Russia 091214

Basic Political Developments Reuters: PRESS DIGEST - Russia - Dec 14 Itar-Tass: Lavrov, US special envoy to discuss Bosworth’s visit in N Korea -

Russian Foreign Minister Sergei Lavrov will meet Monday with U.S. special envoy on North Korea Steven Bosworth to discuss the results of Bosworth’s visit in Pyongyang and prospects for resuming the six-party talks on denuclearization of the Korean Peninsula.

Yonhap: S. Korean nuke envoy to visit Russia this week Russia Today: START could be marred by Soviet nuclear “Dead Hand” - “There

was a system developed in the USSR that was known as ‘Dead Hand’. What does that mean? Well, if the country was subjected to a nuclear missile strike and the Commander-in-Chief failed to make any decision, among the intercontinental missiles the USSR had there were those that could be launched by a signal given over the radio channel of the battle command system,” said doctor of Engineering Science Pyotr Belov.

VOVNews: PM Dung arrives in Moscow for Russia visit - Prime Minister Nguyen Tan Dung arrived in Moscow on December 14, beginning an two-day official visit to Russia at the invitation of Prime Minister Vladimir Putin.

Viet Nam News: PM Dung visits Russia to strengthen relations ISRIA: Vietnam - Prime Minister visits Russia to boost multifaceted ties RIA: Russia, Croatia presidents to hold informal meeting Monday TVNZ: McCully heads for Europe and Russia - Foreign Minister Murray

McCully heads overseas on Sunday for the regular six monthly consultation with the European Union and bilateral meetings in Sweden and Russia. The relationship with Russia was also important and it was a growing market for New Zealand exports, he said.

African Press Agency: Russia, Africa relations undergoing revival, says Kremlin official  

Today.az: Russian MP: Turkey should act jointly with Russia, not U.S. in Karabakh issue - Day.Az interview with Sergei Markov, director of Russia-based Institute of Political Studies, professor at Moscow State Institute of International Relations and member of the Russian State Duma (parliament).

Civil.ge: Ex-PM Nogaideli Visits Moscow The Georgian Times: Georgian Journalists Meet Russian President The Georgian Times: Russian Passports Being Distributed in Stepantsminda

Despite Government's Ignorance RIA: Russia to launch three Glonass satellites RIA: Two bombs deactivated on gas pipeline in south Russia Itar-Tass: Gas supplies cut in North Ossetia, Ingushetia over blast threat Aysor.am: Gas transit to Armenia stopped because of bomb Reuters: UPDATE 1-Russia cuts gas to Armenia after bombs found near pipe Itar-Tass: RF, China satisfied with development of relations – FM The Moscow Times: Moscow Will Fund Bulgarian Power Plant - Moscow is

prepared to fund most of the construction of a 4 billion euro ($6 billion) nuclear

power plant at Belene in Bulgaria, Energy Minister Sergei Shmatko said Friday, as Russia tries to sweeten a deal that Sofia has put under review.

Standart News: Borissov Discussed Belene Project with Shmatko The Moscow Times: Belarus Gets Extended Discount on Gas - Belarus will get

Russian gas at a discount for a few more years, Belarussian First Deputy Prime Minister Vladimir Semashko said Friday, as the countries negotiated terms for creating a common economic space.

The Moscow Times: Customs Union Will Send Papers to WTO ISRIA: Recording on Russian President Dmitry Medvedev's blog: World's Major

Greenhouse Gas Emitters must simultaneously make the necessary commitments Russia Today: World Bank chips in to green Russia Online.wsj.com: Russia Demands Its Credits - Moscow, to Keep Its Carbon

Permits, Threatens to Block a Global Climate Deal The Moscow Times: Moscow Aims to Carry Over Balance of Emissions Rights -

Moscow does not plan to sell its unused Kyoto Protocol emissions rights and instead wants to carry them over to a new agreement, Kremlin advisor Alexander Bedritsky said Friday.

Reuters: Rebel Abkhazia re-elects leader, Russia hails vote Online.wsj.com: Russian Presence Grows in Abkhazia ISRIA: Mexico - The 4th meeting of the Mexico -RussiaJoint Commission for

Cooperation on Economic, Trade, Scientific, Technical and Maritime Transportation Affairs is held

BarentsObserver: Radioactive leak in Severodvinsk RIA: Russian shipyard says recent radioactive leak poses no threat Itar-Tass: Hasty conclusions impermissible in Perm fire case - Investigation

Committee RIA: Investigators say town mayor, wife shot dead Itar-Tass: Major fire breaks out at oil refinery in Samara region, no victims Itar-Tass: Second study of Sayano-Shushenskaya HPP dam stability starts The Moscow Times: 20 Prison Officials Fired After Lawyer’s Death The Georgian Daily: Russia’s Right-Wing and Left-Wing Extremist Groups

Similar in Tactics but Different in Organization The Guardian: Russia and Nato: A frozen conflict - editorial New Europe: EU: In Putin We(have to) Trust - Putin — the current prime

minister and former president of Russia — may well be the most powerful man in the world and maintains his dominant hold on energy. Germany, France and Italy have formed strategic energy partnerships with Russia, which determine to a large extent their policies despite the United Kingdom’s often hostile approach towards Moscow.

FT.com: Industry: Russia’s one-company towns face bleak future Reuters: Reign of fear grips Russia's Chechnya

National Economic Trends Bloomberg: Ruble Advances Against Dollar as Oil Prices Reverse Losses RBC: Bank of Russia may take strategic companies from Lombard List The Moscow Times: Central Bank to Buy Gold From Gokhran

Business, Energy or Environmental regulations or discussions Itar-Tass: Sberbank gives AVTOVAZ credit of 7 billion rubles Reuters: AOL in talks with Russian investment firm on ICQ Online.wsj.com: AOL Talks to Russia's DST Over ICQ SteelGuru: Updated Russian metallurgical sector development strategy Alibaba.com: Mechel's TFZ obtains certificate of compliance with ISO

9001:2008 standard Alibaba.com: Russia's Kuzbassrazrezugol announces Jan-Nov operational results Reuters: REFILE-UPDATE 1-Russia's Exillon raises $100 mln in London IPO Asiaone.com: Russians setting up Asian shop in Singapore

Activity in the Oil and Gas sector (including regulatory) RBC: Oil companies to be forced to disclose contractual terms JPost.com: New Asian gas line to weaken Russian influence OilVoice: Lukoil and Statoil Win Bid on the West Qurna 2 Field in Iraq UPDATE 1-BP says Lukoil buys out stake in CPC pipeline JV The Financial: LUKOIL Becomes Owner Of 100 Per Cent Of LUKARCO Reuters: TRUD - Russian oil company LUKOIL's, which owns Bulgaria's sole

refinery Neftochim, plans to invest $250 million in the plant in 2010, Lukoil's First Vice President Vladimir Nekrasov said in an interview.

OilVoice: Kentz Awarded Sakhalin 1 Contract by Exxon Neftegas

Gazprom Bloomberg: Dubai Shows No Guarantee Gazprom Debt Backed by State

(Update1) Upstreamonline: Gazprom licensed to operate Badra iStockAnalyst: Gazprom Neft Wins Tender for Iraq Mineral Field OilVoice: Eni and Gazprom Celebrate 40 Years of Co-operation Brunei fm: GAZPROM, UZBEKISTAN COORDINATE GAS TRANSIT,

DELIVERY TERMS New Europe: Gazprom eyes Iran-Pakistan-India pipeline

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Full Text Articles

Basic Political Developments

Reuters: PRESS DIGEST - Russia - Dec 14http://uk.reuters.com/article/idUKLDE5BD02720091214

Mon Dec 14, 2009 7:47am GMT

MOSCOW, Dec 14 (Reuters) - The following are some of the leading stories in Russia's newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Mirax Group, a leading developer of offices and luxury apartments that has faced problems in financing of sites in Moscow, will sell a 55 percent stake in a $400 million project to the Tashir group of Samvel Karapetyan.

- After 12 years of fighting, Russia's Lukoil (LKOH.MM: Quote, Profile, Research) has secured access to one of the world's biggest oilfields in Iraq, the West Qurna Phase Two oilfield, the daily reports.

VEDOMOSTI

www.vedomosti.ru

- Russian subsidies for gas supplies to Belarus could cost the government and state gas firm Gazprom (GAZP.MM: Quote, Profile, Research) up to $2.5 billion next year.

- Russia has not yet finalized a deal to built a nuclear plant in Bulgaria's Belene but Moscow has no doubt the deal will be done, the daily says, citing Russian Energy Minister Sergei Shmatko.

- Russia's VTB (VTBR.MM: Quote, Profile, Research) plans to buy 32.5 percent of the Bashkir polymer producer Polief, an asset that services conglomerate Sistema (SSAq.L: Quote, Profile, Research) is considering potentially interesting for an acquisition.

- Russia's Digital Sky Technologies (DST) may buy AOL's (AOL.N: Quote, Profile, Research) instant-messaging service ICQ for $200-250 million.

IZVZESTIA

www.izvestia.ru

- Russian President Dmitry Medvedev has sacked several senior prison officials after the death in jail of lawyer Sergei Magnitsky, whose relatives say he was denied medical treatment.

VREMYA NOVOSTEI

www.vremya.ru

- A number of Moscow night clubs will be closed during the New Year and Christmas holidays due to safety problems, the daily says. Almost 400 sites in the capital have been probed after a fire in a nightclub in Perm killed more than 140 people.

Itar-Tass: Lavrov, US special envoy to discuss Bosworth’s visit in N Koreahttp://www.itar-tass.com/eng/level2.html?NewsID=14635906&PageNum=0

14.12.2009, 02.31

MOSCOW, December 14 (Itar-Tass) -- Russian Foreign Minister Sergei Lavrov will meet Monday with U.S. special envoy on North Korea Steven Bosworth to discuss the results of Bosworth’s visit in Pyongyang and prospects for resuming the six-party talks on denuclearization of the Korean Peninsula.

The U.S. diplomat will also have negotiations with Deputy Foreign Minister Alexei Borodavkin, who heads the Russian delegation at the six-party nuclear negotiations.

Upon results of the 3-day visit in North Korea (on December 8-10) Bosworth earlier stated that the United States and North Korea reached “mutual understanding on the need for resuming the six-party talks and for fulfilling the 2005 historic agreements on denuclearization of the Korean Peninsula.”

The diplomat emphasized that the question about how and when the delegations will resume the six-party negotiations in Beijing, will be settled through consultations with other negotiating nations, including South Korea, China, Russia and Japan. Bosworth met with North Korean Deputy Foreign Minister Kang Sok-ju and head of the North Korean delegation Kim Kye-gwan.

According to U.S. Secretary of State Hillary Clinton, the U.S.-North Korean negotiations were quite positive. North Korea also stated that the countries managed to bring their positions closer.

Moscow hopes for the soonest resumption of the six-party negotiations. “The Russian side takes positively contacts on the nuclear problem of the Korean Peninsula in any format, bearing in mind that they (contacts) contribute to resuming the six-party negotiations,” spokesman for the Russian Foreign Ministry Andrei Nesterenko said. “We hope that U.S. and North Korean colleagues will find common language quite soon that makes it possible to continue the six-party negotiations already in the near future,” the spokesman said.

Yonhap: S. Korean nuke envoy to visit Russia this weekhttp://english.yonhapnews.co.kr/national/2009/12/14/11/0301000000AEN20091214004700315F.HTML

2009/12/14 14:51 KSTBy Lee Chi-dongSEOUL, Dec. 14 (Yonhap) -- South Korea's chief nuclear envoy will visit Moscow later this week to discuss the next step in efforts to bring North Korea back to six-way talks, following the resumption of North Korea-U.S. dialogue, the foreign ministry said

Monday.

   "Wi Sung-lac, special representative for Korean Peninsula peace and security affairs, will visit Russia from Dec. 16 till Dec. 19," ministry spokesman Moon Tae-young said.

   Wi will hold a meeting with his Russian counterpart Alexei Borodavkin on Thursday as part of continuing consultations among the North's five dialogue partners "on the current situation related to the North Korean nuclear issue and discuss future steps," he added.

   Another ministry official, asking not to be named, said that Wi will compare notes with Borodavkin about the results of a trip to Pyongyang last week by Stephen Bosworth, the U.S. special envoy on the North.

   Bosworth sat down last week with North Korea's Vice Foreign Minister Kang Sok-ju and they hammered out a "common understanding" on the need to restart the six-party negotiations also involving China and Japan. But the two sides failed to agree on a date for a new round of six-way talks. China, chair of the forum, usually sets a schedule through consultations with the other member nations.

   North Korea and the U.S. are widely expected to have more contact to discuss detailed conditions for reconvening the negotiations that have been stalled for a year.

   Bosworth visited South Korea, China, and Japan to brief them on the outcome of his three-day trip to the North and talk about the next step. He is also on a trip to Russia.

   The South Korean nuclear negotiator, Wi, is also considering traveling to China and Japan. His exact schedule has yet to be set, the official said.

Russia Today: START could be marred by Soviet nuclear “Dead Hand”http://rt.com/Top_News/2009-12-14/dead-hand-ussr-weapon.html/print

14 December, 2009, 10:05

It has been more than a week since the START treaty between Moscow and Washington on cutting nuclear arsenals expired. While nuclear reduction may be the current trend, this was not always the case.

The Russian and the US presidents have been on the phone over the weekend, trying to forge a new arms deal. The next round of talks on the follow-up to the START treaty is to begin in Geneva this week.

However, there was a time when the United States and the Soviet Union were poised to do anything to gain the upper hand in a nuclear war – even if that hand was “dead”.

Imagine a completely automated means of global annihilation, much like “Skynet” from the Terminator movies, or even the absurd “Doomsday Device” boasted about by Doctor Strangelove. Is it a Soviet “X-File”? Or is it possible that any of this is real?

“There was a system developed in the USSR that was known as ‘Dead Hand’. What does that mean? Well, if the country was subjected to a nuclear missile strike and the Commander-in-Chief failed to make any decision, among the intercontinental missiles the USSR had there were those that could be launched by a signal given over the radio channel of the battle command system,” said doctor of Engineering Science Pyotr Belov.

Using a complex network of sensors measuring seismic activity, air pressure and radiation to detect if the Soviet Union had suffered a surprise nuclear attack, the “Dead Hand” system was there to make sure the nuclear arsenal could be launched without anyone pressing the red button. If the Kremlin was cut off, and the computers sensed an obliterating blast, the launch codes would be sent, giving the USSR the ability to strike back post-mortem.

“A system that could be automatically activated with the very first enemy strike is indeed required. Its availability makes the enemy understand that even if our command centers and the decision-making system are destroyed, there will be some automated means of launching the remaining missiles in a counterstrike,” said former joint Chief of Staff of Armed Forces General–Colonel Leonid Ivashov.

In the Cold War, America had its own backup, codenamed “Looking Glass”. Command crews were kept in the air continuously for three decades, with the idea they would constantly oversee strikes from the sky if ground control was lost in an attack. The main difference between “Dead Hand” and “Looking Glass” was that the Americans relied on humans to make the call. It was also retired when the Cold War ended – while it is not clear if the Soviet version still exists. Those who would know avoid the subject.

”I won't talk about it because I am not informed of its current condition,” Ivashov said.

All this comes at a time when everyone is talking about ditching nukes. Even so, now that the sun on the original arms reduction treaty is setting, a new one is only inching towards reality – possibly held back by America's recent plans for a missile defense shield, a move that would upset the balance, giving the US an unfair strategic advantage.

“I can only add that the task of further reduction of strategic offensive weapons is too important – both for Russia and the United States, and for the entire world – In fact, to prevent it from being held hostage, to any particular regime, anywhere around the globe,” Russian Foreign Minister Sergey Lavrov said.

If the treaty is signed and nuclear disarmament continues, maybe the world will see the day when such destructive technology is put aside, and other nuclear–capable nations will follow suit.

Updated : 3:30 PM, 12/14/2009VOVNews: PM Dung arrives in Moscow for Russia visit http://english.vovnews.vn/Home/PM-Dung-arrives-in-Moscow-for-Russia-visit/200912/110824.vov

Prime Minister Nguyen Tan Dung arrived in Moscow on December 14, beginning

an two-day official visit to Russia at the invitation of Prime Minister Vladimir Putin.

He was welcomed at Vnukovo airport by Deputy Minister of Foreign Affairs Alexei Borodavkin, the Russian Ambassador to Vietnam, Andrey Grigorievich Kovtun, the Vietnamese Ambassador to Russia, Bui Dinh Dinh, ASEAN ambassadors to Russia and representatives of friendship groups.

In the afternoon (Moscow time), Mr Dung is scheduled to make a tour of several industrial centres and cultural places in the capital. He will also attend an inauguration ceremony of Vietnam-Russia Bank branch in Moscow and meet with representatives of leading Vietnamese and Russian enterprises.

Mr Dung’s visit is aimed at promoting the strategic and comprehensive cooperation partnership between Vietnam and Russia, especially in the fields of economics, trade, investment, science-technology, education-training, oil&gas and tourism.  

Viet Nam News: PM Dung visits Russia to strengthen relationshttp://vietnamnews.vnagency.com.vn/showarticle.php?num=03POL141209

(14-12-2009)

HA NOI — Prime Minister Nguyen Tan Dung starts his visit to Russia today to strengthen relations between the two countries at the invitation of his counterpart Vladimir Putin.

Dung, accompanied by a high-ranking Government delegation, will be in Russia for two days to promote a multifaceted relationship with the country.

Dung will then go to Copenhagen, Denmark, to attend the ongoing World Climate Change Conference and confirm Viet Nam’s determination to contribute its part to the world’s fight against climate change.

During his three days at the conference, Dung will attend high-ranking discussion and workshops about the United Nations Framework on Climate Change and with signatories of the Kyoto Protocol.

The Vietnamese delegation includes ministers and senior officials from relevant ministries and Government agencies. — VNS

ISRIA: Vietnam - Prime Minister visits Russia to boost multifaceted ties http://www.isria.com/pages/14_December_2009_51.php

Prime Minister Nguyen Tan Dung will pay a working visit to Russia from Dec. 14-15 with the aim of boosting multifaceted cooperation between the two countries.

Vietnam and Russia have developed fine traditional relations in many fields. The two sides have exchanged visits by high-ranking delegations, as well as delegations at ministerial, sectoral and local levels. The two countries established the strategic partnership during President Vladimir Putin’s first visit to Vietnam in 2001.

The official visit to Russia by State President Nguyen Minh Triet in October 2008 created a new momentum for the development of relations between the two countries.

Vietnam and Russia have shared numerous views on regional and international issues and supported each other at international forums, including the UN, the Asia-Pacific Economic Cooperation forum (APEC), the Association of Southeast Asia Nations (ASEAN) and the ASEAN Regional Forum (ARF).

Economic, trade and investment relations between the two sides have developed steadily over recent years.

Two-way trade was between 350-400 million USD in the mid 1990s and increased to over 1 billion USD in 2007.

Vietnam exports seafood, garment, rubber and footwear to Russia and imports coal, steel, fertilizer and petroleum from the latter.

In 2008, two-way trade between the two countries reached 1.6 billion USD, including 671 million USD in Vietnam ’s export turnover.

In investment, Russia now has 55 projects valued at 302.9 million USD, ranking 23 rd among 81 foreign investors in Vietnam .

Oil and gas, and energy are traditional cooperation fields, which have brought in huge revenues for state budgets of the two countries. The two sides have signed a protocol to turn the Vietnam-Russia Oil and Gas Joint Venture (Vietsovpetro) into two-member limited liability company after 2010. They will expand their in oil and gas cooperation to

third countries in the future.

Additionally, Russian has continued cooperate with Vietnam in upgrading and building energy projects.

Russian gas group GAZPROM is expanding its cooperative ties with the Vietnam National Oil and Gas Group (PetroVietnam).

During the visit by Prime Minister Dung, the two sides plan to sign several important cooperation documents, including an agreement to set up a joint venture between GAZPROM and PetroVietnam in Russia and a cooperation agreement between the Electricity of Vietnam and the Russia Electricity Group and the launching of the Vietnam-Russia Joint Venture Bank.

Cooperation in science and technology, education and training and tourism has been strengthened, while that in culture has been resumed.

Activities of cultural exchanges between the two countries took place effervescently.

Russian has made great contributions to human resource training for Vietnam . It provides over 250 scholarships annually to Vietnamese students to study in Russia .

Moreover, Vietnamese students, who pay themselves for studying in Russia number more than 5,000.

RIA: Russia, Croatia presidents to hold informal meeting Monday http://en.rian.ru/russia/20091213/157221051.html

18:0013/12/2009

Russian President Dmitry Medvedev will hold an informal meeting with his visiting Croatian counterpart, Stjepan Mesic, on Monday, the Kremlin said.

"The heads of state will hold informal talks seeking a genuine exchange of opinions on a wide range of issues," the Kremlin said on Sunday adding the presidents will focus on trade while discussing bilateral ties.

Bilateral trade grew to over $2 billion in 2008, but declined more than 60% in January-September against the backdrop of the ongoing global recession, the Kremlin said in a news release.

"A possibility of carrying out projects in the oil, gas, and electricity sectors is being studied," the Kremlin said.

Tourism is another area of cooperation between Russia and the Balkan state. Croatia with its striking natural beauty and resorts on the Adriatic coast is a popular tourist destination among Russians.

Mesic arrives in Moscow on Sunday for a two-day working visit. This will be the last official visit to Russia as president for Mesic as his second five-year presidential term expires in early 2010.

He is also expected to meet with Prime Minister Vladimir Putin and other high-ranking Russian officials.

MOSCOW, December 13 (RIA Novosti)

TVNZ: McCully heads for Europe and Russia   http://tvnz.co.nz/politics-news/mccully-heads-europe-and-russia-3285766

Published: 3:40PM Sunday December 13, 2009

Foreign Minister Murray McCully heads overseas on Sunday for the regular six monthly consultation with the European Union and bilateral meetings in Sweden and Russia.

The EU meetings are being held in the Swedish capital of Stockholm as Sweden currently holds the EU presidency.

While there McCully will also meet Swedish Trade Minister Eva Bjorling before travelling to Moscow for talks with his Russian counterpart Sergei Lavrov.

The talks with the EU will be the first since the Lisbon Treaty came into force strengthening and reforming many of the EU's powers and institutions.

"It will be an important opportunity to reinforce our relations with Europe," McCully says.

"I will also be reviewing progress in exploring a possible comprehensive formal agreement between New Zealand and the EU, to provide the basis for a deeper and more long term relationship."

The relationship with Russia was also important and it was a growing market for New Zealand exports, he said.

McCully returns to New Zealand on December 19.

African Press Agency: Russia, Africa relations undergoing revival, says Kremlin official  

http://www.apanews.net/apa.php?page=show_article_eng&id_article=113475

APA-Moscow (Russia) Russia and Africa are currently witnessing a revival of more honest and open relations, and this process was demonstrated by the official visit to Africa of Russian President Dmitry Medvedev in June, in particular, and the establishment of interparliamentary ties, the deputy head of the State Duma’s Foreign Affairs Committee, Andrey Klimov, told APA in an interview ahead of an enlarged special meeting on Russia-Africa relations sheduled for Monday in Moscow.

“The prospects of our relations are really good. They are based on a long tradition that has been laid out in the 1960s during the process of African countries obtaining independence. Russia never participated in the colonization of Africa but has helped train many scientists, doctors, engineers and many others who know and can speak Russian. These we consider as bridges of forging and strengthening our cooperation,” Klinov said assertively.

He explained that Monday’s parliamentary hearing will be dedicated exclusively to examine Russia’s partnership with the African continent and will be a productive platform for exchange of views among politicians, African diplomats as well as Russian researchers and specialists on Africa.

Regretably, Klimov said that “the level of our economic relations leaves much to be desired and a lot of opportunities were lost in the 1990s after the collapse of the Soviet Union.”

“It is complicated to develop cooperation on an equal scale with different African countries. We would like not only to work together in the sphere of natural resources such as mining, but mostly to offer our assistance in the build-up of the infrastructure, increase partnership in the energy field and provide needed training of African specialists,” the Russian politician remarked in conclusion.

Today.az: Russian MP: Turkey should act jointly with Russia, not U.S. in Karabakh issue http://www.today.az/news/politics/58180.html

14 December 2009 [13:12] - Today.AzDay.Az interview with Sergei Markov, director of Russia-based Institute of Political Studies, professor at Moscow State Institute of International Relations and member of the Russian State Duma (parliament).Day.Az: How serious are the recent discussions between Turkish Prime Minister Erdogan and U.S. President Obama about Armenia’s leaving seven occupied Azerbaijani regions around the former Nagorno-Karabakh Autonomous Region in exchange for Turkey's ratifying the Turkey-Armenia protocols and opening the borders?

Sergei Markov: This is not a subject of compromise between Armenia and Turkey. I think that relations between these countries will improve. There is another subject of the exchange involved- Armenia rejects claims about the "genocide of 1915” and Turkey gives up economic restrictions against the country.

I think, the situation is still closer to resolution which will create a fundamentally new situation in the region. Both sides will have quite substantial benefits from these steps. The fact that there are forces both in Armenia and in Turkey that are trying to keep the border closed clearly indicates that there is reason for a compromise, but not victory of one party.  

As to seven regions that were not part of the Nagorno-Karabakh Autonomous Region during the Soviet Union, I think that they are becoming  basis for future compromise between Armenia and Azerbaijan. When the Armenian armed forces return their control to Azerbaijan, in response they will gain some form of recognition of autonomy for Nagorno-Karabakh, as well as some form of recognition of Armenian control over the Lachin corridor. Because, Armenia’s control over Karabakh without control over this corridor is hard to exercise from a practical standpoint.

What will happen in future? I think, the Turkish side will try to get involved in a compromise between Armenia and Azerbaijan. Russia believes that it would be better if Turkey acted according to its proposals together with Russia but not with the United States.

Because America today is still a major destabilizing force in the Caucasus region. It cannot exercise full control there, because it still does not want to contribute to it. There would be peace in the Caucasus if some force establishes full control over the region. But Americans are not able to establish full control there and are unwilling to spend their own resources for this purpose.

So, I think it would be better for the U.S. and the EU leave the region leaving behind only some economic ties and valuable policies, kindly treating all others and Russia and Turkey, as the main leaders of the peace process, would alone resolve all conflicts in the Caucasus. I think one should  expect success only in this case.

To what extent Russia is interested in full resolution of the Nagorno-Karabakh conflict? Or it does not matter for Russia at all?

Russia is interested in resolving the Nagorno-Karabakh conflict. Because fewer conflicts around its borders, the more calm the situation will be.  

Russia also wants to secure formation of a common economic area that would include besides the current Kazakhstan, Belarus and Ukraine (in the near future) also Azerbaijan, Armenia, Georgia and Turkey. That is why it needs peace between Armenia and Azerbaijan.

First, Russia does not want foreign players to solve your problem at the expense of their interests. Secondly, Russia wants to ensure that this process takes place very quietly and slowly. Because there is likelihood not only to resolve the conflict, but also to unfreeze it and to launch a new war. We know very well that the second is obtained more easily than the first.

Do you believe that the current format of OSCE Minsk Group mediators is the only truly format for the parties? Is the group is able to bring something new into the talks between the Armenian and Azerbaijani presidents?

First, the Minsk format is the only working format which impedes start of a war. We all say that the conflict should be solved, but we must never forget that the existence of a peace, while not perfect, is more important than war.

Secondly, one can  think of dozens of different diplomatic formats. So, it is wrong to assume that the OSCE Minsk Group is the only possible  format. I believe South Caucasus, including the very three states, plus three countries around the Caucasus - Russia, Turkey and Iran, is the most optimal format to solve conflicts in the region. Unfortunately, the U.S. influence has a destabilizing effect on the region. Obama has not yet been able to completely abandon the Bush-Cheney policy.

Rasul Mehdiyev

Civil.ge: Ex-PM Nogaideli Visits Moscowhttp://www.civil.ge/eng/article.php?id=21778

Civil Georgia, Tbilisi / 14 Dec.'09 / 11:57

Georgia’s former Prime Minister, Zurab Nogaideli, who now leads opposition Movement for Fair Georgia party, is in Moscow – the third visit to Russia’s capital in less than three months.

Movement for Fair Georgia party said in a statement that in Moscow Nogaideli would meet with representatives from ruling party, United Russia, and discuss issues related with resumption of direct flights between Moscow and Tbilisi; removing trade restrictions from Georgia and the issue of Georgian detainees held in Tskhinvali.

“It is not up to the opposition to resolve these issues; it is up to the authorities to tackle them, but today Georgia has reckless and coward government, so it is up to us to do what the authorities should be doing,” Nogaideli said.

The Georgian Times: Georgian Journalists Meet Russian President

http://www.geotimes.ge/index.php?m=home&newsid=19584

While political relations between Tbilisi and Moscow hit an all-time low 12 Georgian journalists participated in a high-profile European and Asia Media Forum in Moscow. Their visit provoked mixed reactions in Tbilisi.

The Georgian media representatives planned their trip in Moscow in response to an aborted roundtable in Georgia involving Russian journalists. Maksim Shevchenko, anchor of ORT’s Sudite Sami programme and Vladimer Mamontov, Izvestia’s Editor-in-Chief, were denied entry into Georgia on September 9. The two then announced that although they were insulted by Tbilisi’s “hostile attitude” they would invite Georgian journalists to Moscow in an attempt to restore dialogue.

On December 8 twelve Georgian journalists checked in at Tbilisi Airport. But going to Moscow when Georgia and Russia do not have diplomatic relations is a risky affair. GT talked to them in the airport asking whether they were concerned that they would probably be called KGB agents.

Nana Devdariani, Executive Director of the Georgian Journalists’ Union, said: “I don’t think Medvedev is going to buy Georgia from us. We are just 12 people. This is going to be an opportunity to talk to them and this is not a bad thing.”

Vaso Kapanadze, Director of International Relations of the Rezonansi newspaper, said that the presence of Georgian journalists at the forum would be a demonstration of public diplomacy. “You have to negotiate with such a big country like Russia –which has occupied one fifth of your territory - as you cannot defeat it and no one will go to war with Russia for your sake. But you pursue national interests during these talks. Certainly the view will be expressed that all kind of contact with Moscow should be severed but this position is wrong.”

Natia Mikiashvili from Maestro said she was going to Moscow to learn what the chances of dialogue are. “I am not afraid of being called a spy. It will be better if Government officials also go to Russia frequently so that we have normal relations and do not see a new war.”

Malkhaz Gulashvili, owner of The Georgian Times Media Holding, said that the visit would be a chance to discuss critical issues for Georgia: lifting the ban on the sale of Georgian products in Russia, restoring direct air communication and the return of the displaced people to the occupied territories. “We are journalists and it is our duty to be mediators at the most critical times,” he said.

The participants of the Forum were mostly from post-Soviet countries. Malkhaz Gulashvili was one of the seven member panel which gave questions to President Medvedev and he gave his book Towards Peaceful Caucasus to him. As he had promised he asked when direct flights between Moscow and Tbilisi would be restored and visa requirements removed and whether Russia was going to open its market to Georgian

products.

“Unfortunately, our political relations [with Georgia] have been destroyed... Russia’s position and my personal position is that this happened not through our fault," Medvedev said. “I have said time and again that I am not going to contact the acting Georgian President and some other [Georgian] leaders exactly because we have parted ways, and our assessment of the events is quite different,” he said. “Saakashvili bears personal judicial responsibility for the crimes committed,” Medvedev added.

However, the Russian leader said that this does not mean that we should suspend all other kinds of relations. Medvedev described relations between Russia and Georgia as a “centuries-old friendship” saying: “I am not going into obvious events that took place when the Russian state came to the aid of the Georgian state in the past...Russia and Georgia must preserve the positives that were accomplished,” he said.

“All the problems you have mentioned, including the possibility of direct flights and the opening of the Upper Larsi checkpoint, are absolutely normal topics to discuss. Seriously speaking, I do not see any particular obstacles there,” Medvedev said.

Georgian politicians gave the cold shoulder to Medvedev’s statement. Goka Gabashvili, a member of the ruling majority, said that relations between Moscow and Tbilisi could be restored only when Russian troops left Georgia. He said Medvedev’s statements were political PR.

Giga Bokeria, Deputy Foreign Minister, said Medvedev’s statements could not be assessed as a breakthrough in Russian-Georgian relations: “The fundamental problem between Georgia and Russia is that Russia is fighting against Georgia's statehood. Georgian territory is still occupied and until this problem is resolved, it is not serious to package it differently.”

PM Nika Gilauri said he would welcome Russia lifting sanctions: “The main obstacle remains the occupation of Georgian territories. As for loosening sanctions related to the visa regime, direct flights and transit, Russia imposed all these restrictions. If Russia follows up and loosens sanctions, this will be good.”

Some Georgian journalists who refused to participate in the trip slammed their colleagues, saying that the Georgians should have asked Medvedev to pull his troops out of Georgian territory. In his live broadcast from Moscow to Rustavi 2 Malkhaz Gulashvili tried to answer this criticism: “It is important for me to achieve some small success. I am not a politician. I am not President of Georgia. I am President of The Georgian Times and I try to resolve the issues I can resolve. As soon as Medvedev left the media forum he met the Minister of Transport and told him to deal with the issue [of flights] immediately, if the Georgian side agrees.

"While we were fighting on the front line in the war my friends opened fire on my back.You know that there is hysteria in Georgian society related to Russia. How are you

going to resolve the issues, the Government or journalists? They say. Hysteria, shouting, diplomacy are needed but our diplomacy is below zero. These methods fail to resolve issues. What is the important is that those people who fly from Tbilisi to Moscow will be thankful to us, and if Georgian goods are restored to the Russian market this will help the economic crisis.

"Our two countries are at war and unless positive steps are taken they will still be so but deoccpation won’t happen. The US and Europe are insisiting on withdrawal but the Russians remain, and moreover they are beefing up their presence,” said Malkhaz Gulashvili.

By Pridon Dochia, translated from the Georgian edition of The Georgian Times newspaper 2009.12.14 12:38

The Georgian Times: Russian Passports Being Distributed in Stepantsminda Despite Government's Ignorancehttp://www.geotimes.ge/index.php?m=home&newsid=19583

Russia has started distributing passports in the Kazbegi region at the Georgia-Russia border, several residents of the village of Sno have told The Georgian Times.

“We have been approached several times in recent weeks and offered Russian citizenship,” a resident of Sno, in the region of Stepantsminda, said on condition of anonymity. Kazbegi residents claim that many Georgians have started to accept this citizenship as the shutdown of the Larsi checkpoint in the north has hit the region’s economy and deprived many people of their only source of income, as they supported their families by transporting various products to Russia via the checkpoint.

Evil-minded persons are profiting from the locals' hard economic conditions and have decided to 'coax' them. "If you accept Russian citizenship you will be able to cross the border easily and will not have any problems taking products to Russia," the passport distributors are saying, trying to reassure people on the edge of poverty.

However neither Governor of Mtskheta-Mtianeti Tsezar Chocheli nor Roman Marsagishvili, the MP for Kazbegi, have any knowledge of Russian passports being distributed in Kazbegi. Tsezar Chocheli flatly denied it was taking place: "This is all false, what passports are you talking about? This is a lie, if you believe the residents I do not know but I am telling you this is a lie." Although GT has no grounds for mistrusting the Kazbegi locals, Chicheli asserts that "this is information spread by some provocateurs who live in delirium" and insists that everything is alright in Kazbegi.

Roman Marsagishvili also said he was unaware of any such passport distributuion but could count on the patriotism of people living in Georgia’s highlands. "I am hearing this information for the first time from you, but I cannot say anything good about residents of Gali who accept another country’s passport. I really denounce such behaviour." The Border Police also know nothing. "We protect the border and our border guards stand at the checkpoint. They are not obliged to find out what is happening in the villages. We

have no information regarding the distribution of Russian passports in Sno," a border guard who preferred to remain anonymous told us

When we asked Shota Utiashvili, Head of the Analytical Department of the Georgian Interior Ministry, about this issue we received this answer: "Kazbegi? Very well, we will find out about it now." Georgian politicians are also un informed. Gigi Tsereteli has said, "We have no information about this issue, but everything is possible because Russia has a very large number of agencies working there. If this practice was widespread we would know about it. Now we have received your information I will call all the people I can. There are other bodies with an interest in this area and maybe they have been informed."

By Rusudan Shelia, translated from the Georgian edition of The Georgian Times newspaper 2009.12.14 12:35

RIA: Russia to launch three Glonass satelliteshttp://en.rian.ru/science/20091214/157224983.html

04:4714/12/2009

MOSCOW, December 14 (RIA Novosti) - The Proton carrier rocket with three Glonass navigation satellites will be launched from the Baikonur space center in Kazakhstan on Monday, a spokesman for the Federal Space Agency Roscosmos said.

"The launch is scheduled for 13:38 Moscow time" he said.

Roscosmos head Anatoly Perminov pledged that six satellites for the Glonass satellite grouping would be launched by the end of 2009. However, Monday's launch will be the last in 2009, with the launch of three other satellites delayed until February 2010.

Glonass - the Global Navigation Satellite System - is the Russian equivalent of the U.S. Global Positioning System, or GPS, and is designed for both military and civilian use. Both systems allow users to determine their positions to within a few meters.

RIA: Two bombs deactivated on gas pipeline in south Russia http://en.rian.ru/russia/20091214/157226620.html

10:0914/12/2009ROSTOV-ON-DON, December 14 (RIA Novosti) - Bomb technicians deactivated on Monday two explosive devices planted on a natural gas pipeline in the south Russian republic of Ingushetia, a local security spokesman said.

Russian energy giant Gazrpom confirmed late on Sunday that a bomb had been found on the pipeline running from Mozdok in the Russian republic of North Ossetia to Georgia. Several gas transiting facilities were temporarily shut down over the news.

"Two explosive devices based on hand grenades have already been deactivated," the spokesman said.

He said sappers would continue searching for other explosives for several more hours.

Itar-Tass: Gas supplies cut in North Ossetia, Ingushetia over blast threat

http://www.itar-tass.com/eng/level2.html?NewsID=14636422&PageNum=0

14.12.2009, 02.57

MOSCOW, December 14 (Itar-Tass) -- The gas supplies were cut in North Ossetia and Ingushetia at least until Monday morning. The gas supplies were halted in these republics, after an explosive device had been found under the trunk gas pipeline in the vicinity of Sredniye Achaluki, Ingushetia, on Sunday afternoon.

The sappers from the local crack police and security forces started unarming the dangerous object. However, with darkfall the demining operation was delayed until Monday morning. Currently the police cordoned off the incident site.

The gas supplies will be restricted in Ingushetia and North Ossetia until the demining operation is over.

The gas supplies have already been cut for the major industrial gas consumers in North Ossetia. The classes were suspended at all educational establishments for the next two days.

The republican emergency situations ministry warns the population to prevent probable household gas blasts in the morning, when the gas supplies will resume. The gas supplies are planned to resume at about 9.00 a.m. Moscow time in the republic already on Monday.

The North Ossetian committee for prevention and elimination of aftermaths of emergency situations addressed to the local residents with a request to limit gas consumption. “Otherwise, if the gas supply were fully halted, low-pressure gas supplies will be made from the reserves in the transit gas pipelines that will be enough no more than eight hours of regular supplies. If the gas reserve is fully exhausted the restoration works on the gas pipeline will take at least two weeks,” the foresaid committee said.

Aysor.am: Gas transit to Armenia stopped because of bombhttp://www.aysor.am/en/news/2009/12/14/bomb-gaz-armenia/

Russia’s gas transit to Armenia via Georgia has been brought to a stop, media outlets report citing spokeswoman of the Georgian Oil and Gas Corporation, Tamara

Shoshiashvili. According to reports, the reason for bringing to a stand was a bomb which was found at the Mozdok-Tbilisi track of the North-South pipeline.

A bomb and some mines were found on Sunday, at early morning. Meanwhile, gas supply to Georgia hasn’t been stooped as Georgia receives gas from Azerbaijan.

Reuters: UPDATE 1-Russia cuts gas to Armenia after bombs found near pipehttp://in.reuters.com/article/oilRpt/idINLDE5BD06020091214

Mon Dec 14, 2009 12:55pm IST

* Bombs found near gas pipeline in Russia's Ingushetia

* Russia halts gas supplies to ally Armenia

* Armenia's gas firm says using reserves

(Recasts, changes source, adds details)

By Conor Humphries

MOSCOW, Dec 14 (Reuters) - Russia halted gas supplies to Armenia after two bombs were found close to a pipeline in southern Russia, officials said on Monday, but Armenia's gas importer said it had enough reserves to supply consumers.

A trunk gas pipeline in Russia's Ingushetia region was shut down late on Sunday after several explosive devices were found nearby, a police official in Ingushetia told Reuters.

The stoppage affected customers in Russia's North Ossetia and Ingushetia regions as well as Armenia, which gets around two billion cubic metres of gas annually from Russia, Russian news agencies reported.

A spokeswoman for the Armenian subsidiary of Russian gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research), ArmRosGazprom, said gas had been cut but that domestic consumers would not be affected.

"Our dispatcher received a telegram that deliveries of gas to Armenia would stop," said spokeswoman Shushanik Sardaryan. "We will use gas from our storage facilities until the restoration of supplies," she said.

The mainly Muslim region of Ingushetia, which borders Chechnya, has seen a surge in attacks by Islamist rebels in recent months.

Russian supplies to Armenia transit through Georgia, which has not been affected by the cut, a spokeswoman for the Georgian Oil and Gas Corporation told Interfax news agency.

A spokesman for Russia's Gazprom said he was not immediately able to comment on the cut in supplies. (Reporting by Hasmik Mkrtchan in Yerevan and Conor Humphries in Moscow)

Itar-Tass: RF, China satisfied with development of relations – FM

http://www.itar-tass.com/eng/level2.html?NewsID=14634622&PageNum=0

12.12.2009, 23.16

MOSCOW, December 12 (Itar-Tass) - Russia and China are satisfied with the ongoing development of relations, the Foreign Ministry reported.

The ministry commented on the results of Saturday’s telephone conversation between Russian Foreign Minister Sergei Lavrov and his Chinese counterpart Yang Yiechi.

According to the ministry, “the sides expressed satisfaction with progress in many fields.” “The ministries stated the positive tonality of the celebrations devoted to the 60th anniversary of the establishment of diplomatic relations between the two countries and the success of Year of Russian Language in China,” the ministry said.

“In light of the U.N. Climate Change Summit in Copenhagen the foreign ministers of the two countries synchronised positions on this problem and agreed to continue consultations,” the ministry said.

The Moscow Times: Moscow Will Fund Bulgarian Power Plant http://www.themoscowtimes.com/business/article/moscow-will-fund-bulgarian-power-plant/391366.html

14 December 2009Combined Reports

Moscow is prepared to fund most of the construction of a 4 billion euro ($6 billion) nuclear power plant at Belene in Bulgaria, Energy Minister Sergei Shmatko said Friday, as Russia tries to sweeten a deal that Sofia has put under review.

“We think it is important to ensure steady work on the Belene project in the next year or two,” Shmatko said. “We are considering possibilities to take on the main financial burden, including the option of equity participation. We are interested in the success of this project and are prepared to take certain risks.”

Shmatko was speaking after a two-day session of the Bulgarian-Russian economic cooperation commission, which discussed joint energy projects including the Burgas-Alexandroupolis oil pipe and the South Stream gas link.

RWE, Germany’s second-largest utility, withdrew from the 2,000-megawatt nuclear power-plant project on the Danube River after the country declined to provide state funding. Atomstroiexport was chosen in 2005 to build the plant, with Areva and Siemens as subcontractors.

Construction was delayed as the global financial crisis hindered financing. Bulgaria said it can sell half of its 51 percent stake in the project.

The government of Bulgarian Prime Minister Boiko Borisov, which is struggling to cut spending and bridge a budget deficit, has been re-examining its participation in major Russian-backed energy projects agreed by the previous administration to see whether they matched the national interests and the European Union’s agenda.

Bulgaria will do an environmental impact assessment study of the planned Burgas-Alexandroupolis pipeline, before deciding whether to continue its participation, Bulgarian Energy and Economy Minister Traicho Traikov said. The 1 billion euro oil link running from the Bulgarian Black Sea coast to the Greek port of Alexandroupolis on the Aegean Sea, aims to bypass Turkey’s congested Bosphorus.

Shmatko said Friday that Moscow understood Bulgaria’s environmental concerns and supported its decision to assess its impact.

Earlier this week, Borisov said Sofia would decide whether to stay onboard with the pipeline after the assessment was ready. It could take up to 18 months.

“We show full understanding about how important it is for Bulgaria [to have] an objective environmental assessment,” Shmatko said at the end of a session of a Russian-Bulgarian commission which discussed joint energy projects.

“We have denied talks that the project will be frozen. This will not happen,” Shmatko said, adding Friday’s meeting proved relations between Moscow and Sofia had not cooled.

Standart News: Borissov Discussed Belene Project with Shmatkohttp://paper.standartnews.com/en/article.php?d=2009-12-13&article=31089

SUNDAY, 13 December 2009

Energy heads and managers of Maritsa-Iztok to be investigated

Bulgaria's PM Boyko Borissov met with Russia's Energy Minister Sergey Shmatko on Friday evening, immediately after Borossov's return from Brussels. Bulgaria's Minister of Economy Traycho Traykov and head of the Bulgarian Energy Holding Galina Tosheva joined the meeting, held in the Council of Ministers building. The four of them discussed the major Bulgarian-Russian energy projects: Belene NPP, South Stream gas pipeline and

the Burgas-Alexandroupolis oil pipeline."Keeping in mind the good relations between Bulgaria and Russia, it wouldn't be normal Bulgaria to face a situation, similar to the one it had to cope with last year," Bulgaria's PM said in an interview with Euronews yesterday, referring to the gas crisis in 2008."We believe that the parallel construction of Nabucco and South Stream pipelines will help us solve this problem," Borissov emphasized. Answering a question about his stand on the fact that the EC hesitates which of the projects to support, the PM reminded that Bulgaria has a strategic position between Asia and Europe. "In our election campaign, before coming to power, we declared that the priority project for us is Nabucco as the European Commission is taking part in it, so we are ready to take part with 300 million euros. There's no problem whatsoever with Nabucco," the PM explained. "As regards the South Stream, in talks with Russia's Prime Minister Putin I told him that we don't intend to oppose this project," Borissov reminded."And, as you know, there was an agreement between the previous government and Russia on South Stream. With regard to that, we think that both Nabucco and South Stream projects can be realized," Borissov added."There were accusations against some of those in charge of the big energy companies, as well as former ministers, involving tens of millions of euros," Borissov said in an interview for BGNEWS. "Right now there are investigations underway, some have already been submitted to the prosecutor's office. I'm certain that there will be investigations of  the people running the power plants and the coal mines, as well as the energy suppliers, but we need time for these investigations to progress," he added.

The Moscow Times: Belarus Gets Extended Discount on Gas http://www.themoscowtimes.com/business/article/belarus-gets-extended-discount-on-gas/391365.html

14 December 2009By Anatoly Medetsky

Belarus will get Russian gas at a discount for a few more years, Belarussian First Deputy Prime Minister Vladimir Semashko said Friday, as the countries negotiated terms for creating a common economic space.

President Dmitry Medvedev and Prime Minister Vladimir Putin — at a five-hour meeting with their Belarussian counterparts the previous day — agreed to push back to at least 2014 the deadline for Belarus to begin paying prices that would give Gazprom the same profit margins that it receives on its European Union exports, Semashko said.

Under the current contract, state-controlled Gazprom was scheduled to charge those prices starting in 2011, when Russia had initially hoped to introduce domestic prices based on EU export prices.

“The Russian president and prime minister voiced their goodwill,” Semashko said in Minsk, commenting on the new gas deal, Interfax reported.

Belarus and Russia agreed that they would start paying the EU-exports-based prices simultaneously in 2014 or 2015, he said. According to the Energy Strategy through 2030, Russia plans to complete introduction of the foreign-market-based prices at home by 2015.

Gazprom spokesman Sergei Kupriyanov declined comment on the agreement Friday. Semashko said he and Russian Deputy Prime Minister Igor Sechin would formalize the new commitments by the end of the year.

Next year’s gas prices for Belarus should remain at this year’s level, Pavel Borodin, state secretary for the union state of Russia and Belarus, an alliance seeking to unify the countries’ laws, said late Thursday, RIA-Novosti reported. Russia, Belarus and Kazakhstan are seeking a higher level of integration by forming a customs union, which kicks off in January, and single economic space planned to be inaugurated in July 2011.

Semashko also said LUKoil, Russia’s second-largest oil producer, and other Russian companies could bid for a stake in the state-owned Naftan-Polimir refinery in Belarus, one of the largest in Eastern Europe. He said the bidding would take place soon but didn’t specify the size of the stake for sale.

Belarus will require that potential bidders provide guarantees of crude supplies and being able to market the refined products, Semashko said.

“Russian oil companies suit us the best in this situation,” he said.

Belarussian President Alexander Lukashenko has said the entire refinery is worth $3 billion.

Energy Minister Sergei Shmatko said recently that Russia could lift export duties on crude deliveries to Belarus if Russian companies bought into Belarussian refineries.

In another sign of improved ties, Sberbank signed a deal Friday to acquire Belarus’ fourth largest bank, BPS Bank, the lenders and the Belarussian government said in a joint statement. Sberbank will pay $280.8 million for a 93.3 percent stake and will offer to buy the minority stakes.

Sberbank will invest from $300 million to $350 million in the other bank’s equity and raise $2 billion in financing for BPS, contributing a portion of that money, the statement said. Sberbank aims to capture 12 percent of the corporate lending market in Belarus by 2015, it said.

The Moscow Times: Customs Union Will Send Papers to WTO http://www.themoscowtimes.com/business/article/customs-union-will-send-papers-to-wto/391349.html

14 December 2009By Irina Filatova

Russia will deliver information on its customs union with Belarus and Kazakhstan to the World Trade Organization next month, in a sign that Moscow may be doubling down on its proposal to enter the organization as part of the confederation.

WTO members requested the information, and Russia will prepare the necessary documents and deliver them after the New Year’s holiday, said Maxim Medvedkov, director of the Economic Development Ministry’s department for WTO accession.

The leaders of the three countries met on Friday for a meeting of the Eurasian Economic Community, the organization on which the customs union is based. Kyrgyzstan and Turkmenistan are also members of the community but are not part of the customs union.

Prime Minister Vladimir Putin signed a raft of trade documents on Friday, several of which formalized the creation of the customs union, which is scheduled to go into effect Jan. 1 with the implementation of a unified customs tariff.

WTO accession director Chiedu Osakwe said Thursday that there remained uncertainty over how the creation of the customs union would affect the accession agreements that Russia, Belarus and Kazakhstan had separately negotiated.

The organization is waiting for an official note from the three countries’ delegations that will explain how they plan to proceed in terms of the creation of the customs union, Osakwe said.

“When the members of our organization receive such a document, they will consult internally and take a decision on the talks restart,” he said at a conference in Washington on Russia’s accession to the WTO, Prime-Tass reported.

“All the members of our organization want to see Russia as part of it. It’s a strategic priority for us,” Osakwe said.

Medvedkov said the Russian delegation hoped that the WTO would make a decision on whether to restart talks on the country’s accession as early as January. He did not specify whether the talks would be for Russia’s accession or for that of the customs union.

President Dmitry Medvedev said last month that entering the customs union would not affect Russia’s plans to join the World Trade Organization.

“There are two options: Either enter [the WTO] with the customs union, which no longer exists only on paper, or each country can enter with the agreed-upon positions, but separately,” he said at the time, adding that both options were acceptable.

Russia should continue talks on separately joining the WTO in order to hasten the process, Deputy Economic Development Minister Andrei Slepnyov said Friday.

“From a juridical point of view, we shouldn’t decline separate talks, since everyone intends to a maximal quick accession,” he said, Interfax reported.

ISRIA: Recording on Russian President Dmitry Medvedev's blog: World's Major Greenhouse Gas Emitters must simultaneously make the necessary commitmentshttp://www.isria.com/pages/14_December_2009_33.php

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Today I want to talk about the global problem of climate change on our planet. There are already existing arrangements in most countries to work together in this area. Incidentally, some of them have been around for quite a while, namely the Kyoto Protocol.

Russia believes that such cooperation is vital. The major economies of the world, and hence the largest greenhouse gas emitters, such as the United States, China, India, Russia, Brazil, and others, must simultaneously make the necessary commitments and strictly observe them. I would particularly like to emphasise that these must be simultaneous commitments and commitments that we all abide by together. Trying to do this on our own will be fruitless and pointless. This is a question of existence itself, and I want to reiterate that we must all be in this together.

I also think that we need to use a differentiated approach in determining the commitments of developed and developing countries: we are all in different situations. These commitments must not conflict with economic opportunities or, most importantly, the development priorities of each country. It's obvious that the young industrialised economies will be a greater drain on energy resources than the post-industrial powers that have already developed their economies.

I want to emphasise that our country is already a world leader in emissions reduction. Our role in improving the global environmental situation is also linked to the role of our forests. Our contribution should be taken into account by the international community. However, we are ready to set ourselves a new challenge.

What is it? It is to reduce greenhouse gas emissions by 25 percent by 2020 taking 1990 as the base year. This is a very substantial reduction. So between 1990 and 2020, Russia will reduce overall greenhouse gas emissions by more than 30 billion tonnes. This is a very significant contribution to the world's joint effort.

We can achieve this by increasing energy and environmental efficiency in our economy.

In effect this will be the result of the modernisation that we have already devised: the gradual introduction of energy-saving technologies and the development of renewable energy.What do we plan to do? We plan to increase the energy efficiency of our economy by 40 percent by 2020. This is one of the first orders that I signed as President.

Secondly, we have already adopted a law on energy saving and improving the energy efficiency of our economy. In a separate initiative, work has already started on changing the regulatory framework in the area of energy efficiency, including the development of an appropriate set of technical regulations.

As a result, our share in this respect will be better; in particular the share of low-power industries in the energy balance will be better.

We have decided on a step-by-step increase in the share of renewables in the country's energy sphere. In particular, the share of nuclear energy will be increased by 25 percent by 2030.

Copenhagen is currently hosting an international UN conference on climate change. And I plan to take part in it, to promote the adoption of decisions that will help coordinate the efforts of all countries – that's right, the efforts of all countries. This is critically important because the quality of life of future generations on this planet depends on the decisions that we make.

Russia Today: World Bank chips in to green Russia http://rt.com/Business/2009-12-14/world-bank-russia-energy.html/print

14 December, 2009, 09:38

The World Bank group is doing benchmarking for Russia’s iron casting industry to help it shift to a more environmentally sustainable basis.

Sixty percent of all air pollution in Russia is caused by inefficient functioning of industrial enterprises. It is cheaper for companies to pay low fines than invest in energy efficient production.

As talks in Copenhagen on climate change continue, the investment branch of the World Bank group, IFC, has stepped forward to teach local producers how to reduce pollution and save energy and at the same time boost competitiveness of their output.

Kristina Turilova, Deputy Manager of cleaner production program at IFC, says that businesses simply do not trust the new and unknown.

“Bankers are generally afraid of energy efficiency – it's like an unknown animal. Why should I lend to some core generation equipment. I don’t know what the risks are. So we provided financial institutions with credit lines and also with advice.”

In some energy consuming industries like iron casting, energy costs may reach up to 40 percent of the product price and that's where privately owned foundries are carefully looking into.

Guizeppe Mazzarelli, a member of the board of directors for Metallitmash, believes that not only equipment must be changed, but those that operate the equipment must be properly trained.

“From the technical point of view you could have incredibly efficient equipment but if your technicians are not up to the task of ensuring that you produce a good rate of perfect product, then you produce a whole bunch of discards and you lose energy efficiency that way. So energy efficiency is kilowatts per ton of delivered product to the customer without reclamations.”

At a time of the credit crunch cutting down operational expenses, it is key to ensure survival of the business – and with the financial stimulus in place going green seems to be an option to consider.

DECEMBER 14, 2009

Online.wsj.com: Russia Demands Its Credits http://online.wsj.com/article/SB126058162650288357.html

Moscow, to Keep Its Carbon Permits, Threatens to Block a Global Climate Deal

By GUY CHAZAN and JACOB GRONHOLT-PEDERSEN

A Russian demand that it keep its huge surplus of emissions permits after they expire in 2012 is overshadowing global climate talks now under way in Copenhagen, with some observers saying it could hamper efforts to reach a deal and upset the global carbon market.

Russia has warned it could reject any deal from Copenhagen that doesn't allow it to carry forward the unused carbon permits it holds as a result of the 1997 Kyoto Protocol. Those who argue against letting Russia keep the credits say Moscow could end up selling them abroad, leading to a collapse in the price of carbon.

That in turn could hurt efforts to green the world's economy. One principle behind promoting an international system of carbon credits -- the currency for buying and selling

the right to pollute -- is that the price of carbon should be high enough to encourage investment in nonfossil-fuel technology such as nuclear, wind and solar.

In a bid to reassure leaders meeting at Copenhagen, Alexander Bedritsky, an adviser to Russian President Dmitry Medvedev, said Russia had no plans to sell its unspent permits abroad. But he stressed that Russia would endorse a global deal only if it allowed Moscow to bank its permits.

Observers say Moscow hasn't decided what to do about the surplus. "There is a chance that Russia could relinquish the permits if it will help the talks," says Vladimir Slivyak, head of Ecodefense, a Russian environmental group. "The authorities would like to be seen as saving Copenhagen if the talks get into trouble." He noted that Mr. Medvedev was due to join world leaders at the summit next week. Previously, Mr. Medvedev had said he would stay away.

The dispute dates to the Kyoto Protocol of 1997, the first international treaty obliging countries to cut their emissions of greenhouse gases. Under Kyoto, a country that has difficulty meeting its emissions goal can buy credits from another country that has reduced them beyond its target.

Russia was required by Kyoto to maintain its carbon-dioxide output at 1990 levels, rather than cut them. But in the aftermath of the Soviet breakup in 1991 and Russia's subsequent economic collapse, its emissions plummeted, and it easily exceeded its Kyoto targets.

That left it with a surplus of carbon allowances equivalent to six gigatons of carbon dioxide, or roughly the same as China's annual emissions. In theory, Russia could sell the stockpile to other countries -- a potential multibillion-dollar bonanza.

The fate of the allowances is unclear once Kyoto expires in 2012. Russia wants them carried forward, in recognition of its achievement in cutting its CO2 volumes, which it says have fallen by 34% since 1990.

Mr. Bedritsky said Russia wasn't ready to curb its economic growth for the sake of reducing emissions.

Write to Guy Chazan at guy.chazan@wsj.com

The Moscow Times: Moscow Aims to Carry Over Balance of Emissions Rights http://www.themoscowtimes.com/business/article/moscow-aims-to-carry-over-balance-of-emissions-rights/391364.html

14 December 2009Combined Reports

Moscow does not plan to sell its unused Kyoto Protocol emissions rights and instead wants to carry them over to a new agreement, Kremlin advisor Alexander Bedritsky said Friday.

“Russia is going to carry the saved quotas in the Kyoto Protocol over to a new agreement,” Bedritsky said. “As far as I know, there are no plans to sell emission quotas.”

Under Kyoto, countries comfortably under their emissions targets can sell the difference in the form of AAUs to other nations. Russia has an inventory of billions of AAUs because of the collapse of its industry in the 1990s. Bedritsky said curbing greenhouse gas emissions would help stimulate new technologies and in turn economic growth.

Tackling the growth in emissions was necessary to show the current generation could take responsibility for future generations, he said.

Bedritsky stood by Russia’s offer to reduce its emissions by up to 25 percent from its 1990 emission figures, which, because of the collapse of Soviet-era industries in the 1990s, would still allow Russian emissions to grow in future.

He also said the Copenhagen talks were likely to result in a “political” rather than a legal agreement.

Russia expects the accord to be “global,” with participants agreeing that a 50 percent cut in greenhouse emissions by 2050 should come as a result of joint efforts of both developed and developing nations, he said.

President Dmitry Medvedev will go to Copenhagen for the final scheduled day of the UN climate change summit on Dec. 18.

Reuters: Rebel Abkhazia re-elects leader, Russia hails votehttp://in.reuters.com/article/worldNews/idINIndia-44680720091213

Sun Dec 13, 2009 7:23pm IST

By Matt Robinson

SUKHUMI, Georgia (Reuters) - The rebel Georgian region of Abkhazia re-elected President Sergei Bagapsh in a vote trumpeted by sponsor Russia as a successful test of statehood but shunned by most of the world.

The result of the election on Saturday was never likely to change Abkhazia's deepening dependence on Russia, its economic lifeline and military protector with thousands of servicemen in the Black Sea territory of 200,000 people.

Moscow recognised Abkhazia in August last year after crushing an assault by U.S. ally Georgia on the other pro-Russian breakaway region of South Ossetia in a five-day war.

Venezuela and Nicaragua followed suit, but the West says Abkhazia must re-integrate with Georgia more than 15 years since throwing off rule from Tbilisi with the collapse of the Soviet Union. The Abkhaz say this will never happen.

Volleys of celebratory gunfire broke out in the sleepy seaside self-styled capital on Sunday after election authorities announced that Bagapsh had won 59.4 percent of the vote, well ahead of second-placed former KGB agent Raul Khadzimba on 15.4 percent.

Turnout was 73.4 percent.

Khadzimba had already cried foul over what he said were widespread irregularities, but there was no sign of the tense standoff that followed Bagapsh's first victory over Khadzimba in late 2004 which led to unrest in the streets.

Russia did not want to be embarrassed by a repeat. The West officially ignored the election, but Abkhazia is watched closely for its ability to stir friction between Georgia and Russia in the South Caucasus, a transit route for oil and gas to the West.

"The republic passed with dignity the test posed by elections in any state," said Vasily Likhachev, deputy head of the foreign affairs committee of the Russian Duma.

"The elections in Abkhazia demonstrated the role and significance of such an important factor as national sovereignty." Georgia said it was a "farce".

MILITARY BASES

"This election was held by a puppet regime and staged by occupiers," Georgian National Security Council Secretary Eka Tkeshelashvili told Reuters. "It is illegitimate and cynical."

Sixty-year-old Bagapsh drew support from the fact Abkhazia won recognition under his watch.

"These elections were to set the course of the country for the next five years," Bagapsh said on Sunday. "If the people voted, it means they believe, and that belief must be answered."

But some Abkhaz, who pride themselves on a history of resistance to stronger powers, accuse him of handing too much influence to former Soviet master Russia, on which Abkhazia depends for pensions, investment and at least half its budget.

Russia has some 3,600 servicemen patrolling Abkhazia's borders and stunning coastline, where Stalin's luxurious dacha still stands, and is building two military bases.

"We're becoming a region of Russia, and I don't want to be part of today's Russia," said a man who refused to give his name but said he voted for third-placed Beslan Boutba, a businessman.

Bagapsh will try over the next five years to restore Abkhazia's former glory as the playground of the Moscow elite. Russian tourist numbers are up, but the sliver of sub-tropical land remains strewn with scorched homes from the 1992-93 war.

Some 40,000 of the estimated 240,000 Georgians who fled Abkhazia with the end of the war have returned to the eastern Gali region, but were excluded from Saturday's vote by a rule limiting the electorate to Abkhaz passport holders.

Even some passport holders did not get to vote.

In the scarred New Region district of Sukhumi, where Abkhaz and Georgian forces traded heavy artillery fire in 1992-93, police cadets closed the doors of a polling station on at least 100 people who did not get to cast ballots before polling ended.

"Have you ever seen anything like it?" a member of the security services at the polling station asked a Reuters reporter. "This is our democracy."

(Editing by Matthew Jones)

DECEMBER 14, 2009

Online.wsj.com: Russian Presence Grows in Abkhazia http://online.wsj.com/article/SB126070743647789499.html

By SAMANTHA SHIELDS

SUKHUMI, Georgia -- Russia is steadily building its military and economic presence in Abkhazia, more than a year after the brief war that cost Georgia the tiny-but-strategic Black Sea coastal region.

Two Russian coast-guard ships arrived to keep Georgian vessels out of the waters off the port of Ocamchire Friday, a day before the first presidential poll in Abkhazia since Russia recognized its declaration of independence in August 2008. The only other countries that recognize Abkhazia are Nicaragua and Venezuela. The rest of the world ignored the election, which Georgia labeled a farce.

Abkhaz officials insist that the region, whose subtropical climate and gorgeous coastline made it a summer playground for the Soviet elite, isn't being annexed by its bigger neighbor, and Russia says it respects Abkhazia's autonomy. But both sides admit Abkhazia couldn't survive without Russian money and protection.

"We're not worried that Russia is using us for its own geopolitical ends. Russia is a friendly country for us and it was our initiative to ask them for help after they recognized our independence," said Sergei Bagapsh, Abkhazia's de facto president, who won a second term in the first round with 59.4% of the vote, preliminary results showed Sunday.

Russian observers declared the election was fair and transparent, but opposition candidate and ex-KGB agent Raul Khadzimba, runner up to Mr. Bagapsh with 15.4% of the vote, said there had been irregularities and threatened to challenge the result.

Russia needs to keep a peaceful Abkhazia, which borders key oil and gas transit routes, under its wing. A vicious ethnic war in the early 1990s, when the region first broke away from Georgia, decimated its tourist industry and has left crumbling hotels along the capital Sukhumi's once-elegant seaside promenade and abandoned Georgian houses throughout the lush countryside. Yet its border is just 12 miles from Sochi, the Russian Black Sea resort that will host the 2014 Winter Olympics.

There are 3,000 Russian troops in Abkhazia now, including 1,000 border guards and 2,000 mostly at a tent military base in Gudauta 23 miles northwest of Sukhumi. There is a provision in the current defense cooperation agreement for around another 1,800 to arrive within the next year, said Garry Kupalba, Abkhazia's deputy defense minister.

Another two coast-guard vessels will arrive in Ocamchire by the end of December and the plan is for Gudauta to be expanded to a full-scale Russian army base with a complete infrastructure and permanent living quarters within two or three years, said Russia's ambassador to Abkhazia, Semyon Grigoriev.

"Of course, there is Russian political and military influence and of course, there is economic influence because of the big financial assistance we're giving. But we take Abkhaz independence very seriously," he said.

The currency in use throughout Abkhazia is the ruble, most people there speak Russian rather than Abkhaz and international telephone codes were recently changed from Georgian to Russian prefixes.

Russia allocated two billion rubles ($66.5 million) to Abkhazia's budget this year, 57% of the total, and will match that figure in 2010, said Kristina Ozgan, Abkhazia's economy minister. The region needs to develop its tourist and agriculture industries and, although 80% of current investment comes from Russia, it would welcome it from anywhere, she said.

An estimated 200,000 Georgians fled Abkhazia during the 1992-1993 war and the most recent census in 2003 put the population at just 215,000. Of that number, around 90,000 are Abkhaz, Mr. Bagapsh said, with the rest Armenians, Russians and Georgians.

The de facto government says there are more than half a million ethnic Abkhaz in Turkey, many of whom were forced out by Russia in the 19th century. It says it hopes security and the first signs of economic development will lure some of them back, but so far only around 2,000 have returned.

"Demographics are our big problem. We preserved our statehood, our language and our ethnicity, but we suffered great human losses," said Foreign Minister Sergei Shamba.

Russia's biggest oil company, OAO Rosneft, has signed a cooperation agreement with Abkhazia and began oil deliveries this year, said Mr. Grigoriev. He added that Russia's state gas monopoly, OAO Gazprom, might show interest in expanding to Abkhazia.

Ms. Ozgan hopes Abkhazia can capitalize on its coastal location between East and West to become a trade and travel hub.

"We could be a little Silk Road," she said.

ISRIA: Mexico - The 4th meeting of the Mexico -RussiaJoint Commission for Cooperation on Economic, Trade, Scientific, Technical and Maritime Transportation Affairs is heldhttp://www.isria.com/pages/13_December_2009_36.php

Given their interest in strengthening the relations between Mexico and Russia, the 4th meeting of the Joint Commission for Cooperation on Economic, Trade, Scientific, Technical and Maritime Transportation Affairs was held on December 7-8 in Moscow. The meeting was co-chaired by Energy Secretary Georgina Kessel and Russian Education and Science Minister Andrey Fursenko.

The meeting demonstrated the desire of both countries to broaden the bilateral dialog, exchange information on the global and national economic situation and, especially, to diversify and strengthen their bilateral ties by establishing the priority areas for cooperation. Participating on the commission on behalf of Mexico were representatives from the Ministries of Foreign Affairs; Economy; and Agriculture, Livestock, Rural Development, Fisheries and Food; ProMexico; the National Council of Science and Technology (CONACYT); the National Autonomous University of Mexico (UNAM); the National Polytechnic Institute (IPN); and the Autonomous University of Nuevo Leon (UANL).

In the economic area, the agreement of the two countries to conclude negotiations on an Agreement for the Reciprocal Promotion and Protection of Investments is particularly important, as is the agreement to progress in negotiating agreements on energy, air transport, customs and financial cooperation, among others. Also important was the creation of a mechanism between ProMexico and Russian banks to pinpoint opportunities and foment a dialog between businessmen from both countries, and the progress made on issues related to animal health in order to export more Mexican products to the Russian market.

In the area of energy, Energy Secretary Kessel said that the Mexican government was interested in exploring areas of cooperation within the framework of current Mexican legislation on gas, oil and energy efficiency and the training of specialists.

Regarding technical and scientific cooperation, Mexico presented 14 projects related to advanced technologies in new materials, nanotechnology, robotics and satellite technology, among others, to be included in the 2010-2011 Scientific-Technical Cooperation Program.

The heads of the technical and scientific cooperation delegations of both countries, Rogelio Granguillhome Morfin, head of the Foreign Ministry’s International Economic Relations and International Cooperation Unit, and Victor Pilipneko, Deputy Head of Innovation and Infrastructure Development of the Russian Federal Agency for Science and Innovation, signed a Protocol of Technical and Scientific Cooperation that reflects the priorities agreed on for the 2010-2011 program, with an emphasis on giving impetus to projects related to advanced technologies. The protocol also includes the signing of a Memorandum of Understanding with CONACYT and plans for a sectoral workshop on nanotechnology to be held in 2010 in Mexico for scientists, technology workers and businessmen.

Both countries agreed to work together to explore and use outer space for peaceful means, which will facilitate the effective application of space technologies and services for the benefit of the scientific, technological and economic development of both nations.

The results of the Joint Commission reflect the interest of both countries in achieving new and enhanced levels of understanding, cooperation and interaction based on common

goals, as a demonstration of the growing friendship between the peoples and governments of Mexico and Russia, which will also be reinforced by the visit to Mexico of Russian Foreign Minister Sergei Lavrov in February 2010.

BarentsObserver: Radioactive leak in Severodvinskhttp://www.barentsobserver.com/radioactive-leak-in-severodvinsk.4664849-16176.html

2009-12-13 Two cubic meters of liquid radioactive waste leaked out from a pipe at the treatment facility at Zvezdochka naval yard last Thursday.

The leakage from the pipe going between a storage tank and the treatment facility for liquid radioactive waste was stopped. Two hours later the liquid radioactive waste, contained in a leak-proof tunnel, was cleaned up, according to the website of Zvezdochka.

The reason for the leak is unclear, but investigation is under way, says Zvezdochka. The radiation levels is said to not to exceed background levels.

Zvezdochka is engaged in dismantlement of older nuclear powered submarines and repair and maintains of operating submarines.

The storage tanks for liquid radioactive waste at Zvezdochka naval yard are financed with support aid from Norway.

RIA: Russian shipyard says recent radioactive leak poses no threathttp://en.rian.ru/crime/20091212/157207628.html

00:4112/12/2009

The Zvezdochka shipyard in northern Russia said on Friday that a recent minor radioactive leak at its storage facility posed no threat to people or environment.

According to a Zvezdochka statement, the "radiation incident" took place on Thursday when about two cubic meters liquid radioactive waste leaked through a seam in a pipe connecting a storage tank and a waste treatment facility.

"The pipe itself is located in a leak-proof tunnel and the waste did not spill outside," the statement said, adding that the tunnel has been drained of the waste in two hours following the leak.

"The radiation levels around the tunnel are normal. The causes of the leak are being investigated," the shipyard said.

Severodvinsk-based Zvezdochka is Russia's biggest shipyard for repairing and dismantling nuclear-powered submarines. It has the capacity to scrap up to four nuclear submarines per year.

SEVERODVINSK (Russia), December 12 (RIA Novosti)

Itar-Tass: Hasty conclusions impermissible in Perm fire case - Investigation Committeehttp://www.itar-tass.com/eng/level2.html?NewsID=14635589

13.12.2009, 20.05

MOSCOW, December 13 (Itar-Tass) -- Presumptions of supervisory agency representatives that certain individuals may be guilty of the Perm nightclub fire are premature and may violate human rights, spokesman for the Prosecutor General’s Office Investigation Committee Vladimir Markin said on Sunday.

“Supervisory agencies have intensified their comments on the investigation of the Perm nightclub fire. Officials jump into conclusions in their interviews, without thinking about possible consequences,” he said.

“The Main Investigation Department is analyzing the case. Any information significant for this inquiry will be accepted and verified,” Markin said.

“Meanwhile, posting of untimely and unverified information about possible causes of the nightclub fire and guilty parties may cause a violation of human rights, escalate tensions in Perm and the whole country and lead to irreparable consequences,” he said.

“If such consequences occur, the Investigation Committee will have to charge those who have released the untimely and unverified information,” Markin said.

The Perm nightclub burned down in the small morning hours of December 5. The death toll has grown to 146, and 86 patients are at hospital.

Prime Minister Vladimir Putin ordered the allocation of 432.6 million rubles from the government’s reserve fund for buying medicines, blood plasma, disposable medical instruments and medical equipment for treating injured guests of the Perm nightclub, the government press office said.

The Health and Social Development Ministry will receive 51.1 million rubles, the Federal Medical and Biological Agency – 29 million rubles, the Defense Ministry – 82.5 million rubles, the Moscow government – 139.3 million rubles, the St. Petersburg government – 50.5 million rubles, the Chelyabinsk government – 8 million rubles, and the Perm government – 72.2 million rubles.

Fumes of burning foam polystyrene caused the death of many guests of the Perm nightclub, a source close to the investigation team told Itar-Tass.

“According to forensic experts, the nightclub used foam polystyrene as sound insulation. Fumes from burning foam polystyrene smothered guests,” he said.

The suspended ceiling was treated with fireproof substances, which made it resistant to blaze, but the insulation caught fire.

“A fire inspector could hardly see the sound insulation. Besides, there are no requirements to sound insulation materials in Russia,” the source said.

Burning foam polystyrene emits toxic substances, and “one or two breaths can kill a person,” he said.

Pyrotechnics blast is the main theory of the Perm nightclub fire. A short circuit is not ruled out either, head of the Perm territorial department of the Russian Prosecutor General’s Office Investigation Committee Marina Zabbarova said earlier.

“The police have several theories, mostly a fire sparked by pyrotechnics. A short circuit is not ruled out either. We have information about an electricity network failure,” she said.

The detained pyrotechnician insisted that it was possible to use that particular type of pyrotechnics at the Perm nightclub but the detectives disagreed.

Nightclub guests were killed both by fire and by toxic smoke. “The fume coming from nightclub decorations was so toxic that people died even if they broke outdoors,” Zabbarova said.

The entire nightclub management was taken into custody, and the court authorized their arrest last Sunday. “The suspects pleaded not guilty and described themselves as victims,” Zabbarova said.

In all, two criminal cases were opened over the Perm nightclub fire. If found guilty, the suspects may be sentenced from five to seven years in custody.

“A sufficient amount of material evidence has been collected,” the Perm department said. The detectives have samples of nightclub electric wiring, decorations and pyrotechnics. Experts of the Prosecutor General’s Investigation Committee and Moscow police are working on the location. Investigation Committee Chairman Alexander Bastrykin visited Perm to supervise the investigation.

RIA: Investigators say town mayor, wife shot deadhttp://en.rian.ru/crime/20091214/157225903.html

08:1414/12/2009

The mayor of the town of Tuchkovo, 80 kilometers (50 miles) west off Moscow and his wife, who were found dead in their house on Sunday, were shot dead, investigators said on Monday.

It was initially said that Vitaly Ustimenko and his wife were found with multiple stab wounds.

"The body of Vitaly Ustimenko was found at the entrance, the body of his wife - inside the house. According to preliminary data, both died of gunshot wounds," the source said.

Forensics are still working at the scene. No further details are available at the moment.

Ustimenko was the mayor of the town with population of over 18,000, for only two months, a local police source said. He is the member of the Kremlin-backed A Just Russia party.

MOSCOW, December 14 (RIA Novosti)

Itar-Tass: Major fire breaks out at oil refinery in Samara region, no victims

http://www.itar-tass.com/eng/level2.html?NewsID=14636027&PageNum=0

14.12.2009, 06.17

SAMARA, December 14 (Itar-Tass) -- A major fire broke out at an oil refinery in the Samara region. According to the preliminary reports, no casualties sustained, chief press officer of the Samara regional emergencies department Mikhail Metelkin told Itar-Tass on Monday.

The delayed coker unit sparked up at 01.38 a.m. Moscow time on Monday at the Novokuibyshevsk oil refinery (about 30 kilometers away from Samara).

The fire area amounted to 1,000 meters. The fire was ranked highly dangerous with a looming threat for the fire to spread.

Nine employees were evacuated. No injured or killed people were reported.

The fire was localized at 03.38 Moscow time. The firefighting efforts are in progress. Some 25 pieces of machinery and 130 firemen are working at the fire site.

The remaining fuel oil and coking gas are burning out. “There is no danger to the Novokuibyshevsk residents,” Metelkin noted.

Itar-Tass: Second study of Sayano-Shushenskaya HPP dam stability starts

http://www.itar-tass.com/eng/level2.html?NewsID=14636130

14.12.2009, 08.31

GORNO-ALTAISK, December 14 (Itar-Tass) - The second complex study of the durability and stability of the Sayano-Shushenskaya hydropower plant's dam and its bedrock foundation has been launched. The operations are conducted by specialists of the Moscow-based Centre of the Service of Geodynamic Research in the Electric Power Industry Sphere, the HPP directorate told Itar-Tass on Monday.

The most advanced technologies in the sphere of diagnostics of the state of hydraulic engineering installations will be applied in the process of the dam’s examination. The first results will be available by the beginning of next year, and the final – in late 2010.

The Moscow Times: 20 Prison Officials Fired After Lawyer’s Death http://www.themoscowtimes.com/news/article/20-prison-officials-fired-after-lawyers-death/391373.html

14 December 2009By Natalya Krainova

President Dmitry Medvedev has fired 20 prison officials, including Moscow’s top prison official and the head of the Butyrskaya jail, after an investigation into lawyer Sergei Magnitsky’s death last month found that prison officials had neglected his medical problems.

Magnitsky, 37, who represented William Browder’s Hermitage Capital in a high-profile fight with the Interior Ministry, died Nov. 16 in a prison hospital from what the Interior Ministry said was heart failure.

Magnitsky complained of stomach ailments after being jailed almost a year ago, and his supporters blame the country’s notorious prison system for not properly attending to his medical needs. Hermitage has said prosecutors rejected his family’s request for an independent autopsy.

Medvedev signed a decree Dec. 4 dismissing the head of the Moscow branch of the Federal Prison Service, Major General Alexander Davydov and the head of the

Butyrskaya jail, Dmitry Komnov, Federal Prison Service head Alexander Reimer said Friday.

Among the other 18 dismissed officials were the head of the Federal Prison Service’s department for pretrial detention centers and prisons, Major General Valery Telyukh; and the head of its medical department, Vladimir Troitsky; as well as other prison officials around the country.

Magnitsky spent the last weeks of his life in Butyrskaya, and Reimer said the ouster of Butyrskaya’s head was directly linked to the death.

Reimer said on Ekho Moskvy radio that an internal investigation into the death by his agency found that Magnitsky’s rights concerning his living conditions had been violated in Butyrskaya.

A spokesman for the Federal Prison Service, Alexander Kromin, appeared to contradict Reimer’s remarks, saying the dismissals were not directly connected to Magnitsky’s death. Kromin said the shake-up was because of violations in providing medical assistance to prisoners in general, he told Interfax.

Repeated calls to the press office of the Federal Prison Service and its Moscow branch for clarification went unanswered Friday. A Butyrskaya spokeswoman referred requests for comment to the prison service’s Moscow branch.

Reimer also said several Moscow prison officials had received reprimands, but he did not identify the officials or elaborate on the reprimands.

He said his agency had drafted new detention rules that would guarantee prisoners at least eight hours of continuous sleep every day and time for exercise and eating.

Magnitsky, a lawyer with the Firestone Duncan law firm, was jailed on charges of organizing a scheme with U.S.-British investor Browder to evade taxes. The case was opened by the Interior Ministry shortly after Magnitsky and Browder accused several senior ministry officials of stealing $230 million in federal funds.

Hermitage Capital, once the largest foreign investment fund in Russia, urged Medvedev to go after “far bigger fish” than the dismissed prison officials.

“The penal system employees are merely the bottom of the feeding chain of individuals who were responsible for the death of Sergei,” a Hermitage Capital spokesman said. “There are many other far bigger fish involved in this tragedy. The corrupt Interior Ministry officials whom Sergei testified against for their involvement in the $230 million theft from the Russian state, and who retaliated against Sergei’s brave act by arresting him, bear direct responsibility for his death.”

Magnitsky’s boss, Jamison Firestone, praised Medvedev for acting against the prison officials but said he should focus on why Magnitsky was arrested in the first place.

“The only issue that really matters in Magnitsky’s case is that a group of corrupt law enforcement officers imprisoned a man who they knew was innocent, and they purposely put him in awful conditions in an attempt to get him to change his story,” he said in a commentary published in The Moscow Times. (See commentary, Page 10)

A Kremlin spokeswoman said late Friday that the press office had no comment on the prison dismissals.

Medvedev ordered prosecutors and the Justice Ministry to investigate Magnitsky’s death in late November, just a day after he was publicly pressed by his human rights advisers on the case.

Just hours after Medvedev ordered the inquiry, the Investigative Committee said in a statement that it had opened a criminal case over negligence and prison officials’ failure to provide medical aid. Both charges carry maximum sentences of three years in prison.

The head of the Federal Prison Service’s public council expressed hope that the prison dismissals would lead to improvements for prisoners.

“I believe that the other [prison] chiefs will understand that violations must not be allowed,” said Maria Kannabikh, who is a member of the Public Chamber.

But human rights activists voiced skepticism. “I doubt that anything will change. It might have if criminal cases had been opened,” said Anna Kolesnikova, a member of the Moscow public commission that monitors prisoners’ rights.

Prominent defense lawyer Igor Trunov said prisoners needed to be granted the right to be examined by doctors independent of the Federal Prison Service. “Formally, only a doctor can decide whether a person can stay in detention, but a prison doctor will issue whatever diagnosis that the prison chief needs,” Trunov said.

At total of 386 people have died in Russian pretrial detentions between January and late November, including 169 from injuries and suicides, Reimer said.

The Georgian Daily: Russia’s Right-Wing and Left-Wing Extremist Groups Similar in Tactics but Different in Organizationhttp://georgiandaily.com/index.php?option=com_content&task=view&id=16026&Itemid=72

December 12, 2009

Paul Goble

“Fascists” and “anti-fascists” in Russia today use such similar tactics that many people see in them “not political opponents but two bands of ‘fighters,’” much in the same way that Germans in the early 1930s viewed clashes between Nazi groups led by Ernst Rohm and Communist ones under Ernst Thalmann, according to a Moscow journalist.

But both then and now, Ruslan Gorevoy writes in this week’s “Novaya versiya,” there were important ideological differences and even more important organizational ones, even if these were and are not always obvious to many of the uninitiated or even to all the immediate participants (versia.ru/articles/2009/dec/08/nacionalisticheskie_gruppirovki_rossii).

“The mass fights, shootouts, and murders of the more odious leaders of one or the other side,” Gorevoy says, “may make it appear to those not involved in the mysteries of the ideological conflict that what is going on is not a fight between political opponents but between two bands of street fighters.’

But “despite the similarities in external attributes,” he continues, “the differences” between the ten or so radical extremist groups on the right and the ten or so radical extremist groups on the left are to be found in the very different organizational arrangements of the two groups.

“Pro-fascist groups as a rule,” the “Novaya versiya” investigative reporter says, “do not have a centralized administration, act entirely on their own and do not maintain contact with others like themselves even inside [the Russian Federation], let alone with European or American Nazis.”

Indeed, he points out, “even at various joint actions of the ‘Russian March’ type, the extreme right groups come together on an individual basis, in petty groups” and their leaders” frequently are not acquainted one with the other,” a pattern that makes the extreme right more anomic and harder to control but also in many cases less of an organized threat.

The situation with regard to the extremists on the left is “entirely otherwise,” Gorevoy says, with “the majority” of such groups being “cells of one of the international structures of the extreme left,” be it the Youth Human Rights Movement … or the Network Against Racism and Intolerance.

These organizations, the journalist continues, are extremely well organized and even disciplined, they have “powerful legal centers which function under the wing of human rights organizations, and they are financed not only by Western NGO foundations but also by local businessmen of non-Slavic origin.”

On the one hand, he suggests, that gives these groups a greater ability to coordinate what they do, but on the other, it means that the Russian powers that be can take control of them more easily, either by going after the sources of their funding or by seizing those higher up the chain of command.

But those possibilities are affected by the reality that in many places in Russia now, the anti-fascists have “their own unorganized comrades in arms,” groups like the anti-fascists in St. Petersburg that lack clearly identified leaders and ties and thus have more in common with simple hooligans than with a political organization.

Such groupings come together on the basis of Internet forums, get acquainted that way and decide to engage in one or another “action.” In such cases, “to speak about any ideology is impossible for it is completely lacking,” Gorevoy says. Rather, “there is a desire to show one’s strength in the company others similarly inclined.”

Because of these differences in the groups on the left, the Russian powers that be have deployed different resources against them, the journalist continues. The FSB “looks after” the “well-organized” anti-fascists, while “ordinary militiamen” are responsible for dealing with “the undirected” ones.

There is another characteristic that extremist groups on the right and left share: a tendency to ascribe to “little known” or possibly “non-existent” groups responsibility for their actions, especially when they involve murders or other crimes that could entail serious punishments if the powers that be decided to bring them to trial.

And that tendency, Gorevoy says, raises a serious question: “Why do the law enforcement organs prefer to catch radicals from virtual organizations and are not too willing to punish the more well-known real leaders of the right- and left-wing militants” who are very much more on public view?

The reasons for that, he suggests, are entirely understandable. Those in the law enforcement agencies do not want to “overload themselves with work” or put themselves at risk. At the present time, he notes, “there are no special sections for the struggle with extremists in a single force structure,” and consequently, officials have other, more direct “responsibilities.”

An FSB officer who is responsible for “contacts with extremist organizations and their leaders” told Gorevoy on condition of anonymity that “the murder of an activist of a political organization, whether of the far-right or far-left trend always is a crime that attracts attention,” and consequently, those who carry it out are interested in deflecting attention from themselves.

But there is a bigger problem, Pavel Chikov, the head of the Agora Human Rights Organization, said. The powers that be do not have any criteria for evaluating what is going on in almost all cases and thus are not able to “distinguish [extremists] from ordinary hooliganism,” with which these groups often share many superficial characteristics.

In fact, Gorevoy concludes, “at present, neither society nor the law enforcement agencies have a single approach to the question of how ‘skinheads’ should be considered: political activists or simple hooligans who cover their base instincts with political slogans or one

kind or another.” As a result, the legal system isn’t working, but these groups very much are.

The Guardian: Russia and Nato: A frozen conflicthttp://www.guardian.co.uk/commentisfree/2009/dec/14/russia-nato-ukraine-security-europe

EditorialThe Guardian, Monday 14 December 2009

President Barack Obama has had precious little to show for his big foreign policy idea of constructive engagement. Attempts to get Israeli and Palestinian negotiators round the table are deadlocked. Iran has rejected an imaginative offer to enrich uranium outside its borders, and is headed for another round of UN sanctions. Mr Obama opted to go in the opposite direction by committing more troops in Afghanistan. After all the soaring hopes and high-flying rhetoric of his speeches, it looks very much like business as usual. The only bright spot on the horizon is America's transformed relations with Russia.

Behind the scenes, officials in Geneva are beavering away at producing a replacement for the 1991 Strategic Arms Reduction Treaty (Start 1) which expired on 5 December. And yesterday we learned that they have begun similar talks about curbing cyber warfare and strengthening internet security. It remains to be seen whether Russia will support another set of UN sanctions against Iran or simply let China take the lead in watering them down. Russia has traditionally treated Iran as a reliable neighbour, although there is private anger in Moscow at Iran's rejection of the offer to enrich its uranium, a process that would have taken place in Russia. But all in all, US negotiators are getting more from talking to their Russian counterparts than they have in the days of George Bush. The reset button appears to be working.

The same, alas, cannot be said for Russia's relationship with Europe, which suffers, as one diplomat put it, from "reset envy". The west gave a cool response to a recent Russian proposal for a new Euro-Atlantic security pact, which would restrict the use of force by signatories and create a new mechanism for the resolution of conflicts. Britain's response was to say that existing structures such as the Organisation for Security and Co-operation in Europe (OSCE) work well enough, although they could be improved.

Two fundamentally opposing views lie behind the exchange: Russia sees Nato as a military organisation whose eastward expansion was stopped dead in its tracks by Russia's military response in South Ossetia last year. Russia now seeks a legally binding guarantee that Nato will never admit either Georgia or Ukraine into its alliance. Why legally binding? Because it says it has been lied to too often by western leaders in the past. Although it is accepted informally that Nato membership is not on the table for either country, western diplomats refuse to put that down in words, because to do so would be to acknowledge Russia's veto over the sovereign decisions of independent countries. The result is that while modest steps can be made in meetings of the Russia-Nato council (such as agreements over the modernisation of Russian helicopters),

Moscow's red lines – plans to expand Nato, the fate of the regime to control conventional armaments in Europe, and Nato's military infrastructure coming close to Russia's borders – remain as red and as active as ever.

Now, as we all know, there is no such thing as a frozen conflict that remains frozen. South Ossetia proved that in abundance. So Russia's strained post-cold-war relations with Nato and an enlarged Europe remain vulnerable to another regional crisis breaking out – Nagorno-Karabakh is one, Trans-Dniester another. Faced with this, it is difficult to maintain that there is no need to change the organisations that govern security in Europe. First, because there are still disputed borders in Europe and they have to be dealt with. Second, because one third of the population of Europe lies outside Nato's area. And third, because the status quo can degenerate quickly. So although there should be no Russian veto over what alliance Ukraine seeks to join, neither can Nato expand, as it has in the past, in a manner that ignores Russia's security needs. Europe indeed needs a new security architecture if it is to put the cold war behind it.

New Europe: EU: In Putin We(have to) Trusthttp://www.neurope.eu/articles/98047.php

Author: Kostis Geropoulos13 December 2009 - Issue : 864

Read more: http://www.neurope.eu/articles/98047.php#ixzz0ZeAzDuCQ Under Creative Commons License: Attribution Non-CommercialHi, the Energy Insider here, writing this three-year-old column about the energy wilderness. On December 16, 2006, in my first column “Putin says ‘Jump!’ Foreign energy companies ask: ‘How high?’” I addressed Vladimir Putin’s grip over foreign oil companies’ assets and the EU’s dependence on Russian energy supplies.Not much has changed on the energy front. Following two gas crises with Ukraine, which interrupted Russian gas flows to Europe, Brussels is more worried than ever on its reliance on Moscow.Putin — the current prime minister and former president of Russia — may well be the most powerful man in the world and maintains his dominant hold on energy. Germany, France and Italy have formed strategic energy partnerships with Russia, which determine to a large extent their policies despite the United Kingdom’s often hostile approach towards Moscow. During Putin’s trip to Paris late last month, the Russian premier secured France’s participation in the South Stream gas pipeline. Russia’s Gazprom and Italy’s ENI signed a memorandum of understanding on 26 November to grant French power group EDF a stake in the project, seen as a competitor to the EU’s Nabucco pipeline. France already ranks with Germany and Italy as one of Russia’s top energy investors, due to Gazprom’s partnership with French company Total in the $15-billion Shtokman gas field. Putin has excellent relations with French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi. In 2007, Sarkozy rushed to congratulate Putin on his party’s victory in the Russian parliamentary elections, putting him at odds with EU allies who said the voting was deeply flawed. On October 7, 2009, Berlusconi apparently snubbed the Jordan King, choosing instead to fly to Putin’s dacha in St

Petersburg in order to attend his Russian pal’s 57th birthday and discuss energy politics, even though they weren’t any young girls at hand. German Chancellor Angela Merkel has also adopted a pragmatic approach in dealing with Russia, choosing to promote the Nord Stream gas pipeline between Russia and Germany.Like it or not, Russia has penetrated the European energy market, with economic interests overshadowing political choices. At the OSCE 17th annual meeting in Athens on 1-2 December, 2009,  some foreign ministers drew a connection between European security and energy security. I asked Alexander Stubb, Finland’s foreign minister, if he was concerned about Europe’s increased reliance on Russia to which he replied: “My take on European energy is that the EU should have its common energy policy both on the market side and the security side. I think Europe should diversify its energy; we should have renewables, we should have old-fashioned energy - including gas and oil – and should also have nuclear. My take on energy dependency, which is much talked about, is that we should not make it asymmetrical - 25 percent of all energy that the European Union consumes comes from Russia, but 75 percent of the Russian energy market is in Europe. So my question is who is more dependent on whom? And if you add on top of that that Russia actually gets 50 percent of its state income from energy exports, then I think the case is quite clear.” Stubb advocated mutual positive dependency in energy matters between Russia and the EU, saying: “We need Nord Stream, we need Nabucco and we need South Stream.” And the EU still needs Putin.  KGeropoulos@NEurope.eu

Read more: http://www.neurope.eu/articles/98047.php#ixzz0ZeB1SSQy Under Creative Commons License: Attribution Non-Commercial

FT.com: Industry: Russia’s one-company towns face bleak futurehttp://www.ft.com/cms/s/0/9cde8752-e5e4-11de-b5d7-00144feab49a.html

By Charles Clover

Published: December 13 2009 23:23 | Last updated: December 13 2009 23:23

Perched on the banks of the picturesque River Volga, the city of Tolyatti in southern Russia at first seems a picture of serenity. But in recent months tension has not been far from the surface.

With a population of 700,000, Togliatti is the largest monogorod in Russia – one of hundreds of towns and cities where a single industry or factory accounts for most of the local economy. In the case of Togliatti the main economic enterprise is Avtovaz, the carmaker, which employs 102,000 workers making the boxy Lada cars ubiquitous on Russia’s roads.

Fearing social instability and unable to keep many far-flung Soviet-era enterprises afloat, Russia’s government has launched a wide-ranging review of up to 400 such towns and is

pondering how to restructure local enterprises, bring in new sources of employment or, as a last resort, shut them down and move the people to new lives and uncertain futures.

Most monogoroda are not more than half a century old, having been built over coal seams or ore deposits or near hydroelectric dams under the Soviet Union’s rapid industrialisation drive starting in the 1930s. Life in these cities has been harsh, for the most part, over the span of their existence.

Now, spread out amid Russia’s vast steppes and forests, many have little economic reason to exist following the fall of communism and the end of central planning. Their products are uncompetitive against imports, they have seen little investment and have been kept barely afloat by a government that until this year was awash in oil revenues. With the onset of the economic crisis, many of these towns have gone from limping along to a slow death spiral.

Built a half-century ago, Togliatti was named after Palmiro Togliatti, the Italian communist leader, and this misplaced Soviet optimism can still be found in the peeling socialist murals depicting red flags and happy proletarians on the walls of high-rise apartment blocks.

The city is perhaps the most expensive social headache facing the Russian government. Referred to in the Russian press as a financial “black hole”, Avtovaz has already swallowed Rbs25bn ($823m) in state support, to little effect.

Mismanagement at the factory is at the root of the problem. In October Avtovaz admitted 7,500 vehicles were missing from its dealer network. Avtovaz cars just barely compete with imported cars, despite 30 per cent import tariffs. The plant has had a variety of owners. In 2005 Rostechnologiya, the state arms monopoly, took over the plant. France’s Renault took a 25 per cent stake in 2008. Troika Dialog, the Moscow investment bank, owns a similarly-sized stake.

Politicians and businessmen have been bickering about whose fault the situation is. In late November, however, Togliatti had some good news at last when Vladimir Putin, the prime minister, announced a Rbs50bn government cash injection into the company as part of a rescue agreement signed with Renault, which will contribute €240m ($353m) worth of technology and know-how.

Over the long term, Tolyatti is relatively lucky in one respect: there is interest abroad in investing in Russia’s automobile industry. Russians bought about 3m vehicles in 2008, nearly overtaking Germany in market volume.

Other towns are not so lucky. Of the 400 monogoroda under scrutiny by the economy ministry, about 20 will be targeted by special federal programmes, and could theoretically face closure, says Elvira Nabiullina, economy minister. “In principle, this is possible if we don’t have any alternative forms of employment, no private investors ready to invest,”

she says. In that case: “We should create conditions for resettlement, create conditions for mobility of human resources. But as of today such projects do not yet exist.”

Moscow clearly fears instability in these towns, where economic conditions can get very bad, very quickly. A series of strikes in the Kuzbass region of Siberia in 1989, for example, helped hasten the collapse of the Soviet Union two years later. In June a strike in one monogorod, Pikalevo, brought national attention after Mr Putin flew to the city to address strikers, forcing industry leaders to get the town’s cement factory back on its feet.

Ms Nabiullina says that soon after the Pikalevo disruption the government began developing the new measures aimed at addressing the economic problems of the monogoroda. “It was one of a number of factors which drew the attention of the government to study the situation in these towns,” she says.

In Tolyatti before the rescue agreement was announced, there were at least three separate government announcements about imminent lay-offs, all with different numbers. The confusion heightened tensions in the normally placid town and demonstrators took to the streets twice in recent months.

Underlying those expressions of frustration are the rising expectations of its residents, which, if unmet, could cause a more severe backlash, says Rimma Mikhareva, editor of local news agency RIA.

“The past eight years the people have got used to living better, and no one wants to go back to how things were in the 1990s, with wage delays [and deep] unemployment. That could cause an explosion.”

This is an updated version of an article first published on October 28.

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.

Reuters: Reign of fear grips Russia's Chechnyahttp://in.reuters.com/article/worldNews/idINIndia-44695120091214

Mon Dec 14, 2009 2:16pm IST

By Amie Ferris-Rotman

GROZNY, Russia (Reuters) - Bearded police in camouflage clothes, carrying assault rifles and long daggers, stop cars with tinted windows in the rebuilt Chechen capital -- their latest ploy in the hunt for Islamist fighters.

As one car pulls over, a policeman jerks open the back door, slides in and slashes the dark tinted film off the car windows with his 10-inch (25 cm) dagger.

"If you don't like it, take it up with the president. Militants could be hiding behind these," he snarls at a pair of nervous passengers, exposing a row of sparkling gold teeth.

Rights groups say Chechnya, the southern republic which has fought two separatist wars with Moscow since the mid-1990s, is becoming a fear-crippled region where the militia of President Ramzan Kadyrov, the rebel turned Kremlin loyalist, has amassed enormous power.

Many Chechens dread the appearance of law enforcement officers, whose black woollen hats bear the letters "K.R.A.", the initials of the president's names, Ramzan Akhmadovich Kadyrov.

Thousands of "Kadyrovtsy" are eager to prove they are defeating the Islamic insurgency across the North Caucasus that aims to create an independent Muslim state ruled by sharia.

Many of them fought for independence from Moscow but, like Kadyrov, switched sides. Rights groups say they enforce decrees issued by Kadyrov, such as a ban on alcohol and making women cover their heads in state buildings, regardless of the constitutionality of such rules.

Residents tremble at the sight of the black-booted police, who can "take us away for being against a law we don't even know is real or even exists," said one young man called Aslan.

The Russian human rights group Memorial says the climate of fear intensified rapidly after the Kremlin lifted security restrictions in April, transferring enormous power from Moscow to Kadyrov's militia.

Women complain that the militia taunt them for not wearing headscarves near state buildings such as airports or schools -- which bear large smiling portraits of Kadyrov and his father and predecessor, Akhmad, assassinated by a bomb blast in 2004.

TAKEN AT NIGHT

Compounding the fear is the increasing number of abductions which rights groups like Amnesty International blame on the authorities and law enforcement personnel.

Locals compare the situation to the Great Terror Soviet citizens suffered under Josef Stalin in the late 1930s, when millions of people were arbitrarily sent to labour camps or exiled, using fake confessions extracted under torture.

"It's the Terror all over again," said one woman in Grozny whose friend disappeared when his flat was raided.

Kadyrov's spokesman, Alvi Karimov, said rights groups were misinterpreting the situation and failed to appreciate that Chechnya had lived through two devastating wars.

"They (rights groups) are not looking at the fact Chechnya suffered terrible wars, we are a post-conflict region. The power structures do everything they can to liquidate militants, provide safety and rebuild the economy," he said.

Memorial, whose activist Natalya Estemirova was kidnapped and murdered in Chechnya in July, a crime that drew widespread condemnation, estimates at least 86 people were abducted in the first nine months of this year in the republic of 1 million.

This is just over double the 2008 total, almost triple that of 2007, Memorial says, but significantly lower than 2002, at the height of the second Chechen war, when there were 544, most of whom showed up dead.

Of those kidnapped this year, nine have been found dead but most have simply disappeared, said Alexander Cherkasov of Memorial. Relatives say the victims are taken from their homes at night by armed men on suspicion of being Islamist rebels.

Minkail Ezhiev, who set up the Chechen Civil Society Forum in 2005 to encourage dialogue with the authorities, said: "No one knows where they are, where they've been taken to, or what they do to them. There are no trials.

"They are tortured and beaten up ... and then we bury them".

Ezhiev said abducted men were being offered up to 500,000 roubles ($16,260) by authorities to "confess" to being a militant on television.

Abductees' families were bribed to denounce their relatives, and abductions were used to support the authorities' claim that they are beating the Islamist insurgency, he said.

Kadyrov has consistently denied allegations of involvement in abductions or torture and says he is successfully destroying rebels.

Amnesty International's Europe and Central Asia Programme Director, Nicola Duckworth, said abductions were Chechnya's most far-reaching problem.

"The scale of it and the lack of investigations into mass graves, previous disappearances, the failure to exhume bodies and identify them are just perpetuating the trauma in Chechnya," she told Reuters by e-mail from London.

Earlier this week the head of the FSB, the successor to the KGB, Alexander Bortnikov, said security forces had detained almost 800 militants in the North Caucasus this year and seized 1,600 firearms and 490 homemade bombs.

National Economic Trends

Bloomberg: Ruble Advances Against Dollar as Oil Prices Reverse Losseshttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGub2ywHgwuo

By Denis Maternovsky

Dec. 14 (Bloomberg) -- The ruble touched its highest in five days against the dollar as oil, Russia’s chief export, recouped its losses, heading toward $70 a barrel.

The Russian currency added 0.2 percent to 30.0122 per dollar by 11:04 a.m. in Moscow, poised for its strongest close since Dec. 7. It strengthened 0.4 percent to 44.0527 per euro.

Oil prices have more than doubled since February, boosting the earnings outlook for the world’s biggest energy exporter and supporting the ruble. Crude for January delivery last traded at $69.70 a barrel, after earlier losing as much as 1.8 percent to $68.59 in New York, as Abu Dhabi pledged $10 billion in aid to the Dubai government, spurring investors to buy riskier assets.

The movements against the dollar and the euro left the ruble at 36.3320, the strongest level in a week, against the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters.

The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged Jan. 22 to defend.

To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

Last Updated: December 14, 2009 03:42 EST

RBC: Bank of Russia may take strategic companies from Lombard List

http://www.rbcnews.com/free/20091214112950.shtml

      RBC, 14.12.2009, Moscow 11:29:50.The Bank of Russia is considering the opportunity of excluding shares and bonds of non-quoted companies and companies with ratings below B3 (B-) assigned by S&P, Moody's and Fitch from its Lombard List, RBC Daily wrote today citing an advisor at the Bank of Russia's market operations department Yulia Snizhkova.

      In particular, this applies to shares of a few strategic companies. To this end, the Bank of Russia will have to alter the criteria strategic enterprises. In late 2008, the government published a list of 295 strategic companies, and granted the Central Bank the right to extend loans against the pledge of these companies' shares.

The Moscow Times: Central Bank to Buy Gold From Gokhran http://www.themoscowtimes.com/business/article/central-bank-to-buy-gold-from-gokhran/391362.html

14 December 2009Reuters

The state repository will sell 30 metric tons of gold worth $1 billion to the Central Bank next week, a source at the body said Friday, keeping the metal inside Russia after rethinking a plan to sell it on the market.

Central banks worldwide are building up their gold reserves as the metal trades near record highs. Gokhran, the repository, canceled plans to sell the gold on the open market after information about the sale leaked.

“The primary aim is to make sure this gold doesn’t hit the market and influence prices,” said Olga Okuneva, metals and mining analyst at Deutsche Bank. “It’s also a way for the Central Bank to diversify more into gold.”

Russia had planned to sell between 20 and 50 metric tons on the open market to help plug a budget deficit incurred during its first recession in a decade. The economy has since shown some signs of early recovery, in line with a rebound in oil prices.

With gold trading at record highs of $1,226.10 per ounce last week, boosted by a weaker dollar, analysts said Russia would be reluctant to sell the metal abroad or to push prices down by releasing a large quantity to the market.

Thirty metric tons, or 964,522 ounces, is equivalent to 16 percent of Russia’s gold production last year or up to 1.25 percent of global consumption of the metal.

The source at Gokhran, speaking on condition of anonymity, said President Dmitry Medvedev signed a decree on Dec. 7 approving the sale. “Next week, I think, we will conclude everything,” the source said.

Finance Minister Alexei Kudrin first announced the sale Nov. 18, saying Gokhran — which falls under his ministry’s watch — would sell at market price and use some of the proceeds to buy diamonds from state-run miner Alrosa.

Kudrin said Friday that the sale would take place by the end of the year. He gave no more details.

Russia holds the world’s third-largest gold and foreign exchange reserves — $451.2 billion as of Dec. 4. It is also the world’s fifth-largest gold miner, ranking between Australia and Peru, with an 8 percent share of global production.

The Central Bank held 19.5 million ounces of gold, or more than $20 billion worth, in its reserves as of Nov. 1.

Gold prices hit a four-week low of $1,109.10 an ounce Friday.

Upbeat U.S. economic data, highlighted by worries over sovereign debt in Spain and Greece, also boosted the safe-haven dollar and diminished gold’s appeal as an inflation hedge.

In the past, gold has served as a safe haven in times of economic crisis. However, spot bullion is now trading more than $100 below its record high $1,226.10 reached on Dec. 3, because of liquidation. Year to date, gold has still gained 27 percent.

Business, Energy or Environmental regulations or discussions

Itar-Tass: Sberbank gives AVTOVAZ credit of 7 billion rubles

http://www.itar-tass.com/eng/level2.html?NewsID=14636602&PageNum=0

14.12.2009, 11.03

MOSCOW, December 14 (Itar-Tass) -- The Savings Bank of Russia (Sberbank) has given AVTOVAZ a credit of seven billion rubles, a representative of the car works said. Conditions of the credit are not disclosed by AVTOVAZ.

The credit was provided for settlements with AVTOVAZ’s suppliers and ensuring of the car works’ production activity.

Reuters: AOL in talks with Russian investment firm on ICQhttp://www.reuters.com/article/idUSTRE5BC20420091213

NEW YORK (Reuters) - AOL is in talks to sell its ICQ instant-messaging service to Russian investment firm Digital Sky Technologies, The Wall Street Journal reported on Sunday, citing people familiar with the matter.

Technology

According to the report, the discussions are still in the early phase and AOL has reached out to other parties. The value of the sale could be between $200 million and $300 million, the Journal said.

A spokeswoman for AOL declined to comment on the story. A spokeswoman for Digital Sky could not be immediately reached for comment.

(Reporting by Michael Erman, editing by Martin Golan)

Dec 14, 2009

DECEMBER 14, 2009

Online.wsj.com: AOL Talks to Russia's DST Over ICQ http://online.wsj.com/article/SB10001424052748703442904574594390157672818.html?mod=WSJ_hpp_MIDDLTopStories

By EMILY STEEL and JULIA ANGWIN

AOL Inc. is in talks to sell its ICQ instant-messaging service to Russian Internet-investment group Digital Sky Technologies, according to people familiar with the matter.

Discussions between AOL and the prominent Facebook investor are still in the early stages, and AOL has reached out to other parties as well, according to a person familiar with the talks. The deal could fetch between $200 million and $300 million, this person said.

Digital Sky Technologies owns pieces of a number of Russian Internet properties, including Russia's largest Web site, Mail.ru, and a Polish social-networking site. But DST, run by Russian businessman and Internet investor Yuri Milner, is best known for buying a $200 million stake in Facebook.

ICQ has been eclipsed by other instant-messaging services in the U.S., but it remains popular overseas. In October, ICQ's largest markets were Germany, with 12.6 million unique visitors, and Russia, with 8.4 million unique visitors, according to research firm comScore.

The talks come just after AOL has completed its spinoff from media giant Time Warner Inc. AOL CEO Tim Armstrong said last week at the UBS Global Media and Communications Conference that AOL is evaluating shedding some of its assets "that don't make sense" with the company's new focus.

Also on the block could be second-tier social-networking site Bebo, which AOL acquired for $850 million last year, according to a person familiar with the situation.

AOL is trying to move from its roots as a subscription-based service for logging on to the Internet to an advertising-supported digital media company. Last year it generated much of its revenue and most of its profit from the Internet-access portion of its business. AOL doesn't break out revenue from its instant-messaging services.

Mr. Armstrong is trying to shore up AOL's double-digit-percentage declines in subscription and advertising revenues as well as drop-offs in traffic to its sites and services, which include the AOL.com home page, e-mail, instant messaging and mapping site MapQuest. He intends to refocus AOL on becoming a top producer of digital news, information, entertainment and other content, while maintaining AOL's traditional presence in e-mail and instant messaging.

AOL wasn't in a hurry to make any deals until after its separation from Time Warner, according to a person familiar with the situation. A spokeswoman for AOL declined to comment on Sunday on news of any deal talks.

AOL acquired ICQ's parent company, Tel Aviv-based Mirabilis, in June 1998 for $287 million in cash and additional performance-related payments of up to $120 million. Soon after buying ICQ, however, AOL's own instant-messaging service—now known as AOL Instant Messenger—became more popular in the U.S.

Write to Emily Steel at emily.steel@wsj.com and Julia Angwin at julia.angwin@wsj.com

SteelGuru: Updated Russian metallurgical sector development strategyhttp://steelguru.com/news/index/2009/12/14/MTI0NzI1/Updated_Russian_metallurgical_sector_development_strategy.html

Monday, 14 Dec 2009

According to the Ministry Of Industry And Trade Of Russia, average yearly investment volume to Russian metallurgy will amount in 2009 to 2011 RUB 150 billion including the investments in ferrous metallurgy RUB 96 billion and in non-ferrous metallurgy RUB 53 billion. In 2012 to 2015 the investments will amount RUB 190 billion including RUB 117 billion and RUB 75 billion correspondingly. In 2016 to 2010 the investments will amount RUB 210 billion including RUB 125 billion and RUB 90 billion correspondingly.

Minpromtorg had updated the metallurgy development strategy till 2020 taking into account the effect of the global economy crisis on the figures, development rates, and economy situation in Russia.

In 2004 to 2008 average yearly investment volume in metallurgy amounted more than USD 6 billion having exceeded similar figure for 2000 to 2003 by 2.4 times. Due to the crisis metallurgical companies’ investment resources fell acutely. In 2008 investments volume in metallurgy basic stock decreased comparing with the expected RUB 230 billion and amounted to RUB 198 billion.

In 2009 further investment decrease is forecasted. The investments in metallurgy will not exceed RUB 125 billion.

Minpromtorg reports Aluminium output in Russia can grow in 2010 by 40% to 5.9 million tonnes, copper by 40 % to 1.2 million tonnes, zinc by 90 % to 0.5 million tonnes, nickel by 16 % to 305,000 tonnes as compared with 2008.

The development of high-tech non-ferrous metal products domestic market till 2020 will be connected with the demand increase, first of all for the “fourth process stage” products from the main metal consuming industries.

(Source from Rusmet.ru)

Alibaba.com: Mechel's TFZ obtains certificate of compliance with ISO 9001:2008 standardhttp://news.alibaba.com/article/detail/metalworking/100216776-1-mechel%2527s-tfz-obtains-certificate-compliance.html

Published: 13 Dec 2009 22:33:58 PST

SteelOrbis - The Russian mining and steel producing group Mechel has announced that, as a result of an audit conducted by international certification organization TUV SUD, its ferroalloy producing subsidiary Tikhvin Smelting Plant (TFZ) has obtained the certificate of compliance with the quality management system standard ISO 9001:2008. TFZ is consolidated within Oriel Resources Ltd., which is Mechel's ferroalloy sub-holding.

"Having obtained the certificate of compliance with the international quality management system standard ISO 9001:2008, TFZ has strengthened its market positions and proved the strong competitiveness of Mechel's enterprises," Oriel Resources Ltd.'s CEO Alexey Ivanushkin commented.

TFZ manufactures high quality high carbon ferrochrome which is used mainly for stainless steel production. Its ferrochrome is consumed by Mechel's subsidiaries and is also supplied to the market. About 85 percent of TFZ's sales to the market consist of export sales to Japan, US, Germany, India, China and others. "TFZ's products are in high demand in both the domestic and international markets. This is the youngest ferroalloy plant in Russia; here we have up-to-date powerful equipment and experienced specialists," Mr. Ivanushkin stated.

Alibaba.com: Russia's Kuzbassrazrezugol announces Jan-Nov operational resultshttp://news.alibaba.com/article/detail/metalworking/100216808-1-russia%2527s-kuzbassrazrezugol-announces-jan-nov-operational.html

Published: 13 Dec 2009 23:15:40 PST

SteelOrbis - Russian coal mining company Kuzbassrazrezugol has issued its operational results for November and for the first eleven months of 2009.

Accordingly, in November Kuzbassrazrezugol fulfilled its production plan for the month at the rate of 100.3 percent, producing about 3.95 million of coal, including 238,000 mt of coking coal. Meanwhile, in the first eleven months of 2009, Kuzbassrazrezugol's coal output amounted to about 42.23 million mt - down eight percent year on year, including about 2.5 million mt of coking coal - down 45 percent year on year.

In January-November this year, Kuzbassrazrezugol's deliveries of coking coal amounted to 2.55 million mt - down 37.5 percent compared to the same period last year.

As SteelOrbis previously reported, Kuzbassrazrezugol's production plan for 2009 targets an output of 46 million mt of coal, including 2.05 million mt of coking coal.

Reuters: REFILE-UPDATE 1-Russia's Exillon raises $100 mln in London IPOhttp://uk.reuters.com/article/idUKLDE5BD0DN20091214

Mon Dec 14, 2009 8:13am GMT

(Corrects spelling of "two" in third paragraph)

* Oil producer launches Russia's first London IPO of 2009

* To raise $100 mln in placing 40.5 mln shares

* Proceeds to go on debt repayment, new projects

(Adds details of IPO)

MOSCOW, Dec 14 (Reuters) - Exillon Energy, a Russia-focused oil producer, is to raise just over $100 million in what will be the first London stock market flotation by a Russian company since the financial crisis broke in 2008.

The group, which has early stage assets in the Western Siberia and Komi regions of Russia, said on Monday it would place 40.5 million shares at 153 pence each and will use the cash to repay debt and develop future projects.

The statement confirms what two sources with knowledge of the matter had told Reuters early last month. [ID:nL3236150]

Russian companies have announced a slew of secondary share placements and bond issues in recent weeks, but Exillon will be the first to successfully launch an IPO outside local markets.

The IPO represents just under a third of Exillon's share capital and values the group at 186 million pounds ($301.9 million).

Bank of America Merrill Lynch and ING Bank were joint global co-ordinators and bookrunners of the deal. (Reporting by John Bowker; Editing by David Holmes) ($1=.6161 Pound)

Asiaone.com: Russians setting up Asian shop in Singapore

http://www.asiaone.com/Business/News/Story/A1Story20091214-185765.html

Medvedev said Russia should learn from S'pore's growth from a resource-poor country into a top financial hub. -AFP

Mon, Dec 14, 2009AFP

SINGAPORE - If you want to rent an Italian supercar or British limousine in Singapore, look up Pavel Zotov - one of a new wave of Russian businessmen using the city-state as an entry point to Asia.

Luxe Car Rental, Singapore's first company specialising in high-end auto leasing, was set up by the young Moscow entrepreneur over a year ago in the depths of the global financial crisis.

But business is booming and Zotov plans to double his fleet of eight cars, which are worth an average of one million Singapore dollars each, topped by a Lamborghini Gallardo and Bentley Continental Flying Spur.

"It's a unique business, nobody has done it in Singapore do far," Zotov, 38, told AFP by telephone from Moscow, where he started out as a car trader.

Zotov is now seeking permanent residency in Singapore and looking at expanding his business to other Southeast Asian countries.

"When you meet their entrepreneurs, they are a different breed," Michael Tay, a former Singapore ambassador to Moscow, said in an interview.

Tay, who inaugurated an annual Russia-Singapore business conference in 2006, played down any concerns about the source of the new money coming from Russia's opaque business world.

"When the Russians come, they go through the due diligence process," he said, asked about the possibility of money-laundering.

"Many of them are self-made people, they have not done anything that is against the law. I don't see that as a problem."

The Russian government is keen to tap Singapore's expertise as it tries to diversify its oil- and gas-powered economy. Last month President Dmitry Medvedev brought a high-powered business delegation on a state visit here.

Medvedev said Russia should learn from Singapore's "great example" of transformation from a resource-poor colonial outpost into one of Asia's top financial hubs.

Bilateral trade doubled from US$1.38 billion (S$1.919 billion) in 2007 to US$2.75 billion (S$3.824 billion) last year, according to Singapore officials.

"Singapore can be Russia's gateway to Asia. We have networks and experience in the economies of China, India and Southeast Asia," Singapore President S.R. Nathan said at a state dinner for Medvedev. An estimated 200 Russian companies including Lukoil, the country's second biggest oil producer, and TMK, its largest exporter of steel pipes, have offices in Singapore.

Russian officials say 2,000 of their citizens live in Singapore, which has just five million people. The Singapore Tourism Board says visitor arrivals from Russia rose from 19,000 in 2004 to over 56,000 last year.

Singaporean property developers are also trying to generate more business from Russian buyers.

Former ambassador Tay's annual conference has grown steadily, from about 200 delegates in 2006 to almost 700 this year.

"Singapore has the credentials to not just be a listening post to understand the region but be an actual business hub from which they can start getting partners to enter the region," said Tay.

Moscow-based investment adviser Giedrius Pukas, who makes a trip to Singapore every three or four months, says his firm Quadro Capital Partners is in talks with a number of Singapore-based parties to explore working together.

"Russians understand that Asia is the growth area and Singapore is one of the most developed bases for business operations," the 34-year-old Lithuanian told AFP by telephone from the Russian capital.

Activity in the Oil and Gas sector (including regulatory)

RBC: Oil companies to be forced to disclose contractual terms

http://www.rbcnews.com/free/20091214103626.shtml

      RBC, 14.12.2009, Moscow 10:36:26.The government has found a new way to find out at what prices, in what amount and to whom oil companies cell their oil products, RBC Daily wrote today. Currently, the St. Petersburg International Commodity Exchange and the Federal Financial Markets Service are drafting a document to oblige companies to register their over-the-counter contracts in St. Petersburg.

      The list of goods and the registration procedure will be determined by the government, while the exchange has already worked out a set of rules to register the contracts, along with appendices to them, which contain forms of presenting information on deliveries under contracts concluded. The exchange also suggests calculating a composite index based on trading results on the exchange market in order to set an objective benchmark for market participants.

JPost.com: New Asian gas line to weaken Russian influence

http://www.jpost.com/servlet/Satellite?cid=1260447435140&pagename=JPost%2FJPArticle%2FPrinter

Dec. 14, 2009Associated Press , THE JERUSALEM POST

A landmark pipeline carrying natural gas from Central Asia to China began working Monday in a development that will loosen Russia's grip over the region's vast energy resources.

The leaders of China, Kazakhstan, Turkmenistan and Uzbekistan jointly turned on the tap to the pipeline in northeastern Turkmenistan, sending the first gas on its way to energy-hungry China.

The pipeline is the first major Central Asia gas export route to bypass Russia. It will play a key role in wresting the former Soviet republics in the region out of Moscow's economic sphere of influence.

Gas deliveries to China through the pipeline are expected to hit around 13 billion cubic meters in 2010. Supplies will reach 30 billion cubic meters by 2013, after the route has been definitively completed.

OilVoice: Lukoil and Statoil Win Bid on the West Qurna 2 Field in Iraqhttp://www.oilvoice.com/n/Lukoil_and_Statoil_Win_Bid_on_the_West_Qurna_2_Field_in_Iraq/19fc94b5b.aspx

12 December 2009

Around 40 companies are prequalified for participation in Iraq's second licensing round 11 and 12 December in Baghdad. On the licensing round's second day Lukoil and Statoil secured the winning bid on the gigantic West Qurna 2 field.

A total of four bids were delivered for the West Qurna 2 field in the southern part of Iraq. Lukoil and Statoil, with Lukoil as lead bidder, proved to be the most competitive consortia. 10 oil fields were included in this licensing round.

Based on thorough analysis and an optimised development plan for the field, Lukoil and Statoil were able to bid a production plateau of 1.8 million barrels per day and a remuneration fee of 1.15 dollars per barrel.

"We are proud to win together with Lukoil in this strong competition and look forward to work with Iraq to increase their production, to the benefit of both the Iraqi people and the companies. We have worked with Iraqi authorities for more than five years, doing joint field studies and training of Iraqi personnel, and consider this an important milestone. Our focus now is to establish the organisation needed to develop this project in a responsible and safe manner," says Torgeir Kydland, senior vice president for Eurasia, Middle East and Asia in Statoil.

The security situation in Iraq is still demanding. There has been improvement over the last couple of years, but an increased number of incidents in the run up to the Iraqi election in March 2010 should be expected.

Security for personnel will always be main priority. The security situation has been evaluated thoroughly and adequate security measures to be able to handle the situation are prepared.

Lukoil and Statoil are bidding on West Qurna 2 with shares of 85% and 15% respectively. The consortium will be joined by an Iraqi state partner with 25% interest, bringing Lukoil and Statoil shares to 63.75% and 11.25% respectively.

UPDATE 1-BP says Lukoil buys out stake in CPC pipeline JVhttp://uk.reuters.com/article/idUKGEE5BA27N20091211

Fri Dec 11, 2009 6:19pm GMT

* Russian oil company buys BP stake for $1.6 bln cash

* BP divests all interest in Caspian Pipeline Consortium (Writes through, adds detail)

LONDON, Dec 11 (Reuters) - British oil company BP (BP.L: Quote, Profile, Research) said on Friday it had sold its stake in Lukarco, which has a minority stake in the Caspian Pipeline Consortium, to its joint venture partner, Russia's Lukoil (LKOH.MM: Quote, Profile, Research), for $1.6 billion in cash.

It added that a $43 million loan from BP to Lukarco, which owns a 5 percent share in TengizChevroil and a 12.5 percent interest in the Caspian Pipeline Consortium, will also be repaid.

The oil group said it no longer has a interest Kazakhstan's Tengiz oil field and the pipeline consortium, which carries oil between Kazakhstan and Russia.

Lukoil, which already owns 54 percent of Lukarco, had previously said it would buy BP's shares following approval from Kazakhstan. [ID:nL6391947] (Reporting by Lorraine Turner; Editing by David Holmes)

The Financial: LUKOIL Becomes Owner Of 100 Per Cent Of LUKARCOhttp://finchannel.com/index.php?option=com_search&Itemid=18&searchword=LUKOIL&submit=Search&searchphrase=exact&ordering=newest

12/12/2009 12:00 (2 Day 00:42 minutes ago)

The FINANCIAL -- LUKOIL bought out a 46 per cent stake in the LUKARCO B.V. joint venture from British Petroleum on December 11.

Thus, LUKOIL has become owner of a 100 per cent stake in LUKARCO B.V.

According to LUKOIL , the transaction amount came to USD 1.6 billion, which will be paid in cash in three installments over the next two years.

LUKARCO B.V. owns a 5 per cent share in TengizChevroil (TCO), a joint venture which develops the Tengiz and Korolevskoye fields in Kazakhstan. The TCO’s proved reserves as of the end of 2008 are estimated at 4.4 billion barrels of oil and 5.6 billion cubic feet of gas. The current TCO production level is about 600,000 barrels a day.

LUKARCO B.V. also owns a 12.5 per cent share in the Caspian Pipeline Consortium (CPC) carrying oil from Kazakhstani and Russian oil fields to the Novorossisk terminal. At present, CPC has the capacity to carry up to 28.2 million tons a year and ultimately the throughput capacity is expected to reach 67 million tons a year.

‘Consolidation of LUKARCO B.V. assets will strengthen LUKOIL positions, particularly in Kazakhstan, and generally in the Caspian Sea region’, Vagit Alekperov, OAO LUKOIL President, said.  

Mon Dec 14, 2009 12:38pm IST

http://in.reuters.com/article/oilRpt/idINLDE5BD07M20091214

Reuters: TRUD - Russian oil company LUKOIL's (LKOH.MM: Quote, Profile, Research), which owns Bulgaria's sole refinery Neftochim, plans to invest $250 million in the plant in 2010, Lukoil's First Vice President Vladimir Nekrasov said in an interview.

OilVoice: Kentz Awarded Sakhalin 1 Contract by Exxon Neftegashttp://www.oilvoice.com/n/Kentz_Awarded_Sakhalin_1_Contract_by_Exxon_Neftegas/216463326.aspx

13 December 2009Kentz Corporation Limited, the holding company of the Kentz engineering and construction group, announces the award of a shutdown services and operations support contract with Exxon Neftegas Ltd, within the Sakhalin 1 development project, through its Russian joint venture operating company Kentz DEM LLC.

The contract is worth approximately US$25 million and includes the provision of all personnel, permits, equipment, transportation and front end execution planning, as well as the management of contractor and subcontractor resources. This project falls under Kentz's technical support services global business unit and the shutdown is scheduled to take place during the third quarter of next year.

Kentz DEM LLC is a Sakhalin based company comprising of Kentz Russia LLC and DalelectroMontazh (DEM) - a leading Sakhalin based engineering and construction services company for the oil and gas industry. The venture is supported by key resources and systems from the Maintenance & Shutdown division ofKentz's operation in South Africa. Kentz and DEM first cooperated together in 2004 under a strategic partnership agreement before officially incorporating their joint venture in 2008.

Hugh O'Donnell, chief executive of Kentz, said:'We are delighted to be working with Exxon Neftegas on the first major shutdown associated with this development. We now look forward to delivering a high quality, solution driven service which will draw on Kentz DEM's wide range of skills and experience. We are also pleased with the continued growth in our successful technical services business unit.'

Gazprom

Bloomberg: Dubai Shows No Guarantee Gazprom Debt Backed by State (Update1)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aATsAnjWocco

By Ben Sills, Shelley Smith and Laura Cochrane

Dec. 14 (Bloomberg) -- Norval Loftus left the meeting with Dubai officials in London on Oct. 27 believing the bonds he held from state-controlled property developer Nakheel PJSC were backed by the government.

“People were asking about Nakheel and getting a yes answer,” said Loftus, the head of convertible and Islamic bonds at Matrix Group in London, which manages $2.5 billion of assets. Now the securities are down more than 50 percent from their peak as Nakheel’s parent Dubai World seeks to reschedule $3.52 billion of principal that’s due today.

Nakheel’s debt restructuring, and Dubai’s refusal to guarantee timely repayment, is prompting investors from Mexico to South Korea to demand higher premiums for state-run company debt.

The extra yield, or spread, investors require to hold the bonds of Moscow-based OAO Gazprom, the world’s biggest natural gas producer, Mexico City-based Petroleos Mexicanos and Korea Electric Power Corp. rather than debt of their governments increased after Dubai said Nov. 25 that state-owned Dubai World would seek a “standstill” agreement from creditors.

The spread on quasi-sovereign emerging-market debt rose to an 11 week high of 3.98 percentage points over U.S. treasuries on Nov. 30, compared with 3.30 percentage points for all developing-nation debt, according to JPMorgan Chase & Co. indexes. The gap on quasi-sovereign debt was at 3.79 percentage points on Dec. 9, compared with 3.02 percent for emerging-market government debt on Dec. 11.

‘Repricing’

“There will be a repricing of some of those quasi- sovereigns,” said Beat Siegenthaler, London-based chief emerging markets strategist at TD Securities Ltd. “Dubai certainly has shown that unless there is a clear legal link one shouldn’t assume sovereigns will always be there in times of trouble.”

Dubai World began talks last month with banks to restructure $26 billion of debt as the government said it hasn’t guaranteed the securities. Nakheel, which is building the man- made palm-shaped islands off the Emirate’s coast, lost 13.4 billion dirhams ($3.65 billion) in the first half of this year as property prices tumbled, according to company filings.

Nakheel’s bond rose to as high as 54 cents on the dollar Dec. 11 after dropping to as low as 45 cents two days earlier as analysts said the developer may seek to avoid default by repaying holders up to 70 cents on the dollar and issuing new securities. Such an outcome “would be beneficial for both parties,” EFG-Hermes Holding SAE’s Dubai-based strategist Fahd Iqbal wrote in a research report.

More Cases

Dubai World’s restructuring talks prompted ratings downgrades by Moody’s Investors Service and Standard & Poor’s of state-run companies.

“We are going to see more and more cases where companies which investors expected governments to support will fail,” said Pierre Cailleteau, managing director of the global sovereign risk group at Moody’s in London. “In some cases there will be support and sometimes there will not.”

The yield spreads of Gazprom and Pemex, which said it may seek $8 billion to $10 billion of financing next year, may widen further as the public finances in Russia and Mexico deteriorate, Cailleteau said.

Russia has “less room for error” on fiscal and monetary policy because its foreign-exchange reserves will decline, Moody’s said in an Oct. 15 report. The agency kept a stable outlook on the country’s Baa1 rating. Fitch Ratings reduced Mexico’s last month to BBB from BBB+ as lower revenue from the state-owned oil company widened the budget deficit.

Spreads

The spread between yields on Pemex’s 5.75 percent dollar- denominated bonds due 2018 and Mexico’s 5.95 percent dollar bonds maturing in 2019 reached a seven-week high of 73 basis points on Dec. 10, up from 56 basis points on Nov. 24, according to Bloomberg composite bond pricing.

Gaps between yields on Gazprom’s 8.146 percent dollar- denominated bonds due 2018 and Russia’s eurobonds due the same year jumped to near a month-high of 226 basis points on Dec. 1 and traded at 187 basis points on Dec. 11, almost unchanged from Nov. 24, before Dubai World’s “standstill” request.

The spread between yields on Korea Electric Power’s 5.5 percent dollar-denominated bonds due 2014 and Korea’s 4.875 percent dollar bonds maturing 2014 reached 70 basis points, the highest in more than four months, on Dec. 4, from 40 basis points on Nov. 24, according to Royal Bank of Scotland prices on Bloomberg. A basis point is 0.01 percentage point.

Differentiation

“You’re going to see an increasing differentiation on the basis of standalone fundamentals,” said Viktor Hjort, a Hong Kong-based credit strategist for Morgan Stanley. “Many of the Korean issuers actually have reasonably strong fundamentals; others are extremely weak.”

Kepco merits a BBB- rating, four levels below its single A rating, without government support, said Brayan Lai, a credit analyst at Calyon, the investment banking arm of Credit Agricole SA, in Hong Kong.

“Kepco looks a very marginal investment-grade rating as a standalone company,” he said.

An official at Kepco’s treasury department who declined to be identified said the company’s debt wasn’t explicitly guaranteed by the government. An official at South Korea’s Ministry of Strategy and Finance declined to comment.

A spokesman for Gazprom declined to comment Dec. 9. A Pemex spokesman in Mexico City didn’t respond to phone calls and e- mails requesting a comment.

Dubai Government

Dubai’s Department of Finance says investors had no reason to expect the government to back debt sold by state-controlled companies, known as GRE.

“The prospectus is quite clear that the Dubai government has no legal obligations in respect to GRE indebtedness,” Rupert Young, a spokesman at Brunswick Group LLP in Dubai, said on behalf of the department.

Investors such as Loftus heard a different message. In October, Dubai officials including Abdulrahman Al Saleh, director general of the Department of Finance, met investors in Hong Kong and London as the government promoted its first international bond sale since April 2008.

During the London presentation at Founders Hall, home to the city’s 600 year-old metalworkers’ guild, the officials told investors the company Nakheel was important to the Gulf hub and that Dubai had never defaulted in its history, according to two people who attended the meetings and asked not to be identified because it was private. The officials also said Nakheel’s bond repayment wouldn’t be a concern by Dec. 15, the day after the payment is due, the people said.

Important Companies

At an Oct. 22 lunch meeting in Hong Kong, investors also asked officials about support for Dubai World and Nakheel and were told “these companies are important to the Emirate,” according to Arthur Lau, a fund manager at JF Asset Management Ltd., who attended the event in the city’s Mandarin Oriental Hotel. He said he didn’t buy the bonds being marketed that day.

Dubai’s ruler, Sheikh Mohammed Bin Rashid Al Maktoum, also encouraged investors to believe the government would guarantee Nakheel’s debts, said Emmanuel Dubois-Pelerin, a credit analyst at S&P in Paris.

“I assure you we are alright,” Sheikh Mohammed told reporters Sept. 8, when they asked about the Nakheel repayment. The bond rose 9 percent to 102 cents on the dollar the next day, according to Citigroup Inc. prices.

To contact the reporters on this story: Ben Sills in Madrid at bsills@bloomberg.net; Shelley Smith in Hong Kong at ssmith118@bloomberg.net; Laura Cochrane in London at lcochrane3@bloomberg.net

Last Updated: December 13, 2009 21:37 EST

Upstreamonline: Gazprom licensed to operate Badrahttp://www.upstreamonline.com/live/article201589.ece

A Gazprom-led consortium has won the licence to operate the Badra oilfield in Iraq.

Upstream staff  Monday, 14 December, 2009, 06:04 GMT

Gazprom holds a 40% stake in the consortium, comprising 30% interest from Korean Gas (Kogas), 20% from Petronas and 20% from Turkish Petroleum Corporation, the Joogang Daily reported citing Korea’s Ministry of Knowledge Econcomy.

The Badra field is located in southeast of Iraq near the Iranian border and holds 800 million barrels of oil reserves, the Ministry said.

The consortium has reportedly pledged $1.5 billion to develop the field and lowered the asking price per barrel to $5.50 from $6 in a bid submitted during Iraq’s second licensing round.

Other than Badra, Kogas was also awarded as part of an Eni-led consortium, the licence for Zubair oilfield in Iraq.

Kogas’ share of production from Zubair stand at 200 million barrels from 2010 to 2030. Another 20 million barrels will come from the Badra oilfield from 2013 to 2030, according to estimates released by the Ministry.

Published: 14 December 2009  | Last updated:  14 December 2009

iStockAnalyst: Gazprom Neft Wins Tender for Iraq Mineral Fieldhttp://www.istockanalyst.com/article/viewiStockNews/articleid/3709195

Saturday, December 12, 2009 2:51 PM(Source: Daily News Bulletin; Moscow - English)MOSCOW. Dec 12 (Interfax) - A consortium comprised of Gazprom Neft, an oil subsidiary of the Russian gas monopoly Gazprom, Turkey's TPAO, South Korea's Kogas, and Malaysia's Petronas has won a tender to develop the Badra oil field in Iraq in the second licensing round, Boris Zilbermints, a Gazprom Neft deputy general director for exploration and production and a deputy board chairman, told Interfax.

The consortium offered to produce 170,000 barrels of oil a day at the field and asked for a bonus of $6 per barrel for extra production. The bonus limit offered by the Iraqi Petroleum Ministry, however, was $5.5 per barrel. The investor accepted the proposal and was declared the winner.

There were no other bidders in the tender.

Gazprom Neft holds 40% in the consortium, TPAO 10%, Kogas 30%, and Petronas 20%.

Zilbermints called the tender's terms and conditions "very good."

"Considering that all the previous tenders offered about $2 per barrel of extra production, our $5.5 is a very good result," he said.

Gazprom Neft is already an international company, which produces oil in Serbia and controls Serbia's NIS, Zilbermints said. "The victory in the Iraqi tender for the Badra field means that the company is entering the Middle East," he said.

Gazprom Neft is also negotiating with the National Iranian Oil Company NIOC on working in that country, and the Badra field is located close to the Iranian field on which the company would like to work, he said.

It was reported earlier that Gazprom Neft and NIOC had signed a memorandum on mutual understanding, which reflects the companies' plans to cooperate in developing the Azar and Shangule oil fields in Iran.

(c) 2009 Daily News Bulletin; Moscow - English. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.

OilVoice: Eni and Gazprom Celebrate 40 Years of Co-operationhttp://www.oilvoice.com/n/Eni_and_Gazprom_Celebrate_40_Years_of_Cooperation/4ec6ab4c1.aspx

13 December 2009Last week Eni and Gazprom celebrated the 40th anniversary of their co-operation, which dates back to the first contract between the former Soviet Union and Italy for the supply of natural gas signed in December 1969.

The relationship between Eni and Gazprom over the last 40 years has been characterized by mutual trust and several successful industrial achievements, including the construction of the Blue Stream gas pipeline which connects Russia to Turkey. This long standing relationship culminated in the broad strategic alliance signed in Moscow in November 2006.

This historic agreement sees Eni and Gazprom jointly committed to the realization of projects across the entire gas value chain and has allowed Eni to enter the Russian upstream sector through the SeverEnergia joint venture, the first Italian-Russian E&P company.

The strength of the relationship between Eni and Gazprom significantly contributes to guaranteeing the security of gas supply to Europe and Italy. In light of this, the two companies are currently studying a new large project, the South Stream, which will bring gas from Russia through the Black Sea.

The South Stream project represents the latest collaborative step, in accordance with the strategy of relationships launched in the 50s by Enrico Mattei, who initially signed the first oil contract with the Soviet Union in 1958.

Through the development and strengthening of the strategic alliance with Gazprom, the first class producer of gas, Eni intends to consolidate its leadership in the European gas market.

Brunei fm: GAZPROM, UZBEKISTAN COORDINATE GAS TRANSIT, DELIVERY TERMShttp://world.brunei.fm/2009/12/13/gazprom-uzbekistan-coordinate-gas-transit-delivery-terms/

MOSCOW, Dec 13 (NNN-QNA) — Russian gas giant Gazprom and Uzbekistan?s Uztransgaz have signed a gas transit contract addition and specified terms of Uzbek gas deliveries in 2010. Gazprom and UzbekNefteGaz signed a strategic cooperation agreement in 2002.

The deal stipulates long-term acquisition of Uzbek gas in 2003-2012, Gazprom?s participation in natural gas mining in Uzbekistan on production sharing terms, and cooperation in the development of Uzbek pipelines and transportation of Central Asian gas via Uzbekistan, Prime Tass reported.

In 2005 Gazprom and Uztransgaz, a subsidiary of UzbekNefteGaz, signed an agreement on gas transportation across Uzbekistan in 2006-2010.

The deal was about the delivery of Central Asian, primarily Turkmen gas, through the Central Asia ? Center and Bukhara ? Urals pipelines.

On Jan 1, 2009, Gazprom coordinated terms of gas deliveries from Uzbekistan in 2009 and signed an addition to the contract on Uzbek gas deliveries, which enacted the pricing formula based on median European gas prices.

New Europe: Gazprom eyes Iran-Pakistan-India pipeline

http://www.neurope.eu/articles/Gazprom-eyes-IranPakistanIndia-pipeline/98044.php

13 December 2009 - Issue : 864

Russian gas monopoly Gazprom officials scheduled a meeting with the members of the Iran-Pakistan-India (IPI) pipeline for January, news agencies reported. Tehran has lobbied for the IPI pipeline to deliver natural gas from its offshore Shah Deniz field to customers in Pakistan and India. Tehran and Islamabad signed agreements on the project earlier this year, and New Delhi has warmed to IPI in recent weeks.Abubakir Shamuzov, the Gazprom representative to Iran, said the Russian gas monopoly was paying close attention to projects like IPI, the Tehran Times reports. “As a major gas producer and supplier, Gazprom pays special attention to the development projects which are being implemented in the southern Asia,” he said.Gazprom expressed interest in a possible role in IPI during meetings with the Iranian oil minister last week, the report added. Iranian executives with the National Iranian Oil Company said delegates would discuss IPI again during a summit in January in Iran. Tehran said it encouraged New Delhi to take part in the meeting.