Russia 110929
Basic Political Developments











Ukrainian delegation in Moscow for gas talks – minister: Delegation of "Naftogaz
Ukraine" has left on Thursday, Sept. 29, in Moscow for gas talks with Russia's
OAO "Gazprom". This was announced by Minister of Energy and Coal Industry
of Ukraine Yuriy Boyko.
Russia to insist U.S., NATO take realistic approach to missile threats - envoy to
NATO
- Russia-NATO Chicago summit possible if progress made on missile
defense – Rogozin
NATO provoking another conflict in Balkans – Rogozin
- Ambassador demands investigation of NATO’s firing at Kosovan Serbs
Russia supports Jordan’s reform drive - During a meeting with Foreign Minister
Nasser Judeh, which was held on the sidelines of the UN General Assembly
meetings on Tuesday, the two sides discussed the latest regional developments,
especially those taking place in several Arab countries. They also stressed the
importance of ongoing cooperation and coordination vis-à-vis issues of mutual
concern.
UNSC may agree measures on Syria - Russia's UN ambassador
- EU, Russia inch towards compromised draft text in UNSC on Syria
Politics
Deputy Foreign Minister Vladimir Titov’s Conversations in Berlin - They
substantively examined topical international issues, including pan-European
security and Russia-EU and Russia-NATO cooperation, and the situation in
different regions of the world.
Poland and Russia differ on Smolensk disaster autopsy findings - The news
threatens to undermine the entire series of autopsies carried out in Russia in the
wake of the plane crash which killed President Lech Kaczynski and 95 others in
western Russia last year.
Russian military power worries Nordic region - “A rise in Russia’s military
operations in the Baltic Sea region is cause for concern among Baltic states
Finland, Sweden and Poland, Estonia’s military chief said.
Russia moves to bolster Arctic military presence - Anton Vasilev, a special
ambassador for Russia's Ministry of Foreign Affairs, was quoted this week by the
Interfax news agency as saying his country would be beefing up its presence in
the Arctic, and that NATO was not welcome there.
Cruiser Adm Kuznetsov to leave for Mediterranean in Nov - Verification is under
way of a list of foreign ports to be visited by the Russian ships, including an
update in view of the developments in the Middle East and North Africa. The
question of the Russian ships' participation in joint exercises together with the
navies of countries in the region is being worked out as well, the MNH officer
pointed out.
Greece, Russia meet on Rodos to discuss investments - “Our interaction in
shipbuilding has been good but I know that Greek ship owners want more


















contracts with Russian companies. At the moment, Greek ship owners are a major
force in shipping,” Kedikoglu added.
Turkmenistan, Russia discuss joint projects in Ashgabat - The forum will present
economic opportunities for Russian regions, in particular, Omsk, Chelyabinsk and
Saratov, as well as trade organizations and industrial structures. In addition,
bilateral talks are expected to be held with representatives of ministries and
departments, heads of private companies, and Turkmen firms.
Russian-Turkmen trade reaches 2 bln dollars in first half of 2011
“Moscow May Use Karabakh Trump Card Against BP” - "But they have such a
serious lever as Karabakh. They may push the button at any moment to create
instability, suspending the project," he said, adding that Russia would not be
disappointed in case Turkmenistan refuses to join the project.
Russia's Hermitage cancels exposition in Japan over nuclear fears
Russian MPs are expected in the occupied territory - Today a delegation of the
Russian Federation Council headed by First Deputy Chairman of the Committee
on Defence and Security Yevgeny Serebrennikov is arriving in Tskhinvali.
Georgia says yes to US missile defense but no to Russia in WTO
- Saakashvili: U.S. Stopped Russia Bombings
Azerbaijan exports to Russia much more energy than it receives - An agreement
on the parallel operation of power system of Azerbaijan and Russia is at the
consultation stage, Shedrin said.
Pro-Russian Activists Quarrel In Ukraine's Crimea
Final conf on e-gov't project to be held at EU Moscow office - Cooperation
between Russia's regions and the European Union (EU) in promoting the
establishment of an electronic government of Russia has entered the finishing
straight.
United Russia submits election list led by Medvedev
- Russia’s Election Commission admits lists of candidates for parliamentary
elections
Russians living in poverty 'up by 2 mln since 2010'
Russia plans over 15 space launches for Q4 2011
- Glonass-M to be launched from Plesetsk early on Oct 2 morning – source
- Russia set for launch of Proton-M carrier rocket with Mexican satellite
The gigantic Typhoons will be scrapped for metal - The world’s largest
submarines did not fit into the limits of the START Treaty
Firefighters extinguish 18 forest fires in Russia's Siberia over past 24 hours
Blast on motorway in Dagestan presumably targeted at local official
Estonian investments come in Dagestan - Within several days, the representatives
of "Bell BOATS" and "MIRODON" have been examining the opportunities for
companies' participation in investment projects in Makhachkala.
Shakira to attend Chechen president's birthday bash
New clue in Chechen killings - Six former Chechen commanders were all killed
in Turkey over the past four years with the same weapon produced by an arms
factory near Moscow for the Russian Military Intelligence Service, or GRU,
according to Turkish police sources.











Caucasus Muslims Office: Interethnic and interfaith understanding to bring happy
future in Caucasus
Russia doesn’t blame Muslims as terrorists: CG - H E Consul General of the
Russian Federation Andrey V. Demidov has said that his country keenly sought
friendly relations with the Muslims of Pakistan.
Church official asks journalists no to turn conversation from attempts to justify
pedophilia to discussing novels
- Russian church wants novels banned
Deputy mayor promises not to prolong building of 200 new churches in Moscow
"for decades"
Moscow housing inspection chief dismissed - "Obyedkov is relieved of the
position and discharged from the city's civil service on his own initiative as he
retires on a pension," the source aid.
Barracks fire in St Pete brought under control, over 200 evacuated
Moscow close to bottom on world list of cities convenient for living
Reuters PRESS DIGEST - Russia - SEPT 29
- www.vedomosti.ru
- Russian state officials spent more than 4.5 billion roubles ($141 million)
in 2007-2009 to acquire expensive executive cars, the daily says citing a
research compiled by a parliament deputy.
- Russia eyes introducing obligatory Director and Officers Liability
Insurance for chairmen of the boards of major state companies.
- www.kommersant.ru
- The European Commission antitrust probe into Gazprom's supplies to its
European customers could allow the EU to get more leverage on the
company, the daily says.
- The first test launch of Russia's fifth generation intercontinental ballistic
missile has failed, the daily says.
- www.ng.ru
- The earnings of 21.1 million Russians, or 15 percent of the country's
population, were below living standards in the first half of 2011, the paper
cites official statistics.
- www.rg.ru
- Prime Minister Vladimir Putin awarded a medal named after Russia's
prominent 20th century reformer Pyotr Stolypin to a top Kremlin official
Vladislav Surkov. ($1 = 31.746 Russian Roubles) (Writing By Tatiana
Ustinova)
RIA Russian Press at a Glance, Thursday, September 29, 2011
Editorial: Another reason not to join the Russian army - The Russian army is
having a hard time filling its ranks with draftees. About half of all potential
recruits never show up for induction. Bribes to obtain medical deferments are
common, and there is no real social stigma attached to draft dodging.
FT: Putin's intended return as president unleashes open rebellion within the
Kremlin - Mr Medvedev’s entire presidency (Mr Putin was constitutionally
prohibited from a third successive term) now appears to have been an elaborately


constructed play, whose final act was the return of the former KGB colonel to his
job next March.
Yet Another Example of The Economist's Awful Russia Coverage - We have
been asked a lot recently about the "Russia: Time to Shove off" piece that ran in
the Economist earlier this month.
Yet Another Example of The Economist's Awful Russia Coverage - By Mark
Adomanis
National Economic Trends









Inflation continues to decelerate in September - According to Rosstat, Russia's
weekly consumer inflation was 0% last week (19-23 September), after shrinking
by 0.1% since the beginning of September; YtD inflation amounted to 4.6%.
Russia Macro View - That Sinking Feeling
Ruble Weakens Third Day This Week Against Dollar, Euro at Open
Kremlin Moves Rumble the Ruble - By ANDREW PEAPLE
Russia strengthens positions at world grain markets
Russia Grain, Pulses Harvest at 86.4 Million Tons, Ministry Says
Russia resumes sugar exports for first time since 1999
Central Bank may ease requirements for two major banks - The Central bank of
Russia (CBR) may refrain from introducing sanctions against Sberbank and the
Bank of Moscow for infringing the law on the national payment system by
introducing a temporary moratorium for the two financial institutions, RBC Daily
reports today.
COMMENT: Russian banks - Late to the party - David Nangle of Renaissance
Capital
Business, Energy or Environmental regulations or discussions






Russian shares down, indexes lose 0.9%-1%
Globaltrans to shell out $1.2bn on M&A
Aeroflot flies 23% more passengers in 8 mths
Billionaire Potanin May Seek Norilsk Control
Norilsk May Borrow $4 Billion for Buyback, Vedomosti Says
TMK considering USD 3 billion in investments in US Russia and Romania
Activity in the Oil and Gas sector (including regulatory)






Lukoil to start supplying lubricants to Afghanistan
Russian Watchdog Wants Oil Refiners Spun Off, Kommersant Says - Russia’s
Anti-Monopoly Service proposed splitting oil companies into production, refining
and retail businesses to defend independent retailers, Kommersant reported, citing
Igor Artemyev, head of the body.
International conference on Arctic shelf opens in Murmansk
Kamchatka gasoline stations owners agree to lower fuel prices
TNK-BP Says It Paid $1 Billion to Partner With HRT in Amazon
BP to stay in Russia despite lawsuit and raids


Lukoil’s Lawsuit against Customs Agency Postponed - Experts should have
completed the technical expertise on the case November 9
Gas imports from Russia are expected to reach USD 545/1000 cubic meters - The
price of gas imports from Russia is expected to reach USD 545 for 1000 cubic
meters this October, according to Agerpres newswire. This statement was made
by Hilmar Kroat-Reder, member of the Petrom directorate and responsible for the
natural gas market, during a conference on energy.
Gazprom






Gazprom to be offered several Belarusian assets - Russian state giant Gazprom
may get its hands on several major Belarusian assets, Alexander Surikov, Russian
ambassador to Belarus, claimed to Prime on Wednesday, as Belarus insisted it
expects no delay to the next tranche of the Russian-led bail out programme.
Romania's top oil and gas company Petrom , controlled by Austria's OMV , is in
talks to sell about 130 petrol stations it holds in Romania, almost a quarter of its
total gas stations, to Serbian oil firm NIS, majority owned by Russia's Gazprom
Neft , market sources said.
Gazprom Seeking Short-Term Debt Amid Market Rout: Russia Credit
UPDATE 2-Europe's fear of Russian gas behind Gazprom raids
Gazprom Gas Supply Contracts Are Focus of EU’s Antitrust Probe - By Aoife
White and Anna Shiryaevskaya
The Empire Strikes Back: European Energy and the Return of Gazprom Matthew Hulbert and Dr. Christian Brutsch
-----------------------------------------------------------------------------------------Full Text Articles
Basic Political Developments
Ukrainian delegation in Moscow for gas talks – minister
http://www.interfax.co.uk/
29/09/11 8:58AM GMT
KYIV. Sept 29 (Russian Energy News) – A Ukrainian delegation is in Moscow for talks
on gas issues on Thursday, Ukrainian Energy and…
CORRECTED GOOGLE TRANSLATION
Naftogaz went to negotiate with Gazprom
29.09.2011 11:04
Delegation of "Naftogaz Ukraine" has left on Thursday, Sept. 29, in Moscow for gas
talks with Russia's OAO "Gazprom". This was announced by Minister of Energy and
Coal Industry of Ukraine Yuriy Boyko.
According to him, the talks will discuss a wide range of issues.
Earlier, the head Gazpromexport Alexander Medvedev said that Gazprom asked
European customers not to worry, saying that there is no threat of another "gas war"
between Russia and Ukraine, which transports Russian gas to Europe.
In turn, Prime Minister Mykola Azarov said that Ukraine and the Russian Federation in
November, will change the existing contracts between NAK "Naftogaz Ukraine" and
"Gazprom". He promised that the new price for Russian gas will be effective from
January 1, 2012. However, the spokesman for OAO "Gazprom" Sergei Kupriyanov said
that Russian and Ukrainian side has not agreed to the revision of gas supply contracts.
Ministry of Industry
http://minprom.ua/news/77329.html
September 29, 2011 11:27
Russia to insist U.S., NATO take realistic approach to missile threats - envoy to
NATO
http://www.interfax.com/newsinf.asp?id=276611
BRUSSELS. Sept 29 (Interfax) - Problems of negotiations on missile defense aspects
were discussed in a tense atmosphere at an ambassadorial meeting of the Russia-NATO
Council on Wednesday, Russian permanent envoy to NATO Dmitry Rogozin told
Interfax.
"I presented findings by American researchers from the University of Massachusetts,
which confirm the Russian Federation's concerns that the U.S. plans of deploying its
missile defense group in the northern seas and on Polish territory on the third and fourth
stages will pose a real threat to the Russian strategic nuclear forces," he said.
"If our NATO partners do not believe our Russian researchers and experts, the Defense
Ministry and the Foreign Ministry, then they should at least listen to their own experts.
They virtually have nothing to parry such information," Rogozin said.
Russia will continue "to use authority, opportunities, and goodwill of our partners,
researchers from Europe and the U.S., to ensure that the United States and those who
support it in NATO regarding the missile defense deployment plans in Europe take an
appropriate approach, which presumes that, if there are missile threats, then a system
opposing them should be absolutely proportional to these risks," he said.
"And when all plans are being sewn together and all agreements are being signed already
now, including with Warsaw, on deploying U.S. missile defense elements right near
Russia's northwestern borders on the pretext of the so-called much talked-about Iranian
missile threat, there should be no illusions that Russia will silently swallow such
propagandistic moves. We won't swallow this, and if we don't obtain coherent reaction
from our partners in the negotiations, we will have to resort to the best guarantee of
which Czar Alexander III said calling the army and the navy Russia's only allies,"
Rogozin said.
va
(Our editorial staff can be reached at [email protected])
Russia-NATO Chicago summit possible if progress made on missile defense – Rogozin
29/09/11 7:28AM GMT
BRUSSELS. Sept 28 (Russian Military News) – The Russia-NATO Chicago summit, set
for May 2012, is possible only if agreements have been reached…
NATO provoking another conflict in Balkans – Rogozin
http://rt.com/news/kosovo-nato-conflict-603/
Published: 28 September, 2011, 21:12
Edited: 28 September, 2011, 22:54
NATO peacekeeping force KFOR has sent more troops to the Serbian-Kosovo border
following bloody clashes there. But as Russia’s envoy to NATO Dmitry Rogozin told RT
the alliance is creating a new conflict in the region.
"It's another mistake that NATO is making by provoking another conflict in the Balkans,”
Dmitry Rogozin said.
According to witnesses, KFOR has deployed armored vehicles, sandbags and barbed wire
around the Jarinje border crossing, about 100 km (60 miles) from Kosovo's capital,
Pristina, on Wednesday.
“It seems my NATO colleagues don't have a clue what the consequences of their
involvement in the conflict could be,” Dmitry Rogozin said. “Instead of taking a neutral
position in accordance with the UN Security Council resolution, they took the side of
Kosovo-Albania. Basically, NATO is blocking the only road of life between the Kosovan
Serbs and Serbia. It's the international peacekeepers who are involved in the civil conflict
in the north of the region.”
NATO reinforced the border a day after clashes which left 16 Kosovo Serbs and four
KFOR members injured.
Milan Jakovljević, the director of Kosovska Mitrovica Health Center, said six people
sustained serious injuries from live rounds and one person had been taken to the
ophthalmology ward due to eye problems caused by tear-gas, Serbian radio and television
broadcaster B92 reported.
Both sides blame each other for starting the violence, in which rubber bullets and tear-gas
were used by NATO forces.
It is believed the clashes took place when alliance peacekeeping forces tried to dismantle
a roadblock set up by Serbs. NATO’s spokesperson insists that KFOR troops had fired on
Serb protesters in the Mitrovica region in response to an attack by the crowd.
Meanwhile, according to Rogozin, NATO does not want to discuss the situation in
Kosovo or to investigate the latest bloody accident.
“They are hiding behind formal phrases that mean nothing,” he said.
“We are witnessing outright lies about what kinds of measures have been used against
the civilian population in Kosovo. We have been told that only rubber bullets and teargas were used. But according to the information from the hospital, all the injured have
gunshot wounds. And physicians from Mitrovica complained about the bombardment of
ambulances, which were transporting the wounded from the conflict zone," Rogozin told
Interfax news agency.
Russia has demanded that NATO creates a commission to investigate what happened in
the region.
“I have just asked for an objective investigation into what the so-called NATO
peacekeepers are doing in Kosovo. But they just ignored my question,” Rogozin said. “If
NATO is concerned about its reputation they should stop this immediately, become
neutral again, and investigate the crimes that have taken place against the civilians in
northern Kosovo,” he added.
He stressed that Russia would support and protect civilians, and would also protect
decisions made by the UN Security Council.
John Laughland of the Paris-based Institute for Democracy and Cooperation agrees the
deployment of KFOR troops has reactivated a ‘frozen conflict.’
“If they took away their newly sent force from the borders between the northern Kosovo
and the rest of Serbia, then yes, I do think that the region would go back to being
peaceful,” John Laughland told RT.
20:55 28/09/2011ALL NEWS
Ambassador demands investigation of NATO’s firing at Kosovan Serbs
http://www.itar-tass.com/en/c154/235742.html
BRUSSELS, September 28 (Itar-Tass) – Russia’s ambassador to NATO, Dmitry Rogozin
has issued a demand that NATO officials investigate the incident, in which NATO forces
opened fire at Kosovan Serbs near the Jarinje check-post in Kosovo.
He wrote about his demand at his Twitter microblog.
“I’ve demand an investigation of the fact of fire by NATO servicemen at Kosovan Serbs,
who protested against the blocking of the administrative border between Kosovo and
Serbia,” Rogozin said.
“What I’ve heard in response is apologies only,” he said. “Irresponsibility of this sort
leads to a war.”
Earlier, a demand to investigate the incident was made by Serbia’s President Boris Tadic,
who had a telephone conversation with NATO Secretary General Anders Fogh
Rasmussen.
Tuesday, KFOR servicemen made an attempt to pull down the barricades that the
Kosovan Serbs had put up in front of the Jarinje check-post. They opened fire with rubber
bullets and used teargas after the Serbs had thrown several stones at them.
In retaliation, the Serbs hurled a few improvised bombs at the troops.
The incident left four KFOR soldiers and seven Serbs wounded.
Russia supports Jordan’s reform drive
http://www.jordantimes.com/index.php?news=41791
AMMAN (JT) - Russia’s Foreign Minister Sergey Lavrov commended Jordan’s current
drive towards reform and development, stressing his country’s support for the reform
process.
Lavrov also stressed Russia’s support for Jordan’s efforts to achieve regional peace and
stability, the Jordan News Agency, Petra, reported.
During a meeting with Foreign Minister Nasser Judeh, which was held on the sidelines of
the UN General Assembly meetings on Tuesday, the two sides discussed the latest
regional developments, especially those taking place in several Arab countries. They also
stressed the importance of ongoing cooperation and coordination vis-à-vis issues of
mutual concern.
Judeh briefed his Russian counterpart on current political, economic and social reform
implemented in Jordan, emphasising that a major goal is to engage the youth in the
decision-making process.
Judeh and Lavrov stressed the importance of the Palestinians and the Israelis returning to
negotiations, which they said should lead to the establishment of an independent
Palestinian state on the basis of the 1967 borders.
Judeh asserted that the establishment of a Palestinian state is a Jordanian interest, adding
that all final status issues, including Jerusalem, security, borders, water and refugees are
also significant as far as Jordan’s future is concerned.
Also on Tuesday, Judeh met with Lebanon’s Prime Minister Najib Mikati over means to
boost ties between the two countries in all fields.
Talks with Mikati, whose country holds the rotating presidency of the Security Council
for September, focused on the Palestinian request for full UN membership.
The two officials also reviewed other recent developments in the region.
29 September 2011
UNSC may agree measures on Syria - Russia's UN ambassador
http://english.ruvr.ru/2011/09/29/56910366.html
Sep 29, 2011 09:58 Moscow Time
The United Nations Security Council may agree a draft resolution aimed at stopping
violence in Syria, Russia’s Permanent Representative to the UN Vitaly Churkin told
reporters in New York.
He was speaking after a two-hour debate at the council on two draft resolutions, one
submitted by Russia, the other by a group of European countries. The main aim is to stop
violence and launch a political process that would lead to reforms and to a situation that
would suit the Syrian people, the diplomat said.
Earlier, France’s ambassador to the UN Gerard Araud said that a draft resolution on Syria
may be finalized on Friday. Damascus welcomed the Russian-proposed draft that does
not stipulate sanctions against Syria.
Commenting on the issue, Syria’s Permanent Representative to the UN Bashar al-Jafari
said that any proposals that could counterbalance the European and American positions
deserved approval.
(RIAN)
EU, Russia inch towards compromised draft text in UNSC on Syria Politics
http://www.kuna.net.kw/NewsAgenciesPublicSite/ArticleDetails.aspx?id=2193310&Lan
guage=en
9/29/2011 9:34:00 AM
UNITED NATIONS, Sept 29 (KUNA) -- Security Council European countries and
Russia late Wednesday said they are inching towards a compromised draft resolution that
would condemn the continued violence in Syria, with both parties hopeful the gaps
between their rival texts will be soon bridged and a vote would possibly take place on
Friday.
The Council met late Wednesday to examine two competing draft resolutions from UK,
France, Germany and Portugal on one hand, and another one from Russia.
The EU draft resolution circulated late Tuesday, contrary to an earlier version circulated
last August and stalled for months because of a Russian threat to veto it, does not call for
any sanctions.
It "strongly condemns" the continued systematic human rights violations in Syria,
demand an "immediate end to all violence," call for an inclusive Syrian-led political
process and for political reforms.
It would request the Secretary-General to report on the implementation of the resolution
within 15 days from its adoption, and express its "determination to adopt targeted
measures, including sanctions." in the event the report states that Syria has not complied.
The rival Russian draft, void of any sanctions, would also condemn the violence in Syria,
but in the draft's preambular part, call for an inclusive-led political process, urge "tangible
progress" in implementing the promised reforms, allow international monitors and media
to enter the country, release all political prisoners, and reaffirm the need to resolve the
crisis "peacefully, ruling out any military intervention from outside." Experts in the
Council are expected to merge the two drafts and come up with a compromised text that
would be acceptable to both parties. They are scheduled to hold an informal meeting later
today Thursday.
Asked how he felt about the EU draft, Russian Ambassador Vitaly Churkin told reporters
after the Council closed-door session "It will depend on how serious they (EU cosponsors) are going to be in an effort to produce something that we can rally around. I
think it can be done, but there are still certain things that if they are still there, will make
it impossible for us to go along with," in reference to the threat of sanctions.
Asked how soon the vote would take place, he said "as soon as we have a good
resolution, It is important to work fast, but it is also important not to make mistakes and
to calibrate the message that the Council will be sending" to Damascus.
Portuguese Ambassador told reporters "I think we are getting closer to an agreement." A
European diplomat, who spoke on condition of anonymity, said the 15 Council members
are "closer together. there were some constructive comments as we tried to bridge the
gaps" between the two sides.
"We're taking on board the European text a number of elements from the Russian text.
There was certainly nothing that was insurmountable," he stressed.
However, he added, "we'll try to keep the sanctions' threat in. We're not taking it away.
We're trying to find a way to meet their concerns, but we have no intention to drop it
altogether. We're finding a way of sending a more unified message, so that the message is
heard more clearly in Damascus." Another European diplomat also said "the new
compromised draft will take into account what was raised by the delegations (Russian
and Chinese) and will try to accommodate them as much as possible, while keeping at the
same time the core European elements." (end) sj.asa KUNA 290934 Sep 11NNNN
PRESS RELEASE
Deputy Foreign Minister Vladimir Titov’s Conversations in Berlin
http://www.ln.mid.ru/bdomp/brp_4.nsf/e78a48070f128a7b43256999005bcbb3/a6ce4aaf7
28f23a2c325791a002132e9!OpenDocument
1460-28-09-2011
Deputy Minister of Foreign Affairs of the Russian Federation Vladimir Titov
met in Berlin with the German Chancellor’s foreign policy adviser, Christoph
Heusgen, and also held consultations with Werner Hoyer, Minister of State at
the Federal Foreign Office, and State Secretary of the Federal Foreign Office
Emily Haber on September 27.
A range of practical matters relating to bilateral cooperation in the light of the
agreements reached at the end of the Summit-level Interstate Consultations
(Hannover, July 18-19, 2011) was discussed. The parties clarified the schedule
of political contacts for the near term, as well as the progress of preparation and
the holding of the cross-cultural years of Russia in Germany and Germany in
Russia in 2012-2013.
They substantively examined topical international issues, including panEuropean security and Russia-EU and Russia-NATO cooperation, and the
situation in different regions of the world.
September 28, 2011
Poland and Russia differ on Smolensk disaster autopsy findings
http://www.thenews.pl/1/9/Artykul/55973,Poland-and-Russia-differ-on-Smolenskdisaster-autopsy-findings
29.09.2011 10:35
Initial findings by Polish medics indicate that the Russian autopsy on Polish MP
Zbigniew Wassermann, one of the victims of the 2010 Smolensk disaster, was only 7 to
10 percent correct in its analysis.
The news threatens to undermine the entire series of autopsies carried out in Russia in the
wake of the plane crash which killed President Lech Kaczynski and 95 others in western
Russia last year.
Zbigniew Wassermann, an MP for the Law and Justice party, was exhumed in August at
the request of his family and approved by Poland's Chief Military Prosecutor's Office.
As was clarified at the time, the action was not taken owing to doubts over the identity of
the buried man, but rather over the details of the autopsy.
Wassermann's remains were taken from Krakow to Wroclaw, south west Poland, where a
second autopsy was conducted by the city's Medical Academy.
Russian and Polish findings appear to tally only on the most basic matters, such as the
height of the victim and the main external injuries.
However, Polish medics claim that there are faults in such questions as the number and
location of fractures. Furthermore, the Wroclaw specialists say that some organs were not
even analysed by the Russian medics.
Meanwhile, Jerzy Kawecki deputy leader of the team that led the Polish autopsy, told
RMF FM Radio that it is necessary “to wait until all the results of the tests have been
provided for consultative discussions.”
The report will now be sent to the Chief Military Prosecutor's Office, which approved the
Wassermann family's initial request for an exhumation. (nh/pg)
Russian military power worries Nordic region
http://www.helsinkitimes.fi/htimes/finland-in-the-world-press/16825-russian-militarypower-worries-nordic-region.html
Thursday, 29 September 2011 10:37
“A rise in Russia’s military operations in the Baltic Sea region is cause for concern
among Baltic states Finland, Sweden and Poland, Estonia’s military chief said.
‘Russia has significantly increased its military presence in the western region (Baltic) and
has created a new west strategic command that is – to believe its own military head –
much more powerful than was the Leningrad military district,’ General Ants Laaneots,
head of Estonia’s defence forces, said in an interview on Estonia’s public ETV website
Friday.
‘This is causing worries in Finland, Sweden, Baltic State and Poland,’ Laaneots said.
Ex-communist Poland became a Nato member in 1999 while the three ex-Soviet Baltic
states joined in 2004. Neutral Finland and Sweden remain outside the Western military
alliance...”
THE SWEDISH WIRE 25 September
LEHTIKUVA - SARI GUSTAFSSON
Russia moves to bolster Arctic military presence
http://www.alaskadispatch.com/article/russia-moves-bolster-arctic-military-presence
CBC News | Eye on the Arctic | Sep 28, 2011
Just days after Gen. Walt Natynczyk, Canada's chief of defence staff, left Moscow after
meeting his counterpart last weekend, a Russian official announced that the country
would be increasing its Arctic military presence, a move that could increase tensions in
the resource-rich area.
Anton Vasilev, a special ambassador for Russia's Ministry of Foreign Affairs, was quoted
this week by the Interfax news agency as saying his country would be beefing up its
presence in the Arctic, and that NATO was not welcome there.
Russian Prime Minister Vladimir Putin was in Iceland this week meeting with the
country's leaders, with the Arctic being at the top of the agenda, local media reported.
Putin, according to the Moscow Times, then announced that Russia would be ordering
three nuclear and six diesel icebreakers to be delivered by 2020, with the goal of
expanding transportation in the Arctic.
In July, Russia said it would create two specialist brigades to be based in the Arctic. It's
not known if the latest announcement is tied to that declaration or if additional forces will
be moved to the region. A brigade can typically contain up to a thousand soldiers.
The Canadian military said in a news release that the purpose of Natynczyk's three-day
visit to Moscow last weekend was "to gain the Russian perspective on a range of issues to
improve and develop Canada's bilateral military relationship with Russia."
Natynczyk told CBC News after the visit that it was a "good relationship-building event."
The Moscow visit by a Canadian chief of defence was the first in almost a decade.
The military highlighted the counter-terrorism training exercises the two countries have
been involved in, as well as a number of training programs, in its release, but made no
mention about the Arctic.
The Defence Department was asked to provide details of the meeting and what was
discussed, and whether the Arctic issue was part of the discussions, but no information
was provided. Officials pointed to the press release that was issued prior to the meetings.
Arctic a priority for Harper
Prime Minister Stephen Harper has made a priority of increasing Canada's presence in the
North, as the countries that border the Arctic region eye the vast amount of oil and other
resources in the area.
The North Pole itself is considered an international site and is administered by the
International Seabed Authority. But if a country can prove its underwater shelf is an
extension of its continental border, then it can claim an economic zone based on that.
There has been tension with Russia as the two countries wait for the UN to rule on legal
claims in the resource-rich area. In that vein, a military presence is also seen as a way to
stake an even higher claim in the Arctic region.
Since 1994, the Russians have staffed year-round a research base called Ice Station
Borneo on the deep Arctic ice, only 60 kilometres from the pole. Their planes have
sometimes approached Canadian airspace and jets have been scrambled to shadow them.
The Canadian Forces has said is has a "real, growing, and long-term presence in its Arctic
region," and has been in the North since 1898.
In August, Canada held one of its largest military exercises, dubbed Operation Nanook,
in the North. The month-long operation involved more than 1,000 troops.
Canada, along with Russia, Denmark (including Greenland and the Faroe Islands),
Finland, Iceland, Norway, Sweden, and the U.S. belong to a group called the Arctic
Council, which was created by the Arctic nations in 1996 and is billed as a high level
intergovernmental forum.
This story is posted on Alaska Dispatch as part of Eye on the Arctic, a collaborative
partnership between public and private circumpolar media organizations.
12:39 29/09/2011ALL NEWS
Cruiser Adm Kuznetsov to leave for Mediterranean in Nov
http://www.itar-tass.com/en/c154/236116.html
MOSCOW, September 29 (Itar-Tass) — The heavy air-capable cruiser Admiral
Kuznetsov at the head of a squadron of Northern Fleet ships will set out on a longdistance voyage in November this year to accomplish combat duty missions in the
Mediterranean Sea and the North-Eastern Atlantic, anofficer at the Main Naval
Headquarters (MNH) of Russia told Itar-Tass on Thursday.
"The Admiral Kuznetsov will go to the Barents Sea on November 13 and moor up there
to take on board an air wing -- eight jetfighters Su-33, several MiG-29K, as well as two
ASW helicopters Ka-27. The air wing will be drilling the tasks of takeoff and landing
onto the deck of the carrier for a week.
"On November 19, the Admiral Kuznetsov will set out on a three-month cruise to the
Mediterranean and the Atlantic. The large anti-submarine ship Admiral Chabanenko will
be together with the cruiser among the the carrier group of ships for screening and
combat support purposes," the MNH officer said.
Verification is under way of a list of foreign ports to be visited by the Russian ships,
including an update in view of the developments in the Middle East and North Africa.
The question of the Russian ships' participation in joint exercises together with the navies
of countries in the region is being worked out as well, the MNH officer pointed out.
As of now, the Design 1143.5 cruiser Admiral Kuznetsov -- a fifth Soviet-built heavy aircapable cruiser -- is the only operational one in the Russian Navy. The cruiser made four
long-distance voyages to the Mediterranean and the North Eastern Atlantic. The cruiser
can carry 26 shipboard fighter planes Su-33 and MiG-29 K and 24 ASW helicopters -eighteen Ka-27 and Ka-29, two Ka-27PS, and four Ka-31.
The cruiser's full-load displacement is 60,000 tonnes and maximum speed is 29 knots;
cruising range is 8,400 miles; crew membership is over 1,900, including over 600 air
pilots and technicians of the air wing.
The ship's armament includes twelve launchers of anti-ship missile Granite, four six-tube
launchers of anti-aircraft missile Kinzhal (dagger), eight launchers of the anti-aircraft
system Kortik (dirk), six six-tube 30-mm artillery mounts AK-630M, and two rocketassisted bomb-throwers RBU-12000 Udav (python).
The Admiral Kuznetsov joined the Northern Fleet in January 1991. By now the cruiser
has gone through at least three periods of repairs with an aggregate duration of six years.
01:48 29/09/2011ALL NEWS
Greece, Russia meet on Rodos to discuss investments
http://www.itar-tass.com/en/c154/235846.html
RODOS (Greece), September 29 (Itar-Tass) — The first Greek-Russian investment
conference “New Horizons of Economic Relations of Greece and Russia in the sphere of
investment policy, commerce and tourism” is opening on Rodos Island on Thursday.
The forum’s organizers told Itar-Tass that plenary meetings would discuss problems and
prospects of Russian-Greek relations at contemporary stage. Other topics will include the
creation of a new economic model for bilateral partnership, investments in Greece and
other countries of southern Europe, the development of regulations for mutual interaction
and cooperation in the sphere of energy, tourism, immovable property and banking
business.
A briefing for Russian and Greek journalists will be held on Thursday afternoon.
The first plenary meeting will take place on Friday.
Simos Kedikoglu, the head of the Greece-Russia friendship group in the Greek
parliament and the chairman of the Greece-Russia friendship society, said in an interview
with Itar-Tass that the Rodos conference was a vital and necessary undertaking.
“It’s important for Greece to develop cooperation with Russia in the power sector, in the
exploration of natural resources, industry, shipbuilding, the introduction of new
technologies and tourism,” Kedikoglu said. He personally wished that a Russian
technology for solar power stations operating on photo elements could appear in Greece
because that sector is going to develop actively.
The Greek MP called for developing cooperation in shipbuilding.
“Our interaction in shipbuilding has been good but I know that Greek ship owners want
more contracts with Russian companies. At the moment, Greek ship owners are a major
force in shipping,” Kedikoglu added.
Turkmenistan, Russia discuss joint projects in Ashgabat
http://en.trend.az/capital/business/1938114.html
29 September 2011, 12:05 (GMT+05:00)
Turkmenistan, Ashgabat, Sept. 29 / Trend , H.Hasanov /
Ashgabat is hosting the Turkmen-Russian economic forum on Sept. 28-30, organized by
both countries’ Chambers of Commerce to form intergovernmental agreements, the local
media reported today.
"Russian business showed significant interest, paying attention to Turkmenistan’s
initiatives to create joint ventures, participate in tenders, present specific projects for
cooperation in Turkmenistan’s priority sectors, and confirm a high willingness for their
implementation," the Neytralniy Turkmenistan newspaper reported.
The forum organizers have indicated that development of the energy sector,
transportation infrastructure, communications, industry, the construction industry, and
agriculture are promising areas for cooperation.
The forum will present economic opportunities for Russian regions, in particular, Omsk,
Chelyabinsk and Saratov, as well as trade organizations and industrial structures. In
addition, bilateral talks are expected to be held with representatives of ministries and
departments, heads of private companies, and Turkmen firms.
The Russian delegation includes representatives of the Russian Presidential
Administration, the Economic Development Ministry, Russian companies, and other
organizations. The delegation is headed by Vice-President of the Chamber of Commerce
and Russian Federation Industry Alexander Rybakov.
Turkmenistan is represented by heads of ministries in trade and international relations,
economics and finance, oil and gas industry and mineral resources, textile, construction,
energy, communications and transport sector agencies, the banking sector, and the Union
of Industrialists and Entrepreneurs of Turkmenistan.
Do you have any feedback? Contact our journalist at [email protected]
00:43 29/09/2011ALL NEWS
Russian-Turkmen trade reaches 2 bln dollars in first half of 2011
http://www.itar-tass.com/en/c154/235830.html
ASHGABAD, September 29 (Itar-Tass) — Trade turnover between Russia and
Turkmenistan reached some two billion U.S. dollars in January-August 2011.
The vice-president of the Russian Chamber of Commerce and Industry, Alexander
Rybakov, described it as a good result. However, he told a two-day economic forum that
opened in the Turkmen capital on Wednesday that the figure still didn’t reflect the huge
potential of Russian-Turkmen economic interaction.
A business delegation from Russia, including entrepreneurs from Moscow, St.
Petersburg, Omsk, Saratov, Chelyabinsk and other parts of Russia has brought
cooperation proposals to Ashgabad.
“Relations between Turkmenistan and Russia make the weather in the entire Central
Asia. We fully share this assessment given by the presidents of Russia and Turkmenistan
during their last meeting,” the head of the Russian delegation said at the forum.
Alexander Rybakov, the vice-president of the Russian Chamber of Commerce and
Industry, said that Russian companies were participating in more than 30 projects in
Turkmenistan. Another twenty projects are ready to be launched in the sphere of hi-tech
production. About a hundred proposals made by Turkmen agencies and entrepreneurs are
in the process of development. Priority areas of cooperation as set forth by the sides
include the power sector, textiles, the light industry, raw materials, building materials,
education and tourism.
“We are focused on innovative projects. The future of our relations lies with them,”
Rybakov emphasized.
“Moscow May Use Karabakh Trump Card Against BP”
http://www.historyoftruth.com/news/latest/10234-moscow-may-use-karabakh-trumpcard-against-bp
Thursday, 29 September 2011 08:22
Moscow is quite likely to use the Karabakh trump card against British Petroleum to
frustrate the Azerbaijan-Turkey natural gas pipeline deal, an Azerbaijani expert said.
Speaking about Russia's plans on BP in an interview with the Azerbaijani news website
SalamNews, political analyst Zardush Alizade said Moscow has no real lever to hamper
the company's project.
"But they have such a serious lever as Karabakh. They may push the button at any
moment to create instability, suspending the project," he said, adding that Russia would
not be disappointed in case Turkmenistan refuses to join the project.
"Russia's main goal is to prevent Europe from accessing the Central Asian gas reserves.
As for Azerbaijan, it is already connected with Europe thanks to its oil and natural gas. At
the same time Azerbaijan wishes to increase its oil export to Europe via the Turkish
territory," he said.
It comes after recent reports that BP is planning to build a 1,300 km pipeline to make its
natural gas accessible to Europe. The pipeline is expected to connect the Shah Deniz
natural gas mine with Turkey and the West.
Tert.am
Russia's Hermitage cancels exposition in Japan over nuclear fears
http://www.monstersandcritics.com/news/europe/news/article_1665768.php/Russia-sHermitage-cancels-exposition-in-Japan-over-nuclear-fears
Sep 29, 2011, 7:50 GMT
Moscow - Officials at Russia's national museum the Hermitage cancelled an art
exposition planned in Japan because of fears of radioactivity from the damaged
Fukushima nuclear power station, the Interfax news agency reported on Thursday.
The traveling display of rare glass sculptures from Russia's Tsarist era was to have
opened its doors in December in the city Takasaki, some 230 kilometres from
Fukushima.
The artworks had been on display in other Japanese cities including the capital Tokyo,
some 20 kilometres more distant from Fukushima than Takasaki, the report said.
The Hermitage's exhibition Glass Admired by the Russian Imperial Court contains 327
items from the 16th through the early 20th century. The display began touring Japan in
July.
Russian MPs are expected in the occupied territory
http://eng.expertclub.ge/portal/cnid__9901/alias__Expertclub/lang__en/tabid__2546/defa
ult.aspx
29/09/2011 10:23
Today a delegation of the Russian Federation Council headed by First Deputy Chairman
of the Committee on Defence and Security Yevgeny Serebrennikov is arriving in
Tskhinvali. On September 30th Russian senators will meet with members of the so-called
"parliament". Vice-speaker of the "parliament" Yuri Dzitstsoyty said that they would
discuss socio-political situation in the Tskhinvali region on the eve of the "election" of a
new head of the puppet regime. It is also planned to discuss socio-economic
development.
RT News line, September 29
Georgia says yes to US missile defense but no to Russia in WTO
http://rt.com/news/line/2011-09-29/#id19211
Georgia would welcome the installation of X-Band radar inside the country to participate
in US missile defense of Central Asia and the Middle East against Iran, the internet portal
the Daily Beast quotes President Saakashvili as saying in an exclusive interview. The
portal says Republican senators John Kyl and Mark Kirk have pressed the Pentagon to
cancel the installation of the radar system in Turkey later this year and instead move it to
Georgia. Turkey said they would host the radar only on condition of non-disclosure to
Israel of any data obtained through the radar. “We are willing to share with any country,
including Israel,” said Saakashvili. Meanwhile the head of Georgia’s Foreign Ministry
has said Tbilisi cannot give its approval to Russia’s WTO bid unless Moscow allows
Georgian customs agents to monitor the borders of Abkhazia and South Ossetia.
Saakashvili: U.S. Stopped Russia Bombings
http://www.thedailybeast.com/articles/2011/09/26/mikheil-saakashvili-interview-hillaryclinton-saved-georgia.html
Sep 26, 2011 7:59 PM EDT
For months, bombings linked to Russian intelligence disrupted
life in the former Soviet republic of Georgia. In an exclusive
interview with Eli Lake, the country’s president credits the
Obama administration—particularly Secretary of State Hillary
Clinton—for stopping them through quiet diplomacy.
Azerbaijan exports to Russia much more energy than it receives
http://en.trend.az/capital/energy/1938081.html
29 September 2011, 10:50
Azerbaijan, Baku, Sept. 28 / Trend , E.Ismayilov /
Russia’s Trade Representative in Azerbaijan Yuri Shedrin stated that Azerbaijan supplied
to Russia electricity in the amount of 342.9 million kilowatt-hours worth $21.8 million in
seven months of 2011.
During this period, Russia delivered to Azerbaijan electricity in the amount of 2.5 million
kilowatt-hours worth $0.2 million, he told journalists today.
An agreement on the parallel operation of power system of Azerbaijan and Russia is at
the consultation stage, Shedrin said.
The sides are also in talks on the issue of pumping oil through the Baku-Novorossiysk
Baku hosted in early September a meeting of the working group on amendments to an
agreement on the Azerbaijani oil transportation through Russia, dated Jan.18, 1996.
Shedrin said the working groups of each party agree on the volume of transportation,
tariffs, as well as the quality of oil.
The bilateral Russian-Azerbaijani inter-governmental agreement on the transit of
Azerbaijani oil via the Baku-Novorossiysk pipeline was signed in 1996. It provides for
transportation of 5 million tons of oil a year at the rate of $15.67 per one ton of transited
oil.
SOCAR transships its own oil, as well as oil of joint ventures and operating companies
operating in Azerbaijan's onshore fields, through Novorossiysk.
Until late 2007, AIOC was the operator of Baku-Novorossiysk. The structure then
transferred these functions to SOCAR.
Do you have any feedback? Contact our journalist at [email protected]
Pro-Russian Activists Quarrel In Ukraine's Crimea
http://www.rferl.org/content/pro_russian_activists_in_ukraines_crimea/24343087.html
September 28, 2011
SIMFEROPOL, Ukraine -- Pro-Russian activists in Ukraine's Crimean peninsula have
accused a moderate pro-Moscow group of betraying the "Russian movement" in Crimea,
RFE/RL's Ukrainian Service reports.
The activists held what they called a "people's tribunal" for several hours on September
28 in the Crimean capital, Simferopol, where they read a list of "sins" committed by
Russian Community of Crimea leader Serhiy Tsekov and his colleagues, saying that they
had betrayed voters.
At the end of the gathering the activists announced a "verdict" of "eternal shame."
Tsekov, who is also a deputy in the Crimean parliament, did not comment on the
accusations. His nongovernmental organization quoted an earlier decision by the
Coordination Council of Russian Compatriots, which forbids groups from encouraging a
split in the pro-Russian movement in Crimea.
Local observers note that the Russian Community of Crimea has close links to the
Russian consulate office in Crimea.
Analysts say tensions have been created because of plans by Moscow to increase its
financing of pro-Russian groups abroad.
Crimean analyst Mykola Semena told RFE/RL that the "Russian pre-election campaigns
are being transferred to Ukraine."
About 60 percent of Crimea's 2 million people are ethnic Russians and Russian is the
dominant language on the peninsula, which has greater autonomy than other Ukrainian
regions.
Crimea was transferred from the Russian Soviet republic to the Ukrainian Soviet republic
in 1954.
Read more in Ukrainian here
08:33 29/09/2011ALL NEWS
Final conf on e-gov't project to be held at EU Moscow office
http://www.itar-tass.com/en/c154/235922.html
MOSCOW, September 29 (Itar-Tass) — Cooperation between Russia's regions and the
European Union (EU) in promoting the establishment of an electronic government of
Russia has entered the finishing straight.
The implementation of a project on the theme of "The State for Citizens", encompassing
the territory stretching from the Baltic Sea to the Pacific Ocean, has continued for two
years. The EU allocated two million euros for carrying out the project which is to be
introduced to the public at-large and the Russian establishment at the EU representative
office here on Thursday.
European diplomats say the project is intended to promote not only a more active
interaction between Russian regions but also stable contacts with partners in EU
countries. Summing up the preliminary results of the work done, an EU Office staff
member said that about 3,000 public employees from 53 regions of Russian had
undergone training. In all, 25,000 people took part in the development of new electronic
services.
This is not the first project being implemented by the EU in partnership with the Russian
Ministry of Economic Development and the Ministry of Communications and Mass
Media. In the period from 2004 to 2009, similar programmes were alternately introduced
in Arkhangelsk, Kaliningrad, Novgorod, Petrozavodsk, and St Petersburg.
This time the project has covered the entire territory of Russia, European diplomats
emphasize.
RT News line, September 29
United Russia submits election list led by Medvedev
http://rt.com/politics/news-line/2011-09-29/#id19233
The ruling United Russia party has submitted its list of candidates for registration at the
Central Election Commission. According to Sergey Neverov, the secretary of the
presidium of the party’s general council, the slate includes 416 members of United Russia
and 183 other candidates, including those nominated by the Popular Front. President
Dmitry Medvedev, who heads the list, is unlikely to take part in the election debates with
other parties, Neverov said. He noted United Russia has “a serious team of debaters.”
Russia’s Election Commission admits lists of candidates for parliamentary
elections
http://english.ruvr.ru/2011/09/29/56912115.html
Sep 29, 2011 10:34 Moscow Time
Russia’s Central Election Commission continues to admit lists of candidates for
December parliamentary elections for certification.
On Thursday, the ruling United Russia party is to file its list of candidates.
Patriots of Russia, Liberal Democratic Party of Russia and Yabloko have already
submitted their lists.
Certification procedure is to be completed by October 6.
After that the parties will undergo registration procedure.
The election to the State Duma, lower house of parliament, will be held on December 4.
TASS
Russians living in poverty 'up by 2 mln since 2010'
http://www.google.com/hostednews/afp/article/ALeqM5iHBi4q12XsF2skrGibI5l06SzY6
g?docId=CNG.d2b3a8ccf23254b4d5ac2261f83673f7.5e1
(AFP) – 1 hour ago
MOSCOW — The number of people in Russia living below the poverty line has grown
by about two million in the first six months of 2011, new figures released by the state
statistics service said.
The total number of Russians living in poverty has reached 21.1 million after the first six
months of the year, up from 18.1 million last year.
The share of the population living in poverty also grew to 14.9 percent from last year's
12.8 percent, according to official figures.
The poverty line was defined after the second quarter of 2011 at 6,505 roubles per month
per capita ($204), which grew from 5,625 roubles from the same period last year.
Inflation was 4.7 percent since the beginning of the year. The Russian government has
aimed for a 7.5 percent inflation for the year 2011.
International institutions such as the World Bank have said this year that poverty in
Russia remains a key concern amid sluggish growth and modest earnings. The country
needs to work on effectiveness of its public spending to improve the situation, the World
Bank report said earlier this month.
Copyright © 2011 AFP. All rights reserved. More »
Russia plans over 15 space launches for Q4 2011
http://www.interfax.co.uk/
29/09/11 8:40AM GMT
MOSCOW. Sept 29 (Interfax-AVN) – Russia plans more than 15 space launches from
three spaceports in the remaining three months of this year…
Glonass-M to be launched from Plesetsk early on Oct 2 morning – source
http://www.interfax.co.uk/
29/09/11 8:39AM GMT
MOSCOW. Sept 29 (Interfax-AVN) – A Soyuz-2-1B rocket will lift off Plesetsk,
Arkhangelsk region, early on Sunday morning to position a Glonass-M navigation…
Russia set for launch of Proton-M carrier rocket with Mexican satellite
http://en.rian.ru/science/20110929/167230449.html
01:25 29/09/2011
MOSCOW, September 29 (RIA Novosti)
Russia's Proton-M carrier rocket with a Mexican telecommunications satellite, QuetzSat1, will be launched on Thursday from the Baikonur space center in Kazakhstan, a
spokesman for the Russian Space Agency (Roscosmos) said.
"The launch of the Proton-M carrier rocket with QuetzSat-1 satellite has been scheduled
for Thursday at 22:32 Moscow time [18:32 GMT]. The separation of the satellite from
the carrier rocket has been slated for Friday at 7:45 Moscow time [3:45 GMT]," the
spokesman said.
This will be a second launch of Proton-M carrier rockets equipped with Briz-M boosters,
following a recent string of launch failures in the Russian aerospace industry.
On August 18, a Russian Proton-M rocket lost an Express-AM4 satellite that was
designed to provide digital television and secure government communications for Siberia
and the Far East.
One week after the Express-AM4 went off course, a Soyuz-U booster malfunctioned,
preventing a Progress M-12M cargo spacecraft from reaching orbit and a link-up with the
International Space Station (ISS).
The gigantic Typhoons will be scrapped for metal
http://rt.com/politics/press/izvestiya/nuclear-military-missile-metal/en/
Published: 29 September, 2011, 04:52
Edited: 29 September, 2011, 04:53
Ilya Kramnik
The world’s largest submarines did not fit into the limits of the START Treaty
The Project 941 Akula strategic missile submarine, better known as Typhoon, will be
written off by 2014 and scrapped for metal, Defense Ministry representatives told
Izvestia. All three Typhon-class submarines, which are currently in operation, will be
dismantled: the Dmitry Donskoy, Arkhangelsk, and Severstal.
Military officials explain that using the submarines for their intended purpose is
impossible due to contractual restrictions, and their reconstruction is unjustifiably
expensive.
However, representatives of the Sevmash shipyard, where these submarines were built,
say that the vessels could be re-equipped to become underwater gas transport tankers or
year-round maritime carriers.
“We are willing to develop some other options for their application. The vessels could
transport liquefied gas, oil or cargo for Arctic ports under Arctic sea ice. This type of
reconstruction need not be very expensive,” say shipbuilders.
Military experts say that the career of the Typhoons had been destroyed by the Boreiclass, a new submarine, which is being built at Sevmash for the Bulava rockets. Their
successful trials have made it pointless to maintain the bulkier and more expensive
Typhoons.
“A Borei crew is one and a half times smaller than that of a Typhoon, and there is a
difference in maintenance cost. Meanwhile, Borei is a far-more improved vessel, which is
a lot harder to detect in water,” argue military experts.
The Defense Ministry explained that any improvements of vessels cost tens of billions of
rubles.
“It would be better to spend this money on new ships,” said one Defense Ministry
representative.
The fate of the enormous submarines has been decided by START-3, which was signed
by the Russian and US presidents in the spring of 2010. It has limited the strategic
arsenals of each country to 1,550 nuclear warheads. Meanwhile, it is possible to install
more than 1,100 nuclear warheads on the new Project 955 Borei submarines and the
operational Project 667BDRM Delfin-class ballistic missile submarines alone.
The remaining 400 nuclear warheads will be used with long-range aviation and the
Strategic Rocket Forces (RVSN). Meanwhile, the three Typhoons simply do not fit the
bill. One Typhoon is able to carry 120-200 nuclear warheads, and an entire fleet of these
boats will “eat” almost a fourth of Russia’s nuclear arsenal.
Military expert Captain Konstantin Sivkov believes that Typhoons could be kept for other
needs.
“Large internal capacity makes it possible to place various arms and equipment in the
submarines, turning them into cruise missile carriers. The US has chosen a similar track,
having re-equipped four Ohio missile carriers for cruise missiles. Today, these
submarines can be used in special operations as a naval base for military divers and minisubmarines. We, too, would benefit from such vessels,” Sivkov told Izvestia.
At the same time, the president of the Institute for Strategic Assessments, Aleksandr
Konovalov, noted that the time of Typhoons is a thing of the past.
“It is an enormous thing, the biggest submarine in the world, triple-hulled and very
expensive to operate. Moreover, there are no rockets for them,” said Konovalov.
According to him, it could cost hundreds of millions of rubles to recycle the typhoons,
which is a lot less than re-equipping them to meet other needs.
Firefighters extinguish 18 forest fires in Russia's Siberia over past 24 hours
http://en.rian.ru/russia/20110929/167234601.html
07:53 29/09/2011
NOVOSIBIRSK, September 29 (RIA Novosti)
Firefighters and rescuers extinguished 18 forest fires on the total area of over 700
hectares in Russia's Siberia over the past 24 hours, the regional department of the Russian
Emergencies Ministry reported on Thursday.
The department also said that firefighters continue battling remaining wildfires in the
region that cover a total area of some 100 hectares.
Wildfires across Russia are common during dry and hot summers and in the fall. Most
fires start because of the careless behavior of local residents.
Forest fires devastated a number of regions in central Russia last year, killing 62 people
and leaving thousands homeless.
11:28 29/09/2011ALL NEWS
Blast on motorway in Dagestan presumably targeted at local official
http://www.itar-tass.com/en/c154/236035.html
MAKHACHKALA, September 29 (Itar-Tass) — An explosion of a jeep loaded with
explosives in the Levashinsky district of Dagestan on Wednesday was presumably an
attempt on the life of the head of the Gergebilski district municipality, Magomed
Magomedov, a representative of the Russian Investigative department for Dagestan told
Itar-Tass on Thursday. Magomedov's motorcade numbering two armored cross country
jeeps was passing by exactly when the blast went off. Neither Magomedov nor his guards
were hurt in the incident. The two jeeps from Magomedov’s motorcade were slightly
damaged.
The explosion in the abandoned jeep left on a motorway near the settlement of
Khadzhalmakhi killed a policeman and a family of seven who were in another jeep which
passed the detonating car. Several more policemen were wounded in the incident.
The suspicious jeep with no one inside was spotted on the crossroads on a motorway in
the Levashinsky district on Wednesday afternoon. When the jeep was examined by
policemen an unknown terrorist activated a powerful explosive device inside the jeep.
The explosion killed eight, including an eleven- year-old girl. Six other policemen who
received wounds of a different degree of seriousness were hospitalized.
Criminal proceedings have been instituted on charges of murder conspiracy and illegal
weapons trafficking.
Estonian investments come in Dagestan
http://www.riadagestan.com/news/2011/09/29/7404/
29.09.2011 , 09:41
Makhachkala, September 29, 2011. Administration of Makhachkala and the Estonian
companies "Bell BOATS" and "MIRODON" signed a letter of intent. Within several
days, the representatives of "Bell BOATS" and "MIRODON" have been examining the
opportunities for companies' participation in investment projects in Makhachkala.
At the meeting with Makhachkala Mayor Said Amirov the commercial director of the
"Bell BOATS" Thomas Lilienbah said his company’s interest to investment projects of
Makhachkala appeared after participation in the first Dagestan Economic Forum, where
the company’s representatives specially arrived to establish business relationships with
business circles and authorities of the republic. Estonian businessman, he says, are
interested in joint production of pleasure boats and boats and floating docks.
"We are pleased to welcome foreign companies on Dagestan market. This proves we
have something to offer for investors" - Amirov said.
Shakira to attend Chechen president's birthday bash
http://colombiareports.com/colombia-news-lite/people/19309-shakira-to-attend-chechenpresidents-birthday-bash.html
Wednesday, 28 September 2011 11:08 Alice Boyd
Pint-sized pop star and media darling Shakira is one of the stars expected to attend the
35th birthday celebrations of Chechen president Ramzon Kadyrov in Chechnya on
October 5, according to news source Portafolio.
The Colombian singer, recently named "person of the year" at the Latin Grammys, will
join other celebs such as Kevin Costner, Eva Mendes and Hilary Swank in celebrating the
Chechen president's birthday bash. The stars will also participate in various ceremonies to
take place in the Chechen capital on the big day.
October 5 has been declared a public holiday in Chechnya in recognition of Kadyrov's
birthday.
Here's hoping that ongoing accusations of human rights violations by the Chechen
administration will not impinge upon the birthday boys festivities, or on Shakira's new
title as "person of the year."
We recommend Shakira look into what the president has planned for later in the evening,
given that he has been engulfed in the past in various embarassing sex scandals
involving, among other things, two prostitutes, a sauna, some monkey spanking and a
video camera. Berlusconi and his Bunga Bunga parties have nothing on this guy.
New clue in Chechen killings
http://www.hurriyetdailynews.com/n.php?n=new-clue-in-chechen-killings-2011-09-28
Wednesday, September 28, 2011
Şükrü Oktay Kılıç
ISTANBUL – Radikal
The same weapon, produced near Moscow, is used in the assassination of all six former
Chechen commanders and the recent killing of three Chechens in Istanbul’s Zeytinburnu
district, says police sources
Six former Chechen commanders were all killed in Turkey over the past four years with
the same weapon produced by an arms factory near Moscow for the Russian Military
Intelligence Service, or GRU, according to Turkish police sources.
Production on the 7.62 milimeter MSP Groza (“Thunderstorm”) began at a weapons plant
in Tula near Moscow in 1994 for the GRU. The Groza, which can be used either as a
long- or short-barreled weapon, can also be used to launch rifle grenades. Night vision
equipment, as well as a scope, can also be mounted on the double-barreled weapon. With
a maximum range of 700 meters, the Groza is reportedly a favorite with Russian agents
due to its versatility.
The killing of three Chechens, Musaevi Berkkhazh, Rustam Altemirol and Zavrbek
Amriev, in Istanbul’s Zeytinburnu district on Sept. 16 with a silencer arm was also
committed with the same weapon, according to daily Radikal.
All the Chechens assassinated in Turkey had fought in the Russian-Chechen War and had
arrived in Turkey either after they were wounded in battle or after their true identities
were revealed. Some were killed in front of their wives and children, while others never
returned home after venturing outside.
Despite claims that the former Chechen commanders were killed due to personal matters,
mafia relations or alleged love affairs, the use of the same weapon in every act indicates
another culprit, according to claims.
Meanwhile, another Chechen dissident, Ömer İsrailov, 27, was also killed in Vienna on
Jan. 13, 2009, in a similar fashion to the compatriots murdered in Turkey. Crime scene
investigators there also reportedly recovered an empty 7.62 millimeter shell.
Gazhi Edilsultanov was shot dead with two bullets in the head on Sept. 6, 2008, after he
ventured out of the Chechen camp in Istanbul’s Fenerbahçe neighborhood. A former
colonel in the 1999 Russian-Chechen War, Edilsultanov was wounded heavily in 2001
and arrived in Turkey in 2004.
İslam Canibekov, a leading Chechen general who fought against Russian forces for years,
settled in Istanbul in 2002. Canibekov was being sought in Russia for allegedly killing 30
people and conducting three bomb attacks. He was shot dead with three bullets in the
head on Dec. 9, 2008, while on his way back home with his wife and children.
Ali Osaev, the representative of Chechen leader Doku Umarov in Turkey, also settled in
Turkey after the 1999 war. He was also killed on Feb. 2, 2009, while entering his flat. He
had told a close friend that Ramazan Kadirov had sent three teams to Istanbul to kill him,
according to reports.
Musaevi had replaced Osaev after the assassination of the latter in 2009. He was killed
along with two of his men after Friday prayers on Sept. 16, 2011. Twelve shots were
fired from a black automobile during the incident in Zeytinburnu.
Caucasus Muslims Office: Interethnic and interfaith understanding to bring happy
future in Caucasus
http://en.trend.az/news/society/1938072.html
29 September 2011, 11:36
Azerbaijan, Baku, Sept. 29 / Trend M. Aliyev /
The sole road to a happy future in the Caucasus is through an interethnic and interfaith
understanding, cooperation, and preservation of national territorial integrity, the
Chairman of the Caucasus Muslims Office Sheik-ul-Islam Haji Allahshukur Pashazade
said during the opening of the academic conference "Preventing the spread of extremist
ideology in the Caucasus," dedicated to the 20th anniversary of Azerbaijan's
independence on Thursday.
"Caucasus security and welfare are very important for all of us," Pashazade said.
He said that one of Azerbaijan's greatest achievements is establishing the stability of
religious and spiritual values.
The conference has been organized by the Caucasus Muslims Office and the Moscow
State Linguistic University. Azerbaijani and Russian religious figures, theologians, and
public representatives of civil society will attend the conference.
Do you have any feedback? Contact our journalist at [email protected]
Russia doesn’t blame Muslims as terrorists: CG
http://pakobserver.net/detailnews.asp?id=116909
M M Alam
Karachi—H E Consul General of the Russian Federation Andrey V. Demidov has said
that his country keenly sought friendly relations with the Muslims of Pakistan.
“In my country Muslims, the second largest religious community constituting some 20
percent of our population, are not blamed as terrorists only due to their religious
affiliation. We consider them as an integral part of our society - they are not migrants”,
he further added talking to Pakistan Observer on the occasion of the inauguration of a
photo exhibition ‘Muslims in Russia’ here on Tuesday at the Consulate.
Speaking about the exposition he said: “It is dedicated to the life of millions of Muslims
in the Russian Federation and to the place of Islam in Russia. The vast majority of the
population in our multi-religious country is orthodox Christians. But we have many
others. You can find religious Jewish people, Buddhists, Animists, Catholics and others.
We attach a very serious importance to inter-religious harmony”.
The Russian diplomat went on to inform: “The Supreme Mufti of Russia is one of the
informal advisors to the President of the Russian Federation. He is a member of the
governing body of the ruling party ‘United Russia’. At present a draft law on recognizing
Muslim holidays as public holidays in Russia is under consideration in the State Duma the lower House of our Parliament.
“Luckily the relations between religious communities have always been friendly. We
never had religious wars in Russia. We have no burka-ban. We seek peaceful coexistence between Russian citizens belonging to different religions. We are quite certain
that in the nearest future we all will live and prosper in one great state - the Russian
Federation”, H.E. concluded in an optimistic tone.
Amongst image aficionados there were Consul General of Germany Dr. Tilo Klinner and
Madam Lyubow Kilnner, Consul General of Japan Masaharu Sato and Vice Consul
General for Political & Economic Affairs Yuki Ochiai, MNA (Parliamentary Secretary,
Ministry of Defence Production) Gul Muhammad Khan Jakhrani, Editor Ibrat Kazi Asad
Abid, Editor Pakistan Observer Faisal Zahid Malik and Madam Faisal Zahid Malik,
journalist & former interim Minister Agha Masood, Russian-speaking columnist Khan
Zafar Afghani, former Ambassador Zia Ispahani and others.
Captivating snaps taken in different regions of Russia remarkably portrayed activities of
different religious communities. A picture taken by Nikolai Nikitin in Samara shows a
Kufic Quran dated 1909 on display; ‘Worshippers offering Eid-ul-Fitr prayers’ is a
picture taken by Arkady Kirnos; ‘Man carrying a sheep for Eid-ul-Azha sacrifice’ is
another interesting snap by Vasily Alexandrov; Sergei Uzakov’s image captures ‘Models
presenting creations of Chechen designers during a fashion show’ ; Viktor Vong’s
Madrassah is yet another magnum opus; a number of mosques captured included Samara
Mosque by Nikolai Nikitin.
29 September 2011, 10:09
Church official asks journalists no to turn conversation from attempts to
justify pedophilia to discussing novels
http://www.interfax-religion.com/?act=news&div=8767
Moscow, September 29, Interfax - The Russian Church official urges not to substitute the
problem of justifying pedophilia with the discussion of certain pieces of literature.
"I would keep it on conscience of those journalists who do it, I mean their efforts to
change the talk about some Russian public figures' attempts to justify pedophilia to
discussing old novels," Head of the Synodal Department for Church and Society
Relations Archpriest Vsevolod Chaplin told Interfax-Religion.
Thus he commented reports in some media claiming that Father Vsevolod asked to check
if pedophilia is promoted in Lolita (Vladimir Nabokov) and One Hundred Years of
Solitude (Gabriel Garcia Marquez).
The priest accepted that "these novels romantisize vicious passion that make people
unhappy and it's evident that popularization of the novels, for example, in schools doesn't
add to moral health of society while future of our society depends on such health."
Father Vsevolod explained that he mentioned the novels answering the question on a
radio station.
According to him, main discussion today should focus on "the attempts to justify
pedophilia that take place in modern Russia, however it shouldn't deprive anyone of the
right to morally evaluate any pieces of art whether old or new."
"Today we need to decisively revise our attitude to public morality, including the
problem of lechery. Without such revision Russian society will stop existing in hundred
years. For me it's quiet evident," the interviewee of the agency stressed.
In this context, he further said, "an attempt to justify pedophilia from which the
discussion started is monstrous and cynical and it shouldn't be left without public
evaluation".
The priest said he refers to the textbook written by a lecturer of the North State Medical
University (Arkhangelsk) Gennady Deryagin, where, according to him, the author tries
"to impose on the society a thought that relations between adult men and boys are
acceptable and normal and boys are interested in such contacts."
Russian church wants novels banned
http://www.boston.com/news/world/europe/articles/2011/09/29/russian_orthodox_church
_wants_2_novels_banned/
Associated Press / September 29, 2011
MOSCOW - A senior Russian Orthodox official said yesterday that novels by Vladimir
Nabokov and Gabriel Garcia Marquez justify pedophilia and argued they should be
banned in the nation’s high schools.
Father Vsevolod Chaplin’s demand that Russia’s government investigate and limit the
use of the books was the church’s latest effort to impose religious norms in a nation that
once rejected religion.
Chaplin, who heads the Moscow Patriarchate’s public relations department, discussed
Nabokov’s “Lolita’’ and Garcia Marquez’s “One Hundred Years of Solitude’’ on Echo of
Moscow radio, accusing both of “justifying pedophilia.’’
The priest later elaborated in comments on Interfax, saying the authors’ works should not
be included in high school curriculums because they “romanticize perverted passions that
make people unhappy.’’
Mikhail Shvydkoi, a Kremlin envoy for international cultural cooperation, disagreed,
saying such action by authorities would badly hurt Russia’s image.
Nabokov, who left his native Russia shortly after the 1917 Bolshevik Revolution,
published “Lolita’’ in English in 1955. The book, which describes a relationship of a
middle-aged intellectual with his 12-year-old stepdaughter, was briefly banned in several
European countries, Argentina, and South Africa - as well as several library systems and
public schools in the United States
Unlike “Lolita,’’ Garcia Marquez’s “One Hundred Years of Solitude’’ was published in
the Soviet era - despite numerous references to incest and sex with minors. The
Colombian novelist was awarded the Nobel Prize in Literature in 1982.
© Copyright 2011 Globe Newspaper Company.
29 September 2011, 10:04
Deputy mayor promises not to prolong building of 200 new churches in
Moscow "for decades"
http://www.interfax-religion.com/?act=news&div=8766
Moscow, September 29, Interfax - First deputy of Moscow mayor Vladimir Resin
responsible for building 200 new Orthodox churches in the capital, promises to carry out
the project actively.
"The main goal is not to prolong the construction of these churches for decades, but to do
it at least in five years," Resin said on Wednesday at the ceremony of consecrating the
foundation of St Stephan Church in South Butovo chaired by Patriarch Kirill of Moscow
and All Russia.
"We're striving to do it (200 churches program - IF) and I'm sure we will do it. Your
Holiness, we will soon meet at such ceremonies more than once," Resin said.
The church in Butovo is erected in frames of the mentioned Program 200 carried out
together by the Mayor Office and the Patriarchate.
Patriarch Kirill said that the churches in the capital were erected "to commemorate the
destroyed Moscow shrines."
"We can't build churches at those places where they used to be as they were long ago
replaced by other buildings. However, those great shrines that protected our nation from
evil, venerated by previous generations can't be wiped away from people's and church
memory," he stressed.
The Patriarch thanked Resin for his efforts to realize Program 200 in "new districts of
Moscow, where there's lack of such churches," and prefect of the south-west district of
Moscow Alexey Chelyshev for his contribution in building the Church of St.Stephan of
Perm.
The 200 Churches Foundation was set up in Moscow in April 2011. It is chaired by
Patriarch Kirill and Moscow mayor Sergey Sobyanin.
Program 200 started on April 29, when Patriarch Kirill and Sergey Sobyanin laid the first
stone in foundation of the church near theatre center in Dubrovka.
09:54 29/09/2011ALL NEWS
Moscow housing inspection chief dismissed
http://www.itar-tass.com/en/c154/235969.html
MOSCOW, September 29 (Itar-Tass) —— Moscow Mayor Sergey Sobyanin has relieved
the city's housing inspectorate chief Vladimir Obyedkov of his post. The mayor signed
the corresponding resolution, a source at the mayor's office said.
"Obyedkov is relieved of the position and discharged from the city's civil service on his
own initiative as he retires on a pension," the source aid.
Obyedkov headed the city housing inspectorate since 2007. Previously he was prefect of
Moscow's Northern district.
Sobyanin also appointed Oleg Ageyev as deputy head of the department for inter-regional
cooperation, ethnic policies and ties with religious organisations and Georgy Chizhenkov
as deputy head of the department for foreign economic and international ties. Alexey
Ulyanov is re-appointed as deputy head of the department for science, industrial policies
and entrepreneurship. Vitaly Dorosh is relieved as deputy head of the housing policy and
housing fund department.
09:23 29/09/2011ALL NEWS
Barracks fire in St Pete brought under control, over 200 evacuated
http://www.itar-tass.com/en/c154/235950.html
ST. PETERSBURG, September 29 (Itar-Tass) —— A fire broke out in barracks at a
training base of the Kronshtadt garrison overnight.
The fire alarm signal was received at 02:30 Moscow time, a source at the Emergencies
Ministry’s Petersburg department told Itar-Tass.
The attic of the five-storey building was burning. Afire were 2,000 sq m.
Twenty crews of firemen fought the blaze. Two hundred and fourteen people were
evacuated from the building. Nobody was hurt.
The fire was brought under control at 06:40 Moscow time.
September 29, 2011 12:17
Moscow close to bottom on world list of cities convenient for living
http://www.interfax.com/newsinf.asp?id=276632
MOSCOW. Sept 29 (Interfax) - Russia ranks 70th amongst 80 world cities by the quality
of life, head of the city economic policy and development department Marina Ogloblina
told a Wednesday press conference at the Interfax main office.
"Moscow is a city convenient for work and business activity, but it obviously has big
problems with living conditions," she said.
Ogloblina based her conclusions on data of British and U.S. rating companies, including
the Globalization and World Cities Study Group, the analytical unit of the Economist
journal and the Chicago Council on Global Affairs. Moscow ranks fourth by the cost of
living and 15th by GRP.
"It ranks 21st as a possibility city, 12th as a global city and 48th as a brand," she said.
In the opinion of experts, Moscow ranks in the second half of the top 20 world centers by
business activity, Ogloblina said.
te jv
(Our editorial staff can be reached at [email protected])
PRESS DIGEST - Russia - SEPT 29
http://www.reuters.com/article/2011/09/29/press-digest-russia-septidUSL5E7KT09J20110929
2:47am EDT
MOSCOW, Sept 29 (Reuters) - The following are some of the leading stories in Russia's
newspapers on Thursday. Reuters has not verified these stories and does not vouch for
their accuracy.
VEDOMOSTI
www.vedomosti.ru
- Russian state officials spent more than 4.5 billion roubles ($141 million) in 2007-2009
to acquire expensive executive cars, the daily says citing a research compiled by a
parliament deputy.
- Russia eyes introducing obligatory Director and Officers Liability Insurance for
chairmen of the boards of major state companies.
KOMMERSANT
www.kommersant.ru
- The European Commission antitrust probe into Gazprom's supplies to its European
customers could allow the EU to get more leverage on the company, the daily says.
- The first test launch of Russia's fifth generation intercontinental ballistic missile has
failed, the daily says.
NEZAVISIMAYA GAZETA
www.ng.ru
- The earnings of 21.1 million Russians, or 15 percent of the country's population, were
below living standards in the first half of 2011, the paper cites official statistics.
ROSSIISKAYA GAZETA
www.rg.ru
- Prime Minister Vladimir Putin awarded a medal named after Russia's prominent 20th
century reformer Pyotr Stolypin to a top Kremlin official Vladislav Surkov. ($1 = 31.746
Russian Roubles) (Writing By Tatiana Ustinova)
Russian Press at a Glance, Thursday, September 29, 2011
http://en.rian.ru/papers/20110929/167237320.html
10:45 29/09/2011
POLITICS
The Russian parliament's upper house ratified agreements concluded last year with
Abkhazia and South Ossetia, under which Moscow will set up military bases in the
former Georgian republics
(Rossiiskaya Gazeta)
Russian Foreign Minister Sergei Lavrov reiterated Russia's readiness to act as a guarantor
of non-use of force agreements between Georgia and its breakaway republics of
Abkhazia and South Ossetia
(Nezavisimaya Gazeta)
Russia’s top anti-drug official says that a good way to boost the agricultural sector would
be to cultivate plantations of cannabis
(The Moscow Times)
ECONOMY & BUSINESS
The European Commission proposed a financial transaction tax expected to take effect
from 2014 and raise about 57 billion euros ($78 billion) a year
(Vedomosti, Rossiiskaya Gazeta)
Russia's finance ministry has no plans to increase taxes in the nearest future, acting
Finance Minister Anton Siluanov said
(Kommersant)
The combined MICEX-RTS stock exchange is expected to grow three times to reach
$13.8 billion by 2015, making it the world's third largest bourse by market capitalization,
MICEX vice president Sergei Sinkevich
(The Moscow Times)
OIL & GAS
European Commission officials have searched the offices of gas companies in ten
European states, including subsidiaries of Russian gas giant Gazprom
(Vedomosti, Kommersant, Rossiiskaya Gazeta)
Russian Prime Minister Vladimir Putin said he had no business relation with Gennady
Timchenko, the owner Gunvor Group, of one of the world's largest oil trading companies
(Vedomosti)
DEFENSE
Russia's Space Forces confirmed the failure of a test-firing of a Yars (RS-24)
intercontinental ballistic missile launched from the Plesetsk space center
(Kommersant, Rossiiskaya Gazeta)
WORLD
Ukrainian state prosecutors insist on a seven-year jail term for the country's ex-premier
Yulia Tymoshenko. Prosecutors say she should also pay off $195 million damage that the
government lost after her 2009 gas deal with Russia
(Rossiiskaya Gazeta)
CRIME
Lom-Ali Gaitukayev, a former Chechen businessman suspected of organizing the murder
of campaigning journalist Anna Politkovskaya in 2006 has been brought to Moscow for
questioning
(Rossiiskaya Gazeta)
A policeman and seven civilians, including an 11-year-old girl, died when a car was
blown up in the village of Khajalmakhi in the southern Russian republic of Dagestan
(Nezavisimaya Gazeta)
SOCIETY
The number of poverty-stricken Russians has grown by more than 2 million over the past
year, the State Statistics Service reported. Almost 15 percent of the population now live
below the poverty line
(The Moscow Times)
SPORTS
Roman Shirokov scored two and made a third for Zenit St. Petersburg in a 3-1
Champions League win over 10-man Porto
(Kommersant, Rossiiskaya Gazeta)
For more details on all the news in Russia today, visit our website at http://en.rian.ru
Editorial: Another reason not to join the Russian army
http://www.scrippsnews.com/node/64468
Submitted by SHNS on Wed, 09/28/2011 - 17:15
An editorial / By Dale McFeatters, Scripps Howard News Service
The Russian army is having a hard time filling its ranks with draftees. About half of all
potential recruits never show up for induction. Bribes to obtain medical deferments are
common, and there is no real social stigma attached to draft dodging. In fact, it seems
more or less expected.
The undermanned army is now hoping to lure illegal immigrants into joining with a
promise of full Russian citizenship three years into a five-year enlistment.
The draftees, if they show up, serve for 12 months, but the new recruits face a vicious
brutality, that Human Rights Watch called inhuman, degrading and grossly abusive, at
the hands of the "granddads," soldiers serving the final six months of their enlistment.
Unsurprisingly, desertion is common.
Numerous studies have brought this to the attention of the officer corps and the
government with little to no effect.
But the Russian army has decided there might be an incentive to join and even to stay for
the entire 12 months -- better food.
The army is doing away with barley porridge, a staple of the military going back to
czarist times and widely described as inedible. It is being replaced by buckwheat
porridge, which is described as five times more expensive but does not require the hours
and hours of cooking that the barley does.
The quicker preparation time means that the army has been able to fire a large number of
civilian cooks, who are not too happy about it. Maybe we could hire a few of them to
cook for death row inmates like the one in Texas who ordered a huge last meal then
refused to touch it. At least with barley that's been boiled all day, he'd have an excuse.
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
Putin's intended return as president unleashes open rebellion within the Kremlin
High quality global journalism requires investment. Please share this article with others
using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy
for more detail. Email [email protected] to buy additional rights.
http://www.ft.com/cms/s/0/f3d6fde0-e9e9-11e0-a149-00144feab49a.html#ixzz1ZJsxuSxs
It was supposed to be the stitch-up to end all stitch-ups. On Saturday Vladimir Putin,
Russian prime minister, and Dmitry Medvedev, president since 2008, announced in front
of a loudly cheering audience of the ruling United Russia party that they were once more
switching jobs next year.
“I want to say directly: an agreement over what to do in the future was reached between
us several years ago,” Mr Putin told the crowd, while Mr Medvedev too said the pact had
been agreed back in 2007 when he was prime minister and Mr Putin backed him as his
successor for the presidency. “We actually discussed this variant of events while we were
first forming our comradely alliance,” proclaimed Mr Medvedev.
It was the epitome of politics by conspiracy perfected by Mr Putin in more than a decade
in power, intended both to end three-and-a-half years of intrigue that had gripped Russia
about Mr Putin’s political plans and to demonstrate that the omnipotent Kremlin political
machine was impervious to rivalry, jealousy, competition and scandal.
But what happened next proved precisely the opposite: since the weekend, Russia has
been gripped by a political crisis after a number of government officials in effect
mutinied, refusing to play along to the script that had been presented to them as a fait
accompli. What they aired was a feeling of betrayal by the backroom deal of which they
had not been informed.
Monday’s sacking as finance minister of Alexei Kudrin, who had served 12 years in the
post and is one of Mr Putin’s oldest friends from St Petersburg, was the first and possibly
not the last head to roll in what has become a hefty political brawl. On learning of the
deal, Mr Kudrin had questioned Mr Medvedev’s competence in economic matters and
summarily announced his refusal to serve in his cabinet – probably because he had had
his own eye on the prime ministership.
On Tuesday, the rogue ex-minister aired his grievances in a way deeply unhelpful to the
central bank, which has spent at least $6bn in the past week propping up the rouble in the
midst of global market turmoil. As he lashed out at the pressure from above, which, he
said, had forced him to approve increases in state spending, particularly on the military –
budgetary miscalculations would “inevitably spread to the entire national economy”, he
warned – the political infighting only exacerbated the pressure on the currency.
It was an unheard-of public brawl between two members of Mr Putin’s famously tightlipped political team, who have long kept their internal fights to themselves. In 2007, for
example, Mr Kudrin said almost nothing in public when Sergei Storchak, his deputy, was
arrested and charged with embezzlement in a heavily politicised case. This case,
according to a consensus within the government, was ordered by a rival Kremlin official,
also from the Putin circle. But the matter was settled behind closed doors and the charges
against Mr Storchak were dropped this year.
Such opacity has become typical under the Kremlin’s rules of managed democracy.
Political parties are invented; television stations censored (Mr Kudrin’s face has not been
seen on national TV since Saturday); decisions are taken by fiat but then legitimised by
an army of pollsters, spin-doctors and broadcasters who sell these as democratic choices.
Russians have become consumers of politics in the same way that they are consumers of
cosmetics or electronic goods – their opinions registered through tireless market research
and sales data but with no formal way to influence the process through a meaningful vote.
The Kremlin has used such “political technology” for more than a decade to provide a
veneer of democracy for an authoritarian system.
But this week’s fireworks indicate that conspiracy as a governing tool is becoming
untenable. Despite the Kremlin’s efforts to drain all the spontaneity and competition from
public politics, it just as stubbornly refuses to go away.
“The system of management of politics is exhausted, it’s morally worn out. The situation
has changed and it doesn’t work any more,” says Gleb Pavlovksy, who heads the Fund
for Effective Politics, a Moscow think-tank, and is a former political consultant to the
Kremlin.
Mr Kudrin was not the only rebel. Igor Yurgens, a Medvedev economic adviser, told the
Financial Times he was “disappointed” by the decision. Arkady Dvorkovich, a key aide
to Mr Medvedev on the economy, also registered his displeasure in a mild way, posting
on Twitter that “there is no cause for celebration” in the announcement that Mr Putin was
to return to the top job. He later tweeted that Luzhniki stadium, where the speech was
held, “is better used for playing hockey”.
The disgust of the Medvedev team with the voluntary humiliation of their patron by Mr
Putin was palpable. “There are two teams: Medvedev’s team and Putin’s team,” says
Vladimir Pribylovsky, editor of the political website anticompromat.org, retelling a
variation of a joke that has made the rounds in Moscow. “But it’s not clear whose team
Medvedev is on.
“Well, we found out that he is actually on Putin’s team.”
Political transitions in Russia have in some sense always been conspiracies – some more
successful than others. The death of communism happened amid the foul-ups of the failed
1991 coup by hardline generals; the upset 1996 presidential re-election win by Boris
Yeltsin was stage-managed by seven oligarchs. Most successful was the rise of Mr Putin
himself to replace Yeltsin in 1999. Indeed, the man who wrote Yeltsin’s resignation
speech on New Year’s eve 1999, who wishes to remain anonymous, says only six or
seven people knew at the time.
Mr Medvedev’s entire presidency (Mr Putin was constitutionally prohibited from a third
successive term) now appears to have been an elaborately constructed play, whose final
act was the return of the former KGB colonel to his job next March.
But in its refusal to swallow yet another fait accompli, Russia’s political aristocracy is
demonstrating that its patience for paternalistic rule is ebbing – and, simultaneously, the
Kremlin appears to be losing its touch.
For instance, the deal presented by both Mr Putin and Mr Medvedev as having been
agreed “years ago” may have instead been recent and hastily constructed. According to
one official, it was pushed for by Mr Medvedev, while Mr Putin wanted it delayed until
after parliamentary elections. “It wasn’t great politically – now how are we going to get
anyone to vote in the parliamentary elections if we’ve told them we’ve already decided
everything?” he adds.
Another official speculates that Mr Kudrin’s prime ministerial ambitions were well
known at the time and Mr Medvedev wanted to make clear he had been tapped for the
post before Mr Putin could back out of the deal they had made. According to a consensus
of officials and analysts, the two men decided on the succession not in 2007 but just this
August.
The presentation of the plan was botched. The speeches “sounded like they were written
in the car on the way over”, says one government official. Telling the nation that the pact
had been made long ago was a big mistake, says a former high-ranking Kremlin official.
“It is a very bad explanation because, first of all, it’s a lie. And second of all, it doesn’t
explain anything.”
Whatever the background, the announcement clearly did not go down well except among
the party faithful at Saturday’s rally. Nor was the displeasure confined to those in the
Medvedev and Putin political teams. On Monday, Moskovsky Komsomolets, a popular
and largely apolitical Moscow tabloid, took aim at the “tandem” in an editorial. “Russia
consists not only of government bureaucrats, not only of those who have a pass to
Luzhniki stadium,” the article read. “And everyone whose consciousness has not been
demolished by ecstatic glee [over Mr Putin’s return] has understood that you have lied to
us for four years.” Russia, it continued, “has just received a lesson in unbridled
cynicism”.
In a country where resignations and reshuffles are usually choreographed with care, Mr
Kudrin’s abrupt departure was already the second political scandal to erupt in a month.
On September 15, Right Cause – a pro-Kremlin party of economic liberals and democrats
aimed at emerging middle-class voters – self-destructed after Mikhail Prokhorov, the
third-richest man in Russia and the party’s leader, was expelled in a furious public row.
Brought in to lead what was widely thought to be a Kremlin project, Mr Prokhorov
blamed his expulsion on a row with Vladislav Surkov, chief of the Kremlin’s domestic
political operations, whom he labelled a “puppet master”.
However, the ensuing scandal made it clear that patience with such managed democracy
is running out. Mr Prokhorov himself said on his blog on Tuesday, commenting on the
week’s upheavals: “I think that we stand on the verge of a very important – possibly
tectonic – shift in the consciousness of the elite, including the ruling elite. There is
polarisation. It will inevitably bring to the surface new ideologies, new conceptions of
development and new people.”
Few reckon Mr Putin is in any political danger but the scandals this month, according to
some analysts, indicated that he may be under considerable pressure to liberalise – which
was formerly a no-go area for the stern ex-KGB colonel. In power, Mr Putin has shown
himself to be (mainly) an economic liberal but a political autocrat, who strangled the
media and clearly feared giving up the state’s implicit veto over the political process.
But the Russia he will take over in 2012 is not the same Russia, sick of the chaos of
democratic transition, that welcomed a strong hand in 2000 when he first came to power.
Today the country is richer, more middle-class and less patient than it was a decade ago,
according to an increasing amount of sociological research.
Few can predict what Mr Putin’s third term as president will bring. But if he is wise, says
one former senior official, he will have to “show everyone that he is not what they think
he is”.
.......................................................................
The middle class: a potential headache for Putin
Vedomosti, a Russian newspaper part-owned by the Financial Times, recently ran an
online quiz that was an instant hit. It was called “Are you middle class?”
Respondents were judged by their ability to identify pieces of Ikea furniture, the stamp on
a Schengen visa used in parts of the European Union, an iPhone and various types of
sushi – all de rigueur accoutrements of a middle-class Moscow lifestyle.
In many ways, this constituency is the most important for Vladimir Putin if he wishes to
have an untroubled third or fourth term in power as president. But the group’s political
loyalties are famously hard to read – and fickle.
The middle class is a comparatively new phenomenon in post-communist Russia, created
during Mr Putin’s first presidency (2000-08) as economic growth soared and real
incomes doubled.
Alongside their greater wealth, they crave more of a voice – and are chafing against the
authoritarian culture of the Kremlin that excludes them from politics. They could prove to
be a headache for Mr Putin if he wishes to rule once again as an unchallenged autocrat.
The Kremlin has recently been keen to build bridges. It backed Right Cause, a liberalleaning party headed by billionaire Mikhail Prokhorov that sought to mobilise the 15 per
cent of voters reckoned to be middle class. The venture flopped, falling apart this month
amid scandal.
For Mikhail Dmitriev of the Centre for Strategic Research, a Moscow think-tank, the
middle class comprises 40 per cent of the population of Moscow and 20-30 per cent of
other urban centres. He says it forms the core of a potential opposition to the Kremlin,
which he reckons will soon find itself in a “crisis of legitimacy” if it does not reform.
Other sociologists are less alarmist, saying that divining a coherent middle class is
practically impossible. Some work for the state, some are in the private sector; many are
intensely nationalistic, others are democrats.
“There is very little you can say about this group as a whole,” argues Larisa Kosova of
Moscow’s Higher School of Economics, who believes that even the term itself is
something of a misnomer. She says the title refers mainly to the category of people whose
lifestyles most closely mirror the western middle class. “It consists of the top two deciles
of Russian society,” she said. “So in what way is this ‘middle’ class?”
Copyright The Financial Times Limited 2011. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Yet Another Example of The Economist's Awful Russia Coverage
http://www.bne.eu/dispatch_text16714
bne
September 28, 2011
bne: We have been asked a lot recently about the "Russia: Time to Shove off" piece that
ran in the Economist earlier this month.
Basically it says that the Russians are so fed up with their leaders and where the country
is going that they want to leave. While the writer gets the mood right - I too have noticed
that many people, especially the young and the elite, are visibly frustrated and talking
about leaving - typically for the Economist it gets all the facts wrong - or rather leaves
important ones out.
The desire to emigrate from Russia is no higher than in other countries. This piece was a
classic hatchet job where the journalist has selectively chosen facts that support a
preconception that has more to do with the correspondent's bias than with what is going
on. Put another way: a normal Economist piece.
More seriously this is in the vanguard of the "Russia stagnates" line that we think will
now take over in the Economist (and everywhere else) from the "Russia about collapse"
line it took in the second half of the naughties (it boomed). More recently the line has
been "Russia is corrupt" but the Economist studiously ignores the president's anticorruption campaign (which it has failed to report completely) and the fact that
policemen, generals and now even former regional governors are being thrown in jail on
a weekly basis - albeit a very flawed and slow moving campaign.
(see Corruption in Russia: All bets are off for an example.)
Even Elena Panfilova, who runs Transparency International in Russia, told us that she is
optimistic and believes the campaign will work; the Economist quotes her figures ad
nauseum, but hasn't actually interviewed her about the (plentiful) flaws in the president's
campaign as far as we know. And she is the only independent authority on Russian
corruption out there.
Now don't get us wrong - there is a lot wrong with Russia and we were very disappointed
by Prime Minister Vladimir Putin's decision to take his old job back. As one friend put it:
"The Russian optimists will be disappointed, but for the Russian pessimists - ie almost
everyone - nothing has changed." Which is true.
We don't normally run pieces from other publications unless they cause a lot of comment
so here is an excellent rebuttal from Forbes. Why does the Economist have such a good
reputation? It doesn't deserve it, at least when it comes to reporting Russia. (Credit to
David Johnson who ran this piece first in the JRL). END
Yet Another Example of The Economist's Awful Russia Coverage
http://www.bne.eu/dispatch_text16714
Forbes.com
By Mark Adomanis
September 12, 2011
The other day I noted an especially overdrawn article titled "Time to Shove Off" that had
recently appeared in The Economist. The article's thesis was basically the following:
Russia is again stagnating and all of its most talented and successful people are preparing
to leave, a development which will eventual cripple the country. I briefly noted that I
thought this was a load of rubbish and that the article omitted a huge number of relevant
facts that contradicted its analysis.
One of the truly great things about the internet and the rapid spread of information it
enables is that the groups analyzed by the "experts" in the Western media are not simply
mute observers. They can actually engage in the conversation, point out mistakes and
factual errors, or simply suggest alternate explanations that are more deeply informed by
knowledge of the local culture.
Thanks to Kevin Rothrock, who runs the outstanding Russia-focused blog A Good
Treaty, I came upon a particularly excellent example of this at the Russian-language news
site Slon.ru. Stepan Opalev wrote a pithy, and, at least judging from the evidence he
assembled, rather scathing response to The Economist.
I'll translate from the Russian since the relevant text isn't too long:
"The article's author, it's true, didn't try to compare the number of those wanting to leave
Russia with those wanting to leave other countries. In fact people from other countries
are getting ready to "shove off" not in smaller but in much larger numbers. For example,
in 2008 when a Gallup poll showed that about 17% of Russians were preparing to
emigrate, in Great Britain and Germany the same poll showed the figure was almost two
times higher at 27% of their respective populations. In 2010 another Gallup poll showed
that the number of people wanting to leave Russia decreased to 11% of the population. In
Great Britain, where The Economist is published, the number of potential emigrants
increased to 33% of the population.
"The growing desire to leave Russia, by all appearnces, isn't being converted into
corresponding action: if you believe Rosstat, the number of people leaving the country is
steadily decreasing. In other words the number of Russians wanting to leave isn't growing
_ we just complain more about life."
The author also provides a nifty little chart titled "The percent of people who want to
permanently leave the country, 2008." With data taken from Gallup, the chart shows that
in 2008 the following countries had a higher percentage of people who wanted to
permanently emigrate than Russia did in that recent Levada poll (the one which sent The
Economist into such a tizzy): Moldova, Azerbaijan, Great Britain, South Korea,
Germany, Georgia, Ukraine, Egypt, and Armenia.
As is quite obvious from even a cursory glance at the data, the recent Levada poll shows
that Russians' desire to emigrate is utterly unexceptional. Indeed, apart from South Korea,
Great Britain and Germany, there is at least one other well-managed liberal democracy
whose citizens are much more eager to leave the country than the despondent citizens of
Putin's stagnating autocracy. Don't believe me? Look at this Gallup poll from early 2008
which asked the following question: "Ideally, if you had the opportunity, would like to
move permanently to another country, or would you prefer to continue living in this
country." 35% of Chileans said that they would like to move to another country, far
higher than equivalent figures for Argentina (20%) or Venezuela (12%).
Chile is, and has long been, one of The Economist's favorite success stories, a country far
more thoroughly liberalized, both politically and economically, than Russia is ever likely
to be. Yet despite its liberalism, capitalism, and democracy more than a third of its
citizens said they would prefer to emigrate. Chile's figure was far higher than the
corresponding figures for the far less economically liberal Argentina and Venezuela, or
even a famously unequal and polarized society such as Brazil. Does this mean that Chile's
president is evil or that its basic political and economic structures are fundamentally
broken? Does it mean that it should adopt the "Bolivarian" model which apparently is far
better at retaining the basic loyalty of citizens? I suspect not, but then I have no interest in
either tendentiously trying to prove Chile's failure or convincing it of a specific course of
action.
The Economist is not written by foolish or stupid people. Indeed I know at least one
person who writes for it and I feel pretty safe in saying that their intellectual capabilities
comfortably surpass my own. But The Economist does have a quite nasty habit of
excluding evidence and limiting perspective when it serves its own interests, and the
publication has long made clear that it considers Mr. Putin to be a figure of extreme, if
not unique, malevolence. There's nothing wrong with attacking Putin's record as leader,
in fact it's a very easy thing to do. But doing so in such a hackneyed and myopic manner
(in a manner that is so easily rebutted with a few basic Google searches and some
elementary research into opinion polls) helps no one, least of all The Economist's readers
who were very badly misled into believing that Russians' desire to emigrate is unique or
noteworthy when precisely the opposite is the case.
If you wanted to make the argument that the Kremlin needs to more aggressively court its
own economic elite, which really does seem to threaten to run off to London at a
moment's notice, that's one thing. I'd probably agree with that. But implying that Russians
are preparing to "shove off" en-masse, or that this desire to emigrate is dramatic proof
that "Putinism" is a comprehensive failure, is just wrong. Not wrong in some vague moral
sense, but wrong as in "demonstrably and provably wrong."
National Economic Trends
Inflation continues to decelerate in September
http://www.bne.eu/dispatch_text16714
Renaissance Capital
September 29, 2011
According to Rosstat, Russia's weekly consumer inflation was 0% last week (19-23
September), after shrinking by 0.1% since the beginning of September; YtD inflation
amounted to 4.6%. This suggests to us that September inflation could be around 7.2-7.3%
YoY. While we maintain our view that the Central Bank of Russia will leave rates
unchanged until the end of the year, we think the deceleration of inflation coupled with
strengthening global headwinds could create a slight policy bias towards easing.
The rouble's recent depreciation might increase inflationary pressures, but, as we have
argued before, we think that the deflationary nature of the economic backdrop is likely to
offset the effect of a weakening rouble, as occurred during the 2009 crisis when inflation
continued to decelerate.
We think MoM inflation will stop decelerating in the coming months, and will start to
increase due to the increased level of government spending at the end of the year.
Nevertheless, the price level at the end of last year was relatively high after food prices
were impacted by drought conditions; therefore, we don't expect an inflation hike, and we
forecast an inflation rate of 6.9% YoY at the end of 2011.
Natalia Suseeva
Russia Macro View - That Sinking Feeling
http://www.bne.eu/dispatch_text16714
Citi
September 29, 2011
We are cutting our 2012 GDP growth forecast for Russia further to 2.5% - from our
forecast of 3.5% in August and 4% before that. We believe global financial turbulence
and political uncertainty will weigh on investment and consumer expectations in Russia.
We hope this will be the end of the revisions, but the global outlook remains uncertain.
We keep our Brent forecast unchanged at US$86pb in 2012 and lower our global GDP
growth forecast to 2.9% - from 3.2% last month and 3.7% two months ago. We still do
not expect a global recession for 2011 or 2012 as a whole, but QoQ industrial country
growth probably will be close to zero in the next few quarters and is likely to stay well
below average to at least end-2012E (Global Economic Outlook, September).
In Russia appetite for systemic reform is limited - The decision for a reverse of the
current Putin/Medvedev 'tandem', rather than the introduction a new figure to the
leadership structure, suggests that appetite for systemic reform is limited (Political
Implications of the Reverse Tandem , 28 September).
Weaker Ministry of Finance suggests higher debt - The administration's main hawk,
Minister Kudrin, has been recently replaced by a 'tandem' of the First Prime Minister
Shuvalov and a skilled technocrat among the Deputy Ministers of Finance.
Higher pre-election spending should prop up consumption - We expect consumption to
remain a driver of GDP, rising by more than 5% YoY in 2011, but decelerating to 3% in
2012. We see social spending and reduced saving propping up consumer demand, but this
likely 'leaking' through higher imports and capital outflows.
We believe the ruble basket at 37-38 with Brent at US$86 is fairly valued - Global
contagion has recently pushed the ruble lower than seems warranted by oil and rates.
However, pressure could intensify if the CBR gives banks ammunition to bet against
the ruble.
Ruble Weakens Third Day This Week Against Dollar, Euro at Open
http://www.bloomberg.com/news/2011-09-29/ruble-weakens-third-day-this-weekagainst-dollar-euro-at-open.html
Q
By Torrey Clark - Sep 29, 2011 8:05 AM GMT+0200
The ruble weakened for the third day this week against the dollar, retreating 0.3 percent
to 31.8498 at the start of trading in Moscow. The Russian currency slumped 0.4 percent
at 43.3972 against the euro, pushing it down 0.4 percent to 37.0509 versus the central
bank’s target basket.
To contact the editor responsible for this story: Torrey Clark at [email protected]
SEPTEMBER 29, 2011
Kremlin Moves Rumble the Ruble
http://online.wsj.com/article/SB10001424052970204226204576598970115708018.html
By ANDREW PEAPLE
Russian voters weren't consulted on the deal whereby President Dmitry Medvedev agreed
to stand aside for Vladimir Putin in next year's presidential elections. But the markets are
having their say.
The Central Bank of Russia this week was forced into its biggest intervention in the
currency markets since 2009, as the ruble threatened to fall below its official trading band
of 32.50 rubles to 37.50 rubles ($1.03 to $1.18) to a basket of euros and dollars. That
could be a sign of things to come.
True, politics isn't the only thing destabilizing the ruble. The recent falls in oil and gas
prices have exerted downward pressure, as they have on other resource-rich country
currencies, as these commodities make up two-thirds of Russia's exports. When oil prices
tanked during the global financial crisis so did the ruble; the central bank spent more than
$200 billion in 2008 defending the currency and was forced to raise interest rates.
Since then, the central bank has been reducing its interventions in the currency markets,
while widening the trading band. Such moves had encouraged hopes of Russia moving
toward a free-floating currency. That, in turn, would give it scope to run a more
independent monetary policy, setting interest rates to suit domestic financial conditions.
But the political uncertainty has put those ambitions on hold. Net capital outflows in the
first half of this year reached more than $30 billion. This week's sacking of Finance
Minister Alexei Kudrin has fueled investor concerns; capital outflows could accelerate to
$25 billion to $30 billion in the fourth quarter alone, ING forecasts. If Russian
households start switching deposits into foreign currency, as they did in 2008, pressure
on the ruble will increase.
The central bank now has decided to freeze the trading band, a setback for its liberalizing
ambitions. Unless oil prices recover, or the political outlook suddenly improves, it faces
digging into its reserves again to hold the ruble line.
05:34 29/09/2011ALL NEWS
Russia strengthens positions at world grain markets
http://www.itar-tass.com/en/c154/235881.html
ROSTOV-ON-DON, southern Russia, September 29 (Itar-Tass) – Russia is strengthening
its positions in the world market. The president of the National Union of Grain Producers,
Pavel Skurikhin, says that the Grain Russia-2011 international conference, which is
taking place these days, provides a convincing proof of that.
"More than 250 delegates from 20 countries are attending the conference, an
unprecedented number for this kind of event. Turkey has sent 80 people to the
conference. Its plans are ambitious. Turkey wants to triple flour production in the next
few years and counts mainly on Russian grain,” Skurikhin went on to say.
He said the participants in the conference had come to Rostov-on-Don with specific
tasks. “We saw how representatives of grain producers, grain processors and consumers
were actively engaged in talks. Even if they haven’t struck any deals on the sidelines of
the conference, they are definitely going to do that after all the details of the deals have
been finalized,” Skurikhin explained.
He emphasized that grain exports remained an important income item and a source of
currency revenues for the Russian state budget. Skurikhin called for consolidation of
Russian positions in world grain markets.
The president of the National Union of Grain Producers said his task was to create
cooperative marketing associations of consumers for the purpose of streamlining the sales
of grain, including exports, to put big and small producers in an equal position and to be
able to pursue a common grain policy.
Russia Grain, Pulses Harvest at 86.4 Million Tons, Ministry Says
http://www.bloomberg.com/news/2011-09-29/russia-grain-pulses-harvest-at-86-4million-tons-ministry-says.html
Q
By Marina Sysoyeva - Sep 29, 2011 10:25 AM GMT+0200
Russian farmers harvested 86.4 million metric tons of grains and pulses as of yesterday,
about 46 percent more than a year earlier, the Agriculture Ministry said.
The crop was gathered from 85 percent of the planted area, or 37.3 million hectares (92.1
million acres), the ministry said on its website.
The wheat crop reached 53.5 million tons after 86 percent of the sown area was
harvested, the ministry said. The barley harvest was 16.8 million tons from 92 percent of
the planted area.
About 20.7 million tons of grains were collected in the Southern federal district; 21.2
million tons in the Volga area; 16.4 million tons in the Central federal district; 13.3
million tons in the Siberian region; and 9 million tons in the North- Caucasus district, the
ministry said.
The oilseeds crop included 2.6 million tons of sunflower seeds, 534,000 tons of soybeans,
and 797,000 tons of rapeseeds, according to the report.
Prime Minister Vladimir Putin said on Sept. 27 the grains crop is expected to reach 90
million tons this year. That will meet domestic demand and reinstate Russia as one of the
largest grain exporters, he said. The government plans to increase agricultural subsidies
to 170 billion rubles ($5.3 billion) in 2012 from 163 billion rubles this year, Putin said.
Russia’s crops were damaged last year by the country’s worst drought in a half century.
The figures for grains and oilseeds are in bunker weight, which is the weight before
drying and cleaning.
To contact the reporter on this story: Marina Sysoyeva in Moscow at
[email protected]
To contact the editor responsible for this story: Claudia Carpenter at
[email protected]
Russia resumes sugar exports for first time since 1999
http://www.agranet.com/portal2/home.jsp?template=newsarticle&artid=20017907408&pubid=ag044
Thursday September 29 2011
An official at the Russian Sugar Producers Association said that the country will export
sugar to the world market for the first time in more than a decade as the first contracts to
export to Tajikistan and Kyrgyzstan were signed at the end of August, adding that the
sweetener may also find its way to Ukraine, Moldova and other Central Asian countries
with prices at their current levels.
The official added that the government has put together a working group to help support
exporters.
Central Bank may ease requirements for two major banks
http://www.rbcnews.com/free/20110929112649.shtml
RBC, 29.09.2011, Moscow 11:26:49.The Central bank of Russia (CBR) may
refrain from introducing sanctions against Sberbank and the Bank of Moscow for
infringing the law on the national payment system by introducing a temporary
moratorium for the two financial institutions, RBC Daily reports today.
As several provisions of this law become effective today, in order to accept
household utility payments banks are supposed to enter into direct contracts with
housing and utilities infrastructure operators. The banks will now be limited to
receiving payments and transferring them to service suppliers, bypassing
intermediaries.
Sberbank and the Bank of Moscow, the two major players in the segment of utility
payments, failed to renew their contracts and asked CBR to impose a temporary
moratorium on the law.
COMMENT: Russian banks - Late to the party
http://www.bne.eu/storyf2928/COMMENT_Russian_banks__Late_to_the_party
David Nangle of Renaissance Capital
September 29, 2011
In this note, we formally put on paper what we have been debating rigorously with clients
over the past few weeks while marketing. We reduce our growth, earnings and TPs for
Russian banks while, with our crisis hats firmly back on, we stress everything in the
system that can and did go wrong back in 2008 to see where we stand today. Russian
banks are a bit late to the crisis party and it remains to be seen if they can just squeeze in
last orders or really get involved.
We stress test the banks, focusing on the following:
1. Sector liquidity. We see signs of tightening, and while banks and authorities are on
guard and better equipped, we assume the endgame will be fine but getting there could be
messy.
2. Currency risk. As a key risk, the recent rouble weakness has the potential to affect
depositor confidence, to the detriment of banking sector stability.
3. Wholesale funding. Once again, a scarce commodity, and it has negative implications
for growth, but much lower risk of default as Russian banks are less leveraged now than
they were in 2008. System LDR is 90%.
4. Slowdown of loan growth. This is now our logical base-case, in line with a falling
GDP outlook and confidence on both the demand and supply side. Credit growth of 12%
is now forecast for 2012 (previously 20%).
5. Asset quality. Step one, we assume write backs stop, step two banks start to
accumulate provisions again in 2012. NPLs are unlikely to return to 2009-2010 peaks,
but we have to start stress testing the restructured loan books.
6. Trading losses. In our view the most obvious, yet least quantifiable, effect of the 3Q11
market turmoil is on the banks' P&Ls.
EPS forecast cuts, but margins a positive buffer. In our forecasts for 2012E, we cut loan
growth from 16-22% to 10-13% and we up the cost of risk, moving from a write-back
scenario to one with normalised provisioning at 1-1.5% of gross loans. Rising NIMs
(predominantly) and some cost control, as was the case in 2009, should mitigate this.
This results in 2012E EPS cuts of 2-11% for the banks under our coverage. To sanity
check, it is important to note that in 2H08-YE09, pre-provision profit actually rose in
Russian banks - it was asset quality which killed the bottom line.
We remain underweight banks and short-term Russian banks can underperform. We cut
our TPs and ratings across the board on EPS cuts and upped cost of equity. Russian banks
are no place to hide in a crisis and, at best, our lower growth scenario plays out or, at
worst, we get some real sector instability. We stick to fundamentals with our TPs and
ratings and in that world, Sberbank of the liquids and Nomos from the mid-cap space are
our picks. Two additional points: 1) owning Sberbank DR over the common share is
entirely logical while we noticed that in the last crisis, VTB outperformed Sberbank on
the way down, irrespective if the difference in fundamentals. We intend to remain fluid
with our views in this environment.
Stress test summary
In this note, we formally put on paper what we have been debating rigorously with clients
over the past few weeks whilst marketing. We reduce our growth, earnings and TPs for
Russian banks while, with our crisis hats firmly back on, we stress everything in the
system that can and did go wrong back in 2008 to see where we stand today. Russian
banks are a bit late to the crisis party and it remains to be seen if they can just squeeze in
last orders or really get involved. Our aim is to be realistic, balanced and not dramatic in
what is becoming a very real situation, again. In this note we compare and contrast the
current positioning of Russian banks with their situation in 2H08, and we also stress test
the banks for the key downside risks that we are currently seeing. Specifically, we focus
on the following aspects:
1. Liquidity: The 2008 crisis in Russia started with a liquidity crisis in the interbank
market in September 2008, which caused several small and medium-sized banks to fail
and called for government intervention to provide liquidity to the system. This AugustSeptember we also see signs of liquidity tightening, although the good news is that
authorities are now better prepared to deal with the situation. We expect a bumpy road to
a positive end game.
2. Currency risk: With Russian banks generally holding no or small open currency
positions, the worst-case scenario is that we see some instability in the local banking
market via the local proxy for risk, the Russian rouble. Instability in general and retail
deposit instability in particular, is clearly the biggest risk for Russian banking stocks.
3. Funding. 2008 saw an effective closure of international capital markets for Russian
banks, calling into question their ability to meet/refinance their debt. Once again, we
expect that it will be very difficult to source funding internally or externally for most
Russian banks, ex. the state champions. Hence debt rollovers will likely have to be
funded from existing resources. On a positive note sector LDR is below 100% and there
are no serious maturities coming up for listed banks.
4. Slowdown of growth. The previous crisis was marked by quite a sharp slowdown of
both the Russian economic and lending growth. This time around, slower lending growth
also appears to be a logical outcome: 1) the global economy should see a slowdown (with
read-across for Russia); 2) market turbulence results in lower business confidence (and
hence loan demand); 3) funding (both debt and equity) becomes less easily available for
banks and affects credit supply; 4) as liquidity becomes scarce, banks get less willing to
lend. We downgrade our loan growth forecasts for 2012E from 16-22% to 10- 13%.
5. Asset quality: The 2008-2009 crisis was marked by significant asset quality
deterioration, driving banks' annual cost of risk as high as 5-7%. We do not currently
forecast such a dramatic meltdown of asset quality this time around since, in the past two
years, loan growth has been slower and lending standards generally tighter than in 20052007. Our base-case scenario factors in a logical halt to write backs and an immediate
return to normalised provisioning charges of 1-1.5% in 2012E - up from our abnormally
low assumption of 0.4-1% before. This is a top up scenario to an already left-over
aggressive buffer from the last crisis.
6. Securities portfolios and trading losses: These factors hit the banks' P&Ls severely in
2H08, and clearly represent the most obvious near-term downside risk to our 2011
forecasts, which is not straightforward to quantify. We expect banks to post losses from
trading securities in 2H11 and FY11, while continuing to earn positive profits on FX and
precious metals.
Sector liquidity
In September-October 2008 the banking crisis officially started in Russia with a liquidity
squeeze in the interbank market around the Lehmans failure. Once again we have started
to see liquidity in the system somewhat deteriorate over the past few weeks. We are not
yet alarmist about it, moreover, we think the Russian banking system is now better
positioned to sustain the stress, with the Central Bank of Russia's (CBR's) policy being
supportive and preventive (as opposed to reactive as in 2008). Hence our current view is
that end game will be fine but getting there could be rocky. Liquidity indicators are
sending negative signals, in our view: _ Balances on the banks' correspondent accounts
and deposits with the CBR are on a downward track and are now at YtD lows. This is
partly a seasonal phenomenon (September-October tend to be tight in terms of liquidity
because of tax payments), but it also means that at this time of the year banks are
particularly vulnerable (remember 2008?).
- The banking system's liquidity position net of borrowing from the CBR and Minfin is
around zero.
- Interbank rates are on the rise: The Mosprime rate (3M) has inched up from 4- 4.5% to
5%+ - a negative trend from a very low base; not yet anywhere near the 2008-highs (a
near 28% peak). _ MinFin deposits auctions: Demand exceeds supply (i.e. banks queue
up for MinFin money), and in mid-September the rate touched 6.17% (vs below 5% for
most of 2011).
- Anecdotal evidence suggests that smaller banks (number 50+) are having some
difficulty accessing liquidity from the interbank market. They are not cut off, but have to
pay up for funds and therefore increasingly turn to the CBR, instead of commercial
banks, for liquidity.
• What are the key downside risks, should the liquidity situation deteriorate - recent
history is the guide for the worst-case scenario
If the view in the system is that the rouble is going to weaken further, this can place more
pressure on bank liquidity, as banks seeking to take net long positions in the foreign
currency queue up for rouble liquidity, with a view towards buying dollars or euros for
roubles.
- Pressure on fixed income asset prices, as Russian banks unwind positions, some of
which are leveraged (anecdotal evidence from our fixed income traders suggests that
some [smaller] banks may have significant leverage via repo 'pyramids' [buy OFZ bonds
- repo them at 3%, or even 0% at times, discount - buy OFZ bonds again - repo them
again etc.]). Either way Russian banks are large holders of Russian local currency and
dollar debt.
- Failure of small-to medium-sized banks most leveraged to the repo market facing
margin calls (a la KIT Finance, Svyazbank in 2008). _ A deposit run on a smaller bank
being blown out of proportion by local media and turned into a crisis that it isn't.
• What is different/better versus 2008 is policy response
The CBR's actions (both in terms of FX and rates policy) immediately prior to the 2008
(Lehman) crisis were counterproductive in our view, exacerbating the impact of the
global credit crisis: the CBR was still increasing the policy rates in August 2008, with a
focus on curbing inflation. It was only after the liquidity crunch happened that the CBR
reacted - with what was, in fairness, a very quick and efficient intervention (see Appendix
for details). Now the situation is different in that the CBR is trying to take preventive
steps (e.g. it cut the one-day direct repo rate from 5.5% to 5.25% in mid-September), its
FX policy is much more flexible, it is equipped with the entire set of liquidity
enhancement measures first introduced in 2008 (uncollateralised lending, extended
Lombard list etc), and the system overall looks to us much better prepared for any
turmoil.
• Feedback from our economists' recent meeting with the CBR- the regulator is alert and
on guard
Banking system liquidity issues have recently come to the fore as liquidity has been
steadily declining since the beginning of 2011 from a peak of RUB1.7trn at the start of
the year to around RUB800bn at the end of August and . The situation has been
exacerbated by recent declines in oil prices, which have led to more limited inflows into
the Russian market. Consequently, interbank rates have spiked, raising concerns about
the stability of the Russian banking sector. _ The CBR is well aware of the situation. It
indicated that two main factors have contributed to the decline in liquidity: 1) larger-thanexpected budget surpluses so far in the year; and 2) the discontinuation of FX
interventions to prevent the rouble from strengthening too much. According to the CBR,
it is the latter that has served as the main avenue for providing liquidity in the system and
since the rouble has been under depreciation pressure recently, the CBR has almost
stopped buying dollars and euros with roubles.
The CBR thinks that the expected intensification of budget spending in
November/December 2011 will significantly alleviate liquidity issues, although this
leaves September/October as two months where interbank rates could still remain at
elevated levels. The CBR also feels comfortable with interbank rates that move within the
boundary set by the overnight deposit rate (3.75%) and the repo rate (5.25%), as long as
market rates fluctuate within this range the CBR is unlikely to get too worried about the
situation. Still, the CBR argued that it will defend the 5.25% rate, implying that it stands
ready to provide enough liquidity to the banks at the current repo rate. We also
understand that having cut the direct REPO once the CBR will probably cut even further,
should global economic conditions continue to disappoint. This also implies, as the CBR
argued, that we are very unlikely to see a repeat of the 2008 crisis, when interbank rates
rose by a considerable amount as the CBR is now much more concerned about smoothing
interest rate volatility than it was back then.
Feedback from banks' management: We are not seeing deposit outflows, but some
nervousness is being felt as the rouble starts to move. With that in mind banks have
become more conservative in preparation for volatile markets and are thinking of the
possible conversion of rouble deposits into FX, therefore they have started increasing
their rouble-liquidity positions. Bottom line: The authorities do seem very aware of the
risks and liquidity is being supplied directly to the system as currently being seen. We
expect a volatile month on this front, while we have yet to see much negative impact
from the weakening rouble. Although the authorities are far better placed to handle the
situation vs 2008 and we are comfortable about the end game from here, the path to that
end game is what concerns us. We expect volatility of banking sector newsflow around
liquidity, funding availability and deposit stability. All of which is negative for Russian
banks asset prices, in our opinion.
Currency risk
With the rouble having come under intensifying pressure in August-September, further
currency weakness is clearly a focus for investors at the moment, as Russian banks are
effectively a pure(ish) rouble play. To recap, late 2008-early 2009 saw a 36%
depreciation of the rouble against the dollar, despite an aggressive defence by the CBR.
This time around, the CBR is being openly more flexible in its FX rate policy, with the
rouble weakening within a broader band and allowed to move more with market forces
than before.
Business, Energy or Environmental regulations or discussions
September 29, 2011 10:21
Russian shares down, indexes lose 0.9%-1%
http://www.interfax.com/newsinf.asp?id=276590
MOSCOW. Sept 29 (Interfax) - Russian share prices started Thursday with losses
following last night's drop on Wall Street triggered by mounting discord in Europe over
how to tackle the debt problem.
The MICEX stock index was down 0.98% to 1364.4 and the RTS was off 0.88% in the
first minute of trading. Benchmark stocks fell up to 1.9%, however MMC Norilsk Nickel
(RTS: GMKN) continued to rise, up 1%, after launching its share buyback on
Wednesday, as did gold miner Polyus Gold (RTS: PLZL).
Pr
(Our editorial staff can be reached at [email protected])
Globaltrans to shell out $1.2bn on M&A
http://www.rbcnews.com/free/20110929105355.shtml
RBC, 29.09.2011, Moscow 10:53:55.Russian rail freight operator Globaltrans has
set aside $1.2bn for mergers and acquisitions (M&A) before the end of this year, the
company's CEO Sergey Maltsev told RBC late Wednesday.
Globaltrans, which dropped its plan to participate in an auction for a 75% minus
two shares stake in Freight One, could take part in an auction for container shipping
company TransContainer, he said.
The refusal to bid for Freight One was attributed to reluctance to contract a huge
debt in order to finance this acquisition amid market volatility. According to earlier
reports, Globaltrans had planned to borrow over $5bn.
September 29, 2011 12:05
Aeroflot flies 23% more passengers in 8 mths
http://www.interfax.com/newsinf.asp?id=276622
MOSCOW. Sept 29 (Interfax) - Aeroflot (RTS: AFLT) flew 9.177 million passengers in
January-August, 23% more than in the same period of last year, the airline said.
Passenger turnover grew 20.3% to 27.577 billion passenger-km.
Pr
(Our editorial staff can be reached at [email protected])
Billionaire Potanin May Seek Norilsk Control
http://www.bloomberg.com/news/2011-09-28/billionaire-potanin-may-strengthen-gripon-norilsk-after-buyback.html
By Yuliya Fedorinova - Sep 29, 2011 7:40 AM GMT+0200
Billionaire Vladimir Potanin’s Interros Holding Co. may seek control of OAO GMK
Norilsk Nickel after a $4.5 billion buyback and stock cancellation, gaining the upper
hand in a shareholder dispute with United Co. Rusal.
Interros will tender its entire stake of about 30 percent in the buyback, Potanin said
yesterday in an interview in Moscow. The company will then ask Norilsk to cancel stock
covered by the repurchase, he said.
Interros and Oleg Deripaska’s Rusal, which holds 25 percent of Norilsk, have been
locked in a dispute over influence on the board and use of the company’s cash since
2008. Rusal said Sept. 13 the buyback is solely in the interest of Interros, which aims to
take full control of Norilsk using the company’s own balance sheet. Potanin said the
principal reason for the buyback is to bolster Norilsk’s shares in an “unstable” market.
Norilsk Nickel Investments Ltd. began a monthlong program yesterday to repurchase
7.71 percent of the mining company’s stock for as much as $306 a share, or $30.60 a
depositary receipt. Norilsk will buy stock on a pro-rata basis, which means at least 30
percent of the offer will be allocated to Interros, Kirill Chuyko, a UBS AG analyst, said
by telephone from Moscow.
Raise Stake
Norilsk shares rose 7.35 percent yesterday to 6,998 rubles ($219.80), the biggest gain
since January, as the company’s buyback program started. That is 10 percent lower than
this year’s high in April. Norilsk is accepting bids until Oct. 28.
Norilsk plans to finance the buyback offer using its own funds and existing credit lines
from banks, Potanin said.
Given that Rusal and some minority investors won’t participate in the program, the shares
sold by Interros may amount to about $3 billion, with the balance bought back in the
market, Alexander Pukhaev, co-head of research at VTB Capital, said by phone.
After a share cancellation, Interros’s stake would exceed 30 percent, Potanin said.
Interros would then ask the Russian government for permission to raise this to a
controlling interest, he said, adding that “we haven’t decided yet whether we will
increase it or not.”
Cancellation Rejected
Crossing the 30 percent threshold as a result of a share cancellation doesn’t trigger the
mandatory general offer usually required under Russian rules. Interros may already
control about 32 percent of Norilsk to ensure it will have at least 30 percent after the
cancellation, UBS’s Chuyko said. Otherwise, the company may have to buy some stock
on the market, he said.
To proceed with a cancellation, Norilsk Nickel Investments would need to transfer shares
to the parent company, and the cancellation itself will need to be approved by Rusal.
If Rusal blocks the share cancellation, Norilsk may sell the repurchased shares to the
market, Potanin said.
“I hope Rusal won’t block the share cancellation as this is a logical deal and it is in the
interests of all shareholders,” Potanin said. Rusal’s press office declined to immediately
comment.
Rusal has snubbed several buyout offers from Norilsk. This latest buyback program was
announced after the aluminum producer rejected a proposal to sell a 15 percent stake
back to Norilsk for $8.75 billion.
Rusal Chairman Viktor Vekselberg aims to broker a deal with Rusal shareholders that if
Norilsk offers about $18 billion they will agree to sell their stock, people with knowledge
of the matter said Sept. 20, declining to be identified because the talks are confidential.
“Norilsk shouldn’t make a new buyout offer to Rusal in the current unstable market
situation, as it will cause an increase in the company’s debt,” Potanin said yesterday. A
possible deal with Rusal may be discussed only if the price is appropriate.
To contact the reporter on this story: Yuliya Fedorinova in Moscow at
[email protected]
To contact the editor responsible for this story: John Viljoen at [email protected]
Norilsk May Borrow $4 Billion for Buyback, Vedomosti Says
http://www.bloomberg.com/news/2011-09-29/norilsk-may-borrow-4-billion-forbuyback-vedomosti-says.html
Q
By Stephen Bierman - Sep 29, 2011 6:18 AM GMT+0200
OAO GMK Norilsk Nickel may borrow more than $4 billion to fund a share buyback,
Vedomosti reported, citing two unidentified bankers.
The credit under discussion would be at the London interbank offered rate, or Libor, plus
1.5 percent, Vedomosti said, citing the same people.
To contact the reporter on this story: Stephen Bierman in Moscow
[email protected].
To contact the editor responsible for this story: Will Kennedy at
[email protected].
TMK considering USD 3 billion in investments in US Russia and Romania
http://www.steelguru.com/russian_news/TMK_considering_USD_3_billion_in_investme
nts_in_US_Russia_and_Romania/227445.html
Thursday, 29 Sep 2011
It is reported that in order to maintain an industry leader in the oil and gas markets,
Russian energy tubulars manufacturing giant OAO TMK plans to spend up to USD 3
billion over the next 10 years at its Russian, Romanian and US operations.
About one quarter to one third of the investments are expected to be geared toward its US
operations, TMK IPSCO. Specifically in US, the focus will be on the company premium
connection seamless pipes business which is used in offshore drilling projects.
(Sourced from Bloomberg)
Activity in the Oil and Gas sector (including regulatory)
09/29 10:28 Lukoil to start supplying lubricants to Afghanistan
http://www.interfax.com/newsinf.asp?id=276590
Russian Watchdog Wants Oil Refiners Spun Off, Kommersant Says
http://www.bloomberg.com/news/2011-09-29/russian-watchdog-wants-oil-refiners-spunoff-kommersant-says.html
Q
By Stephen Bierman - Sep 29, 2011 6:06 AM GMT+0200
Russia’s Anti-Monopoly Service proposed splitting oil companies into production,
refining and retail businesses to defend independent retailers, Kommersant reported,
citing Igor Artemyev, head of the body.
To contact the reporter on this story: Stephen Bierman in Moscow
[email protected].
To contact the editor responsible for this story: Will Kennedy at
[email protected].
06:43 29/09/2011ALL NEWS
International conference on Arctic shelf opens in Murmansk
http://www.itar-tass.com/en/c154/235902.html
MURMANSK, September 29 (Itar-Tass) — The fourth international conference “The
Arctic Shelf Exploration: Step-by-Step” is opening in Murmansk in the Russian north on
Thursday.
The delegates to the forum include representatives of Gazprom, Statoil Russia, Total
Prospecting Development Russia, Shtokman Development AG, The Oil and Gas Institute
of the Russian Academy of Sciences as well as other companies and research institutes.
The conference will discuss the participation of Russian and foreign companies in the
development of the Shtokman deposit and other fields harbouring hydrocarbon resources,
the development of the production basis and coastal infrastructure as well as gasification
of the Arctic shelf, the Ministry of Economic Development of the Murmansk region told
Itar-Tass.
The region’s governor, Dmitry Dmitriyenko, believes that his region will play the leading
role in the development of Russian Arctic.
The Association of Oil and Gas Suppliers, the government and Duma of the Murmansk
region and the Russian Gas Society have organized the conference.
11:24 29/09/2011ALL NEWS
Kamchatka gasoline stations owners agree to lower fuel prices
http://www.itar-tass.com/en/c154/236034.html
PETROPAVLOVSK-KAMCHATSKY, September 29 (Itar-Tass) — The Kamchatka
regional government has concluded an agreement with local fuel traders to lower gasoline
prices.
On October 1, the prices for AI-92 and AI-95 will be reduced by 50 and 40 kopecks to
32.9 and 34.5 roubles, the government press service told Itar-Tass on Thursday.
The regional authorities have taken the level of retail automobile fuel prices on the
peninsula under special control, the press service noted.
Their talks with the major fuel supplier -- Kamchatnefteproduct -- and the Kamchatka
Fuel Union, which unites owners of gasoline stations, resulted in the agreement to reduce
the prices in two stages. The first was in mid-September.
The prices will go down 50 kopecks to one rouble on the average for gasoline and only
20 kopecks for diesel, Governor Vladimir Ilyukhin said, commenting on the situation.
According to him, local filling stations reduce the prices at their expense by lowering
their incomes.
Though the Russian suppliers' wholesale prices rose one rouble over the past month
alone, the Kamchatka enterprises have found a possibility not only to hold in check but
even lower retail prices, Ilyukhin noted.
The governor said the territory's government would raise the issue for the federal
government’s consideration to have the wholesale fuel prices reduced for the region. The
main wholesale supplier for Kamchatka is NK-Rosneft, which accounts for about 70
percent of the supplies for Kamchatka companies.
"We have already asked Russian Deputy Prime Minister Igor Sechin to set a fixed price
for fuel for the peninsula," he said.
"Kamchatka is a remote region with a complex energy system, and a sharp rise of fuel
prices has a very negative impact on the entire process of the region's social and
economic development. So, we will insist on settlement of the issue, and there is
confidence that we will find understanding on the federal level," he added.
TNK-BP Says It Paid $1 Billion to Partner With HRT in Amazon
http://www.businessweek.com/news/2011-09-28/tnk-bp-says-it-paid-1-billion-to-partnerwith-hrt-in-amazon.html
September 28, 2011, 8:28 PM EDT
By Nathan Crooks and Peter Millard
(Updates with TNK-BP comment in third paragraph and comment on Venezuela
expansion plans in seventh paragraph.)
Sept. 28 (Bloomberg) -- TNK-BP, Russia’s third-largest oil producer, signed a contract to
pay about $1 billion to become a partner with Brazil’s HRT Participacoes em Petroleo
SA in an oil project in the Brazilian Amazon, an official at TNK-BP said.
The transaction with HRT will be completed in two to three weeks and HRT will remain
the operator, said Sergey Funygin, head of TNK-BP’s Venezuela division, today at an oil
conference in Puerto la Cruz, Venezuela. The deal will give TNK-BP a 45 percent stake
in exploration blocks in the Solimoes Basin where HRT recently found signs of oil, he
said.
The companies signed a “definitive agreement” for TNK-BP to join the project, Funygin
said. HRT will be the operator for at least two years and the companies have the option to
change the agreements’ conditions, he said without offering further details.
TNK-BP is looking for opportunities in Brazil, Africa, the Middle East and Latin
America to diversify operations, Funygin said.
Brazil expects to more than double oil production over the next 10 years as it develops
the largest discoveries in the Americas in more than three decades.
TNK-BP is buying the stake from Petra Energia SA, HRT’s original partner in the blocks,
through an arrangement where HRT has rights to buy Petra’s stake. HRT didn’t return
two telephone calls to its Rio de Janeiro office today seeking comments about the deal
with TNK-BP.
Venezuela Expansion
TNK-BP, which has stakes in four joint ventures with Petroleos de Venezuela SA, is
looking to produce more oil in the South American country and may increase its interests
in current ventures or buy new assets, said Funygin. The Russian company has a 16.7
percent interest in the Petromonagas heavy crude venture that was nationalized from
Exxon Mobil Corp. in 2007.
Exxon is currently pursuing arbitration with PDVSA, as the Caracas-based company is
called, and seeking around $7 billion in compensation in the venture formally known as
Cerro Negro.
“We’re waiting for the issue to be resolved with Exxon Mobil, and then we are willing, if
the Venezuelan government and PDVSA consider us, to increase our interest in the
venture,” said Funygin. “We’ve already told PDVSA that we are ready to sit down and
talk about it.”
TNK-BP’s share of production from its joint ventures in Venezuela is around 25,000
barrels of oil a day, said Funygin. Petromonagas, which upgrades about 120,000 barrels a
day of heavy crude, will be stopped for a month next year in March or April for
programmed maintenance, Funygin said.
--Editors: Robin Saponar, Jonathan Roeder
To contact the reporter on this story: Nathan Crooks in Puerto La Cruz at
[email protected]; Peter Millard in Rio de Janeiro at [email protected]
To contact the editor responsible for this story: Robin Saponar at
[email protected]
BP to stay in Russia despite lawsuit and raids
http://rbth.ru/articles/2011/09/29/bp_to_stay_in_russia_despite_lawsuit_and_raids_13503
.html
September 29, 2011
Igor Vyuzhny
BP’s Moscow offices were raided after its Arctic exploration deal with state oil giant
Rosneft collapsed. But other British companies have not been deterred.
The latest developments surrounding the abortive deal between BP and Rosneft have left
the British company facing an enormous damages claim and pondering its future in
Russia.
On August 31, the day after it was announced that American firm ExxonMobil would be
developing the Arctic shelf instead of BP, a search was carried out at the BP Exploration
Operating Company office in Moscow. The search warrant was issued by a Tyumen court
and was based on a submission by the Siberian minority shareholders in TNK-BP, the
third biggest oil producer in Russia, owned on a 50-50 basis by BP and Alpha Access
Renova (AAR), a consortium of Russian shareholders.
The confidential documents removed during the search concerned the Rosneft-BP deal.
The claimants want compensation for opportunities lost because of the failed TNK-BP
partnership with Rosneft. They say it was the British shareholders that wrecked the deal,
which would have increased TNK-BP’s capitalisation. The minority shareholders initially
put their damages at 87.12bn roubles (about £1.75bn), but almost doubled their claim to
154.284bn roubles (£3.1bn) at a trial in Tyumen on September 21. The claims are
addressed to the British BP plc and BP Russian Investments Limited.
The chances of the lawsuit succeeding are slim, according to experts. They believe the
minority shareholders will find it hard to secure compensation from BP because the deal
with Rosneft cannot be deemed effective. But even if they win, the money will go not to
the plaintiffs but to TNK-BP.
After the searches, BP declared that its business had come under unreasonable pressure,
while Exxon merely expressed its surprise at the searches. The US company, which has
not previously worked in Russia, may get a juicy plum. Rosneft and Exxon are to explore
three Arctic areas in the Kara Sea with combined resources put at some 5 billion tons of
oil and 10 trillion cubic metres of gas. No precise figures are yet available for reserves.
Exxon will also join the Tuapse Trough project in the Black Sea. The reserves in the
Trough may be as much as 1bn tons, but that is a tentative assessment. The American
company will get 33.3pc stakes in both the Arctic and the Black Sea projects, with the
remaining 66.7pc to be owned by Rosneft.
In return, Exxon offers Rosneft participation in American and Canadian projects, notably
the Hibernia petroliferous province in Canada’s territorial waters nearly 200 miles southeast of Newfoundland and Labrador islands. Its reserves are estimated at 1-1.3 billion
barrels (136-178 million tons) of oil. Exxon has a 33.1pc stake in the project.
On September 13, Rosneft president Eduard Khudainatov announced that the companies
would have a detailed plan in place for the joint projects before the end of the year. That
same day, the Tyumen state arbitration court, on a petition from Rosneft, revoked its
ruling authorising the removal of documents from BP’s Moscow office. This happened
the day after the British Prime Minister David Cameron and a delegation of British
businessmen, including BP’s chief executive Robert Dudley, visited Moscow. The raids
were raised by David Cameron at a meeting with Russian President Dmitry Medvedev,
but no conclusions on the matter were reached.
This latest setback triggered rumours that BP might pull out of Russia. Yet this is an
unlikely and highly undesirable scenario for the company: TNK-BP accounts for a
quarter of the British giant’s production, a fifth of its reserves and a tenth of its earnings.
Having invested $9bn in setting up TNK-BP in 2003, the British had received $16bn in
dividends by 2011.
Other British companies, undeterred by BP’s setbacks, are anxious to enter the Russian
commodity market. According to unofficial Kommersant data, the British Empire Special
Situations investment fund, controlled by the Rockefeller family, is trying to gain access
to two gas fields in Urengoy in Siberia.
28.09.2011 17:46
Lukoil’s Lawsuit against Customs Agency Postponed
http://www.publics.bg/en/news/5893/Lukoil%E2%80%99s_Lawsuit_against_Customs_A
gency_Postponed.html
Experts should have completed the technical expertise on the case November 9
AUTHOR: publics.bg
The lawsuit of Lukoil against the Bulgarian Customs Agency was postponed by the
Administrative Court in Sofia, on experts’ demand, BNR reported. The legal claim comes
in response to the cancelling of the Lukoil refinery licenses by the Agency two months
ago. It led to the almost full halt of fuel production in the technological complex and
customs warehouse in Burgas.
The lawsuit will be restored November 9, when experts should have completed the
technical expertise on the case.
September 27, 2011 18:24
Gas imports from Russia are expected to reach USD 545/1000
cubic meters
http://business-review.ro/power/gas-imports-from-russia-are-expected-to-reach-usd-5451000-cubic-meters/12419/
The price of gas imports from Russia is expected to reach USD 545 for 1000 cubic
meters this October, according to Agerpres newswire. This statement was made by
Hilmar Kroat-Reder, member of the Petrom directorate and responsible for the natural
gas market, during a conference on energy.
In the first trimester of 2011, the price of gas imports was USD 400 dollars for 1000
cubic meters. However, the price for natural gas from the local production stood at USD
155.
Kroat-Reder mentioned that the price of natural gas from the local production hasn't
suffered any adjustment, not even with the medium inflation rate of 6 to 8 percent, in the
last three years. In July, the local production of natural gas represented 83 percent of all
sources, with Romgaz and Petrom covering over 95 percent from this source.
The Petrom representative added that the Romanian natural gas market is not attractive
for investors, due to a lack of connectivity to regional markets. The liberalization of the
natural gas market should contribute to an increase in investments and reduced tariffs for
this market.
Ovidiu Posirca
Gazprom
Gazprom to be offered several Belarusian assets
http://www.bne.eu/dispatch_text16714
bne
September 29, 2011
Russian state giant Gazprom may get its hands on several major Belarusian assets,
Alexander Surikov, Russian ambassador to Belarus, claimed to Prime on Wednesday, as
Belarus insisted it expects no delay to the next tranche of the Russian-led bail out
programme.
The diplomat told reporters that Minsk may offer the gas giant a role in the privatization
of petrochemical company Grodno Azot - which is a major gas consumer - as well as
power companies and other chemicals concerns. The claim follows a call from President
Alexander Lukshenko for Gazprom to expand its role in the privatization of Belarusian
assets from its planned purchase of pipeline operator Beltransgaz.
Minsk and Moscow have been arguing over the price of Belarusian state assets for
months, with Russia expecting to receive favourable valuations in return for the $3bn
EurAsEC bail out agreed in the summer. However, in classic style, Lukashenko appears
to have changed tack once the first tranche of the loan was received, resisting Russian
pressure to sell the assets and turning his attention to attempts to get a bail out from the
IMF.
That has led to suggestions that the second $400m tranche of the EurAsEC loan - due in
November - could be delayed. However, Belarusian vice premier Sergei Rumas claimed
on Wednesday that the cash will arrive, reports Interfax. "We joined the program to
comply with every requirement and get all tranches of the loan," he said, insisting that his
country is complying with all necessary requirements.
Romania - UPDATE 1-Factors to watch on Sept 29
http://www.reuters.com/article/2011/09/29/idUSL5E7KT05M20110929
PETROM
Romania's top oil and gas company Petrom , controlled by Austria's OMV , is in
talks to sell about 130 petrol stations it holds in Romania, almost a quarter of its
total gas stations, to Serbian oil firm NIS, majority owned by Russia's Gazprom
Neft , market sources said.
Ziarul Financiar, Page 1
Gazprom Seeking Short-Term Debt Amid Market Rout: Russia Credit
http://www.bloomberg.com/news/2011-09-28/gazprom-seeking-short-term-debt-amidmarket-rout-russia-credit.html
By Anna Shiryaevskaya and Denis Maternovsky - Sep 28, 2011 10:00 PM GMT+0200
OAO Gazprom is seeking to raise short-term funds outside Russia for the first time in
almost a year after the worst month for emerging-market debt since 2008.
The world’s biggest natural-gas producer will meet investors in Switzerland from Oct. 3
and may sell dollar- denominated euro commercial paper, according to a person with
knowledge of the plans. Moscow-based Gazprom’s July 2013 dollar bonds yielded
5.3276 percent on Sept. 27, the highest level since June 2010. They traded at the biggest
premium to Petroleo Brasileiro SA (PETR4) debt in 15 months the previous day, data
compiled by Bloomberg show.
Gazprom is looking at shorter-term paper as concern the world is headed for recession
sent average yields on corporate debt in developing nations up 80 basis points this month,
the biggest jump since October 2008, according to JPMorgan Chase & Co.’s Corporate
EMBI Index. The government canceled an auction of 10 billion rubles of four-year bonds
this week, the second debt sale it’s pulled in a row, after yields soared to a record.
“Even though I like the company, I see more risk for deterioration of global growth
conditions,” Sergey Dergachev, who helps manage $8.5 billion of emerging-market debt
at Union Investment Privatfonds in Frankfurt, said in e-mailed comments on Sept. 28.
Bonds like Gazprom’s “will be punished first across the curve, and it does not matter
whether these names have strong fundamentals or not.”
New Debt
Dergachev said he cut back his holdings of Gazprom bonds this week, along with debt of
OAO Sberbank, Russia’s biggest lender, partly because Finance Minister Alexei Kudrin’s
dismissal on Sept. 26 raised concerns about a loosening of the country’s budget and
monetary policy.
Gazprom is boosting its borrowing program this year by 67 percent more than planned
after the company raised its 2011 investments by 56 percent while building pipelines in
Russia’s Far East and to Europe, the biggest consumer of Gazprom gas. The producer
aims to keep its debt to earnings before interest, taxes, depreciation and amortization ratio
at about 0.8. The ratio for Rio de Janeiro-based Petrobras, Brazil’s state-run oil producer,
was 1.1 in 2010, data compiled by Bloomberg show.
“One should borrow now because it may get worse later,” Petr Grishin, a senior credit
analyst at VTB Capital, the investment banking arm of Russia’s second-largest lender,
said by phone in Moscow. “Euro commercial paper will help them do so fast, easy and
cheap.”
Negative Flow
Three-month Euribor -- the rate banks say that they pay for three-month loans in euros -has remained above 1.5 percent this month, compared with an average 1.36 percent this
year. One-week Euribor increased to 1.228 percent on Sept. 28, the highest level since
Aug. 9.
Gazprom registered $4 billion of euro commercial paper two years ago, saying the funds
would help the Moscow-based company manage short-term cash flows. A debut $600
million of three- month paper was sold at a 3.4 percent annual yield in September 2009.
While Gazprom had record earnings in the first quarter, the last time that it reported, the
producer’s free cash flow swung to negative from 278 billion rubles ($8.8 billion) a year
earlier as capital expenditures rose.
The increase in the investment program this year as well as rising mineral extraction
taxes mean Gazprom is in need of financing now, said VTB Capital’s Grishin. The
producer also faces a six-month delay in higher domestic fees, after the government
pushed back an increase in regulated gas and transportation prices to July 1, he said.
Record Earnings
Gazprom’s 2013 bond yields narrowed yesterday, trimming the increase since the
beginning of August to 213 basis points, or 2.13 percentage points, data compiled by
Bloomberg show. Similar-maturity notes of Petrobras, Brazil’s state-controlled oil
company, yielded 2.73 percent on Sept. 28, up 117 basis points in the same period.
Officials at Gazprom’s press service declined to comment on the company’s borrowing
plans when contacted by Bloomberg News. In June, Andrey Kruglov, the chief financial
officer, said Gazprom has no “great need” to boost debt levels and “won’t borrow just for
the sake of it.” The producer expects record earnings in 2011 as demand recovers from
the global economic crisis and oil gains push gas prices higher, Chief Executive Officer
Alexei Miller said in June.
Urals crude, Russia’s benchmark export blend, has slumped 14 percent from its 2011high of $122.88 a barrel in northwest Europe in April. Oil is the country’s biggest
revenue earner and Urals traded at $104.85 yesterday, below the $109 level the
government needs it to average to balance its budget this year.
Weakening Ruble
The ruble weakened 0.1 percent to 31.75 per dollar yesterday, after rebounding on Sept.
27 from its weakest level since August 2009. The currency has tumbled 14 percent from
its strongest price in 2011. Non-deliverable forwards, or NDFs, which provide a guide to
expectations of currency movements and interest-rate differentials, showed the ruble at
32.2183 per dollar in three months.
Russia’s ruble notes due in August 2016 rose yesterday, sending the yield 30 basis points
lower to 8.17 percent. The yield hit 8.74 percent on Sept. 26, the highest level since the
notes were sold in August 2010. The yield on Russia’s ruble Eurobond due in 2018 rose
two basis points to 8.194 percent. Russia’s dollar bonds due in 2020 climbed, pushing the
yield eight basis points lower to 5.139 percent.
The cost of protecting Russian debt against non-payment for five years using creditdefault swaps jumped six basis points to 297 basis points, up from as low as 122 on April
6, according to data provider CMA, which is owned by CME Group Inc. and compiles
prices quoted by dealers in the privately negotiated market.
Yield Premium
The contracts pay the buyer face value in exchange for the underlying securities or the
cash equivalent should a government or company fail to adhere to its debt agreements.
The extra yield investors demand to hold Russian debt rather than U.S. Treasuries rose
one basis point to 391, according to JPMorgan EMBIG indexes. The difference compares
with 254 for debt of Mexico -- rated the same level as Russia at Baa1 by Moody’s
Investors Service, the third-lowest investment grade -- and 256 for Brazil, rated one step
lower at Baa2 by Moody’s.
The yield spread on Russian bonds is 56 basis points below the average for emerging
markets, down from a 15-month high of 105 in February 2010, according to JPMorgan
Indexes.
Gazprom is raising investments to 1.28 trillion rubles as it builds domestic pipelines and
the Nord Stream network, the company’s first direct link to Europe. The pipeline
bypasses Ukraine, where pricing disputes have disrupted Gazprom’s winter supplies to
Europe at least twice since 2006.
Cash Squeeze
Borrowing options at home declined this month with a surge in bond yields and a decline
in funds available to banks. The central bank provided the biggest cash injection to
lenders in two years on Sept. 16, and cut the interest rate charged on repurchase loans two
days earlier in a bid to bolster money supply.
The three-month MosPrime rate, the average rate banks say they are charging to lend to
each other, climbed two basis points to 6.66 percent on Sept. 27, the highest level since
December 2009, data compiled by Bloomberg show.
Gazprom has 300 billion rubles of bonds registered, and none of them were sold in the
first half of the year, according to CFO Kruglov. Since Standard & Poor’s cut the U.S.’
top credit rating on Aug. 5, 15.7 billion rubles of debt has been sold in Russia, down 91
percent from the same period last year, according to data compiled by Bloomberg.That is
the lowest amount sold in that period since 2007.
‘State Coffers’
The company may find it easier to borrow for shorter terms than to issue longer-maturity
debt in the current market, said Sergei Goncharov, a fixed income analyst at Troika
Dialog.
The $10 billion Nord Stream project is designed to carry 27.5 billion cubic meters (971
billion cubic feet) of gas a year under the Baltic Sea to Germany. Gazprom plans to
double the amount of gas conveyed by the end of 2012.
“Nord Stream is a very good project, very much needed for our partners, for Gazprom,
for the Russian economy,” Prime Minister Vladimir Putin said on Sept. 6, after the first
gas was pumped into the link. “It’s a big, significant source of export revenue for the
state coffers, for Gazprom’s earnings so it can develop its production.”
Oil and gas account for 17 percent of Russia’s gross domestic product, compared with
less than 10 percent of Brazilian GDP, government data show. Energy sales contribute as
much as 40 percent of budget revenue.
Arctic Yamal
Putin has pushed Gazprom at home to build gas distribution networks to help develop the
economy of the Far East, which is closer to Beijing than Moscow, as well as pipelines to
allow the development of the Arctic Yamal Peninsula, one of Russia’s biggest sources of
untapped gas.
Including the projects from these regions, Russia may boost natural-gas output to 1
trillion cubic meters a year from about 650 billion cubic meters now, Putin said in
October 2010, while discussing the country’s 20-year gas development program.
“Gazprom standalone credit quality is extremely strong and six-month risk could be very
well placed,” Union Investment’s Dergachev said. “In Switzerland, commercial papers
are very welcome.”
To contact the reporters on this story: Anna Shiryaevskaya in Moscow at
[email protected]; Denis Maternovsky in Moscow at
[email protected]
To contact the editors responsible for this story: Gavin Serkin at [email protected];
Will Kennedy at [email protected]
UPDATE 2-Europe's fear of Russian gas behind Gazprom raids
http://in.reuters.com/article/2011/09/28/gazprom-europe-idINL5E7KS16320110928
Wed, Sep 28 2011
* EU launches investigation into Gazprom's subsidiaries
* Raids linked to EU efforts to cut dependence on Russian gas
* EU, Russia compete for sources of gas
* Gazprom eyes bigger EU gas market share (Adds details, comments, background)
By Vladimir Soldatkin
MOSCOW, Sept 28 (Reuters) - Russian gas exporter Gazprom said it would cooperate
with an EU competition probe of its units, while sources on both sides said on
Wednesday the real source of tension was Europe's fear of its growing reliance on
Russian gas.
A European Commission official said raids on the units this week were part of efforts to
cut dependence on Russian gas, and Gazprom sources suggested the EU was acting out of
worry over progress on Russia's pipeline projects that would increase Moscow's share of
European energy markets.
Officials from the executive Commission launched the raids in central and eastern
European states to investigate firms involved in the supply, transmission and storage of
natural gas. The Commission has said the raids were linked to suspicions about anticompetitive practices.
A Commission official, who declined to be named, told Reuters the raids were part of the
EU's efforts to wean itself off reliance on Russian gas and concerns about Gazprom's
power as a state-controlled entity.
"The Commission has been much concerned about Gazprom for quite a while. There
have been a number of informal discussions between the Commission with EU
governments and companies about Gazprom," said the official.
Gazprom is Russia's biggest company and the world's largest gas producer. President
Dmitry Medvedev is a former chairman, and some critics have accused Prime Minister
Vladimir Putin of using energy exports as a lever in geopolitical maneuvering.
Gazprom sources suggested the probe was linked to progress on its South Stream pipeline
project, a rival to the EU-backed Nabucco link that would bring Caspian region to Europe
while bypassing Russia.
"My guess is that it comes as Russia is speeding up its projects, including the South
Stream underwater link," one of Gazprom sources said.
The raids were carried out as rivalry between Russia and the EU over Caspian
hydrocarbon resources heats up and a pricing row with Ukraine, a transit country for
Russian gas supplies to Europe, persists.
Gazprom, Russia's largest company with capitalisation of $113 billion, is looking to
increase its gas supplies to Europe this year by 12 percent to 155 billion cubic metres. It
also eyeing a 30 percent share of the European gas market, up from around 25 percent
now, in coming years.
In a statement published on Wednesday the company said that the Commission had not
informed it of any claims and the raids did not amount to accusations it had broken
competition law. Gazprom added that it was ready to fully cooperate over the probe with
the EU authorities.
The raids were carried out in Gazprom's subsidiaries including Gazprom Germania and
the Czech Republic's Vemex, which earlier this month bought a controlling stake in
Czech energy retailer RSP Energy.
A Commission spokeswoman said regulators had just begun their investigation and had
not yet drawn any conclusions.
"We're at the beginning of the investigation, we have our suspicions and we have to see
whether these are confirmed on the basis of the evidence we find and our analysis,"
spokeswoman Amelia Torres told a daily news briefing in Brussels.
THIRD ENERGY PACKAGE
The EU is working on implementation of the so-called Third Energy Package, which
imposes limits on the ownership of EU pipeline infrastructure by gas suppliers and calls
for the "unbundling" of over-concentrated ownership.
Under the rules, Russia could be forced to sell off parts of its pipeline network in the EU,
which has sought to liberalise the gas and power markets in recent years.
Wielding its antitrust tools and the threat of fines up to 10 percent of a company's global
turnover, the EU executive has in recent years forced E.ON (EONGn.DE: Quote, Profile,
Research), RWE and ENI to open up or sell their pipelines to rivals. E.ON and GDF had
also to dismantle their market-sharing deals.
A group of experts from European regulators is expected to meet Russian colleagues in
Moscow on Oct. 6-7 to discuss the package among other issues.
Vladimir Feigin, president of the Energy and Finance Institute in Moscow and a member
of the Russian delegation, said the European Commission was taking a "dangerous path"
with the raids.
"It's not a simple demonstration of muscles.... There are lots of issues, which are highly
politicised, including Gazprom's long-term contracts," he said.
These contracts have been the subject of heated debates with the Russian company's
clients, including Germany's E.ON (EONGn.DE: Quote, Profile, Research), which call
for a spot price mechanism as a way to obtain cheaper gas.
Gazprom sources told Reuters that it may take years for the European Union's
competition authority to analyse the results of its raids and draw any conclusions.
(Additional reporting by Melissa Akin in Yuzhno-Sakhalinsk and Charlie Dunmore and
Foo Yun Chee in Brussels; Editing by Douglas Busvine, Steve Gutterman and Anthony
Barker)
Gazprom Gas Supply Contracts Are Focus of EU’s Antitrust Probe
http://www.businessweek.com/news/2011-09-28/gazprom-gas-supply-contracts-arefocus-of-eu-s-antitrust-probe.html
September 28, 2011, 8:23 PM EDT
By Aoife White and Anna Shiryaevskaya
Sept. 29 (Bloomberg) -- OAO Gazprom’s natural gas contracts are the focus of European
Union antitrust investigators’ raids across central and eastern Europe that sought to
uncover information on prices and supplies to customers.
The probe is looking at companies with long-term natural gas supply contracts with
Gazprom and was “a way to circumvent confidentiality clauses” that prevent regulators
from getting data on capacity, Bulgaria Energy Minister Traicho Traikov told reporters in
Sofia.
Gazprom, which supplies about a quarter of European gas needs, has been looking to
further expand in Europe, its biggest market by revenue. At the same time, Europe’s
dependence on Russia’s state-owned gas monopoly has spurred the EU to try to diversify
energy supplies and trade more gas within its borders by opening up markets and
pipelines.
“We are on the verge of a battle between the cartel of consumers and the cartel of
suppliers,” Alexander Rahr, an analyst at the Berlin-based German Council on Foreign
Relations, said by phone yesterday. “The EU did a bit of muscle-flexing, as Gazprom is
trying to reach separate agreements with companies behind Brussels’ back.”
Companies found to violate EU competition rules can be fined as much as 10 percent of
annual revenue. Earlier EU probes led RWE AG to sell its gas-transmission network and
E.ON AG to shed its German power grid in settlements that helped them avoid large
penalties.
Watching Probe ‘Closely’
Gazprom said Sept. 27 that EU officials visited its German and Czech units to study
documents and that the company was cooperating with regulators. The raid doesn’t mean
that Gazprom breached any antitrust rules, both Gazprom and the EU said.
RWE AG, E.ON AG AG’s Ruhrgas and Hungary units, OMV AG and Poland’s Polskie
Gornictwo Naftowe I Gazownictwo SA said Sept. 27 that they were also raided by the
European Commission. As many as seven other companies in Bulgaria, Latvia, Estonia
and Slovakia also said they were raided.
Russia expects the EU investigation to respect the rights of Russian investors and gas
suppliers, the country’s energy ministry said in an e-mailed statement. Russia is watching
the probe “closely,” Prime Minister Vladimir Putin’s spokesman Dmitry Peskov said by
telephone.
Destination Clauses
EU regulators are likely to focus on so-called destination clauses in Gazprom contracts
signed in the 1980s and 1990s that forbid customers from selling gas outside one country
and now contravene EU rules that encourage gas to be sold across the 27- nation bloc,
said Chris Rogers, an analyst at Bloomberg Industries.
“One of the problems with gas contracts is that they’re super-secret,” Rogers said in a
telephone interview. The only way for regulators to secure information on gas prices or
volumes “is if they go and grab them for themselves.”
A lengthy EU investigation “makes life more complex” and may slow down negotiations
on new contracts between Gazprom and two of its biggest European customers RWE and
E.ON, Rogers said.
Gazprom has been in arbitration with RWE, its main partner for supplying the Czech
Republic, and E.ON, Germany’s biggest utility, about prices for gas under long-term
contracts. E.ON and RWE are seeking to weaken the link between gas and oil prices in
Gazprom’s supply contracts as oil costs surged. The companies lost hundreds of millions
of dollars in the past year as they sold gas to customers at less than it cost to source.
Selective Discounts
The raids may pressure Gazprom to provide the same pricing to all European gas
customers, Valery Nesterov, an oil and gas analyst at Troika Dialog in Moscow, said by
phone. Gazprom has “selectively” provided discounts to some partners, he said.
While the raids are the first time Gazprom has been targeted by EU antitrust regulators,
the company in June said that the European Commission set “unacceptable conditions”
for the company’s planned purchase of a stake in Central European Gas Hub AG in
Austria.
“Europe doesn’t want to give away control of the market to Gazprom fearing it may take
roots there,” Rahr said. “The EU is making its position tougher while Gazprom just wants
to make money in the EU.”
The EU approved legislation in 2009 to spur more competition and investment in the
energy industry that would separate companies’ control over energy infrastructure and
energy supplies. The EU separately plans to oversee energy contracts between European
nations and suppliers such as Gazprom to make sure they respect competition rules.
Lithuania’s government in January asked the EU to investigate Gazprom for refusing to
cut gas prices after it announced it would split ownership of gas sales and transmission.
Overgas, Bulgaria’s biggest private natural gas distributor which is partly owned by
Gazprom, also complained to the EU in November after state-owned Bulgartransgaz AD
blocked access to a high-pressure pipeline, Overgas spokeswoman Nerry Terzieva said in
a phone interview.
--With assistance from Elizabeth Konstantinova in Sofia, Ilya Arkhipov in Moscow,
Milda Seputyte in Vilnius, Ilya Arkhipov in Moscow, Aaron Eglitis in Riga, Edith Balazs
in Budapest, Ott Ummelas in Tallinn, Radoslav Tomek in Bratislava, Stefan Nicola in
Berlin, Zoe Schneeweiss in Fuschl am See and Ben Farey in London. Editors: Anthony
Aarons, Will Kennedy
To contact the reporters on this story: Aoife White in Brussels at
[email protected]. Anna Shiryaevskaya in Moscow at
[email protected]
To contact the editor responsible for this story: Anthony Aarons at
[email protected].
The Empire Strikes Back: European Energy and the Return of
Gazprom
http://www.ensec.org/index.php?option=com_content&view=article&id=328:the-empirestrikes-back-european-energy-and-the-return-ofgazprom&catid=118:content&Itemid=376
Wednesday, 28 September 2011 00:00 Matthew Hulbert and Dr. Christian Brutsch
Compared to the Eurozone’s public finances, European energy policy looks decidedly
bright. Capacity margins are high, prices are low, even emissions have dropped of late.
The EU's 'Third Package' of gas and power market reforms, which took effect in March,
is set to further enhance supply security, increase competition and improve consumer
choice and services. It all sounds very good, but the problem is that such 'policy hits' are
grounded in weak fundamentals–not silver bullet policy making. Shale gas developments
have turned LNG markets on their head, while deep seated financial frailties and
economic slumps have kept fundamentals weak and growth anemic across EU27 states.
That's making energy policy look good, and political populism all too easy.
But with growth showing tentative signs of recovery and climate policies still placing a
premium on natural gas over coal, complacency and energy populism will come with
costs. Nowhere more so than on natural gas – and the 158 billion cubic meters (bcm) of
Russian supply that the EU will gobble up this year. After dipping to 2002 levels in 2009,
EU gas consumption has surged by 7.2% in 2010, with most analysts expecting that by
2013, demand should have rebounded to pre-crisis levels. Increased LNG shipments to
Asia have already added upward pressure on prices, and Germany’s snap decision to
decommission its last nuclear power plants in 2022 will sustain demand growth for the
foreseeable future. The European Commission, meanwhile, has taken its eyes off the
Asian ball and remains undecided how it should deal with Russia, its single largest
supplier. If RWE, Germany's second largest electricity producer, and Gazprom, the
world's biggest gas firm, implement their recently announced Memorandum of
Understanding (MoU) and establish a joint venture to manage coal and gas plants across
Germany, the UK and the Benelux countries, the EU's Third Package might well follow
Germany’s 2011 decision to toss nuclear power into the dustbin of history.
Thanks to European politicking, Moscow holds the energy aces. Berlin's accelerated
nuclear phase out may be popular, but it is likely to add as much as 20bcm/year to
German gas imports alone. The French ban on shale gas drilling is hardly going to help
reduce energy dependency, while Europe's renewed commitment to democracy and good
governance in its neighborhood may chime with European values, but has done little to
reassure the authoritarian rulers who control alternative upstream sources in Central Asia
and the Middle East that Europe is a credible energy supply bet. Any European state that
follows Germany's nuclear example, emulates France's disdain for fracking, or thinks it
can 'play nice' and win with suspect neighbors will simply strengthen Russia’s hand.
Missing the point?
Overly dramatic? Perhaps. Conventional wisdom in Europe holds that Gazprom is in
deep trouble. The main reason for this relates to cheap spot markets that have been
growing in liquidity. Oil indexed gas from Russia is deemed too expensive for European
consumers to bear, with independent benchmarks on Western European hubs the
preferred option. Move over or lose market share is the clarion call from consumers:
current price spreads clearly point towards this way of thinking between UK wholesale
hub and oil-indexed Russo-German border prices. Unsurprisingly, producers have been
screaming murder. In 2010 Gazprom reportedly agreed to cut oil indexation levels in
some long-term contracts to 85%, but insisted that the three years exemption would not
change its long-term contract system. Algeria went a little further and called for the
formation of a fully fledged gas cartel. So far, it was only really Norway that took price
corrections on the chin by rapidly revising contractual relations to retain its stake in
European supplies.
You’d think that with Gazprom on the ropes and shale gas starting to blossom beyond US
shores that European capitals would not offer Russia an opportunity to regroup. Not so.
In June, the German government shocked utilities, already out of the money on oilindexed prices and burdened with an onerous nuclear fuel tax, when it reversed the
October 2010 amendment that had extend the lifespan of nuclear plants by an average of
12 years in exchange for an annual €2.3bn ‘fuel rod tax’. Faced with a massive capital
expenditure program, ratings downgrades and a negative outlook, RWE went cap in hand
to Gazprom to offer the Russian company a major downstream stake in a rare and
combustible blend of commercial and political brinkmanship.
Commercially, RWE’s gamble might pay off if Gazprom’s entry into the downstream
game made it more amenable to price discounts that would narrow the gap between term
prices and lower hub-based spreads. A more flexible Russian partner might also add
pressure on E.On, RWE’s main competitor in Germany, whose supply contracts expire in
2012 having voiced its preference for '100% spot'. But the fact that Alexey Miller,
chairman of Gazprom, has been talking with both RWE and E.On about prospective tieups suggests that he is far more likely to pitch the utilities against each other rather than
to make concessions. If discounts are offered, they will be given on the strict
understanding that oil indexation will remain the basis of Russian supply pricing in any
long term take-or-pay contract. In short, Gazprom intends to use RWE and E.On as
'sledge hammers' to crack the European spot market 'nut' before it really takes off.
That would be a shame. Spot markets can obviously play out any which way in terms of
price, but moves towards independent gas benchmarks would have been in everyone's
long term market interests – at least within the European context. To that extent, German
politics has given Gazprom an unnecessary eleventh hour reprieve to retain European
market share and a Russian 'market price'. Politicians will no doubt blame RWE for using
Gazprom as collateral in its fight to overturn Berlin's nuclear ban. But they should keep
in mind that the power utility has lost roughly 20% of its market capitalization since the
German parliament decided to accelerate the nuclear phase out and wipe out roughly 30%
of RWE’s installed capacity. The policy message is thus very clear. Chancellor Merkel
must rethink the nuclear turn or RWE will hand Gazprom the keys to European
downstream doors. A classic double catch: RWE is using Gazprom to salvage its nuclear
position, just as much as Gazprom is using RWE (and potentially E.On) to maintain its
pricing policy.
Eventually something has to give. If the German government doesn't budge on nuclear,
RWE might find that its brinkmanship leaves it little choice but to turn the MoU with
Gazprom into a contractual commitment. In the interests of consumers, industry and tax
payers, things arguably shouldn’t get that far; if German courts agree that the government
violated the utilities' property rights, or if Berlin comes to its senses and reinstates the
October 2010 consensus that stretched the phase out until 2036, they probably won’t. But
as the Eurozone debt crisis has shown, German politicians can be stubborn defenders of
voters’ preferences, no matter the costs. And energy populism has a price. Even if Berlin
keeps some nuclear generation capacity online, Germany will still have to look to gas to
fill most of its gaps. This is exactly what Gazprom is banking on. Germany's nuclear
window has offered the Russia a perfect opportunity to keep exports high and prices firm.
If it all goes to plan, Russia will be able to feed Europe with discounted gas—on its own
joint venture terms.
Russian hugs
Given the complexity of the games underway, it’s impossible to say how the RWEGazprom MoU will or won't play out. But the simple fact that utilities are considering the
comforts of a Russian bear hug has set alarm bells ringing in Brussels and beyond. And
with good reason: German brinkmanship has exposed the deep rooted frailties that
pervade European Energy Policy on pricing, supply diversification and unbundling.
Besides threatening a return to the oil-indexed dark ages, an RWE-Gazprom tie-up could
deal the final blow to one of the few supply side measures among the EU’s 2020 energy
infrastructure priorities: the Nabucco pipeline.
RWE has long been the driving utility force behind Nabucco, and it does not take a
clairvoyant to see the 'synergies' created from a tie up would ensure RWE tucked in
behind Gazprom's South Stream initiative, not to fight the Russian giant tooth and nail for
strategic control of the 'Southern Corridor'. No matter how much Brussels has invested
branding the likes of TAP, AGRI or ITGI as 'European' projects, it is highly unlikely that
any other pipeline will see the light of day besides South Stream. Today's spread bets on
South Stream and Nabucco from countries and utilities involved, displays just how little
credence 'projects of European interest' have among those who understand that to be
commercially viable, one, and only one, pipeline project can prevail.
This hits on a deeper European problem. Even if Nabucco were to succeed, and even if
Azerbaijan were to bet on the EU, rather than Russia, Gazprom would still have a
downstream say. It already controls 20% of the German gas market through linkages with
BASF, Wintershall and Wingas, and looks determined to use North Stream take offs to
increase its stake in the Netherlands, France and the UK. More importantly, Gazprom
also holds a 50% stake in OMV's Baumgarten transmission hub that is designated to
connect Nabucco to European pipelines. Last but not least, the Russian firm has ramped
up storage-capacity across multiple markets including Austria, Hungary and Netherlands,
with a view to expanding facilities in Serbia, France, Belgium and Britain.
This underpins why the RWE-Gazprom tie up is so crucial. Although the deal would
have to overcome political opposition in Germany and to conform to the growing body of
legislation that envelops the Third Energy Package, it will be hard to close the 'vertical
integration' flood gates once Gazprom claims a major stake in German production and
distribution. The Russian company is already talking with France’s GDF-Suez (a Nord
Stream partner) and Italy is no doubt on the list. As Central and Eastern European states
will be left to fend for themselves, the Third Package might well be remembered as a lore
of 'legal niceties'. Russo-German political and commercial realities will hold sway. As
the fine print of European legislation points out, national regulators should take the
'utmost account' of the European Commission’s terms and opinions. But this won't cut
much ice with utilities whose profits and survival depend on swap agreements with
Gazprom, or with Moscow once Gazprom has a say on downstream rents.
From regional supplier to global player
Vertical control is of course exactly what any ambitious producer state dreams of. And
the bad news for Europe is that things might get worse. While the EU has been caught up
in increasingly parochial squabbles over energy efficiency, renewables, smart grids and
the control of transmission systems, Gazprom has turned to the East, and is reportedly
close to signing a 68bcm/y deal with China. True, we've been there before. Gazprom and
CNPC struck a similar gas MoU in 2006 only to see it flounder on pricing problems. But
the rationale of linking one of the world's largest energy consumers to one of the world’s
biggest gas reserves remains as compelling as ever, and Beijing has already moved the
debate on by offering prospective advanced payments of $25-40bn in return for 30bcm/y
of discounted gas.
Although Gazprom will haggle to raise the current (alleged) $300/million cubic meters
(mcm) target price, Moscow knows that it needs Chinese cash to consolidate its Eastern
Gas Program and that spare funds could enable it to upgrade the integrated gas
production, transportation and supply system that connects Eastern Siberia and the Far
East. Gazprom also knows that while China may not be prepared to pay European gas
prices, it is likely to agree to some kind of oil index link. Beijing is too cautions to buy
into a buyers' market, not the least because both Sakhalin and Shtokman have been
earmarked for LNG development and might produce as much as 62 million tons a year by
2030. Even before the Fukushima meltdown boosted Japanese demand, Gazprom had
been discussing prospective LNG deals with the likes of South Korea, India, Vietnam,
Thailand and Singapore down the line to secure market presence and market share well
beyond traditional Western European hunting grounds.
There is no point in pretending that European politicians have woken up to these
developments, let alone contemplated a 'doomsday' scenario in which Russia links its
East Siberian reserves to the Unified Gas Supply System in a way that would allow it to
switch between LNG or pipeline exports and route supplies to either the Atlantic or the
Pacific basin at a mouse click. Even if the engineering and financial strains mean that
Yamal will feed the EU for some time to come, Europe needs to understand that as the
gravitational pull of supplies is shifting eastwards, Gazprom's—and Russia's—strategic
focus will be on arbitrage not compromise.
Realignment
Gazprom's return thus highlights a number of bad moves the EU made while it was lulled
by a soft gas market. Investment in storage capacity has been low, reforms to reduce
pricing pressures have been meek and grid integration has been treated as a regional, if
not local problem. More recently, the EU's plans for upstream diversification have been
debunked by its blatant failure to project military power across the Middle East and North
Africa, and Germany's decision to phase out its nuclear assets just as tighter markets were
heralding the golden age of gas has been reckless at best; no matter what showings in
local elections will prove, voter 'preferences' in Germany will not eclipse rising Asian
demand, the energy needs of a European recovery, or potential supply side constraints as
the downside risks of fracking and cracking unconventional gas become more apparent.
European posturing has not only placed supply side eggs into predominantly Russian
baskets, it has also encouraged Gazprom to renew its efforts to move downstream across
the European value chain. If Russia manages to cement supplies to the East and enhance
internationalization strategies across North African and Central Asian markets to boot,
the prospects for European energy will be incredibly bleak, and even more so when
markets will tighten. Who knows, we might be truly grateful to retain an oil-indexed link
by that stage to keep a lid on spiraling gas prices, and applaud those who turned a policy
failure into a 'crowning success'. But like with the Eurozone debt crisis, we will still
wonder whether the price to appease the German voter is worth paying.
Contributor Matthew Hulbert is the Lead Columnist for the European Energy Review
based in Amsterdam and Dr.Christian Brutsch is Senior Lecturer, University of Zurich