Russia 091030

Basic Political Developments Reuters: PRESS DIGEST - Russia - Oct 30 AFP: Russia to boost Obama with nuclear treaty: report Itar-Tass: US National Security aide says satisfied with meetings in Moscow RIA: Russian, Philippine, Ghana nationals on ship seized by pirates Russia Today: Somali pirates capture Russian sailors Xinhuanet: Brazilian, Russian leaders discuss next BRIC meeting VNS: Vietnam, Russia turnover in trade up by nearly 6% RIA: Russia hails UN support of confidence-building in outer space Polskie Radio: Russia-Poland gas talks - what’s the deal? Prague Daily Monitor: Fedotov: Czech-Russian trust restored Strategypage: Mi-17 Becomes NATO Standard RIA: Russian tactical missile self-destructs during live-fire drills Itar-tass: RBD gives credit of over RUR 2 bln to VTB24 RIA: Russia's Federation Council to review bill on using troops abroad Panorama.am: Russia commemorates victims of political repression RIA: Russian president says 'no excuse for Stalinist repression' Itar-Tass: Medvedev says Stalinist repressions cannot be justified AFP: Medvedev says Stalin-era killings 'unjustifiable' Itar-Tass: Putin to discuss preparations for United Russia congress FT.com: UK’s reset button with the Kremlin Timesonline: Five ways Britain can get the most from Russia The Moscow Times: Ecuador Visit Brings Deals, No Recognition Balkans.com: Serbia seeks terms of $1bn Russian loan Azatutyun.am: Armenia Confirms Russian Bid in Nuke Station Building RBC: Review of capital punishment logical, official says Interfax: Russian Supreme Court seeks clarification on death penalty use NTI: Terrorists in Former Soviet States Want "Dirty Bombs," Official Says The Moscow Times: Mironov Offers Bill To Increase Job Caps Itar-Tass: Russia introduces criminal responsibility for anti-monopoly breaches The Moscow Times: Police Prepare for Protest Season WSJ: FBI Lets Barred Tycoon Visit U.S. - Aluminum magnate Oleg Deripaska

met with FBI agents in August and earlier this month as part of a continuing criminal probe, according to two administration officials. The focus of that probe couldn't be learned.

Interfax: 11 members of Hizb ut-Tahrir extremist organization convicted in Tatarstan

Apa.az: Azerbaijan arrested Chechen wanted in Russia for 10 years for committing murders

RIA: Chechen suicide-bomber blows self up in police pursuit Itar-Tass: Two servicemen wounded in Ingushetia, militant killed in Chechnya Itar-Tass: Deputy district prosecutor killed in Makhachkala The Other Russia: The Landmark Murder of Maksharip Aushev

Georgian Daily: Plans to Expand Russian Forces in North Caucasus Won’t Solve Russia’s Security Challenges

RFERL: Russian Election Commission Members Investigated For Fraud RIA: Police seize 20 kg of heroin in Urals Businessneweurope: Crouching bear, leaping dragon - Prime Minister Vladimir

Putin remains Russia's best salesman. He regularly concludes arms deals during his foreign trips or actively pushes telecommunication deals on behalf of Russian oligarchs. However, he outdid himself during his week in Beijing in October, overseeing a total of $3.5bn of deals

Time.com: Medvedev Dashes Hopes for More Democracy in Russia

National Economic Trends UPDATE 1-Russia c.bank shifts bid twice early Friday Bloomberg: Russia Warning on Hot Capital May Fall Victim to Oil (Update2)

Business, Energy or Environmental regulations or discussions Bloomberg: AvtoVAZ, Gazprom, Lukoil, Polyus: Russia Stock Market Preview Bloomberg: Russia’s RTS Index May Climb 34% on Global Growth, Goldman

Says Reuters: WRAPUP 2-Russia debt/IPO deals to peak after $2 bln in 1 wk Barentsobserver: The Norwegian bank Sparebank Acquires 75% of shares in

Russian bank Reuters: Russian Standard bank posts H1 loss Bloomberg: Evraz Says Steel Pipe Orders May Spur Restart of Oregon Plant Digitalmedianet.com: RUSNANO and Alcoa Sign a Memorandum of

Understanding ARMS-TASS: "Sukhoi" became the winner of the award "Company of the Year

2009"

Activity in the Oil and Gas sector (including regulatory) RBC: Rosneft, Gazprom may be required to sell products on energy exchange MIGnews: Lukoil to launch Odessa portside plant again WSJ: Lukoil Resumes Operations At Odessa Refinery From Nov 1 Reuters: LUKOIL sells $1.5 bln of debt in two tranche deal Energy Intelligence: TNK-BP to Name Siberian Oilman as CEO Reuters: Russian oil firm Surgut's Q3 profit rises vs Q2 RBC: Surgutneftegas posts lower 9M profit Interfax: Transneft net profit down 5.6% in 9 mths Mydigitalfc.com: Russian consultant targets India’s energy sector Barentsobserver: Oil spill in Nenets

Gazprom Reuters: Italy SACE backs 408 mln euro loan to Gazprom Focus: Gazprom forecasts gas consumption in Europe will go up by 12.5% until

2020 Business Standard: GSPC in talks with Gazprom, STG for exploration, J&K

pipeline

Telegraph.co.uk: Gazprom in Europe: Russian government plans to share part of Yamal gas resources

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Full Text Articles

Basic Political Developments

Reuters: PRESS DIGEST - Russia - Oct 30http://in.reuters.com/article/oilRpt/idINLU52333420091030

Fri Oct 30, 2009 1:19pm IST

MOSCOW, Oct 30 (Reuters) - The following are some of the leading stories in Russia's newspapers on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Chechen president Ramzan Kadyrov plans to sue for moral damage an opposition newspaper Novaya Gazeta hoping to win at least 1 million roubles ($34,280), the paper writes.

- Communists of St Petersburg want to sue local officials for 15 million roubles ($514,200) for demolishing of one of Russia's best known monuments of Vladimir Lenin after it's been damaged by blast earlier this year, the daily says.

- The paper runs an interview with the leader of Israeli opposition party Kadima Tzipi Livni.

VEDOMOSTI

www.vedomosti.ru

- Gazprom Neft (SIBN.MM: Quote, Profile, Research), the oil arm of Russia's Gazprom (GAZP.MM: Quote, Profile, Research), has bought $900 million of debt that co-owners of mid-sized oil company Sibir Energy owe to Sberbank (SBER03.MM: Quote, Profile, Research), the daily reports.

- Volkswagen (VOWG.DE: Quote, Profile, Research), which plans to assemble at least 63,000 cars at its Kaluga, Russia plant in 2009, may be hurt by Russian Economy Ministry plans to limit the number of cars an automaker may assemble using only foreign-made components while importing them at preferential rates.

- Russia has dropped on 51 place among 134 countries in The Global Gender Gap Report, prepared by the World Economic Forum in 2009, against 42 place in 2008, the paper writes.

- Russia's state grain trader, the United Grain Company, plans to export 40-42 million tonnes of grain by 2015, which will need 92 billion roubles ($3.15 billion) investments, the paper says.

ROSSIISKAYA GAZETA

www.rg.ru

- New version of anti-monopoly law provides for up to seven years of prison for violators, the paper says.

NEZAVISIMAYA GAZETA

www.ng.ru

- Wages in many Russian regions dropped by more than 20 percent, industrial output felt by 25 percent year on year August 2008, the paper says citing state statistics.

- Prime Minister Vladimir Putin heads the list of 100 most powerful Russian politicians, outrunning President Dmitry Medvedev by 0.04 point, the paper publishes an expert poll.

AFP: Russia to boost Obama with nuclear treaty: reporthttp://www.google.com/hostednews/afp/article/ALeqM5gJQS81pRr932_91xG6LhgCPkTdoA

(AFP) – 22 minutes ago

MOSCOW — Moscow and Washington want to reach a deal on a key nuclear disarmament treaty before US President Barack Obama receives his Nobel Peace Prize on December 10, a Kremlin source was quoted as saying Friday.

The source, quoted in the Kommersant daily, said the Obama administration wanted to sign an agreement on replacing the Strategic Arms Reduction Treaty (START) before the Nobel ceremony and that Moscow was willing to oblige.

"On December 10 the ceremony for awarding Nobel laureates will take place... Our partners want the document to be signed before the Nobel Peace Prize is given to Barack Obama," the Kremlin source was quoted as saying.

"We are not against this," he added, according to Kommersant.

Russian and US negotiators have been discussing a new pact to replace START, a landmark 1991 treaty that led to deep cuts in the two countries' nuclear arsenals, before it expires on December 5.

A deal on START would mark a major foreign policy success for Obama and would boost his stated vision of a world free of atomic weapons.

By coincidence, the treaty's expiration date comes just five days before Obama is due to visit Oslo to accept his Nobel Peace Prize.

The ceremony for awarding the Nobel Peace Prize takes place in Oslo, while the other Nobel prizes are awarded in Stockholm the same day.

The Nobel Prize Committee stunned many around the world last month when it announced that it would give Obama the 2009 Peace Prize nine months into his presidency, prompting criticism that Obama did not deserve the prize yet.

Kommersant's report came out a day after a senior US delegation led by Obama's national security advisor, James Jones, discussed START with top Russian officials in Moscow.

The newspaper reported that compromises had been reached on two key issues: the limit on the number of "carriers" that can deliver warheads and how the START replacement treaty will address missile defence.

Russia has insisted that the START replacement treaty must establish a link between missile defence systems and strategic arms.

"Compromise solutions have been found on these parameters of the treaty," Kommersant quoted a source, identified as a participant in Wednesday's talks with Jones, as saying.

"We still have an array of concerns where we have not yet agreed with the Americans. But there is movement."

Itar-Tass: US National Security aide says satisfied with meetings in Moscow

http://www.itar-tass.com/eng/level2.html?NewsID=14484268&PageNum=0

29.10.2009, 23.35

WASHINGTON, October 29 (Itar-Tass) – U.S. National Security Advisor James Jones said Thursday he is satisfied with the meetings he has had during the recent trip to Moscow.

As he mentioned his talks with Russian Foreign Minister Sergei Lavrov, he said they had held a very good discussion on a range of issues of bilateral cooperation.

General Jones’s consultations with Russian officials in Moscow centered around a new treaty on strategic arms reductions that is due to replace a similar treaty expiring in December, and the Iranian nuclear problem.

Apart from Lavrov, Gen Jones had meetings with Russia’s Security Council Secretary Nikolai Patrushev and President Dmitry Medvedev’s aide Sergei Prikhodko.

The sides agreed to do everything in their power and fulfill the promise made by Presidents Medvedev and Obama to complete talks on the new arms reductions treaty by December, says a statement issued by the National Security Council’s representative in the White House, Benjamin Chang.

The effective START-1 treaty, which the USSR and the U.S. signed in July 1991, expires December 5.

According to Chang, Russian officials and Gen Jones reiterated commitment to the joint Russia-U.S. efforts on Iran.

RIA: Russian, Philippine, Ghana nationals on ship seized by pirateshttp://en.rian.ru/russia/20091030/156645078.html

09:4730/10/2009

VLADIVOSTOK, October 30 (RIA Novosti) - There are 23 Russian, two Philippine and two Ghana nationals on board a Thailand-flagged fishing vessel hijacked off the Seychelles, an International Transport Workers' Federation official said on Friday.

The vessel, the Thai Union 3, was hijacked by two pirate skiffs about 370 km (200 miles) north of the Seychelles on Thursday.

A European Union naval task force operating in the region said the vessel appeared to be heading toward Somalia.

Pyotr Osichansky said, citing preliminary reports, that the sailors were not hurt when the vessel was seized.

Osichansky also said that the pirates had so far not demanded a ransom.

So far this year, there have been over 150 pirate attacks on commercial vessels in the Gulf of Aden and off the east coast of Somalia. The war-ravaged country has been without an effective government since 1991.

Russia Today: Somali pirates capture Russian sailorshttp://russiatoday.com/Top_News/2009-10-30/somali-pirates-russian-sailors.html/print

30 October, 2009, 12:20

The Thai-flagged fishing trawler “Thai Unit 3” that was hijacked by Somali pirates in the Indian Ocean is crewed by 23 Russians, two Philippians and a Ghanian according to the EU naval force operating in the area.

A naval aircraft spotted pirates aboard the ship, which is now believed to be heading toward Somalia. It is the fourth vessel hijacked in the area over the past fortnight, and the eighth currently being held.

The owner of “Thai Unit 3” has requested that the insurance company start talks with the terrorists as soon as possible. The talks may start as early as Sunday, when the ship reaches Somalia.

John Harbour, a spokesman for the EU naval force, said the information is fairly limited at the moment. The pilot of the EU naval force aircraft saw skiffs (small boats) on the deck of the Thai-flagged fishing ship.

“And this is an indication that the pirates have taken the vessel,” Harbour said.

When the ship was captured, he said, it was able to send a signal to the UK Maritime Trade Organization in Dubai.

“And that system alerted the flagship of the EU naval force, “Atalanta,” and the force commander was able to launch maritime patrol aircraft from the Seychelles to fly over the ‘Thai Unit 3,’” he said.

The EU naval force will monitor the vessel, which is “presently 500 miles off the Somali coast,” according to Harbour.

So far there’s been no information about pirates trying to contact the ship’s owners.

Two pirate boats attacked the vessel in an area which is around 200 nautical miles off the coast of the Seychelles and roughly 650 miles off the coast of Somali, a press release by the European Union Anti-Piracy Naval Force stated.

The Russian Foreign Ministry is now working on confirming the reports that the sailors onboard the ship are indeed Russians.

“Our main goal now is to find out if there are sailors of Russian citizenship on board. We have sent a request to a number of states bordering Somalia. They were made by the Russian embassies in Kenya, Yemen, Eritrea and the Seychelles,” Andrey Nesterenko, Foreign Ministry spokesperson, said.

“It’s not possible to tell who is captured at the moment, as the assault happened too far from both Somalia and the Seychelles,” he added.

The official also expressed hope that the situation will be resolved sometime soon.

RT’s piracy specialist, Vladimir Andrianov, thinks that the volatile situation in the area has to do with the difficulty of accusing people of piracy:

“Very often they just throw away the guns they carry with them on the boat and that doesn’t allow the investigation to proceed,” he explained.

The situation is made worse by the fact that there hasn’t been a feasible government in Somalia for 17 years. Thus the local residents, having no jobs and no means of survival, have taken to resorting to piracy.

There have been over 306 acts of piracy in the world this year, compared to 293 in 2008.

After the current attack the number of civilian vessels held by the pirates has reached eight ships, with four of them being captured during the last two weeks.

Somali pirates’ appetites grow

Somali pirates are becoming more aggressive. According to the International Maritime Bureau, a total of 32 ships have been hijacked in the first nine months of 2009, with over 530 crew members taken hostage.

What's more is that Somali pirates have extended their reach, threatening not only the Gulf of Aden, but also the Red Sea, the east coast of Oman and now the Seychelles.

The area still ranks as the number one piracy hotspot. The pirates' largest capture to date was the “Sirius Star,” a Saudi oil tanker captured in November of last year. After the owners paid a $ 3 million ransom, the vessel was released.

And last September, the “Faina,” a Ukrainian ship loaded with tanks, was hijacked. The crew was held for five months while negotiations over their release were going on. That time the pirates profited to the tune of $3.2 million.

Another ship with a Ukrainian crew – the Greek bulk carrier “Ariana” hijacked back in May – is to be freed in 48 hours following an agreement to pay a $3.5 million ransom.

Around 20 warships from the navies of at least a dozen countries are involved in anti-piracy operations off Somalia.

Russia joined international efforts in the area a year ago, sending warships there. In April a Russian destroyer seized a boat carrying 29 suspected pirates believed to have been involved in an attack on a Russian-crewed oil tanker.

Xinhuanet: Brazilian, Russian leaders discuss next BRIC meetinghttp://news.xinhuanet.com/english/2009-10/30/content_12360165.htm

2009-10-30 12:29:22

BRASILIA, Oct. 29 (Xinhua) -- Brazilian President Luiz Inacio Lula da Silva on Thursday discussed the next BRIC summit in Brazil with his Russian counterpart Dmitry Medvedev over the telephone.

    The Russian president congratulated Lula on his 64th birthday last week, Rio de Janeiro's successful bid to host the 2016 Olympic Games and Brazil's seat on the UN Security Council until December 2011.

    During the conversation, Lula expressed his interest in visiting Russia next year to reciprocate Medvedev's visit last year.

    But the presidential spokesman did not disclose details of the next BRIC summit.

    BRIC is an acronym for the dynamically developing economies of Brazil, Russia, India and China. The leaders of BRIC nations met in the Russian city of Yekaterinburg in June. The next BRIC summit will be held in Brazil in 2010.

VNS: VN, Russia turnover in trade up by nearly 6%http://vietnamnews.vnagency.com.vn/showarticle.php?num=03ECO301009

(30-10-2009)

HA NOI — Two-way trade turnover between Viet Nam and Russia in 2009 has increased by 5.7 per cent compared to the same period last year, despite the global economic downturn.

Prime Minister Nguyen Tan Dung spoke with his Russian counterpart Vladimir Putin over the telephone yesterday.

The two PMs were happy with the growing co-operation in trade and economics between the two nations. They discussed ways to expand ties to other fields,such as energy, industry and military technology.

They highly appreciated the development of the Viet Nam-Russia Strategic Partnership for the benefit of both countries.

Putin invited Dung to visit Russia and the invitation was accepted with pleasure.

The schedule for the visit will be arranged through the diplomatic channel. — VNS

RIA: Russia hails UN support of confidence-building in outer spacehttp://en.rian.ru/russia/20091030/156643568.html

04:3730/10/2009

UNITED NATIONS, October 30 (RIA Novosti) - The unanimous support of a Russian draft proposal on confidence-building measures in outer space will pave the way for talks on an agreement on the demilitarization of space, a Russian diplomat said.

The draft resolution on Transparency and Confidence-Building Measures in Outer Space, submitted by Russia and China, was approved late on Thursday by all 192 members of the UN First Committee (Disarmament and International Security).

"The unanimous support of this resolution indicates that the conditions have been created to use this treaty as a basis for opening talks in the near future on a legally-binding agreement banning the deployment of weapons in outer space," said Viktor Vasilyev, a deputy head of the Russian delegation in the First Committee.

The document envisions, in particular, that the predictability of military activities in outer space would "reduce the probability of emergence of sudden military threats in space and from space, would diminish ambiguities in the strategic situation in outer space and, consequently, would decrease the need for early preparation of states to neutralize such threats."

In the past, only the United States and several island nations opposed similar Russian proposals. The approval of the draft document by the committee practically ensures that the proposals will be adopted by the UN General Assembly in December.

Vasilyev emphasized the fact that the U.S. has decided for the first time to go along with the rest of the world and Washington has noted the importance of bilateral cooperation with Russia on all issues related to outer space.

It clearly shows the shift in U.S. global policies in general and builds up optimism on the success of future talks on demilitarization of outer space, the Russian diplomat concluded.

Polskie Radio: Russia-Poland gas talks - what’s the deal?

http://www.polskieradio.pl/thenews/business/artykul118950_russia_poland_gas_talks___whats_the_deal.html

30.10.2009 07:58

Talks between Poland and Russia on a new gas deal for 2010 ended last night but details will only emerge Friday, said a spokesperson for the Polish Oil and Gas Concern (PGNiG).

The negotiations, which began in Moscow this week, concerned primarily the tariffs for the transit of Russian gas through Poland. The Russian gas giant Gazprom opted for tariffs to be be set at a minimal level, while the Polish side called for an increase in order that the EuRoPol Gaz company - which runs the Polish section of the Jamal-Europe gas pipeline - could have its share of profit.

Media reports suggested that a political  agreement has been reached for Gazprom and PGNiG to have an equal 50% share in EuRoPol Gaz, thus eliminating Gaz Trading, the Polish controlled minority shareholder of EuRoPol Gaz .

In line with the final settlement Gazprom may deliver some 11 billion square meters of gas to Poland in 2010. This is some three billion meters more than in 2009 and fills the gap in gas demand for 2010 in Poland.

 The new bilateral agreement on gas supplies is to be prolonged to 2037. (ab/pg)

Prague Daily Monitor: Fedotov: Czech-Russian trust restored http://praguemonitor.com/2009/10/30/fedotov-czech-russian-trust-restored-after-radar-end

ČTK | 30 October 2009

Prague, Oct 29 (CTK) - The United States' abandoning its plan to build a radar base within the missile defence system on Czech soil has benefited Czech-Russian relations and trust has been restored between the two countries, Russian ambassador to the Czech Republic Alexei Fedotov told journalists Thursday.

He said this was also proved by the meeting between the Czech and Russian presidents, Vaclav Klaus and Dmitri Medvedev, respectively, in Moscow in mid-October.

"Positive dynamism is evident in international relations. Both presidents noted that it is possible to breathe more easily now," Fedotov said.

He said the situation improved after Barack Obama's new administration took office (early this year).

"A more constructive attitude is evident, particularly to agreements on strategic offensive weapons and the rejection of the national system of missile defence," he said.

Fedotov said building political relations in Europe, including between Russia and the Czech Republic, is easier in this context.

"We feel pragmatism in bilateral relations. We believe that political and economic relations are being activated under the current (Czech) government," Fedotov said.

He said the Klaus-Medvedev talks gave a new impulse to political and economic cooperation.

Fedotov confirmed that Klaus invited Medvedev to visit the Czech Republic during his stay in Moscow and that the invitation was accepted. No date has been set as yet, he added.

Fedotov said certain obstacles to the successful development of Russian-Czech relations rest in "politics ideologisation" and in "economy politicisation."

He said the Czech Republic's abandoning the plan to sell the Czech air carrier CSA to the Russian company Aeoroflot is an example of " a political decision."

Fedotov said he hopes conditions for participation of Russian firm Atomstroyexport in the tender for the completion of the nuclear power plant in Temelin, south Bohemia, will be "open and transparent."

Strategypage: Mi-17 Becomes NATO Standardhttp://www.strategypage.com/htmw/htairfo/articles/20091030.aspx

October 30, 2009: Nine NATO members (including Czech Republic, Albania, Hungary, Poland and Slovakia) will cooperate in upgrading their Russian Mi-8, Mi-17 and Mi-171 helicopters, so that will meet NATO requirements. This will make it possible for these nations to use these helicopters in places like Afghanistan , where there is a growing need for that type of helicopter. Helicopters are also in demand for all peacekeeping operations, and the Russian aircraft have proven themselves quite capable of meeting the demand.

The Mi-17 is the export version of the Russian Mi-8, a twin-engine helicopter, roughly equivalent to the U.S. UH-1. But the Mi-8/17 is still in production and is the most widely exported (2,800 out of 12,000 made) helicopter on the planet. The Mi-8 is about twice the size and weight of the UH-1, but only hauls about 50 percent more cargo. However, the Mi-8 had a larger interior, and can carry 24 troops, versus a dozen in the UH-1. The UH-1 was replaced by the UH-60 in the 1980s, while the Mi-8 just kept adding better engines and electronics to the basic Mi-8 frame. But the UH-60, while weighing twice as much as the UH-1 (4.8 tons), could carry as much as the 12 ton Mi-8. But the Mi-8 costs about

half as much as a UH-60, and the larger interior is popular with many users. Russia also offers lower rates for training pilots and mechanics.

RIA: Russian tactical missile self-destructs during live-fire drillshttp://en.rian.ru/mlitary_news/20091030/156641866.html

00:2930/10/2009

MOSCOW, October 29 (RIA Novosti) - A Tochka-U short-range ballistic missile self-destructed on Thursday shortly after a practice launch at training grounds in northwestern Russia, the Defense Ministry said.

The accident occurred during life-firing drills at the Luga training grounds in the Leningrad Region. No casualties or damage have been reported.

"The missile self-destructed at the height of 1,000 meters [about 3,280 feet]," Col. Alexei Kuznetsov said.

The official added that the missile was carrying a dummy warhead because its service life has expired and it was due for destruction.

Nevertheless, an investigation into the accident will be launched, Kuznetsov said.

According to the official, the second Tochka-U missile, which was launched during the same drills, hit the designated target.

The Tochka-U (SS-21 Scarab) short-range tactical ballistic missile is a 1989 modification of the Tochka missile system that went into service with the Soviet military in 1976. It has an effective range of 120 km (70 miles).

Tochka-U is a high-precision weapon that can be used for strikes on enemy tactical targets, such as control posts, bridges, storage facilities, troop concentrations and airfields. It can carry conventional and nuclear warheads.

At least 15 Tochka missile systems were reportedly deployed by Russia during the five-day war with Georgia in August 2008.

Itar-tass: RBD gives credit of over RUR 2 bln to VTB24http://www.itar-tass.com/eng/level2.html?NewsID=14485047

30.10.2009, 11.16

MOSCOW, October 30 (Itar-Tass) -- The Russian Bank of Development (RBD) has given a credit of almost 2.4 billion roubles to VTB24 for a period of three years,

implementing the programme of financial support of small- and medium-size entrepreneurship, the RBD press service reported on Friday.

These funds will be provided for VTB24 clients from among small- and medium-size entrepreneurs both through the head bank and a wide network of its branches. According to the agreement conditions, it is possible to get credits according the RBD programme at VTB24 offices in 47 constituencies of the Russian Federation, the business news agency PRIME-TASS notes.

The Russian Bank of Development was established in 1999. One hundred percent of RBD shares belong to the state corporation Bank of Development and Foreign Economic Activity (Vnesheconombank).

RIA: Russia's Federation Council to review bill on using troops abroadhttp://en.rian.ru/russia/20091030/156644091.html

06:3330/10/2009

MOSCOW, October 30 (RIA Novosti) - The upper house of the Russian parliament will review on Friday amendments to a law on defense which expands the use of the Russian Armed Forces abroad in certain situations.

President Dmitry Medvedev submitted the amendments to parliament in August, just after the first anniversary of Russia's five-day war with Georgia. The lower house of the Russian parliament, the State Duma, passed the bill on October 23.

The amendments stipulate that Russian troops can be used abroad to repel an attack on Russian military units or other troops deployed outside the country, to repel or prevent an armed attack on another state asking Russia for military assistance, to defend Russian citizens abroad from an armed attack, to combat sea piracy and to ensure safety of commercial shipping.

"The new amendments will create a solid legal foundation for the quick and timely deployment of the Russian Armed Forces abroad and, therefore, strengthen the security of the Russian state," Viktor Ozerov, the head of the Federation Council's committee on defense and security, said on Thursday.

Russia's current 2006 legislation only allows the president to send troops to fight terrorism on foreign soil. Experts have said the law lacks clearly defined terms of "wartime" and a "combat situation," which complicates the deployment of army units outside the country.

Russia sent in troops last summer to repel Georgia's offensive on South Ossetia, where Moscow had maintained peacekeepers since a bloody post-Soviet conflict in the early

1990s. Russia was condemned internationally over its "excessive" use of force and subsequent recognition of South Ossetia and Abkhazia.

In line with the new document, the Russian president will be entitled to make a decision on using armed forces abroad based on a prior approval by the upper house of the Russian parliament. The president would also be able to determine the strength of the troops to be used abroad and their deployment areas, to set the goals facing them and determine the timeframe of their deployment.

12:31 30/10/2009

Panorama.am: Russia commemorates victims of political repressionhttp://www.panorama.am/en/politics/2009/10/30/russia/

Russian President Dmitry Medvedev said on Thursday that attempts to justify repressions during the Stalinist regime under the pretext of ultimate state interests were unacceptable.

Speaking in his video blog ahead of the Day commemorating the victims of political repression, which Russia marks on October 30, Medvedev said:

"Millions of people [in the Soviet Union] have died as a result of terror and false accusations...But we are still hearing that these enormous sacrifices could be justified by certain ultimate interests of the state. I am convinced that neither the goals of the development of the country, nor its successes or ambitions should be achieved through human suffering and losses."

"Nothing is more sacred than a human life. And repressions cannot be justified," he said.

The president expressed concern over the fact that the Russian youth have poor knowledge about the tragic events in the country's past, which led to practical extermination of the whole layers of the Russian society.The president believes that the Russian citizens should accept their country's past as it is, and fight the urge to forget its dark moments.

According to archives of Russia's Federal Security Service (FSB), the successor of the much-feared KGB secret police, some 21,000 people including 939 priests were killed at the Butovo firing range in a short period between August 8, 1937 and October 19, 1938.

The total number of people killed at the site before the executions stopped in 1953 is still unknown, but experts suggest dozens of thousands could have perished there.

RIA: Russian president says 'no excuse for Stalinist repression'http://en.rian.ru/russia/20091030/156643863.html

05:3030/10/2009

MOSCOW, October 30 (RIA Novosti) - Russian President Dmitry Medvedev said on Thursday that attempts to justify repressions during the Stalinist regime under the pretext of ultimate state interests were unacceptable.

Speaking in his video blog ahead of the Day commemorating the victims of political repression, which Russia marks on October 30, Medvedev said:

"Millions of people [in the Soviet Union] have died as a result of terror and false accusations...But we are still hearing that these enormous sacrifices could be justified by certain ultimate interests of the state. I am convinced that neither the goals of the development of the country, nor its successes or ambitions should be achieved through human suffering and losses."

"Nothing is more sacred than a human life. And repressions cannot be justified," he said.

The president expressed concern over the fact that the Russian youth have poor knowledge about the tragic events in the country's past, which led to practical extermination of the whole layers of the Russian society.

"It is important to prevent any attempts to vindicate, under the pretext of restoring historical justice, those who destroyed their own people," Medvedev said.

The president believes that the Russian citizens should accept their country's past as it is, and fight the urge to forget its dark moments.

"I am convinced that the memory of our national tragedies is as sacred as the memory of our victories. And it is very important that our young people be able to have an emotional response to one of the most tragic events in the Russian history," Medvedev said.

"Without the knowledge of the complicated and controversial history of our country we often cannot comprehend the causes of problems and difficulties that Russia experiences today," the president said, adding that it is the task of the current generation to pass on the true historical knowledge to the future generations of Russian citizens.

Itar-Tass: Medvedev says Stalinist repressions cannot be justified

http://www.itar-tass.com/eng/level2.html?NewsID=14484434

30.10.2009, 05.02

MOSCOW, October 30 (Itar-Tass) -- President Dmitry Medvedev said on the Day of Remembrance of victims of political repressions marked on Friday there can be no justification for Stalinist-era GULAG as nothing can value more than human life.

He rejected claims that mass repressions at the time were justified by “top state interests”.

“I am convinced that no development of the country, no successes and ambitions can be achieved at the expense of human grief and losses. Nothing can treasure more than human life. There is no justification to repressions,” the president said in his video blog.

“Let’s only think that millions of people died because of terror and false accusations. Millions were deforced of their rights, even of the right for decent burial, and for long years their names were deleted from history,” Medvedev said.

“It is even impossible to comprehend the scope of terror, from which all peoples of the country suffered. It peaked in 1937-1938,” Medvedev said quoting GULAG Archipelago author and Nobel Prize winner Alexander Solzhenitsyn who described the endless flow of repressed people as “the Volga of popular grief”.

“For 20 pre-war years the whole strata and estates of our people were exterminated. Cossacks were nearly liquidated. “Kulak” peasants were dispossessed and bled white. Intellectuals, workers and the military were subject to political repressions. Representatives of absolutely all religious confessions were persecuted,” the president said.

“I am convinced that remembrance of national tragedies is as sacred as commemoration of victories. It is extremely important for young people to have both historic knowledge and public spirit and be able to emotionally empathize one of the greatest tragedies in Russian history,” Medvedev said.

He recalled an opinion poll two years ago, which revealed that nearly 90 percent of young Russians aged from 18 to 24 could not name a single outstanding person that suffered or died because of repressions. “That cannot but cause concern,” the president said.

October 30 is the day of remembrance of millions of “people executed without trial or investigation, people sent to GULAG and exile, stripped of civil rights for the ‘wrong’ occupation or for the notorious “social origin”. The ‘enemy of the people’ stigma stained the whole families”, according to the president.

“We are paying much attention to the fight against falsification of our history. But we sometimes believe the talk is only about inadmissibility of revision of the results of the Great Patriotic War. But it is no less important to prevent under the pretext of historic justice exoneration of those who exterminated their own people,” the president said, adding Russia has to “accept its past as it was.”

“It is important to study the past, to overcome indifference and intention to forget its tragic sides. Nobody but us can do that,” the president said.

A memorial service will take place on Friday in Lubyanka Square in Moscow in front of the former KGB building. The service was blessed by Russian Patriarch Kirill, whose father was repressed for singing in church choir and grandfather imprisoned for 30 years.

The Remembrance Day was instituted in Russia in 1991 after the Soviet disintegration. According to the latest data, in the ‘20s-50s 52 million people were sentenced for political reasons, six million were exiled without any court sentence and one million executed.

AFP: Medvedev says Stalin-era killings 'unjustifiable'http://www.google.com/hostednews/afp/article/ALeqM5gZ0VsAsm2XcZpNIuTJb58j8NXKqA

(AFP) – 6 hours ago

MOSCOW — The killing of millions during Soviet dictator Joseph Stalin's rule cannot be justified, Russian President Dmitry Medvedev said on his blogsite early Friday, warning against any attempt at revisionism.

"I am convinced that the memory of national tragedies is as sacred as those of victories," Medvedev said, calling the "repression" and the purges during the 1930s "one of the greatest tragedies in Russian history."

He dismissed apologists' claims that the "extermination" was necessary for the "higher objectives of the state," saying: "Nothing can be more important than a human life.

"Nothing can justify repression," he added, pledging to back the fight "against the falsification of our history."

There have been fierce arguments between Russian liberals and conservatives about the legacy of a dictator responsible for the death and imprisonment of millions in the Soviet Union's notorious gulag prison system.

But while his brutality has been well documented, many Russians still associate his rule with the Soviet victory over Nazi Germany in World War II and remain sympathetic to him.

Under former president Vladimir Putin, now prime minister, Moscow has been downplaying Stalin's crimes in a bid to boost patriotic feelings, praising him as an effective manager and wartime leader.

But in May this year, Medvedev warned against whitewashing history.

Itar-Tass: Putin to discuss preparations for United Russia congress

http://www.itar-tass.com/eng/level2.html?NewsID=14484326&PageNum=0

30.10.2009, 05.32

MOSCOW, October 30 (Itar-Tass) -- Prime Minister Vladimir Putin, who heads the United Russia Party, will meet party leaders on Friday to discuss preparations for the upcoming United Russia congress and the approval of the 2010 budget in the State Duma.

The government press service said Putin will meet with United Russia Supreme Council Chairman and State Duma speaker Boris Gryzlov, Secretary of the General Council Board of the party Vyacheslav Volodin, General Council Board member Oleg Morozov, and head of the Central Executive Committee Andrei Vorobyov.

FT.com: UK’s reset button with the Kremlinhttp://www.ft.com/cms/s/0/1432f0a0-c497-11de-912e-00144feab49a,s01=1.html

Published: October 29 2009 22:19 | Last updated: October 29 2009 22:19

As diplomatic encounters go, the forthcoming official visit to Moscow by David Miliband, Britain’s foreign secretary, at the invitation of his counterpart, Sergei Lavrov, could be of signal significance. For the last three years, Britain has had arguably the worst relationship with Russia of any major western state, one that was seriously undermined by the 2006 murder in London of the former KGB officer Alexander Litvinenko.

Mr Milband’s trip, the first official visit by a British foreign secretary to Moscow in five years, could put relations back on an even keel.

The running sores in Britain’s troubled relationship with Russia are well known. The UK has for some years been home to a number of prominent figures – notably the businessman Boris Berezovsky and the Chechen dissident Akhmed Zakayev – who are leading antagonists of Vladimir Putin, the Russian prime minister. Britain refuses to expel them despite the anger of the Kremlin at their presence on UK soil.

But Litvinenko’s murder by polonium poisoning three years ago remains the greatest source of tension. Britain has for several years sought the extradition of Andrei Lugovoi, the man whom UK prosecutors deem responsible for the murder. Russia, citing constitutional reasons, has refused. As a result, the UK has imposed a range of sanctions on Russia – including visa restrictions on visits to Britain by Russian officials and a refusal to co-operate with the Russian security service, the FSB.

This dispute, though serious, has not affected economic relations between the two countries. As Mr Miliband pointed out in an interview with the FT this week, UK-Russia

trade has bounded ahead in recent years, while some 250,000 Russians now live in the south-east of England.

Mr Miliband’s visit is therefore a welcome opportunity for Britain and Russia to show that there are areas where they can co-operate – on Afghanistan, Iran and policy towards the Middle East – at precisely the moment that the Obama administration has made it a priority to engage with Moscow. But what Britain must not do is capitulate on the Litvinenko case.

The murder of Litvinenko was one of the more grotesque assassinations of modern times. The British public would not forgive the government for resiling in its demand for Mr Lugovoi’s extradition. At the very least, Britain’s tough position is a reminder to the Kremlin and its agencies that it must never again countenance political murder on British soil.

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

October 30, 2009

Timesonline: Five ways Britain can get the most from Russiahttp://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6896058.ece

When David Miliband visits next week there will mad talk of a ‘new Cold War’. On the contrary, we should be optimisticTony Brenton

In a few days time we celebrate the 20th anniversary of the fall of the Berlin Wall; the collapse of a system, communism, which enslaved and slaughtered millions; the launching point for a new era of democracy and prosperity; a moment for unambiguous celebration everywhere.

Except Russia. It was, of course, Russia that inaugurated this momentous transformation (Mikhail Gorbachev really earned his Nobel Peace Prize). But the outcome, for Russians, was not the “end of history” but a decade of economic chaos and political collapse.

The demise of the “outer empire” with the fall of the wall was swiftly followed by that of the “inner empire” with the dissolution of the Soviet Union. The “shock therapy” urged by so many Western economists was a disaster. There were no rules, institutions or habits to prevent the ruthless and unscrupulous from taking all they could. Everything — natural resources, politicians, the law — was for sale. A tiny minority made billions while the majority lost their savings, their job security, everything.

Unsurprisingly, politics turned sour. The country saw a military assault on its parliament, a dubious presidential election and the rapid rise of extreme nationalism. Externally, Russia underwent serial humiliation as the West insouciantly expanded Nato and took Kosovo from Serbia.

As so often in its history, Russia found a strong man to sort things out. Vladimir Putin became President in 2000. The next eight years for most Russians were good years. Through the magic of the market and a buoyant oil price, the economy doubled in size. Russians could suddenly afford luxuries and foreign travel. The barons of the Yeltsin era — overmighty provincial governors, billionaire oligarchs, megalomaniac press magnates — were tamed, locked up or exiled. The debilitating war in Chechnya was won. Russia began to assert itself again internationally as it turned off the gas to a troublesome Ukraine, faced down US missile deployment and crushed a provocative Georgia.

There was, of course, a price. While the forms of liberal democracy have been preserved, the reality is of a docile media, harassed opposition and manipulated elections. A state insulated from domestic criticism has become corrupt and rapacious. The pacification of Chechnya has been appallingly brutal. Troublesome journalists and businessmen have been exiled — or worse.

But there is no doubt that most Russians see this loss of freedoms as a small price to pay for prosperity and international respect. Mr Putin continues to enjoy the support of more than 60 per cent of Russians.

David Miliband is to visit Russia next week. This will be the first bilateral visit by a British foreign secretary since UK-Russian relations went through a deep low with the Alexander Litvinenko murder and the attacks on the British Council. As Mr Miliband knows well, dealing with today’s prickly, self-assertive Russia is going to be a long game. With due humility, I offer him five guidelines by which we should play it.

First, we should remain true to our own liberal principles. Russia is a signatory to the European Convention on Human Rights. This gives us clear standing to criticise the more flagrant breaches — lawyers arrested, NGOs pressurised, journalists murdered. We should not, with our more pusillanimous European partners, be ready to turn a blind eye to bad behaviour. Russia does not respect weakness. And standing up for what we believe in strengthens those brave Russians who are working to improve their country.

Second, we should work with Russia where we can. Talk of a “new Cold War” is a grotesque exaggeration. Russia is not the revanchist troublemaker depicted in much of the Western press. Its foreign policy is based on a cautious assessment of its national interest. There is common ground that we should work to exploit. Russia is as keen as we are to stop Iran going nuclear and Afghanistan falling back into the hands of the Taleban. We have a joint contribution to make to cutting the world’s excessive stock of nuclear weapons. And there are vast gains to be made by expanding our mutual trade and investment.

Third, we should make it clear when Russia’s external behaviour becomes unacceptable. The murder of Litvinenko, the attacks on the British Council, the unilateral Russian recognition of Abkhazia and South Ossetia, the cyber attack on Estonia all disrupted the international order. To let such behaviour pass is simply to invite more of the same. If we are clear where the limits are, we strengthen the hand of those inside Russia who argue that it should observe international norms more carefully.

Fourth, we should recognise that Russia is going to evolve only gradually and according to its own rhythms. It is unrealistic to believe that our behaviour can alone set Russia on a more co-operative and liberal path. We, with our partners, can be influential at the margins, but only there. We should accept that, for a while at least, Russia is going to remain a very challenging player on the international scene, and adjust our tactics accordingly.

But, finally, we should remain optimistic. Russia is a country that, in terms of both history and culture, knows itself to be profoundly European. As it looks around its borders, the least threatening one is that to the west. Its trade and investment links are heavily western orientated. The values to which it aspires are Western values. As its people grow more prosperous and more knowledgeable about the freedoms enjoyed by their Western neighbours, so they will grow less tolerant of the constraints under which they are forced to live.

While Russia’s feelings will be mixed as we celebrate the events of 1989, there is real reason to hope that the freedoms that came to Eastern Europe will, sooner rather than later, come to Russia as well.

Tony Brenton is the former British Ambassador to Moscow, 2004-08

The Moscow Times: Ecuador Visit Brings Deals, No Recognition http://www.themoscowtimes.com/news/article/ecuador-visit-brings-deals-no-recognition/388569.html

30 October 2009By Maria Antonova

Ecuadorian President Rafael Correa on Thursday made his first visit to Moscow, where he signed a series of deals while admiring the Kremlin palace but kept mum on a widely anticipated recognition of South Ossetia and Abkhazia.

Correa’s visit to the Kremlin was the first in the history of diplomatic relations between Ecuador and Russia and yielded a strategic partnership agreement that covers politics, trade, culture, tourism, sports, science, technology and the environment.

“It’s so beautiful here that I don’t want to work — only sit and admire what I’m seeing!” Correa exclaimed in the Grand Kremlin Palace, where the talks took place, Interfax reported.

The two leaders also oversaw the signing of general partnership agreements in nuclear energy, as well as memorandums of cooperation in energy and telecommunications.

In his recent bid for foreign aid, Correa started out playing hardball.

Earlier this week in London, Correa proposed that European countries give his country money in exchange for not extracting some 850 million barrels of oil, or 20 percent of the country’s reserves. The oil is located under the Yasuni rainforest, an area of the Amazon in eastern Ecuador known for its biodiversity, and concerns have been raised that drilling could seriously damage the ecosystem.

Correa took a different energy policy route in Russia, instead signing a memorandum of understanding with Russia’s Energy Ministry.

“We want to repair roads and develop electrical infrastructure. We want to reconstruct our oil refineries and continue developing our oil and gas reserves,” Correa said at a joint news conference with President Dmitry Medvedev. “In all of these projects we can expect enormous help from Russia, made possible by its technological and financial capabilities.”

Medvedev said he had hoped to “develop full-fledged, full-format relations with the region’s countries” and that “Ecuador is one of our strategic partners on the Latin American continent.”

Russia has been intensely courting Latin American countries, and the leaders of Argentina, Nicaragua, Bolivia, Venezuela and Cuba have all visited Moscow this year to renew bilateral contacts.

Russian firms, especially state-owned ones, have scored lucrative contracts in fields including electricity and oil and gas, and Moscow has been able to extract one of its key foreign policy objectives from Nicaragua and Venezuela: the recognition of South Ossetia and Abkhazia as independent countries.

Vladimir Mikhailov, an expert on Latin American countries at the Russian Academy of Sciences, called today’s visit “very positive” despite the unrealized recognition of the two republics.

In contrast to Nicaraguan President Daniel Ortega and Venezuelan President Hugo Chavez, Correa is “more technocratic, more professional and practical rather than ideologically oriented,” Mikhailov said.

Russia also signed a deal to deliver two Mi-171E helicopters, worth a combined $22 million, to the Ecuadorian military. “This is not a lot, but it’s only the beginning of our interaction in this sphere. … There is potential,” Medvedev said.

There may be potential for at least four more helicopters.

Ecuador suspended the use of its helicopter fleet, consisting of six India-built aircraft, after one of them crashed at a military parade in Quito on Tuesday. On the same day, Correa told Reuters in London that he expected to sign a deal for two Russian helicopters on his Moscow visit.

In other business deals reached Thursday, Russia’s Inter RAO signed a cooperation agreement with Vneshekonombank’s subsidiary Roseximbank and the Ecuadorian energy company Hidrotoapi. Currently, the only specific project under discussion is a complex of two hydroelectric plants on the rivers Toachi and Pilaton, with a combined capacity of 246 megawatts.

Inter RAO, which is controlled by Rosatom and already has energy projects in Cuba, will participate in the construction of the plant, while Roseximbank will finance the project, according to a joint press release issued Thursday.

Hidrotoapi’s previous partner on the Toachi-Pilaton project, Brazilian firm Odebrecht, canceled its contract in January after the $336 million project was 60 percent finished, Ecuadorian media reported at the time. Correa expelled the company because of alleged faulty construction.

The trade volume between Russia and Ecuador was $1 billion in 2008, Medvedev said. About $594 million of that is comprised of Ecuadorian banana imports, according to Fruit News, a web site that tracks the fruit market in Russia. Bananas make up over 70 percent of all Ecuadorian trade with Russia, while flowers make up 23 percent and coffee 4.5 percent.

Correa was to meet with Russian Orthodox Patriarch Kirill on Friday, when he will be given a tour of the Christ the Savior Cathedral and then have a private conversation with the patriarch.

Correa later met with Prime Minister Vladimir Putin and the two discussed prospects for further cooperation as well as a mutual old friend.

“We’ve heard a lot about you — our common friend Hugo Chavez has said much about you, and we have been carefully following your activities in domestic and foreign policy,” Putin said, according to comments posted on the government web site.

“We’ve been very happy to see your policies, which President Medvedev is continuing, of moving closer to Latin America,” Correa said, also thanking Putin for the Soviet Union’s sacrifices in defeating Nazism.

Balkans.com: Serbia seeks terms of $1bn Russian loanhttp://www.balkans.com/sr/open-news.php?uniquenumber=41891

Marko Subotic in Belgrade - 29.10.2009Serbia began talks with Russia Oct.29 on forging terms terms for a $1-billion loan the federation has offered the cash-strapped Balkan country.

During two days of negotiations in Moscow, a Serbian delegation will lay out its plans for spending the money, Deputy Finance Minister Zoran Ciric told domestic B92 Radio.

Ciric, who is heading the talks, said $800 million of the loan would finance six infrastructure projects and the remainder help to cover the 2010 budget deficit.

"For all of these projects, the Serbian delegation will present complete blueprints so the Russian side can have a complete picture of what our needs are," he added.

During a visit to Serbia earlier this month, Russian President Dmitry Medvedev and Serbian President Boris Tadic agreed to the loan in principle.

Source: Balkans.com Business News

Azatutyun.am: Armenia Confirms Russian Bid in Nuke Station Buildinghttp://www.azatutyun.am/content/article/1864472.html

29.10.2009 Karine Simonian

Energy Minister Armen Movsisian has confirmed that Russia is willing to have a major role in the construction of a new nuclear plant facility in Armenia that will have a projected capacity nearly three times exceeding that of the existing one.

The head of Russia’s Federal Agency on Atomic Energy (Rosatom) Sergey Kirienko visited Armenia late last week to discuss with Armenian leaders growing bilateral cooperation on nuclear energy.

President Serzh Sarkisian’s press service reported that during their meeting last Saturday the two men specifically discussed the Armenian government’s ambitious plans to build a new nuclear power plant in place of the aging facility at Metsamor which is managed by Rosatom and is due to be decommissioned by 2017.

Movsisian told RFE/RL that the tender for the construction of the plant’s new energy unit will be announced in March next year.

“We will openly announce that we are implementing such a construction project and will invite all those who want to have investment in it and be a stakeholder in our future nuclear energy unit to take part,” said Movsisian.

“[Sergey] Kirienko expressed [Rosatom’s] willingness to take part in the construction of

the new energy unit and the main issues discussed dealt with the nuclear unit of the Metsamor station and prospecting for uranium,” added Movsisian.

“This process will start when the feasibility study is completed and the configuration of the new unit become known.”

According to Movsisian, the final cost of the project “will be clear when we complete the projecting work.”

The new facility is expected to have a capacity of 1,000-1,200 Megawatts depending on its configuration. The current plant in Metsamor has a capacity of 400 Megawatts.

RBC: Review of capital punishment logical, official says

http://www.rbcnews.com/free/20091030115154.shtml

      RBC, 30.10.2009, Moscow 11:51:54.Chairman of the Federation Council's foreign affairs committee Mikhail Margelov believes that the Russian Supreme Court's desire to consider a provision in the country's legislation for capital punishment is very logical. "We are in a state of uncertainty. The existing moratorium on the use of capital punishment will expire once jury trials have been introduced in all regions of Russia, and the Chechen Republic will be the last region to introduce jury trials in January of next year," Margelov told RBC today.

      The official stated that now is the time to decide whether the death penalty - which hardly acts as a deterrent for the criminal world - would be re-established, or political will would take over and cause the death penalty to be abolished. He reiterated that Russia was the only member of the Council of Europe that had not ratified the sixth protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, which provides for the abolition of capital punishment.

Interfax: Russian Supreme Court seeks clarification on death penalty usehttp://www.interfax.com/3/526680/news.aspx

ST. PETERSBURG. Oct 30 (Interfax) - The Constitutional Court ofRussia has received the Supreme Court's request seeking itsclarification as to whether or not it would be possible to start usingthe death penalty in the country from January 1, 2010, theConstitutional Court said. Bearing in mind the urgency and extreme importance of the matter,the Constitution Court could address the aforementioned request at itsnext session on November 3, the court said. "If the Constitutional Court agrees to consider this request, itwill be addressed at an open plenary session," it said.

Russia's Supreme Court wants the Constitutional Court to clarifywhether or not Russian courts would be able to use the death penaltystarting from January 2010, when jury trials are expected to beginworking in Chechnya. This request received the support of the SupremeCourt's board during its recent session.

NTI: Terrorists in Former Soviet States Want "Dirty Bombs," Official Sayshttp://www.globalsecuritynewswire.org/gsn/nw_20091029_7204.php

Thursday, Oct. 29, 2009

Terrorist organizations operating within the Commonwealth of Independent States are believed to be actively trying to build a radiological "dirty bomb," Interfax reported yesterday (see GSN, July 31).

However, extremists in the former Soviet republics are not yet in possession of the radioactive material that would be combined with conventional explosives in such a weapon, according to CIS Antiterrorist Center chief Andrei Novikov.

"Such attempts have never been reported by our (CIS) special services and law enforcement agencies," Novikov said to reporters at a conference yesterday in Moscow.

Novikov said, though, that intelligence officials "have been registering attempts to relocate and to sell radioactive materials in the territory of various countries."

"Such an attempt was made in Ukraine last year," he said (see GSN, Interfax, Oct. 28).

The Moscow Times: Mironov Offers Bill To Increase Job Caps http://www.themoscowtimes.com/business/article/mironov-offers-bill-to-increase-job-caps/388545.html

30 October 2009By Irina Filatova

Federation Council Speaker Sergei Mironov submitted a bill to the State Duma on Thursday that would allow small and medium-sized businesses to hire more employees but keep their current benefits.

The bill is intended to help reduce unemployment, as small and medium-sized businesses will be able to create new jobs, Mironov said in a statement on his web site. He proposed changing the employee limit for a medium-sized business to between 121 and 270 employees, from 101 to 250 now, and to 120 for a small business, up from 100.

Such enterprises enjoy tax and other benefits under the law, but expanding companies risk losing them by hiring new employees.

“We want more companies to use the benefits, as it will help them resist the crisis better. We also hope that the enactment of the bill will stimulate the establishment of new companies,” Natalya Avilova, Mironov’s spokeswoman, said by telephone.

Avilova said it was the right time to amend the law on small and medium-sized businesses, as these companies in particular needed support during the crisis. Initially, the bill would have seen the changes expire after two years, but the version sent to the Duma proposes increasing the limits permanently.

Mironov’s proposal is the latest in a long line of state efforts to combat growing unemployment.

In January, the government presented a 43 billion ruble ($1.5 billion) employment stimulus package to fund region-specific job retraining programs, relocation assistance, small business development and job creation. The government hopes to create at least 900,000 jobs through the program, including temporary positions and new positions in small businesses.

The country’s jobless rate was 7.6 percent in September, the State Statistic Service said Oct. 20.

Andrei Shubin, head of the legal analysis department for the Opora business lobby, said the increases were not large enough to be felt.

“Most small and medium-sized businesses in Russia are retail enterprises. If a company with 200 employees hires 20 more, nothing will fundamentally change for it. The government must support small and medium-sized business more substantively, instead of solving individual problems and insisting it will help,” he said.

Prime Minister Vladimir Putin told Economic Development Minister Elvira Nabiullina during a Presidium meeting Thursday that he signed an order giving another 7.5 billion rubles to support small and medium-sized business, according to a transcript on the government web site.

Nabiullina said the funds would be used by the regions to help guarantee loans to small business.

Itar-Tass: Russia introduces criminal responsibility for anti-monopoly breacheshttp://www.itar-tass.com/eng/level2.html?NewsID=14484403

30.10.2009, 06.41

MOSCOW, October 30 (Itar-Tass) -- Russia is introducing on Friday criminal responsibility for violators of anti-monopoly legislation, the Federal Anti-Monopoly

Service (FAS) said specifying a prison term of up to seven years is envisaged for abuse of dominating market position or price fixing.

Article 178 of the Criminal Code comes into force on Friday and will be used in case competition restrictions inflicted damage of over one million rubles or resulted in proceeds exceeding 25 million rubles.

FAS said no criminal punishment is envisaged for first-time abusers of the dominating position. “One and the same person has to commit three violations of the anti-monopoly legislation in three years”, after which FAS will demand criminal persecution.

The Moscow Times: Police Prepare for Protest Season http://www.themoscowtimes.com/news/article/police-prepare-for-protest-season/388565.html

30 October 2009By Alexandra Odynova

Interior Ministry officers tested out their newest techniques for dispersing rallies Thursday, in exercises that news agencies said were focused on dealing with angry pensioners.

According to the ministry’s scenario for the drill, a group of pensioners gathered for an unsanctioned demonstration and blocked an important highway to seek social support, Interfax reported. Within several minutes, the crowd was dispersed with water, tear gas and stun grenades, while some of the elderly demonstrators were arrested.

Demonstrators have blocked several roads this year, most notably in the Leningrad region town of Pikalyovo.

The Interior Ministry later said in a statement that the information about the dispersed pensioners was incorrect and that special equipment was not “used and is not generally used in practice, except for psychological influence.”

The mock demonstration of force came ahead of Russia’s traditional protest season, with opposition movements planning to hold a series of rallies in early November coinciding with National Unity Day and former Soviet holidays.

“The fall is a period of heightened public activities, largely driven by the recent election campaign,” said Mikhail Sukhodolsky, a deputy interior minister, RIA-Novosti reported. The end of the summer holidays and seasonal employment would add to the size of demonstrations, he said.

The ministry also showed off new technology, including the Groza and Shtorm water-canon vehicles. Clips of the drills, held in the Moscow region town of Balashikha, were shown on Vesti-24 state television.

The exercises were part of the Interpolitekh-2009 international fair of law enforcement equipment. Reporters in attendance were also shown a mobile policeman robot, Metallist, Interfax said.

“Most of the samples presented today in the course of the exercises were made in Russia and are or will soon be taken into service,” Interior Ministry Rashid Nurgaliyev said.

OCTOBER 30, 2009

WSJ: FBI Lets Barred Tycoon Visit U.S. http://online.wsj.com/article/SB125685578903317087.html?mod=WSJ_hpp_LEFTTopStories

By EVAN PEREZ and GREGORY L. WHITE

One of Russia's most powerful tycoons -- barred entry to the U.S. for years due to U.S. government concerns about possible ties to organized crime -- visited the country twice this year under secret arrangements made by the Federal Bureau of Investigation.

Aluminum magnate Oleg Deripaska met with FBI agents in August and earlier this month as part of a continuing criminal probe, according to two administration officials. The focus of that probe couldn't be learned.

Mr. Deripaska used the opportunity of his recent U.S. visits to meet with top executives of U.S. investment banks Morgan Stanley and Goldman Sachs Group Inc. The aluminum giant he controls, UC Rusal, is preparing for an initial public offering, a vital part of Mr. Deripaska's efforts to save his debt-burdened business.

The U.S. trips came at an opportune moment to help reassure bankers his visa difficulties may be easing. Mr. Deripaska's visa troubles are a potentially sensitive issue for investors, bankers say.

Mr. Deripaska also stopped in Detroit to meet with top executives at General Motors Co. to discuss the sale of a stake in its Adam Opel AG unit to a Russian-backed consortium that includes Mr. Deripaska's AO GAZ auto maker, people familiar with the visit said.

The State Department, which rules on requests for U.S. visas, hasn't publicly said why it previously denied entry to Mr. Deripaska, and declined to comment on the recent visits.

Mr. Deripaska controls a Russian business empire that stretches from metals to finance to construction and which, by itself, accounts for just under 2% of Russia's gross domestic product. He enjoys good relations with the Kremlin, which provided a $4.5 billion bailout loan -- the biggest granted to any Russian company -- through a state bank to Rusal a year ago as the financial crisis hit Russia hard.

He is a regular member of the delegation on Prime Minister Vladimir Putin's international trips, and the Kremlin lobbied hard in support of the GAZ-backed bid for Opel.

n the past, Russian officials including Mr. Putin repeatedly have raised the visa issue with their U.S. counterparts. Mr. Deripaska also hired top Washington lobbyists in 2003 and 2005, including former Republican Sen. Bob Dole, to plead his case.

Mr. Deripaska's recent visits were arranged outside of regular State Department visa procedures because the U.S. continues to have concerns about Mr. Deripaska's business associations, according to administration officials. Instead, FBI officials arranged for a limited-entry permit from the U.S. Department of Homeland Security, as allowed in special cases related to sensitive matters, officials said.

Another person familiar with the case said there was some opposition from other U.S. agencies to Mr. Deripaska's visits, but that the FBI prevailed. The FBI had previously been at loggerheads with the State Department over Mr. Deripaska; FBI officials have said they were getting interesting information from him, this person said.

Spokesmen for the FBI, DHS and the U.S. Embassy in Moscow declined to comment.

Deripaska's Empire

Companies he controls account for nearly 2% of Russia's GDP. Some of his main holdings (stakes in each vary):

Rusal (world's largest aluminum producer) GAZ (cars and trucks) VPK (armored military vehicles) Aviakor (aircraft) Ingosstrakh (insurance) Continental Management (pulp and paper) Glavstroi (construction)

Source: WSJ research

Mr. Deripaska has repeatedly denied any links to organized crime and blamed the U.S. visa ban on a smear campaign by business rivals.

In an interview with the BBC in July, Mr. Deripaska accused American authorities of trying to blackmail him by revoking his visa, which he said undermined investor confidence after the actions became public. "They tried to push me in a corner, maybe believing that at this point I will cooperate with them," he said.

He denied providing sensitive information to the FBI. There are "Russian interests that I would never" betray, he said. A spokesman for Mr. Deripaska described as "inaccurate"

the assertions that the billionaire entered the U.S. on special permits arranged by the FBI and that he provided information to FBI investigators during the trips.

"Mr. Deripaska did visit the U.S. twice this year for business meetings," the spokesman said. "Mr. Deripaska has no travel restrictions to any country including the U.S."

A State Department official said Mr. Deripaska doesn't hold a valid U.S. visa.

FBI investigators, as well as authorities in Britain and Spain, have probed Mr. Deripaska's business interests in the past amid allegations of money-laundering from investigators and prosecutors. He has never been charged with a crime in those probes. Mr. Deripaska has met with FBI investigators before. It isn't known what was discussed.

After granting a visa in 2005 to allow Mr. Deripaska to come to the U.S. to talk to investigators, the State Department revoked it a year later when officials raised questions about the truthfulness of his statements during the course of those talks, according to people familiar with the situation.

During the early October trip he met top investment-banking executives including Goldman Chief Executive Lloyd Blankfein, according to people familiar with the meetings.

Neither of this year's trips was announced publicly. A Russian newspaper owned by a former Deripaska lieutenant last month published photos of him with GM executives in Detroit. In a telephone interview, the paper's owner said he took the photos on the August trip.

Questions about Mr. Deripaska's business dealings trace to the 1990s, when he emerged as one of the dominant players in the highly profitable aluminum industry. A rival tycoon, Mikhail Cherney, is suing in London for what he says is a 13% stake in Rusal that Mr. Deripaska owes him. Mr. Deripaska's lawyers have sought to have the suit thrown out. The court of appeals in July rejected their latest attempt.

In court documents, Mr. Deripaska testified that he paid Mr. Cherney $250 million as a payoff for "protection" provided by Mr. Cherney and others. He denies Mr. Cherney is owed any stake in Rusal. Mr. Cherney, who now resides in Israel, rejects Mr. Deripaska's account. He also has produced testimony from other former associates that says Mr. Deripaska maintained friendly ties with several alleged mafia figures long after he had claimed to have severed those ties.

Mr. Deripaska denies the allegations.

—Susanne Craig and John Stoll contributed to this article.

Write to Evan Perez at evan.perez@wsj.com and Gregory L. White at greg.white@wsj.com

30 October 2009, 10:01

Interfax: 11 members of Hizb ut-Tahrir extremist organization convicted in Tatarstanhttp://www.interfax-religion.com/?act=news&div=6597

Kazan, October 30, Interfax - The Supreme Court of Tatarstan found 12 activists of the Kazan division of the international terrorist organization Islamic Liberation Party (Hizb ut-Tahrir) guilty of extremism.

"Seven men, including Tajik citizen Dzhurayev and six Russians, have received four to eight years in a penal colony," court press secretary Natalya Loseva told Interfax.

Four other Kazan residents have received suspended sentences of three years and six months to five years in prison.

"The accomplice Gimaliyev was found insane and is exempt from criminal liability. He will be forcibly treated," Loseva said.

The sentence has not yet gone into legal force.

Apa.az: Azerbaijan arrested Chechen wanted in Russia for 10 years for committing murdershttp://en.apa.az/news.php?id=110159

[ 30 Oct 2009 12:14 ]

Baku. Hafiz Heydarov – APA. Citizen of Chechnya, wanted for committing a number of murders in Russia, has been arrested in Azerbaijan, Binagadi district police office told APA.

Khabibullayev Khajimurad Khajibullayevich, 44, had been wanted for 10 years under article 102 (premeditated murder) of the Russian Federation. Khabibullayev, who committed a number of murders in Russia, hid in Dagestan for a time and later in Azerbaijan. Operations were carried out in Azerbaijan through Interpol, but he was not detained.

Binagadi district police carried out investigation yesterday and detained Khabibullayev in Bilajari settlement of Baku. Weapon was found on Khabibullayev. He did not show armed resistance.

Talks are being held to hand him over to Russia.

RIA: Chechen suicide-bomber blows self up in police pursuithttp://en.rian.ru/russia/20091030/156642241.html

00:5330/10/2009

GROZNY, October 30 (RIA Novosti) - A 19-year-old Chechen militant, who planned to commit an act of terror in Grozny, blew himself up after being surrounded by police, the Chechen interior minister said on Friday.

"Acting on information about a planned terrorist act, police located the militant in the Lenin district of Grozny. The terrorist, cornered by police, set off a bomb and killed himself," Ruslan Alkhanov said.

The minister said there were no other casualties in the blast.

He added that the militant, identified as Kureysh Duguyev, was the brother of a member of an illegal Chechen armed group, who was killed near Grozny several months ago.

On October 27, a suicide bomber blew himself up in Grozny, killing one police officer and injuring another policeman.

Itar-Tass: Two servicemen wounded in Ingushetia, militant killed in Chechnyahttp://www.itar-tass.com/eng/level2.html?NewsID=14484233&PageNum=0

30.10.2009, 02.01

NAZRAN/GROZNY, October 30 (Itar-Tass) -- Two Russian army servicemen were slightly wounded by a land mine that exploded when a military convoy was driving in North Caucasian Republic of Ingushetia late on Thursday.

Also on Thursday in neighboring Chechnya police killed a militant suspected of preparing a terrorist act.

Ingushi police said the incident with the army convoy took place on the road between the settlements of Karabulak and Troitskaya.

Chechen Interior Minister Ruslan Alkhanov told Tass “member of illegal armed formations Kureish Dulduyev was killed y return fire after he rendered resistance to law enforcers during detention.”

He specified the special operation to seize the suspected terrorist took place in the Leninsky district of Grozny.

Itar-Tass: Deputy district prosecutor killed in Makhachkala

http://www.itar-tass.com/eng/level2.html?NewsID=14483616&PageNum=0

29.10.2009, 19.58

MAKHACHKALA, October 29 (Itar-Tass) -- The deputy prosecutor of Makhachkala’s Kirovsky district, Nazim Murtuzaliyev, was killed Thursday evening.

Sources in Dagestan’s law enforcement said the incident took place near the Eltap industrial plant at about 18:00 Moscow time. Murtuzaliyev was attacked when he was driving off the prosecutor’s office building in his car. Unidentified attackers rained the vehicle with bullets and escaped.

Murtuzaliyev died of multiple wounds at the scene of the attack.

A team of police, prosecutor’s office and federal security service FSB investigators is examining the scene. A search operation in the city is on.

The Other Russia: The Landmark Murder of Maksharip Aushev http://www.theotherrussia.org/2009/10/30/the-landmark-murder-of-maksharip-aushev/

October 30th, 2009 • Related • Filed Under

Writing for Yezhednevny Zhurnal, journalist Yulia Latynina chronicles the events leading up to Sunday’s murder of Ingush opposition leader Maksharip Aushev. Aushev was on his way to visit family when assailants sprayed his vehicle with machine gun fire.

The Ingush President has pledged full support for the investigation, but his ability to control the violence in Ingushetia is in doubt.

The Russian republic of Ingushetia borders Chechnya in the North Caucasus. Ingush security forces in charge of controlling spillover insurgent violence are blamed for hundreds of kidnappings and extrajudicial murders, but are rarely investigated.

“They killed this man two hours ago, but he walks among us here on film.”Yulia LatyninaOctober 26, 2009Yezhednevny Zhurnal

On Sunday, October 25, 2009, in the North Caucasian city of Nalchik, one of the most influential people in the Republic of Ingushetia was killed – Maksharip Aushev; the killers peppered his car with machine guns. It happened on the day after Maksharip appeared on Marianna Maksimovskaya’s REN TV news show and gave a piercing indictment of former republic president Murat Zyazikov.

“Nobody has established yet who to suspect,” said Yakhya Aushev, Maksharip’s father. “You could get bogged down in the fact that he just recently was speaking out against

Zyazikov. Not long ago, a team from REN TV was photographing their [the Zyazikovs'] mansions, and there was an incident with Ruslanbek Zyazikov. It was as if there were forces hunting him down.”

Ruslanbek Zyazikov is the cousin and former chief security detail of former president Zyazikov.

“I have a feeling it’s because of us,” says Marianna Maksimovskaya. “Maksharip saved our film crew literally ten days ago.”

Leonid Kanfer’s film crew was shooting a story in Ingushetia on the corruption of the former president. Among other things, they filmed their mansions in the village of Barsuki. When the film crew returned to the hotel, armed men came for them.

“They beat up the driver. Ruslanbek Zyazikov beat him personally,” said Maksimovskaya. “Our journalists called Maksharip, he arrived by himself, drew out a Stechkin [automatic pistol], and in Ruslanbek’s eyes brought out our cameraman and correspondent to the presidential administration, where they their testimony was taken.”

On Maksimovskaya’s program, Maksharip had said that the republic’s old leadership gave money to militants and sabotaged the actions of the new president; he gave as an example the fate of Construction Minister Ruslan Amerkhanov. According to Maksharip, he was appointed by new president Yevkurov and shot in his own office after refusing to continue business as usual.

Two hours after Maksharip’s murder, a rerun was aired of “The Week with Marianna Maksimovskaya.” “They killed a man, but he walks among us here on film.”

Two people managed to remove former President Zyazikov: the first owner of Ingushetia.ru, Magomed Yevloyev, and the second owner of the site, Maksharip Aushev. Both are dead.

Warnings and Tanks

The site Ingushetiaru.org had reported on September 12 about plans to murder Maksharip. “The would-be murder was commissioned to a member of one of the ORB-2 units to be committed at the moment of Aushev’s departure outside the republic,” the site asserted [ORB-2 (Operations and Search Bureau) is a federal police bureau in Chechnya accused of flagrant and widespread violations of the law, including torture of civilian detainees].

Maksharip was stopped three days later on September 15 at the post office, alongside which stood federal BTR tanks and Gazelle light trucks. Men from the BTR attempted to apprehend Maksharip, but were beat off by friends and chance bystanders – including the vice chairman of the government of the republic.

Having barely escaped, Maksharip phoned the president of the republic, Yunus-bek Yevkurov. The president called the security forces to a meeting the next day. It became clear that the BTR had been placed so as to not fall within view of any cameras. However, authorities now assert that had been a routine security check, and that Maksharip, who had been warned about plans of an attempt on his life, simply lost his nerves. Furthermore, he for some reason presented the Russian inspectors with his son’s identification, and not his own.

Forty days later he was shot.

How Maksharip Became Engaged in Politics

Maksharip Aushev was not a professional politician. He became engaged in politics after a “death squad” abducted his nephew Magomed on June 17, 2007. Magomed was taken out to the forest, tortured by being shot point-blank while standing in a waist-deep hole (first being outfitted with two bulletproof vests), and then freed upon signing an agreement of cooperation. Instead of cooperating, Magomed submitted a written statement to the prosecutor’s office.

After that, Magomed was of course doomed, and was abducted once again on September 18, 2007. As he had been together in the car with Maksharip’s son – his cousin – both were abducted.

They were tortured for several hours in the Chechnyan village of Goyty, and afterwards brought to the mountains for “snickers” – a practice in which a murdered corpse is bound with explosives and blown up; animals eat up the scattered pieces of meat, and the person disappears without a trace.

While they were being tortured, however, Maksharip assembled a rally in the city of Nazran. The authorities spooked and freed the Aushev boys.

Maksharip began to investigate who had abducted his son and nephew, and determined that it was Urus-Martan District Department of Interior Ministry Chief Ramzan Dzhamalkhanov, who it appears was acting on order of the Ingush Interior Minister Musa Medov – in any event, it was after a personal phone call from Medov to Dzhamalkhanov that the boys were freed.

Whatever the relationship was between the Aushev family and regional militants (and at that time, thanks to the activity of president Zyazikov and his “death squads,” the militants had sympathy or approval from practically everyone besides their targets), it is important to note that Maksharip was actually a legal oppositionist. He did not run off to search through the forest; he investigated the kidnapping of his son, made the results public, and demanded the resignation of Zyazikov. He did what befits a father and a man, and he would not have gotten into politics if politics had not gotten into him.

In the Caucasus, where yesterday’s terrorists now lead anti-terrorism detachments, where family ties mean more than beliefs, and reputation means even more than family ties, Maksharip was one of the central figures in negotiations between the authorities and the militants; or at that time, if I may, between the authorities and the people.

As a legal oppositionist, Maksharip was a thorn in the side of the authorities. He was arrested on February 14, 2008, and the circumstances of this arrest were truly fantastical. Several dozen people accompanied by two BTR tanks arrived at Aushev’s village of Surkhakh, incinerated the house of his brother with a grenade launcher, and sat in wait for Maksharip to arrive on the scene. Maksharip did come, but so many people were with him that the men decided not to arrest him. They sat in ambush until evening, when Maksharip returned alone.

The authorities, however, made a strategic mistake: they had not dared to kill Maksharip immediately upon his arrest. The plan fell to pieces. This mistake was corrected for the following notorious murder – that of Maksharip’s friend and ally, Ingushetia.ru owner Magomed Yevloyev.

The Murder of Magomed Yevloyev

On August 31, 2008, Ingushetia.ru owner Magomed Yevloyev few from Moscow to Ingushetia and by accidental coincidence wound up sitting in business class with President Zyazikov.

A quarrel arose between Zyazikov and Yevloyev, and Yevloyev left for a different cabin. According to the investigation undertaken by Yevloyev’s relatives, President Zyazikov called his chief of security and cousin Ruslanbek Zyazikov immediately after the argument and ordered him to take care of Magomed.

Ruslanbek then set out to find Ibragim Yevloyev, chief of security for Interior Minister Musa Medov, who had been at a wedding at the house of Medov’s uncle. Ruslanbek, Musa and Ibragim met Magomed Yevloyev at the airport; Magomed was dragged out of the cabin and put in a Volga armored car.

Seeing what was going on, Yevloyev’s armed followers – who were also Aushev’s – took off after him, but went for the wrong part of the motorcade. They were able to cut two armored Volgas away from the motorcade, dragged out Medov’s guards, and began to beat them. They cried out that “the blood is not on us!” which Aushev thought referred to the guards’ previously victims. In fact, it referred to Magomed Yevloyev. It seems that Ibragim Yevloyev shot Magomed in cold blood in the temple even before the motorcade left the airport.

The investigation of this murder itself became possible when the victim’s father, Yakhya Yevloyev, declared blood vengeance on Zyazikov. Almost immediately, participants of the murder, including the chief of police and President Zyazikov himself, came out of the

woodwork and began dumping blame for the crime on each other. Topping of the list of Yevloyev’s murderers, published on Ingushetia.org, is Ingush President Murat Zyazikov.

Ten days after Magomed Yevloyev’s murder, Ruslan Zyazikov’s brother Bekkhan was shot by unknown assailants. It is important to note that Ruslan Zyazikov is the son of Uruskhan Zyazikov, who was kidnapped by militants on March 23, 2007. It was precisely after this abduction that “death squads” began abducting anyone who could possibly be to blame. A five million dollars ransom was apparently paid for Uruskhan.

The murder of Magomed Yevloyev was more than the Kremlin could tolerate. Zyazikov was removed two months later, and named in his place was Yunus-bek Yevkurov.

Yevkurov’s Appointment

That there is disorder and lawlessness in Ingushetia has long since been obvious. But the depth of the rot that was discovered when Yevkurov’s took office simply cannot be described. Ingushetia.org reported, for example, on the following incident: in December of last year in the central mosque of Nazran, around three thousand people had gathered, demanding that Ruslanbek Zyazikov return stolen budget money and swear on the Koran that he had not given the money to militants. Ruslanbek did not go to the mosque, but he did admit to a crowd that showed up outside his house that he had paid militants thirty million rubles a month to not harm his relatives.

The strategy of the new president was utterly severe: forgive those who may be forgiven, and kill those who had ought to be killed. And no corruption.

Yevkurov’s strategy split the opposition. Oppositionist Kaloy Akhilgov became press secretary for the new president. But oppositionist Magomed Khazbiev, a close friend of Maksharip, continued to indict Yevkurov as a murderer.

The strategy split not only the opposition, but also the militants and the security forces. Paradoxically, these latter two implacable opponents had one thing in common: they both favored a continuation of uncontrolled violence – the militants, because it builds a base for Islamic revolution, and the security forces, because it makes it so easy to earn stars for one’s uniform. They, as well as others still, needed for the deciding tool in the republic to be the axe of the slaughterer, not the knife of the surgeon. For them, violence that was targeted or deemed necessary would not be sufficient.

If militants have left Zyazikov untouched (which you’d figure, for 30 million rubles a month), then Yevkurov, having taken it upon himself to root out corruption and uncontrolled violence, now faces assassination attempts that have befallen him as if from a bucket. The first of these attempts was preceded by a fully incomprehensible – but undoubtedly very historically important – special operation on December 6, 2008. On that day in the town of Barsuki, another Magomed Aushev (please excuse the abundance of Aushevs in this story), right-hand man of the chief of Ingush militants in the village of Magas, was killed. Although actually, while Aushev was thought to be dead, he was

really hiding in Barsuki (Zyazikov’s native city). He also at that time apparently had negotiations with President Yevkurov concerning possible surrender, as well as about a meeting that Maksharip Aushev would mediate.

Because of these negotiations, word spread by phone that Magomed Aushev had been killed by federal troops, who subsequently killed his brother Adam. Militants grabbed hold of the incident to blame the “kafir and apostates” of Yevkurov in the entire matter, and assassination attempts came one after another. It was a miracle that the heavily wounded Yevkurov survived after guards dragged him from his blazing car in June.

While Yevkurov lay in the hospital, a suicide bomber blew up a local police station in Nazran. The terrorist act shocked the Kremlin. Medvedev fired then-new Ingush Police Chief Meyriev and appointed Deputy Interior Minister Arkady Yedelev as coordinator for all security agencies in the Caucasus. The appointment was very strange, considering the reputation Yedelev enjoyed in the Caucasus. He is considered a man close to Chechen President Kadyrov and a patron of Musa Medov, that same former Ingush Chief of Police who figures in at number two after President Zyazikov on the list of Magomed Yevloyev’s murderers.

The murder of Maksharip Aushev is testimony to the fact that, aside from obvious discrepancies between Ingush President Yevkurov and the militants on the creation of a Caucasus Emirate, there exists another less obvious but very deep discrepancy between President Yevkurov and part of the former elite – the part wanting violence and impunity.

The murder of Maksharip Aushev is not one of those murders where everything is immediately clear. Like Yakhya Yevloyev, father of the murdered Magomed, said to me on Sunday: “Tomorrow, information should come out.” But this is a landmark murder. Whether or not President Yevkurov can find Maksharip Aushev’s murderers will determine who is in control of the republic. And for Yevkurov, this question is one of life and death – politically and literally.

Georgian Daily: Plans to Expand Russian Forces in North Caucasus Won’t Solve Russia’s Security Challenges

http://georgiandaily.com/index.php?option=com_content&task=view&id=15458&Itemid=65

October 29, 2009Paul GobleMoscow is planning to increase the number of units in the North Caucasus military district by a factor of four, according to officers there, but independent experts say that this expansion in Russian forces will not solve either the challenges posed by opposition groups in the North Caucasus or those presented by neighboring countries like Georgia. Today’s “Nezavisimoye voennoye obozreniye” reported that its sources in the North Caucasus Military District say that Moscow plans to create on the basis of the 58th army

an operational command consisting of seven motorized rifle brigades and one tank brigade (www.ng.ru/nvo/2009-10-29/2_militarizaciya.html?mthree=9).In addition, Moscow plans to increase the number of MVD forces there and is creating for them a new center in Krasnodar and the number of military aviation squadrons by at least five over the next year, all of which are to be supplied, the military affairs journal said, with the very latest military technologies.While the journal does not say so, this dispatch of additional Russian troops to the North Caucasus clearly represents a victory for those in Moscow and officials in the North Caucasus like Chechen President Raman Kadyrov who argue that the only way to defeat the militant opposition to the existing power structures is to use more force.But experts have doubts about the utility of this expansion in military units either domestically or internationally. Vladimir Popov, a specialist on the Caucasus, said that such an increase in the number of Russian troops there will “not in all respects promote the stabilization of the situation and the resolution of humanitarian problems.”On the one hand, he pointed out, past experience suggests that an increase in the number of Russian troops will be matched by an increase in the number of those opposed to Moscow. And on the other, no matter how many troops Moscow sends in, they will not be able to protect any particular individual.That shortcoming, Popov said, will continue to be exploited by opposition groups who will carefully target particular individuals. Indeed, he said, it is precisely on the basis of such calculations that there have been murders of rights activists and others in Daghestan, Chechnya, and Ingushetia in recent weeks.And at the same time, another expert, Aleksandr Khramchikhin, who heads the Moscow Institute of Political and Military Analysis, argues that this expansion of Russian military forces in the North Caucasus will do little or nothing to promote Russian security or advance Russian interests beyond the Russian border (www.sobkorr.ru/news/4AE96C2CA05E0.html).Because these new forces and military arrangements will be put in place only “after the present military reform,” he argued, “they will not be able to respond to any threat.” Indeed, he said, Russia’s military forces have been degraded to the point that they “already could not defeat even Georgia.”Obviously, both Popov and Khramchikhin have their own reasons for making these arguments, but this Moscow decision to increase its force levels in the North Caucasus points to three important conclusions about policy and politics in the Russian capital, conclusions that suggest some very different conclusions than some have been drawing in recent weeks.First, this decision suggests that decision making on these questions is still dominated by the force structures around Vladimir Putin who has made no secret of his belief in the efficacy of the use of force rather than by political forces around Dmitry Medvedev who have promoted the idea that Moscow must use economic and social tools to overcome problems in the Caucasus.Second, it suggests that for all the complaints about the downsizing of the officer corps and the military that have been raised in recent months, the Russian army can still get government support whenever it is in a position to make the case that only it is in a position to guarantee that those who are in power remain there.

And third – and most important – the report indicates that the situation in the North Caucasus is much worse than Moscow has acknowledged and the dangers of new clashes between Russia and Georgia much greater than anyone has admitted, an indication that the coming weeks may be more violent and the region no more secure as a result.

RFERL: Russian Election Commission Members Investigated For Fraud http://www.rferl.org/content/Russian_Election_Commission_Members_Investigated_For_Fraud/1864534.html

October 29, 2009 IRKUTSK, Russia -- A criminal case has been opened against 10 members of the local election commission in Russia's eastern Irkutsk Oblast, RFE/RL's Russian Service reports.

Handwriting experts reportedly testified that the signatures of 120 voters during the elections to the regional legislative assembly on October 12, 2008, had been falsified.

An official investigation showed that the election commission members placed votes under the names of the people whose signatures were falsified.

RIA: Police seize 20 kg of heroin in Uralshttp://en.rian.ru/russia/20091030/156645231.html

10:0830/10/2009

MOSCOW, October 30 (RIA Novosti) - Police in Russia's Urals city of Yekaterinburg have seized around 20 kg (44 lbs) of heroin from Tajik and Kyrgyz nationals, a police spokesman told RIA Novosti on Friday.

"Yekaterinburg police conducted two operations [on Thursday]. Five suspects were detained and about 20 kg of heroin was seized," the spokesman said.

He said three Tajik citizens were detained in the Zheleznodorozhny district of Yekaterinburg, and about 7 kg of heroin was seized. Some 12.5 kg was also seized from two unemployed people, one of them a Kyrgyz national, in the city's Verkh-Isetsky district.

An estimated 90% of heroin consumed in Russia is trafficked from Afghanistan via the ex-Soviet states of Tajikistan and Uzbekistan.

The vast majority of heroin consumed in Europe passes through Russia on its way from Afghanistan, where illegal drug production has reportedly increased more than 40 times since U.S. forces toppled the radical Islamic Taliban movement in 2001.

Businessneweurope: Crouching bear, leaping dragonhttp://www.businessneweurope.eu/storyf1847/Crouching_bear_leaping_dragon

Ben Aris in Moscow October 30, 2009

Six years ago in October, Russia's security services crept up quietly to a private jet parked on the tarmac of Novosibirsk's airport where it had stopped to refuel. The militia climbed the ladder and burst into the plane brandishing Kalashnikovs to arrested Russia's richest man, Mikhail Khodorkovsky, the majority shareholder of oil major Yukos.

He was hauled back to Moscow and locked in the overcrowded Matrosskaya Tishina prison, where he was charged with seven counts of fraud and tax evasion before eventually being sentenced to eight years in jail.

Khodorkovsky's arrest on October 25, 2003 set off a firestorm of international criticism that hasn't really abated since. A cause celebre, he is held up any time anyone feels like putting the boot into Russia's democratic credentials – and with some justification.

But while Khodokovsky was nominally imprisoned for cheating the state out of tax revenue, the real issue that got him into such trouble was trying to hijack Russia's foreign policy by pushing for the construction of an oil pipeline from Yukos oilfields in Angarsk in Western Siberia to Daqing in Northwest China.

The pipeline makes perfect economic sense: it is short and the Chinese have an insatiable appetite for Russian oil. Trouble is, building a pipeline from the middle of nowhere to the middle of nowhere commits Russia's Siberian oil exports to just one customer. Pipelines are intensely political beasts before they are built, but once built they are the geo-political equivalent of a marriage. The Kremlin wasn't ready to settle down and preferred a much longer pipeline that ends on Russia's Pacific coast at Primorsk, which makes less economic sense but has the advantage that cutting off shirty customers is as easy as saying "hard to starboard."

Now fast forward six years to this October. Prime Minister Vladimir Putin has just returned from a trip to China where he signed off on a landmark deal to build the Altai natural gas pipeline from – you guessed it – Western Siberia to northwest China, committing a substantial proportion of Russian gas to the Chinese market. Gazprom will increase exports of gas from Russia from the current nothing to 70bn cubic meters a year (cm/y) between now and 2014-2015, and inexorably tie the economies of the two emergent powers together in the process.

So what has changed? China and Russia have been on poor terms since Sino-Soviet relations floundered in the 1950s after the death of Chairman Mao and the subsequent ideological split over just what "socialism" means. But Khodorkovsky must have been choking on his brown bread and black tea as early as 2004 when the Kremlin did an

abrupt volte-face and began to send all the oil it could in trains (that used to belong to Yukos) to its southern neighbour.

West put on notice

"For decades Russia has had rocky relations with its powerful eastern neighbour, but now Russian strongman Putin has decided to set these aside and embrace closer economic co-operation," says Lilit Gevorgyan, a China-analyst with IHS Global Insight. "It is a pragmatic partnership that comes out of necessity. Russia had long-term plans to develop and invest up to a trillion dollars into places like Siberia, but the crisis has destroyed its resources. The Russians can offer the Chinese what they want (resources) and the Chinese can offer the Russians what they need (investment)."

Improving relations with China is also politically expedient, but the stakes rose when Putin put the West on notice with an aggressive speech in Munich 2007, warning that Russia was losing its patience with the lack of western cooperation. Russian President Dmitry Medvedev followed up with a similar message during his first foreign trip to Berlin in 2008, arguing that Russia and Western Europe "should" be natural partners, but calling on Brussels to step to the mark with some friendly action. If anything, the hysterical Russian coverage has only got worse since then.

Former German Chancellor and now a Gazprom employee Gerhard Schroeder added that same summer that Europe should embrace Russia now as, "there is a window of opportunity to partner with Russia, but that window will close and another power is waiting in the wings to take up the role of strategic partner – namely China." That window has now closed.

"Russia has been promoted to strategic partner and the two countries are united in that they want to build a post-Cold War multiple polar world to break the US hegemony over political power," says Professor Noesselt, a China expert at the University of Goettingen in Germany.

Gas for cash

Russia's best salesman arrived in Beijing on October 14 in what was his most successful trip yet. Putin is a man of commerce who routinely closes billion-dollar-plus arms deals on the sidelines of state visits, but he surpassed himself this time.

The Sino-Russian gas deal was the headline grabber, but Russia's prime minister closed about 40 deals in all worth an estimated $3.5bn – and these are only the ones that have been reported. Following one of Putin's recces abroad, news of deals typically dribbles out for another six months after he has left. This trip brings to conclusion many deals that were set in motion during Putin's last trip in March 2006 when the then president flew a convoy of 25 planes carrying 800 Russian businessmen to Beijing to do deals with Chinese President Hu Jintao, which is when talk of the gas deal first surfaced.

Rising Russian oil exports to China already accounted for a big chunk of the $29bn trade turnover between the two countries in 2005, which grew to some $50bn by the end of 2008 and is supposed to reach $80bn by 2010, say experts. A new phase in this Moscow-Beijing partnership will be the planned 2,000-kilometre 30bn cm/y Altai pipeline, which will carry Russian gas from the West Siberian fields to China and will cost $13bn to build. There are also plans to sell Russian gas to China from Sakhalin, Yakutia and Irkutsk via the Russian Far East corridor, but these pipelines will be even more costly to build.

The deal has already made Europeans nervous (see related piece) and many European companies have already extended their long-term purchase contracts for 25-30 years to lock in Russian supplies before China starts eating into Russia's limited supply capacity. Analysts say the chances of any more long-term contracts in Europe are now low, so in this sense Europe's recent attempts to warm relations with its prickly cousin to the east seem too little, too late. Russia's deputy prime minister responsible for the fuel and energy sector, and the Russian government's chief negotiator with China, Igor Sechin, said during the Beijing trip: "We have the gas and we'll give China as much as it needs."

Natural partners

And the energy ties are just the beginning. Of all the countries that China does business with, Russia is in a uniquely strong position; China sees the industrialised countries as markets for its cut-price goods and has already become "the factory for the world," says Professor Noesselt.

Multinational companies have rushed to set up shop in China to tap its billion-strong market as well as take advantage of low labour costs, but with Russia the investment is increasingly flowing the other way – from China into Russia, as unlike the developed world, Russia has all the inputs China needs to capitalise on its competitive advantages.

At the same time, Russia's physical proximity to China means Russian companies are in a better position than anyone to re-orientate their production away from the west and toward the east. The upshot is that the Russian economy is perfectly placed to ride on China's GDP growth coat tails. "The Sino-Russia team has the best synergy on the planet. China needs Russia's resources and Russia needs China's capital. China provides a growing market, financial resources and macroeconomic stability. Russia can provide oil, gas and coal that are needed for the next stage of Chinese industrialization," Kingsmill Bond, head of strategy at Troika Dialog, said in a recent note.

Troika, therefore, recommends buying companies with hard assets near to China. Rosneft is an obvious China play, as it owns oilfields – some of them formerly of Yukos - in Eastern Siberia and Sakhalin, which are both close and eventually will supply a third of Chinese demand for oil and gas. The tax breaks and short delivery route mean the company should earn three times more profit for a barrel sold to China than it would from shipping Siberian oil to the West.

Potash producer Uralkali is another winner, as it is already the largest supplier of fertilisers to China, which the agrarian economy is heavily dependant on. Peter Hambro's iron ore company Aricom is perfectly placed to serve China, as it is exploiting untouched ore fields just over the border in Russia's Far East. Moreover, there is already a big steel mill complex on the Chinese side of the border that has used up all the ore in the Chinese part of the same fields and so is a captive customer. Exceptionally low transport costs only sweeten the deal. Raspadskaya Coal should be able to establish itself as a major coal exporter to China. The company already has the lowest production costs in the sector and is keen to diversify from its traditional markets by looking for new customers in Russia's Far East and Asia. And cargo company Globaltrans is very well positioned to benefit from growing traffic flows between China and Russia - the company is focused on exporting bulk commodities to China and thus would largely benefit from rising demand as the Chinese economy improves, says Troika.

So should the West be scared of a Sino-Russian alliance? Sorta – but there is not a lot the rest of the world can do even if it is.

China hasn't replaced the US as an engine of global growth, but the crisis has clearly shown it can, and probably will pretty soon. However, despite the harsh rhetoric, Russia remains open to western investment and the EU remains Russia's most important trading partner. Both countries want to trade with everyone and while both want the respect they believe is due to them, trade also demands they maintain civil relations with everyone. "The improved relations with China is not about Russia switching sides, but building a more balanced relation with the rest of the world," argues Gevorgyan. "Will they succeed in becoming world powers? It is not an easy question, as both countries do not have a stable government and they are still dealing with regional protests, and they need to solve these problems first."

Putin's Chinese takeaways

Prime Minister Vladimir Putin remains Russia's best salesman. He regularly concludes arms deals during his foreign trips or actively pushes telecommunication deals on behalf of Russian oligarchs. However, he outdid himself during his week in Beijing in October, overseeing a total of $3.5bn of deals. Amongst the most important were:

• Gas is by no means the only Russian energy export to China. The Kremlin agreed to a 20-year oil supply deal for China in return for $25bn in credit for state oil company Rosneft and state oil pipeline monopoly Transneft;

• China Development Bank extended a $500m credit line to Russia's Vnesheconom Bank (VEB), while the Agricultural Bank of China will refinance the Russian state-controlled VTB Bank with another $500m. Securing the credit line is important for cash-strapped Russian banks severely hit by the global economic crisis.

• A joint Russian–Chinese venture for production of high-speed train locomotives that

will eventually boost the construction of railroads across vast swathes of China and Siberia. The details of this deal have yet to be clarified;

• Chinese construction company Gu & Lun together with Russian Central Trade Company will invest $630m in building a Trade and Exhibition centre in Yekaterinburg, Russia;

• A VEB–Chinese Export-Import Bank deal to invest $52.34m in developing a cement plan in the central Russian region of Penza;

• The United Ship-Building Corporation (OSK) and Yantai (China-Singapore) intend to build a mega-shipyard in the Russian Far East to produce oil and gas rigs. The project is estimated to cost a total of $1bn, with VneshEkonomBank (VEB) acting as the chief investor. There are no shipyards of this kind in Russia at present; several such projects have been announced, but none have secured state financing so far;

• China Investment Corporation, a $200bn sovereign investment fund, made its first investment in Russia during Putin's visit, investing a total of $300m for a 45% stake in junior Russian oil company Nobel Oil Group, plus debt extended to the company. Simultaneously, Hong Kong-based Oriental Patron acquired a 5% equity stake of Nobel Oil, with the 50% remaining under the control of the original Russian shareholders.

Time.com: Medvedev Dashes Hopes for More Democracy in Russiahttp://www.time.com/time/world/article/0,8599,1933251,00.html

By Simon Shuster / Moscow Friday, Oct. 30, 2009The democratic mettle of President Dmitri Medvedev was put to its greatest test this month. Perhaps naively, many of the country's liberals had believed that Medvedev, a doe-eyed and often bashful technocrat, would finally rise up to challenge the unrivaled dominance of Prime Minister Vladimir Putin. After all, they thought, he is technically the commander in chief of the country and he has cultivated the image of a reformer intent on bringing true democracy to Russia. But in the wake of rampant fraud allegations in local elections, Medvedev yet again disappointed the hopeful.It all started when Medvedev surprised the nation by initiating a fresh debate over the state of democracy in Russia. In a breach of the usual Kremlin protocol, Medvedev wrote a policy paper — a liberal manifesto of sorts — that was published in September on the independent news website gazeta.ru. It was seen by many to be a groundbreaking document. Although Medvedev did not criticize Putin overtly — that would have been political suicide — he did lament Russia's isolationism, its vulnerable economy and its "negative democratic tendencies," all jabs at the authoritarian political system that Putin cultivated during his eight years as President.

What's more, Medvedev laid out a bold democratic vision for the future. "Russia's political system will be extremely open, flexible and inherently complex," he wrote. "The

leaders of the political struggle will be parliamentary parties, which will periodically take each other's place in power."

No such system has ever really existed in Russia, and none had ever been promised in such terms. Talk-show hosts and columnists nearly lost their heads interpreting the paper. Was Medvedev actually taking a stand against Putin? Were they preparing to face off for the presidency in 2012? In the weeks that followed, nearly every public intellectual responded to the piece, including former Soviet leader Mikhail Gorbachev and oil mogul Mikhail Khodorkovsky, who had been stripped of his assets and imprisoned under Putin for fraud. Most of them were skeptical. "It is absolutely clear that one leader cannot modernize the country alone, even the strongest leader, if he has no support base of his own," Khodorkovsky wrote from his prison cell in a piece published in the daily Vedomosti newspaper on Oct. 21.

Putin enjoys the largest support base in Russia, with his political party, United Russia, controlling 315 of the 450 seats in the Duma. Medvedev's manifesto implied that the party's super-majority would eventually need to be broken up and its control of the bureaucratic machinery dissolved. This prospect, though seemingly impossible, provided opposition leaders with a rallying cry heading into elections on Oct. 11 to choose representatives in 76 of the country's 83 regional governments.

But as in every major vote since the fall of communism, reports of vote-rigging, ballot box–stuffing and voter intimidation were rife. In the most blatant violation, one polling station in Moscow recorded zero votes for the opposition Yabloko Party, even though its leader, Sergei Mitrokhin, and his family had all gone there to vote. (Their votes were later found during a recount.) It was a typical landslide day for United Russia. The party claimed victory in virtually all 7,000 races, in some cases by improbably wide margins.

The results didn't cause much of a stir among voters, who are long used to allegations of fraud. Voter apathy is so widespread in fact that in a poll released Oct. 15 by the independent Levada Center, a shockingly low 4% of Russians said they felt certain that democracy existed in their country. The political opposition, however, challenged the election results like never before. Three days after the vote, and for the first time this decade, all of the opposition members of parliament stormed out of the chamber in protest over the vote, leaving the United Russia deputies on their own. (They didn't seem to mind — they passed 19 laws in little more than an hour that day.)

Outside the chamber, the members of the Communist Party, the Liberal Democratic Party and the Just Russia Party, which was created by the Kremlin to attract opposition votes, demanded a meeting with Medvedev to urge him to live up to his promises. "We do not recognize the nationwide election results," said Vladimir Zhirinovsky, head of the right-wing Liberal Democrats. "We will not sit in a room with fraudsters."

The deputies also called for the resignation of the head of the Central Election Commission, Vladimir Churov, who, in their view, epitomizes all that is wrong with Russia's electoral system. A bearded apparatchik with Coke-bottle glasses, Churov served

under Putin in the St. Petersburg mayor's office in the early 1990s. After Putin became President, he paved the way for Churov to lead the election commission, and Churov has since repaid the favor by deflecting the fraud allegations that mar every election in Russia.

Medvedev finally agreed to meet with the opposition leaders on Oct. 24. He clearly realized the gravity of the moment. "Let us not allow this to become the funeral of our democracy and our electoral system," Medvedev told the deputies. "Although it is true, I made a point to wear black today, because I knew you would be in the mood for a funeral." Three days later, Medvedev asked Churov to look into the opposition's claims. Then the President slipped back into his usual complicity. He said the elections had been "satisfactory" and that any claims to the contrary would have to be settled in court. (Read TIME's 1991 article "The End of the U.S.S.R.")

This statement, aired on state television, killed off whatever flicker of hope liberals had that Medvedev might finally start moving Russia toward real democracy. The humbled opposition has since gone back to their places in the Duma. And the pro-democracy camp can only look with dread to 2012 when Putin is widely expected to run for President again. Whether he realizes it or not, Medvedev may already be a lame duck.

National Economic Trends

UPDATE 1-Russia c.bank shifts bid twice early Fridayhttp://www.forbes.com/feeds/afx/2009/10/30/afx7066097.html

10.30.09, 04:32 AM EDT

MOSCOW, Oct 30 (Reuters) - The Russian central bank administered two shifts of its intervention bid levels on forex market early on Friday, bringing the rouble's rise to around 8 percent in nine weeks.

The regulator moved its bid at which it buys foreign currency to 35.30 per basket, used for guiding the rouble's nominal exchange rate policy, after buying as much as $700 million, local dealers said.

The move, however, came only minutes after the central bank's previous shift by five kopecks at the session's opening.

The rouble had seen some correction during the week on falling crude prices, giving the central bank a break from intervening. Friday's shifts were the first such moves since Oct. 26.

'Until now we saw some closing of positions and fears that the happy period is over, but now its obvious that the opposite is happening,' Sergei Romanchuk, a dealer with Moscow's Metallinvestbank, said.

The central bank has been more forthcoming lately in revealing its market interventions and monetary policy plans, but it still does not comment on regular basis on its actions.

(Reporting by Andrei Ostroukh; Writing by Lidia Kelly; Editing by Victoria Main)

Bloomberg: Russia Warning on Hot Capital May Fall Victim to Oil (Update2)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTEcLJQKY76I

By Alex Nicholson and Paul Abelsky

Oct. 30 (Bloomberg) -- The Russian central bank’s warning that it will use rate reductions to keep out speculative capital will probably fall victim to high oil prices, economists said.

The bank yesterday cut the refinancing rate half a point to a record low 9.5 percent, partly aimed at “reducing the difference between short-term interest rates on the internal and external markets” to diminish “the attractiveness of short- term investments in Russian assets and stop the accumulation of risk on the stock and currency markets,” it said.

Moscow-based Bank Rossii is struggling to stabilize the ruble and stem an appreciation that threatens to hurt exporters and stall economic recovery in the world’s biggest energy supplier. The bank bought more than $11 billion of currency this month, First Deputy Chairman Alexei Ulyukayev said on Oct. 23. Russia’s currency reserves, the world’s third-biggest stockpile, rose to $429.3 billion this week, the highest this year.

The bank’s warning “will keep investors wary, but in the case of Russia, if oil rests this side of $60 a barrel, which isn’t difficult to envisage, then obviously we will see continued capital inflow,” said Simon Quijano-Evans, head of emerging-markets strategy at Credit Agricole Cheuvreux in Vienna. “It’s the first warning that they don’t want to see massive inflows of short-term portfolio investments occurring.”

Risk Appetite

Urals crude, Russia’s key export, has gained more than 80 percent this year and was trading at $77.09 a barrel yesterday. Oil makes up 30 percent of gross domestic product.

The central bank uses foreign exchange transactions to steer the ruble against a basket of dollars and euros. Prime Minister Vladimir Putin said last month preventing a ruble appreciation remains one of the government’s objectives.

Even so, the ruble is the fifth-best performer against the euro and the dollar since the end of June of the 26 emerging market currencies tracked by Bloomberg. It’s gained 7.2 percent against the dollar and 1.4 percent against the euro in the period.

The Russian currency gained 0.5 percent to 29.0700 per dollar at the start of trading in Moscow today and was little changed against the euro.

Rising crude prices coupled with “a renewed inclination of investors to take risks” required currency purchases to prevent “a sharp strengthening of the ruble,” the central bank said.

“Clearly the currency is more influenced by things like the oil price and global capital flows and global risk aversion,” said Vladimir Osakovsky an economist at UniCredit Spa in Moscow.

Carry Trades

The ruble is appreciating as investor appetite for emerging market assets returns.

“Currency appreciation in emerging markets has been particularly strong this year,” Nouriel Roubini, professor at the Stern Business School at New York University, wrote in an opinion piece about Latin American markets published on Forbes Magazine’s Web site yesterday. “Policy makers need to figure out how to avoid losing international competitiveness.”

Emerging market equity funds drew in a net $2.2 billion in the week ended Oct. 28, EPFR Global said. Gains this week took the total inflows for the year to a record $64 billion, according to estimates by Morgan Stanley.

Even so, this week’s emerging capital flows suggest investors are less keen to pursue high-yielding assets than they were a week earlier.

Carry Trades

Russian equity funds posted net outflows of $43 million in the seven days to Oct. 28 after drawing a record $450 million a week earlier, the most since EPFR began tracking data in the first quarter of 2002.

“The recent bout of risk aversion, if prolonged, will also help calm the Russian central bank’s fears about the speculative inflows build-up,” Goldman Sachs Group Inc. economist Anna Zadornova said in an e-mailed note.

As a carry trade, in which investors borrow funds in a country with low interest rates and invest where rates are higher, the ruble is still attractive, said Peter Westin, chief strategist at Moscow-based brokerage Aton LLC.

“Russia has one of the highest differences if you look at policy rates related, for example, to the U.S.,” Westin said. “Some central banks have started to introduce capital controls to stem inflows in the light of currency strengthening.” Russia’s central bank and government seem “to be reluctant to impose capital controls again but at the same time

we should probably expect to see continued rate cuts in an effort to make inflows less attractive.”

1,000% Inflation

The bank wants to stabilize the currency to allow it to move toward an inflation target by 2011. That goal will be difficult to achieve as long as the economy fails to wean itself off its commodity reliance, economists said. Inflation eased to an annual 10.7 percent in September from 11.6 percent in August. Slowing price growth marks a reversal for Russia, which is haunted by inflation rates in excess of 100 percent after its 1998 default and more than 1,000 percent after it abandoned central planning for market prices in the early 1990s.

While the central bank’s ability to prevent the ruble’s ascent is limited as long as demand for oil mounts, Russian authorities have no choice but to signal their readiness to act, economists said.

Message Needed

“They really needed to convey some verbal messages and be more explicit about this,” said Osakovsky.

President Dmitry Medvedev has called Russia’s oil dependence “humiliating” and has said he envisages a diversified economy in 15 years. Even so, with a global recovery driving up commodity demand , Russia may find it hard to stay committed to its goal of diversification.

“I don’t think they’ll be against a relatively strong ruble,” said Credit Agricole’s Quijano-Evans. “The ruble has actually underperformed all other currencies in the region, except perhaps the Romanian leu now. So there’s potential for the ruble to appreciate from this level, and that’s independent of the central bank’s refinancing rate.”

To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net. Alex Nicholson in Moscow at anicholson6@bloomberg.net.

Last Updated: October 30, 2009 03:29 EDT

Business, Energy or Environmental regulations or discussions

Bloomberg: AvtoVAZ, Gazprom, Lukoil, Polyus: Russia Stock Market Previewhttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aa5A_1Jeqd34

By Lucian Kim

Oct. 30 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close. The 30-stock

Micex Index rose 3.1 percent to 1,291.99 in Moscow, snapping three days of declines. The dollar-denominated RTS Index advanced 0.6 percent to 1,377.16.

OAO AvtoVAZ (AVAZ RX): Russia’s largest carmaker may require suppliers of components to form ventures with foreign companies, Interfax reported. AvtoVAZ slipped 0.1 percent to 14.601 rubles.

OAO Gazprom (GAZP RX): Russia’s largest energy producer said demand for natural gas is increasing after plunging in the first half of the year. Gazprom advanced 3 percent to 184.02 rubles.

OAO Lukoil (LKOH RX): Crude oil rose after the U.S. economy grew in the third quarter for the first time in more than a year. Shares in Russia’s largest non-state oil company rose 2.3 percent to 1,784.56 rubles.

OAO Polyus Gold (PLZL RX): Gold rose the most in three weeks as a sliding dollar increased the metal’s appeal as an alternative investment. Shares in Russia’s largest gold miner rose 2.5 percent to 1,594.43 rubles.

To contact the reporter on this story: Lucian Kim in Moscow at lkim3@bloomberg.net

Last Updated: October 29, 2009 22:00 EDT

Bloomberg: Russia’s RTS Index May Climb 34% on Global Growth, Goldman Says http://www.bloomberg.com/apps/news?pid=20601085&sid=aA_K.bRlzStE

By Stephen Kirkland

Oct. 30 (Bloomberg) -- Russia’s RTS Index may climb 34 percent to 1,850 within 12 months on valuations and global economic growth, according to Goldman Sachs Group Inc.

“We continue to believe in the positive global macro backdrop for Russia, which coupled with inexpensive valuations should lead to rallies,” Goldman Sachs wrote in a report dated Oct. 29. The brokerage added OAO Novatek and OAO Mechel to its Russia list of focus ideas.

The RTS rose 0.6 percent to 1,377.16 yesterday.

Last Updated: October 30, 2009 03:16 EDT

Reuters: WRAPUP 2-Russia debt/IPO deals to peak after $2 bln in 1 wkhttp://in.reuters.com/article/oilRpt/idINLT44121720091029

Fri Oct 30, 2009 12:15am IST

* Magnit raises $527 mln in SPO, LUKOIL $1.5 bln

* Polymetal, Megafon seen next

* Trust in Russian firms revived, still tough for RUSAL

(Updates with LUKOIL pricing)

By Dmitry Zhdannikov

MOSCOW, Oct 29 (Reuters) - Russian firms have raised over $2 billion from debt and capital markets this week and more borrowers are poised to follow suit shortly if current risk aversion proves to be short lived.

After a period of panic selling at the end of 2008 and early 2009, investors have regained their appetite for Russia as oil prices rose to annual peaks, the rouble strengthened and government officials and bankers said the worst was over.

Russia borrowed less than any other BRIC nation this year and is the only one in the group -- which includes Brazil, India and China -- with lower syndication levels than in 2008.

This was because "the Russian economy had been falling while (those of) other BRIC nations continue to rise," said Denis Poryvai from Uralsib.

"The picture is different now as oil prices are strong, the economy is showing some signs of recovery and problems with credit refinancing are being solved domestically. We therefore expect a recovery in trust toward Russian companies," he added.

On Thursday, grocery chain Magnit (MGNTq.L: Quote, Profile, Research) raised $527 million in a heavily oversubscribed secondary share issue while oil major LUKOIL is placing a $1.5 billion Eurobond (LKOH.MM: Quote, Profile, Research). [ID:nN29373364]

Magnit's issue became the largest Russian share placement since the crisis and only the second to take place after steel maker Evraz (HK1q.L: Quote, Profile, Research) [ID:nLL620295]. The Krasnodar-based retailer will use the proceeds to expand its hypermarket chain.

Magnit priced its SPO at the top end of the price range to meet healthy demand from foreign investors, who chose to ignore a 3-day correction in emerging markets.

LUKOIL's placement, however, has taken longer than expected to be priced but was in the end helped by better-than-expected U.S. economic data. It is Russia's first benchmark bond by a privately-held firm since the crisis.

"LUKOIL's bond placement could prove an important milestone in overcoming the effects of the crisis for Russian companies," analysts from Unicredit said in a research note.

IPO EXIT

Russia's government plans to issue $18 billion worth of Eurobonds next year, but its sovereign rating will not be affected because its debt ratios will remain comparatively low, Moody's lead analyst for the country told Reuters on Thursday.

"The Russian government has very little debt. Even with this extensive increase in borrowing, Russia still seems OK," Jonathan Schiffer told Reuters financial television. [ID:LAG005873]

Russian firms and banks borrowed fiercely before the crisis to fuel growth and entered the financial storm with over $400 billion in foreign debts, prompting the government to save them from defaults and propose measure to cap borrowings.

Now the macro-economic environment is improving, with no measures to cap borrowing yet in place, the number of firms with bond and share placement plans is growing again.

Russia's No 3 wireless firm MegaFon, which is considering acquisitions, said on Wednesday it will launch a $1.5 billion European Medium-Term Notes programme in December-February. [ID:nLS681741]

The country's top silver miner Polymetal (PMTLq.L: Quote, Profile, Research) may accelerate book building for a $300 million secondary placement of up to 10 percent of its shares. [ID:nLS732489]

"With investor sentiment appearing to improve and with a pent up supply of private equity portfolio companies considering an IPO exit, we continue to believe that there will be a substantial pick-up in IPO activity in the first half of 2010," PwC said in its European IPO watch report this week.

Strong silver and gold prices will support Polymetal's placement just as oil is helping LUKOIL.

But bankers say even a solid recovery in aluminium prices might not be enough to persuade investors to sign up for shares of aluminium giant RUSAL, co-owned by Oleg Deripaska -- once Russia's richest man and now its most indebted tycoon.

The firm has to reach agreement with its foreign creditors on $7.3 billion of debt by mid November if its IPO is to proceed this year, bankers said on Wednesday. [ID:nLS721142] (Reporting by Dmitry Zhdannikov, + 7 495 775 12 42; Editing by David Cowell)

Barentsobserver: The Norwegian bank Sparebank Acquires 75% of shares in Russian bankhttp://www.barentsobserver.com/acquire-75-of-shares-in-russian-bank.4648831-16175.html

2009-10-30 The Norwegian bank Sparebank 1 Nord-Norge has got license to acquire 75 percent of the shares in the Russian ZAO Agrokredbank, according to an information release posted at the Oslo Stock Exchange’s NewsWeb.

NewsWeb writes that SpareBank 1 Nord-Norge is negotiating with OAO Bank Tavrichesky, St. Petersburg, on an agreement for the acquisition of all shares in Agrokredbank from current owners.

Upon takeover the bank will have disposed of its existing portfolio, but will retain full licensing for banking operations in Russia. Agrokredbank will be restructured and form the basis of a new bank in northwest Russia with its main operations in Murmansk and a registration address in St Petersburg. The agreement is dependent on licensing from Russian authorities.

SpareBank 1 Nord-Norge is negotiating with OAO Bank Tavrichesky, St. Petersburg, on an agreement for the acquisition of all shares in Agrokredbank from current owners.

Yesterday, BarentsObserver reported that Sparebank 1 Nord-Norge presents its best quarterly result ever.

The Northern Norwegian base bank presents a pre-tax operation result of NOK 671 million (EUR 75 million) per third quarter 2009, the bank wrote in a marked statement.

Reuters: Russian Standard bank posts H1 losshttp://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLU56956220091030

Fri Oct 30, 2009 5:11am EDT

MOSCOW, Oct 30 (Reuters) - Russian Standard bank, one of the country's top consumer lenders, posted a 5.3 billion-rouble ($181 million) net loss for the first half of 2009, after making a profit of 5.1 billion roubles in the same period last year.

The Russian economy is struggling with its first contraction in a decade while rising unemployment and a fall in disposable incomes hit retail banking with full force in 2009.

Russian Standard, owned by vodka-to-banking tycoon Rustam Tariko, decreased its loan portfolio by 26 percent from Dec. 31, 2008, to 106.9 billion roubles, according to the bank's unaudited financial statement obtained by Reuters.

Russian banks have to channel almost all of their profits into provisions as bad loans rise and Russian Standard bank has aggressively created provisions totalling 10.2 billion roubles as of June 30, 2009, a 2.7-times rise from a year ago.

The bank's capital decreased by 15 percent to 32.7 billion roubles but the capital adequacy ratio is still well above mandatory requirements of 10 percent. ($1=29.34 roubles) (Reporting by Dmitry Sergeyev; Editing by Greg Mahlich)

Bloomberg: Evraz Says Steel Pipe Orders May Spur Restart of Oregon Planthttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=abYrWks9bnxg

By Ilya Khrennikov and Maria Kolesnikova

Oct. 30 (Bloomberg) -- Evraz Group SA, 36-percent owned by billionaire Chelsea Football Club owner Roman Abramovich, said steel demand is rising at most of its foreign operations and pipe orders may lead to the restart of a U.S. plant that was idled in July.

The company, Russia’s second-largest steelmaker, is “working on” pipe orders for 2010 in North America that may prompt the restart of Evraz’s 200,000-ton-a-year plant in Portland, Oregon, Senior Vice President Pavel Tatyanin, who oversees the company’s businesses outside Russia, said in an interview.

“Our South African steel mill is currently operating at the highest capacity in 10 years,” Tatyanin said. Evraz’s Italian steel-plate mill has been working at full capacity since May and has sold all its November output, he added.

The collapse in commodity prices in the past year has left Evraz posting a first-half net loss while holding $8.5 billion of debt that it amassed buying steel plants in the U.S., Europe and Africa. Evraz may have to renegotiate terms with lenders, Standard & Poor’s said last month.

Demand for vanadium, which Evraz produces in South Africa and the U.S., will probably grow faster than steel as emerging economies buy more of the steel additive, Tatyanin said Oct. 28 in Moscow, where the company is based.

Foreign operations account for about 75 percent of Evraz’s revenue, said Tatyanin.

‘V-Shaped Recovery’

The recovery in global demand “will not be V-shaped, it will be slow and gradual,” Tatyanin said. “We expect to show moderate production growth in some regions” in the fourth quarter, he said.

Evraz wrote down the value of its assets by $880 million last year and posted a first-half loss of $987 million. Demand is still weaker in the Czech Republic, where Evraz has its Vitkovice unit, Tatyanin said.

The cost of hot-rolled coil, a benchmark steel product used in cars and construction, gained 16 percent in the third quarter, the steepest increase in 15 months, according to data compiled by Metal Bulletin. Coil in Europe, which fetches 395 euros ($581) a metric ton, is 41 percent lower than a year ago. U.S. prices fell 35 percent.

There is concern in the steel market that China, the world’s largest steel producer, may raise exports and depress global prices, said Boris Krasnojenov, an analyst at Renaissance Capital in Moscow. Tatyanin says that’s not a concern.

“China has high-cost steel production as it relies on imports of raw materials,” he added. “China has no reason to export its steel below the cash costs.”

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

Last Updated: October 29, 2009 20:00 EDT

Digitalmedianet.com: RUSNANO and Alcoa Sign a Memorandum of Understanding http://storage.digitalmedianet.com/articles/viewarticle.jsp?id=888967

(October 29, 2009) NEW YORK, BUSINESS WIRE --

Alcoa (NYSE:AA) President and CEO Klaus Kleinfeld and RUSNANO CEO Anatoly Chubais have signed a Memorandum of Understanding to explore opportunities for applying nanotechnology in the aluminum industry. The two companies have identified several promising technical and commercial fields to begin pursuing together. These include off-shore oil and gas drilling systems, high-efficiency power transmission, next-generation lighting, energy-efficient buildings and transportation systems and green packaging.

The signing took place during a visit by a RUSNANO delegation to Alcoa's New York headquarters and the Alcoa Technical Center in Pittsburgh, Pennsylvania.

Commenting on the results of the visit, Klaus Kleinfeld, Alcoa President and CEO, said: 'This partnership with RUSNANO offers great promise for Alcoa and the entire aluminum industry. Building on our existing investment and presence in Russia, we are proud to be a partner of the leading Russian nanotechnology institution.'

Alcoa has been present in Russia since 1993. In 2005, the company purchased two leading aluminum fabricating facilities Alcoa SMZ (formerly the Samara metallurgical plant) and Alcoa Metallurg Rus (formerly Belaya Kalitva metallurgical production plant.). Alcoa has modernized the facilities, investing more than $750 million in upgrades. Together with RUSNANO, Alcoa continues that modernization with the new development of cutting-edge, advanced technologies for aluminum production in Russia. The Company anticipates the partnership will not only contribute to the increase in the aluminum products consumption in the country, but will also assist in diversifying and innovating the Russian economy.

RUSNANO CEO Anatoly Chubais stated: 'Having been established in 2007, our Corporation has occupied a very active position in working with the world's leading companies and scientific institutions on developing and localizing the nanotechnologies in Russia. We work in cooperation with the most renowned Russian scientists and experts to identify and commercialize the innovative technologies that will take the Russian economy to the next level of development. I am confident that the Memorandum of Understanding that we signed with Alcoa, one of the global leaders in the production of aluminum and aluminum products, is a first step on the road to a very beneficial joint cooperation that will heavily rely on both parties' expansive knowledge and expertise. With Alcoa, we are looking forward to the implementation of the concrete projects of bringing nanotechnologies' advantage for the creation of the new generation aluminum products for the Russian and export markets.'

ARMS-TASS: "Sukhoi" became the winner of the award "Company of the Year 2009"http://armstass.su/?page=article&aid=77286&cid=25/Google translation/

MOSCOW, October 30. (ARMS-TASS). "Sukhoi" became the winner of the award "Company of the Year 2009" in the category "Project of the Year" according to the business weekly "Companiya". Expert Council, which consists of independent experts, representatives of business associations, government bodies, prominent journalists, found the most successful program to build medium-range passenger aircraft, Sukhoi Superjet 100. Its production is conducted in today is part of a holding Aircraft Manufacturing Factory in Komsomolsk-on-Amur. In the near future planes will begin to enter Russia and foreign customers. The portfolio of firm orders is now 122 cars.

Last year, Sukhoi has made notable achievements in the field of military aviation industry. In August, at the MAKS-2009 was signed over the past decade, the largest contract to supply the Ministry of Defense 64 advanced Su-35C, Su-27SM, Su-30m2. Is realized signed in late 2008, government contract to supply the Air Force Russia 32 Sukhoi Su-34. Mass production of these planes organized by the Novosibirsk aviation plant of the company. Project development and creation of the fifth generation fighter entered the stage of preparation of the first flight, scheduled to take place before the end of 2009 combat aviation equipment supplied to foreign customers. Negotiations on new

contracts.

Competition "Company of the Year" is held editorial board since 1999, through continuous monitoring and analysis of developments in the markets, a list of companies that have managed to achieve in the year the most outstanding achievements in their industries and play a significant role in the development of national economy. The Prize takes expert advice. Among the winners this year besides Sukhoi included such companies as Capital Group, Comstar, the airline "Moscovya", Nemiroff, Google Russia, etc.

Activity in the Oil and Gas sector (including regulatory)

RBC: Rosneft, Gazprom may be required to sell products on energy exchange

http://www.rbcnews.com/free/20091029174548.shtml

      RBC, 29.10.2009, Moscow 17:45:48.Russia's Economic Development Ministry believes that Rosneft and Gazprom Neft may be required to sell 10 percent of their oil products directly on the energy exchange even before the respective federal bill is passed, head of the ministry's competition development department Alexander Pirozhenko told journalists today. He pointed out that the given amount - 10 percent - was approved by the Anti-Monopoly Service, adding that the government and concerned ministries ultimately had the final say. The Energy Ministry, Industry and Trade Ministry, and the antitrust watchdog have 10 days to submit their reviews of the Economic Development Ministry's propositions.

// 29.10.2009 // 16:06 //MIGnews: Lukoil to launch Odessa portside plant againhttp://mignews.com.ua/en/articles/376446.html

MIGnews.com.ua

Lukoil may launch Odessa portside plant in November which stopped to work in early October. The company managed to agree with Transneft on pumping oil for the plant by pipeline Druzhba, Kommersant-Ukraine newspaper reports.

"Transneft" national stock company and Lukoil agreed to transport oil to the Odessa Refinery plant on the route Belarus-Brody-Odessa till the end of 2009, spokesman of the Ministry of Fuel and Energy Fent Di reported.

"According to my information, oil will be transported by the Belarusian and Ukrainian section of Druzhba pipeline to Odessa", - explained Fent Di.

OCTOBER 29, 2009, 9:31 A.M. ET

WSJ: Lukoil Resumes Operations At Odessa Refinery From Nov 1 http://online.wsj.com/article/BT-CO-20091029-713359.html

MOSCOW (Dow Jones)--Russian oil producer OAO Lukoil Holdings (LKOH.RS) will resume operations at its Odessa refinery in Ukraine Nov. 1 after a month-long forced standstill, the company said Thursday.

The Odessa refinery will receive 195,000 metric tons of oil in November through the Druzhba pipeline via Brody, Lukoil said.

Lukoil said in the beginning of November that it was forced to suspend operations at the Odessa refinery after Ukraine's state-owned pipeline monopoly Ukrtransnafta stopped deliveries through the Lisichansk-Kremenchug-Odessa Refinery pipeline.

Company Web site: www.lukoil.com

-By Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 937 8445; jacob.pedersen@dowjones.com

Reuters: LUKOIL sells $1.5 bln of debt in two tranche dealhttp://in.reuters.com/article/oilRpt/idINN2938227720091029

Fri Oct 30, 2009 2:53am IST

NEW YORK, Oct 29 (Reuters) - LUKOIL (LKOH.MM: Quote, Profile, Research), Russia's second-largest oil producer, sold $1.5 billion in five-year and 10-year debt on Thursday, pricing both tranches at a discount, according to a source at one of the lead managers.

The five-year tranche worth $900 million sold at a price of 99.474, bringing a coupon of 6.375 percent and a yield of 6.5 percent, the source said. The debt matures Nov. 5, 2014.

The 10-year tranche worth $600 million sold at a price of 99.127, bringing a coupon of 7.25 percent and a yield of 7.375 percent. This tranche matures Nov. 5, 2019.

LUKOIL's deal is the first benchmark bond by a privately held Russian firm since the global economic crisis erupted.

The lead managers of the deal are Barclays Capital, ING and RBS.

LUKOIL is an investment-grade credit. Standard & Poor's and Fitch Ratings rate the company at BBB-minus, the lowest investment grade rating, while Moody's Investors Service rates the company one notch higher at Baa2. (Reporting by Daniel Bases; Editing by Dan Grebler)

Energy Intelligence: TNK-BP to Name Siberian Oilman as CEO http://www.energyintel.com/DocumentDetail.asp?Try=Yes&document_id=643959&publication_id=31

Copyright © 2009 Energy Intelligence Group, Inc.  (click for details)Friday, October 30, 2009

SummaryMaxim Barsky, the former head of a small Russian oil producer, is expected by the end of November to be announced as the new chief executive of TNK-BP, ending a year-long search for a replacement for the ousted Robert Dudley.

Reuters: Russian oil firm Surgut's Q3 profit rises vs Q2http://uk.reuters.com/article/idUKLS66922520091030

Fri Oct 30, 2009 7:12am GMT

MOSCOW, Oct 30 (Reuters) - Surgut (SNGS.MM: Quote, Profile, Research), Russia's fourth-largest oil company, saw net profit rise to 13.18 billion roubles ($452 million at current rate) in the third quarter 2009 from 8.47 billion roubles in the second quarter, the company said on Friday.

For the third quarter of 2008, the company had reported net profit of 47.47 billion roubles.

The results are to Russian accounting standards. Surgut is the only big Russian oil firm that does not report to international standards. (Reporting by Vladimir Soldatkin, writing by Maria Kiselyova, editing by Will Waterman) ($1=29.17 ROUBLE)

RBC: Surgutneftegas posts lower 9M profit

http://www.rbcnews.com/free/20091030105704.shtml

      RBC, 30.10.2009, Surgut 10:57:04.The net profit of Surgutneftegas under RAS dropped 24.7 percent to RUB 90.444bn (approx. USD 3.08bn) in the first nine months of 2009 compared to the same period of the previous year, the Russian oil and gas company indicated in a report today.

      Meanwhile, the company's net profit surged 1.6 times to RUB 13.183bn (approx. USD 449m) in the third quarter compared to Q2 2009.

Interfax: Transneft net profit down 5.6% in 9 mthshttp://www.interfax.com/3/526653/news.aspx

MOSCOW. Oct 30 (Interfax) - Transneft (RTS: TRNF) saw net profitdecline 5.6% in the first nine months of 2009 year-on-year to 2.632billion rubles under Russian accounting standards, the oil pipelineoperator said in a statement. Net profit in the third quarter was down 15.7% year-on-year to418.77 million rubles.

Mydigitalfc.com: Russian consultant targets India’s energy sectorhttp://www.mydigitalfc.com/plan/russian-consultant-targets-india%E2%80%99s-energy-sector-290

By Siddhartha P Saikia Oct 29 2009 , New Delhi

Tags: GCE, Indo, Russian, Trade, Plan Indo-Russian trade relations got a leg up on Thursday after St Petersburg-based GCE Group announced the launch of India operations. The group provides energy efficiency consultancy to power and energy sector.

The company targets $100 million (around

Rs 470 crore) revenue annually over next five years. “GCE India plans to tie up with leading Indian firms in energy sector as a consultant and is already in talks with GAIL, ONGC, IOC and BPCL,” said Alexander Moskalenko, president of the GCE Group.

Meanwhile, the company is facing problems in India because of political and bureaucratic bottlenecks. The government returned documentations (that are for company registration) for necessary corrections. “We are concerned about the kind of approach for registration of a company in India. In Russia, registration of a new company takes two weeks while we took three months to register in Brazil. But, in India, we are dealing with the process for almost a year,” added Moskalenko.

The company is being helped by Russia trade representative in India to complete the official formalities for setting up their business in the country. According to an official though, the company expects the process to be over in the next 10 days.

GCE India plans to start services in technical risk analysis and targets to set up a team of 1,000 people over the next five years.

India’s massive economy, which is developing very fast, is the primary cause for the firm to spread their footprint here. “We plan to work in coordination with local companies in the country. We are focused to expand our business in BRIC (Brazil, Russia, India and

China) nations and Europe,” said Moskalenko.

The company claims it will help India in reducing carbon emissions and offer new job opportunities.

Mikhail A Rapota, trade commissioner, trade representation of the Russian Federation in India, told news persons that they expect the Indo-Russia trade to touch $10 billion by 2010. “We saw 11 per cent increase in the Indo-Russian trade in the first half of the current year,” said Rapota.

GCE Group’s clients list include companies such as British Petroleum, TNK BP, Gazprom, Lukoil, CPFL, RUSAL, China and National Petroleum Corporation among others.

Barentsobserver: Oil spill in Nenetshttp://www.barentsobserver.com/oil-spill-in-nenets.4647835-16176.html

2009-10-29 An estimated 2,6 tons of oil leaked out from the Varandey pipeline at Yuzhnoye-Khylchuyu on October 21th.

The joint commission from the Nenets branch of the Russian technical inspection and Naryanmarneftegaz company is holding an inquiry of accident with the oil spill. According to the preliminary estimate, 2,6 tons of oil spilled in result of incident, informed Nenets Autonomous Okrug Administration.

The representatives of the federal inspections (Rostekhnadzor and Rosprirodnadzor ), the Nenets AO Administration and journalists visited the site of occurrence.

The consequences of spill are said to be efficiently removed. The spill happened in the area of the Yaretarku river basin, but oil did not get into the water. The emergency crew had time to clean up the oil.

The situation was improved thanks to the subzero temperature and snow. The liquidators removed the oil together with the polluted snow, according to information from Naryanmarneftegaz.

The specialists of the Rosprirodnadzor (Nature inspection authorities) will check if oil has leaked into the ground. So far, ground tests have been sent to the examination. The results will be known in the beginning of November. The final verdict will be announced by the inspection on November 10, said Vladimir Bezumov, head of the inspection. 

The Nenets office of the Norwegian Barents Secretariat contributed to this article.

Gazprom

Reuters: Italy SACE backs 408 mln euro loan to Gazpromhttp://www.forbes.com/feeds/afx/2009/10/29/afx7062638.html

10.29.09, 12:26 PM EDT

MILAN, Oct 29 (Reuters) - Italy's state export credit agency SACE said on Thursday its had approved a guarantee for a 408 million euro ($601 million) loan to Russia's Gazprom to buy and build gas treatment facilities as part of the Nord Stream project.

The facilities for the Portovaya compressor station will be supplied by Siirtec Nigi, an Italian engineering and contracting company, SACE said in a statement.

The compressor station will pump gas from Russia's Shtokman gas and condensate field to the Nord Stream submarine pipeline, which will link Russia to Germany through the Baltic Sea, it said.

(Reporting by Svetlana Kovalyova)

Focus: Gazprom forecasts gas consumption in Europe will go up by 12.5% until 2020http://www.focus-fen.net/index.php?id=n198729

29 October 2009 | 20:53 | FOCUS News Agency Moscow. Russian gas company Gazprom forecasts natural gas consumption in Europe will go up by 12.5% until 2020 to 700 billion cubic meters annually, reads company’s statement released after a meeting of Gazprom’s managing body, RBC agency reports.The meeting discussed the trends for a change in demand and dynamics of natural gas prices on the global markets.Gazprom forecasts a rise in gas demand also in Northern America and the countries in the Asian-Pacific region.

Business Standard: GSPC in talks with Gazprom, STG for exploration, J&K pipelinehttp://www.business-standard.com/india/news/gspc-in-talksgazprom-stg-for-exploration-jk-pipeline/374708/

BS Reporter / Mumbai/ Ahmedabad October 30, 2009, 0:05 ISTGujarat State Petroleum Corporation is in tie-up talks with Russia's oil and gas major Gazprom for exploration of hydrocarbon blocks both in India and Russia. Besides, it is also exploring possibilities of roping Gazprom for its proposed 20 MMTPA LNG terminal at Mundra.

The state run PSU has also initiated talks with Stroytransgaz (STG) for jointly setting up various pipeline projects including the proposed Mehsana to Srinagar pipeline project.

"The deputy chairman of Gazprom and senior officials of STG met Gujarat chief minister Narendra Modi and discussed possibilities of future tie-ups," said chief secretary, D Rajagopalan. The chief minister along with a high-level delegation visited Russia early this week.

GSPC, through its subsidiary Gujarat State Petronet Ltd (GSPL) is planning to lay down pipeline network from Gujarat to Punjab right upto Jammu and Kashmir. The 960 km pipeline will be laid between Mehsana to Bhatinda in first phase. Later on, it will be extended by about 450 km from Bhatinda to Srinagar, sources privy to the development said.

"We have held talks with STG for the J&K pipeline project. When it comes to competitive bidding, it's very difficult to beat the Russians. We are exploring exploration activities with Russia's state-owned Gazprom both there and in India," said S Jagdeesan, Principal Secretary, Energy and Petrochemicals department, Gujarat. He said that the Russian oil and gas companies have shown interest in the entire energy value chain of GSPC.

When asked if GSPC has shown interest in participating with Gazprom in oil and gas exploration projects including Shakhalin-3 in Russia, Rajagopalan said, "Yes, they are open to that." He, however refused to give details of any specific project.

A delegation from Russia will be visiting Gujarat in near future, according to Rajagopalan. GSPC along with Adani group is also setting up an LNG terminal at Mundra which will be operational by 2011-12. "Gazprom has shown interest in LNG project," said DJ Pandian, MD of GSPC.

Besides, Gazprom and STG, Modi also held talks with officials of Russian oil and gas major Systema and Itera.

Modi was on a two-day visit to Moscow to participate in the International Energy Week and address the 4th International Energy Week and 9th Russian Oil and Gas Week conference where he was invited to deliver a key note address. The event was organized by the Ministry of Energy of the Russian Federation and Chamber of Commerce, Moscow.

Telegraph.co.uk: Gazprom in Europe: Russian government plans to share part of Yamal gas resourceshttp://www.telegraph.co.uk/sponsored/russianow/6461238/Gazprom-in-Europe-Russian-government-plans-to-share-part-of-Yamal-gas-resources.html

This online supplement is produced and published by Rossiyskaya Gazeta (Russia), which takes sole responsibility for the content. Ivan Rubanov, Expert MagazinePublished: 3:39PM GMT 29 Oct 2009

The Russian government plans to share bits of the giant Yamal prize with international companies. However, rather than a sign of liberalism, this represents an attempt to address the fundamental challenges that the expanding Gazprom is facing in Europe

Prime minister Vladimir Putin unveiled a new gas strategy in the statement he made recently in Salekhard, the Arctic capital of the Yamal-Nenets Autonomous Region. Mr Putin personally presented a summary of the giant Yamal gas resources to the top executives of major oil and gas companies.

For the first time, the Kremlin talked of making the gas-rich region accessible to foreigners. Some commentators conclude that the economic downturn is forcing Russia to surrender part of its strategic industry to foreign control. But is that really so?

Reserves now, LNG tomorrow

“This gesture, inviting foreign companies to attend the Salekhard meeting, indicates both our openness and willingness to work together,” said Mr Putin. According to Alexey Miller, Gazprom CEO, gas production in Yamal over the next 20 years is set to grow from zero to 360 billion cubic metres – or by two thirds of current output.

This might sound surreal given that, in recent years, Moscow has consistently wrenched away multinationals’ stakes in big hydrocarbon projects. And now they are cordially welcomed to help themselves to some of the Russia’s biggest unexplored gas fields in a region that has enough potential to become a major gas production centre.

“This comes as a surprise,” says Konstantin Simonov, managing director of the National Energy Security Foundation. “The original plan was to let Gazprom broach its biggest project alone.”

Yamal, however, is a tough environment for development, due to both a punishing climate (with its permafrost, freezing temperatures, strong winds, frequent storms and almost year round offshore ice cover) and the region’s distance from markets that must be reached by long, ice-obstructed sea routes.

Still, there is a reason for foreign companies to scramble like mad to the “world’s end,” as Yamal translates from the Nenets language – the mind-boggling resources deep under the region’s surface. By 1993, Russian companies had discovered about 25 big gas, and oil and gas condensate fields.

Based on Mr Putin’s statement, Yamal holds about 12 trillion cubic metres of booked gas, or over 25pc of the total Russian resource base – plus another 50 trillion cubic metres of exploration potential, according to Sergey Shmatko, the Russian energy minister. Any of these figures positions Yamal, along with the Persian Gulf, among the principal gas provinces that globally account for 177 trillion cubic metres of proven reserves.

Emphasis on liquefied natural gas (LNG) was another important concept introduced at Salekhard. Never before had the key figures in the Russian energy industry spoken about the LNG segment with more enthusiasm and audacity of scale. LNG seems to have taken the place of new pipeline projects as a tool for diversifying exports.

According to Mr Miller, Gazprom expects that the global LNG market will have doubled by 2020, and its share in this fast-growing business will have reached 25pc, which is only marginally short of Gazprom’s current pipeline export to Europe.

Like flies to honey

Today, only one LNG plant in the world – on the coast of Alaska – operates in a sub-arctic climate. LNG projects require new technology solutions and, therefore, discussions with foreign partners must now begin. According to energy scientist Yuriy Orlov, Russian companies will not be able to manufacture heavy liquefасtion equipment in the near future.

The Yamal meeting was attended by CEOs of all the invited multinational petroleum companies, except for BP and Chevron. “Although the principal barrier cited is the rough handling of corporate interests by the Russian government, has it done real damage to their business in Russia?” wonders Mr Simonov.

“Shell, for instance, was forced to give up its share in the Sakhalin project, but it pocketed a multibillion-dollar compensation, and amid the general outcry against the Kremlin, the victim itself remained surprisingly reserved. Now that Shell is among the key Gazprom partners, it is unlikely to bear any grudge – saying nothing of those German and Italian companies that can access Russian assets and earn hundreds of millions from options alone.”

Dmitriy Lutyagin, an analyst from Veles Capital, notes that “as gas production in Europe is declining annually by 5-7pc, the share of the EU’s local gas supplies will have fallen from 41pc today to 20pc by 2025, and, in this context, European companies cannot afford to miss the opportunity of accessing this giant gas province.”

No skills, no drills

Why does the Kremlin need foreign investment? One of the reasons stems from Russia’s bumpy relations with its main customer, the European Union. Daniel Yergin, the author of The Prize and a renowned energy expert, believes that Gazprom has not seen sufficient

recent assurance from the EU to be confident that its potential gas production will be fully contracted: while Gazprom has 26 trillion cubic metres of recoverable gas, only 2.3 trillion cubic metres are covered by long-term contracts. In Mr Yergin’s opinion, the gas giant will have to move from less manageable pipeline contracts to more flexible LNG deliveries.

Another essential reason for bringing in petroleum majors is the shortage of local technology – exacerbated by the diminishing volume of easily accessible gas. The lack of heavy manufacturing technology for LNG equipment is a handicap, given that Russian companies are already struggling to manufacture and install offshore pipelines or extract deep gas.

Compared to the current Gazprom production base, where 70pc to 85pc of gas reserves come from the shallow Cenomanian reservoirs (about 700m deep), Yamal can offer only 27.5pc at this geological level. Russian companies have little experience in the medium and deep offshore operations that are critical for tapping the Yamal potential.

One more factor is Gazprom’s need to share both risks and costs. “Gazprom estimates that the huge Bovanenkovo oil and gas condensate field will require $100bn to build the infrastructure and come onstream,” says Mr Lutyagin. “The total estimate is $200bn, and you have to bear in mind that planned costs tend to increase as the project progresses.” Put simply, Gazprom is unable to foot such bills on its own.

Russia still in control

The structure of foreign participation will be partially defined by the Comprehensive Yamal Development Programme, which is due in early 2010. Some of its messages, however, are discernable even today. Obviously, this is not a case of changing the political paradigm in order to let private investors gain some control over Russia’s strategic industries.

The whole maneouvre looks like a large-scale campaign to support expansion of Gazprom into new markets through asset swapping. Mr Shmatko said that money alone will not buy foreign players their “admission tickets”. They will have to provide technology and access to foreign markets through “their existing marketing and logistics infrastructure” and asset swaps.

“Nobody is going hand over large assets to foreign companies, since they are barred from strategic fields by Russian law,” says Mr Lutyagin. “In all likelihood, they will... participate in joint ventures that typically have a transparent business structure. Apart from LNG projects, I think, foreign partners may be offered more challenging satellite fields around large structures.”

According to Yuriy Saakyan, managing director of the Natural Monopoly Institute, international companies can access gas projects only as minority stakeholders in a way similar to the Shtokman development; there will be no major concessions apart from the

LNG project. “Foreign energy companies will not sell their LNG equipment unless they secure a piece of your business in return,” says Mr Orlov. “For example, Shell asks for 22-31pc of all new LNG projects.”

LNG projects, too, present a dilemma: will they pay off both for Gazprom and the state budget? “Moscow’s emphasis on LNG was unexpected for foreign investors,” says Mr Simonov. “LNG prices in the US are very low, and marketing prospects are unclear. By 2012, Qatar plans to export 100bn cubic metres of gas, while the US expects their import potential to be only 70bn by 2020.” In this light, Mr Putin’s words that Russian LNG will help balance the global market sound strange.

The price of LNG on the south coast of the United States (less export duties) is the same that Russian customers pay for their local gas. Thus, LNG from Yamal might turn out to be a poor competitor on the market. “The gross internal rate of return on LNG projects ranges from 50-60pc,” says Mr Orlov. “But after tax, it drops as low as 10-12pc, so their commercial value will largely depend on fiscal treatment.”

The Russian government is ready to make sacrifices in order to gratify its ambition. At the Salekhard session, Mr Putin reiterated his idea of applying no mineral extraction tax to Yamal developments, while economic development mimister Elvira Nabiullina reassured foreign guests that staff are busy drafting proposals for a special economic zone in Yamal.

In any case, Gazprom has already secured a sizeable exemption. Fiscal authorities levy a 30pc export duty on gas, but liquefied gas was legislated to be exempt in 2006. Hopefully, Yamal’s public coffers will see some gas money, too.

Yamal Prize

Yamal contains 12 trillion cubic metres of booked gas, or more than 25pc of the total Russian reserves, and 55 trillion cubic metres of potential resources. By comparison, proven global gas reserves total 177 trillion cubic metres. According to Gazprom CEO Alexey Miller, Yamal can be developed to produce up to 360 bn cubic metres of gas per year by 2030.

Russian LNG Projects

The Russian LNG plant in Sakhalin will run at full capacity of 9.6m tonnes in 2010, delivering 5pc of the global LNG output. The major portion of future gas supplies is already contracted by customers in Japan, the US and South Korea. An LNG facility is expected to be built near Teriberka in the Murmansk Region to handle gas from the giant Shtokman gas condensate field, and another will be constructed in Yamal at the Yuzhno-Tambeiskoye field.