Russia 101207
Basic Political Developments
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Moscow, Washington have strong political support for economic cooperation –
ambassador
Russia, NATO may start cooperation on ABM – Beyrle: Following several years
of tense relations over ABM, Russia and NATO may finally start cooperation in
the area, says the US ambassador to Moscow John Beyrle.
RUSSIA, U.S. REACH COMPROMISE ON ALL OF OUTSTANDING ISSUES
OF INTERNATIONAL ADOPTION - RUSSIAN EDUCATION AND
SCIENCE MINISTRY
China, 18 others to miss Liu's Nobel gala - It said the countries were: Russia,
Kazakhstan, Colombia, Tunisia, Saudi Arabia, Pakistan, Serbia, Iraq, Iran,
Vietnam, Afghanistan, Venezuela, the Philippines, Egypt, Sudan, Ukraine, Cuba
and Morocco.
WIKILEAKS ON RUSSIA
o Moscow knew about NATO plans to protect Baltic States, Poland from
"Russian aggressor" – source
o WikiLeaks: NATO Expanded Baltic Defense Plans After Georgia Conflict
o NATO's E.Europe plans amid Russia fears: WikiLeaks
o Wikileaks: US-Nato plan to defend Baltics from Russia
o Leaked memo describes Russia's security chiefs as maintaining 'a Cold
War mentality'
o WikiLeaks Shows Intel Blackmailed Russian Govt.
o Intel threatened to pull out of Russia
RUSSIA-EU SUMMIT
o Medvedev to take part in 26th Russia-EU summit - The Russian leader’s
aide Sergei Prikhodko has voiced hope that the summit will complete the
procedure of Russia’s joining the WTO… The Brussels summit agenda
also features such important problems as climate change, energy security,
economics, visa-granting, and also international and regional issues. The
parties to the summit meeting will likewise take up Iran’s nuclear
programme and some frozen conflicts. Sergei Prikhodko does not rule out
that Russia and the European Union may sign a new framework agreement
on cooperation some time next year.
o RF-EU summit to deal with visa issues, WTO, energy
o Medvedev to attend RF-EU summit in Brussels Tue
o One step closer to the WTO – EU-Russia summit kicks off in Brussels
o Medvedev Heads for Tough EU Talks in Brussels - By Nikolaus von
Twickel
o Russia Moves Closer to WTO Membership With EU Breakthrough Deal
o EU to sign trade document with Russia's 'lilliputian' - ANDREW
RETTMAN
Kazakh govt approves documents on Common Economic Space - Minister for
Economic Development and Trade Zhanar Aitzhanova said at a government
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session that 17 agreements had been drafted upon instructions of the heads of
state of the Customs Union.
The first meeting with Vladimir Putin - Finnish Prime Minister Mari Kiviniemi
will Friday go to Sankt Petersburg for her first meeting with Russia’s Vladimir
Putin.
Russian General Staff chief visits India - The chief of the Russian General Staff,
Army Gen. Nikolai Makarov, will visit India on December 7-9 to discuss bilateral
military cooperation, the Russian Defense Ministry said on Tuesday.
Russian nuke power company to set up production units in India Atomstroyexport, which is building two 1000 MW reactors at Kudankulam in
Tamil Nadu, said it has decided to set up an equipment manufacturing unit in
India considering the boom in the nuclear business and cut down timeframe for
construction of atomic reactors.
Germany halts plan to transport spent N-fuel rods to Russia - German
Environment Minister Norbert Roettgen said that 951 spent fuel rods from an
experimental reactor in former East Germany will remain at the present storage
facility in Ahaus until further notice because safe reprocessing cannot be
guaranteed at the Mayak nuclear facility in Russia.
Bulgaria: The EUR 6.3bn Belene deal a great success, says FinMin - Signing the
memorandum with the Russian Rosatom only establishes the frame for the future
negotiations on Belene. The real talks are still ahead, said Djankov.
Skolkovo plans to engage Swiss research companies - Russian research institutes
- including the Bauman Moscow State Technical University and the All-Russian
Scientific Research Institute of Aviation Materials, as well as Renova and
Switzerland's Sulzer have already signed up for the project worth a total of $50m.
According to RBC Daily, Renova's head and Skolkovo President Viktor
Vekselberg is a minority shareholder in Sulzer.
Fuel overload blamed for Proton launch failure
Russian Helicopters win Brazilian tender to operate in Amazon basin - The
Russian multi-role Mi-171A1, manufactured by the Ulan-Ude Aviation Plant, a
subsidiary of the Russian Helicopters holding company, won the tender of Brazil
national oil company Petrobras to operate in the Amazon Basin.
Russian Helicopters Holding acquires 24.66% stake in Kazan Helicopters
Russia concerned about foot-dragging by International Tribunals - Russia is
concerned about foot-dragging by the International Tribunals for the former
Yugoslavia and for Rwanda. This came in a statement by the First Deputy
Russian Ambassador to the United Nations Alexander Pankin during the Security
Council meeting on Monday.
Russia must exorcise Stalin's legacy - Kremlin aide: Mikhail Fedotov told Reuters
that people's minds were still shaped by decades of oppressive Soviet rule which
discouraged them from questioning authority and taking initiative.
Major auto station to open at RF-Poland border Tue - A Mamonovo-2 major
permanent versatile border-crossing station for freight-and-passenger vehicles
opens in the Kaliningrad Region at the border of the Russian Federation (RF) and
the Republic of Poland on Tuesday, Alexander Koshlin, deputy head of the
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Kaliningrad territorial department of the Rosgranitsa (Federal Agency for the
Equipment of the State Border of the RF), has told Itar-Tass.
o Medvedev Eyes Polish Privatizations
o Russia, Poland focus on energy, trade
o Beginning of meeting with Prime Minister of Poland Donald Tusk
o Speech at Russian-Polish Public Forum
Russian sailors kept in custody in Puerto Rico
Putin to chair meeting of VEB Supervisory Board Tue - - Russian Prime Minister
Vladimir Putin on Tuesday will chair a meeting of the Supervisory Board of the
"Bank for Development and Foreign Economic Activities" (popularly known as
VEB) state corporation, the government press service announced.
Putin to meet with members of volunteer movement - Russian Prime Minister
Vladimir Putin on Tuesday will take part in a ceremony marking the summing up
of the results of an all-Russia competition among higher and secondary
specialized educational establishments for the right to establish centers for the
training of volunteers for the 2014 XXII Winter Olympic Games and XI
Paralympic Games.
Another terrorist leader eliminated in Dagestan - The leader of a local terrorist
group in Dagestan, Akhmed Abdulkemirov, has been killed, a source with the law
enforcement bodies informs.
Russia must train experts on Islam in Caucasus - Kremlin envoy
March 2000 attackers detained in Karachayevo-Cherkessia - The gunmen
involved in an attack on the federal forces in late February and early March, when
85 paratroopers were killed, were detained in Karachayevo-Cherkessia.
Khakassia governor holds emergency session on electricity failure
All Dimitrovgrad nuclear reactors shut down due to bad weather
Over 53,000 people in Ulyanovsk region left without electricity
Lenin monument blown up in St Pete suburb
Russia's Metro takes top spot - According to TNS Russia Data for the six months
up to October 2010, the Metro-Moscow and Metro-St Petersburg had a joint
readership of 1,445,900 a day. This took them ahead of the previous leader,
Rossiyskaya Gazeta, which had 1,393,400 readers. Moskovsky Komsomolets was
third an average readership of 1,150,600 per issue.
Russian Internet providers may avoid responsibility for sketchy content
Russian Man Indicted for 'Mega-D' Botnet Spam, FBI Says
Russian Press at a Glance, Tuesday, December 7, 2010
Russia Tries to Exploit European Disunity - Pavel K. Baev
Moscow Increases Its Focus on Solving the North Caucasus Riddle - Valery
Dzutsev
MP's aide suspected of espionage confirmed as Russian citizen - source (Part 2)
o 'Spy' confirmed Russian
o New rules on visas would not have stopped 'spy' entering country - Tighter
rules on student visas to be announced by the Coalition today would not
have prevented the suspected Russian spy Ekaterina Zatuliveter entering
the country.
o Russian spy-row researcher Katia Zatuliveter monitored Liam Fox defence
talks - Ms Zatuliveter, 25, monitored his speeches and blasted the way he
called her native Russia our No1 threat. Writing online in 2008 before Dr
Fox was part of the Government, she bitterly claimed the West believed
"Russia is always wrong".
o Russian spies: they can’t take their eyes off us - If Katia Zatuliveter was
spying for Russia, she is proof that a new breed of agent is operating, and
on a scale that exceeds the Cold War, says former KGB officer Oleg
Gordievsky.
National Economic Trends
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Russia May Spend Up to $32 Billion on Irrigation After Drought
Free Hand’ on Rates Means Best of Bonds Over: Russia Credit
RUSSIA 2011: Growth but state-led recovery is bad news - While Western
Europe is once more staring into the abyss of sovereign default, Russia is
expected to see economic growth pick up next year. But even Russia's leading
officials admit that the state is carrying the can, while the private sector and
consumers have yet to recover from the shock of 2008's collapse.
Business, Energy or Environmental regulations or discussions
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Norilsk Nickel, Polymetal, Rosneft: Russian Equity Preview
Prokhorov Seeks to Create ‘Top 3’ Gold Producer in 2011 Merger
Moscow Seeks $445 Million in 2011 Asset Sales, Vedomosti Says
Aeroflot to Swap 6.3% Shares For 6 Air Carriers, Kommersant Says
Usmanov May Seek $160 Million in IPO of TV Unit, RBC Daily Says
Puget Ventures Signs Definitive Deal To Buy Cobalt Assets In Russia
Two Russian Grocers Move to Thwart Wal-Mart
Russia Box Office Sales Reach Record $1 Billion, Kommersant Says
‘Nutcracker’ Breaks Russian Movie Budget Record, Vedomosti Says
VTB Capital bought Interros Holding’s 19.3 percent of Rosbank, which is
controlled by Societe Generale, VTB said Monday.(Bloomberg)
A second trans-Siberian railway line may have to be built to handle increasing
freight traffic, Russian Railways said Monday, saying the proposed BAM-2 link
may cost 448 billion rubles ($14.3 billion). (Bloomberg)
Aeroflot closed Monday at 83.94 rubles, up 1.9 percent, after the airline said it
boosted net income 65 percent to $281 million in the first nine months, and
revenue rose 28 percent to $3.16 billion. (Bloomberg)
Norilsk Nickel said Monday that it plans to restart its Lake Johnston nickel mine
in Western Australia in the first half of 2011.(Bloomberg)
Activity in the Oil and Gas sector (including regulatory)
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Rosneft Sells Jan-Feb Sokol Crude To BP At High Premium -Trader
$27Bln Yamal LNG Plan May Earn Tax Break
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INTERVIEW-Yamal region leads Russia's gas surge - Gas superpowers should
divide market share in the face of a global glut, the governor of the Arctic Yamal
Nenets region told Reuters.
Bashneft reports neutral 3Q10 IFRS results
Bashneft Making Foray Into European Trade
Joint Bid for Poland Refiner - Gazprom’s oil arm and Rosneft are interested in
acquiring Grupa Lotos, Poland’s second-biggest refiner, and may team up to
make a competitive bid, Energy Minister Sergei Shmatko said Monday.
Gazprom
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Ukraine pays for November gas in full, Gazprom says
Gazprom, Namcor to Take Piece of Tullow Kudu Stake
Gazprom Neft seeking Arctic offshore assets
Europe Can Lift CO2 Market From Gridlock, Gazprom Says (Update1)
Gazprom to develop cleaner energy in Papa New Guinea
-----------------------------------------------------------------------------------------Full Text Articles
Basic Political Developments
11:06
Moscow, Washington have strong political support for economic cooperation –
ambassador
http://www.interfax.com/news.asp
Russia, NATO may start cooperation on ABM – Beyrle
http://english.ruvr.ru/2010/12/07/36348135.html
Dec 7, 2010 12:15 Moscow Time
Following several years of tense relations over ABM, Russia and NATO may finally start
cooperation in the area, says the US ambassador to Moscow John Beyrle. He points out
in an interview with the Komsomolskaya Pravda daily that in Lisbon NATO made it
perfectly clear that it no longer sees Russia as an enemy and is prepared to jointly build a
new ABM system in Europe. Ambassador Beyrle also confirmed President Barack
Obama’s intention to press for the ratification of the new START treaty before the end of
this year, adding that this is one of the US President’s priorities.
12/07 11:37 RUSSIA, U.S. REACH COMPROMISE ON ALL OF
OUTSTANDING ISSUES OF INTERNATIONAL ADOPTION - RUSSIAN
EDUCATION AND SCIENCE MINISTRY
http://www.interfax.com/
China, 18 others to miss Liu's Nobel gala
http://www.reuters.com/article/idUSLDE6B60BT20101207
3:11am EST
OSLO, Dec 7 (Reuters) - China and 18 other countries have declined invitations to attend
Friday's Nobel Peace Prize ceremony for Chinese dissident Liu Xiaobo, the Norwegian
Nobel Committee said on Tuesday.
It said the countries were: Russia, Kazakhstan, Colombia, Tunisia, Saudi Arabia,
Pakistan, Serbia, Iraq, Iran, Vietnam, Afghanistan, Venezuela, the Philippines, Egypt,
Sudan, Ukraine, Cuba and Morocco. (Reporting by Oslo newsroom)
WIKILEAKS ON RUSSIA
12/07 11:41 Moscow knew about NATO plans to protect Baltic States, Poland from
"Russian aggressor" – source
http://www.interfax.com/
WikiLeaks: NATO Expanded Baltic Defense Plans After Georgia Conflict
http://www.rferl.org/content/article/2241066.html
December 07, 2010
U.S. diplomatic messages newly released by WikiLeaks show that NATO decided to
expand its plans to defend the Baltic states and Poland following the 2008 brief war
between Russia and Georgia.
The leaked U.S.cables, revealed in Britain's "Guardian" newspaper, show that the
NATO plan involved grouping Estonia, Latvia, Lithuania, and Poland into a new regional
defense scheme code-named "Eagle Guardian."
NATO chiefs are reported to have endorsed the plan this year. The cables say the military
plans should be not be discussed publicly as they might lead to an "unnecessary increase"
in NATO-Russia tensions.
The U.S. messages say leaders in the Baltic states and Poland became increasingly
concerned about a potential security threat from Russia following the Georgia conflict. In
the Poland case, the cables say the United States offered to deploy special naval forces to
Baltic ports in Poland and to put F-16 fighter aircraft into Poland.
The details are from some of the thousands of U.S. diplomatic cables that have been
obtained by WikiLeaks and are now being made public.
compiled from agency reports
NATO's E.Europe plans amid Russia fears: WikiLeaks
http://www.google.com/hostednews/afp/article/ALeqM5gxpVY-KG-uayY3INBYxbCFUmJ9A?docId=CNG.faa163142488d3c01327c0ffa2a40643.361
(AFP) – 4 hours ago
LONDON — Military alliance NATO has expanded defence plans in parts of eastern
Europe amid fears that Russia poses an increasing threat, US diplomatic cables released
Tuesday by WikiLeaks showed.
Contingency plans were drawn up for the three Baltic states -- Estonia, Latvia and
Lithuania -- earlier this year after they lobbied for extra protection following the 2008
Russia-Georgia war, said the leaked cables.
The US has also offered to beef up Polish security amid fears of a resurgent Russia, said
the cables, despite the policy of US President Barack Obama's administration to "reset"
relations with Moscow.
Painful memories were stirred in the Baltic states -- all former Soviet republics -- as
Russian troops poured into Georgia in August 2008, the cables show.
"Events in Georgia have dominated the news and discussion here like few other events in
recent memory," said a cable from the American embassy in Riga, Latvia, cited in The
New York Times.
Latvians, at least ethnic Latvians, "look at Georgia and think that this could easily be
them," said the dispatch, one of some 250,000 US diplomatic cables leaked to
whistleblower website WikiLeaks and now being slowly released in small batches.
US admiral James Stavridis, NATO's top commander in Europe, proposed drawing up
defence plans for Lithuania, Latvia and Estonia, which had joined the military alliance in
2004, according to the leaked correspondence.
NATO military officials agreed in January this year to the policy, which groups the Baltic
states with Poland in a new regional defence scheme codenamed Eagle Guardian, said the
cables, according to Britain's Guardian daily.
Earlier calls by eastern Europe for more security guarantees had been stymied by
opposition from western Europe, and in particular Germany, which feared any such
moves could antagonise Russia.
With regard to Polish defences, the US offered various measures which included
deploying special naval forces to Baltic ports in Poland and putting squadrons of F-16
fighter aircraft into the country, according to the cables.
However, US diplomats expressed fears that the moves were not consistent with NATO's
official post-Cold War policy, which is not supposed to regard Russia as a threat.
An October 2009 cable, signed by the American ambassador to NATO, Ivo H. Daalder,
highlighted the concerns.
"The Baltic states clearly believe that the Russian Federation represents a future security
risk and desire a contingency plan to address that risk," said the cable.
"And therein lies the problem. Post-Cold War NATO has consistently said that it no
longer views Russia as a threat."
7 December 2010 Last updated at 01:49 GMT
Wikileaks: US-Nato plan to defend Baltics from Russia
http://www.bbc.co.uk/news/world-europe-11933089
The US and Nato have drawn up plans to defend the Baltic nations against Russia, latest
US diplomatic cables disclosed by Wikileaks show.
The cables, published in the Guardian, reveal plans to expand an existing strategy to
defend Poland to include Estonia, Latvia and Lithuania.
Wikileaks is releasing hundreds of diplomatic cables, angering the US.
Meanwhile, a warrant for the arrest of Wikileaks founder Julian Assange has reached UK
authorities.
Mr Assange, who is believed to be in hiding somewhere in England, is preparing to talk
to British police, his lawyer said.
Mr Assange is wanted for questioning in Sweden in connection with rape allegations
which he denies.
The Swiss post office's bank, PostFinance, has also frozen his accounts.
The latest leaked documents show that in January this year, US Secretary of State Hillary
Clinton apparently signed a confidential cable saying allies in Nato had agreed to expand
the contingency plan to defend Poland, to include the Baltic states.
The nine Nato divisions involved would be American, British, German and Polish, the
Guardian says, citing information leaked to Polish newspaper Gazeta Wyborcza.
The cables say the military plans should not be discussed publicly as it might lead to an
unnecessary increase in Nato-Russia tensions.
BBC World Affairs correspondent Peter Biles says the documents should be seen against
the background of Washington's efforts to "reset" its relations with Russia and improve
co-operation.
One secret cable from the US mission to Nato in Brussels revealed that US Admiral
James Stavridis, the alliance's top commander in Europe, had proposed in January
expanding Nato's contingency plans for defending Poland - known as Eagle Guardian - to
include Lithuania, Latvia, and Estonia.
The cable adds: "The expansion was formally submitted to Allies for decision under a
silence procedure."
Call for secrecy
Another cable, signed by Mrs Clinton, instructs US embassies how to deal with the new
Nato plan for the Baltic states, and stresses that the project must be kept secret.
"We see the expansion of Eagle Guardian as a step toward the possible expansion of
Nato's other existing country-specific contingency plans into regional plans," it says.
Analysts say other cables show a degree of frustration between Warsaw and Washington
over plans to deploy Patriot air defence missiles to Poland.
This had been the key price for a Polish decision to back the Bush administration's wider
missile defence plans.
But rather than getting operational systems with their full crews, the Poles received only
launchers minus their missiles and a token number of US troops.
One senior Polish official is quoted in a cable from February 2009 as telling the
Americans that his country expected to get operational missiles and not what he called
"potted plants".
Arrest warrant
Sources have told the BBC that the European Arrest Warrant for Mr Assange arrived on
Monday afternoon.
Mr Assange's UK lawyer, Mark Stephens, told the BBC: "We are in the process of
making arrangements to meet with the police by consent in order to facilitate the taking
of the question and answer that is needed."
Sweden first issued an arrest warrant for Mr Assange on 18 November but it was
invalidated by a procedural error. A new warrant was issued on 2 December.
PostFinance, in a statement on its website, said Mr Assange had "provided false
information regarding his place of residence" during the account opening process.
"(Mr) Assange entered Geneva as his domicile. Upon inspection, this information was
found to be incorrect.
"(Mr) Assange cannot provide proof of residence in Switzerland and thus does not meet
the criteria for a customer relationship with PostFinance. For this reason, PostFinance is
entitled to close his account."
Wikileaks says it and Mr Assange have lost 100,000 euros in assets in a week.
In one of its most controversial leaks so far, Wikileaks released on Monday a US State
Department cable from February 2009 asking its officials around the world to update a
list of key sites, the loss of which "could critically impact" the US.
The list includes undersea cables, key communications, ports, mineral resources and
firms of strategic importance in countries all over the world.
Former UK Foreign Secretary Sir Malcolm Rifkind described Wikileaks' actions as
"verging on the criminal".
Leaked memo describes Russia's security chiefs as maintaining 'a Cold War
mentality'
http://www.washingtonpost.com/wpdyn/content/article/2010/12/06/AR2010120607241.html
Tuesday, December 7, 2010
New insights into Russia and its security services can be gained from a Nov. 5, 2009,
confidential cable written to FBI Director Robert S. Mueller III before his visit to
Moscow that month. The briefing was among the documents made public by WikiLeaks.
Written by U.S. Ambassador John Beyrle, an accomplished Russia expert, it not only
describes the heads of Moscow's three senior security services, with whom Mueller was
to meet, it also outlines the roles those services play within the Russian power structure.
Beyrle made clear that the three "represent institutions that feel threatened - ideologically
and materially - by the 'reset' in [Russian-U.S.] relations." But, he added, they appreciate
the benefits from cooperation with Washington.
Before describing the personalities of the directors, the U.S. ambassador briefly spelled
out the broader background of what he called the "tandem" relationship between Russian
President Dmitry Medvedev and Prime Minister Vladimir Putin. The two, he wrote,
"reinforced long-standing elite divisions between the 'siloviki' [officials from the security
and intelligence services] and the modernizers . . . [who] recognize that Russia's future
depends on integration with the world economy and that confronting some of the
country's most stubborn problems - such as corruption - requires transparency and the
impartial application of the law."
Beyrle advised that "although there is evidence that their closest advisors spar privately
over policies and personnel matters, the two leaders appear united and project complete
ease with one another in the media." He pointed out that, as of a year ago, Putin remained
more popular than Mevedev.
Mueller was preparing to meet with FSB Director Alexsandr Bortnikov, whose agency,
like the FBI, handles domestic crime, terrorism and counterintelligence; SVR Director
Mikhail Fradkov, whose agency is the equivalent of the CIA; and Internal Affairs
Minister Rashid Nurgaliev, whose department controls police forces and has some
similarities to the U.S. Justice Department.
Beyrle said all three "tend toward a Cold War mentality, which sees the U.S. and its allies
intent on undermining Russia," making "public accusations to that effect." Their
agencies, in turn "are skeptical about the West's motivations and are the most influential
opponents of the engagement agenda."
However, the ambassador pointed out that "none of them is within the 'inner circle' of
Kremlin decision-making, but instead enjoy the reflected power of their sponsors and
allies." Fradkov, who worked for Putin years ago, and Bortnikov are economic specialists
who work "behind the scenes to check the influence of Russia's powerful business
magnates and advance the interests of their allies," Beyrle said. Only Fradkov had
experience in foreign relations, working in the Foreign Trade Ministry in the 1990s and
as ambassador to the European Union for a year beginning in 2002.
Still, only Nurgaliev has supported worldwide cooperative ventures, Beyrle said, and
"openly lamented the culture of corruption with Russia's law enforcement system."
Unlike the FBI, the ambassador said "political factors determine the enthusiasm for
pursuing investigations," and some elements of the security services were said to be
linked to organized crime.
Noting that Russian security service directors play a more open role in politics than do
their counterparts in the West, the ambassador said the three "accrue political power . . .
by using the legal system against political enemies - turning the courts into weapons of
political warfare rather than independent arbiters." But, he added, "Despite their similar
outlook and background, they are also competitors for influence against each other, with
shadowy conflicts occasionally bubbling to the surface."
Mueller was warned that the security services "maintain . . . active surveillance" against
U.S. representatives and have "sought to stifle U.S. humanitarian programs in the North
Caucasus." In addition, there have been investigations and trumped up charges against
Western-supported, nongovernment organizations.
While the FSB had elements working cooperatively with U.S. law enforcement agencies
in the areas of terrorism, narcotics, cybercrime, organized crime and nonproliferation,
that agency's counterintelligence units have carried out "harassing activities against all
embassy personnel [that] spiked in the past several months to a level not seen in many
years," Beyrle wrote. These included false and slanderous attacks in the media, assertions
that spouses had been killed accidentally and searches of homes.
Despite what Beyrle called "these challenges," he said Mueller's visit came with strong
Kremlin backing and "a climate of renewed opportunity."
In fact, he said earlier visits to Moscow by President Obama and Secretary of State
Hillary Rodham Clinton "have produced more positive momentum in our bilateral ties
than I have seen in over a decade."
But he said it was "premature to say we have reached a turning point in overcoming
security service suspicions about U.S. intentions," despite the "vigor" with which the FSB
pushed for Mueller's visit, including Russian payment for his aircraft's overflight and
landing fees.
WikiLeaks Shows Intel Blackmailed Russian Govt.
http://www.tomshardware.com/news/Wikileaks-Intel-Wikileaks-Russian-GovernmentJulian-Assange,11749.html
7:00 PM - December 6, 2010
by Tuan Nguyen - source: Tom's Hardware US
It was somewhat apparent that the 250,000-or-so cables released by WikiLeaks
could make the lives of many rather inconvenient, but it seems that the information
goes much further than just diplomatic negotiations.
It was somewhat apparent that the 250,000-or-so cables released by WikiLeaks could
make the lives of many rather inconvenient. However, it seems that the information goes
much further than just diplomatic negotiations. A new document now shows how Intel
was able to get a waiver from the Russian government to import software that usually
could not have been imported. If we read this right, then the information shown could be
called bullying at best and blackmailing at worst. Some may call it business, though.
Intel apparently received approval to import 1000 encrypted platforms that would be used
for the development of software. Intel, which was represented back then by CEO Craig
Barrett, made it clear that it needed the hardware and software in the country and was
able to leverage its intelligence, if you will, knowing that Russia wanted to become a
"knowledge-based economy." Intel highlighted that it was employing more than 1000
Russian engineers and if it was not able to import those platforms, it would have to lay
off over 200 engineers and R&D work would be moved to India or China. Apparently,
the negotiations involved not only Barrett, but also American Chamber of Commerce
President Andrew Somers on the American side, as well as Russian President Medvedev.
The cable described Intel's appearance as high-level lobbying: "Intel was able to
demonstrate the reasonableness of its request and, as a result, by-passed the current
extensive licensing requirement." The cable stated that the import limit was 1000 units
and there was no waiver for commercial products. The American government described
the activity as sign that the Russian government may be flexible in granting waivers for
certain encryption products.
Intel threatened to pull out of Russia
http://www.theinquirer.net/inquirer/news/1930177/intel-threatened-pull-russia
Furious over Putin's encryption policy
By Nick Farrell
Mon Dec 06 2010, 10:08
CHIPMAKER INTEL threatened to pull its research and development operations out of
Russia and relocate them to India or China last year.
According to a US Department of State cable published by WikiLeaks, Chipzilla was
furious that Putin was not allowing it to import software development platforms
containing strong encryption.
The Russians have not streamlined procedures for importing items containing
cryptographic information. Intel wanted to make sure that its software codes were safe.
The cables reveal that Chipzilla had to engage in some intense and high-level lobbying
before it got a waiver allowing 1,000 encrypted workstations to be imported into Russia.
This effectively meant that Chipzilla was allowed to bypass the cumbersome licensing
process.
Intel seems to have used a few threats, saying that if it could not import these
development kits, there would be no programming work available.
Chipzilla threatened to lay off over 200 engineers and shift its R&D work in Russia to
India or China.
The licensing process took six months and involved submitting samples for analysis to a
laboratory, which meant that Intel could lose its IP through reverse engineering.
RUSSIA-EU SUMMIT
Medvedev to take part in 26th Russia-EU summit
http://english.ruvr.ru/2010/12/07/36347672.html
Dec 7, 2010 12:09 Moscow Time
Russian President Dmitry Medvedev is due to attend the 26th Russia-EU summit, which
is getting under way in Brussels today. The Russian leader’s aide Sergei Prikhodko has
voiced hope that the summit will complete the procedure of Russia’s joining the WTO.
Prikhodko said that the parties to the talks on Russia’s joining the WTO reached the final
stage of the discussion late last month. The Brussels summit agenda also features such
important problems as climate change, energy security, economics, visa-granting, and
also international and regional issues. The parties to the summit meeting will likewise
take up Iran’s nuclear programme and some frozen conflicts. Sergei Prikhodko does not
rule out that Russia and the European Union may sign a new framework agreement on
cooperation some time next year.
RF-EU summit to deal with visa issues, WTO, energy
http://www.itar-tass.com/eng/level2.html?NewsID=15752403&PageNum=0
07.12.2010, 00.51
MOSCOW, December 7 (Itar-Tass) - The Russia-European Union (EU) summit, which
opens in Brussels on Tuesday will focus on matters aimed at abolishing the visa regime,
on the Russian Federation's accession to the World Trade Organization (WTO), and on
energy security.
President Dmitry Medvedev, who completes his visit to Poland on Tuesday and goes to
Belgium, will lead a Russian delegation at the summit. The EU will be represented by its
chairman Herman van Rompuy and European Commission president Jose Manuel
Barroso.
When in Brussels, the Russian president will be accompanied by Foreign Minister Sergei
Lavrov, presidential aide Arkady Dvorkovich, Justice Minister Alexander Konovalov,
Economic Development Minister Elvira Nabiullina, Russian permanent representative to
the EU Vladimir Chizhov, and co-chairman of the Russia-EU Inter-parliamentary
Cooperation Committee Andrei Klimov.
Medvedev to attend RF-EU summit in Brussels Tue
http://www.itar-tass.com/eng/level2.html?NewsID=15752498&PageNum=0
07.12.2010, 03.27
WARSAW, December 7 (Itar-Tass) - Russian President Dmitry Medvedev completes his
official visit to Poland on Tuesday.
After taking part in a ceremony marking the laying of a wreath at the memorial to Soviet
soldiers here on Tuesday morning, Medvedev will leave here by air for Brussels where a
Russia-EU summit will take place. The Russian president will also pay an official visit to
the Kingdom of Belgium.
The visit will begin with an official welcoming ceremony. The programme for the stay of
the Russian Head of State provides for his meeting with King Albert II and talks with
Prime Minister Yves Leterme.
RF presidential aide Sergei Prikhodko told journalists, "The forthcoming Russo-Belgian
meeting at summit level is called upon to give a fresh impetus to the development of
constructive political dialogue between our two countries, the dialogue which is an
integral component of the process of Russia's and the EU's drawing closer together, and
the strengthening of the climate of trust, cooperation and security in Europe".
One step closer to the WTO – EU-Russia summit kicks off in
Brussels
http://rt.com/news/russia-eu-summit-brussels/
Published: 07 December, 2010, 09:37
At the EU-Russia summit in Brussels on Tuesday the two sides are planning to discuss
common challenges and review bilateral relations.
As Dmitry Rogozin, Russia’s ambassador to the EU, believes, no reset in relations with
the EU is needed – just acceleration of the strong ties that already bind the two sides.
The main topic on the agenda is Russia’s long-desired accession to the World Trade
Organization. Recently, there have been many signals from the international community
that this could happen as soon as next year.
Another important issue is a new cooperation agreement between Moscow and Brussels,
as relations have so far been based on the pact signed in 1997, which expired in 2008. It
has been extended every year since then.
Russia and the EU are also to discuss security issues in the joint neighborhood. However,
it is not clear whether Moscow’s proposal to build a unified anti-missile defense system
between Russia, the EU and the US is going to be touched upon at the summit.
The so-called partnership for modernization agreement is also highly ranked on the
agenda. The agreement was signed during the last summit in Russia’s Rostov-on-Don. It
is aimed at modernizing bilateral relations and also getting the EU to help Russia
modernize its economy, industry and social sector, through combining European
experience and Russian resources.
The four main points in Russia-EU relations are called “common spaces”, namely:
economy, which also includes the environment; freedom and justice; external issues such
as security and crisis management; research and education.
The Russian side will be represented by President Dmitry Medvedev and Russia’s
Foreign Minister Sergey Lavrov.
Medvedev Heads for Tough EU Talks in Brussels
http://www.themoscowtimes.com/news/article/medvedev-heads-for-tough-eu-talks-inbrussels/425800.html
06 December 2010
By Nikolaus von Twickel
After a groundbreaking summit in Poland, President Dmitry Medvedev will head to
Brussels on Tuesday for much harder talks with European Union leaders.
Medvedev will push long-standing Russian demands at this year's second EU-Russia
summit, the Kremlin said Monday, but analysts said it was unlikely that the talks would
result in much substantial progress.
Many observers expect the main tangible outcome to be a memorandum sealing approval
of Moscow's bid to join the World Trade Organization, while hopes for visa-free travel
and common ground on foreign and security policy will be projected into a dim future.
"Russia sees the EU as a real strategic partner, linked by sizable economic
interdependence and common approaches to international and regional issues," the
Kremlin said in an e-mailed statement Monday.
But one key foreign policy issue identified earlier this year is unlikely to move forward,
diplomats said.
In June, Medvedev and German Chancellor Angela Merkel pledged to found a joint
Security Committee that would help resolve regional crises and conflicts.
Moscow has since been pushing for the committee, which would basically add Russia to
the council of the bloc's 27 foreign ministers, saying the arrangement would give
substance to its foreign policy cooperation with Brussels.
But the initiative immediately ran into trouble because both sides disagree on the
conditions. Merkel said in June that the first issue to be tackled should be the conflict in
Transdnestr, a separatist sliver of eastern Moldova where Russian troops have kept an
uneasy peace for almost two decades.
Diplomats said Transdnestr was chosen as a test case for Russia's willingness to solve
"frozen conflicts" in its neighborhood.
"It seemed the least insolvable of the insolvable conflicts," a senior EU diplomat told The
Moscow Times on condition of anonymity.
But the Kremlin refuses the notion of conditionality.
"Transdnestr was never put forward as a precondition but as a pilot project," Moscow's
EU ambassador, Vladimir Chizhov, told Interfax in an interview last week.
Chizhov added that the impasse could not be solved without the two conflict parties:
Moldova and the separatist leadership in Tiraspol.
A current political impasse in Moldova makes a fast solution to the conflict unlikely, he
said.
That argument was supported by a second diplomatic source in the EU, who said the
summit was too close to last month's parliamentary elections in Moldova to discuss
Transdnestr in detail.
"It is just too early to talk about that," the source said on condition of anonymity because
he was not authorized to speak to the media.
Analysts have argued that Moscow could do much more to solve the conflict.
"The EU expects Moscow to demonstrate good faith in Transdnestr — and so far there is
no sign of that," said Frazer Cameron, director of the EU-Russia Center, a Brussels-based
think tank.
But Konstantin Zatulin, a United Russia lawmaker who serves as first deputy chairman of
the State Duma's Commonwealth of Independent States Committee, said the EU should
not expect any concessions from Moscow over Transdnestr: "We have no obligation to
Brussels here — our only obligation is to help our citizens who were left defenseless after
the Soviet Union's dissolution," he said by telephone.
The issue also overshadowed last week's summit of the Organization for Security and
Cooperation in the Kazakh capital, Astana, which failed to agree on an action plan to
resolve future conflicts.
Another potentially slow-moving topic will be visa-free travel. The Kremlin jumped on
an initiative revitalized by Spain earlier this year to abolish visa requirements for both
Europeans and Russians, but other EU members quickly countered that Russia should not
get free-travel before a group of post-Soviet states including Belarus and Azerbaijan,
which signed the EU's Eastern Partnership program.
On Monday, the Kremlin said the issue remained a test case. "This is an essential
indicator of whether the EU is ready to build a bigger Europe — a unified economic and
liberal [humanitarian] space," the Kremlin statement said.
Ambassador Fernando Valenzuela, head of the EU delegation to Moscow, said EU
leaders would definitely set no deadline for when visas would be scrapped.
"Artificial deadlines do not help," he told Interfax on Monday.
Instead, Valenzuela said, both sides would probably agree to start new negotiations to
ease visa regulations next year. They would be parallel to talks already under way on
lifting visas altogether, he said.
The summit is the 26th top-level EU-Russia meeting. Both sides meet twice every year,
once in Russia and once in an EU member country.
After the Lisbon Treaty reforms abolished the rotating presidency's say over the EU's
foreign policy, the European venue is set to be Brussels.
In a peculiar gaffe, the Kremlin's statement Monday failed to mention Herman van
Rompuy, the European Union president, saying merely that EU Commission chief Jose
Manuel Barroso would represent the European side.
Russia Moves Closer to WTO Membership With EU Breakthrough Deal
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aeejVX176eFs
By Jennifer M. Freedman
Dec. 7 (Bloomberg) -- Russia will move a step closer to membership in the World Trade
Organization today when it signs an agreement with the European Union settling “key
questions” that have hampered its accession bid for years.
Russian President Dmitry Medvedev and EU leaders including President Herman Van
Rompuy and European Commission President Jose Barroso will sign a memorandum of
understanding that sets the terms to resolve all EU-Russia bilateral issues. Russia, the
largest economy outside the WTO, applied for membership of the Geneva-based trade
arbiter in June 1993.
“We have finished our negotiations with Russia on those terms of Russia’s WTO
accession which were not yet agreed previously and were of particular concern
specifically to the EU,” said John Clancy, the commission’s trade spokesman in Brussels.
“These aspects will be politically endorsed with the signing of the MoU. This bilateral
deal resolves a number of key questions for the EU and brings the accession moment
closer.”
Among the bigger EU concerns that have been settled are Russia’s pricing policies for
lumber exports and railway fees. Finland and the Baltic countries complained that the
policies unfairly aid Russian companies by overcharging European rivals. Russia has
agreed to cut the timber export duty to about 15 percent of customs value from 25
percent, though the lower levy won’t be applied until it joins the WTO.
The 27-nation EU is Russia’s biggest trading partner, accounting for 50.4 percent of
volume in the first nine months of this year, according to the Moscow-based Federal
Customs Service. Trade in goods and services between the two economies climbed
almost 35 percent in the first nine months of 2010 to $217.8 billion, according to data
distributed by the Kremlin.
Natural Gas
The EU shipped about 66 billion euros ($87.8 billion) of products such as machinery,
transport equipment, food and live animals to Russia last year and bought 115 billion
euros of Russian goods. Energy and mineral-fuels products make up 77 percent of EU
imports from Russia. The bloc relies on Russia for more than a quarter of its natural-gas
demand, according to EU statistics office Eurostat.
The accord to be signed at the EU-Russia summit in Brussels doesn’t iron out all Russian
WTO accession issues. The world’s biggest energy supplier must negotiate multilaterally
on a slew of unresolved matters such as conditions for a trade-related investment regime
and its application of health rules for food imports, some of which concern the EU,
Clancy said.
Overflight Fees
“We will continue negotiations alongside other WTO members on technical regulations
and will monitor that Russia implements the commitments it undertook in such areas as
sanitary and veterinary conditions for agricultural imports, intellectual- property rights
and other market-access-related non-tariff regulations,” he said.
Russia also agreed during discussions that ran parallel to its WTO accession talks to alter
the way it imposes fees against European planes for the right to pass over Siberia. The
changes will be made when Russia joins the WTO, Clancy said.
“Once all multilateral questions are resolved and negotiations in Geneva are finished, the
EU countries will have to agree to the whole WTO accession package,” he said. “As
Russia made the link to WTO accession, the implementation of the overflight agreement
will be an important element to be considered at that stage, which could be in six to 12
months from now, if negotiations proceed in a good pace.”
Russia expects to complete negotiations to join the WTO in the first half of 2011, Deputy
Economy Minister Andrei Klepach said in a Nov. 30 interview. While accession will
initially have a negative impact on the auto and aircraft industries, it will be positive for
Russia in the long term, he said.
U.S., Russia
Russia and the U.S. won’t complete accession talks this year because sticking points
remain over issues including U.S. demands for greater access for agricultural products,
mainly poultry and pork, legislation to protect intellectual property and Russian curbs on
imports and exports, Myron Brilliant, senior vice president for international affairs at the
U.S. Chamber of Commerce, said in September.
Russia also has yet to reach an agreement on its WTO accession with Georgia. The
former Soviet republic has threatened to block Russia’s entry to the WTO if its northern
neighbor doesn’t lift a four-year-old economic embargo.
To contact the reporter on this story: Jennifer M. Freedman in Geneva at
[email protected].
To contact the editor responsible for this story: James Hertling at
[email protected].
Last Updated: December 6, 2010 19:01 EST
EU to sign trade document with Russia's 'lilliputian'
http://euobserver.com/9/31442
ANDREW RETTMAN
Today @ 09:29 CET
EUOBSERVER / BRUSSELS - The EU will partly lift its objections to Russia joining
the World Trade Organisation (WTO) at a summit on Tuesday (7 December), eight days
before Russian courts give their verdict in the Khodorkhovsky trial in a process described
by the US as "lipstick on a political pig."
The bilateral memorandum on the WTO to be signed at the summit in Brussels comes
after Russia in November agreed to phase out tariffs on lumber and other raw materials.
EU leaders are saying Russia could join the trade body in 2011. But other EU objections
remain in the multilateral track of WTO talks, where Brussels wants Moscow to stop
using phyto-sanitary rules to restrict imports and to improve intellectual property rights.
Brussels will on Tuesday also tell Russian President Dmitry Medvedev that he has a long
way to go on improving technical standards, such as passport and border security, before
any deal on visa-free travel.
Meanwhile, EU commission official Hugues Mingarelli and Russia's deputy minister for
economic development Andrei Slepnev will put forward a draft "working programme"
for the Partnership for Modernisation, a political initiative to improve the rule of law in
Russia and to encourage high-tech foreign firms to invest in its petro-dominated
economy.
The prospect of WTO entry comes amid a broader reconciliation between Russia and its
historic enemies. Nato in November invited Russia to take part in its missile defence
scheme. And President Medvedev on a rare visit to Poland on Monday promised to fully
open archives on the Soviet Union's 1940 massacre of Polish officers and intellectuals in
Katyn.
Speaking at a conference in Warsaw the same day, the EU's neighbourhood policy
commissioner Stefan Fuele said: "The EU's overarching goal is to bind Russia into a
rules-based international and multilateral order, including the WTO, because
transparency and predictability are the key to good economic and political relations."
The Czech politician added: "We need to recognize that the psychological process of
reconciliation following the Cold War has to run its course ... Recent Polish-Russian
efforts in this respect are of crucial relevance here and I hope further progress will also be
possible between Russia and its other neighbours."
The Brussels summit, a regular twice-yearly affair, falls just a few days before Russian
judges on 15 December give their verdict in the trail of Russian oil tycoon Mikhail
Khodorkhovsky.
A recently leaked cable by the US embassy in Moscow in 2009 described what most EU
officials and diplomats dealing with Russia really think about the case. Entitled "Rule of
law lipstick on a political pig," the cable said: "It shows the effort that the GOR
[government of Russia] is willing to expend in order to save face, in this case by applying
a superficial rule-of-law gloss to a cynical system where political enemies are eliminated
with impunity."
EU officials regularly ask questions about Mr Khodorkhovsky in the so-called EU-Russia
human rights consultations which take place in Brussels two-weeks before each summit.
The Russian side gives boiler-plate answers and refuses to bring along interior ministry
officials or to give access to the talks to NGOs, leaving the EU side deeply disappointed
with the process.
"In his annual address Mdevedev stresses the modernisation partnership, in which they
see visas and technology, but no rights. Russia is aiming at a modernisation parnership
which has no clear legal framework," an EU diplomat said, referring to Mr Medvedev's
speech on Russian TV last week.
The "lipstick on a pig" cable is one of several leaked US notes on Russia, which depict
the country as a "mafia state" where businessmen bring suitcases of cash to the Kremlin
and where the secret service, the FSB, kill non-compliant businessmen.
The US note which annoyed Russia the most so far depicted EU summiteer President
Medvedev as an sidekick to Putin, calling him "Robin" after the Batman cartoons, and a
"lilliputian." Another note said that Mr Putin during the 2008 Russia-Georgia war kept
Mr Barroso out of key meetings and saw him as "a glorified international civil servant not
worthy to be in the Czar's [presence]."
Fresh cables released on the morning of the EU summit also show the limits of the NatoRussia and Poland-Russia detente. The cables say Nato in November approved a
Contingency Plan for how to repel a Russian invasion from the Baltic States and Poland,
involving nine Nato divisions to be deployed via Polish Baltic Sea ports.
The Kremlin's PR agency in Brussels, GPlus, is playing down the importance of the
leaks.
"These allegations are nothing new and they contain no evidence. It's like putting old
rumours in a dryer and pressing the button to spin them round again," a GPlus contact
said.
Kazakh govt approves documents on Common Economic Space
http://www.itar-tass.com/eng/level2.html?NewsID=15752746
07.12.2010, 08.47
ASTANA, December 7 (Itar-Tass) - The Kazakh government approved on Tuesday a
package of documents forming contractual legal framework of the Common Economic
Space involving Kazakhstan, Russia and Belarus.
Minister for Economic Development and Trade Zhanar Aitzhanova said at a government
session that 17 agreements had been drafted upon instructions of the heads of state of the
Customs Union.
“They can be divided into four groups. The first one includes agreements aimed at
ensuring coordinated economic policy,” she said. “The second package of agreements is
aimed at ensuring the freedom of movement of capital and services. The third bloc is
aimed at ensuring the freedom of workforce movement, and the fourth one – access to
services of natural monopolies,” the minister added.
The first meeting with Vladimir Putin
http://www.barentsobserver.com/the-first-meeting-with-vladimir-putin.4857697116321.html
2010-12-06
Finnish Prime Minister Mari Kiviniemi will Friday go to Sankt Petersburg for her first
meeting with Russia’s Vladimir Putin.
Kiviniemi, who took over the reigns as Finnish Prime Minister in June this year, will
meet Putin in his home town of Sankt Petersburg.
According to the Finnish Government, commercial and economic relations and transport
and mobility affairs will be top agenda issues. Also the world economy, EU-Russia
cooperation and issues relating to the Baltic Sea will be discussed, a press release
informs.
Finland is one of Russia’s closest partners in the EU, and the two countries hold bilateral
top meetings every six months. As reported by BarentsObserver, Finland was one of the
countries mentioned as partners in economic modernization by President Dmitry
Medvedev in his last week address on the state of the nation.
The Finnish-Russian top meeting takes place only a month after President Tarja Halonen
was on a three-day state visit to the country.
Text: Atle Staalesen
Russian General Staff chief visits India
http://en.rian.ru/mlitary_news/20101207/161660127.html
03:37 07/12/2010
The chief of the Russian General Staff, Army Gen. Nikolai Makarov, will visit India on
December 7-9 to discuss bilateral military cooperation, the Russian Defense Ministry said
on Tuesday.
Makarov will meet with his Indian counterpart Air Chief Marshal Pradeep Vasant Naik
and other top military commanders.
The sides will focus, in particular, on the preparation for the Indra 2011 joint military
drills.
During his stay in India, Makarov will also visit the BrahMos Aerospace Ltd., a RussianIndian joint venture manufacturing supersonic cruise missiles, and the headquarters of the
50th independent parachute brigade, the first Indian airborne unit formed in 1941.
The Indian and Russian military have conducted joint INDRA exercises since 2003.
The latest drills were held in October this year in the Indian Himalayas.
Russia sent more than 200 troops from its 34th mountain brigade, based in the North
Caucasus, to join the Indian troops in the exercises.
MOSCOW, December 7 (RIA Novosti)
7 Dec, 2010, 02.11PM IST,PTI
Russian nuke power company to set up production units in India
http://economictimes.indiatimes.com/news/international-business/Russian-nuke-powercompany-to-set-up-production-units-in-India/articleshow/7058660.cms
MOSCOW: Eyeing the over 100-billion-dollar civilian nuclear market in India, Russia's
global nuclear project company Atomstroyexport is holding talks with Larsen and Toubro
for setting up a joint venture to manufacture equipment required for construction of
atomic power plants.
Atomstroyexport, which is building two 1000 MW reactors at Kudankulam in Tamil
Nadu, said it has decided to set up an equipment manufacturing unit in India considering
the boom in the nuclear business and cut down timeframe for construction of atomic
reactors.
"We are going to set up a joint venture for production of equipment required for
construction of nuclear power plants. We are currently holding negotiations with Larsen
and Toubro," said Georgy O Kumani, Vice President of Atomstroyexport, a subsidiary of
Rosatom, the state-run nuclear corporation
At present, L&T manufactures reactor vessels for pressurised heavy water reactors and
fast breeder reactors. It has also designed technology and critical equipment and systems
for heavy water plants, fuel re-processing plants and plasma reactors.
Kumani said the proposed production unit will initially manufacture general equipment
and at a later stage will make critical parts of nuclear power plants (NPP).
Asked about investment and share holding pattern of the joint venture, he refused to
elaborate. "We are yet to firm up the deal."
Although commissioning of a nuclear power plant takes three to seven years, Kumani
said the company will be able to operationalise one plant every year after setting up the
manufacturing unit provided the company gets good number of contracts for building
NPP.
Kumani said the manufacturing unit will be operationalise before Atomstroyexport starts
construction of two more atomic power plants in Kudankulam.
Russia's concerns over some clauses of the nuclear liability law has led to delay in
finalising contracts for building these two plants.
"We have already carried out extensive preparations for setting up unit three and unit four
at Kudankulam. We hope to resolve the hurdles soon," Kumani said.
Atomstroyexport has already signed an agreement with Nuclear Power Corporation of
India Limited (NPCIL) for carrying out the first priority design for the two reactors.
Kumani said the first unit of Kudankulam nuclear power plant will be operational by
early next year as its construction has already been completed. The second unit is
expected to be made operational within a year of commissioning of unit-1.
The Atomstroyexport official said he considers India as a very fast growing market for
civilian nuclear power project. The company has already built 31 nuclear power units in
seven countries, including China and Iran.
07/12/2010
Germany halts plan to transport spent N-fuel rods to Russia
http://news.in.msn.com/international/article.aspx?cp-documentid=4669207
K Mammen Mathew
Berlin, Dec 7 (PTI) Germany has halted a controversial plan to transport highly
radioactive reactor fuel rods to Russia for reprocessing and storage of nuclear waste
following strong protests from environmental groups and opposition parties.
German Environment Minister Norbert Roettgen said that 951 spent fuel rods from
an experimental reactor in former East Germany will remain at the present storage
facility in Ahaus until further notice because safe reprocessing cannot be
guaranteed at the Mayak nuclear facility in Russia.
The nuclear fuel reprocessing and storage plant at Mayak in the Urals is not operating at
present and therefore its safety cannot be established, he told reporters in Bonn yesterday.
The Federal Office for Protection Against Radiation had already approved the plan to
ship the fuel rods in 18 containers from a Baltic Sea port to Russia. The fuel rods were
supplied by the former Soviet Union for the experimental reactor at Rossendorf, near
Dresden.
Following the German reunification 20 years ago, the state government of Saxony
dismantled the spent fuel rods from the reactor and sent them to the Ahaus nuclear waste
storage facility in the state of North Rhine Westphalia.
Russia had expressed its readiness to reprocess the spent fuel and store the waste at its
facility under an inter-governmental agreement signed recently.
However, Russian environmental groups and scientists had warned against sending the
radioactive material to Russia saying that the Mayak plant, which was one of the oldest
nuclear research centres in the former Soviet Union, is very unsafe for reprocessing and
storage of waste.
Russian environmental organisations and anti-nuclear activists had in a letter to
Chancellor Angela Merkel, urged her not to send the fuel rods to the Mayak plant, which
had a series of accidents since the 1950s and is now one of the most radioactive
contaminated places in the world.
Germany''s anti-nuclear Green party claimed that the decision to stop the nuclear
shipment to Russia was the result of its campaign against the export.
Greenpeace also welcomed the decision and said it would have been "irresponsible" to
send a nuclear transport to an "ecologically catastrophic region."
The Mayak plant was one of the centres of the ex-Soviet Union''s nuclear weapons
programme and it was kept secret for more than 30 years. A series of accidents in the
plant led to the radioactive contamination of a large territory in the Ural region.
It is estimated that over half a million people have been irradiated and some of them were
exposed to 20 times more radiation levels than during the Chernobyl nuclear disaster.
PTI KMM
Bulgaria: The EUR 6.3bn Belene deal a great success, says FinMin
http://www.balkans.com/open-news.php?uniquenumber=83516
bne - 07.12.2010
The EUR 6.3bn deal for building the Belene Nuclear Power Plant is a great success, said
Bulgaria's Finance Minister Simeon Djankov in an interview for the TV channel Nova
Televizia, reports Novinite.
"The price of EUR 6.3 B is high and we will negotiate to lower it, but to fix it at this
amount right now is still great success," said Djankov.
Signing the memorandum with the Russian Rosatom only establishes the frame for the
future negotiations on Belene. The real talks are still ahead, said Djankov.
He added that there are four possible ways to finance Belene: to finance it through a loan
granted to Bulgaria's National Electric Company (NEK), to use Russian financing, to find
European or Chinese investors or to not build it at all. China has expressed a strong
interest in the NPP project, Djankov confirmed.
"Bulgaria's biggest trump card is the fact the NPP is on EU territory. So "the battle" is not
between 7 million Bulgarians and 150 million Russians, but between 450 Europeans
against 150m Russians," Djakov said. bne.
Skolkovo plans to engage Swiss research companies
http://www.rbcnews.com/free/20101207105119.shtml
RBC, 07.12.2010, Moscow 10:51:19.The Skolkovo Fund Management Company
plans to open a research center for membrane, coating and surface modification technologies that can be used in aircraft building to increase the lifetime of engines within the innovation center. Russian research institutes - including the Bauman
Moscow State Technical University and the All-Russian Scientific Research Institute
of Aviation Materials, as well as Renova and Switzerland's Sulzer have already signed
up for the project worth a total of $50m. According to RBC Daily, Renova's head and
Skolkovo President Viktor Vekselberg is a minority shareholder in Sulzer.
The premises for the project have not yet been determined, however, with the
Kurchatov Institute slated as another possibility. Presumably, two subdivisions of
Sulzer, Sulzer Innotec and Sulzer Metko, will contribute part of their research to the
new center.
Fuel overload blamed for Proton launch failure
http://english.ruvr.ru/2010/12/07/36348739.html
Dec 7, 2010 12:19 Moscow Time
Fuel overload has been singled out as the prime reason for Sunday’s failed launch of the
Proton-M carrier rocket that was supposed to deliver satellites for the completion of
Russia's GLONASS satellite navigation system.
This preliminary conclusion made by a government commission probing the matter
explains why the carrier’s speed was about 100 meters per second below normal at the
moment the three satellites separated from the DM-3 booster.
Russian Helicopters win Brazilian tender to operate in Amazon basin
http://www.shephard.co.uk/news/rotorhub/russian-helicopters-win-brazilian-tender-tooperate-in-amazon-basin/7865/
December 06, 2010
The Russian multi-role Mi-171A1, manufactured by the Ulan-Ude Aviation Plant, a
subsidiary of the Russian Helicopters holding company, won the tender of Brazil national
oil company Petrobras to operate in the Amazon Basin.
Brazilian operators bid in the tender and demonstrated rotorcraft of the leading global
manufacturers to Petrobras: Sikorsky Aircraft, Eurocopter, and the Russian Helicopters
holding company. The heavy Russian rotorcraft Mi-171A1 won the tender through its
combined high characteristics and value for money. It was presented by Аtlas Taxi
Aereo.
The first batch of two Mi-171A1 helicopters in transport configuration is scheduled for
delivery to Brazil in 2011. At the moment the parties have confirmed the technical
parameters and conditions of the delivery. Further deliveries and the creation of an MRO
centre based on a Brazilian company can be reviewed in the future.
"Russian Helicopters holding company is ready to provide for the needs of our Brazilian
partners in rotorcraft. With Petrobras plans to pump up its oil production in the Amazon
Basin the use of Mi-171A1 helicopters in that off road region can become one for the key
factors in preserving the ecology of the relic tropical forests of this unique region,"
Russian Helicopters CEO Dmitry Petrov said.
The Mi-171A1 became the first Russian civil rotorcraft to be delivered to the Brazilian
aviation market. Earlier in 2008 the FSUE Rosoboronexport signed a contract with the
Brazilian Ministry of Defence to deliver 12 military Mi-35M helicopters manufactured
by Rostvertol, a subsidiary of Russian Helicopters. By this time 6 units have been
delivered to the Brazilian side pursuant to that contract; according to the schedule, the
final batch of Mi-35M helicopters may be delivered before end 2011.
The Mi-171A1 was certified in Brazil in 2005 and has a corresponding type certificate. It
can perform night and day flights in adverse weather conditions. The Mi-171A1 can
transport up to 26 passengers or 4 tons of load inside the cabin or 4 tons on an external
sling. The helicopter can carry up to 12 injured with medical personnel; perform search &
rescue and firefighting operations.
Source: Russian Helicopters
Russian Helicopters Holding acquires 24.66% stake in Kazan Helicopters
http://www.bne.eu/dispatch_text13834
Renaissance Capital
December 7, 2010
Event: Yesterday (6 Dec), Kazan Helicopters (KHEL) announced that its major
shareholder, Oboronprom, had transferred a 24.66% stake in KHEL to Russian
Helicopters Holding (100% controlled by Oboronprom). Oboronprom now owns 41.49%
of KHEL, while Russian Helicopters Holdings owns 24.66% and 33.85% is in free float.
Action: The news is neutral for KHEL, in our view. Rationale: We believe that the
transfer of the stake in KHEL from Oboronprom to Russian Helicopters Holding is part
of the consolidation of the Russian helicopter industry and is related to Russian
Helicopter Holding's preparations for an IPO.
Mikhail Safin
Russia concerned about foot-dragging by International Tribunals
http://english.ruvr.ru/2010/12/07/36336020.html
Dec 7, 2010 09:47 Moscow Time
Russia is concerned about foot-dragging by the International Tribunals for the former
Yugoslavia and for Rwanda. This came in a statement by the First Deputy Russian
Ambassador to the United Nations Alexander Pankin during the Security Council
meeting on Monday. The countries that have been formed in the area of the former
Yugoslavia, as well as Rwanda are prepared to mete out justice on their own, he said. The
Chief Prosecutor of the International Tribunal for the former Yugoslavia Serge
Brammertz has said in New York that the Tribunal has failed to meet the deadline, set for
the end of this year.
Russia must exorcise Stalin's legacy - Kremlin aide
http://in.reuters.com/article/idINIndia-53388420101206
1:39am IST
By Thomas Grove
MOSCOW (Reuters) - Russia has no future unless it can overcome its totalitarian
mindset and understand the full scale of Soviet dictator Josef Stalin's repressions, the
Kremlin's top human rights advisor said on Monday.
Mikhail Fedotov told Reuters that people's minds were still shaped by decades of
oppressive Soviet rule which discouraged them from questioning authority and taking
initiative.
"It is necessary to overcome the remnants of the totalitarian regime, because it is the most
important aspect of the policy of modernisation," Fedotov said in an interview.
He said Russia's Soviet legacy was inextricably linked with its main problems such as
corruption and lack of press freedom.
Criticising Stalin still causes outrage among some Russians but Medvedev has done so
himself on various occasions, suggesting Fedotov's plans may not fall on deaf ears.
Fedotov, previously head of Russia's liberal-leaning Union of Journalists, was named by
Medvedev as the head of the Kremlin council on human rights in October.
Last month, Russia's lower house of parliament backed a resolution that, for the first time
in a public document, blamed Stalin for the 1940 massacre of 22,000 Polish officers.
Fedotov said he expected to present Medvedev with a package of proposals to eradicate
"totalitarian thinking" in January.
It will contain concrete measures such as building more monuments to Stalin's victims -which are very scarce -- and increased compensation payments for survivors.
Russia pays a minimum monthly compensation of 300 roubles ($10) to surviving victims
of Stalin's repressions. Western historians say up to 60 million people died in Stalin's
gulag labour camps, executions and forced farming collectivisation.
"For someone who spent months in a gulag ten dollars a month doesn't mean very much,"
Fedotov said.
SENSITIVE ISSUE
Chipping away at Stalin's legacy is a sensitive issue in Russia where some history
textbooks still portray him in a positive light. Words of praise for the dictator have been
recently restored to a Moscow metro station vestibule.
Rights groups say they have been alarmed by attempts by some officials -- especially
during Vladimir Putin's 2000-2008 presidency -- to whitewash Stalin's crimes and play
up his role in industrialising the country and defeating Nazi Germany.
Enraging some liberal-minded Russians, Moscow authorities put up posters portraying
Stalin during celebrations of the 65th anniversary of the war victory in May.
Fedotov said only by coming to terms with the atrocities of the past can Russia deal with
current problems like corruption.
Investors say corruption is one of the most serious barriers to doing business in Russia,
which Transparency International rates as joint 154th out of 178 nations in its corruption
perceptions index, along with Cambodia, Kenya and Laos.
Medvedev's push to modernise, which centres on using technology to diversify Russia's
$1.2 trillion economy and wean it off reliance on oil and gas revenues, is a key part of his
policy, without which he has said Russia has no future.
(Editing by Maria Golovnina)
Major auto station to open at RF-Poland border Tue
http://www.itar-tass.com/eng/level2.html?NewsID=15752623&PageNum=0
07.12.2010, 06.33
KALININGRAD, December 7 (Itar-Tass) - A Mamonovo-2 major permanent versatile
border-crossing station for freight-and-passenger vehicles opens in the Kaliningrad
Region at the border of the Russian Federation (RF) and the Republic of Poland on
Tuesday, Alexander Koshlin, deputy head of the Kaliningrad territorial department of the
Rosgranitsa (Federal Agency for the Equipment of the State Border of the RF), has told
Itar-Tass.
The Rosgranitsa official specially pointed out that "the new automobile border-crossing
station Mamonovo-2 is the largest one on the Russo-Polish border. By its characteristics
and technical equipment it is up to all modern norms and requirements".
The Mamonovo-2 border-crossing station has been built under the Russo-Polish
intergovernmental Treaty on the reconstruction of automobile roads and building of
border-crossing stations at them to ensure automobile links between Russia's Kaliningrad
Region and the Polish Elblag.
Medvedev Eyes Polish Privatizations
http://www.themoscowtimes.com/news/article/medvedev-eyes-polishprivatizations/425745.html
06 December 2010
Reuters
WARSAW — President Dmitry Medvedev said Monday that Russian firms wants to take
part in the privatization of Polish companies and promised to cooperate with Poland in
investigating a plane crash in the Smolensk region that killed Poland's president in April.
During a visit designed to draw a line under old disputes and highlight burgeoning
economic ties, Medvedev also confirmed his readiness to work with NATO on missile
defense.
"There are big energy projects in Poland with regard to privatization that would be of
interest to Russian entities," Medvedev told a joint news conference with Polish President
Bronislaw Komorowski.
In his remarks, he singled out Poland's second-largest refiner Lotos as a potential target.
The Polish government has put up for sale a controlling 53 percent stake in Lotos and
will be awaiting offers until early 2011.
Energy Minister Sergei Shmatko told reporters in Warsaw that a number of Russian
companies had shown interest in buying the Lotos stake.
"Rosneft and Gazprom's oil arm, Gazpromneft, among other Russian companies, are
eyeing the possibility," he said.
Medvedev, the first Russian president to visit the Polish capital in eight years, said some
Russian firms might be interested in listing on the Warsaw bourse, emphasizing the role
of small and medium-sized businesses.
Addressing Komorowski, Medvedev said Russia was committed to full transparency in
investigating the April 10 plane crash that killed 96 people, mostly top Polish officials.
"This is a very sad page [in our history]. We must do all we can so that no practical
questions remain, so we agreed [with Komorowski] to continue to work in this direction
under our joint patronage," Medvedev said.
Some, mainly from Poland's right-wing opposition Law and Justice party, have accused
Moscow of trying to cover up the crash. A small group of protesters waved Polish flags
and banners reading, "We want the truth," near the presidential palace where Medvedev
and Komorowski held their talks.
"I think Medvedev has a duty … to explain to the Polish people what happened there and
why he and his master, Putin, have been lying since April 10 about what they did there,"
said one protester, Edward Mizikowski, referring to Prime Minister Vladimir Putin.
Russia won praise from Poland last month when the State Duma backed a resolution that
for the first time blamed Soviet dictator Josef Stalin for the 1940 massacre of thousands
of Polish officers in Katyn in the Smolensk region.
Medvedev also awarded a friendship medal to octogenarian Polish film director Andrzej
Wajda, whose film "Katyn" was shown on Russian television earlier this year. Wajda's
father was among those who perished at Katyn in 1940.
Also during the visit, Russian and Polish historians presented a joint history book
covering sensitive episodes from their shared past. NATO-related issues were also on
agenda.
In an interview published on Monday in the weekly Polish magazine Wprost, Medvedev
said: "This should be a joint initiative of Russia and NATO to protect us against threats.
[But] if Russia does not find a place for itself within that system, in 2020 it may be that
an anti-missile defense umbrella will become a factor destabilizing the nuclear
equilibrium and diminishing Russia's defense capacity, and this may lead to a new arms
race."
Russia, Poland focus on energy, trade
http://www.euractiv.com/en/print/global-europe/russia-poland-focus-energy-trade-news500337
Published: 07 December 2010
Russia wants to take part in the privatisation of Polish companies, its president said
yesterday (6 December) during a visit designed to draw a line under old disputes and
highlight burgeoning economic ties. From Warsaw, Medvedev left for Brussels, where an
EU-Russia summit is being held today.
Background
Polish-Russian relations, described by Polish President Bronislaw Komorowski as being
a thousand years old, have had their ups and downs in the last 20 years, since Poland
became the first Soviet satellite to overthrow communism.
This is an overview of some key events:
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1992 - Russian President Boris Yeltsin released secret clauses of the 1939
Molotov-Ribbentrop pact between Nazi Germany and the Soviet Union that
showed they agreed to carve up Poland at the outbreak of World War Two.
Yeltsin also gave Poland documents showing Soviet leader Josef Stalin ordered
the execution of thousands of Polish prisoners of war at the Katyn forest in the
western Soviet Union.
1993 - Yeltsin visited Poland and was feted by the hero of the Polish anticommunist struggle, President Lech Walesa. Walesa obtained Yeltsin's
declaration that Russia would not object to Polish NATO entry - which caused an
outcry in Moscow. The Kremlin backtracked and launched a drive to warn the
alliance against accepting its former satellites.
1999 - NATO admitted Poland, Hungary and the Czech Republic.
2004 - Poland joined the European Union. President Aleksander Kwasniewski
met Russian counterpart Vladimir Putin. Ties strained over Polish reluctance to
allow Russian energy companies buy Polish peers.
Kwasniewski infuriated Putin by leading the EU mediation in Ukraine after the
rigged presidential election there in December 2004. A re-run resulted in victory
for pro-Western candidate, Viktor Yushchenko.
2005 - Conservative Law and Justice led by brothers Lech and Jaroslaw
Kaczynski won power in Poland, taking a sharply anti-Russian course. Moscow
imposed ban on Polish farm imports.
Russian gas monopoly Gazprom and its German partners agreed to build an
undersea gas pipeline bypassing Poland. Radoslaw Sikorski, then defence
minister, now foreign minister, compared the agreement to the MolotovRibbentrop Pact.
2007 - Poland declared it was ready to host a US missile defence system, sparking
furious reaction from Putin. In May, Poland blocked talks on a new EU-Russia
strategic partnership over the meat ban.
In October 2007, center-right Civic Platform party won a parliamentary election,
with its leader and future prime minister Donald Tusk promising to improve ties
with Russia. In November, Poland lifted a veto on Russia's talks to join the
Organisation for Economic Cooperation and Development.
In February 2010, Poland approved a long-delayed gas deal with Russia ensuring
higher deliveries until 2037, with the settlement still awaiting a final rubber
stamp.
On April 10, Polish President Kaczynski, his wife and 94 officials were killed in a
plane crash on their way to a ceremony in Russia's Katyn forest marking the
anniversary of the killings. Relations between the neighbours improved.
On a trip rich in symbolism, President Dmitry Medvedev promised to cooperate with
Poland to investigate a plane crash in Russia that killed Poland's president in April. He
also confirmed his readiness to work with NATO on missile defence.
"There are big energy projects in Poland with regard to privatisation that would be of
interest to Russian entities," Medvedev told a joint news conference with Poland's
President Bronislaw Komorowski.
In his remarks, he singled out Poland's second-largest refiner Lotos as a potential target.
The Polish government has put up for sale a controlling 53% stake in Lotos and will be
awaiting offers until early 2011.
Russian Energy Minister Sergei Shmatko told reporters in Warsaw that a number of
Russian companies had shown interest.
"Rosneft and Gazprom's oil arm Gazpromneft, among other Russian companies, are
eyeing the possibility [of acquiring a stake in Lotos]," Shmatko said.
Although energy dominates trade, Moscow increasingly sees Poland, the only European
Union member state to avoid recession last year, as a key trading partner in other areas as
well.
Bilateral trade was $10 billion in the first six months of 2010, growing by up to 50%
from same period in 2009.
Medvedev, the first Russian president to visit the Polish capital in eight years, said some
Russian firms may be interested in listing on the Warsaw bourse, emphasising the role of
small and medium-sized businesses.
Medvedev's visit to Warsaw comes amid a wider "reset" of relations between Russia and
the West. Last month, he and NATO leaders, including from Poland, agreed to cooperate
on missile defence, an issue long viewed by Moscow with deep distrust.
The NATO system will link existing European anti-missile systems to radars and
interceptors the United States plans to deploy in the Mediterranean, Romania, Poland and
maybe Turkey.
Crash probe
Addressing Komorowski, Medvedev said Russia was committed to full transparency in
investigating the 10 April plane crash that killed 96 people, mostly top Polish officials.
"This is a very sad page [in our history]. We must do all we can so that no practical
questions remain, so we agreed [with Komorowski] to continue to work in this direction
under our joint patronage," Medvedev said.
Some, mainly from Poland's right-wing opposition Law and Justice party, have accused
Moscow of trying to cover up the crash. A small group of protesters waved Polish flags
and banners reading "We want the truth" near the presidential palace where Medvedev
and Komorowski held their talks.
"I think Medvedev has a duty [...] to explain to the Polish people what happened there
and why he and his master [Prime Minister Vladimir] Putin have been lying since 10
April about what they did there," said one protester, Edward Mizikowski.
Russia won praise from Poland last month when its lower house of parliament backed a
resolution that for the first time blamed Soviet dictator Josef Stalin for the 1940 massacre
of 22,000 Polish officers in Katyn, now in western Russia.
"I think it is important that we can again hear each other and are ready to discuss the most
difficult, the gloomiest [...] pages of our common history," Medvedev said.
The Kremlin leader also awarded a friendship medal to octogenarian Polish film director
Andrzej Wajda, whose film "Katyn" was shown on Russian television earlier this year.
Wajda's father was among those who perished at Katyn in 1940.
Also during the visit, Russian and Polish historians presented a joint history book
covering sensitive episodes from their shared past. NATO-related issues were also on the
agenda.
(EurActiv with Reuters.)
Positions
A Polish diplomat told EurActiv that Warsaw was highly appreciative of the recent
decision by the Duma, the lower chamber of the Russian parliament, to approve a
resolution directly blaming Stalin for the 1940 massacre of 22,000 Polish officers at
Katyn.
The resolution, adopted on 26 November in a 324-57 vote, calls the killings committed
by Soviet secret police a "crime by the Stalinist regime and the Soviet Union, a
totalitarian state". It adds that secret Kremlin documents show that the massacre was
directly ordered by Stalin and other Soviet leaders.
The vote came seven months after Russian Prime Minister Vladimir Putin, previously
wary of criticising Stalin, denounced the Soviet dictator's regime during a visit to Katyn
on 7 April with his Polish counterpart, Donald Tusk.
Beginning of meeting with Prime Minister of Poland Donald Tusk
http://eng.news.kremlin.ru/transcripts/1425
December 6, 2010, 20:30
PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Mr Prime Minister,
I am very glad to see you again. This year has been very rich in events for our
relationship. Although it began with a tragedy, recently we have been able to
significantly advance the development of Russian-Polish dialogue.
I am very pleased that the official visit of the President of Russia to Poland is taking
place now, in early December. This has been a long-awaited visit, as there has been a gap
of many years. I hope that the official part of my visit, informal contacts, our talks with
the President and with the Prime Minister, and my other contacts, will significantly
intensify our relations and take them to a new level, helping us review the most difficult
issues of our history openly and without deception.
I would like to tell you that Russia is ready for this. As you know, I have taken some
serious steps recently to ensure that the burden of the past which dominates our relations,
including the Katyn tragedy, remains in the past forever and does not afflict the relations
between our peoples in the present, in contemporary life.
There are a number of economic projects that I think we should focus on. That is
primarily the responsibility of our governments but I am prepared to discuss these issues.
A number of important documents will be signed today. We agreed to intensify our
humanitarian ties and to organise youth exchanges. All these issues and much of the work
will clearly fall within the competence of our governments. So today, I think we have
launched a new development trend and that is very important.
Once again, I would like to say that I am very glad to see you.
Speech at Russian-Polish Public Forum
http://eng.kremlin.ru/transcripts/1424
December 6, 2010, 19:00 Warsaw
PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Mr President, Mr Zanussi, Mr
Drachevsky, ladies and gentlemen,
Today is a great day in our relations. Not only because the President of the Russian
Federation has come to Poland on an official visit after many years, although this is
important in and of itself. It is also great because the spirit of our relations, which has
long been weighed down by our past, is changing.
This does not mean that the past has suddenly vanished, or that no questions remain. But
I believe what’s important is that we are once again beginning to listen to one another,
and to discuss the most difficult, morose, and tragic pages of our modern history. After
all, often, it is not a problem of remembering the truth, but rather, of saying that truth and
being ready to accept that truth.
Our nations suffered a great deal in the 20th century because of the wars that rattled
Europe – first and foremost, World War II – and the totalitarian regimes that destroyed
many of their own citizens. It is therefore our sacred duty to finish this work, so as not to
have any more causes for mutual distrust and doubt between our nations, between our
states, and most importantly, between our peoples. That, in my view, is precisely the
purpose of the Russian-Polish Public Forum’s work.
You know, ambitions aside, it is much easier for politicians and public officials to reach
agreement when a significant part of the trail has already been blazed by civil societies.
Thus, it is the civil societies, the public, that sends the signal or request for states to be
friendly, for people to hear one another, for them to understand history and, at the same
time, for them to look toward the future, rather than let themselves be entrapped by
stereotypes. And so, we must open precisely this kind of page – or rather, chapter, as Mr
President says – in our relations.
I want to emphasise again: it is not about shielding our eyes from the past or refuting it;
we must talk clearly about what happened, why, and what consequences it brought. That
is the only way that we can build honest relations as partners, and therefore, build
relations that are mutually beneficial.
Our nations know how to trade with one another. Everything is pretty good in this regard.
Despite the deterioration of political relations, things in recent years have generally been
fine. We have a multi-billion dollar turnover and we have investments – they may not be
enormous, but we have them. Still, things have been much more complicated in terms of
political contacts.
I very much count on this visit by the Russian delegation, and the Forum opening here, to
serve as very important factors in the intensification of our relations in every sense of the
word.
It is true that our nations have gone through a rough patch, but at the same time, our
nations are still at a relatively early phase in transforming their economies and societies.
It was only a few decades ago that we began building market economies, creating the
foundations for full-fledged, beneficial exchanges of goods, building our own
democracies, and developing our political systems. In this regard, we still have much
work to do in both the Russian Federation and in Poland. And that is precisely why the
modernisation we talked about with Mr President today, as well as the agreements on
modernisation that we are signing with many EU nations, including Poland, are aimed at
high-quality cooperation, mutual assistance, and the creation of a high-tech, modern, free
society – a society that is not weighed down by spectres of the past, but is open to
trusting and friendly, close relations between people. I hope that your Forum will address
this very topic today. I am certain that, given the background that Mr President and I have
tried to create, the Forum may have an easier time than it would have otherwise.
I also have another very pleasant mission. I would like to carry out my duty and present a
state decoration to the great film director Andrzej Wajda for his enormous contribution to
the development not only of Polish, but world’s cinematography. And I think that this,
too, serves as a certain symbol of our closeness and the very difficult pages in the history
between Russia and Poland. I would like to say, Mr Wajda, that your work is very much
appreciated and loved in our nation, and I am certain that this work, which draws heavily
on the events of World War II, will continue to spur the greatest minds of our nations to
strive for our countries, and therefore, our people, to be friends, to foster peace, to help us
find in ourselves the strength to communicate openly and sincerely, without shielding our
eyes from the difficulties of the past, but keeping them open toward the future.
I would like to wish you, Mr Wajda, good health, and I hope that everything you created
in the past several decades will forever remain in the bank of world culture.
I want to once again welcome everyone gathered here and sincerely wish you great
success. And let’s hear it for Mr Wajda. (Applause.)
Russian sailors kept in custody in Puerto Rico
http://en.rian.ru/russia/20101207/161660702.html
04:33 07/12/2010
Russian crew of a tanker has been kept on board the ship for a month after the vessel was
arrested in Puerto Rico for alleged violations of U.S. ecology legislation.
Carib Vision is a former oil tanker now carrying molasses only. It has a crew of 17
Russian sailors.
"The tanker with a Russian crew on board was detained in Puerto Rico in a course of a
routine inspection for alleged violation of U.S. environmental laws ," Anastasia Kitsul,
Russia's honorary consul in Puerto Rico, told RIA Novosti on Tuesday.
"The ship has been anchored in Puerto Rico since November 6, but we were informed of
the current situation by a third party only on December 2," she said, adding that the crew
cannot leave the ship because the sailors do not have U.S. visas.
Kitsul said that formal charges had not been pressed yet, but the Russian consulate in the
United States had been preparing a defense team for stranded sailors.
Carib Vision sails under the flag of Saint Kitts and Nevis, a tiny island nation in the
Caribbean.
WASHINGTON, December 7 (RIA Novosti)
Putin to chair meeting of VEB Supervisory Board Tue
http://www.itar-tass.com/eng/level2.html?NewsID=15752574&PageNum=0
07.12.2010, 05.44
MOSCOW, December 7 (Itar-Tass) - Russian Prime Minister Vladimir Putin on Tuesday
will chair a meeting of the Supervisory Board of the "Bank for Development and Foreign
Economic Activities" (popularly known as VEB) state corporation, the government press
service announced.
Those present at the Board meeting will examine a 2009 VEB development report. VEB
will become the first state corporation to issue a certified report in accordance with the
GRI (Global Reporting Initiative) international standard for non-fiscal reporting.
Other main items on the agenda include a decision on the launch of a VEB programme in
2011 to finance regional and urban development projects. Such projects, which are to be
prepared by local administrations, concern the construction and modernization of
infrastructure facilities for the solution of the problems of the environment, energy
efficiency, the preparation of sites for comprehensive affordable-housing development or
for technological clusters, the development of regional and municipal transport systems,
IT development, and a rise in the quality of state and municipal management, and social
development.
Putin to meet with members of volunteer movement
http://www.itar-tass.com/eng/level2.html?NewsID=15752454&PageNum=0
07.12.2010, 02.22
MOSCOW, December 7 (Itar-Tass) - Russian Prime Minister Vladimir Putin on Tuesday
will take part in a ceremony marking the summing up of the results of an all-Russia
competition among higher and secondary specialized educational establishments for the
right to establish centers for the training of volunteers for the 2014 XXII Winter Olympic
Games and XI Paralympic Games.
Sixty educational establishments (51 institutions of higher learning and eight secondary
specialized schools) took part in the competition which was conducted by the "Sochi
2014" Organizing committee in conjunction with the Russian Ministry for Sports and
Tourism and the Ministry of Education and Science. Twenty-six educational
establishments representing 23 constituent entities of the Russian Federation (RF) were
selected. Certificates will be presented to competition winners at the ceremony.
The notion "volunteer" has been sealed by legislation. It signifies a citizen of the RF
taking part in arrangements for and holding of Olympic and Paralympic Games through
the use of their experience, knowledge, skills, and abilities without a monetary
reimbursement for their activities.
Volunteering is increasingly popular in Russia: More than 300,000 young people have
been registered at the specialized website in the Internet. Programs for the development
of volunteering movement have been adopted in a number of regions and measures in
support of the volunteer activities are included in regional purpose-oriented programs.
Another terrorist leader eliminated in Dagestan
http://english.ruvr.ru/2010/12/07/36331582.html
Dec 7, 2010 02:01 Moscow Time
The leader of a local terrorist group in Dagestan, Akhmed Abdulkemirov, has been killed,
a source with the law enforcement bodies informs.
Akhmed Abdulkemirov was one of the most cruel and dangerous terrorist leaders, who
was responsible for numerous terrorist attacks.
Russia must train experts on Islam in Caucasus - Kremlin envoy
http://en.rian.ru/russia/20101207/161659039.html
01:25 07/12/2010
Russia should open a secular university in North Caucasus to train teachers and experts
on Islam, the Kremlin's envoy to the region Alexander Khloponin said.
"We need this secular university on Islamic studies in Caucasus today...because we do
not have experts to teach the basics of this religion," he told a meeting of children's rights
ombudsmen in North Caucasus on Monday.
Khloponin believes that this measure would help prevent religious conflicts in the region.
"Today, when we see prayer rooms in dormitories of universities in Stavropol [southern
Russia], for example, and do not understand the literature their students are reading - we
then should not be surprised that we have [religious] clashes on the streets," he said.
North Caucasus Federal District is one of the eight federal districts of Russia, which
includes the volatile republics of Chechnya, Dagestan and Ingushetia.
The majority of the population in Russia's North Caucasus are Muslims.
PYATIGORSK (Caucasus), December 7 (RIA Novosti)
March 2000 attackers detained in Karachayevo-Cherkessia
http://www.itar-tass.com/eng/level2.html?NewsID=15753056&PageNum=0
07.12.2010, 09.56
MOSCOW, December 7 (Itar-Tass) -- The gunmen involved in an attack on the federal
forces in late February and early March, when 85 paratroopers were killed, were detained
in Karachayevo-Cherkessia.
Chechen policemen and federal security officers carried out a detention operation. “On
December 6, gunmen Ebzeyev and Atuov were detained in a search operation in the city
of Karachayevsk and the settlement of Erkin-Shakhar in the Adyge-Khabl district of
Karachayevo-Cherkessia,” a source in the republican law enforcement agencies said.
“From February 29 to March 1, 2000 the gunmen as members of Abdul-Samat’s gang
were participating in the battle with the federal forces, when 85 paratroopers from the
104th air assault regiment of the Russian Airborne Troops were killed at the settlement of
Ulus-Kert in the Shatoi district of Chechnya,” the source underlined.
Khakassia governor holds emergency session on electricity failure
http://www.itar-tass.com/eng/level2.html?NewsID=15752945&PageNum=0
07.12.2010, 09.25
GORNO-ALTAISK, December 7 (Itar-Tass) - The head of Russia’s republic of
Khakassia, Viktor Zimin, chaired on Tuesday an emergency session of the commission
for the restoration of electricity supply to the settlement of Vershina Tei, sources from the
press service of the Russian Ministry for Emergency Situations’ regional department told
Tass.
A total of 3,500 people, including over 1,000 children, were left without heat and
electricity in the settlement because of power grid failures. The commission has given
instructions to prepare everything necessary for a possible evacuation of the local
population – organise hot meals and transport to bring people to facilities where they can
be temporarily accommodated in case of necessity.
Temperatures in the houses of Vershina Tei are eight to ten degrees above zero. The
social situation there is calm. Local authorities inform the residents on the situation and
warn them about a possible evacuation. The reason of the failure is not yet clear.
The situation is aggravated by snowstorms in the region.
December 07, 2010 10:51
All Dimitrovgrad nuclear reactors shut down due to bad weather
http://www.interfax.com/newsinf.asp?id=207233
ULYANOVSK. Dec 7 (Interfax) - The Research Institute of Nuclear Reactors (NIIAR)
based in Dimitrovgrad, Ulyanovsk region, has shut down all six of its reactors due to ice
and rain and snow precipitation, the Institute told Interfax.
"We decided to switch off the reactors due to the unstable operation of electricity
networks. There is no immediate danger for the reactors, but we decided to switch them
off all the same. The situation is under control. There is no danger to the local
population," the NIIAR said.
NIIAR was founded in the early 1960s as an enterprise for engineering and scientific
research of various nuclear energy problems and is currently a large research center.
kk dp
Over 53,000 people in Ulyanovsk region left without electricity
http://www.itar-tass.com/eng/level2.html?NewsID=15752943&PageNum=0
07.12.2010, 09.46
ULYANOVSK, December 7 (Itar-Tass) - Over 53,000 residents of Russia’s Ulyanovsk
region have been left without electricity supply because of power line breakage, sources
from the regional department of the Russian Ministry for Emergency Situations told Tass
on Tuesday.
“As for Tuesday morning, 92 settlements in which over 53,000 people live remain
without electricity supply,” sources from the press service said. Ministry’s emergency
headquarters coordinates restoration work in those settlements. All in all 69 repair
brigades work there.
Rain mixed with snow fell in the Ulyanovsk region on Sunday, and temperatures were
between minus three and plus two degrees Celsius. As a result, ice coated local roads and
wires. An emergency situation regime was imposed in four rural districts and the city of
Dimitrovgrad.
Lenin monument blown up in St Pete suburb
http://www.itar-tass.com/eng/level2.html?NewsID=15752430&PageNum=0
07.12.2010, 01.20
ST PETERSBURG, December 7 (Itar-Tass) - A Lenin monument has been blown up in
the town of Pushkin, a suburb of St Petersburg. No one was hurt.
The monument leaned but did not fall. Window panes in a nearby residential building
were smashed by a blast wave. The details of the incident are being ascertained.
Russia's Metro takes top spot
http://www.guardian.co.uk/media/greenslade/2010/dec/07/freesheets-metro
Posted by Roy Greenslade Tuesday 7 December 2010 08.02 GMT
Russia's two Metro titles have increased their joint readership to the point where they
now claim to be the country's best-read daily newspaper.
According to TNS Russia Data for the six months up to October 2010, the MetroMoscow and Metro-St Petersburg had a joint readership of 1,445,900 a day.
This took them ahead of the previous leader, Rossiyskaya Gazeta, which had 1,393,400
readers. Moskovsky Komsomolets was third an average readership of 1,150,600 per
issue.
The Metro titles are published by the Swedish-based publisher Metro International.
Metro Moscow's managing director, Boris Konoshenko, said: "According to our
colleagues from Metro International, the Metro Moscow launch was one of the most
successful projects in Metro history."
Source: Metro International press release
Russian Internet providers may avoid responsibility for sketchy content
http://en.rian.ru/russia/20101207/161663251.html
10:46 07/12/2010
Russian providers of Internet services may avoid responsibility for offensive or
controversial content stored on their servers, according to amendments to the Russian
Civil Code proposed by the presidential law codification council, a Russian business
daily said on Tuesday.
A new draft Civil Code includes an article stipulating responsibility of Internet providers
for their content. The presidential council drew up the amendments to the article
following an order by President Dmitry Medvedev, an active Internet user, the Vedomosti
paper said.
The bill relieves providers of responsibility for the content if three conditions are met: the
controversial content was uploaded to the provider's server "by a client or on his order"; a
provider "did not know or should not have known" about the contentiousness of the
content; the provider took "prompt measures" to eliminate the consequences of the
controversial content storage following a written request by a third party.
The measures to be taken will be specified in a special law on Internet providers,
Vedomosti said. According to the proposed amendments, a provider is obligated to delete
the content within three days, suspend the domain on a written police request and limit
access to questionable information upon a prosecutor's request.
MOSCOW, December 7 (RIA Novosti)
Russian Man Indicted for 'Mega-D' Botnet Spam, FBI Says
http://www.pcmag.com/print_article2/0,1217,a=257741,00.asp?hidPrint=true
ARTICLE DATE: 12.06.10
By Chloe Albanesius
A 23-year-old Russian man was indicted last month for allegedly sending billions of
spam messages via his "Mega-D" botnet, the FBI announced last week.
Oleg Nikolaenko, originally from Moscow, was arrested in Las Vegas on November 4
and arraigned in Milwaukee on November 16. Under the provisions of the Can-Spam
Act, Nikolaenko could face up to three years in jail, a $250,000 fine, and another year of
supervised release, if convicted.
According to the indictment, Nikolaenko sent billions of spam messages for people
selling fake Rolex watches as well as non-FDA approved and fake prescription drugs.
This was accomplished via his "Mega-D" botnet, which security experts estimated was
capable of sending 10 billion spam e-mails per day; all with false header information.
Nikolaenko earned hundreds of thousands of dollars for his efforts, the FBI said.
Nikolaenko is due in court on December 21 for a scheduling conference.
In other news, The Telegraph reports that two German hackers recently accessed the
computers of more than 50 celebrities, including Justin Timberlake and Lady Gaga. The
hackers reportedly wanted to steal unreleased material so they could blackmail the
singers.
Copyright (c) 2010 Ziff Davis Inc. All Rights Reserved.
Russian Press at a Glance, Tuesday, December 7, 2010
http://en.rian.ru/papers/20101207/161662682.html
09:18 07/12/2010
POLITICS
Breakthrough on the Polish front - Russian President Dmitry Medvedev pays two-day
historic visit to Poland. (Rossiiskaya Gazeta, Vremya Novostei)
Georgian officials protest the deployment of Russian multiple-launch rocket systems in
South Ossetia as a threat to Georgia’s national security. (Kommersant)
After a groundbreaking summit in Poland, President Dmitry Medvedev heads to Brussels
on Tuesday for much harder talks with European Union leaders. (Moscow Times)
BUSINESS
Simplified work permit issuance procedures for highly skilled professionals, introduced
in Russia this year, are a good sign for foreign investors. About 2,500 foreign specialists
used the simplified procedures to enter Russia in the past five months. (Rossiiskaya
Gazeta)
Russian Prime Minister Vladimir Putin unveils a draft development plan for Russia’s Far
East at a meeting with local United Russia party officials. (Rossiiskaya Gazeta,
Kommersant, Vremya Novostei)
Russia has one of the most efficient taxation systems in the world, according to BKR
International, but bureaucracy and corruption prevent many potential foreign investors
from doing business in the country. (Rossiiskaya Gazeta)
Moscow government plans to start selling its local assets with companies in which it does
not have a controlling stake. (Vedomosti)
Cinema box office in Russia and other CIS countries grew 43 percent year-on-year to a
record $1.05 billion in 2010 mainly because of the popular foreign-made 3D cartoons and
movies. (Kommersant)
STOCKS
Russian markets on Monday traded TNK-BP shares for the first time in history. The first
trading day revealed that the company capitalization is higher than expected - about $43
billion. (Vedomosti)
BANKING
Banks operating in Russia, including Sberbank and HSBC, are finding themselves in a
rush to patent names for their products and services to protect their marketing campaigns
during the holidays and beyond from lawsuits by rivals. (Moscow Times)
SPORTS
Russian football club Rubin faces Barcelona on Tuesday in a tough Group D play-off
qualifying game in Champions League (Kommersant)
SOCIETY
Russia’s new Investigation Committee, which is being formed under orders of President
Dmitry Medvedev, will not receive all promised powers. For instance, the investigators
will not have the right to enter private property without proper authorization as part of an
ongoing probe. (Vedomosti)
WikiLeaks whistleblower website continues to spawn mirror sites around the world
despite strong efforts by the United States to stop its activities. (Rossiiskaya Gazeta)
TECHNOLOGY
Russia lost three Glonass satellites in a botched launch on Sunday. President Dmitry
Medvedev ordered swift investigation into the incident - the future of Russia’s global
positioning satellite network is at stake. (Rossiiskaya Gazeta, Kommersant, Vremya
Novostei)
Russia Tries to Exploit European Disunity
http://georgiandaily.com/index.php?option=com_content&task=view&id=20592&Itemid
=132
December 07, 2010
Pavel K. Baev
The big surprise that rejoiced the vast majority of Russians last Friday was the decision
by the International Federation of Football Associations (FIFA) to hold the 2018 World
Cup tournament in Russia. One person who did not appear surprised was Prime Minister,
Vladimir Putin, who immediately arrived at the FIFA headquarters in Zurich, Switzerland
to express his gratitude and give his assurance that the event will be staged “to the highest
standards.”
The bid for the privilege of hosting the World Cup was Putin’s initiative and it did not
appear very strong in comparison with the three competitors: England, Spain and
Portugal, and Belgium and the Netherlands (Rossiyskaya Gazeta, December 3). Yet
Putin, who also played a key role in securing the decision by the International Olympic
Committee to award the 2014 Winter Olympic games to Sochi, was supremely confident
in his talents for lobbying and “selling” the bid with the best packaging (Kommersant,
December 3).
Indeed, what distinguished Russia’s presentation was the honest admission that nothing is
ready for an event of such global scale so that 15 stadiums in 13 cities, except Luzhniki in
Moscow, will be built from scratch (Moskovsky Komsomolets, December 4). Dozens of
hotels must be constructed, but the most expensive part of the preparation is upgrading
the transport infrastructure, consequently the total cost is expected to exceed $50 billion
(Vedomosti, December 3). It might appear nonsensical to commit to such expenses when
the federal budget is already stretched with the investments in the controversial Sochi
extravaganza, but Putin asserted that Russian “oligarchs” would be happy to pay their
share (www.gazeta.ru, December 3). Shameless graft will enrich hundreds of bureaucrats,
but the unique opportunity to see the best teams in the supreme competition is certain to
be hugely popular among tens of millions of football fans.
There is, however, a particular twist to this triumph in what Putin described as a “tough
and fair fight,” and it concerns his current assessment of European discord and faltering
integration. Russia may have been hit by the economic crisis harder in terms of lost
volume to its GDP, but the political consequences are far more severe in debt-saddled
Europe. Indeed, the Russian leadership does not have to deal with student demonstrations
ransacking party offices or with strikes paralyzing airports and railroads, and the protest
rallies in regions like Kaliningrad are subdued with little trouble (Novaya Gazeta,
December 1). Russian experts argue that looming insolvency of several smaller
economies like Greece or Ireland could seriously undermine the cohesion of the Eurozone, but at the same time strengthen the influence of Germany, which happens to be
Russia’s key European ally (Ekspert, November 29; www.newsru.com, December 3).
This economic centrifugal momentum overlaps with security disagreements caused first
of all by the inability to sustain the joint effort in Afghanistan. The well-propagated effort
at reviving NATO boiled down at the Lisbon summit to the initiative for building a
common missile defense system, which most Europeans see as irrelevant to their real
security concerns. Moscow has concluded that joining this initiative is a surer way to
sabotage it than direct opposition, but last week Putin and Medvedev argued in unison
that failure to take Russia’s demands into account would lead to a new “arms race”
(www.gazeta.ru, December 2). This threat might appear ridiculous given the continued
degradation of the Russian defense industry, but it is addressed not to the US Senate,
where the prospect for the ratification of the Prague Treaty is seen as poor and worsening,
but to European “partners,” who are slashing their defense expenditures as if “world
peace” has already arrived.
Security matters only insofar as Moscow can play safe on trans-Atlantic differences, but
the real priority in Russian policy is energy, and here Putin is firmly set on exploiting
every opportunity provided by European disunity. Visiting Berlin two weeks ago, he
attacked the diversification policy of the European Commission as “robbery,” and last
Friday he embraced his old friend Italian Prime Minister, Silvio Berlusconi, seeking to
end misunderstandings on the South Stream pipeline project, which has the new price-tag
of 15.5 billion Euros (Nezavisimaya Gazeta, December 2). Medvedev followed-up by
visiting Warsaw on December 6 prior to participating in the EU-Russia summit on
December 7, while the deal on selling more volumes of gas to Poland would strengthen
the argument that the EU policy of subsidizing renewable sources of energy amounts to
unsustainable protectionism (RIA Novosti, December 1; Kommersant, November 22).
The EU might indeed experience an introverted moment when internal spasms prevent it
from pursuing a consistent policy in the “near abroad” from Turkey to Belarus but it does
not mean that Russia is able to impose itself as its most privileged partner. Putin has
outplayed the Europeans in football intrigues, but that will hardly help in securing an
inflow of investment (www.gazeta.ru, December 3). The investment climate, as the
successful entrepreneur, Petr Aven, recently confirmed, keeps worsening despite all the
pledges to create incentives for modernization (www.newsru.com, December 3). In his
interview on CNN with Larry King, Putin resolutely dismissed well-documented
opinions that Russia had become a thoroughly corrupt and criminalized state, but he
cannot expect that next week when the judge starts reading the verdict in the crudely
fabricated case against Mikhail Khodorkovsky and Platon Lebedev, that Western leaders
would be too busy with Christmas preparations (Nezavisimaya Gazeta, December 2).
One political consequence of the FIFA decision, driven probably by the best football
intentions, is that Putin is now even more motivated to reclaim supreme power, so that
his new presidential term will stretch from the Sochi Olympic Games to the World Cup
in 2018. He expressed indignation over the “cynical” views of US diplomats who
compared the Russian duumvirate to Batman and Robin. The comparison is indeed rather
off-target: Medvedev could hardly qualify as a useful and ambitious side-kick, but Putin
resembles not the crime-fighting superhero but rather his antagonist –the Joker. Such
characters could not tolerate power-sharing and despise their accomplices motivated by
greed, but their ideas of having mega-fun are seriously dangerous.
Source:
http://www.jamestown.org/programs/edm/
Moscow Increases Its Focus on Solving the North Caucasus Riddle
http://georgiandaily.com/index.php?option=com_content&task=view&id=20593&Itemid
=132
December 07, 2010
Valery Dzutsev
On December 1, Russian Prime Minister Vladimir Putin appointed himself as the head of
the Russian government’s commission for the socio-economic development of the North
Caucasus. The existing head of the North Caucasus Federal District, Aleksandr
Khloponin, became Putin’s deputy on the commission.
“Close coordination of the federal and regional government authorities is needed to
develop the [North Caucasus Federal] district,” Putin explained in setting up the new
commission. According to the Russian prime minister, significant resources of the
government and the investors will be allocated to the region over the next few years,
making the creation of the commission especially relevant (www.gazeta.ru, December 1).
By propping up Khloponin’s mission for the economic development of the North
Caucasus with his authority, Vladimir Putin, Russia’s most influential politician, implied
that Khloponin has largely failed to achieve significant accomplishments in the region.
Khloponin’s appointment as head of the newly created North Caucasus Federal District in
January 2010 was officially billed as an attempt to resolve the rising security issues in the
region. Since his appointment, the economic situation in the North Caucasus has shown
few signs of improvement, while the security situation has further deteriorated, with
whole new territories, like Kabardino-Balkaria, joining the ranks of the other particularly
volatile republics like Chechnya, Dagestan and Ingushetia.
Khloponin’s own assessment of his activities in the North Caucasus sheds light on
Moscow’s perception of the economic development of this region, which is apparently
viewed as cover for gaining more control over the economic and social life of this nonRussian region with separatist tendencies. During the same December 1 Russian
government meeting, Khloponin stated that he was gradually creating a set of federal
institutions in the district that would largely replace local branches of the federal agencies
in the North Caucasus republics. The head of the North Caucasus Federal District divided
his task into several stages: 1. making the federal agencies closer to the local population
in the North Caucasus, 2. ensuring a more effective use of the federal money Moscow
disburses for the region, 3. improving coordination between the branches of the federal
agencies (www.government.ru, December 1).
The system of governance in the North Caucasus, as elsewhere in Russia, includes local
republican governments and branches of federal agencies. The local governments by
definition have greater autonomy from Moscow than the branches of the federal agencies,
which are supposed to be mere transmitters of Moscow’s policies. However, in practice,
the federal agencies’ branches are manned with local staff which, in the small North
Caucasian societies, becomes tightly intertwined with the local governments and
societies. In some cases, the local governments even successfully oppose Moscow’s
decisions to make appointments in federal agencies.
Perhaps the most spectacular examples of Moscow’s inability to appoint its people have
occurred in Dagestan. Military judge Vladimir Danilov, who had won the competition to
become the chairman of Dagestan’s Supreme Court, unexpectedly resigned from the
position and, on October 25, the Russian judicial commission announced another
competition for this position. While the Dagestani government did not make any
statements about this, an unnamed source in the republican government grumbled that
“no one consulted the republican authorities.” Pressure allegedly brought about Danilov’s
premature departure from the republic and, a local, Dagestani candidate now is expected
to win the chairmanship of the republic’s Supreme Court (Kommersant, November 2).
Even though we do not have similar cases in Chechnya recently, it is plausible to suggest
that hardly anyone could work successfully in the republic without the consent of its
absolute ruler, Ramzan Kadyrov. Less conspicuous cases can be also traced in other
republics of the North Caucasus. Once the republican authorities are so effective in
insisting upon candidates for the federal branches’ heads, they are highly likely to be
even more effective in influencing these agencies’ day-to-day activities at lower levels.
The establishment of a special Russian government commission for the socio-economic
development of the North Caucasus chaired by Putin may also reflect internal rumblings
in Moscow. Putin made his name and career on the second Russo-Chechen war in 1999.
The situation in the North Caucasus, therefore, has perceived or actual intimate links to
Putin’s political present and future. He might regard improving the situation in the region
or fighting another war as a sure way of regaining some of his legitimacy as an allRussian leader, which has lately been eroded and may be further challenged in the run up
to the presidential elections in 2012.
By appointing Khloponin as his deputy on the North Caucasus commission, Putin also
insulated him from President Dmitry Medvedev’s criticism after Medvedev twice
expressed disappointment over Khloponin’s progress in the North Caucasus. So the move
could be an indication that Putin is further solidifying his powerbase among the
bureaucrats in order to thwart any attempts to question his leadership.
In the absence of any democratic participation and change, this governance system
inevitably becomes very awkward and unmanageable, even from Moscow. As the latter
has no intention of making the local governments answerable to the local population, it is
trying to further centralize governance in the North Caucasus, essentially trying to make
the local, republican governments redundant. Although this strategy may seem to be fully
justified from Moscow’s standpoint, were it successfully implemented, the local North
Caucasian population would in fact become even more estranged from the Russian
government, because the representation of North Caucasians in governance would
decline and locals would cease to have even a small stake in supporting it, something
they currently have. There are also certain political risks for Putin if the situation in the
North Caucasus remains volatile and, while not spinning into a full-scale war, results in
terrorist attacks in Moscow. Still, given Putin’s grip on the Russian media, the risks for
him appear to be negligible.
Source: http://www.jamestown.org/programs/edm/
December 07, 2010 12:17
MP's aide suspected of espionage confirmed as Russian citizen - source (Part 2)
http://www.interfax.com/newsinf.asp?id=207276
MOSCOW/LONDON. Dec 7 (Interfax) - MP's aide Yekaterina Zatuliveter detained in
the United Kingdom on suspicion of spying for Russia is a Russian citizen and will be
provided with consular access, a Russian diplomatic source told Interfax.
"She is a Russian citizen. The Russian Embassy has already sent a request to the Foreign
Office and the Home Office so that they formally provide information about what is
going on with Zatuliveter," the source said.
The consular section of the Russian diplomatic mission is prepared to make every effort
to provide necessary consular assistance to the Russian woman, should the authorities
formally confirm her arrest, he said.
Russian Foreign Minister Sergei Lavrov commented on the situation a day earlier.
Asked whether the incident would hamper efforts to build the relations with the UK, the
minister said: "Our [efforts] will not be hampered, someone clearly wants to hamper
theirs."
"It's not the first time. As soon as positive changes begin to emerge, somebody steps in,"
Lavrov said.
Earlier, British media reported that a 25-year-old Russian citizen, Yekaterina Zatuliveter,
an aide to Liberal Democratic Party MP for Portsmouth and member of the House of
Commons Defense Committee Michael Hancock, was arrested on Thursday on suspicion
of spying for Russia.
She has been Hancock's aide for 2.5 years.
kk dp
Dec 7, 2010
BRITISH ESPIONAGE CASE
'Spy' confirmed Russian
http://www.straitstimes.com/BreakingNews/World/Story/STIStory_611290.html
MOSCOW - RUSSIA has confirmed that a young woman detained in Britain on
suspicion of spying for Moscow is one of its nationals, a foreign ministry source told the
Interfax news agency on Tuesday.
British authorities detained 25-year-old Katya Zatuliveter last Thursday and she faces
deportation on suspicions of espionage.
British domestic intelligence agency MI5 said she was working for the Russian
intelligence service as a 'sleeper' agent, The Sunday Times newspaper reported.
'She is a Russian citizen. The Russian embassy (in London) has already requested that the
Foreign Office provides information about what is happening,' the diplomatic source told
Interfax.
Russian Foreign Minister Sergei Lavrov on Monday said that if Zatuliveter was Russian
she would receive full consular support. He also added that it appeared 'someone' was
trying to halt an improvement in ties with Britain.
Britain's diplomatic relations with Russia are only just emerging from an icy period after
the murder by poisoning of the dissident Russian spy Alexander Litvinenko in London in
2006. -- AFP
New rules on visas would not have stopped 'spy' entering country
http://www.telegraph.co.uk/news/uknews/crime/8185037/New-rules-on-visas-would-nothave-stopped-spy-entering-country.html
Tighter rules on student visas to be announced by the Coalition
today would not have prevented the suspected Russian spy
Ekaterina Zatuliveter entering the country.
By Gordon Rayner, Chief Reporter 8:00AM GMT 07 Dec 2010
Miss Zatuliveter, who is awaiting deportation after being arrested following a six-month
investigation by MI5, got a job working as a parliamentary researcher after coming to the
UK on a student visa to study a one-year postgraduate course.
The Home Office will today announce measures designed to cut the number of foreign
students by 100,000 per year following a string of cases in which terrorists and spies have
used student visas to get into the country.
Whitehall sources have said the new rules will be “more robust” and help to “stamp out
abuse”, following a Coalition review of the system.
But because the changes will be targeted at those who want to come to the UK to study
for courses below degree level, Miss Zatuliveter would not have been caught in the net.
The new rules would, however, have prevented Miss Zatuliveter staying in Britain
because they would have denied her the chance to obtain a two-year post-study visa after
finishing her course in Britain.
Under the Post Study Work Route, degree graduates are able to remain in the UK a
further two years to find a job, which can then eventually lead to permanent settlement.
Some 38,000 migrants took advantage of the system last year but, on average, only half
find skilled jobs while a fifth end up unemployed. At the same time some one in 10 UK
graduates were unemployed in their first six months after graduating.
Damian Green, the immigration minister, will today announce the route is to be closed as
part of a major review of student visas that will also prevent up to 100,000 fewer
foreigners coming each to study every year.
The moves are designed to curb abuse in the system and help the Government meet its
wider pledge of bring net migration down to the "tens of thousands".
Miss Zatuliveter, 25, came to Britain in 2006 on a student visa, completing a one-year
MA course in peace studies at the University of Bradford before applying for a two-year
post-study visa, giving her freedom to take any job she pleased.
She is understood to have successfully applied for a further extension to her working visa
in 2009, and if she had managed to stay in the country for five years she would have been
eligible to apply for citizenship.
Philip Davies, the Conservative MP for Shipley, said it had become “too easy” for
students to stay in the UK once they had completed their studies.
“It definitely seems to be a case of once you’re in, you’re in,” he said.
“If people have got good jobs then I’m not averse to them staying, as long as they can
support themselves, but that’s not always the case.”
In the past the student visa system has been open to widespread abuse, with bogus
colleges being set up purely to provide documentation and references for foreign
nationals who want to obtain student visas.
A number of terrorism suspects have used the system to claim to be English language
students.
Yesterday William Hague, the Foreign Secretary, insisted the Government remained
“vigilant” and defended the current visa system.
He said: “There is nothing wrong in itself with employing foreign-born people sometimes
in the House of Commons or in the work of government, some of them do outstanding
work, give great service to this country.
“But of course, we have to be vigilant for individuals where there may be something else
involved.
“We are vigilant. I think the fact that we are attending to a case like this shows that where
we have concerns we do take action and I think that is the right way of approaching it.”
Last year Gordon Brown became embroiled in a diplomatic row with Pakistan after he
suggested it was not doing enough to root out terrorism suspects.
But Pakistan responded by pointing out that many of the suspects arrested in Britain in
recent years have been in the country legally after being given student visas.
The Security Service has been concerned about Russian intelligence case officers arriving
in Britain under “non-official” cover, using business or academic visits as a pretext for
spying or recruiting others to spy.
More than 170,000 Russians visit Britain every year and around 2,000 are enrolled in
universities.
Levels of activity are now said to be back to Cold War levels with up to 35 diplomats
based in Britain who are working for the Russian intelligence agencies the SVR and the
GRU, its military equivalent.
Jonathan Evans, the director general of MI5, has said the Russians “continue to devote
considerable time and energy trying to steal our sensitive technology on civilian and
military projects.”
Sources have told the Daily Telegraph that MI5 had already launched its investigation
into Miss Zatuliveter before she was stopped at Gatwick airport in August on the way
back from celebrating her birthday in Croatia with friends.
Russian spy-row researcher Katia Zatuliveter monitored Liam Fox defence talks
http://www.mirror.co.uk/news/top-stories/2010/12/07/russian-spy-row-researcher-katiazatuliveter-monitored-liam-fox-defence-talks-115875-22767421/
By Tom Mctague 7/12/2010
Commons spy row beauty Katia Zatuliveter wrote scathing reports on Defence Secretary
Liam Fox.
Ms Zatuliveter, 25, monitored his speeches and blasted the way he called her native
Russia our No1 threat. Writing online in 2008 before Dr Fox was part of the Government,
she bitterly claimed the West believed "Russia is always wrong".
The aide to Lib Dem Portsmouth MP Mike Hancock, is awaiting deportation amid
espionage claims. Her dad Andrei accused Britain of "dipping my daughter in dirt... why
is everything happening in such an uncivilised way?"
She said she was "absolutely sure" she would win her deportation appeal "if there is
justice". The Russian added: "I was arrested on Thursday and told I would be deported.
Nobody explained why." She passed security vetting before landing her Commons job in
2008.
Foreign Secretary William Hague said: "The fact we are attending to a case like this
shows that where we have concerns we take action."
Russian spies: they can’t take their eyes off us
http://www.telegraph.co.uk/news/newstopics/politics/defence/8185810/Russian-spiesthey-cant-take-their-eyes-off-us.html
If Katia Zatuliveter was spying for Russia, she is proof that a
new breed of agent is operating, and on a scale that exceeds the
Cold War, says former KGB officer Oleg Gordievsky.
By Oleg Gordievsky 8:17AM GMT 07 Dec 2010
There is little that changes in the world of espionage. The Russians have been spying on
Britain since the days of Sidney Reilly, the “Ace of Spies”, who was executed for his part
in attempting to overthrow the Bolshevik regime in 1918. Ever since then, the Russian
secret services have hated their British counterparts. But if Katia Zatuliveter is a spy, the
Russians appear to have had a new kind of star.
Once, the role of an attractive young woman in an espionage tale was simply to be the
honeypot, but Zatuliveter is suspected of being a serious agent, and probably a very
effective one. Many of the agents deployed now are far more dynamic than in my day:
they speak foreign languages fluently, work in important companies and institutions, and
move between countries and jobs with ease. They are often better than the officers they
work for – and, working within Parliament, would be worth more to Moscow than the
whole of the KGB’s London station.
In 1985, when I escaped from the Soviet Union, there were 25 KGB officers and 14 GRU
officers – their military counterparts – working at the embassy in London. Twenty years
after the end of the Cold War, there are exactly the same number there now.
The operation in London is nowhere near as big as in the US or Germany, largely
because of the number of expulsions – in 1971, 105 “diplomats” were thrown out; then,
in 1985, another 31 were expelled; and in 1989 11 went, followed by occasional
expulsions ever since. But with a total of 39 officers, and at least 20,000 Russian
students, along with numerous others working in banks and other companies, it is easier
than ever to work and recruit here. If anything, the overall Russian espionage presence in
Britain is now bigger and more active than in my time.
We viewed the golden age of spying for our country as having passed. We knew it was
difficult to recruit agents in Britain and saw our job as just being an important department
of state – albeit one as large as the rest of the embassy. The number of people actually
working with contacts was no more than 28 and of those, only 10 were focused on
political espionage, with the remainder working on industrial spying, and infiltrating the
police and intelligence agencies.
In those days, Moscow demanded that each officer had about 10 contacts or
acquaintances among British people. Not all were able to manage that – some were
stupid, unsociable or just incapable, and it was a mistake to send them to London in the
first place. One middle-ranking officer would take his money for operations but never left
the office and never wrote a report. The agents they ran were just as bad, with some of
them pretending to be helpful but doing nothing and not even bothering to report in.
A lot of the agents I inherited when I arrived in London in 1982 as “chief resident” at the
embassy were ageing communists. Jack Jones, the union leader, was about the only one
that did well. We had a couple of contacts in Parliament, but one of them was Scottish
and I could never understand what he was saying, although I wrote up the reports
anyway.
Recruiting British people has always been difficult because they are more careful by
nature than other nationals – Italy and India were a different story. Italy must have had at
least 50 agents and in India they would literally queue around the block offering
themselves as spies. That is the way the Russians got their best agents – among them
Aldrich Ames and Robert Hanssen (in the US), who came forward rather than being
approached.
If Zatuliveter was a spy, it sounds as though she was recruited as a member of the public,
rather than an employee of the SVR, the foreign intelligence agency that succeeded the
KGB. That may well have taken place in St Petersburg, where she was a student and
where it was once the job of Vladmir Putin, now the Russian prime minister, to recruit
students just like her. This was real, systematic spy work that started with recruiting
undergraduates aged 17 or 18 and may, in her case, have continued with sending her to
work on a postgraduate course in Bradford.
The new generation of agents is not just asked to work for the KGB but to recruit for
themselves from among their circle of friends, working for the “future of Europe”. By the
time she arrived in Britain, she would have been well trained enough to launch a
fantastic, but short-lived, career.
Zatuliveter was in a position where she had access to strategic, political and military
secrets; where she was able to ask official questions of the British government, while
working for a Member of Parliament; and all the time was meeting a string of influential
and interesting people. No normal officer would be able to obtain such information, to go
to the House of Commons or the European Parliament, or to meet such important
contacts. She would have been a treasure for the London station.
It seems incredible that she was in this country for three years, dealing with potentially
sensitive material, before MI5 stopped her. If she was a Russian officer, the Security
Service’s concern would undoubtedly have been to identify who was running her. But
that would have been hidden very thoroughly because she would have been vulnerable as
soon as they knew the identity of her Russian case officer. MI5 cannot have constant
surveillance of suspects such as Zatuliveter. Most of its resources are devoted to counterterrorism operations and if she was careful about when and where she met the officer
controlling her, she would have been able to get away with her activities for a long time.
On the holiday she is said to have taken to Croatia, she would almost certainly not have
been under surveillance. She might as easily have gone to Brussels or Strasbourg. If she
was in Belgium, she could be sure that no one was watching her, unless a team had been
sent from London, although France is not as easy. But it is most likely that a controller
was in London – someone who knew which parliamentary and Cabinet committees
should be looked at; and what questions needed to be asked.
So how was she identified? The Russian section of MI5, whose job it is to catch such
spies, is not as good as it was in my day – it is staffed by a handful of young officers who
are kept very busy.
I suspect that while Zatuliveter was apparently becoming an important agent, she will
have dropped her guard. She seems to have believed she was invisible; with her short
skirt and long legs, she probably thought she could divert attention from her activities,
and for a while she may well have done, until MI5 caught up with her. For her, at least,
the game is over.
Oleg Gordievsky was a colonel in the KGB and head of station in London. He worked as
a double agent for MI6. He was arrested in 1985 in Russia and escaped back to Britain.
National Economic Trends
Russia May Spend Up to $32 Billion on Irrigation After Drought
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aaCrDR.kmlWk
By Ilya Khrennikov
Dec. 7 (Bloomberg) -- Russia may spend as much as 1 trillion rubles ($32 billion) to
repair and install irrigation systems by 2020 after a record drought this year, Rossiyskaya
Gazeta said, citing a plan drafted by the Agriculture Ministry.
The plan would improve watering systems on about 12 million hectares of farmland, the
government’s official newspaper said. The ministry is proposing an alternative program
that would cost 851 billion rubles and cover 10.3 million hectares, Rossiyskaya Gazeta
said.
The ministry is seeking to boost the harvest by 10.5 million metric tons of grains,
including rice, on the irrigated land, the newspaper said.
To contact the reporter on this story: Ilya Khrennikov at [email protected]
To contact the editor responsible for this story: Torrey Clark at [email protected]
Last Updated: December 7, 2010 01:30 EST
Free Hand’ on Rates Means Best of Bonds Over: Russia Credit
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a.orGXfcc.PE
By Emma O’Brien
Dec. 7 (Bloomberg) -- Traders are increasing their bets on an increase in Russian interest
rates, with forward contracts at their highest for two years as the central bank seeks to
tackle accelerating inflation.
Benchmark rates will rise by 217 basis points over the next nine months, the largest
increase priced in since October 2008, forward rate agreements tracked by Bloomberg
showed on Nov. 29. The prospect of higher borrowing costs precipitated a decline in
Russian ruble debt, with bonds due 2012 sliding the most for four months in November.
An index of ruble corporate bonds traded on Russia’s Micex exchange dropped by the
most since May.
“It’s never a good thing to have higher rates and the question is how much they are going
to hike,” Eugene Belin, head of fixed income at Citigroup Inc. in Moscow, said in a
telephone interview Dec. 2. “We’ve definitely seen the best of the bond run as everything
will be affected.”
Bank Rossii lowered its key interest rates 14 times to revive a banking sector hobbled by
recession and the global credit crisis. The central bank now has a “free hand” to start
raising borrowing costs, First Deputy Chairman Alexei Ulyukayev said Nov. 29. The
government expects the annual rate of inflation to exceed its 8 percent forecast this year.
Brazil has raised its benchmark interest rate three times since April 28, to a record 10.75
percent. The yield on 2012 sovereign real debt has risen 47 basis points since July 30 to
12.19 percent, according to data compiled by Bloomberg.
The yield on the comparable Russian Finance Ministry’s OFZ bond rose 28 basis points,
or 0.28 percentage point, to 5.19 percent in the same period.
‘Definitely Negative’
Russia’s refinancing rate has been at a record-low 7.75 percent since June, along with the
5 percent rate charged on overnight repurchase loans and the 2.5 percent deposit rate, the
cost of interest earned by banks that store money with the central bank overnight. Unlike
Brazil, Russia doesn’t have a single benchmark rate.
“The risk of rate hikes is definitely there, especially after Ulyukayev’s comments,”
Aleksandra Evtifyeva, an economist at VTB Capital, the investment banking arm of
Russia’s second- largest lender, said by telephone in Moscow on Dec. 2. “The first
effects will be felt in the bond market where prices will decline. For the bond market it’s
definitely negative.”
Russian inflation was 7.5 percent in October, the highest rate since January’s 8 percent
rise and versus 5.2 percent in Brazil and 4.4 percent in China, Bloomberg data show.
Ruble, Swaps
The ruble was little changed at 31.2950 yesterday, trading near its strongest level since
Nov. 25. Non-deliverable forwards, or NDFs, which provide a guide to expectations of
currency movements and interest rate differentials and allow companies to hedge against
swings, showed the ruble at 31.5407 per dollar in three months.
The yield on Russia’s dollar bonds due in 2020 fell 6 basis points to 4.746 percent. The
price of ruble notes due July 2015 was little changed, with the yield at 7.21 percent.
The cost of protecting Russian debt against non-payment for five years using creditdefault swaps rose 1 basis point to 149, according to data provider CMA. The contracts
pay the buyer face value in exchange for the underlying securities or the cash equivalent
should a government or company fail to pay.
Credit-default swaps for Russia, rated Baa1 by Moody’s Investors Service, its thirdlowest investment grade, cost 17 basis points more than similar contracts for Turkey ,
which is rated four levels lower at Ba2. Russia swaps cost as much as 40 basis points less
on April 20.
Extra Yields
The extra yield investors demand to hold Russian debt rather than U.S. Treasuries rose 5
basis points to 215, JPMorgan Chase & Co. EMBI+ indexes show. The difference
compares with 137 for debt of similarly rated Mexico and 174 for Brazil, which is rated
two steps lower at Baa3 by Moody’s.
The yieldspread on Russian bonds is 31 basis points below the average for emerging
markets, down from a 15-month high of 105 in February, according to JPMorgan
indexes.
While analysts at UniCredit SpA and Credit Agricole SA said Bank Rossii may raise
rates as soon as this month’s review, the government is concerned higher borrowing costs
may slow the economic recovery.
The central bank shouldn’t raise rates yet even as inflation accelerates, Deputy Economy
Minister Andrei Klepach said Nov. 30, according to Interfax. Economic growth is still
“very fragile” and it’s not the right time to tighten monetary policy, the newswire
reported him as saying.
Shrinking Economy
After contracting a record 7.9 percent last year, the economy of the world’s largest
energy exporter grew at an annual rate of 2.7 percent in the three months to the end of
September, the slowest quarter of growth this year.
Official borrowing costs will remain at record lows until at least the middle of next year,
said Herbert Moos, deputy chairman of VTB Group, Russia’s second-largest bank.
“We don’t see a reason to forecast a rate hike before mid- 2011,” Moos told reporters in
Moscow Dec. 2.
Hungary became the first country in the region to lift borrowing costs, raising its
benchmark rate by 25 basis points, to 5.5 percent on Nov. 29, after 14 cuts since October
2008. The yield on the country’s five-year forint-denominated bonds has risen 3 basis
points since the increase, hitting 15-month high of 8.34 percent on Nov. 30.
For the next three months, traders were pricing in 82 basis points of increases to Russia’s
key rates at the beginning of last week, the most since November 2009, according to
forward rate agreements.
The yield on government ruble bonds due August 2012 jumped 18 basis points in
November, the most since July, and has gained 5 basis points since the Nov. 26 rates
decision, according to data compiled by Bloomberg.
Two-year ruble debt of OAO Gazprom, Russia’s monopoly gas exporter, yielded 6.43
percent yesterday, up 8 basis points since Nov. 26. The Micex index of ruble corporate
bonds lost half a percentage point last month, the most since May.
To contact the reporter on this story: Emma O’Brien in Moscow at
[email protected]
To contact the editor responsible for this story: Gavin Serkin at [email protected]
Last Updated: December 6, 2010 16:29 EST
RUSSIA 2011: Growth but state-led recovery is bad news
http://www.bne.eu/storyf2438/RUSSIA_2011_Growth_but_stateled_recovery_is_bad_ne
ws
Ben Aris in London
December 7, 2010
While Western Europe is once more staring into the abyss of sovereign default, Russia is
expected to see economic growth pick up next year. But even Russia's leading officials
admit that the state is carrying the can, while the private sector and consumers have yet to
recover from the shock of 2008's collapse.
This must change or Russia will be caught in a "period devaluation trap," argues Deputy
Economy Minister Andrey Klepach. But so far, the state has been unable to come up with
anything better than pumping more investment into the economy through the massive
state-owned enterprises. The race is on: make deep qualitative changes in the nature of
the economy or consign Russia to the boom-bust cycles of a commodity-dependent
economy.
A troika of top Russian officials appeared at the Adam Smith annual Russian banking
conference in London and laid out a set of encouraging macroeconomic results. On the
face of it, the pace of economic growth is picking up, while the deficit has fallen further
and faster than anyone expected, and Russia's economy now appears to be amongst the
healthiest in the world.
On closer inspection, however, the official numbers disappointed and the private sector
appears to be moribund. The government's results paint a rosy picture in the European
context of bailouts and spiking credit default swap (CDS) spreads, but it is the blanks in
between that are the cause for worry.
The bottom line is the state and state-owned business have enough money and
momentum to keep the economy climbing out of the deep hole it fell into in 2008, but
everyone is still waiting for consumer and small business confidence to return to the point
where Russians start to shop again and business start to invest again. "Russia enjoys a
very low debt/GDP ratio of about 10%, so we can borrow and remain reluctant to cut
spending. The deficit is projected to be 4.8% this year, 3.6% next year before falling to
zero in 2015," Deputy Finance Minister Dmitry Pankin told delegates. "We are not under
a lot of pressure and we can continue fiscal stimulation, as there is no danger of solvency
problems."
Fragile: handle with care
Still, economic growth remains very fragile. Russia's economy bounced back in the last
part of 2009 and this growth extended into the start of 2010, Klepach said. Then it began
to falter and was slowing even before it was knocked sideways by the fires in Russia over
the summer. More fundamental domestic-based, consumption-led growth only appeared
in the last months of 2010. "The growth of the Russian economy was almost exhausted in
the first quarter of 2010, but then it started to recover in September," Klepach said. "At
the start of this year, the key drivers of the economy were all external and supported by
the recovery of oil prices which goes hand in hand with [the growth in] Russia's GDP. So
in September, we saw the start of a third wave of growth and expect that growth for the
full year will be about 3.8%."
As he went on, a picture of a state-led recovery appeared from the statistics. "In the
fourth quarter, we saw the start of a pick-up in investment, which was faster than
expected: we were expecting 2.5% [increase in the rate of investment year-on-year], but
in October saw 5.5-6%," said Klepach. "Much of this investment was going into energy
and into the metal and engineering sectors. But it is hard to get a clear picture of what is
happening in investment, as the state is also investing heavily under state programmes."
Looking at unemployment gives a clearer picture. Again the macro results were better
than expected, but the numbers that give a better insight into what is happening on the
ground were disappointing. "Unemployment dropped faster than expected, but in all in all
the sectors are now employing less people even though those people are paid more than
before the crisis," said Klepach. "The change in consumption is not reflected in these
numbers and has remained more or less flat and well below the government forecasts:
retail turnover growth won't reach the government's forecast of 5% this year."
Indeed, the latest forecast for consumption growth is closer to 2% for the year. But while
before the crisis increases in income were multiplied in the retail turnover results, so that
the approximate 5% increases in income turned into 15%-plus increases in buying, even
though real incomes have risen over the last two years – this year incomes are up some
5% - retail sales have multiplied down. This strongly suggests that Russian shoppers are
still feeling shell shocked by the crisis and have changed they way they buy: instead of
leveraging their ever-increasing incomes to buy on credit (which multiplies retail
turnover up very fast), they are saving until they can buy goods in cash. In other words,
Russian shopping habits have reverted to those of pre-2001 before retail credit first
appeared.
Companies can't invest unless they have rising sales, as Russian private industry is now
suffering from overcapacity, while the state is doing all the investment. Klepach admitted
as much. "The key drivers for 2011 are all the natural monopolies' plans [for investment]
– nothing is expected from the private or SME sectors – so the state is leading the
recovery," Klepach said. "The investment plans by Gazprom alone will have a huge
impact, while investment in other sectors is still minimal."
Structural problems
Klepach also pointed out some worrying changes in the structure of the economy. What
sales increases there have been are mostly going to imports, which have been rising fast.
That is bad news for domestic industry, as again badly needed sales aren't materialising.
"The growth of the internal demand is mapped to imports," said Klepach. "Now the ratio
of import/export production is worse than before the crisis. Food imports have fallen or
remained stable due to the protectionist measures. However, in durables and investment
sectors the sensitivity to imports is enormous and their gain is enormous. Joining the
WTO will not help and won't slow the growth of imports – in fact it will do quite the
opposite and exacerbate it."
He was also pretty negative on the outlook for the recovery of consumption and suggests
that income growth now is below a level that can kick-start the pre-crisis virtuous circle
of spending, profits, investment, wage rises. "The second key question for the growth in
2011 is what will the consumer do? Incomes are still rising, but they are rising half as fast
as they did pre-crisis. However, we expect that lending will increase, but this is
counteracted by the changes to the saving levels of the population," said Klepach.
"Russians have traditionally been big savers with 20% of total income being saved.
However, saving fell heavily in the crisis to 13% before rebounding to 19%. From here
on, the level of saving will slowly fall to about 13% in 2013."
This is bad news because if this trend continues, then the value of the ruble will come
under pressure. The ruble had been appreciating strongly for the years before the crisis,
but has fallen in value in the last year. Indeed, Klepach said that if there is no change in
the current trends, then Russia will face another bout of devaluation of the ruble to bring
it into line with new structure of the economy. "In 2012, the ruble appreciation will stop
and there will be a devaluation shake up. This happens every few years," said Klepach.
"Or we will have to dramatically open our economy to foreign investors and get a steady
flow of investment."
Will this happen? Alexei Ulyukaev, first deputy chairman of the Russian central bank and
the third member of the troika to speak at the conference, offered a bit more hope. Like
the others, the picture he painted of the banking sector was positive. Non-performing
loans, capital adequacy ratios and liquidity in the sector are all extremely strong. More
importantly, he pointed to a recovery in lending, with consumer lending growing the
fastest. "We expect lending to growth by 12% by the end of the year," said Ulyukaev,
"which if you take out 8% inflation, is a real increase of 3%, but retail lending is growing
faster than corporate."
He went on to say that the private banks are increasing lending faster than the state banks,
which is also good news as they have been, "more realistic about the state of the economy
than the state banks." He also said that banks were in robust health and that the lowerthan-expected bad debt levels will give the bank sector a capital boost in the new year.
"The need to increase bank capital will be solved organically as reserves [set aside to deal
with bad debt] are at a historical high and next year some of this money will be
transferred to boost the capital base," said Ulyukaev.
Ulyukaev comments that retail borrowing is growing give some cause for optimism. But
the race is on: the main drag on Russia's growth is a lack of confidence amongst people
and small business owners. And why shouldn't there be? After all, this is a population
that has been hit by three major crises in the last 20 years. Typically, in the previous
crises it has taken four years for confidence to fully return and we are still only two years
into this one. Most analysts are expecting next year to be much stronger, but the current
picture suggests that while the state-led recovery will bring improvements next year –
essential to restoring confidence – the really strong growth led by investment,
construction and spending like last time may not appear until 2012.
Vasily Vysokov, president of the Rostov-on-Don progressive Centre-Invest Bank, put his
finger on the problem when he said: "We shouldn't increase the rate of growth of a bad
economy, but use the crisis to change the nature of the economy and its direction. The
state support takes money out of the pockets of those that work well and puts it in the
pocket of those that work badly."
Happily, the government seems to get it, which is what President Dmitry Medvedev's
modernisation drive is all about. Unhappily, the state is not doing very well at
implementing this programme and the fact that all the plans for improving the economy
in 2011 rest with the "surprises in store from Gazprom's investment programme," noted
by Klepach, testifies to the government impotence in making a difference. Still, at least
the Kremlin realises the scale of the problem and also what they need to do to avoid
failure. "The economy is now starting a new phase of growth. Where there will be big
qualitative changes otherwise the economy will not be competitive and we will not be
able to escape this periodical devaluation trap," said Klepach.
Business, Energy or Environmental regulations or discussions
Norilsk Nickel, Polymetal, Rosneft: Russian Equity Preview
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a1PfcDPQPjYk
By Anastasia Ustinova
Dec. 7 (Bloomberg) -- The following companies may be active in Russian trading. Stock
symbols are in parentheses and share prices are from the previous close in Moscow
The 30-stock Micex Index climbed 1.4 percent to 1,672.57.
VTB Group (VTB RX): VTB Capital acquired a stake in OAO Rosbank from Vladimir
Potanin’s Interros Holding Co., saying it sees a “strong growth outlook” in the country’s
banking industry. Russia’s second-biggest lender rose 1.3 percent to 10.27 kopeks in
Moscow.
OAO GMK Norilsk Nickel (GMKN RX): Copper prices rose to a three-week high on
speculation that a recovery in the global economy will boost demand for electrical wire
and plumbing. Russia’s biggest mining company fell 0.2 percent to 6,656.52 rubles.
OAO Polymetal (PMTL RX): Gold rose near a record on concern the U.S. economy may
need more stimulus, and Europe’s debt crisis will spread, boosting the appeal of the metal
as an alternative to holding currency. Silver also gained. Russia’s biggest silver producer
gained 3.8 percent to 622.69 rubles.
OAO Rosneft (ROSN RX): Crude oil for January delivery fell 0.1 percent to $89.07 a
barrel on the New York Mercantile Exchange. Russia’s biggest oil producer rose 0.9
percent to 219.59 rubles.
To contact the reporter on this story: Anastasia Ustinova in St. Petersburg at
[email protected].
To contact the editor responsible for this story: James M. Gomez in Prague
[email protected]
Last Updated: December 6, 2010 22:00 EST
Prokhorov Seeks to Create ‘Top 3’ Gold Producer in 2011 Merger
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aOq9L6wZ87qw
By Ryan Chilcote, Henry Meyer and Ilya Khrennikov
Dec. 7 (Bloomberg) -- OAO Polyus Gold, Russia’s largest producer of the metal, may
merge with a global competitor as early as next year to form a “Top 3” gold miner,
billionaire owner Mikhail Prokhorov said.
Polyus plans to get a primary listing in London next year by combining with its Jersey,
U.K.-based unit KazakhGold Group Ltd., Prokhorov said in an interview with Bloomberg
Television yesterday in Moscow. He then intends to “make a merger with one of the
leading gold companies in the world,” he said, declining to name potential targets.
Russian gold producers are seeking to expand their global reach after prices for the
precious metal soared 30 percent this year. OAO Polymetal, a Russian gold and silver
miner, is seeking to change its domicile to Jersey to widen its investor base, while OAO
Severstal’s Nord Gold unit plans an initial public offering in London.
Polyus’s market value will rise 20 percent after the U.K. listing, Prokhorov said. After a
merger, “we’ll need to be in the world’s Top 3” gold miners, he said. The businessman,
who controls Moscow-based Polyus with fellow billionaire Suleiman Kerimov, will have
a minority stake in the combined company.
Barrick Gold Corp., Newmont Mining Corp. and AngloGold Ashanti Ltd. were the
world’s largest gold miners last year, according to London-based researcher GFMS.
Target Any Rival
Polyus, which spent almost a decade buying mineral deposits to amass the world’s fifthlargest gold reserves, will be able to merge with any global competitor once it has a
primary London listing, Prokhorov said.
The company had considered a merger with Canada’s Kinross Gold Corp. “several years
ago,” Chief Executive Officer Evgeny Ivanov said in February. In 2004 Polyus, then a
unit of OAO GMK Norilsk Nickel, planned to combine with South Africa’s Gold Fields
Ltd., in which Norilsk had a 20 percent stake. The plan got scrapped and Norilsk sold the
stake two years later.
Forbes magazine this year ranked Prokhorov, 45, as Russia’s second-richest man, with a
$13.4 billion fortune. Last year he extended his interests into U.S. basketball, buying the
New Jersey Nets.
To contact the reporters on this story: Ryan Chilcote in Moscow at
[email protected]; Henry Meyer in Moscow at [email protected]; Ilya
Khrennikov in Moscow at [email protected].
To contact the editor responsible for this story: Amanda Jordan at
[email protected].
Last Updated: December 7, 2010 02:57 EST
Moscow Seeks $445 Million in 2011 Asset Sales, Vedomosti Says
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aDqEfY5mM8ZM
By Ilya Khrennikov
Dec. 7 (Bloomberg) -- Moscow’s government plans to raise 13.9 billion rubles ($445
million) next year selling assets, including stakes in a Vnukovo Airport terminal and in
Hilton, Holiday Inn and Marriott hotels, Vedomosti reported, citing city hall documents.
To contact the reporter on this story: Ilya Khrennikov at [email protected]
To contact the editor responsible for this story: Brad Cook at [email protected]
Last Updated: December 7, 2010 01:02 EST
Aeroflot to Swap 6.3% Shares For 6 Air Carriers, Kommersant Says
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aGoFtqTE8aBc
By Ilya Khrennikov
Dec. 7 (Bloomberg) -- OAO Aeroflot is ready to swap 6.3 percent of its shares for six
regional air carriers owned by Russian Technologies Corp., Kommersant reported, citing
a management meeting with investment analysts.
Russian Technologies was earlier seeking to get 25.8 percent in Aeroflot, Russian largest
air carrier, in exchange for its aviation assets, which have $819 million of debt, the
newspaper said.
To contact the reporters on this story: Ilya Khrennikov in Moscow at
[email protected].
To contact the editor responsible for this story: Amanda Jordan at
[email protected].
Last Updated: December 7, 2010 00:32 EST
Usmanov May Seek $160 Million in IPO of TV Unit, RBC Daily Says
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ahYfFJG..U1s
By Ilya Khrennikov
Dec. 7 (Bloomberg) -- Russian billionaire Alisher Usmanov may seek to raise as much as
$160 million selling shares in his television unit UTV next year, RBC Daily reported,
citing unidentified people familiar with the matter.
UTV owns Media-1, 7TV and Muz-TV, the Moscow-based newspaper said today. The
unit may be valued at about $400 million, RBC Daily said.
To contact the reporter on this story: Ilya Khrennikov at [email protected]
To contact the editor responsible for this story: Brad Cook at [email protected]
Last Updated: December 7, 2010 00:36 EST
Puget Ventures Signs Definitive Deal To Buy Cobalt Assets In Russia
http://www.rttnews.com/Content/CanadianNews.aspx?Id=1499198&SM=1
12/7/2010 12:28 AM ET
(RTTNews) - Vancouver-based Puget Ventures Inc. (PVS.V: News ) announced that it
has signed definitive deal to buy cobalt assets and other mineral assets in Russia and
Mongolia with Imperial Mining Holding Ltd. The company also stated that it will change
its name to Global Cobalt Corporation to reflect evolution to international cobalt
exploration and development company.
The Proposed Transaction will be structured as an arm's-length reverse takeover of Puget
Ventures by IMHL, which is domiciled in Isle of Man. Puget said that it will acquire all
of the issued and outstanding securities of Pafra, a wholly-owned subsidiary of IMHL,
incorporated in Cyprus.
Together with definitive deal, Puget Ventures also announced that it will be undertaking
brokered financing of C$20 million to raise funds for Karakul cobalt project in Russia.
Werner Lake, Ontario, Canada located in Northwestern Ontario, Canada, will continue to
be held and developed through Global Cobalt and will represent the Canadian cobalt
operations division, the company added.
Pursuant to the transaction, Puget has engaged Mackie Research Capital Corporation to
act as lead agent and sole bookrunner, in a syndicate of agents to be named, for a bestefforts financing of C$20 million in subscription receipts . Each receipt will be priced at
C$1.05 and will be comprised of one common share and a half purchase warrant.
Two Russian Grocers Move to Thwart Wal-Mart
http://www.nytimes.com/2010/12/07/business/global/07ruble.html?_r=1&src=twrhp
By ANDREW E. KRAMER
Published: December 6, 2010
MOSCOW — Two of Russia’s largest grocery store chains, Pyaterochka and Kopeika,
said on Monday that they would merge their operations in a move that would better
position them to compete with Wal-Mart, which is expected to enter the Russian market.
The deal, worth about $1.7 billion including the assumption of debt, was also a sign of
renewed confidence in the Russian consumer market, which has been picking up because
of rising prices for oil and other commodities that Russia exports.
Just last week, PepsiCo bought two-thirds of the Russian juice and dairy maker WimmBill-Dann for $3.8 billion. The deal was the largest acquisition in Russia by a United
States company, according to Thomson Reuters. And after the acquisition, Pepsi, which
has been doing business in Russia and the former Soviet Union since the 1950s, became
the largest food and beverage company in Russia.
Consumer goods companies have held a special appeal to foreign investors here because,
in contrast to the oil and mining industries, the retail sector is fairly free of government
meddling and open to foreign investment. And Russians, after decades of pent-up
demand under communism, are free spenders.
“The trickle-down is real,” Hawk Sunshine, portfolio manager for Metropol, said of the
investment interest in retailers in Russia. “Russians will have a steady flow of cash for
years.”
Wal-Mart, the world’s largest retailer, has kept an office in Moscow for years but has not
opened a store yet.
The Russian business daily Kommersant reported that Wal-Mart was in talks earlier this
year with the company that was sold Monday, Kopeika, but did not reach agreement with
the Russian owner. Wal-Mart, based in Bentonville, Ark., has said its efforts to enter
Russia have so far broken down over disagreements about price.
Instead, the X5 Retail Group the parent company of Pyaterochka which is controlled by
the Russian businessman Mikhail Fridman and is the leading retailer in the country,
bought Kopeika. The deal, which X5 said in a statement had already been approved by
regulators, added about 700 stores to its existing chain of Pyaterochka grocery outlets.
Over two years, X5 will convert the Kopeika stores to its Pyaterochka brand, the
company said in a statement that also obliquely noted that it had beat out Wal-Mart in the
acquisition.
“The quality of Kopeika’s assets was underlined by serious interest from international
players,” Andrei Gusev, X5’s director for mergers and acquisitions, said.
Russia Box Office Sales Reach Record $1 Billion, Kommersant Says
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a6ntkLrbtn.M
By Ilya Khrennikov
Dec. 7 (Bloomberg) -- Russian box office sales reached a record $1 billion in the year to
Nov. 28, led by Hollywood 3-D films “Avatar,” “Shrek Forever After” and “Alice in
Wonderland,” Kommersant reported, citing Kinobusiness Today magazine, which tracks
the industry.
Sales of movie tickets jumped 43 percent from $736 million the previous year, the
Moscow-based newspaper said.
To contact the reporter on this story: Ilya Khrennikov at [email protected]
To contact the editor responsible for this story: Brad Cook at [email protected]
Last Updated: December 7, 2010 00:46 EST
‘Nutcracker’ Breaks Russian Movie Budget Record, Vedomosti Says
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a8siJoG8Kzdk
By Ilya Khrennikov
Dec. 7 (Bloomberg) -- “Nutcracker and the Rat King,” a Russian movie that debuts Jan.
1, cost about $90 million to produce, making it the country’s most expensive film,
Vedomosti reported, citing the director, Andrei Konchalovsky.
VEB, the state development bank overseen by Prime Minister Vladimir Putin, financed
almost all of the budget, the Moscow- based newspaper reported today. Konchalovsky, a
brother of Academy Award-winning director Nikita Mikhalkov, started shooting the film
in 2007, Vedomosti said.
To contact the reporter on this story: Ilya Khrennikov at [email protected]
To contact the editor responsible for this story: Brad Cook at [email protected]
Last Updated: December 7, 2010 00:57 EST
For the Record
http://www.themoscowtimes.com/business/article/for-the-record/425789.html
07 December 2010
VTB Capital bought Interros Holding’s 19.3 percent of Rosbank, which is controlled by
Societe Generale, VTB said Monday.(Bloomberg)
A second trans-Siberian railway line may have to be built to handle increasing freight
traffic, Russian Railways said Monday, saying the proposed BAM-2 link may cost 448
billion rubles ($14.3 billion). (Bloomberg)
Aeroflot closed Monday at 83.94 rubles, up 1.9 percent, after the airline said it boosted
net income 65 percent to $281 million in the first nine months, and revenue rose 28
percent to $3.16 billion. (Bloomberg)
Norilsk Nickel said Monday that it plans to restart its Lake Johnston nickel mine in
Western Australia in the first half of 2011.(Bloomberg)
Russia Post is in talks with Poste Italiane on creating a postal bank in Russia, Vladimir
Dmitriyev, head of VEB, told reporters Monday in Khabarovsk. (Bloomberg)
Activity in the Oil and Gas sector (including regulatory)
DECEMBER 6, 2010, 11:18 P.M. ET
Rosneft Sells Jan-Feb Sokol Crude To BP At High Premium -Trader
http://online.wsj.com/article/BT-CO-20101206-716280.html
SINGAPORE (Dow Jones)--OAO Rosneft (ROSN.RS), a Russian oil producer, has sold
1.4 million barrels of light, sweet crude for January-February loading to oil major BP
PLC (BP) at a high premium, reflecting stronger Asian demand for grades rich in
gasoline and naphtha, a trader familiar with the matter said Tuesday.
The two 700,000-barrel cargoes of Sokol crude were sold at a premium of almost $6 a
barrel to benchmark Dubai quotes on a cost-and-freight basis, the trader said.
Singapore's complex refining margin to Dubai crude rose 33 cents to $7.23 in the week to
Dec. 2, Dow Jones Newswires calculations show. The increase was driven by stronger
margins for gasoline and naphtha.
-By Wayne Ma, Dow Jones Newswires; +65 6415 4065; [email protected]
$27Bln Yamal LNG Plan May Earn Tax Break
http://www.themoscowtimes.com/business/article/27bln-yamal-lng-plan-may-earn-taxbreak/425759.html
06 December 2010
By Howard Amos
The Finance Ministry on Monday published a bill that would introduce a tax holiday for
companies that extract natural gas on the remote Yamal Peninsula and liquefy it for
shipment by tanker.
If it becomes law, the bill will provide much-needed support to plans by Novatek to build
a multibillion-dollar liquefied natural gas, or LNG, plant in Yamal in conjunction with
foreign partners. Developers face a host of logistical problems, including freezing
temperatures, in accessing Yamal's fossil fuel reserves.
In a statement released on the ministry's web site, it said LNG production in Yamal
would involve capital expenditure of upward of 850 billion rubles, or $27.2 billion.
Previous estimates by experts and officials were upward of $20 billion.
Posted on the ministry's web site, the bill stipulates for a zero rate of the gas extraction
tax for 12 years for gas lifted from under the Yamalo-Nenets autonomous district and
used for liquefaction. The tax holiday would cease if the cumulative amount of extracted
gas at a field tops 250 billion cubic meters.
The law would come into force Jan. 1, 2012.
A Novatek spokesman, Denis Solovyov, said Monday that any comment was premature
before the bill collects approvals from the parliament and the president.
“When there is a decision, then there will be something to comment on,” he said.
Novatek, the biggest independent gas producer in Russia, is preparing to develop its LNG
project to exploit the giant South Tambei field, estimated to hold 1.3 trillion cubic meters
of gas in proved reserves. If given the go-ahead, it would be Russia's second LNG plant,
after Gazprom's Sakhalin-2 venture, which supplies 5 percent of the global market.
Novatek may start production at the plant as soon as 2016, chief executive Leonid
Mikhelson said in October. The project aims to export 15 million tons of LNG, or 20.4
bcm of natural gas, a year to Asian and European markets.
Without the tax breaks, said Alexei Kokin, an analyst at the international investment
group Metropol, “this would be a loss-making project.”
Under the bill, Novatek would save at least 59 billion rubles during the tax holiday at the
tax rate of 237 rubles per 1,000 cubic meters of gas, which is set for next year.
Foreign companies such as France's Total and Britain's and Holland's Royal Dutch Shell
have expressed interest in joining the project.
Prime Minister Vladimir Putin agreed to a proposal to introduce a tax holiday in Yamal
when he held a meeting on the long-term development of the gas industry in October. He
then instructed the Finance Ministry, the Economic Development Ministry and the
Energy Ministry to work together on submitting the proposal to the Cabinet before the
year's end.
The Finance Ministry's bill will also apply the tax holiday to natural gas condensate
extracted in Yamal. The upper limit of extraction, which would mark the end of the tax
holiday in the case of condensate, is 20 million tons.
INTERVIEW-Yamal region leads Russia's gas surge
http://www.futurespros.com/news/futures-news/interview-yamal-region-leadsrussia%27s-gas-surge-1000005151
2010-12-06 12:41:42 GMT (Reuters)
* Investment in Yamal Nenets to grow 20 percent per year
* Arctic oil link-up with east not to threaten flows to EU
* Govt backs foreign investment in Yamal LNG, other projects
By Jessica Bachman and Olesya Astakhova
MOSCOW, Dec 6 (Reuters) - Russia will have no problem doubling gas output by 2030
and extracting a third of of the world's production, the head of its top producing region
said.
Gas superpowers should divide market share in the face of a global glut, the governor of
the Arctic Yamal Nenets region told Reuters.
Yamal produces 85 percent of Russia's gas or one seventh of global output. Dmitry
Kobylkin said his region could produce 1 trillion cubic metres annually and will also
raise its game in the oil business.
"Only 15 percent (of Yamal's gas) has been extracted, so there is still huge potential,"
Kobylkin said in an interview at the region's embassy-like residence in Moscow.
"We have trillions and trillions of cubic metres left. (Prime Minister Vladimir) Putin is
looking at 1 trillion a year and this is entirely do-able," he said.
Russia, the world's largest energy producer, has been hit by a global oversupply of gas
due to lower industrial demand and a boom in production from unconventional sources,
particularly shale gas.
The International Energy Agency sees the gas glut lasting another decade, but during a
recent visit to Yamal Nenets, Putin said that Russia will stimulate the sector to double its
annual gas production to 1 trillion cubic metres by 2030.
Weak demand has forced Gazprom, Russia's state-owned energy giant, to lower its 2010
output forecast, and with more European consumers preferring to buy cheaper liquified
natural gas (LNG) on the spot market, the firm is banking on China to buy its exports.
In Yamal Nenets, Russia's No. 2 gas producer Novatek is preparing to start construction
of Russia's second LNG plant that would produce 16 million tonnes of LNG per year.
Kobylkin said he supported foreign participation in the project and has spoken with
representatives of Qatar, the world's largest LNG player, and France's Total, both of
which are keen on partnering with Novatek.
"LNG, there is demand for this, and Qatar and Total see this . . . But talks (between
Novatek, Qatar and Total) are about marketing, not because there is not enough money to
build it. Banks will take care of that," he said.
"It's about marketing because they all produce the same product and want to properly,
wisely divide the market."
Novatek bought into Yamal LNG last year, when it acquired 51 percent of the company,
which holds the right to develop Yamal's South Tambey fields, with gas resources
estimated at 1.3 trillion cubic metres.
NEW ARCTIC ENERGY FRONTIER
Yamal Nenets encompasses a 700-km (435 mile) peninsula surrounded by the Arctic
Kara Sea and is home to 500,000 people and 700,000 reindeer. It is also one Russia's the
most promising new oil frontiers, which will account for 15 percent of Russia's total oil
production.
Its large, untapped deposits, such as the Trebs and Titov oil ields which mid-size firm,
Bashneft, won the rights to develop on Thursday, will help compensate for a decline in
production from ageing West Siberian fields.
"In Yamal oil production will grow by 5-10 percent in the next three years and overall
investment in the region will increase 20 percent each year," said Kobylkin, who was
appointed governor in March.
He also said that while the Arctic greenfields will serve Asia via a northern link-up to the
East Siberian Pacific Ocean (ESPO) pipeline, one spur of which going directly to China,
exports to Europe were not under threat.
"There won't be less oil going to our left. The (pipeline) capacity is good, and we will fill
it just like always. Only oil from new deposits will go East. We are expanding our market
and that's it," he said.
Oil majors LUKOIL, Gazprom Neft and TNK-BP, which are developing deposits in the
remote region, will finance the construction of the Zapolyarnoye-Purpe pipeline to bring
this oil to the market.
(Reporting by Jessica Bachman and Olesya Astakova; Writing by Jessica Bachman;
editing by William Hardy)
Bashneft reports neutral 3Q10 IFRS results
http://www.bne.eu/dispatch_text13834
Renaissance Capital
December 7, 2010
Bashneft reported 3Q10 IFRS results and hosted a conference call yesterday (6 Dec). We
note the progress made in the disclosure of quarterly results, although a full set of
accounts has still not been provided. The results themselves came close to consensus
estimates on the revenue and operating lines; however, net income was 15% below the
consensus forecast. A YoY comparison provides little information, since 3Q09 numbers
were not reported on a consolidated basis and a tolling scheme was still in place in 3Q09.
• Revenue increased 5% QoQ as a result of a higher share of exports of oil products and
growth in other sales (Bashkirenergo).
• The key negative trend in costs was QoQ growth in lifting and refining costs per unit of
3.3% and 3.7%, respectively, in rouble terms. Bashneft remains the highest-cost producer
among Russian integrated oil companies, with lifting costs rising to $8.3/bbl.
• The key positive trend was a 19% QoQ reduction in transportation costs due to
optimised logistics.
• Net income was affected by several non-operating items, such as provisions for legal
proceedings with Probusinessbank and an FX loss of $34mn.
• Bashneft continued to demonstrate low capex levels during 3Q of just $117mn ($60mn
for upstream and $39mn for downstream). Low downstream capex was the result of
slower deliveries of key refining units and should accelerate towards year-end.
During the conference call, management provided some broad (and conservative, in our
view) guidance for 2011, including crude output of at least 14.5mnt and refining volumes
close to the 2010 level (subject to market conditions). The company plans to achieve a
production level of 15mnt by 2013 and maintain this for four-to-five years. The company
did not give any details on the development plans for the Titov and Trebs fields, noting
that the government has not yet made an official decision.
Bashneft Making Foray Into European Trade
http://www.themoscowtimes.com/business/article/bashneft-making-foray-into-europeantrade/425749.html
06 December 2010
Reuters
UFA — Fast-growing midsized oil company Bashneft is set to open its trading arm in
Zurich in 2011 to carve a share of the lucrative European crude and oil product market,
the company's head said.
Bashneft, which posted a 17.7 percent drop in third-quarter net profit on Monday due to a
forex loss and maintenance works, also wants to beef up upstream business in Russia and
abroad.
As part of its ambitious plans to strengthen its foothold in trading, president Viktor
Khoroshavtsev expects third-party volumes to make up half of the total trade of crude oil,
motor oil and lubricants.
"I believe that 2011 will be the year of this program's launch. We will have some results
by the year-end, it's early to speak about the volumes," he told Reuters in an interview
cleared for publication Monday.
The company follows in the footsteps of TNK-BP, which plans to open a trading office in
Geneva.
Bashneft, owned by oil-to-telecoms holding Sistema, is set to produce more than 14
million tons this year, above the initial target of 13.4 million tons, as the firm has almost
tripled flow rates at its wells, the president said.
But still, it will be less than 26 million tons of its refining capacity, and the company is
looking into ways to balance its upstream and downstream business.
Last week, Bashneft won the rights to develop the huge Trebs and Titov oil fields in the
Arctic, but Khoroshavtsev said Bashneft will continue its drive to increase its resource
base by acquiring more Russian and foreign deposits.
"Sooner or later, we will go West [to acquire oil fields]. We had some initial offers from
Latin America and the Middle East," he said in the company's headquarters in Ufa,
adding that Bashneft will try to increase its assets base in Russia first. "We are looking at
the Republic of Komi, Krasnoyarsk and Irkutsk regions. We are interested in Naulskoye
deposit."
Earlier this year, Gazprom Neft, the oil arm of Gazprom, was the sole contender to
develop Naulskoye with recoverable resources valued at 50 million tons in the Nenets
autonomous district, but later decided to drop the bid, reportedly because of the high
price tag set by the state.
According to Khoroshavtsev, Bashneft aims to start oil production Trebs and Titov in
2014, a year earlier than planned. He said the production there is set to peak at 7 million
tons, while investments may total at least $3 billion to $3.5 billion. Last week, a Bashneft
independent board member said the company will have to invest between $5 billion and
$6 billion in the development of the fields.
The firm was the only contender in the bid for the fields, which contain an estimated 200
million tons of oil reserves, after rival bidders Surgutneftegaz and TNK-BP were
disqualified.
Bashneft saw its third-quarter net profit after minority interest, decline to $278 million
from $338 million in the previous three months due to a forex loss and the creation of a
reserve to cover possible court case payments.
Refining output in the third quarter edged down by 0.3 percent to 5.56 million tons due to
maintenance works. Khoroshavtsev said the oil products output will continue to fall in the
fourth quarter on the back of a seasonal demand drop.
Bashneft has made provisions for legal proceedings involving lender Probusinessbank,
which is reportedly seeking some 900 million rubles ($28.82 million) in damages related
to a trader insolvency.
Operating income before depreciation and amortization, or OIBDA, dropped 2.3 percent
to $680 million, while revenues increased by 5.3 percent to $3.51 billion.
According to Khoroshavtsev, the losses related to the ruble exchange rate amounted to
about $34 million. The Bashkirenergo power generation unit also contributed to a lower
profit because of some maintenance works before the winter season, he added.
Bashneft's total debt rose by $1.57 billion to $3.75 billion in the third quarter, as the
company secured loans from Gazprombank and VTB, and is set to rise further.
"We enjoy a comfortable ratio of net debt to OIBDA, which is less than 1.5. Obviously,
the debt will keep on rising, as when we get the license, as I hope, for Trebs and Titov
deposits, we will need money for their development," Khoroshavtsev said.
Joint Bid for Poland Refiner
http://www.themoscowtimes.com/business/article/joint-bid-for-polandrefiner/425787.html
07 December 2010
Gazprom’s oil arm and Rosneft are interested in acquiring Grupa Lotos, Poland’s secondbiggest refiner, and may team up to make a competitive bid, Energy Minister Sergei
Shmatko said Monday.
“It’s politically very important to signal that our companies are ready to come, and at
least to hear from Poland that there won’t be any discrimination in decision making,”
Shmatko said.
The Polish government is selling a majority stake in Grupa Lotos, which operates a
refinery in Gdansk, as part of a $19 billion asset-sale plan, with preliminary bids due by
Feb. 4, it said in October.
(Bloomberg)
Gazprom
Ukraine pays for November gas in full, Gazprom says
http://www.rbcnews.com/free/20101207114848.shtml
RBC, 07.12.2010, Moscow 11:48:48.Gazprom has confirmed that Naftogaz of
Ukraine had made a full payment for the gas supplied to Ukraine in November 2010.
Yesterday, Naftogaz's public relations department reported that the company had
transferred $1.043bn to Gazprom for November's natural gas deliveries.
Gazprom, Namcor to Take Piece of Tullow Kudu Stake
http://www.oilandgaseurasia.com/news/p/0/news/9848
Gazprom and Namibia’s Namcor, plan to buy part of Tullow Oil’s Kudu field off the
coast of Namibia. The two firms will set up a JV company that will hold a 54% stake in
the gas field, Boril Ivanov, the head of Gazprom’s international E&P operations said in
the Russian company’s corporate magazine. Tullow will hold 31% and Itochu Corp. the
remaining 15%, he said.
Kudu “reserves may increase several times over with additional exploration,” Ivanov said
in the issue of Gazprom magazine e-mailed today by the company. He estimated the field
holds 1.8 Tcf.
Gazprom is in talks with Namibian and South African authorities about plans to build an
800 MW power plant. Some electricity will be supplied to the domestic market with the
rest to be exported other markets in the southern Africa region.
There is also word that Namibia is pushing Tullow and Gazprom to fast track the power
plant. “We are going to have problems” with electricity shortages by 2013, when power
imports from Zimbabwe, Zambia and the Democratic of Congo start petering out, Siseho
Simasiku, CEO of Namibia’s Electricity Control Board, said in an interview in Cape
Town. Namibia would like a decision on the new plant to be taken “yesterday.”
Copyright 2010, Petroleum Africa. All rights reserved.
Gazprom Neft seeking Arctic offshore assets
http://www.barentsobserver.com/gazprom-neft-seeking-arctic-offshore-assets.485763816178.html
2010-12-06
Russia’s fifth biggest oil company, Gazprom Neft, is preparing bids for four big fields in
the Pechora Sea and the Kara Sea, the company confirms.
Company representative Viktor Savelyev told journal Neftegazovy Vertikal that
Gazprom Neft has a high strategic focus on offshore fields in the Arctic. He also confirms
that bids for four big fields in the Pechora and Kara Seas are under preparations.
In the interview, available at thecompany website, Savelyev also underlines that the
Yamal Peninsula is given priority and reserves in the area are planned boosted with more
than one billion tons of oil equivalents. A major mapping and exploration program for the
area is under planning.
In the Yamal Peninsula, Gazprom Neft can potentially benefit from the major
infrastructure development currently undertaken by mother company Gazprom.
Gazprom Neft is a 100 percent subsidiary of gas giant Gazprom. So far the company has
not been much active offshore. Thus, it is the mother company Gazprom, which controls
the licenses to offshore oil fields like the Prirazlomnoye in the Pechora Sea.
According to Oilru.com, Gazprom Neft is also planning investments in the Caspian Sea,
the Black Sea, as well as in the Chukotka Sea.
Text: Atle Staalesen
Europe Can Lift CO2 Market From Gridlock, Gazprom Says (Update1)
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aNxse6afNdT0
By Ewa Krukowska
Dec. 6 (Bloomberg) -- Europe needs to reinvigorate the world’s second-biggest emissions
market as global climate talks to reduce greenhouse gases stall, the head of a carbontrading unit of Russia’s OAO Gazprom said.
United Nations carbon offsets for delivery in a year fell 4 percent last week amid signals
that differences between 190 developing and industrial nations may preclude a binding
treaty at the climate meeting that started Nov. 29 in Cancun, Mexico.
The $2.7 billion UN Clean Development Mechanism is an offspring of the 1997 Kyoto
Protocol, which expires in 2012 unless governments decide to extend it. Carbon offsets
generated by the CDM may be used for compliance in the European Union’s emissionstrading system, the world’s largest cap-and-trade program, also known as the EU ETS.
“Given that nothing is likely to fundamentally change between now and the next summit
in South Africa in 2011, the EU ETS will continue to be the global driving force in the
international carbon market,” Dan Barry, head of carbon trading at Gazprom Marketing
& Trading, said in a interview from London.
The EU, whose carbon market was valued at $119 billion last year, could bolster
investors’ confidence in the UN market by giving more “certainty and clarity” on what
types of offsets it will accept in the next trading period, which runs from 2013 through
2020, Barry said.
The ETS is a cornerstone of European efforts to tackle the heat waves, storms and floods
that scientists have linked to climate change. The system, started in 2005 with a threeyear trading period, is now in a second phase, which ends in 2012.
European Demand
Demand from European emitters has helped the CDM expand to more than 2,500
registered projects that generate credits to investors for cutting greenhouse gases in
developing nations. The UN program has issued 476 million credits so far and expects
projects in the pipeline to generate 2.7 billion offsets by the end of 2012.
Gazprom Marketing & Trading’s carbon unit is involved in more than 100 UN emissionreduction projects globally and plans to add more, according to Barry. Gazprom and
Trans Wonderland Ltd., a Papau New Guinea transport company with contracts to
provide liquefied natural gas services there, will cooperate on projects with plans to win
UN credits, they said today in an e- mailed statement.
The European Commission, the EU regulator, proposed last week to stop recognizing as
of 2013 UN credits related to projects that cut nitrous dioxide from adipic acid production
and hydrofluorocarbon-23, an industrial gas whose warming potential is 11,700 times
bigger than carbon dioxide. The EU said it is concerned the projects create excessive
credits and undermine the market’s integrity.
Insufficient Clarity
While HFC-23 projects represent less than 1 percent of all registered CDM projects, their
credits account for more than half offsets issued so far.
“Clarity that HFC-23 credits won’t be eligible is useful, but the EU has failed to give
clarity on what will be eligible for the next phase,” Barry said. “That’s a fundamental
requirement that needs to be sorted out very soon.”
More than 11,000 operators in the European program can swap as many as 1.6 billion UN
credits with EU permits on a one-for- one basis in the phase from 2008 through 2012.
The bloc has signaled it wants the CDM to continue, but said the mechanism must be
overhauled to improve its effectiveness and governance.
‘Quite Comfortable’
“The EU appears quite comfortable with credits from UN projects registered pre-2012 to
continue generating credits eligible for the next phase,” he said. “We may start to see new
mechanisms for future projects. The general consensus seems to be as much support as
possible to as many different project types as possible in least developed countries.”
UN Certified Emission Reductions for December 2011 closed at 11.39 euros a metric ton
on Dec. 3. EU allowances for delivery in December 2011 were at 15.03 euros.
The EU is unlikely to accept credits backed by forestry for compliance in its cap-andtrade system in the near future, Barry predicts. Even though deforestation may be one of
the few areas where envoys reach a deal in Cancun, the program will work only if
governments adopt emission-reduction commitments, he said.
“We need to see a meaningful price on carbon, otherwise forestry conservation just won’t
be able to compete against palm oil,” he said.
Gazprom Marketing & Trading announced last month its method for generating carbon
credits by voluntary forestry projects was approved by auditors. The method will
generate around 100,000 credits over the next 30 years in a project in the Rimba Raya
Biodiversity Reserve in Borneo, southeast Asia.
First issuance of the credits should take place by the end of this year, and Gazprom
Marketing & Trading has already brokered a sale of more than 5 million of the Rimba
Raya offsets, Barry said.
To contact the reporter on this story: Ewa Krukowska in Brussels at
[email protected];
To contact the editor responsible for this story: Stephen Voss at [email protected]
Last Updated: December 6, 2010 09:03 EST
Gazprom to develop cleaner energy in Papa New Guinea
http://af.reuters.com/article/energyOilNews/idAFLDE6B50PO20101206
Mon Dec 6, 2010 10:57am GMT
* Trans Wonderland looks to use more LNG than diesel
* GM&T to develop clean energy projects under CDM
LONDON, Dec 6 (Reuters) - Gazprom's (GAZP.MM) trading arm and logistics company
Trans Wonderland Limited (TWL) have agreed to collaborate on clean energy projects in
Papa New Guinea, the companies said on Monday.
Gazprom Marketing & Trading (GM&T) said it will act as a project developer and
carbon offset buyer for TWL's plan to use more liquefied natural gas (LNG) than diesel
in its transport and logistics operations in Papa New Guinea.
Under the U.N.'s Clean Development Mechanism (CDM), companies from rich nations
can invest in clean energy projects in developing countries, and in return receive offset
credits called certified emissions reductions (CERs), which can be used toward emissions
targets or sold for profit.
TWL has been chosen to be the sole transport and logistics operator for Papa New
Guinea's LNG facility due to come on stream in 2014, to allow gas exports to the Asia
Pacific region.
TWL's planned fuel switch project study should be completed by early February 2011.
Then the companies will look to finalise a gas sales and purchase agreement to initially
produce around 50 to 100 tonnes a day of LNG.
TWL plans to install a Salof Mini LNG plant and infrastructure closer to the company's
operations in Hides, which will reduce the amount of fuel the company must bring in
from Lae, which is 800 kilometres away.
"GM&T will support the development of CDM projects by providing expertise and
finance to reach U.N. registration of those projects as well as purchase the CERs
generated as a result of emissions reductions through the switch to clean fuel," GM&T
said in a statement. (Reporting by Nina Chestney; Editing by Alison Birrane)