductions, highlighting that domestic demand for Russian steel is likely
to remain weak. On a separate note, we highlight that trade barriers in the steel industry are rising worldwide. As Russia is one of the world's largest steel exporters, this cannot be positive for Russia. Michael Kavanagh
UC Rusal is close to completing restructuring of US$7.4bn of foreign debthttp://www.businessneweurope.eu/dispatch_text9209
CitiJuly 27, 2009
Vedomosti reports that the deal will extend maturities by seven years and UC Rusal shareholders will not be able to receive dividends until a debt/EBITDA ratio comes to an acceptable level.
Our take: it seems likely that VEB would adopt the same strategy as foreign banks, eg it seems likely that VEB will ask its debtors (Evraz (HK1q.L; US$20.30; 3M), Rusal) to stop paying dividends until debt/EBITDA reaches an acceptable level.Daniel Yakub
Russian Railways to lose if steel scrap tariff is reducedhttp://steelguru.com/news/index/2009/07/27/MTAzOTY3/Russian_Railways_to_lose_if_steel_scrap_tariff_is_reduced.html
Monday, 27 Jul 2009
Interfax cited Mr Vladimir Yakunin president of Russian Railways as saying that Russian Railways will lose some RUB 4.5 billion if the tariff on ferrous scrap metals is lowered.
Mr Yakunin was commenting on a proposal by an industry representative at the meeting on lowering transportation costs for metals producers by reclassifying ferrous scrap metals from the third tariff class to the first tariff class.
The third tariff class is for the most expensive goods, while the first tariff class is used for transporting cheaper products such as sand and crushed stone.
He said "If the proposal mentioned is passed, RZD revenue will decline by RUB 4.5 billion in 2009 prices. Scrap metal accounts for 7.3% of the raw materials the company transports. He added that based on the current average domestic prices for metals and the procurement prices for metal, the value of the scrap metals in the end cost does not exceed 9%. And the industry's savings will only total 0.8%."
Mr Yakunin said if such a decision is passed, it could mean RZD would have to forfeit repair work on 1,400 kilometers of railroads or reduce purchases of ferrous metals by 255,000 tonnes. He said that these aren't figures that could have a real impact on something in the metals industry.
Mr Vladimir Putin Prime Minister of Russia who chaired the meeting issued instructions
to give this issue more attention.
The RZD press service said that Russian railroads carried 6.3 million tonnes of scrap ferrous metals in the first half of 2009. Exports accounted for 12% of the scrap shipped compared to 8.8% in the first half of 2008.
Metals plants are the main recipients of the scrap ferrous metal, accounting for 60%, or 4.2 million tonnes.
(Sourced from Interfax)
EBRD to lend Freight One $100m
http://www.businessneweurope.eu/dispatch_text9209
bneJuly 27, 2009
Russian rail freight company Freight One, Ryussia's largest rail freight operator, with 6.8% market share in 2008, is to take out a $100m loan from the European Bank for Reconstruction and Development (EBRD) soon, company General Director Salman Babaev told journalists, according to Interfax.
Russian Railways (RZD) founded Freight One in July 2007. It operates a fleet of rolling stock comprising 21% of the Russian total.
The loan follows a $130m loan from the EBRD in late 2008 to fund business expansion in Ukraine and Kazakhstan.
According to Babayev, Freight One aims to increase Russian market share to 22%-25% of freight.
Chelyabinsk Output Down
http://www.moscowtimes.ru/article/1009/42/379866.htm
Chelyabinsk Zinc Plant said first-half production of zinc and zinc-based alloys fell 33 percent.
Output declined to 51,686 tons from 76,980 tons in the year-earlier period, the company said Friday. (Bloomberg)
Russia reports 24.6% gold output growth in 1H09 http://en.rian.ru/business/20090727/155636859.html
MOSCOW, July 27 (RIA Novosti) - Gold output in Russia grew 24.6%, year-on-year, in January-June 2009 to 77.3 metric tons (2.5 million troy ounces), the Union of Russian Gold Miners said on Monday.
Gold production decreased 23.5% in June 2009, year-on-year, due to lower alluvial gold output, the union said.
The production growth in the reporting period is largely attributable to production buildup in Russia's easternmost territory of Chukotka and the Amur Region in the Russian Far East, the union said.
Russia's largest gold miner is Polyus Gold, whose operating mines and development and exploration projects are located in five major gold mining regions of Russia - the Krasnoyarsk Territory and the Irkutsk Region in Siberia, the Far Eastern Magadan and Amur Regions, and the Republic of Sakha (Yakutia) in East Siberia.
Russia's gold production increased 13.3% in 2008, year-on-year, to 184.49 metric tons (5.9 million troy ounces).
Alrosa to Reduce Rough Prices to Jump Start Sales, Report Claimshttp://www.idexonline.com/portal_FullNews.asp?id=32682
(July 26, '09, 7:06 Edahn Golan)
Alrosa may cut rough diamond prices by up to 25 percent in a move aimed at generating sales. The company saw its sales come to a near halt since November 2008.Fyodor Andreyev, the new president of Alrosa, has reportedly decided to increase the company's sales by offering discounts, the Russian business daily Vedomosti reported. If the report is accurate, this would be a sharp change in policy. Ousted Alrosa president Sergei Vybornov kept prices high since the onset of the economic crisis. Diamond Trading Company (DTC) Sightholder and major Alrosa buyer, Kristall of Smolensk, said it may start purchasing diamonds from Alrosa if prices are indeed reduced. According to Maxim Shkadov, general director of Kristall, the company will start purchases from Alrosa in the near future. Alrosa is reportedly in the process of creating diamond parcels of certain quality, and the discount to the pre-crisis prices could reach 25 percent, Shkadov told Vedomosti. Rough diamond trading started picking up in the past couple of months after a depressed period that lasted through the firs quarter of the year. The rise in purchases - and
premiums paid on the secondary market - was enough to cause major market supplier De Beers to raise prices on many of its goods.
Bank VTB cuts lending rates for strategic enterpriseshttp://www.businessneweurope.eu/dispatch_text9209
CitiJuly 27, 2009
VTB announced on Friday that "within its program of supporting the real sector of Russian economy" it began to lower lending rates for strategic companies. The rates were reduced primarily on mid- and long-term loans by 200-300 basis points on average.
The rates cut followed the recent comments made by Prime Minister Vladimir Putin that banks should lower lending rates to the more acceptable level of 14% (the refinancing rate + 3% margin). In the press release VTB lists some of the enterprises for which rates were decreased, including NPO Saturn, Motorostroitel, Ural Steel, etc. At the meeting with Putin last week, Governor of Yaroslavl region Sergei Vakhrukov mentioned that regional companies could barely afford to take loans at current interest rates and provided the example of NPO Saturn for which borrowing costs jumped to 17% from 11% in September last year.Simon Nellis
VTB gets prime real estate in lieu of debt-paperhttp://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLR6607220090727
Mon Jul 27, 2009 7:20am EDT
MOSCOW, July 27 (Reuters) - Russia's state-controlled VTB bank (VTBR.MM: Quote, Profile, Research, Stock Buzz) has taken control of prestigious residential real estate near Moscow as repayment for a $2.4 billion loan to businessman Sergei Pugachev, Vedomosti business daily reported on Monday.
Pugachev's company, OPK, had put 1,200 hectares as a collateral against the loan before the credit crunch and economic crisis badly hit the construction sector, bringing many developers and real estate firms to the brink of bankruptcy.
VTB took over the plots at a value of $20,000 per 100 square metres, the price they were pledged for the loan, Vedomosti reported, citing a businessman close to Pugachev.
Experts told the newspaper that Pugachev is lucky to get this price as the economic crisis has effectively frozen the real estate market and brought values down significantly.
State-controlled VTB holds a large part of Russia's credit portfolio, some of it backed by real estate assets that could end up under its control if the financial crisis continues to strain its borrowers' solvency. (Reporting by Dmitry Sergeyev; editing by Simon Jessop)
Sberbank Capital Takes Mosmart Stakehttp://www.themoscowtimes.com/article/1009/42/379850.htm
27 July 2009 Vedomosti
Sberbank Capital concluded a deal for the purchase of retail chain Mosmart last week, a source close to Mosmart and a Sberbank employee told Vedomosti.
A new company was registered, and former Mosmart owner Sarnatus Trading, controlled by Mikhail Bezelyansky and Andrei Shelukhin, transferred 100 percent of its shares in the retailer, which owns 23 stores and four shopping malls.
Sberbank Capital received a stake of 50 percent plus two shares in the new company; Yevgeny Novitsky, a member of Sistema’s board of directors, got 10 percent minus one share; and Sarnatus Trading retained 40 percent minus one share.
Sberbank Capital restructured 3 billion rubles ($97 million) of Mosmart’s debt and gave it new long-term loans of 3.9 billion rubles at 17 percent to 18 percent interest.
A source close to Mosmart’s management said Novitsky, along with Bezelyansky and Shelukhin, would receive stock options. If the company services its debt and hits certain financial marks by the end of 2010, Novitsky can increase his stake to 51 percent and Sarnatus can raise its to 49 percent by buying out Sberbank Capital.
In mid-June, Mosmart’s total debt stood at 7.5 billion rubles, 2.5 billion of which was due to its suppliers, chief executive Vitaly Podolsky told Vedomosti.
Kazakh bank BTA says Sberbank talks continuehttp://in.reuters.com/article/bankingfinancial-SP/idINLP54474820090725
Sat Jul 25, 2009 4:22pm IST
ALMATY, July 25 (Reuters) - Kazakhstan's largest bank BTA BTAS.KZ is continuing talks with Russia's Sberbank (SBER03.MM: Quote, Profile, Research) about its potential takeover of the Kazakh lender, BTA Chief Executive Anvar Saidenov said on Saturday.
Some analysts have doubted if the deal would go through, citing the slow progress of BTA's talks with creditors to restructure its $12 billion debt following a default in April and a $7.9 billion loss in 2008.
Earlier this week, BTA said creditors' losses could reach 97 percent, excluding trade finance, under a "stress" scenario.
But Saidenov said talks with Sberbank were continuing.
"It is clear of course, that Sberbank's final decision will largely depend on this restructuring," he told reporters. "I think that the chances of this deal happening are quite high."
BTA, nationalised in February, has not provided a clear timeline for its restructuring process.
(Reporting by Olga Orininskaya; Writing by Olzhas Auyezov)
(([email protected]; +7 7272 508500; Reuters Messaging: [email protected])) Keywords: SBERBANK BTA/
(C) Reuters 2009. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nLP544748
Potash producers: All key potash producers conclude contracts with India
http://www.businessneweurope.eu/dispatch_text9209
UralSibJuly 27, 2009
Potash price for India established at $460 per ton. Belarusian Potash Company (BPC, joint trader for Uralkali (URKA LI - Sell) and Belaruskali and Canpotex (the export association of Saskatchewan potash producers, including PotashCorp, Agrium, and Mosaic) on Friday made announcements regarding potash supplies to India. Both export traders signed contracts for potash supplies to India with prices set at $460 per ton and deliveries effective from July 2009-March, 2010. This is fully in line with our expectations of potash prices for India, as International Potash Company (IPC), Silvinit's (SILV - Hold) export trader, had earlier signed a contract with India at this price, thus establishing a potash-price benchmark for Indian customers. So, all key potash players currently have contracts with India. We believe the lower price for Indian contracts is only an initial step in the downward trend for potash export prices, Despite all the positive talk, Gazprom and RZhD announced significant capex reductions, highlighting that domestic demand for Russian steel is likely to remain weak thus we expect further corrections are possible from the level of $460 per ton. Our model implies a $350-400 per ton average export prices for Silvinit and Uralkali in the medium to long term.
Silvinit slightly benefits on volumes from being first to conclude. The new contracts will
see BPC, Canpotex, and IPC supplying a respective 675,000 tons (down 10% YoY), 850,000 ton (down 35% YoY), and 850,000 tons (up about 5% YoY, according to our estimates) of potash to India by March, 2010. We think that the YoY increase in potash delivery volumes for IPC versus other potash players is due mainly to the fact that IPC was the first to conclude contracts with India, and thus benefitted from larger delivery volumes versus other potash producers. Our current estimates imply Uralkali and Silvinit to supply 400,000 tons (15% of the total production in 2009) and 750,000 tons (21% of the total production in 2009), respectively, to India in 2009.
Uralkali Signs India Deal
http://www.moscowtimes.ru/article/1009/42/379866.htm
Uralkali said Friday that its Belarussian sales joint venture agreed to sell 675,000 tons of potash fertilizer to India at $460 per ton.
“The price is quite low, but they have a contract, and this means their utilization rates can increase,” Merrill Lynch analyst Pavel Simonenko said. He added that Chinese buyers are now likely to negotiate a price of $400 to $430 per ton. (Reuters)
Perm's Mineral Fertilizers lowers net profit by 20% in H1http://www.interfax.com/3/507638/news.aspx
PERM. July 27 (Interfax) - Perm-based OJSC Mineral Fertilizers(RTS: MINU) posted 718.485 million rubles in net profit according toRussian accounting standards (RAS) for the first half of 2009, down by19.8% year-on-year, the company told Interfax. The drop in net profit was the result of decreasing prices for thecompany's production on the world market. The company's sales revenue in January-June of this year increasedby 8.4% year-on-year to 2.849 billion rubles, a representative ofMineral Fertilizers said. Perm's Mineral Fertilizers produces liquid synthetic ammonia andcarbamide.
GM-AvtoVAZ plant in south Russia resumes work after holidayhttp://en.rian.ru/russia/20090727/155635695.html
SAMARA (Volga Region), July 27 (RIA Novosti) - A GM-AvtoVAZ plant, which produces the Chevrolet Niva off-road model, resumed production on Monday following a two-week summer holiday, a company spokesperson said.
Production was halted according to schedule from July 13 until July 27 and in line with the practice of taking a summer holiday period at the plant.
"The assembly line has resumed work on schedule," the spokesperson said.
The joint venture between the U.S. auto giant General Motors and leading Russian car manufacturer AvtoVAZ was established in 2001.
The assembly plant in Togliatti, on the Volga River, produced 53,300 Niva vehicles in 2008, representing a 2.38% drop in production year-on-year.
AvtoVAZ Workers Plan Salary Protesthttp://www.themoscowtimes.com/article/1009/42/379852.htm
27 July 2009Bloomberg
AvtoVAZ workers will hold a demonstration Aug. 6, five days after Russia’s biggest carmaker suspends production for a month, to protest against pay cuts of 50 percent that the company plans in response to slumping sales.
Wages for AvtoVAZ’s 110,000 employees will be slashed by half when the Tolyatti-based manufacturer resumes operations in September as it scales back work hours, Pyotr Zolotarev, head of the independent Unity labor union at the carmaker, said in a phone interview. Average monthly pay at the plant is 12,000 rubles ($386), he said.
“The salary cuts will be absolutely devastating for the local economy,” Zolotarev said Friday.
AvtoVAZ announced plans on June 24 to operate one production shift of eight hours a day, five days a week through February to reduce spending. Alexander Shmygov, an AvtoVAZ spokesman, said by phone Friday that the cutbacks, which include reducing individuals’ weekly work times by 50 percent to 20 hours, allow the carmaker to save money without eliminating jobs.
Russian sales of cars and light commercial vehicles dropped 49 percent to 763,962 in the first half of 2009 as rising unemployment, a devalued ruble and inflation reduced disposable income, according to the Association of European Businesses. Deliveries of AvtoVAZ’s Lada models fell 44 percent.
AvtoVAZ won’t build any Ladas in August, the company said July 22. The suspension is part of an effort to cut the company’s 85,000-vehicle inventory in half, Shmygov said Friday.
The carmaker is 25 percent owned by Renault, France’s second-biggest carmaker, and has a separate venture with General Motors to make Chevrolet Niva sport-utility vehicles. The GM-AvtoVAZ plant isn’t affected by the August shutdown.
Russia may face outbreaks of labor unrest as manufacturing slumps at a record pace and companies struggle to pay employees, the Higher School of Economics said July 6.
Kopeyka Seeks 2 Billion Rubles From Sberbank to Refinance Bonds
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aP9ibLkHDgtY
By Maria Ermakova
July 27 (Bloomberg) -- OAO Trading House Kopeyka, the Russian food retailer owned by billionaire Nikolai Tsvetkov, agreed to borrow 2 billion rubles ($64.7 million) from OAO Sberbank to refinance bonds.
Kopeyka’s 50,000 square meters (538,000 square feet) of selling space and at least 51 percent of its parent company, OOO Kopeyka-Moskva, have been put down as collateral for the three- year loan, Kopeyka Chief Financial Officer Alexander Tarasov said by telephone today. Sberbank hasn’t transferred the money yet after deciding to make the loan, he added.
The advance would be used to help refinance 4 billion rubles of bonds that have a put option due Aug. 19, according to Tarasov. The company, whose total debt is 9.5 billion rubles, is seeking to extend the terms of its borrowings, he added. Short- term debt totaled about 5.3 billion rubles at the end of 2008.
“Long-terms loans is what we need,” Tarasov said. “It’s our general strategy to try to strengthen our financial position at the time of financial instability.”
The loan was reported initially by newspaper Vedomosti.
To contact the reporter on this story: Maria Ermakova in Moscow at [email protected]
Last Updated: July 27, 2009 02:30 EDT
Russian meat and poultry prices rise 27 Jul 2009http://www.worldpoultry.net/news/russian-meat-and-poultry-prices-rise-4156.htmlRussian meat prices have grown 5% on the average following the results of the first half of 2009.
Yelena Tyurina, General Director of the Institute of Agricultural Marketing (IAM), stated the price for meat will continue to go up, though at a slower pace – 1-2% per month.
According to her data, the pork has risen in price most of all – at 7%. Poultry prices have grown 5% and beef prices by 3%.
As Roman Kypot, analyst of the Institute of the Agricultural Market Trends (IAMT) related in his interview to Business.ru, the current growth of prices is connected first of all with the increase of price for the import meat due to the ruble devaluation. The import of meat to Russia remains significant, while its share is decreasing.
At the same time, the price growth for imported meat causes the growth in price for domestic meat, though not so fast. The high yield of the grain last year and a drop of price gave hope for saturation of the market by domestic pork. Private farms have raised plenty of young stock for the winter time.
Knauf starts building €110m gypsum board plant
http://www.businessneweurope.eu/dispatch_text9209
bneJuly 27, 2009
Knauf CIS has started building a plant to produce gypsum boards in the Irkutsk region, Prime-Tass reports. The plant, which will cost over €110m to constrcut, will produce 60 million square meters of gypsum boards a year. It is expected to open in 2011, and will be the companys first facility in Russia that it has built from scratch.
Russia has fastest hotel construction rate in Europe, report sayshttp://www.mosnews.com/world/2009/07/27/hotelsconstr/
Today, 12:42 PM
Russia is the king of hotel development in Europe, according to the June 2009 Smith Travel Research Global Construction Pipeline Report, quoted by Business Travel News online.
As of June, Moscow has the largest number of active rooms in the continent: 5,127 of the total 94,695, which includes projects from the planning stages to those under construction. Russia is also one of the countries seeing the most development, said STR vice president of content management Duane Vinson.
"I don't think the global recession has impacted Russia as much as its own internal issues have, so we've continued to see a lot of development in that country," Vinson said in a statement.
Other countries seeing a good deal of hotel development include Germany, France, Spain and the United Kingdom, according to Vinson. London's 4,968 rooms are the second-highest number, followed by Berlin's 4,720, the report said.
Hotel construction in Europe has its heaviest concentration in the upper upscale and upscale tiers, according to the report. Together, the two tiers account for 42.6% of the hotels under construction at the end of June.
Activity in the Oil and Gas sector (including regulatory)
Domestic Oil Prices Down
http://www.moscowtimes.ru/article/1009/42/379866.htm
Domestic oil prices for August delivery were fixed 10 percent down versus July on Friday at 7,800 rubles to 8,200 rubles ($251-$263.9) per ton, traders said citing crude oversupply.
The trade started a week ago with prices initially declining to 8,000 to 8,200 rubles from 8,600 to 9,200 rubles in July. (Reuters)
Trutnev Wants Easier Access for Foreignershttp://www.themoscowtimes.com/article/1009/42/379857.htm
27 July 2009 By Vladimir Soldatkin / Reuters
The government should think about easing foreign investors’ access to its resources in the changed world after the boom years, Natural Resources and Environment Minister Yury Trutnev said Friday.
Emboldened by a sevenfold surge in crude prices from 2002 to over $147 a barrel in July 2008, the country had passed laws to curb foreign participation in tapping its mineral resources.
“I believe that today there is a need to think about legislative changes, about investment attractiveness … on investments of foreign companies in the exploration and development of resources,” Trutnev said.
The comment came after Prime Minister Vladimir Putin offered in June surprise deals to Royal Dutch Shell and France’s Total, which analysts said signaled the easing of resource nationalism.
The deals were signed days before U.S. President Barack Obama’s trip to Moscow in early July, during which some U.S. companies, including ExxonMobil, called on Russia to clarify and ease caps on foreign investments in strategic sectors.
A source with a foreign energy lobby in Moscow said Trutnev’s remarks were a sign that restraints would ease further.
“There were a lot of surprises from Putin recently, now here comes Trutnev. Obama’s visit made a great difference,” he said.
Putin last year signed a law on strategic industries, one of his last decrees as president, clarifying what types of assets would be off-limits to foreigners — which included big oil and gas fields.
The global economic downturn since then has depressed demand and sent oil prices plummeting from record highs, cutting state budget revenues and pressuring some governments in mineral-rich countries to sweeten terms for foreign firms to help get projects developed.
Foreign direct investment into Russia fell 2.8 percent last year to $27 billion and is expected to shrink further this year.
ExxonMobil chief executive Rex Tillerson said last year that there was no trust in the county’s judicial system and that should be changed if the country wanted to attract major foreign investment.
Neil Duffin, head of Exxon’s project development unit, said this month that Russia’s subsoil law was the main obstacle for new deals in the country.
“Does the legislation take into account today’s reality? There are some doubts about that. I think there is a need to rethink it,” Trutnev said.
Analysts said foreign money was badly needed, especially to boost exploration, as underinvestment will lead to an oil supply crunch and a new spike in prices.
“There is a problem of underinvestment in the Russian oil industry. Investments will match last year’s level at best. … Only foreign participation will guarantee an acceleration in exploration,” said Valery Nesterov, an analyst at Troika Dialog.
Mitsubishi, Mitsui Interested in Acquiring Sakhalin-3 Stakeshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQ3GWQUv4UGw
By Michio Nakayama
July 27 (Bloomberg) -- Mitsubishi Corp. and Mitsui & Co., Japan’s largest trading companies, said they are interested in buying stakes in Russia’s Sakhalin-3 natural gas project.
The companies are yet to enter into negotiations with the operator, Russian gas monopoly OAO Gazprom, according to Mitsui spokesman Kazuhisa Kawamura and a Mitsubishi spokesman, who declined to be named because of company policy. Both spoke by phone from Tokyo today.
The Yomiuri said today that Mitsui and Mitsubishi may win stakes in the project. The spokesmen said the claim in the Japanese-language newspaper is speculative.
Mitsui holds 12.5 percent of Sakhalin-2 and Mitsubishi has 10 percent, according to the project’s Web site.
To contact the reporter on this story: Michio Nakayama in Tokyo at [email protected].
Last Updated: July 27, 2009 00:14 EDT
LUKoil to Return to Ghana
http://www.moscowtimes.ru/article/1009/42/379866.htm
LUKoil and U.S.-based Vanco Energy may be ready to resume operations on a deepwater block off the Ghanaian coast next month after repairs to their drilling ship, Vanco Energy vice president Jeffrey Mitchell said Thursday.
“It looks like there is about two or three more weeks of work to do,” Mitchell said, referring to repairs on the refitted drilling ship. (Bloomberg)
Tatneft to enter Belarusian market
http://www.businessneweurope.eu/dispatch_text9209
bneJuly 27, 2009
Tatneft is planning to enter the Belarusian market. The company, which is based in the constituent republic of Tatarstan, intends to oil to Belarusian refineries, refine oil and sell oil products in Belarus, a source with the Belarusian government told Prime-Tass. It also intends to buy up existing petrol stations and build new ones in the country.
Tatneft postpones launch date for Nizhnekamsk refinery
http://www.businessneweurope.eu/dispatch_text9209
CitiJuly 27, 2009
Tatneft's 40% subsidiary Taneco, operator of a new Nizhnekamsk refinery construction, announced last Friday that the refinery would be launched in December 2010, one year later than we currently forecast. Tatneft's management earlier had said that the refinery would be launched in late 2009, although last month Tatarstan's PM Rustam
Minnikhanov was already mentioning 2010 during his visit to Nizhnekamsk.
Further, Taneco announced that the total project capex would amount to RBL 223bn vs. the RBL 130bn earlier estimate. Such a difference is likely to be explained by the plans to reduce refining complexity of the plant and instead double its capacity from 7mtpa to 14mtpa, announced in February by Tatarstan's President Mentimer Shaymiev. In our model we still forecast a 7mtpa plant with the original configuration. Sensitivity of our Tatneft DCF value estimate to a 1-year delay in refinery launch is -2.3%.
We also note that in June Taneco announced the election of a new BoD where all directors now represent exclusively Tatneft and the Tatarstan government, 9% co-owner of Taneco. The structure of the new Board may imply that IPCG Fund, 51% co-owner of Taneco, may have sold or plans to sell its stake to Tatneft. Taneco financials are currently being consolidated by Tatneft which owns a 49% stake in IPCG fund.Alexander Korneev
Blocks Offered in Three Russian Regions and Awarded in Two Regionshttp://www.oilvoice.com/n/Blocks_Offered_in_Three_Russian_Regions_and_Awarded_in_Two_Regions/a6bc0ea4e.aspx
Sunday, July 26, 2009Written by Deloitte Petroleum Services
Blocks offered in the Samara Region The Russian Subsoil Management Agency of the Samara Region (www.samaranedra.ru) announced an auction to be held on 26 August 2009. Under this auction, four hydrocarbon blocks (Baykalskiy, Mnogopolskiy, Padovskiy, and Rudnikovskiy) are offered for 25 years of exploration and production. The deadline to submit a deposit is 5 August 2009 and the deadline to submit applications is 11 August 2009. Blocks offered in the Yamalo-Nenets Autonomous AreaThe Russian Subsoil Management Agency (www.rosnedra.com) announced an auction to be held on 23 September 2009. Under this auction, the Akaytemskiy and Kamennomysskiy blocks are offered for 25 years of exploration and production. The deadline to submit applications and deposits is 21 August 2009.Blocks offered in the Republic of BashkotostanThe Subsoil Management Agency of the Republic of Bashkortostan (www.bashnedra.ru) has also announced an auction to be held on 10 September 2009. Under this auction, three hydrocarbon blocks (Sabirovskiy, Suyanovskiy, and Zapadno-Kungakskiy) are offered for 25 years of exploration and production. The deadline to submit applications and deposits is 11 August 2009.Auction awards in the Tomsk Region, Nenetsk Autonomous AreaOn 17 June 2009 the Subsoil Management Agency of the Tomsk Region (nedra.tomsk.gov.ru) announced the auction results of the Kargasokskiy-2 block. CH-Gasproduction LLC has been awarded a 25 year exploration and production licence for
Kargasokskiy-2 block. In the initial five years of exploration, the company is committed to acquire a 400 kilometre line of 2D seismic data and drill one well.
On 30 June 2009 the Russian Subsoil Management Agency (www.rosnedra.com) announced the competitive process results for the Korovinskiy block. “EvroSeverNeft” LLC has been awarded a 25 year exploration and production licence for the Korovinskiy block. During the first phase of exploration, EvroSeverNeft will acquire 75 square kilometre of 3D seismic data and drill one well.
CH-Gasproduction and EvroSeverNeft are both controlled by CH-Oil&Gas LLC, a managing company which was established in April 2008 for the purpose of coordinating the oil and gas assets of ALLTECH Group.
Auction award in the Sakhalin AreaThe Subsoil Management Department of the North-Western Federal District (sevzapnedra.nw.ru) announced auction results for Vostochno-Goromayskiy block. “Tomgazneft” LLC has been awarded 25 year exploration and production licence for Vostochno-Goromayskiy block.
Auctions cancelled in the Tomsk Region, the Khanty-Mansiysk Autonomous Area and the Republic of Sakha (Yakutia)The Subsoil Management Agency of the Tomsk Region (nedra.tomsk.gov.ru) announced that the auctions for the Aysazskiy, Basmassovskiy, Kengskiy-1, Kengskiy-3, Ledovyy, Narymskiy, Nizhnepaninskiy, Togurskiy, Ust-Bakcharskiy-2, Ust-Tymskiy-1, Ust-Tymskiy-2 and Kargasokskiy-1 blocks were cancelled.
The Subsoil Management Agency of Khanty-Mansiysk Autonomous Area announced that the auctions for Vostochno-Kayumovskiy 1, Vostochno-Nikolskiy, Zapadno-Tumannyy, Zmanovskiy and Ityakhskiy blocks were cancelled. No applications were submitted for Vostochno-Nikolskiy block and only one application was submitted for each of the Vostochno-Kayumovskiy 1, Zapadno-Tumannyy, Zmanovskiy and Ityakhskiy blocks.
The Subsoil Management Agency of the Republic of Sakha (Yakutia) (www.yakutsknedra.ru) announced that auctions for the Iktekhskiy, Monulakhskiy, Nizhnetyukyanskiy blocks were cancelled. No applications were submitted for the Iktekhskiy and Nizhnetyukyanskiy blocks and only one application was submitted for the Monulakhskiy block.
Gazprom
Putin Dodges Miller’s Idea on Import Tariffshttp://www.themoscowtimes.com/article/1009/42/379861.htm
27 July 2009 Reuters
Gazprom CEO Alexei Miller on Saturday told Prime Minister Vladimir Putin that he opposed a proposed hike in the gas extraction tax, suggesting instead the introduction of import tariffs.
The Finance Ministry said Friday that a hike in the gas export tariff could bring in an extra 53 billion rubles ($1.71 billion), while increasing the extraction tax would add another 7 billion rubles.
“I do not think these proposals are justified at the current time,” Miller said, according to a transcript published on the government web site.
“I think it advisable to look into the question of introducing an import tariff for Gazprom’s gas purchases abroad. That could be a source of extra income for the federal budget.”
Putin replied that import tariffs were not just an economic question. “We will return to this later,” he said.
As the world faces its deepest crisis since the Great Depression, some countries have been increasingly looking to protectionist measures as a way to help domestic economies.
The meeting comes a day after Putin met steel barons and pledged to help the sector by stimulating demand and steps to offset protectionism in other countries. Miller said that for its part, Gazprom already buys 90 percent of its pipes from Russian producers.
Gazprom proposes gas import tariffshttp://steelguru.com/news/index/2009/07/27/MTAzOTY4/Gazprom_proposes_gas_import_tariffs.html
Monday, 27 Jul 2009
Reuters reported that the head of Russian gas export monopoly Gazprom on Saturday told Mr Vladimir Putin Prime Minister of Russia that they opposed a proposed hike in the gas extraction tax, suggesting instead the introduction of import tariffs.
Russia faces at least three years of budget deficits and is seeking extra sources of revenues to replenish state coffers drained by the country's first recession in a decade. The Finance Ministry said a hike in the gas export tariff could bring in an extra RUB 53 billion while increasing the gas extraction tax would add another RUB 7 billion.
Mr Alexei Miller CEO of Gazprom told Mr Putin that "I do not think these proposals are justified at the current time. I think it advisable to look into the question of introducing an import tariff for Gazprom's gas purchases abroad. That could be a source of extra income for the federal budget."
Mr Putin replied that import tariffs are not just an economic question and we will return
to this later.
The meeting comes a day after Mr Putin met Russia's steel barons and pledged to help the sector by stimulating demand and steps to offset protectionism in other countries.
As the world faces its deepest crisis since the great depression, some countries have been increasingly looking to protectionist measures as a way to help domestic economies.
(Sourced from Reuters)
Gazprom almost fully buys production of local producers http://capital-en.trend.az/oil/oilgas/1511895.html25.07.09 19:08
Azerbaijan, Baku, July 25 / Trend Capital /
Gazprom OJSC buys 90 percent of equipment and other production from Russian enterprises, head of gas concern, Alexei Miller, said during a working meting with Russian Prime-Minister Vladimir Putin, Vesti TV channel said.
Chairman of the Russian government showed interest how the company realizes investment programs and whether anti-crisis recommendations of the government directed to support local producers are taken into account. Miller said that at present, Gazprom almost fully purchases Russian plants' production. Most part of this purchase is production of companies producing pipes, Miller said.
Earlier Putin said during governmental meeting that amount of investment program of Gazprom will hit 775 billion rubles in 2009. First investment program of the company was scheduled to the amount of 920 billion rubles in 2009, including capital investments - 700 billion rubles. So, adjusted volume of investment program can hit lower than 16 percent, Prime Minister said. Earlier, Gazprom supposed that investment program can reduce 30 percent in 2009.
Russia - Prime Minister Vladimir Putin held a meeting with Deputy Chairman of the Board of Directors, Chairman of Gazprom's Management Committee, Alexei Millerhttp://www.isria.com/pages/26_July_2009_25.php
The future development of Russia's gas sector, Gazprom's activities in particular, and the company's cooperation with the metalworking industry were discussed at the meeting.
Transcript of the beginning of the meeting:
Vladimir Putin: Mr Miller, yesterday I had a meeting with managers from companies in
the metals industry. We discussed cooperation between the energy and metalworking sectors in great detail.
And at the end of last year I asked that, when you arrange the purchase of vital equipment primarily from the metalworking industry, domestic producers should be your first port of call. I would like to hear what progress you are making with those metalworkers. How do you plan to develop the work in the near future? That is the first question.
And the second is, we are currently concluding our work on the basic parameters of the budget, the sections on revenue and expenditure. In relation to this, Gazprom's actions are of significant interest to us, and we consider them to be of great importance.
I'm sure you are aware of the proposals put forward by several members of the Government to change the tax scale for natural resources production, and for customs tariffs. I would like to discuss this with you as well. What is your view on these proposals, and how to you regard them? Of course, taking into account the fact that we must consider the revenue side of the budget so that we are able to discharge all our duties, especially our social responsibilities.
Alexei Miller: Recently Gazprom has in its purchase of materials, equipment and pipelines, been lead by the directives set out by both the Government and yourself personally, in making Russian producers a priority in purchasing. I would like to report back that currently purchases of pipeline and technical equipment from Russian producers accounts for 90% of all purchases made by Gazprom. I can say therefore that we have moved almost entirely to purchasing from Russian producers.
Of course most of this is pipeline related. We recently outlined new forms of cooperation, in particular by signing bilateral protocols with pipeline producers, in accordance with which we let them know what tasks and goals we have set ourselves in the medium term. Since Gazprom has a major investment programme, pipeline related purchasing amounts to billions of dollars every year, and it is very important for these producers to understand what our plans are, so they can plan their production and finances accordingly. Therefore, we are working in a very straightforward manner. In addition, Gazprom tells the pipeline producers about all the technical aspects of the pipeline use, our desired specifications for the pipeline, the fact that, quality wise, it must meet the highest, most advanced standards.
I can tell you now that today's Ukhta-Bovanenkovo gas pipeline in Yamal is being built to the most advanced technical standards of both the pipeline and gas industries. It is indeed a new generation of gas trunkline system. That is why I can say that we have of late been achieving very good results in this area.
I think that taking the dynamics of current market trends into account, and here I mean the growth in demand for gas on the European and internal markets, I am confident that the extent to which these investment programmes are being implemented, and consequently the volume of purchasing from Russian producers, will be maintained at
that level recently attained.
Vladimir Putin: Good. What do you think about the tax on natural resources production, and the customs tariffs?
Alexei Miller: I think that these proposals are so far unfounded. I think that, factoring in the growth in supply to both the European and internal markets, we can achieve the same results in figures as projected by the Ministry of Finance. I am confident, that this will be the case. Apart from anything else, I think it makes economic sense to consider the introduction of import tariffs on gas purchased by Gazprom abroad. This could become an additional source of revenue for the federal budget.
Vladimir Putin: As for import taxes on gas purchased by Gazprom, that is a separate subject and we will not discuss it now. It is not a solely economic question. We will return to it later.
PGNIG CEO welcomes possible Gazprom deal extensionhttp://www.reuters.com/article/rbssEnergyNews/idUSLR9550620090727
Mon Jul 27, 2009 3:13am EDT
WARSAW, July 27 (Reuters) - The Chief Executive of Polish gas monopoly PGNiG (PGNI.WA: Quote, Profile, Research, Stock Buzz), Michal Szubski, on Monday gave his support to the possible extension of a gas suppply deal with Russia until 2035.
Earlier this month, Maciej Wozniak, Polish Prime Minister Donald Tusk's advisor on energy issues, said Poland may prolong its gas contract with Russia until 2035, expecting to raise its gas usage by nearly a third to 18 billion cubic metres by 2015.
Asked if it was a good idea to increase gas volumes imported from Russia and to prolong the contract with Gazprom until 2035, Szubski said: "Yes."
Poland, which imports some two-thirds of its annual gas consumption from Russia, hopes to finalise soon talks with Russian giant Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) on gas deliveries starting next year. Diversification has long been a priority for consecutive Polish governments and the country's first liquefied natural gas (LNG) terminal is expected to go on line as of 2014.
"If we increase imports from Russia by some 2 billion cubic metres per year, then still after 2015, that is after finishing the LNG terminal, the share of this fuel in our balance will be lower than now," Szubski also said. (Writing by Gabriela Baczynska; editing by Simon Jessop)
Yamal pipeline laying proceedshttp://www.barentsobserver.com/yamal-pipeline-laying-proceeds.4615051-16178.html
2009-07-24 Gazprom is continuing the laying of a 70 km long underwater pipeline across the Baydarata Bay. The pipeline will link the huge Bovanenkovo field with the Russian west-bound pipeline grid.According Regnum, the research vessel “Ivan Petrov” on 28 July heads towards the Baydarata Bay to assist in the pipeline laying. The underwater pipeline is part of the 1100 km long Bovanenkovo-Ukhta pipeline.
The “Ivan Petrov” is well suited for the mission, expedition leader Yury Ifutin says to Regnum. It is capable of operating in any weather condition and it is compact, easy to maneuver and can take on many various task, he maintains.
Last summer about 40 km of the pipeline was completed. Climate in the area is shallow and storms are common. The waters in the bay are shallow.
As BarentsObserver reported in June, Gazprom has decided to postpone the launch of the Bovanenkovo field one year, from 2011 to 2012.
Gazprom places USD 1.25 billion and EUR 850 million in LPNhttp://steelguru.com/news/index/2009/07/27/MTAzOTcw/Gazprom_places_USD_1.25_billion_and_EUR_850_million_in_LPN.html
Monday, 27 Jul 2009
Interfax reported that Gazprom placed loan participation notes totaling USD 1.25 billion and EUR 850 million at a yield of 8.125%.
A source close to one of the issue organizers said "The deal ended up being crazy. We did the euro issue at a spread narrower than Gazprom's curve."
It is the first corporate bond deal for a Russian company this year, not counting two placements by Gazprom itself: an issue of Eurobonds in April denominated in Swiss francs, a currency that targeted particular investors; and an issue of dollar-denominated Eurobonds that was essentially a repackaging of a loan raised earlier from Credit Suisse.
A portion of the proceeds will go to refinance loans Gazprom raised at the end of last year at high rates. It will transfer about USD 1 billion to its oil subsidiary Gazprom Neft to finance purchase of shares in UK-based Sibir Energy.
The issuer was Luxembourg registered Gaz Capital SA.
A source at a major UK management company that took part in the placement said "I don't think a put option on Eurobonds is the most appealing structure for investors at present. Five-year securities and full redemption upon maturity is preferable to a put option in five years."
As the bid book filled up, the proposed yield on the bonds fell from 8.5% for the dollar LPN and 8.75% for the euro LPN to 8.125% for both.
The source said the company was able to secure that yield thanks to positive sentiment among investors abroad toward new emerging-market issues and Gazprom's reputation as a borrowed.
It was reported earlier that the demand for the bonds totaled USD 6 billion and EUR 5 billion.
(Sourced from Interfax)
Gazprom May Invest Less
http://www.moscowtimes.ru/article/1009/42/379866.htm
Gazprom’s investment program for 2010 could be cut to $21 billion from the $25 billion earmarked for this year, deputy chief executive Alexander Ananenkov said Friday.
Ananenkov told a meeting chaired by Prime Minister Vladimir Putin that to meet a plan to install large-diameter pipes capable of carrying 1.5 million tons in 2010, the investment program would need to total 645 billion rubles ($21 billion). (Reuters)
Gazprom 2010 capex to be RUB645 bln
http://www.businessneweurope.eu/dispatch_text9209
UralSibJuly 27, 2009
Main upstream projects may be delayed. Vedomosti reported today, citing company Deputy Chairman Alexander Ananenkov, that Gazprom's (GAZP - Buy) 2010 capex is planned at RUB645 bln ($20.8 bln). According to the newswire, this is less than half the figure in the company's December's 2008 business plan proposal of RUB1.4 trl ($45.2 bln), but 29% higher than 2009 capex. Vedomosti did not provide any information as to which projects will be frozen or cancelled. We believe that the main cuts will be for upstream projects since most of the initially planned 2009-10 capex was allocated for the Yamal Peninsula development and Gazprom's recent statements that com missioning of the Bovanenkovskoye and Shtokmanovskoye fields is likely to be postponed by at least one year to 2012 and 2014, respectively. Meanwhile, investment in key export transportation projects, like Nord Stream pipeline is unlikely to change.
Unfavorable market conditions limited 2009 investments. According to Gazprom's 2009 business total investment this year was to be over RUB920 bln ($33 bln). However, in light of the unfavorable global environment it cut 2009 investment in February 2009 by 20% and recently adjusted it to RUB775 bln ($24.2 bln) which breaks down to capex of
RUB500 bln ($15.6), RUB145 bln ($4.7 bln) in investments and RUB130 bln ($4.1 bln) for the purchase of Gazprom Neft's 20% stake from Eni.
Neutral impact on valuation. Although gas demand remain weak on both domestic and export markets, and Gazprom's 2010 capex is the biggest among its Russian oil and gas peers. We estimate the company's 2010 capex at RUB577 bln ($18.7 bln) and 2010 operating cash flow at RUB880 bln ($28.3 bln) which would be sufficient to cover its investment program and financial payments in 2010. The impact of the new 2010 capex figure (9% higher than we forecasted in our DCF-model) on valuation is very limited (about 1% of target price), thus we reiterate our Buy recommendation and target price of $6/share. Victor Mishnyakov
Gazprom Neft Repays Loan
http://www.moscowtimes.ru/article/1009/42/379866.htm
Gazprom Neft said Friday that it had repaid a $375 million loan from state bank VEB ahead of schedule.
It received the one-year loan on Jan. 14, 2009, and used the money toward partial refinancing of its eurobonds issued in 2002, the company said in a statement. (Reuters)
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