Russia 101115

Basic Political Developments Russian consul meets with alleged spy in Georgia - Georgia has allowed a

Russian diplomatic official to meet with one of the Russian nationals in custody awaiting trial on spying charges, Georgian Deputy Foreign Minister Nino Kalandadze said on Monday.

Georgia should sell section of Armenia-Russia gas pipeline to Yerevan, MP says - If Georgia really considers Armenia a friendly state, it should sell section of Armenia-Russia gas pipeline, passing through its territory, to Yerevan, Shirak Torosyan, head of Javakhk union, Republican party MP told NEWS.am.

RF president to attend Third Caspian Summit in Baku - Russian President Dmitry Medvedev on November 18 will take part in the Third Caspian Summit that will be held in Baku with the participation of the heads of the five Caspian littoral states - Russia, Azerbaijan, Iran, Kazakhstan and Turkmenistan, the Kremlin press service reported.

President Serzh Sargsyan will conduct a working visit to Moscow - On November 16, President Serzh Sargsyan will conduct a two-day working visit to Moscow. The program of the visit includes Armenian-Russian bilateral contacts, as well as President Serzh Sargsyan’s participation at the event dedicated to the 10th anniversary of the Union of Armenians of Russia, the All-Russian non-governmental organization.

APEC summit due to be held on Russky Island in Vladivostok on Sept 8-9, 2012 Japan’s reaction to Russian offer concerning peace treaty cautious - Japan’s

reaction to Russian president’ s offer to change the approach to a peace treaty and prioritise the economy instead of the territorial dispute has been cautious so far.

Lebanon premier to focus on economic cooperation in Russia - The governmental delegation, which will accompany the Lebanese prime minister, will comprise the ministers of defence, foreign affairs, finance, justice and transport, a source in the Russian Embassy in Beirut said.

o Hariri to Discuss Tribunal, Arms with Russian Officials - Hariri, who beings a two-day visit to Moscow on Monday, is scheduled to meet Russian President Dmitry Medvedev, Prime Minister Vladimir Putin, and a number of officials.

o Tribunal, arms aid on Hariri's Russia agenda Haaretz: Are Russia-Israel ties really 'better than ever' under Lieberman? - The

foreign minister has devoted much of his energy to improving bilateral ties, which he says are 'better than ever,' but many senior officials aren't buying it. By Barak Ravid

Russian minister set for Kenya, Nigeria visit - Russian minister set for Kenya, Nigeria visit

o Russian Foreign Affairs Minister Sergey Lavrov plans official visit - During the visit, Lavrov will pay a courtesy call on President Mwai Kibaki on Tuesday and later hold bilateral talks with his counterpart, acting Foreign Affairs minister, Prof. George Saitoti. "The talks will focus on ways of enhancing bilateral cooperation between the two countries in

various fields including in the areas of trade, tourism, culture, transport and education," the statement said.

UPDATE 1-Bulgaria PM:trans-Balkan pipeline won't be built - The trans-Balkan pipeline aimed at taking Russian crude through Bulgarian territory to Greece will not be built due to environmental concerns, Bulgarian Prime Minister Boiko Borisov told the newspaper 24 Chasa daily.

o Talks on Russian Gas Prices for Bulgaria Imminent - Talks on gas prices between Bulgaria's "Bulgargaz" and the Russian energy giant "Gazprom" are happening as early as this week, according to the CEO of the Bulgarian Energy Holding (BEH), Maya Hristova.

o South Stream starts its procession in Europe – comments in Russian media (FOCUS News Agency)

o Putin Leaves Sofia With Pipeline Deal, Puppy Joint Communiqué of the Tenth Meeting of the Foreign Ministers of the People’s

Republic of China, the Russian Federation and the Republic of Indiao Russia, India, China to establish close contacts between innovation hubs -

Lavrovo Russia, China, India talk economy and securityo Russia, India, China call for resumption of six-way talkso Russia, India, China to develop energy cooperationo China, India, Russia begin trilateral talkso Trilateral RIC talks underwayo Russia, India, China FMs anxious about situation in Afghanistan

Meeting with Prime Minister of New Zealand John Key - Dmitry Medvedev and John Key made the decision to start drafting the agreement on free trade between Russia, Customs Union states and New Zealand.

o Russia, New Zealand begin free trade talks - Russian and New Zealand trade ministers met in Wellington earlier this year to kickstart the talks as New Zealand, the world's largest exporter of dairy products, seeks access to a new market for its products.

o Fonterra Welcomes Trade Negotiations With Russia, Belarus And Kazakhstan

Meeting with President of Chile Sebastian Pinera - The focus of the talks was on intensifying contacts in investment and energy and increasing the bilateral trade turnover. Following the meeting, the Russian-Chilean Partnership Agreement was signed in the presence of the two heads of state.

Rare Earths in Focus as China Cuts Sales - Russia and the United States are the most likely sources to help fill a shortage of rare earths as China cuts output of the minerals needed for electronics, wind turbines and smart bombs, an Australian academic said.

British military delegation to visit British WWI tombs in Murmansk Strong explosive device found in Makhachkala being defused 3 Militants Shot Dead in Dagestan Police officer Kiramutdin Gabiyev shot down at Khasavyurt hospital

Mansour meets Chechen president - Deputy Prime Minister '&' Minister of Presidential Affairs has received Ramzan Kadyrov, President of the Chechen Republic in Al-Wathba, Abu Dhabi.

Chechen spies said to have operated in Germany - Spies working for Chechen President Ramzan Kadyrov have been operating in Germany, trying to silence exiled dissidents, according to a report in the German magazine Der Spiegel on Saturday.

Station in Yuzhno-Sakhalinsk was evacuated due to bomb threat Yakutia prosecutor's aide killed in Altai Territory Victor Bout may be released this Friday - Sirisak Tiyapan points out that the Thai

court decision to extradite Bout to the United States expires this coming Friday. Two Russian astronauts to conduct spacewalk Russia's Proton-M takes U.S. telecoms satellite into orbit Russian space freighter to be 'buried' in Pacific UAC aims to control 16% of world market of frontline aircraft Mi-171 Helicopter of Ulan-Ude Aviation Plant production is included in amount

of 100 the best goods of Russia Russia may bid to host World Expo in 2020 PRESS DIGEST - Russia - Nov 15

o www.kommersant.ruo A branch of the United Russia political party in Tula expelled the mayor

of Tula from the party and threatened to dismiss her from her post as mayor, the paper writes.

o Around 500 journalists and activists gathered on Sunday in Moscow to demand a better investigation of the recent attack on journalist Oleg Kashin, the paper reports.

o Moscow's credit bank seized the bank accounts of indebted Capital Tour, one of Russia's biggest travel companies, leaving hundreds of tourists unable to fly out of the country last Friday, the paper writes.

o www.vedomosti.ruo Russia's VTB (VTBR.MM: Quote, Profile, Research) bank is in talks with

Czech PPF Group to buy Home Credit and Finance Bank for almost $2 billion, the daily writes.

o Russian state commission on radio frequencies will start testing a new generation of broadband mobile access NG1, the daily writes.

o www.ng.ruo Russian President Dmitry Medvedev may meet leaders of political parties

represented in parliament next week. Kremlin fears protests against rising utilities prices, the paper writes.

o www.trud.ruo 1.5 million Russians may lose their jobs in industrial sector due to the

economy's modernization, the paper says. Russian Press at a Glance, Monday, November 15, 2010

o Russian President Dmitry Medvedev and the Japanese prime minister met on Saturday on the sidelines of the APEC summit. Both leaders confirmed their readiness to develop economic,

cultural and political ties between the countries. Naoto Kan, who strongly protested Medvedev's visit to an island of the disputed Kuril archipelago earlier this month, said that the two nations must build mutual trust. Medvedev reportedly said that he would return to the island whenever he likes.(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant)

o Prime Minister Vladimir Putin returned from a trip to Sofia, Bulgaria, on Saturday with an agreement on the South Stream gas pipeline and a puppy given to him by his Bulgarian counterpart.(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

o Moscow seems to be reaching the final stage of its accession to the World Trade Organization. Russia, which is the only major economy still outside the global trade body, may join it by next fall. The results of Dmitry Medvedev’s meeting with Barack Obama in Yokohama indicate that the United States and EU are very likely to persuade Georgia, which remains the only obstacle on Russia’s way to the WTO, to change its mind.(Nezavisimaya Gazeta)

o The Russian Finance Ministry said the budged deficit of 2.1% of GDP (784 billion rubles), recorded as a result of the first ten months of 2010, was the lowest this year, and below the 2010 forecast of 5.3% of GDP. Budget incomes stood at 6.7 trillion rubles, while expenditures amounted to 7.5 trillion rubles in January-October. (Kommersant)

o Russia and the United States are the most likely sources to help fill a shortage of rare earths as China cuts output of the minerals needed for electronics, wind turbines and smart bombs.(The Moscow Times)

o Glavstroy, owned by Russian billionaire Oleg Deripaska, may build houses with a total area of 300,000 square meters in Venezuela’s capital Caracas in the next two years. The houses, designed for slum residents, are the company’s first foreign project. (Kommersant)

o The Russian Defense Ministry will officially announce the results of its tender to buy two foreign-built helicopter carriers for its Navy on Monday. The participants were not disclosed, but France’s DCNS, Spain’s Navantia, Germany’s TKMS and South Korea’ STX are thought to take part. The French shipbuilder is seen as the most likely winner.(Vedomosti)

o Russia may bid to host the Expo-2020, Deputy Minister of Industry and Trade Stanislav Naumov said.(Rossiiskaya Gazeta)

o Three rallies were held over the weekend in Moscow and its satellite city of Zhukovsky in support for Kommersant journalist Oleg Kashin and Khimki forest defender Konstantin Fetisov,

brutally beaten earlier this month.(The Moscow Times, Vremya Novostei, Kommersant)

o Three major sporting events that took place on Sunday were in the Russian media spotlight on Monday: Russia defended their title against Brazil in the finals of the world women's volleyball championship; Sebastian Vettel (Red Bull) clinched the Formula One 2010 Champion title from Fernando Alonso (Ferrari) with a little help from Russia’s Vitaly Petrov (Renault); and Zenit (St. Petersburg) won the Russian Premier League title.(Vremya Novostei, Kommersant, Rossiiskaya Gazeta)

Moscow press review for November 15, 2010o VEDOMOSTI:o "Plans to liberalize the Russian natural gas market and the principle of

equal profitability from contractual gas prices in Europe will lead to the extinction of the national nitrate fertilizer industry," 18 agrochemical companies wrote to Prime Minister Vladimir Putin in September. Officials heeded agrochemists. The Ministry of Industry and Trade has suggested giving 10-15% gas discounts to fertilizer producers and providing an opportunity for new producers to receive gas at favorable fixed prices, two officials told Vedomosti, but the decision is up to the government. ("Discount from the Ministry of Industry and Trade").

o Czech financial group Home Credit (owned by Peter Kellner's PPF Group) could sell its businesses in Belarus, Kazakhstan and Russia to the VTB Group (RTS: VTBR). The Czech group already has banks in Vietnam and China. It is going to develop business in India as well, a source from the PPF Group said. A banker close to the VTB management confirmed to Vedomosti that the company is in talks over the purchase of Home Credit and Finance Bank (RTS: HCFB) (HCF Bank), but said that no decision has been made yet. A financier cooperating with PPF Group said talks with VTB are under way and could end up in a deal. On Saturday a VTB spokesperson denied reports of both talks and a forthcoming deal, as did Milan Tomanek of PPF Group. ("Czech credit from VTB").

o Last week Metropol and Japanese financial group SBI Holdings signed in Tokyo a statement on completing the purchase by SBI of 50% in the capital of the United Investment Bank (Obibank, a Metropol Group company), Metropol owner Mikhail Slipenchuk told Vedomosti. SBI will become a co-owner of Obibank after the deal and receiving licenses from the Central Bank and the Federal Anti-monopoly Service. Obibank will become the first Russian-Japanese bank, Toyota Bank and Mizuho Corporate Bank, 100%-owned by foreign companies. The purpose of the deal negotiated by the parties in February is to implement and develop Internet-banking technologies that proved themselves well in Japan. ("Slipenchuk throws in Japanese net").

o KOMMERSANT:o The results of the federal budget spending in the first ten months of 2010

presented by the Finance Ministry showed this year's lowest current deficit

at 2.1% of GDP instead of the planned 5.3% GDP by the year-end. The ministry, however, is not in a big rush to change the unfulfilled forecast: reducing the expected profits and short funding of inflated state spending will soon enable it to report better than planned indicators of the 2010 state treasury. (Page 6, "Budget deficit is struggling to catch up with MinFin").

o Kommersant has learnt that MTS will buy Sistema Telecom from its controlling shareholder, AFK Sistema (RTS: AFKS). Until mid-2007 the company managed all AFK telecommunications assets, including those of MTS, currently it still owns all 'egg' trademarks. MTS will pay for them around $380 million. (Page 10, "MTS is holding on to eggs").

o Prosperity Capital Management plans to litigate with Mikhail Abyzov's RU-COM, which, according to the fund, withdrew assets from the Novosibirsk-based equipment maker, NPO Elsib (RTS: ELIB) (the fund owns 14% of its shares). RU-COM admits the sale of Elsib assets but reassures that it withdrew non-core assets. Prosperity Capital Management can challenge the deal successfully only if it proves that the buyer of these assets is affiliated to RU-COM. (Minority shareholders are fighting for Elsib).

o Oleg Deripaska's Glavstroy will build 300,000 square meters of homes within two years in Caracas for people relocated from old houses. This is the first foreign project for the company. Moscow developers were asked to help local slum residents by Russian Prime Minister Vladimir Putin after his April meeting with Venezuelan President Hugo Chavez. Yelena Baturina's Inteco also promised help in construction. (Page 9, "Oleg Deripaska will clear slums").

CORRUPTION WATCH: Russia finally launches investigation into Daimler kickbacks

Ivo Daalder: We are looking for a reset in the NATO-Russia relationship - U.S. Permanent Representative to NATO Ivo Daalder has given an interview to Interfax ahead of the NATO-Russia summit in Lisbon in which he speaks about the upcoming summit and other pressing issues, such conventional armed forces in Europe, Iran and Russia’s assistance to NATO in Afghanistan.

START TREATY o New START treaty discussed in Japan - “There is zero chance that we

can get back to the negotiating table any time soon on tactical nuclear weapons unless we get this treaty into force,” Gottemoeller said. “It will be a profound blow to the US-Russian relationship and will cause some difficulties in terns of advancing our national security agenda with the Russian Federation.”

o Clinton and Gates: Why the Senate should ratify New START - Before this session of Congress ends, we urge senators to approve an arms control treaty that would again allow U.S. inspectors access to Russian strategic sites and reduce the number of nuclear weapons held by both nations to a level not seen since the 1950s.

o Old Problems With New Start - The Senate shouldn't ratify the New Strategic Arms Reduction Treaty without guarantees that the administration will modernize weapons and improve missile defense. By R. JAMES WOOLSEY

o Russia Profile Weekly Experts Panel: Will Obama's Electoral Defeat Disrupt the Reset with Russia? - The Russian political class cringed last Wednesday morning on learning that U.S. President Barack Obama had suffered a humiliating political defeat in the mid-term elections, losing Democrat control in the House and barely hanging onto a razor-thin Democrat majority in the Senate. Russian leaders are worried over what the Republican political onslaught on Washington might mean for the fledgling reset in U.S.-Russian relations championed by the Obama administration.

o Medvedev Can Learn From Obama’s Errors - Moscow is worried over what the Republican revanche in Congress might mean for the “reset” in U.S.-Russian relations. The concern is not limited to foreign policy. President Dmitry Medvedev’s domestic political standing could be adversely affected if the reset goes south.

National Economic Trends Russia's official unemployment up first time in 8 months - ministry Russian banks have 547.1 bln rbs on CBR correspondent accounts on November

15. Kudrin Deputy Hits Narrow Tax Breaks - "We are again starting to move toward

one or another tax break," said Sergei Shatalov, the Finance Ministry's top tax official. "In my opinion, this is not a correct position, it is a wrong logic. But this is the logic that's very prominent today.

MinFin suggests delaying hike in unified social tax Over 30 credit institutions disappear Bad year for Russian farmers - Wheat production is forecast to fall this year by a

third to 41 million tons, while barley production will halve to 8 million tons. The worst crop losses were experienced in the Volga Federal District and the Central Federal District surrounding Moscow. Harvests in the North Caucasus Federal District and the Southern Federal District were about as large as last year.

Business, Energy or Environmental regulations or discussions AvtoVAZ, Rosneft and Severstal: Russian Equity Preview RTS Stock Exchange May Seek $400 Million in IPO, Kommersant Says Evraz enjoys rise in 9-month revenue EuroSibEnergo Seeks $1.5 Billion in Hong Kong IPO (Update2) Rusal Aluminum Sale Price to Rise in 4th Quarter, Deripaska Says VTB denies BNE report of Home Credit and Finance Bank purchase Russian Standard to finally raise a glass to Nemiroff deal Deputies May Liberalize Law On Illegal Entrepreneurship Russia's MTS to buy Sistema Telecom for $380 mln - paper Renault: How Investors Can Tap Into AvtoVAZ's Growth Story

Laser Zentrum Hannover adds two laser innovation centers in Russia Rosatom's Wind Power Plan - State nuclear corporation Rosatom is planning to

expand into wind power and will look for foreign partners to help build farms in the Balkans, Eastern Europe and Ukraine, its equipment head said.

Mongolia Uranium Dispute - Khan Resources has said it will use all available legal means, including international arbitration, to fight a decision by Mongolian authorities not to reinstate the Canadian miner’s licenses at the Dornod uranium deposit.

Sheremetyevo fuelling complex to be sold UTair posts stronger passenger transportation figures Yakutia Parliament Greenlights Alrosa's OJSC Bid - Yakutia's State Assembly

has approved amendments to regional legislation, which will allow Russian diamond giant Alrosa to pursue it aspiration to become an Open Joint Venture Company.

Activity in the Oil and Gas sector (including regulatory) Kommersant: South Stream outpaces Nabucco Lukoil to invest USD 1 billion to USD 2 billion in Bulgarian refinery Surgutneftegas reports 3Q10 RAS results TAIF May Use IPO to Fund $11 Billion Russian Refining Plan

Gazprom Gazprom expansion fuels hiring spree - Gazprom, the Russian state-controlled gas

group, is mounting an aggressive hiring spree that could see it recruit up to 600 staff in London as it seeks to expand its energy and commodities trading operations worldwide.

Gazprom May Hire 600 Workers as It Expands U.K. Unit, FT Says Gazprom Sells First Foreign Bond in 16 Months: Russia Credit Gazprom and the Bulgarian Energy Holding EAD have signed Shareholder

Agreement and Charter on the joint project company South Stream Bulgaria AD Hydrocarbon reserves discovered in Algeria by Gazprom and Sonatrach Sakhalin – Khabarovsk – Vladivostok GTS construction enters its final stage WorleyParsons awarded Shtokman FEED High-ranking Gazprom official beaten up in Moscow

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Full Text Articles

Basic Political Developments

Russian consul meets with alleged spy in Georgiahttp://en.rian.ru/russia/20101115/161341592.html

12:04 15/11/2010

TBILISI, November 15 (RIA Novosti) - Georgia has allowed a Russian diplomatic official to meet with one of the Russian nationals in custody awaiting trial on spying charges, Georgian Deputy Foreign Minister Nino Kalandadze said on Monday.

Russia previously asked Georgia via the Swiss embassy, which represents its interests in Tbilisi, to provide information on the detainees so as to properly identify them and establish their nationality.

As soon as the Russian side submits a request for a meeting with its other nationals in custody it will be granted, she said.

"These people are being charged with espionage, and in accordance with Georgian law they are to face Georgia justice," Kalandadze said.

The Georgian Foreign Ministry announced on November 5 it had arrested 15 people with alleged links to the Russian intelligence services. Two of them were released, while the others remain in custody.

Russia and Georgia fought a brief war in August 2008 over the former Georgian republic of South Ossetia, which was attacked by Georgian forces in an attempt to bring it back under central control.

Russia recognized South Ossetia and another former Georgian republic, Abkhazia, as independent states two weeks after the conflict. Georgia considers the two regions part of its sovereign territory.

Georgia should sell section of Armenia-Russia gas pipeline to Yerevan, MP sayshttp://news.am/eng/news/38108.html

November 15, 2010 | 12:25

If Georgia really considers Armenia a friendly state, it should sell section of Armenia-Russia gas pipeline, passing through its territory, to Yerevan, Shirak Torosyan, head of Javakhk union, Republican party MP told NEWS.am.

“If the pipeline is sold to not to Russian or Armenian but Azerbaijani company, taking into account principle of presumption of innocence, it is supposed to be just a business project that Azerbaijani want to realize. However, I doubt it,” he noted. In case the pipeline is sold to Azerbaijan, the country will try to pose obstacles to Armenia’s gas supply. “They will have problems with Russia as a supplier. If Georgian side creates additional problems for us and bears obstacles to our gas supply, it should be regarded as enmity of one country towards another,” he added.

State Oil Company of Azerbaijan intends to purchase section of the Armenia-Russia gas pipeline passing through Georgia’s territory. Company has already applied to the owner - Georgian gas company.

RF president to attend Third Caspian Summit in Baku

http://www.itar-tass.com/eng/level2.html?NewsID=15681071&PageNum=0

15.11.2010, 10.22

MOSCOW, November 15 (Itar-Tass) - Russian President Dmitry Medvedev on November 18 will take part in the Third Caspian Summit that will be held in Baku with the participation of the heads of the five Caspian littoral states - Russia, Azerbaijan, Iran, Kazakhstan and Turkmenistan, the Kremlin press service reported.

After the old Soviet Union split into fifteen nations, including Caspian Sea neighbours Azerbaijan, Turkmenistan and Kazakhstan, Iran has called for an equal division of the Caspian Sea among the five countries: Iran, Azerbaijan, Turkmenistan, Kazakhstan, and Russia. If this division does not come to pass, then Iran intends to recognizes only its old treaty (between Iran and Russia) and will challenge Russia to divide its 50 percent share among the three littoral states - Azerbaijan, Turkmenistan and Kazakhstan - over a more friendly position toward the West and the US, such as opening of US interest section in Tehran.

President Serzh Sargsyan will conduct a working visit to Moscowhttp://news.president.am/events/news/eng/?id=1303

13.11.2010On November 16, President Serzh Sargsyan will conduct a two-day working visit to Moscow.

The program of the visit includes Armenian-Russian bilateral contacts, as well as President Serzh Sargsyan’s participation at the event dedicated to the 10th anniversary of the Union of Armenians of Russia, the All-Russian non-governmental organization.

In Moscow, the President of Armenia, President of the Board of Trustees of the All-Armenian Hayastan Fund will also take part in the annual Gala Night of the Fund.

11/15 10:34   APEC summit due to be held on Russky Island in Vladivostok on Sept 8-9, 2012http://www.interfax.com/news.asp

Japan’s reaction to Russian offer concerning peace treaty cautious

http://www.itar-tass.com/eng/level2.html?NewsID=15680948&PageNum=0

15.11.2010, 08.37

TOKYO, November 15 (Itar-Tass) - Japan’s reaction to Russian president’ s offer to change the approach to a peace treaty and prioritise the economy instead of the territorial dispute has been cautious so far.

“We cannot simply say something like ‘yes, yes, or course’ to that,” Chief Cabinet Secretary Yoshito Sengoku told a news conference here on Monday. At the same time, he declined to give more concrete answers to journalists’ queries about the issue.

Informed sources say the Japanese government has begun work on reconsidering its stance on talks with Russia in the new situation following Russian President Dmitry Medvedev’s trip to the South Kuriles.

The Yomiuri newspaper, close to the influential conservative circles, writes that Prime Minister Naoto Kan must now look more seriously for ways to a breakthrough in the territorial dispute with Russia, basing on economic cooperation and technology transfer.

Russian Foreign Minister Sergei Lavrov reported earlier that at a meeting with Prime Minister Naoto Kan in Yokohama on November 13, Dmitry Medvedev had offered to change the approach the problem of a peace treaty between the countries.

“The president noted that it is better to refuse from emotional statements and diplomatic gestures, because they do not help the business, but to the contrary,” he said. “The president offered to change the approach to the problem of a peace treaty and to prioritize the economy,” Lavrov elaborated.

“The broader economic cooperation is, the more solid the foundations of the relations are,” the minister added.

“Business circles of both countries are interested in normal cooperation, while the task of the leaders is to encourage that in every way,” Lavrov stressed.

Lebanon premier to focus on economic cooperation in Russia

http://www.itar-tass.com/eng/level2.html?NewsID=15680972&PageNum=0

15.11.2010, 02.28

BEIRUT, November 15 (Itar-Tass) -- Lebanese Prime Minister Saad al-Din al-Hariri will arrive on an official visit in Moscow on Monday to discuss promising projects of economic cooperation.

The governmental delegation, which will accompany the Lebanese prime minister, will comprise the ministers of defence, foreign affairs, finance, justice and transport, a source in the Russian Embassy in Beirut said.

Upon results of the negotiations the sides are expected to sign a set of documents aimed at further development of bilateral cooperation. Before the visit the sides signed an agreement on the participation of the Russian Emergencies Ministry’s specialists in the humanitarian demining program in Lebanon.

Russia “plays an important role in the Middle East, because the country has many friends in the Arab world,” the Lebanese prime minister said before the departure for Moscow.

“It is very valuable for us that Russia takes with understanding the Arab position and can bring it to the international community,” he said. The Lebanese prime minister recalled that Russia promoted the peace process, which was launched at the Madrid Conference 20 years ago and is the co-sponsor of the Middle East settlement together with the United States.

“Moscow and Beirut established a perfect political dialogue and now we want to yield mutual economic benefits from close bilateral relations,” the Lebanese premier pointed out. He put it clearly that military-technical cooperation will be high on the agenda of forthcoming negotiations, particularly Russia’s assistance in rearming the Lebanese army. “We will keep discussing those proposals, which were made during a visit of President Michel Sulayman to Moscow,” al-Hariri said.

The premier praised highly Russia’s position on the U.N. Special Tribunal on Lebanon that was established in The Hague to pass a guilty verdict in the murder case of his father, a prominent politician and businessman Rafik al-Hariri, who was killed in an awful terrorist act in 2005. “Russia supported strongly the U.N. Special Tribunal for Lebanon from the very beginning and the need for bringing those guilty to justice. We are grateful to the Russian government for this approach, which meets fully the traditions laid down in our relations,” al-Hariri underlined.

“The two countries have launched Russian-Lebanese partnership to focus on the trade and economic cooperation,” Chairman of the Russian Federal Agency for Technical Regulation and Metrology Grigory Elkin told Itar-Tass earlier.

Elkin visited Lebanon as co-chairman of the intergovernmental cooperation commission at the end of October.

In his words, the sides had already mapped out promising spheres for the implementation of mutually beneficial projects, including those in the electricity generation, construction of gas pipelines, oil refining, and exploration of offshore deposits.

Among other priorities of bilateral cooperation Elkin named hydropower engineering, water supply and river development projects, as well as tourism, inter-bank relations and transport communications.

Sheikh Saad al-Hariri will visit Moscow for the first time as the head of the government. The 40-year-old leader of the Al-Mustaqbal (Future) public and political movement became the head of the national government a year ago. He is a son of the late Prime Minister Rafik al-Hariri, who deserves the major credit for the restoration of Lebanon after the 1975-1990 civil war.

Hariri to Discuss Tribunal, Arms with Russian Officialshttp://www.naharnet.com/domino/tn/newsdesk.nsf/0/829B9758ADE08557C22577DC002281EA?OpenDocument

Prime Minister Saad Hariri will discuss Monday with Russian officials the Special Tribunal for Lebanon and military assistance to the Lebanese army.Hariri, who beings a two-day visit to Moscow on Monday, is scheduled to meet Russian President Dmitry Medvedev, Prime Minister Vladimir Putin, and a number of officials.

The talks are also expected to tackle the latest regional and international developments, as well as ways to develop bilateral ties in various fields.

Lebanon and Russia will sign a number of agreements in the areas of military cooperation, justice, cultural and others.

Lebanon is also expected to sign a deal to receive military donation that was previously approved which includes 10 advanced military helicopters.

An-Nahar newspaper said Moscow is likely to reiterate its support for the STL and stress both that the Tribunal work is not politicized and the need to maintain calm and stability.

On the eve of his trip, Hariri stressed that "whatever the dangers, difficulties and problems in Lebanon … calm and constructive dialogue remain the only way to solve all dilemmas in the country."

Asked during an interview on Russia Today TV about ongoing tensions over the anticipated indictment, Hariri said that over the past five years, the March 14 camp had not contributed to aggravating tensions over the indictment or the tribunal, despite the fact that assassinations had targeted several March 14 politicians.

 

Tribunal, arms aid on Hariri's Russia agendahttp://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=2&article_id=121574#axzz15KZWumEN

PM says he is ready to discuss concerns over court ‘if calm and constructive dialogue is adopted’ By Elias Sakr Daily Star staffMonday, November 15, 2010

BEIRUT: Prime Minister Saad Hariri begins a two-day official visit to Moscow Monday to discuss Russian military assistance to the Lebanese Army and controversies over the Special Tribunal for Lebanon among other regional and international issues.

On the eve of his visit to hold talks with the Russian President Dmitry Medvedev and Prime Minister Vladimir Putin, Hariri said he would not succumb to threats in Lebanese politics but added that he was ready to participate in a sober dialogue to dispel concerns over the Special Tribunal for Lebanon (STL).

“No one can threaten me into meeting his demands. I disapprove of such logic and I do not give in to threats, but if calm and constructive dialogue is adopted, I am ready to debate,” Hariri said in an interview with Russia Today TV.

Hizbullah has called on the government to boycott investigations by the UN-backed tribunal and continues to pressure Hariri to renounce support for the court.

The prime minister added that the STL was a guarantee against the resumption of political assassinations.

Asked whether he was concerned about repercussions from the STL’s indictment, Hariri said he was more troubled by the presence of weapons throughout Lebanon.

Some analysts fear an indictment accusing Hizbullah individuals of involvement in the assassination of statesman Rafik Hariri could spark Sunni-Shiite tension that could lead to violence.

Hizbullah’s Loyalty to Resistance parliamentary bloc leader MP Mohammad Raad said Sunday his party would take “decisive and swift action” to protect the resistance and contain Sunni-Shiite tension or attempts to instigate conflict between the resistance and the Lebanese Army.

In some of sharpest remarks to come from a tribunal official yet, STL President Antonio Cassese described Hizbullah’s boycott of the tribunal as “a dangerous precedent” in obstructing justice and said such action would be addressed by the UN Security Council.

Maronite Patriarch Nasrallah Butros Sfeir said justice should be served irrespective of the repercussions. Criticizing Hizbullah, Sfeir said some parties sought to abolish the UN-backed tribunal.

The patriarch voiced concern over the possibility of renewed sectarian clashes similar to the May 7, 2008 events which pitted pro-Hizbullah militants against pro-government gunmen.

Cassese said only he, in cooperation with Prosecutor Daniel Bellemare, would decide upon the timing of the release of the indictment.

Hizbullah has accused the US of applying pressure for the swift release of the indictment and has called on Hariri’s government to refer the issue of “false witnesses” – witnesses it says gave false testimony –  to the Judicial Council to correct the course of investigations by the STL prior to the release of the indictment.

Hariri said Hizbullah’s accusations that Lebanese officials have stood behind witnesses who gave false statements to international investigators was impeding the course of Lebanese judicial investigations into the issue.

“We hope that discussions reach a solution that satisfies all parties as we all agreed to evaluate this issue in the Cabinet. In the meantime let the judiciary take its course and put false witnesses on trial,” Hariri said in reference to the March 8 coalition’s demand to refer the issue to the Judicial Council.

Hariri rejected the notion of stepping down, while highlighting “excellent Lebanese ties with Damascus.”

Syrian Foreign Minister Walid al-Moallem said over the weekend Syrian-Saudi cooperation was continuing to preserve stability in Lebanon, and called on parties interested in the country’s security to support Damascus and Riyadh’s efforts.

Progressive Socialist Party leader MP Walid Jumblatt, who watered down the possibility of a comprehensive regional settlement under the current circumstances, said Saudi-Syrian contacts did not exempt the Lebanese from assuming their responsibilities to preserve stability in Lebanon.

“There is no doubt that the situation in Lebanon is very sensitive and all political forces must be aware of the magnitude of dangers surrounding Lebanon and the region,” he told the Iranian News Agency.

Raad said Hizbullah have provided an opportunity for Saudi-Syrian contacts on the basis of protecting the resistance and rejecting any accusation against it. However, Raad said Hizbullah would not relinquish its commitment to the resistance and would challenge attempts to frame the party.

Published 01:33 15.11.10

Latest update 01:33 15.11.10

Are Russia-Israel ties really 'better than ever' under Lieberman?http://www.haaretz.com/print-edition/news/are-russia-israel-ties-really-better-than-ever-under-lieberman-1.324698

The foreign minister has devoted much of his energy to improving bilateral ties, which he says are 'better than ever,' but many senior officials aren't buying it.By Barak RavidLast Monday night a few hundred people filled the banquet hall of the Foreign Ministry in Jerusalem, for the highlight of a two-day conference marking 20 years of diplomatic relations between Israel and Russia. The project was Foreign Minister Avigdor Lieberman's "baby," and to market it to media outlets in both countries the ministry hired a private PR firm.Lieberman did his best to make the large Russian delegation, headed by the Speaker of the Russian Federation Council Sergey Mironov, feel at home. In his address, the foreign minister lavished compliments on Russia and on the quality of bilateral relations.

"The relationship is better than ever before," Lieberman said. "The time has come to move to the next level and upgrade relations even further."

Upgrading Israel-Russia relations has been a major goal of Lieberman's since his appointment as foreign minister in March 2009, and is even noted in the government coalition agreements. Lieberman has consolidated under his control all powers connected to relations with Russia, even receiving responsibility for Nativ - the Israeli agency that operates among Russian Jewish communities - from Prime Minister Benjamin Netanyahu in advance.

The sensitive nature of the Israeli-Russian relationship makes it a focus of disputes within the Mossad, the Foreign Ministry and the defense establishment. One camp views the bilateral relationship, despite its limitations, as an opportunity, and points at its steady improvement over the past decade. The other camp remains suspicious of the Russians and believes they cannot be trusted because they are insufficiently attentive to Israel's concerns.

Lieberman, for his part, advocates looking at glass as "two-thirds full, not one-third empty" when it comes to ties between the two nations. While acknowledging that Russia may be taking steps that may hurt Israel, he also points out the mutual visa waiver

agreement, which increased the number of Russian tourists coming to Israel from around 100,000 a year to an estimated 500,000 by the end of 2010.

Military ties are also improving. Last month the first cooperation agreement between the Israeli and Russian defense ministries was signed, during Defense Minister Ehud Barak's historic visit to Moscow. Israel Aerospace Industries inked a $400 million deal with Russia for the sale of unmanned aerial vehicles, while the Russian president canceled the planned sale to Iran of S-300 missiles, which if carried out would make a strike on Iran's nuclear facilities much more difficult.

Bilateral economic cooperation has also been revived over the past two years. For four years - most of them during Eli Yishai's term as minister of industry, trade and labor - the countries' joint economic committee did not convene. Since Lieberman was appointed foreign minister, the forum has met three times, with Vladimir Putin's First Deputy Prime Minister, Viktor Zubkov, tapped as chairman.

Senior Foreign Ministry officials in the pro-Russia camp see economic ties as the key to strengthing military and diplomatic relations between the two states. "The Russians don't only want to talk with us about Syrian missiles or Iran's nuclear program," one official said. "They want to strengthen their economy. They tell us, 'Increase your trade from $3 billion to $10 billion a year, and see how considerate we'll be on all other issues.'"

'A slap in the face'

That said, in the past two years Russia did several things that caused great frustration in Israel. While former Prime Minister Ehud Olmert returned Jerusalem's Sergei Courtyard to Moscow's control, and Netanyahu is erecting a monument to soldiers from the Red Army, according to some in the Foreign Ministry's doubters' camp the Russian response in certain cases resembled "a slap in the face."

One example can be seen with regard to Israel's near-total freeze of its military cooperation with Georgia in the past two years, in response to Moscow's request. Lieberman told Russian officials in private meetings, and recently in interviews as well, that Israel was suspending arms sales to Tbilisi indefinitely.

In Jerusalem, the expectation was that Russia would reciprocate by halting its own weapons deliveries to Syria. But just a few weeks ago Damascus received its first shipment of advanced Russian P-800 Yakhont (SS-N-26 ) anti-ship cruise missiles, despite harsh protests from Netanyahu and Barak. The Russians are supplying Syria with advanced anti-aircraft missiles as well, a combination of weapons that will hinder the operations of the Israeli Navy and the Israel Air Force, respectively.

Asleep at the switch

According to high-ranking Israeli diplomats and defense officials, Israel "fell asleep at the switch" when it came to the Yakhont deal, by only shifting into high gear to head off

the deal after it had already passed the point of no return. An even greater problem is that, even when it comes to arms sales, Russian economic interests trump all other considerations.

"Israel must understand that the only way to prevent the sale of advanced Russian weapons to Syria or Iran is simply to find another buyer," said one senior official involved in military relations with Moscow. "Diplomatic arguments won't work here."

In late September, Russia joined China and Arab states to support international monitoring of the Dimona nuclear reactor in Israel. Russia's decision to side against Israel in such a critical International Atomic Energy Agency vote further inflamed Jerusalem officials.

According to one senior Israeli official, "That vote showed exactly where the Russians stand when it comes to Israel's security." Lieberman, deeply disappointed by the move, called his Russian counterpart, Sergei Lavrov, for a talking-to.

To all this must be added Russia's position toward Hamas. Immediately after the organization's victory in the Palestinian Authority elections, Russia announced its intention to engage with the group, in violation of the position held by the Quartet on the Middle East. In May, Israel was shocked to discover that Russian President Dmitry Medvedev had met with Khaled Meshal, head of the Hamas political bureau, during a visit to Damascus. High-ranking officials in Jerusalem were furious, and today even the Russians admit that the meeting was a major misstep.

"There is no symmetry in the relationship," a senior Foreign Ministry figure admits. "Is anyone surprised that we have a greater interest in the partnership than the Russians?"

In private conversations, Lieberman claims that he has no illusions and is not burying his head in the sand. "There are things I'm not happy about, but they were known in advance and the Russians never deceived me," he said.

One astonishing discovery, though, is the amount of energy Lieberman has expended to keep the lid on disagreements with Russia. The foreign minister, who over the past 18 months has employed what could be called "megaphone diplomacy" vis-a-vis Turkey, Sweden, Norway and even the United States, has carefully avoided any public, or publicized, confrontation with the Russians. When he finally did denounce Moscow, he did so with uncharacteristic softness.

But a little over a week ago, as he was playing host in his Jerusalem offices to a visiting group of senior Russian journalists, Lieberman's Teflon coating when it comes to Russia was scratched slightly. "What can Russia and the Quartet do to promote peace?" they asked. His answer shocked them to the core: "I expect the Quartet to leave us alone and to forget that we exist. They would be better off dealing with Iraq or the Caucasus."

His remarks were published in the Russian media, and Lavrov was asked to issue a response the following day. "I don't think that is a productive or realistic proposal," Lavrov told a news conference in Moscow. "We are arranging for a meeting of the Quartet leaders, and that is more important than all sorts of calls to leave the Israeli and the Palestinians alone."

The high-profile dispute was barely covered in Israel. After all, when compared to a confrontation between Netanyahu and U.S. President Barack Obama, Israel's relations with Russia do not look like the biggest problem on the foreign-policy agenda.

Russian minister set for Kenya, Nigeria visit http://www.nation.co.ke/News/africa/Russian%20minister%20set%20for%20Kenya,%20Nigeria%20visit%20/-/1066/1053532/-/14r8rlv/-/

By NATION ReporterPosted Sunday, November 14 2010 at 19:11

Russian Foreign minister Sergey Lavrov arrives in Nairobi on Monday in the most high profile visit of an official of the oil-rich nation to Kenya.

Mr Lavrov is on a three-day visit to Africa that also takes him to Nigeria. In Kenya, Mr Lavrov, will meet President Kibaki and the Minister for Foreign Affairs, Professor George Saitoti.

Briefing the Nation on the visit, an official of the Russian embassy said that Kenya had a very important geostrategic location and pursues an active policy in facilitating settlement of conflicts.

Russia and Kenya have traditionally enjoyed warm and friendly ties, and Russia was among the first countries that established diplomatic relations with Kenya when it got independence.

At the bilateral level prof Saitoti and Mr Lavrov will discuss perspectives of boosting trade between Russia and Kenya, cooperation in infrastructure projects especially construction and modernization of railways, exploration of natural deposits and their development.

The Parties will also discuss enhancing cultural ties, cooperation in the sphere of tourism and personnel training.

Mr Lavrov will also visit the UN Complex in Gigiri besides holding a press conference with Prof Saitoti.

Mr Lavrov’s visit is the first time a high ranking official of the Russian Federation undertakes a visit to Kenya.

Russian Foreign Affairs MinisterSergey Lavrov plans official visithttp://www.coastweek.com/3346_russia.htm

November 12 - 18, 2010

TALKS WILL FOCUS ON WAYS OF ENHANCING BILATERALCO-OPERATION IN VARIOUS FIELDS INCLUDING TRADE,TOURISM, CULTURE, TRANSPORT AND EDUCATION.

NAIROBI (Xinhua) -- Russian Foreign Affairs Minister Sergey Lavrov is due in Kenya on Monday for a three-day official visit to boost bilateral ties between the two countries, foreign ministry said on Saturday.

The Nov. 15-17 visit is part of his two African nation’s tour that will also take him to Nigeria.

This will be the first visit to Kenya by a Russian minister for Foreign Affairs.

"The minister will arrive in Nairobi on the evening of Monday and will be accompanied by senior government officials from the Russian government," a statement from Kenya’s foreign ministry said.

During the visit, Lavrov will pay a courtesy call on President Mwai Kibaki on Tuesday and later hold bilateral talks with his counterpart, acting Foreign Affairs minister, Prof. George Saitoti.

"The talks will focus on ways of enhancing bilateral cooperation between the two countries in various fields including in the areas of trade, tourism, culture, transport and education," the statement said.

The statement said the two ministers will also exchange views on a wide range of regional and international issues of mutual interest.

Kenya and Russia continue to hold similar positions on many key issues of international concern.

The ministers will conclude the bilateral talks with the signing of a Memorandum of understanding on Cooperation between the Diplomatic Academy of the Ministry of Foreign Affairs of the Russian Federation and the Foreign Service Institute of the Ministry of Foreign Affairs of Kenya.

The two ministries will also commence negotiations on the pending trade agreements and the agreement on cooperation in the field of tourism.

An Agreement on Cooperation in Cultural Exchange between the National Museum of Kenya and the Institute of the Russian Academy of Sciences, Peter the Great museum of Anthropology and Ethnography of Russia is also expected to be signed by the respective Directors.

Lavrov’s visit will also include a familiarization tour of the United Nations Office in Nairobi, where he will meet with Achim Steiner, the Director General of the United Nations Office in Nairobi and Executive Director of UNEP.

Lavrov’s visit to Kenya follows a similar one to Russia by the then Minister for Foreign Affairs of Kenya, Moses Wetang’ula in 2008.

The continued exchange of high level contacts reaffirms the commitment by the two countries to further strengthen the bonds of friendship and cooperation between them.

One of the areas that Kenya has benefited greatly from Russia is in the field of education.

Over 1,000 Kenyans have studied in Russian institutions of higher learning, mainly in scientific fields where Russian tertiary institutions are internationally acclaimed.

At present, the Russian Government offers 30 scholarships to Kenyan students per year.

Kenya and Russia established diplomatic ties immediately after Kenya gained independence.

UPDATE 1-Bulgaria PM:trans-Balkan pipeline won't be builthttp://af.reuters.com/article/energyOilNews/idAFLDE6AE06X20101115

Mon Nov 15, 2010 7:45am GMT

SOFIA Nov 15 (Reuters) - The trans-Balkan pipeline aimed at taking Russian crude through Bulgarian territory to Greece will not be built due to environmental concerns, Bulgarian Prime Minister Boiko Borisov told the newspaper 24 Chasa daily.

In an interview published on Monday, Borisov said the project will not be carried out.

"Yes (Burgas-Alexandroupolis stops)," he said.

Borisov has repeatedly said Bulgaria would most likely abandon the 300-km pipeline from the Black Sea port of Burgas to Alexandroupolis on the Aegean Sea over environmental risks and a lack of adequate economic benefits. Last week, Sofia rejected the environmental impact assessment of the project, saying it did not give details how a

possible oil spill would affect fishing and tourism and the measures to counter any such spills did not guarantee they would not cause irreversible damage to the environment and the bay. [ID:nLDE6A81Z6]

In 2007, Bulgaria agreed with Russia and Greece to build the pipeline to bypass the traffic-clogged Bosphorus Straits, but the new centre-right cabinet put on review the project to see if it matched national interests and was environment-friendly.

The three countries set a joint venture company for the project - Trans-Balkan Pipeline, in which Moscow holds 51 percent, while Sofia and Athens have 24.5 percent each.

The previous cabinet has largely ignored concerns and stressed that the oil link, estimated to cost over 1.0 billion euros ($1.37 billion) and pump up to 50 million tonnes of crude a year, was of strategic importance and would bring Bulgaria closer to becoming a major energy hub.

However, Borisov has also said that the project was not economically viable for the European Union poorest member, which would receive only transit fees from the link.

The residents of Burgas and nearby Black Sea resort towns have held a series of protests opposing the project, which they fear may cause serious environmental damage to the coast and scare away holiday makers, their main livelihood.

(Reporting by Irina Ivanova)

Talks on Russian Gas Prices for Bulgaria Imminenthttp://www.novinite.com/view_news.php?id=122165

Energy | November 15, 2010, Monday

Talks on gas prices between Bulgaria's "Bulgargaz" and the Russian energy giant "Gazprom" are happening as early as this week, according to the CEO of the Bulgarian Energy Holding (BEH), Maya Hristova.

On November 13, Hristova and the "Gazprom" CEO, Alexey Miller, signed an agreement for the establishment of a joint company for the construction of the Bulgaria section of the Russian South Stream gas line. The signing took part in Sofia after a meeting between Bulgarian Prime Minister, Boyko Borisov, and his Russian counterpart, Vladimir Putin.

On Sunday, Borisov stated the price of Russian gas is going down and the trend was to continue.

In the eve of Putin's visit, Russian media reported the price of natural gas for Bulgaria might drop by 5% to 7%.

On Monday, Hristova assuaged fears Bulgaria would lose EU funding for the construction of gas connections with neighboring Greece and Romania.

"We are within the deadline. The European Commission sent us official notification that we are approved for such funding," the BEH CEO explained, adding a joint company for the connection with Greece would be established before the end of the year between BEH and the "Poseidon" company where the Greek "DEPA" and the Italian "Edison" have shares.

Hristova rejected reports Miller had stated "Gazprom" is ready to provide the initial financing of "South Stream."

South Stream starts its procession in Europe – comments in Russian media (FOCUS News Agency) http://www.focus-fen.net/index.php?id=n235239

14 November 2010 | 13:13 | FOCUS News AgencyHome / WorldMoscow. The South Stream agreement between Gazprom and Bulgarian Energy Holding, economic issues in Russian Prime Minister Vladimir Putin’s visit to Bulgaria, and the Bulgarian shepherd dog PM Boyko Borisov gave Putin as a present are among the main topics in the Russian media.Russian Prime Minister Vladimir Putin has managed to draw Bulgaria and Russia closer, Russian Komsomolskaya Pravda daily writes.After the collapse of the USSR the relations of the Eastern European country, which was considered Russia’s first ally for a long time, with Russia cooled off and now with the efforts of the Russian foreign policy the country is again returning to the central street. One of the reasons for the enhanced bilateral cooperation is South Stream gas pipeline project, the newspaper says.Bulgaria steps on the gas, writes Russian Argumenty i Fakty news website.It notes that Gazprom and Bulgarian Energy Holding signed documents to set up the joint stock company South Stream Bulgaria AD, which will deal with the technical and economic justification of the construction and operation of the Bulgarian section of the gas pipeline. The official registration of the company will be finished by the end of November.The news website says that Bulgaria’s participation in the project had long been uncertain and adds that in 2009 Russia held talks with Romania to replace mistrusting Bulgaria.Argumenty i Fakty pays attention also to the possibility to build Russian vessels in Bulgaria and for Bulgarian construction companies to take part in the building of the facilities for the Winter Olympic Games in Sochi in 2014.Russian Prime Minister Vladimir Putin paid a working visit to Bulgaria. After the talks Gazprom and Bulgarian Energy Holding signed an agreement on South Stream gas pipeline. The Russian prime minister presented his Bulgarian counterpart Boyko Borisov with the final figures of the construction of Belene nuclear power plant. However,

Borisov’s friendly gesture seemed to be not less symbolic – he gave Vladimir Putin a Bulgarian shepherd dog named Yorgo as a present, ANN reports.The Russian prime minister seemed to have liked the gift. He accepted the dog with a warm smile, cuddled him, and kissed him several times on the head.Yorgo was born in the Bulgarian prime minister’s breeding farm. Borisov expressed hope that this typically Bulgarian breed will bring joy to his Russian counterpart.Bulgaria hopes to get a reply from Russia about the gas price soon, said Bulgarian Prime Minister Boyko Borisov after the end of the talks with his Russian counterpart Vladimir Putin, the Echo of Moscow radio station reports.Putin answered that the gas price issues should be raised before the respective economic subjects. He highlighted that the Russian gas price was not determined by the government or Gazprom, but it depended on the international oil prices.

Putin Leaves Sofia With Pipeline Deal, Puppy http://www.themoscowtimes.com/business/article/putin-leaves-sofia-with-pipeline-deal-puppy/422969.html

15 November 2010By Irina Filatova

Prime Minister Vladimir Putin returned from a trip to Sofia, Bulgaria, on Saturday with an agreement on starting construction of the South Stream gas pipeline and a puppy from his Bulgarian counterpart.

Gazprom and Bulgarian Energy Holding signed an agreement on forming a 50-50 joint venture that will build and operate the stretch of the pipeline running though Bulgaria. The venture will be registered in Bulgaria by the end of the month.

“As far as Bulgaria's material benefit is concerned — it's obvious. Bulgaria currently gets about 600 million euros … from Russia for transit of a small amount of gas to other countries,” Putin told a news conference, according to a transcript on his government's web site.

“If we implement the South Stream project, Bulgaria will get almost 2.5 billion [euros] only for a pipeline going through its territory,” he said.

The 20 billion euro ($27.4 billion) South Stream project is run by Gazprom and Italy's Eni. In June, Russia signed a memorandum of understanding giving France's EDF a minimum 10 percent stake in the project, to be taken from the Italian share.

Bulgaria became the eighth country to sign on to the 900-kilometer South Stream pipeline, following Austria, Croatia, Bulgaria, Serbia, Hungary, Greece and Slovenia.   

More countries may join the South Stream project, which has “enormous significance” for Europe, Putin said.

“Leading companies of such European countries as Italy and France are already participating in the project. There are proposals from our other partners in Western Europe,” he said.

German oil and gas producer Wintershall, a unit of BASF, is in talks with Gazprom on possible participation in the project, Interfax reported earlier this year. The company has denied the rumors.

Bulgaria agreed to participate in the project in 2008, but Bulgarian Prime Minister Boyko Borissov announced a suspension of energy projects with Moscow after taking office last year. The sides signed a road map on building the pipeline earlier this year.

The pipeline, whose start is scheduled for December 2015, may be launched four months earlier, Gazprom head Alexei Miller said.

He also said reaching the agreement with Bulgaria was significant because it would be “the first country where South Stream arrives after its sea segment,” Interfax reported.

Once the project is operational, gas transit through Bulgaria will increase to 63 billion cubic meters annually, from 13 bcm last year, Miller said.

Bulgaria also supports the OMV-led Nabucco pipeline, which is aimed at reducing Europe's dependence on Russian supplies. The project has faced difficulties in securing gas supplies.

Laying the South Stream pipeline will not result in cheaper gas prices for Bulgaria, Putin said, but he and Borissov will follow the issue and “agree on acceptable terms."

The Russian gas accounts for one-third to half the final price paid by Europe, with the rest being the result of “local taxation and agent margin,” Putin said. “We should think and work on that properly as well.”

Gazprom proposed reducing gas prices for Bulgaria by 5 percent to 7 percent by 2012, Interfax reported, citing materials provided by the Russian government ahead of the visit.

The sides also agreed to give up using agents' services for gas supplies starting in 2013.

Meanwhile, the project of the Burgas-Alexandroupolis oil pipeline developed by Russia, Bulgaria and Greece must be improved, Borissov said.

He reiterated Bulgaria's position that laying the pipeline would damage the country's “ecological balance” and thanked Putin for understanding.

The sides also discussed construction of the Belene nuclear power plant in Bulgaria. Construction has been under way since 1984 and was frozen last year after German shareholder RWE quit the project.

Russia has provided the Bulgarian side with the final price of the project, Putin said, adding that Bulgaria would make a decision after analyzing the project. He declined to name the price, saying he would need to agree with Borissov first.

Rosatom head Sergei Kiriyenko told reporters Saturday that it was “very difficult to provide the final price as is normally done because the plant is being constructed for a long time,” Interfax reported.

He also said the power plant would become profitable in less than 20 years, faster than the 25 years normally sought “in Russia and third countries.”

Borissov has said construction costs should not exceed 7 billion euros ($9.6 billion).

Russia and Bulgaria agreed to prepare the technical plan of the power plant by the end of this year, Putin said. Russia is looking for European investors for Belene and is ready to provide loans and supply construction equipment.

He did not names the possible partners, saying only that they are “undoubted world leaders” in their fields.

Siemens may become a new strategic investor in the project, Interfax reported, citing Bulgarian media.

Kiriyenko said Russia might become a strategic investor in Belene, providing a loan of more than $2 billion, Interfax reported. But Russia has no plans to be a part owner, he said. Serbia is interested in acquiring a stake, and other European countries have also shown interest.

In a final move indicating friendship between the two countries, Borissov gave Putin a Bulgarian shepherd dog puppy.

“I gave a Bulgarian dog to Vladimir Putin and hope that he will enjoy this typical Bulgarian dog,” Borissov said, RIA-Novosti reported.

Putin already has an 11-year-old black Labrador, Connie, which was given to him by Emergency Situations Minister Sergei Shoigu. He looked very satisfied as he cuddled the dog.

Former U.S. President George Bush wrote in his memoir that Putin had once boasted that his Labrador was “bigger, stronger and faster” than Bush's Scottish terrier Barney. 

Joint Communiqué of the Tenth Meeting of the Foreign Ministers of the People’s Republic of China, the Russian Federation and the Republic of Indiahttp://www.thehindu.com/news/resources/article887705.ece

Wuhan, November 15, 2010

(As of November 15, 2010)

1.The Foreign Ministers of the People’s Republic of China, the Russian Federation and the Republic of India held their 10th meeting in Wuhan, China on 15 November 2010.

2.The Ministers expressed conviction that the trilateral meeting mechanism had deepened coordination and cooperation among the three countries on international and regional issues and helped promote multilateralism and democracy in international relations. The Foreign Ministers reiterated that the cooperation between China, Russia and India does not target any other country.

3.The Ministers expressed satisfaction with the follow-up efforts made by the three parties on the decisions arrived at during the Bangalore meeting on 27 October 2009. The Ministers reviewed the progress of trilateral cooperation in various fields and agreed that the cooperation between think-tanks and businesses and in the fields of agriculture, disaster mitigation and relief, and medical and health services furthered their trilateral relations. They renewed their solid commitment to advancing existing cooperation, further exploring cooperation potential and reinforcing cooperation in, inter alia, energy, high-tech sectors, innovation and modernization, aerospace, people-to-people and cultural exchanges.

4.The Ministers noted that the three countries have suffered loss of life and property due to natural disasters during the current year. The Ministers appreciated the outcome of the China-Russia-India trilateral expert meeting on disaster mitigation and relief held on 12-13 November in New Delhi and looked forward to the next meeting scheduled for the second half of 2011 in Russia.

5.The Ministers noted the large potential for mutually beneficial cooperation in the field of healthcare and medicine. They looked forward to the report of the next Expert-Level Meeting on Cooperation in the field of Healthcare and Medicine to be convened in Russia in the first half of 2011. They also noted that further interaction would include shaping effective mechanisms for combating infectious diseases and for food safety.

6.The Ministers underlined the importance of exchanging experiences in the agricultural sector, and looked forward to the recommendations of the Trilateral Expert-Level Meeting on Agricultural Cooperation to be held in New Delhi in 2011.

7.The Ministers noted with satisfaction the growth in trade and investment relations among the three countries. They hoped that the business chambers in their meeting in New Delhi on 30 November, preparatory to the 2011 Trilateral Business Forum in

Russia, would be able to chart out innovative mechanisms for true, meaningful trilateral business alliances in identified priority sectors.

8.The Ministers commended the trilateral meetings of scholars for their significant contribution in stimulating scholarly discourse on political and strategic issues of policy relevance to the three countries. They welcomed the outcomes of the tenth meeting of scholars from China, Russia and India held in September 2010 in Moscow, and looked forward to the eleventh meeting to be held in 2011 in China.

9.The Ministers welcomed the proposals by Russia on sectoral cooperation in the field of energy and innovation and agreed to hold expert-level consultations in these areas.

10.The Ministers exchanged views on the current international situation and agreed that they share close or similar views on various international and regional issues and their cooperation is solidly grounded. The Ministers shared the perception that the world is undergoing major and swift changes. They expressed their support for a multi-polar, equitable and democratic world order, based on principles of international law, mutual respect, cooperation, coordinated action and collective decision-making by all states. The Ministers expressed their strong commitment to the use of multilateral instruments for finding common solutions to global and regional problems.

11.The Ministers noted that this year marks the 65th Anniversary of the end of the Second World War and paid tribute to all those who fought against fascism and for freedom . The Ministers reiterated that the three countries would continue to work with all peace-loving countries and peoples to establish a fair international order and prevent war and conflict.

12.The Ministers noted that the global economic recovery remains uneven, fragile, unbalanced. They agreed that major economies shall work together and step up macro-economic policy coordination. They called for global coordinated efforts to promote strong, sustainable and balanced world growth.

13.The Ministers reiterated their support for the G20 as the premier forum for international economic cooperation, and welcomed the decisions of the G20 summit in Seoul including on IMF quota reform. They reiterated that the goal of the reform of international financial institutions was to achieve, step by step, equitable distribution of voting power between developed and developing countries.

14.The Ministers urged all parties to take concrete actions to oppose all forms of protectionism and work for early, comprehensive and balanced outcomes from the Doha Development Agenda, consistent with its mandate, based on the progress already made, including with regard to modalities. The Ministers emphasized that international trade frictions should be handled in the spirit of equality, consultation, mutual benefit and within the framework of WTO. The Ministers of China and India supported Russia’s accession to the WTO in 2011.

15.The Ministers called for continued international adherence to the principles of the UN Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol including that of “common but differentiated responsibilities”. The Ministers of Russia and India appreciated China’s hosting of the 12th session of the Ad Hoc Working Group on Long-term Cooperation under the Convention (AWG-LCA) and the 14th session of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) in October this year. The Ministers reiterated their commitment to step up their cooperation to enable positive outcomes at the Cancun conference.

16.The Ministers expressed the view that global energy security is of great significance to advancing world economic recovery and development, and such security can be achieved through greater dialogue and cooperation between producing and consuming countries. The international community should work together to ensure stable energy supply, the security of international energy transportation and stable energy prices so that the energy demand of all countries, especially developing ones, are met. Efforts should be made to build an open and transparent energy market system and an advanced energy technology R&D and dissemination system for enhanced technological transfer and financial support to developing countries consistent with existing international non proliferation obligations and relevant national policy. The Ministers agreed to step up cooperation in the field of energy security, taking into account, inter alia, the initiative of President Medvedev to negotiate an international legal instrument in this area.

17.The Ministers reiterated the importance of the UN Millennium Declaration and the implementation of the Millennium Development Goals, welcomed the outcomes of the UN high-level meeting on the MDGs held in September 2010 and urged members of the OECD Development Assistance Committee to honor their commitment of devoting 0.7% of their Gross National Income to official development assistance as early as possible.

18.The Ministers commended the indispensible role played by the United Nations in international affairs. The Ministers reiterated the need for a comprehensive reform of the United Nations to make it more democratic, representative and efficient so that it can deal with today’s global challenges more effectively. The Ministers of China and Russia appreciated the role played by India in international affairs and welcomed India’s election to the UN Security Council for the 2011-2012 term, and looked forward to deepening cooperation with India within the Council.

19.The Ministers stressed that proliferation of weapons of mass destruction and their means of delivery as well as its association with international terrorism poses a grave threat to international peace and security and represents a cause for deep concern. The Ministers proceed from the understanding that dialogue over the problems of preventing risks and threats to the global non-proliferation regime must be built on the basis stipulated by the international obligations of states. The prospects for the non-proliferation regime to a large extent depend on ensuring the security of all states, as well as states’ ability to establish an effective export control system and to secure sensitive materials.

20.The Ministers reiterated their strong condemnation of terrorism in all its forms and manifestations and stressed that there could be no justification for any act of terrorism anywhere. They emphasized the need for full international cooperation in counter-terrorism efforts, particularly within the framework of the United Nations, to prevent terrorist attacks and to prosecute terrorists and their supporters. In this context, the Ministers urged all UN member states to urgently conclude and adopt the Comprehensive Convention on International Terrorism. The Ministers exhorted the UN Member States to implement relevant resolutions of the UN General Assembly and the UN Security Council, particularly UNSC Resolution 1267, 1373, 1540 and 1624 and international conventions and protocols against terrorism as well as to contribute to implementation of the UN Global Counter-Terrorism Strategy. The Ministers emphasized the importance of joint efforts to counter the use of information and communication technologies for terrorist and criminal purposes. They also underscored the importance of joint efforts in countering the financing of terrorism.

21.The Ministers emphasized the imperative for the international community to maintain its commitment to render assistance to the Government and people of Afghanistan in ensuring security and development and to make concerted efforts to restore peace and stability in Afghanistan. They expressed concern at the deteriorating security situation and underlined the need for adequate development of the Afghan National Security Forces to enable Afghanistan to defend its sovereignty and independence. The Ministers reaffirmed their long term commitment to a peaceful, stable and prosperous Afghanistan. The Ministers expressed their support to the transition to increasing Afghan responsibility on national security, and to the Afghan Government’s Peace and Reintegration Program. The Ministers stressed the importance of cooperation among three countries on the issue of Afghanistan within current mechanisms. The Ministers considered the SCO as an important platform for regional cooperation on this issue. The Ministers underlined the need to step up the coordinated fight of the international community against illegal trafficking of Afghan drugs.

22.The Ministers recognized that Iran is entitled to the right to use nuclear energy for peaceful purposes, and should at the same time restore international confidence to the exclusively peaceful nature of its nuclear activites. The Ministers emphasized that there is no alternative to the intensification of efforts to address the Iranian nuclear issue by peaceful means through dialogue and negotiation.

23.The Ministers reiterated the importance of maintaining peace and stability on the Korean Peninsula and in the region through dialogue, and called on the parties concerned to return to the Six-Party Talks at the earliest date and to fully implement the Joint Statement of 19 September 2005.

24.The Ministers of China and India expressed support to Russia’s policy to protect its core interests, and to contribute to regional peace and stability in the Caucasus region.

25.The Ministers stressed the need to develop an open transparent inclusive and balanced security and cooperation architecture in the Asia Pacific region based upon universally

agreed principles of international law and giving due consideration to the legitimate interests of all states. The Ministers agreed that experts from three countries should study this issue.

26.The Ministers expressed their determination to work toward strengthening cooperation within BRIC which is acquiring growing importance in the modern world. The Foreign Ministers of Russia and India reiterated their readiness to coordinate with China as it prepares for the third BRIC Summit and other related events in 2011.

27.The Ministers of Foreign Affairs of China and India welcomed Russia to the East Asia Summit process and looked forward to Russia’s positive contribution to the emerging economic and security architecture in the region.

28.The Ministers of China and India welcomed Russia’s membership in the Asia-Europe Meeting (ASEM).

29. The Foreign Ministers of China and Russia welcomed India’s constructive participation in the Shanghai Cooperation Organization as an Observer Country and attached importance to India’s intention to play a larger role in the SCO.

30.The Ministers expressed their gratitude to the Government and people of Hubei Province for their hospitality and arrangements for the 10th meeting of the Foreign Ministers.

31.The Ministers tasked the Heads of relevant Departments of the MFAs of China, Russia and India to hold close consultations on issues related to trilateral cooperation.

32.The Ministers decided to hold their next meeting in Russia in 2011.

Russia, India, China to establish close contacts between innovation hubs - Lavrovhttp://en.rian.ru/business/20101115/161341044.html

11:04 15/11/2010

The foreign ministers of Russia, India and China (RIC) have decided to establish close contacts between their innovation centers to further develop their strategic partnership, Russian Foreign Minister Sergei Lavrov said on Monday.

Innovation hubs are already operating in India and China while Russia has recently announced plans to build an innovation center in Skolkovo outside Moscow to facilitate the country's transition to a knowledge-based economy.

Lavrov said RIC had become an important element of building a multi-polar world as it had a solid foundation based on the common interests of the three countries, which are strategic partners.

WUHAN, November 15 (RIA Novosti)

Russia, China, India talk economy and securityhttp://rt.com/news/ric-meeting-lavrov-iran/

Published: 15 November, 2010, 09:51

After the APEC summit in Japan and the G20 gathering in South Korea, the foreign ministers of Russia, China and India have talked over joint measures to surge forward in the wake of the second wave of financial crisis.

The three emerging economies are part of a powerful bloc known as BRIC which is hoping to change the global economic landscape. China is ahead in the race to leave the dominant powers of today behind.The trilateral meeting in China’s Ukhan resulted in a number of joint statements.

Ministers agreed to broaden energy cooperation and security, and vowed to work more closely together in the field of innovation and high tech. Russian Foreign Minister Sergey Lavrov called the RIC countries (Russia-India-China) strategic partners who co-ordinate their positions on the international arena and play common roles in organizations such as the Shanghai Cooperation Organization (SCO), Asia Pacific Economic Cooperation (APEC) and the G20.From next year, Russia will become a full partner of all Asian summits.

The ministers at the meeting also issued a joint statement recognizing Iran’s right to develop nuclear energy if the international community is provided with proof of its solely peaceful purpose.

The document also calls for a swift return of the six-party talks on North Korea’s nuclear activities.

Ministers specially noticed that the worsening security situation in Afghanistan obliges the international community to fulfill its obligations toward the people and the government of Afghanistan. They said that the Shanghai Cooperation Organization is the key forum to help Afghan security.

Russia, India, China call for resumption of six-way talkshttp://english.ruvr.ru/2010/11/15/34249874.html

Nov 15, 2010 09:28 Moscow Time

The Foreign Ministers of Russia, India and China have called for a speedy resumption of the six-way talks on North Korea’s nuclear problem. Sergei Lavrov, Somanahalli Mallaya Krishna and Yang Jiechi also recognized in a statement they signed following their meeting in the Chinese city Wuhan, Iran’s right to the use of nuclear energy for peaceful purposes. They also came out for an international aid to Afghanistan to ensure security and fight drug trafficking. The three foreign ministers see the Shanghai Cooperation Organization as an important platform for cooperation on Afghanistan.     

Russia, India, China to develop energy cooperationhttp://english.ruvr.ru/2010/11/15/34272652.html

Nov 15, 2010 10:26 Moscow Time

Russia, India and China, or the RIC group, have agreed to promote cooperation in the fields of energy security and ensure contact between their innovation centres. These are two new areas of cooperation, Russian Foreign Minister Sergei Lavrov said following his meeting with his Indian and Chinese counterparts in the Chinese city Wuhan. The Foreign Ministers reached the conclusion that the RIC group is becoming important as an instrument to shape a multipolar world order. The three countries’ are one another’s strategic partners, Lavrov said.

China, India, Russia begin trilateral talkshttp://timesofindia.indiatimes.com/india/China-India-Russia-begin-trilateral-talks/articleshow/6927329.cms

Saibal Dasgupta, TNN, Nov 15, 2010, 05.01am IST

BEIJING: China was dealing with leaders from four Asian countries, including foreign minister S M Krishna, at the same time on Sunday. Beijing's multi-level and simultaneous engagement and efforts to enlarge its influence in Asia is bound to impact the India-China talks.

Krishna, Chinese foreign minister Yang Jiechi and their Russian counterpart, Sergei Lavrov began trilateral talks in the central Chinese city of Wuhan on Sunday. Chinese vice-president Xi Jinping landed in Singapore on Sunday to talk with Prime Minister Lee Hsien Loong. This was preceded by a meeting between the country's president Hu Jintao and Japanese prime minister Naoto Kan on Saturday.

The Indian foreign minister is bound to use the opportunity to take forward India's case

for a seat in the United Nations security council, which recently received open support from US president Barack Obama. But it may not be easy to persuade Beijing, which is using its business influence to establish an Asian trade cartel that can take on the western world.

In all their meetings with officials from Russia, Japan and Singapore, Chinese officials have emphasized the need to join hands on the economic front and make the most of the fact that they wield massive influence in the international monetary system.

Trilateral RIC talks underwayhttp://www.thehindu.com/news/international/article887522.ece

PTIWuhan, November 15, 2010

Foreign Ministers of Russia, India and China (RIC) on Monday held key talks here to discuss a host of regional and international issues like counter-terrorism, trade and disaster relief.

External Affairs Minister S.M. Krishna and his Russian and Chinese counterparts, Sergei Lavrov and Yang Jiechi respectively, attended their 10th trilateral meeting, Chinese Foreign Ministry spokesman Hong Lei said.

The three earlier held informal talks over dinner last night.

RIC which was formed with a lot of fanfare is apparently being overshadowed by the Brazil-Russia-India-China (BRIC) grouping, which emerged as an influential international bloc as it consisted some of the fast developing economies of the world.

Besides the strategic issues, RIC ministers focused on matters relating to disaster relief, agriculture and public health, deepening communication among academic, industrial and business circles as well as promoting multilateral cooperation and democratic international relations.

The last meeting of the RIC Foreign Ministers Meet was held in Bangalore in October 2009 during which the three countries discussed a host of issues, including those relating to terrorism, climate change and reducing the impact of global recession.

Russia, India, China FMs anxious about situation in Afghanistan

http://www.itar-tass.com/eng/level2.html?NewsID=15680886&PageNum=0

15.11.2010, 09.21

WUHAN (China), November 15 (Itar-Tass) - The foreign ministers of Russia, India and China, Sergei Lavrov, Somnahalli Mallaiah Krishna and Yang Jiechi, have expressed concern in connection with the worsening security situation in Afghanistan. This was stated in the final document after the meeting of the three foreign ministers.

It emphasized a need for the international community to meet its commitments on rendering assistance to the government and people of Afghanistan in ensuring security, developing and making concrete moves for the restoration of peace and stability in Afghanistan.

“We express concern in connection with the worsening security situation in Afghanistan,” the ministers stressed. “An adequate development of Afghan national security forces is necessary to protect independence and sovereignty of the country,” they said in the document.

The ministers also emphasized the importance of cooperation of Russia, India and China on Afghanistan within the framework of the existing mechanisms. “The Shanghai Cooperation Organisation is a major platform for regional cooperation on that problem,” the ministers are confident. The parties also agreed to make concrete steps towards coordinating fight against drug trafficking from Afghanistan.

Meeting with Prime Minister of New Zealand John Keyhttp://eng.kremlin.ru/news/1298

November 13, 2010, 13:30 Yokohama

Dmitry Medvedev and John Key made the decision to start drafting the agreement on free trade between Russia, Customs Union states and New Zealand.

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Mr Prime Minister, I am pleased to have this meeting with you on the summit sidelines.

I would like us to share our views on the development of Russian-New Zealand relations, which are moving forward very successfully. In recent years there has been a series of events that, hopefully, will have a positive effect on our relationship.

You and I have just been discussing the issues of free trade. That is the next step in our ties. This initiative, which has our support now, will, I hope, establish a new trade regime between our countries, between New Zealand and the customs area shared by the Russian Federation.

PRIME MINISTER OF NEW ZEALAND JOHN KEY: Mr President, it’s nice to see you again. We’ve had very warm discussions both at the APEC meetings and at the summit earlier today.

This is a very important day for Russia-New Zealand relations. Arguably in the 65 years since we enjoyed diplomatic relations this is maybe our most important [meeting]. Today we embark on negotiations for a tripartite free trade agreement between New Zealand and Russia. I think for both countries this is a very exciting opportunity. There will of course be lots of work for our officials and our negotiators but in the end hopefully we will have an agreement which is a first for Russia and from New Zealand’s point of view a very important link to draw our countries closer together.

DMITRY MEDVEDEV: While these issues are being addressed at APEC summits only in general terms, New Zealand and Russia have moved on to the practical realisation of these agreements.

Russia, New Zealand begin free trade talkshttp://www.google.com/hostednews/afp/article/ALeqM5h4xxeEa0MCPpeh9qRh9Ne83IT14w?docId=CNG.01534870f08f534eb4cceded9fefdceb.ff1

(AFP) – 1 day ago

YOKOHAMA, Japan — Russian President Dmitry Medvedev and New Zealand Prime Minister John Key on Saturday kicked off negotiations on a free trade agreement as the world's top dairy exporter seeks new markets.

"For both countries this is a very good opportunity," Key told Medvedev on the sidelines of a summit of 21 nations in the Asia Pacific Economic Cooperation grouping in the Japanese port city of Yokohama.

Medvedev said that "this initiative will create a new trade regime between our countries."

Russian and New Zealand trade ministers met in Wellington earlier this year to kickstart the talks as New Zealand, the world's largest exporter of dairy products, seeks access to a new market for its products.

A deal could also see New Zealand secure access to the markets of two post-Soviet Russian neighbors, Belarus and Kazakhstan.

Russia is building a joint customs bloc with the two countries and any deal with New Zealand will foresee a free trade zone between Wellington and the customs bloc.

Russia is among the world?s largest importers of meat and dairy products.

APEC economies account for more than half of world gross domestic product and around 44 percent of world trade, according to the organisation.

Fonterra Welcomes Trade Negotiations With Russia, Belarus And Kazakhsta n http://www.ausfoodnews.com.au/2010/11/15/fonterra-welcomes-trade-negotiations-%E2%80%A8with-russia-belarus-and-kazakhstan.html

November 15, 2010

Josette Dunn

Fonterra said today the announcement of full Free Trade Agreement (FTA) negotiations with Russia and its Customs Union partners, Belarus and Kazakhstan, had the potential to make the region an even more important partner for the New Zealand dairy industry. This announcement follows the successful conclusion of preliminary FTA scoping talks between the four countries which started in May 2010.Trade Minister Tim Groser and Elvira Nabiullina, the Russian Economic Development and Trade Minister, made the announcement at the APEC trade summit in Japan. The first round of FTA negotiations is likely to occur in early 2011.

Russia is one of the world’s largest market for imports of butter and cheese and a significant dairy export market for New Zealand. New Zealand dairy exports to Russia, mostly butter and cheese, were last year worth around $120 million.

“New Zealand dairy producers have a long history of supplying Russia with high quality food products. Building on these foundations, Russia has the potential to become an even more important market for the New Zealand dairy industry and for Fonterra,” said Kelvin Wickham, Fonterra Group Director, Supplier & External Relations.

“The work of Trade Minister Tim Groser and Foreign Minister Murray McCully has greatly assisted New Zealand to reach this stage. We look forward to the continued efforts of the New Zealand Government to ensure that these important negotiations quickly progress to a successful conclusion,” Mr Wickham said.

Meeting with President of Chile Sebastian Pinerahttp://eng.kremlin.ru/news/1300

November 13, 2010, 14:50 Yokohama

Dmitry Medvedev met with Sebastian Pinera on the sidelines of the APEC Summit.

Mr Medvedev and Mr Pinera stated their high opinion of the rate at which the Russian-Chilean relationship has been developing and expressed their hope that the ties between the two states will continue to expand. The focus of the talks was on intensifying contacts in investment and energy and increasing the bilateral trade turnover.

Following the meeting, the Russian-Chilean Partnership Agreement was signed in the presence of the two heads of state.

Rare Earths in Focus as China Cuts Sales http://www.themoscowtimes.com/business/article/rare-earths-in-focus-as-china-cuts-sales/422953.html

15 November 2010Bloomberg

Russia and the United States are the most likely sources to help fill a shortage of rare earths as China cuts output of the minerals needed for electronics, wind turbines and smart bombs, an Australian academic said.

“U.S. production is most likely to come on stream early,” Professor Brent McInnes, from Curtin University’s school of science in Western Australia, said on an Australian Science Media Centre conference call. “Russia also has a very large rare-earth resource, so they would be the two to try to fill some supply shortages.”

China, producer of more than 90 percent of the world’s rare earths, reduced its second-half export quota for the minerals by 72 percent this year. Surging prices and China’s actions have spurred companies including Molycorp to study reopening or starting mines to meet an expected supply shortfall.

“There is no doubt that Russia and the U.S. won’t be able to fill the vacuum totally,” said McInnes, director of the university’s John de Laeter Centre for isotope research. Australia is only a “small supplier with a potential of less than 5 percent” of global supply, he said.

Surging rare-earth prices are spurring developments of deposits in Kazakhstan, Kyrgyzstan and Greenland.

Sumitomo Corporation, Japan’s third-largest trading house, and its local partner in Kazakhstan plan to start a pilot plant about the end of next year to produce rare earths from uranium tailings, said Yerzhan Ishanov, deputy director of general affairs at Summit Atom Rare Earth Company, Sumitomo’s venture with Kazatomprom, Kazakhstan’s state-owned nuclear company.

“For main applications like rare-earth magnets and glass catalysts, the [demand] increase is from 10 to 15 percent a year,” Ishanov said. Japan’s consumption of the metal products is about 40,000 metric tons a year at present, he said.

China’s move to constrain supply has soured diplomatic relations with Japan, which is moving to secure supplies from Vietnam, the United States, India and Germany.

Rare earths are a group of 17 chemically similar metallic elements, including lanthanum, cerium, neodymium and europium. The elements are used in radar, high-powered magnets, mini hard drives in laptop computers, catalytic converters for vehicles, electric-car batteries and wind turbines. Prices of neodymium oxide, which is used in mini hard drives in laptops and headphones in Apple’s iPod, have surged fourfold to $80 a kilogram from $19.12 in 2009, according to Lynas Corporation.

Stans Energy may restart operations at an open-pit mine in Kyrgyzstan within 18 months to 24 months, Robert Mackay, president and chief executive of the Toronto-based company, said in an e-mail in response to questions.

Ramping up of global production “may be somewhat protracted given the time it takes to obtain the necessary permits and establish a supply chain for such complex materials,” Mackay said.

Rare-earth projects are capital intensive, requiring investment of more than $40,000 per metric ton capacity, said Judith Chegwidden, managing director of researcher Roskill Information Services. Many deposits also contain radioactive material that has to be contained or stored, she said.

Summit Atom aims to produce 1,100 tons of rare-earth concentrates a year from the pilot plant to supply Japan, Ishanov said. The company may increase its production capacity to between 10,000 tons and 15,000 tons by 2014-15, he said.

British military delegation to visit British WWI tombs in Murmansk

http://www.itar-tass.com/eng/level2.html?NewsID=15680905&PageNum=0

15.11.2010, 05.35

MOSCOW, November 15 (Itar-Tass) -- A British military delegation will visit Monday the war graves of British servicemen fallen in Russia during the First World War, a spokesman for the Russian Navy told Itar-Tass.

“The delegation headed by British Consul General in St. Petersburg Gareth Ward will visit the British war graves at the First World War cemetery in Murmansk and the

Vaenga military cemetery in Severomorsk and will participate in a wreath-laying ceremony,” he noted.

The British military delegation “will meet with Northern Fleet Commander

Vice-Admiral Nikolai Maksimov at the Northern Fleet headquarters,” the spokesman added.

British servicemen, who were dispatched to the Russian Polar region in 1917-1920, are buried in Murmansk and Severodvinsk. The local archives do not have the exact data on the number of British servicemen killed in this region.

Strong explosive device found in Makhachkala being defused

http://www.itar-tass.com/eng/level2.html?NewsID=15680917&PageNum=0

15.11.2010, 07.52

MAKHACHKALA, November 15 (Itar-Tass) -- A strong explosive device was found in Amet-Khan Sultan Street in the Dagestani capital on Monday.

“The explosive device is made of a metallic tube with the fuses,” a source in the Makhachkala law enforcement agencies told Itar-Tass. “The police dog handlers with a sniffer dog confirmed it was the explosive device,” the source said. The FSB sappers are demining the bomb.

3 Militants Shot Dead in Dagestan http://www.themoscowtimes.com/news/article/3-militants-shot-dead-in-dagestan/422959.html

15 November 2010The Associated Press

MAKHACHKALA — Security forces killed three militants in Dagestan on Sunday after trapping them inside a house that went up in flames during a gunbattle, police said.

Television footage showed the house in the city of Buinaksk on fire during the nighttime operation. Two bodies also were shown.

One of the dead militants was suspected of organizing a suicide car bombing at the Buinaksk military base in September that killed four soldiers and wounded 34 others, local Interior Ministry spokesman Vyacheslav Gasanov said.

All three militants were accused of involvement in the killing of policemen, armed attacks on civilians and extortion of money from businesses, he said.

Violence in Dagestan is linked to an Islamist insurgency that has spread from Chechnya to other Russian republics in the North Caucasus.

Sakhratula Nazhmudinov, who was among those killed Sunday, was believed to have organized the attack on the military base, Gasanov said. In the attack, the driver of an explosives-laden car plowed through a gate and headed for an area where soldiers were quartered in tents, but soldiers opened fire on the car before it reached the center of the base and it exploded after ramming a military truck.

Police officer Kiramutdin Gabiyev shot down at Khasavyurt hospital

http://www.itar-tass.com/eng/level2.html?NewsID=15680925&PageNum=0

15.11.2010, 08.45

MAKHACHKALA, November 15 (Itar-Tass) -- An unidentified killer shot down senior lieutenant of the traffic police Kiramutdin Gabiyev, who was undergoing treatment at the Khasavyurt hospital.

“An unidentified killer broke at about 2.30 p.m. Moscow time on Sunday in a ward, where the police officer was staying, and shot him down from the pistol,” a source in the alert force of the Khasavyurt police told Itar-Tass. The killer escaped easily.

A criminal case was instituted. The murder case is under investigation.

Mansour meets Chechen presidenthttp://www.wam.org.ae/servlet/Satellite?c=WamLocEnews&cid=1285739506877&p=1135099400124&pagename=WAM%2FWamLocEnews%2FW-T-LEN-FullNews

Nov 13, 2010 - 05:51 - WAM ABU DHABI, Nov. 13th, 2010: H.H Sheikh Mansour Bin Zayed Al-Nahyan, Deputy Prime Minister '&' Minister of Presidential Affairs has received Ramzan Kadyrov, President of the Chechen Republic in Al-Wathba, Abu Dhabi.

The meeting which took place on the sidelines of the endurance horse race at the Emirates International Endurance Village discussed cooperation and relations and efforts to maintain peace, security and reconstruction in Chechnya.

Chechen spies said to have operated in Germany http://www.monstersandcritics.com/news/europe/news/article_1598759.php/Chechen-spies-said-to-have-operated-in-Germany

Nov 13, 2010, 13:56 GMT

Berlin - Spies working for Chechen President Ramzan Kadyrov have been operating in Germany, trying to silence exiled dissidents, according to a report in the German magazine Der Spiegel on Saturday.

It said Austrian police reports quoted Chechens in Berlin saying they had been approached by Kadyrov agents. Phone taps also showed that a man with Russian citizenship living in Berlin had made a threatening call to a Chechen exile living in Vienna.

The exiles were reportedly urged to go home to Chechnya. Kadyrov, who has the backing of the Kremlin, has been criticized for human rights breaches in the republic, which is a part of Russia.

Austria began investigating the alleged agents after the killing last year of a Chechen exile Umar Israilov in Vienna. Two alleged gunmen go on trial in Austria next week.

Last Updated: Monday, November 15, 2010, 02:19 GMT 05:19 MCKStation in Yuzhno-Sakhalinsk was evacuated due to bomb threathttp://www.bbc.co.uk/russian/rolling_news/2010/11/101114_rn_uzhno_sakhalinsk.shtml

On Monday, passengers and staff were evacuated from the building of the railway station in Yuzhno-Sakhalinsk because of the anonymous posts on bomb scare.Station and the surrounding area cordoned off by the police, experts are searching for the source of possible threat.Later it became clear that the reported bomb scare was not confirmed.

Yakutia prosecutor's aide killed in Altai Territory

http://www.itar-tass.com/eng/level2.html?NewsID=15680946&PageNum=0

15.11.2010, 09.57

BARNAUL, November 15 (Itar-Tass) - An aide to the prosecutor of the town of Mirny of the Sakha Republic has been killed under mysterious circumstances in the Altai Territory, the regional investigation office of the Russian Investigative Committee (SK) told Itar-Tass on Monday.

According to the agency, the woman was on a regular holiday and came to a women’s correctional facility in the Altai Territory to meet a convict. The prosecutor’s aide was found in the rendezvous room with multiple bodily injuries, of which she later died without regaining consciousness.

A resident of the Altai Territory who also came to the penal colony for a meeting with one of the convicts has been detained on suspicion of murder.

Investigators are ascertaining all the circumstances of the incident.

Victor Bout may be released this Fridayhttp://english.ruvr.ru/2010/11/15/34250331.html

Nov 15, 2010 09:47 Moscow Time

The Thai Prosecutor-General does not rule out that a Russian businessman Victor Bout maybe released from custody on November 19th.

Sirisak Tiyapan points out that the Thai court decision to extradite Bout to the United States expires this coming Friday.

The Russian businessman will walk away free unless Washington requests prolongation of custody. The counsel for the defence says there are no legal grounds for holding the Russian in custody.

On August 20th the Thai court ruled that Victor Bout should be extradited to the United States, where he is charged with financial fraud and arms trade.

But the court decision points out that unless Bout is extradited to Washington within three months, he should be released from custody at once. 

Two Russian astronauts to conduct spacewalkhttp://en.rian.ru/science/20101115/161338942.html

04:57 15/11/2010

Two Russian astronauts, Fyodor Yurchikhin and Oleg Skripochka will conduct a spacewalk on Monday, a spokesman for Russia's mission control center said.

The spacewalk, scheduled to begin at 17:30, would last for at least five hours and 55 minutes. It would be the fifth spacewalk for 51-year-old Yurchikhin and first for Skripochka.

The Russian astronauts would wear Orlan-MK spacesuits during the spacewalk.

During their spacewalk, Yurchikhin and Skripochka are to collect samples from the exterior of the Zvezda service module and the Pirs airlock. They would also install a multipurpose workstation on the starboard side of Zvezda's large-diameter section.

Among other objectives is the removal of a robotics experiment known as Kontur, aimed at developing an internet-controlled robotic manipulator.

The mechanism, taken to the International Space Station in 2003, was initially used for experiments conducted by the German space agency DLR. The Russian stage of the experiment began in May 2008.

During the next stage of Russia's Kontur experiment to begin next year, astronauts would check whether robotic manipulators on the Earth could be controlled from the orbital station.

MOSCOW, November 15 (RIA Novosti)

Russia's Proton-M takes U.S. telecoms satellite into orbithttp://en.rian.ru/science/20101115/161339509.html06:46 15/11/2010

Russia's Proton-M carrier rocket took a U.S. telecommunications satellite into orbit on Monday, a spokesman for Russian space agency Roskosmos said.

It was launched at 20:29 Moscow time [16:29 GMT] Sunday from the Baikonur space center in Kazakhstan.

"The foreign communications satellite separated from the Breeze-M booster at 5:09 Moscow time [2:09 GMT] on Monday. Therefore, Russia fulfilled its obligations to deliver a foreign communications satellite into orbit," the source said.

The contract to put the satellite into space was signed between Russian-U.S. company International Launch Services (ILS) and Canadian MSV-Mobile Satellite Ventures.

The satellite, with a commercial name SkyTerra 1, is designed to provide voice and data services in L-band.

It was manufactured by Boeing on an order from the U.S. telecoms company LightSquared, and is based on the reliable Boeing 702 Geo-Mobile platform. The satellite has a 22-meter L-band reflector for mobile terminal links complemented by a 1.5 meter Ku-band antenna.

SkyTerra 1 and its twin – SkyTerra 2 – will enable in the future the world's first commercial mobile satellite service using both space and terrestrial elements.

MOSCOW, November 15 (RIA Novosti)

Russian space freighter to be 'buried' in Pacifichttp://en.rian.ru/science/20101115/161339938.html

08:01 15/11/2010

Russia's Progress M-05M cargo spacecraft will be deorbited and drowned in the remote area in southern Pacific on Monday, after three weeks of autonomous orbital flight.

After undocking from the International Space Station on October 25, the space freighter continued an autonomous flight as a scientific laboratory.

The spacecraft continued two experiments, started by its predecessors and aimed at studying various plasma formations that emerge from its thrusters. Scientists observed the plasma emissions using a ground-based radar in the Siberian city of Irkutsk.

Progress-family freighters have been the backbone of the Russian space cargo fleet for decades. In addition to their main mission as cargo spacecraft, they are used to adjust the ISS's orbit and conduct scientific experiments.

MOSCOW, November 15 (RIA Novosti)

UAC aims to control 16% of world market of frontline aircraft

http://www.itar-tass.com/eng/level2.html?NewsID=15681024&PageNum=0

14.11.2010, 20.40

MOSCOW, November 14 (Itar-Tass) -- The United Aircraft Corporation (UAC) targets for control over 16% of the world market of frontline aircraft with exports of the fifth-generation fighter jet, the corporation said in a quarterly report.

“Despite the anticipated hike in revenues from the deliveries to the Russian Defense Ministry, no less than half of revenues may come from exports of frontline aircraft [projected indicators for 2015-2020 stand at 40-to-60%],” the corporation said. Exports of the fifth-generation fighter jet “may strengthen Russian positions on the market in the period until 2025 [15-to-16% of the world market].”

The fifth-generation aircraft will be the main warplane in the long-term prospect (a period until 2025) as it will help modernize the Russian Air Force and will be supplied to Russian allies, strategic partners, traditional and prospective partners in military-technical cooperation, the corporation said.

UAC said that the growth had resulted from the replacement of third and fourth-generation aircraft, massive production of aircraft of generation 4+ and 5, and increased cost of warplanes.

Mi-171 Helicopter of Ulan-Ude Aviation Plant production is included in amount of 100 the best goods of Russiahttp://www.shephard.co.uk/news/rotorhub/mi-171-helicopter-of-ulan-ude-aviation-plant-production-is-included-in-amount-of-100-the-best-goods-of-russia/7691/

November 15, 2010

Following the results of Federal stage of the 13th all-Russia contest Program "100 the best goods of Russia", the Mi-171 Helicopter produced by JSC "Ulan-Ude Aviation Plant" (UUAP) was among awardees of nomination "the goods of production-technical purpose".

Besides, management of the contest's Program awarded to UUAP the distinctive decorations "For achievements in quality" and "The excellent in quality".

The Program "100 the best goods of Russia" was founded in 1998, by State Standardization and Meteorology Committee of the Russian Federation (now, the Federal Technical Regulation and Meteorology Agency), Academy of Quality Problems and "Standard and Quality" magazine. Within the framework of the Program, every year the contest for determination of 100 the best Russian goods is held. The contest has two stages: regional and federal. UUAP submitted an application for participation in the contest for the first time.

The goods entering for the contest arrived at independent evaluation of experts. The specialists analyzed the goods for consumer properties, performance capability, quality level, safety, being in demand at Russian and foreign markets, price etc.

It is of interest that Mi-171 multifunctional helicopter is the only among all goods entering for the contest that got 100 points of 100 potential ones according to expert evaluation matrix over the whole history of regional stage of "100 the best goods of Russia" in Republic of Buryatia.

The helicopter of Mi-8/17 type (UUAP produces its Mi-171 modification) is considered to be one of the most popular Russian brand in the world. This helicopter and its modifications have been put into operation in more than 30 countries.

Operating companies note such qualities of Mi-171 helicopter as high aircraft performance and operating characteristics, wide range of special equipment, ease of use and maintenance, reliability. According to the specialists' research Mi-171 helicopter is popular at the world market thanks in large part to such qualities and price advantages.

Source: Ulan-Ude Aviation Plant / Russian Helicopters

Russia may bid to host World Expo in 2020http://en.rian.ru/russia/20101115/161339857.html

07:43 15/11/2010

Russia may bid to host the 2020 World Expo in one of its cities, the deputy minister of industry and trade, Stanislav Naumov, told a Russian government daily on Monday.

Naumov said mobility was chosen as the Russian exhibition's main theme.

"It would concern not only transport, but also information, social and other aspects of this notion," he told Rossiiskaya Gazeta.

Several Russian cities have already expressed their willingness to host the event, but the decision is yet to be officially announced.

The Russian official also said he was satisfied with the results of the 2010 Expo, held in Shanghai from May 1 to October 31.

The earliest allowed year to lodge a bid is 2011, and the latest is 2014. Cities from Australia, Brazil, China, Denmark, Thailand, Turkey, the United Arab Emirates and the United States have already indicated their willingness to host the Expo 2020.

MOSCOW, November 15 (RIA Novosti)

PRESS DIGEST - Russia - Nov 15http://in.reuters.com/article/idINLDE6AE0CS20101115

2:14pm IST

MOSCOW, Nov 15 (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

- A branch of the United Russia political party in Tula expelled the mayor of Tula from the party and threatened to dismiss her from her post as mayor, the paper writes.

- Around 500 journalists and activists gathered on Sunday in Moscow to demand a better investigation of the recent attack on journalist Oleg Kashin, the paper reports.

- Moscow's credit bank seized the bank accounts of indebted Capital Tour, one of Russia's biggest travel companies, leaving hundreds of tourists unable to fly out of the country last Friday, the paper writes.

VEDOMOSTI

www.vedomosti.ru

- Russia's VTB (VTBR.MM: Quote, Profile, Research) bank is in talks with Czech PPF Group to buy Home Credit and Finance Bank for almost $2 billion, the daily writes.

- Russian state commission on radio frequencies will start testing a new generation of broadband mobile access NG1, the daily writes.

NEZAVISIMAYA GAZETA

www.ng.ru

- Russian President Dmitry Medvedev may meet leaders of political parties represented in parliament next week. Kremlin fears protests against rising utilities prices, the paper writes.

TRUD

www.trud.ru

- 1.5 million Russians may lose their jobs in industrial sector due to the economy's modernization ,the paper says.

Russian Press at a Glance, Monday, November 15, 2010http://en.rian.ru/analysis/20101115/161340164.html08:36 15/11/2010

POLITICS

Russian President Dmitry Medvedev and the Japanese prime minister met on Saturday on the sidelines of the APEC summit. Both leaders confirmed their readiness to develop economic, cultural and political ties between the countries. Naoto Kan, who strongly protested Medvedev's visit to an island of the disputed Kuril archipelago earlier this month, said that the two nations must build mutual trust. Medvedev reportedly said that he would return to the island whenever he likes.(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant)

Prime Minister Vladimir Putin returned from a trip to Sofia, Bulgaria, on Saturday with an agreement on the South Stream gas pipeline and a puppy given to him by his Bulgarian counterpart.(The Moscow Times, Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

ECONOMY

Moscow seems to be reaching the final stage of its accession to the World Trade Organization. Russia, which is the only major economy still outside the global trade body, may join it by next fall. The results of Dmitry Medvedev’s meeting with Barack Obama in Yokohama indicate that the United States and EU are very likely to persuade Georgia, which remains the only obstacle on Russia’s way to the WTO, to change its mind.(Nezavisimaya Gazeta)

The Russian Finance Ministry said the budged deficit of 2.1% of GDP (784 billion rubles), recorded as a result of the first ten months of 2010, was the lowest this year, and below the 2010 forecast of 5.3% of GDP. Budget incomes stood at 6.7 trillion rubles, while expenditures amounted to 7.5 trillion rubles in January-October. (Kommersant)

METALS & MINING

Russia and the United States are the most likely sources to help fill a shortage of rare earths as China cuts output of the minerals needed for electronics, wind turbines and smart bombs.

(The Moscow Times)

REAL ESTATE

Glavstroy, owned by Russian billionaire Oleg Deripaska, may build houses with a total area of 300,000 square meters in Venezuela’s capital Caracas in the next two years. The houses, designed for slum residents, are the company’s first foreign project. (Kommersant)

DEFENSE

The Russian Defense Ministry will officially announce the results of its tender to buy two foreign-built helicopter carriers for its Navy on Monday. The participants were not disclosed, but France’s DCNS, Spain’s Navantia, Germany’s TKMS and South Korea’ STX are thought to take part. The French shipbuilder is seen as the most likely winner.(Vedomosti)

EXHIBITIONS

Russia may bid to host the Expo-2020, Deputy Minister of Industry and Trade Stanislav Naumov said.(Rossiiskaya Gazeta)

SOCIETY

Three rallies were held over the weekend in Moscow and its satellite city of Zhukovsky in support for Kommersant journalist Oleg Kashin and Khimki forest defender Konstantin Fetisov, brutally beaten earlier this month.(The Moscow Times, Vremya Novostei, Kommersant)

SPORTS

Three major sporting events that took place on Sunday were in the Russian media spotlight on Monday: Russia defended their title against Brazil in the finals of the world women's volleyball championship; Sebastian Vettel (Red Bull) clinched the Formula One 2010 Champion title from Fernando Alonso (Ferrari) with a little help from Russia’s Vitaly Petrov (Renault); and Zenit (St. Petersburg) won the Russian Premier League title.(Vremya Novostei, Kommersant, Rossiiskaya Gazeta)

November 15, 2010 10:24

Moscow press review for November 15, 2010http://www.interfax.com/newsinf.asp?id=201910

MOSCOW. November 15 (Interfax) - The following is a digest of Moscow newspapers published on November 15. Interfax does not accept liability for information in these stories.

VEDOMOSTI:

"Plans to liberalize the Russian natural gas market and the principle of equal profitability from contractual gas prices in Europe will lead to the extinction of the national nitrate fertilizer industry," 18 agrochemical companies wrote to Prime Minister Vladimir Putin in September. Officials heeded agrochemists. The Ministry of Industry and Trade has suggested giving 10-15% gas discounts to fertilizer producers and providing an opportunity for new producers to receive gas at favorable fixed prices, two officials told Vedomosti, but the decision is up to the government. ("Discount from the Ministry of Industry and Trade").

Czech financial group Home Credit (owned by Peter Kellner's PPF Group) could sell its businesses in Belarus, Kazakhstan and Russia to the VTB Group (RTS: VTBR). The Czech group already has banks in Vietnam and China. It is going to develop business in India as well, a source from the PPF Group said. A banker close to the VTB management confirmed to Vedomosti that the company is in talks over the purchase of Home Credit and Finance Bank (RTS: HCFB) (HCF Bank), but said that no decision has been made yet. A financier cooperating with PPF Group said talks with VTB are under way and could end up in a deal. On Saturday a VTB spokesperson denied reports of both talks and a forthcoming deal, as did Milan Tomanek of PPF Group. ("Czech credit from VTB").

Last week Metropol and Japanese financial group SBI Holdings signed in Tokyo a statement on completing the purchase by SBI of 50% in the capital of the United Investment Bank (Obibank, a Metropol Group company), Metropol owner Mikhail Slipenchuk told Vedomosti. SBI will become a co-owner of Obibank after the deal and receiving licenses from the Central Bank and the Federal Anti-monopoly Service. Obibank will become the first Russian-Japanese bank, Toyota Bank and Mizuho Corporate Bank, 100%-owned by foreign companies. The purpose of the deal negotiated by the parties in February is to implement and develop Internet-banking technologies that proved themselves well in Japan. ("Slipenchuk throws in Japanese net").

KOMMERSANT:

The results of the federal budget spending in the first ten months of 2010 presented by the Finance Ministry showed this year's lowest current deficit at 2.1% of GDP instead of the planned 5.3% GDP by the year-end. The ministry, however, is not in a big rush to change the unfulfilled forecast: reducing the expected profits and short funding of inflated state spending will soon enable it to report better than planned indicators of the 2010 state treasury. (Page 6, "Budget deficit is struggling to catch up with MinFin").

Kommersant has learnt that MTS will buy Sistema Telecom from its controlling shareholder, AFK Sistema (RTS: AFKS). Until mid-2007 the company managed all AFK telecommunications assets, including those of MTS, currently it still owns all 'egg' trademarks. MTS will pay for them around $380 million. (Page 10, "MTS is holding on to eggs").

Prosperity Capital Management plans to litigate with Mikhail Abyzov's RU-COM, which, according to the fund, withdrew assets from the Novosibirsk-based equipment maker, NPO Elsib (RTS: ELIB) (the fund owns 14% of its shares). RU-COM admits the sale of Elsib assets but reassures that it withdrew non-core assets. Prosperity Capital Management can challenge the deal successfully only if it proves that the buyer of these assets is affiliated to RU-COM. (Minority shareholders are fighting for Elsib).

Oleg Deripaska's Glavstroy will build 300,000 square meters of homes within two years in Caracas for people relocated from old houses. This is the first foreign project for the company. Moscow developers were asked to help local slum residents by Russian Prime Minister Vladimir Putin after his April meeting with Venezuelan President Hugo Chavez. Yelena Baturina's Inteco also promised help in construction. (Page 9, "Oleg Deripaska will clear slums").

CORRUPTION WATCH: Russia finally launches investigation into Daimler kickbacks

http://www.bne.eu/dispatch_text13605

bneNovember 15, 2010

Russia has finally opened an investigation into who was on the receiving end of up to EUR4.5m in bribes, paid to officials as kickbacks by German carmaker Daimler. The move, which some speculate will target senior officials, suggests that President Medvedev's anti-corruption drive may be developing some teeth at last, although its early days yet.

Vladimir Markin, a spokesman for the Investigation Committee announced the news on Friday, reports Itar-Tass. The violations can be punished with prison sentences of up to 10 years and fines of up to RUB1m.

In March, Daimler admitted to US prosecutors that between 1998 and 2008 it had paid bribes in 22 countries, including Russia. The company paid a fine of $185m, including $27.26m coughed up by its Russian division.

The Interior Ministry, Defense Ministry, several municipal governments, and the Special Purpose Garage were among the agencies that purchased Daimler vehicles during that

time.

Despite this, the Russian authorities have appeared slow to take official action - although investigators claim that Daimler has not provided them with details of the kickbacks.

According to Kommersant, the documents forwarded to the Investigation Committee only detailed the sums involved and the names of state agencies and banks. The names of the officials who trousered the cash were conspicuously absent. Anatoly Bagmet, who wa head of the committee in April, urged Mercedes-Benz Rus to reveal the names, but despite declaring its willingness to cooperate, the company has reportedly failed to deliver.

It's worth noting that investigators have officially opened a fraud case - not a corruption investigation - and remain tight-lipped about it. The Investigative Committee would only say that the case is based on internal investigations launched in April by the Interior Ministry and the Federal Protection Service.

That said, the official investigation is welcome news, with the time lapse since Daimler's admissions suggesting that the case was in danger of being swept under the carpet. The news is an indication that Medvedev's anti-corruption drive may actually be starting to make a difference.

Apart from the results of this investigation, another test will be whether the Investigative Committee opens an investigation into who received the bribes that computer giant Hewlett-Packard admitted to at around the same time Daimler owned up.

That cash went to someone at the Prosecutor General's office. At the time, the Investigative Committee was a department within that same Prosecutor General's office. However, after attempts by the office to quash an investigation into a former deputy-mayor of Moscow, Medvedev changed that in October, making the Investigative Committee a separate federal body which reports directly to the president.

November 14, 2010

Ivo Daalder: We are looking for a reset in the NATO-Russia relationshiphttp://www.interfax.com/interview.asp?id=201758

U.S. Permanent Representative to NATO Ivo Daalder has given an interview to Interfax ahead of the NATO-Russia summit in Lisbon in which he speaks about the upcoming summit and other pressing issues, such conventional armed forces in Europe, Iran and Russia’s assistance to NATO in Afghanistan.

Question: Mr. Ambassador, do you share the view that the upcoming NATO-Russia summit in Lisbon will be a turning point for Russia-NATO relations?

Answer: We will have to see when we get there, but certainly of all the signed points, will be a possibility of this being a real turning point. What we are looking for is a reset in the NATO-Russia relationship, just the same way we had a reset in the U.S.-Russian relationship. Things have improved significantly over the past years, but what we really need now is use the summit agenda for the days, and weeks, and months ahead in order to find areas of practical cooperation in which Russia and the NATO countries together deal with the challenges of the 21st century. That’s what we hope to accomplish and that’s what we hope President Medvedev and 28 other leaders will be able to agree on.Q.: Russia has repeatedly expressed concern over new NATO’s Strategic Concept among other things questioning its conformity to the UN Charter. Are there any guarantees that the new concept does not conceal any unpleasant surprises for the Russian delegations in Lisbon?A.: Yes, I think so. I mean the Treaty of Washington, the North Atlantic Treaty, that formed NATO states in the preamble and in the first article that this is an alliance that is completely formed with supportive of the purposes and principles of the UN Charter. So nothing in the Strategic Concept, nothing in any strategic concept that NATO has ever put together or will put together will in any way deviate from the core principles and purposes of the UN Charter, and that will be reaffirmed. So, that, as far as we are concerned, is not an issue. This is the document that looks forward to the future, to a NATO that is capable of providing defense to its friends and members against new threats, as well as looking forward to how security can be enhanced around the world by working together with other partners. It will be clear in that concept that Russia is a country that NATO wants to have a strong strategic partnership with, and we are looking forward to developing. That is what the Strategic Concept looks forward to, and that is the way we are going to talk about these issues. I do not see anything in the concept that should come as a surprise to Russia or anybody else, when it is announced.Q.: Do you believe it would be useful if NATO and Russia signed a legally binding agreement not to deploy major combat forces near Russian borders?A.: Well, we think that the existing treaty that governs relations amongst all states in Europe – and the four principles and commitments for all states in Europe to move upon we think that is the structure of what we need to move forward. We do not look for treaties; we do not think we need new institutions. What we do need is to uphold all the principles of the treaties and agreements that we have and use the institutions we have to take this organization, which is a peaceful organism – but it does not reach its full potential – and make it an organization that deals with the common concerns that Russia and all NATO countries have in order to address them coherently, practically and together. And that is I think what we hope to achieve, which is much better practical cooperation than trying to figure out if there is another new treaty to be signed.Q.: Russia and NATO are trying to identify common threats. How much progress has been made in this work and when will it be over? Yesterday, Russian envoy to NATO Ambassador Rogozin said that it had been impossible to come to an agreement on missile threats. May be it is Iran? What kind of problem we have on this issue?A.: First on the joint threat. We have been working now for many months on putting together what we call a joint review of 21st-century security, and it is almost complete. We are looking at such issues as Afghanistan, piracy, terrorism, natural and manmade disasters, nuclear proliferation, and the proliferation of ballistic missiles. And on virtually

all of that we have reached a common assessment. It is quite clear that on ballistic missiles we do have views that are different within all the NRC countries and between the United States and Russia. We are continuing to work, we have another week, on how we are going to resolve those issues in a way that allow us to move forward. Even if we have different views. It is okay to have different views. We do not have to agree on everything.Q.: Anyway on Iran. We still have different views on missile threat from Iran?A.: It is more about the methodologies we used to assess what the threats and challenges are. And we are working this through. We still have several days to work these things through. We are committed, I think most of our allies are committed, and I know Russia is committed, to sitting together and trying to figure out a way to come to common assessment of what the threat is and to look at, even when there are differences, why there are differences. And we are committed to working on these issues and we are looking forward to working with all our partners, all our 28 partners, both those in NATO and Russia, to come up with a solution by the time we get to Lisbon.Q.: NATO is inviting Russia to join its missile defense project. Could you clarify how the U.S. plans for a global missile defense is related to NATO’s project?A.: Let me make a distinction between what the U.S. is trying to do with Russia and what NATO is doing with Russia. In the NATO-Russia context, what we are looking for is to cooperate on ballistic missile defense and against threats to Europe. We work together to counter those threats by joining the capabilities of NATO and Russia. We had demonstrated cooperation and exercise what NATO and Russia did in the first half of the decade from 2002 to 2008, the ability to put our systems together in a way that provides for a far more effective and cost-effective defense, and that ability and data that we get from our cooperation suggest that we can expand that kind of cooperation to territorial missile defense.Q.: Is NATO open to equal cooperation with Russia on the missile defense project? For example, would NATO be willing to join forces with Russia in trying to identify missile threats before, not during, the practical implementation of the missile defense project?A.: The United States is developing a missile defense capability, because we see a threat, and we will continue to do that. NATO will make a decision in this case on how it is going to respond to that threat, and we will continue to do that. And in both cases, the U.S. and NATO have and will make it very clear that we want to cooperate with Russia on that. We believe that there is a threat that needs to be countered and we are going to develop missile defenses for it. We would like to cooperate with Russia, but we cannot make cooperation with Russia a condition for us to develop missile defense when we see a threat. And we have a responsibility to defend our territory and population against the threat. And we will continue to do that. And we strongly believe that that threat is equally significant for Russia, and that we are better off when we can work together on countering that threat, which is both a more effective defense and a more cost effective means. Russia is developing ballistic missile defense capabilities, and we want to cooperate with Russia in having more effective and more cost-effective cooperation on this issue.Q.: How can control over conventional armed forces in Europe be resumed?A.: We, at very intensive negotiations and talks with all our partners and parties to the CFE Treaty, are meeting to see how we can overcome the issues that have frankly been a

problem for many, many years. We are in negotiations, and we are working very hard together with Russia and NATO partners and non-NATO partners who are members of the CFE Treaty to see if we can find a way to modernize the conventional forces treaty. We think it is important that we succeed. We believe strongly in the importance of having a conventional arms control regime in Europe that supports the interests and ability of all countries to enhance their security.Q.: Do you believe that progress can be achieved on the CFE Treaty despite the fact that Russia has military bases in Abkhazia and South Ossetia which NATO members view as part of Georgia?A.: In order to have real negotiations, we will have to redress all the issues that divide us and issues that Russia would like to see developed in the CFE Treaty. And there are issues that we would like to see developed in this regime and issues that other countries want to address. That is why we should agree on the principles and a basis for further negations, and then resume our deliberations to see if we can come to a conclusion that strengthens the regime. And that is exactly what we are doing right now.Q.: It is already known that one of the main issues of Russia-NATO summit in Lisbon will be the issue of more intensive NATO transit to Afghanistan through the Russian territory. Can you clarify what are the alliance’s specific needs in this respect? Some media reported that one of the issues under discussion is a proposal for NATO armored vehicles to be transported to Afghanistan through the Russia territory? Can you confirm this?A.: I think the details are still being negotiated. We expect that we will reach agreement on them. Basically, there are two things: the kind of equipment we can ship and, equally important, that we can reverse shipment so that we can take equipment from Afghanistan and ship it back. And the details of those are still in negotiations, but I expect that we will sign a new agreement on the transit and what kinds of things will be allowed.Q.: Has it been possible to achieve any clarity on supplies of Russian helicopters for the Afghan Army?Q.: The NATO secretary general has asked Russia to provide helicopters to the Afghans, and we are still looking to see whether it is possible. What we will be looking at down the line is, in Lisbon, to hopefully set up a trust fund in order to help train and maintain helicopters. Q.: What side will finance this trust fund? Will it be the U.S., NATO or Russia?A.: It will be funded voluntarily by all members of the NRC, and it will be opened too to all 29 members. And everyone will make a decision as to what they would contribute, whether it will be in-kind, trainers, or spare parts.Q.: And how many helicopters will be supplied under this agreement?A.: This is the issue for Russia to decide. The U.S. is buying helicopters from Russia. But this is a different issue; this is the U.S. issue. It has nothing to do with what is happening. The Secretary General requested assistance, and Russia will have to decide whether it will provide any helicopters.Q.: There have also been reports that Russia is willing to provide several helicopters free of charge, is it true?A.: Again, this is for Russia to decide. If Russia wants to provide helicopters for the Afghan army, I am sure the Afghan army will be most grateful. But again it is for Russia to decide, not NATO.

Q.: So, Russia provided no information about this agreement?A.: No.Q.: Drug trafficking from Afghanistan is a very sensitive issue for Russia. Why does NATO refuse to destroy poppy plantations in Afghanistan?A.: Because this is our policy and belief. For one, NATO is not in the business of dealing with opium. That’s not its task. Its task is to provide a secure and safe environment in support of the Afghan government. We also believe that eradication is not the best way to deal with the problem. The best way to deal the problem is to provide alternative crops to farmers so they will grow wheat rather than poppy. That is what we are doing, and it is actually quite successful. We are taking large parts of Afghanistan that used to grow poppy and now growing useful agricultural products. And people think that is the right way to go ahead with it.Q.: How can you comment on data that after international forces entered Afghanistan opium production in Afghanistan has grown much?A.: The reason for opium production going up is that the Taliban is actively encouraging the growth of opium and is using narcotics as a means to support the insurgency. So, the issue why NATO is there is that there is an insurgency there. And we are trying to adjust that by being present. If NATO was not in Afghanistan, the insurgency would be able to take over the entire country.Q.: Russia has announced that it will never send any personnel to Afghanistan. Do you see this as a justifiable stance or do you still expect Russia to send for example instructors or other military specialists to Afghanistan?A.: Russia has decided that it does not want to send personnel to Afghanistan, and that is its right. That is a decision that Russia needs to make for itself. But in many ways in which different countries contribute to the effort in Afghanistan, and indeed Russia is contributing significantly: training counternarcotics inspectors, as well as transport distribution networks for the U.S. and NATO. All of that is directly in support of the efforts provided to Afghanistan to help Afghanistan to achieve its own security. And that is Russia’s contribution; it is a welcome contribution, and its is an important contribution.

START TREATY

New START treaty discussed in Japanhttp://rt.com/news/start-treaty-discussed-japan/

Published: 14 November, 2010, 06:22Edited: 14 November, 2010, 22:07

Global nuclear security has come into sharper focus on the sidelines of the APEC summit being held in Japan.

Presidents Dmitry Medvedev and Barack Obama have discussed the future of the new START Treaty, which would see the atomic arsenals of Russia and the US cut by a third.

President Obama assured President Medvedev that the US Senate regards the issue of START treaty ratification as a top priority, and both leaders seemed very determined to keep to their commitments.

The two leaders signed a deal to ratify the treaty in April, but it still needs to be passed by both the Duma and the Senate.

The chief US negotiator on the issue, Rose Gottemoeller, believes the ratification process has dragged on too long, and says it is now critical that it happens soon.

“There is zero chance that we can get back to the negotiating table any time soon on tactical nuclear weapons unless we get this treaty into force,” Gottemoeller said. “It will be a profound blow to the US-Russian relationship and will cause some difficulties in terns of advancing our national security agenda with the Russian Federation.”

Richard R. Burt, America's chief negotiator for the first START treaty, which was signed in 1991, believes that not ratifying the treaty now would send the wrong signal to the world – and in particular to countries in some of the world's trouble spots.

“Arms control is a critical component of dissuading other members of the international community from trying to go nuclear,” Burt stated. “And if we can’t get a modest arms control agreement ratified, aren’t we giving talking points to Ahmadinejad and Tehran? What impact are we having on Pakistan, on India and on other would-be nuclear powers in the greater Middle East? It has to be viewed as a massive setback in what I consider to be the fundamental security problem of our day, which is the spread of nuclear weapons to fragile, weak states and potentially on to terrorists.”

According to the head of the Franklin Roosevelt Foundation Yuri Rogulev, President Obama might try to persuade Congress to ratify the START treaty during the upcoming “lame duck” session (a Congress that assembles after its successor has been elected, but before the successor's term begins).

”Just recently there were congressional elections, which changed the political atmosphere and changed the situation in the United States Congress, with the Republican party gaining many more seats,” he said. “It means that all of them, all of the newly elected congressmen have been criticizing Obama’s foreign policy and that is why President Obama and his administration could persuade Congress to consider this issue and to ratify the treaty during this so-called “lame duck” session of Congress, which starts tomorrow, November 15.”

According to political analyst Mikhail Troitsky, the non-ratification of a nuclear-reduction treaty would do serious damage to US-Russia relations. Still, there are other areas where the two could continue their “reset,” he believes.

“If Russia considers its moves in advance and thinks them out thoroughly, then I think there is a chance the ‘reset’ will retain momentum and will develop along other parts

such as Afghanistan, or possibly missile defense, or Russia-NATO relations in other areas,” he said.

“But of course both the process of discussing the new START in the new Senate, should it be necessary, and the possible non-ratification or rejection by the US Senate of the new START would deal very serious blows to US-Russian relationships,” he concluded.

The summit in the Japanese city of Yokohama brought together the leaders of the 21 member states of the Asia Pacific Economic Cooperation (APEC) for two days of talks focusing on free trade and other pressing economic issues.

Clinton and Gates: Why the Senate should ratify New START

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/14/AR2010111403884.html?hpid=opinionsbox1

By Hillary Rodham Clinton and Robert M. GatesMonday, November 15, 2010For decades, American inspectors have monitored Russian nuclear forces, putting into practice President Ronald Reagan's favorite maxim, "Trust, but verify." But since the old START Treaty expired last December, we have relied on trust alone. Until a new treaty comes into force, our inspectors will not have access to Russian missile silos and the world's two largest nuclear arsenals will lack the stability that comes with a rigorous inspection regime.

Before this session of Congress ends, we urge senators to approve an arms control treaty that would again allow U.S. inspectors access to Russian strategic sites and reduce the number of nuclear weapons held by both nations to a level not seen since the 1950s.

The New Strategic Arms Reduction Treaty (New START), signed by President Obama and Russian President Dmitry Medvedev in April, builds on foundations laid by American leaders from both political parties over the past four decades. It has broad bipartisan backing. Six former secretaries of state, five former secretaries of defense and three former national security advisers have endorsed ratification, along with seven former commanders of U.S. Strategic Command and the entire current U.S. military leadership. They understand that nuclear dangers did not disappear with the Soviet Union and that we have a responsibility - to Americans and our allies - to keep our eyes on the world's other major strategic nuclear arsenal.

Time is running out for this Congress. Here is what's at stake:

New START will advance critical national security objectives: Reducing the number of deployed nuclear weapons while retaining a safe and effective deterrent; providing direct insight into Russia's nuclear arsenal; and creating a more stable, predictable and cooperative relationship between the world's two leading nuclear powers.

It will put in place an effective verification regime to track each side's progress in reducing its arsenal to 1,550 strategic warheads. We will be able to count the number of deployed strategic weapons more accurately, because we will exchange more data on weapons and their movement than in the past. We will also conduct 18 short-notice inspections of Russian nuclear forces each year, including checking warheads on individual missiles.

New START will also set the stage for future arms reductions, including negotiations on tactical nuclear weapons. It will help solidify the "reset" of U.S. relations with Russia, which has allowed us to cooperate in pursuit of our strategic interests.

That's what the treaty will do. Here's what it will not do:

It will not limit our ability to develop and deploy the most effective missile defenses to protect America's forces and territory, and to enhance the security of our allies and partners. This administration is committed to sustaining and improving our missile defense capabilities and has proposed spending nearly $10 billion in fiscal 2011 to do so.

It will not restrict our ability to modernize our nuclear forces. On the contrary, the United States will continue to maintain a robust nuclear deterrent based on our "triad" of delivery systems: intercontinental ballistic missiles, submarine-launched ballistic missiles and heavy bombers for nuclear armaments. To sustain and modernize these systems, the administration has proposed spending well over $100 billion during the next decade.

Furthermore, the treaty permits us to make investments as needed to maintain a secure and effective nuclear stockpile. The administration has proposed spending $7 billion for this purpose in the current fiscal year - a nearly 10 percent increase - and more than $80 billion to modernize our nuclear weapons complex over the next decade, including a major life-extension program for current warheads. In all, the administration proposes spending more than $180 billion on the infrastructure that sustains our nuclear weapons and the means to deliver them - a substantial investment in the credibility and efficacy of America's nuclear deterrent.

Finally, New START will not constrain our ability to develop and deploy the most effective conventional capabilities possible, including strike systems that could potentially hit a target anywhere on the globe in less than an hour.

Every president since the beginning of the Cold War has opted for verifiable arms control deals. Each time, the Senate has backed these treaties by overwhelming margins. The START Treaty, negotiated by Presidents Reagan and George H.W. Bush, was approved in 1992 by 93 votes to 6. The Moscow Treaty, negotiated by President George W. Bush, was approved 95 to 0 in 2003.

The New START Treaty also deserves prompt ratification. Our national security depends on it.

The writers are, respectively, the U.S. secretary of state and secretary of defense.

NOVEMBER 15, 2010

Old Problems With New Start http://online.wsj.com/article/SB10001424052748703514904575602992172574172.html?mod=googlenews_wsj

The Senate shouldn't ratify the New Strategic Arms Reduction Treaty without guarantees that the administration will modernize weapons and improve missile defense.By R. JAMES WOOLSEY

A number of years negotiating arms-control agreements with the Soviets taught me that, when dealing with Russian counterparts, don't appear eager—friendly yes, eager never. Regrettably, the Obama administration seems to have become eager for a deal in its negotiations on the follow-on treaty to the recently expired Strategic Arms Reduction Treaty (Start). Hopes for a boost in efforts to "reset" relations with Russia, and for progress toward the president's dream of a world without nuclear weapons, apparently combined to trump prudent negotiating strategy.

As a result, concessions to Russian demands make it difficult to support Senate approval of the new treaty, known as New Start, as it currently stands. Why has the administration agreed to a treaty that limits our nonnuclear long-range weapons and runs the risk of constraining our missile defenses? And why did the treaty end up with verification provisions substantially more lax than those negotiated in the 1991 Start treaty?

The Russians are engaging in a comprehensive modernization of their nuclear forces, which senior Russian military officials say is their top priority. We cannot deal effectively with them or with the growing number of nuclear-weapon states around the world if we are strategically weaker, undefended and clueless about our adversaries' capabilities.

Before the Senate approves New Start it should ask the administration to demonstrate its commitment to three things.

First, the administration needs to commit to replacing and modernizing our aging nuclear weapons laboratory and industrial infrastructure as well as the bombers, submarines and ballistic missiles—and the warheads on them—that provide our ultimate guarantee of national security.

The Senate's resolution of ratification should, for example, require the president to commit to specific modernization plans so we can be sure these programs will have his full support. The administration has particularly resisted warhead modernization, beginning with its Nuclear Posture Review last year. This led 10 former directors of the nation's nuclear weapons labs to write to the secretaries of Defense and Energy urging them to revisit that misguided policy. The secretaries should commit to doing so.

Second, it is crucial for the Senate to require that, in the ratification instruments that would be exchanged with Russia, it be made clear that New Start in no way constrains our development and deployment of the most effective missile-defense capabilities.

The administration should also be asked to show that it plans not only to maintain the current program to deploy effective missile defenses in Europe, but also to improve the missile-defense system now deployed to defend the U.S. against long-range threats. The administration's own intelligence estimates indicate that Iranian missile developments could constitute a serious threat to the U.S. several years before the administration's current program can add what is necessary to our defense against it. The administration should reverse the significant cuts it has made to our missile defenses and provide increased resources to develop our ground- and sea-based defenses, including new technologies that will take advantage of the first minutes of a hostile ballistic missile's flight.

Likewise, the Senate resolution should make clear that the treaty will not limit our key new nonnuclear systems, such as very accurate long-range missiles that can hit terrorist havens. And the administration should commit publicly to deploying these systems.

Is New Start verifiable? In this treaty, unlike in the original Start, Russia is free to encrypt telemetry from missile tests, making it harder for us to know what new capabilities it's developing. There is no longer the requirement for permanent, on-site monitoring of Russia's primary missile production facility, which under old Start helped us keep track of new mobile missiles entering the Soviet force. Satellites alone can't tell what's in a railcar exiting a factory. The administration touts treaty provisions that permit the U.S. to inspect Russian missiles themselves, but the new treaty requires fewer inspections.

Most importantly, New Start's verification provisions will provide little or no help in detecting illegal activity at locations the Russians fail to declare, are off-limits to U.S. inspectors, or are underground or otherwise hidden from our satellites. Incredibly, inspectors will only inspect declared sites. The treaty's preamble emphasizes that its verification mechanisms are less costly than those in the original Start treaty. Is there some reason to make our means of understanding the most lethal threat to our existence a high priority for cost-cutting?

Lastly, the Senate should demand that the administration negotiate a binding limitation on Russian sub-launched cruise missiles, as was the case with the first Start treaty. At the same time that the Russians are preparing to deploy a new 5,000 kilometer sub-launched

cruise missile, it is inexplicable that the administration would seek no limitations over systems such as these.

With adequate attention to the country's strategic needs and written guarantees thereof, the administration may be able to secure Senate approval of New Start. But it will be unlikely to succeed if it denigrates or ignores legitimate Senate concerns and continues on the path it has taken so far.

Mr. Woolsey served as an adviser to the Salt I negotiation (1969-70), a delegate-at-large to the Start and Defense and Space negotiations (1983-86), and ambassador and chief negotiator for the Conventional Armed Forces in Europe treaty (1989-91). He was director of Central Intelligence from 1993-95.

November 12, 2010Russia Profile Weekly Experts Panel: Will Obama's Electoral Defeat Disrupt the Reset with Russia?http://www.russiaprofile.org/page.php?pageid=Experts%27+Panel&articleid=a1289579512

Introduced by Vladimir FrolovRussia Profile

Contributors: Ethan Burger, Edward Lozansky, Anthony Salvia, Ira Straus, Alexandre Strokanov

The Russian political class cringed last Wednesday morning on learning that U.S. President Barack Obama had suffered a humiliating political defeat in the mid-term elections, losing Democrat control in the House and barely hanging onto a razor-thin Democrat majority in the Senate. Russian leaders are worried over what the Republican political onslaught on Washington might mean for the fledgling reset in U.S.-Russian relations championed by the Obama administration.

One vulnerable target for the Republicans is the new START treaty which the Obama administration hopes to get ratified during the lame-duck session of the sitting Senate where Democrats control 59 seats and would need eight Republicans to vote for the Treaty.

This is now looking increasingly unlikely as the Republicans have already indicated they want a full debate over the Treaty. They have also proposed unacceptable amendments to the ratification resolution leading Chairman of the Duma Foreign Affairs Committee Konstantin Kosachev to threaten to pull the Treaty off the ratification roster in the Duma. In the new Senate Obama would need the support of at least 16 Republicans - a daunting prospect.

Another likely victim of the Republican congressional victory could be Obama’s measured and cautious policy in the post-Soviet space, which has shown clear signs of

respect for Russia’s legitimate, if not privileged, interests in the region. Republican control of the House and its Foreign Affairs Committee means that they would be in a position to pass provocative legislation to impose sanctions on Russia for its policies in the post-Soviet space or provide financial support and even military assistance to Georgia – something that would most likely disrupt the reset.

Russia’s entry into the World Trade Organization (WTO) and its graduation from the Jackson-Vanik amendment could also be called into question by the Republican leaders.

The noticeable improvement in U.S.-Russian relations under Obama’s reset has turned into a serious political asset for Russian President Dmitry Medvedev who can point to few other foreign or domestic policy successes during his first term in office. The partnership with Obama has also boosted Medvedev’s fortunes domestically and strengthened his claim to the presidency in the eyes of the Russian elites.

Moscow is worried that Obama’s defeat in the mid-terms signals the electorate’s unhappiness with his policies, including his foreign policy, and that correcting these perceptions will also involve recalibrating Obama’s course with regard to Russia, particularly producing greater criticism of Russia’s deficit of democratic freedoms.

There is unease in Moscow over the growth of what one Russian legislator called “the rise of provincial radicalism” in the United States with Republicans turning to their “dark side.” There is a palpable fear that Obama could be a one-term president to be replaced by someone as monstrous as Sarah Palin.

Are these Russian fears over the future of the reset justified? Could the new Republican majority force Obama to review his policy toward Russia and yield to pressures that tally more closely with the Republican agenda? Is the new START Treaty dead in the U.S. Senate? What could be the Republican impact on U.S. policies in the post-Soviet space and cooperation with Russia on Iran and Afghanistan? Could the Republicans provoke a crisis with Russia over Georgia? Is the U.S. turning to the dark side of Republican provincial radicalism and what could that mean for American foreign policy in general and its relations with Russia in particular?

Edward Lozansky, President, American University in Moscow and World Russia Forum in Washington, D.C. :

The most impressive victory of the Republican Party in the last elections sent shivers not only through the White House and Democratic Party headquarters but through Moscow’s political establishment as well. Here, the fear is that the new Congress could try to undermine Obama's reset policy with Russia.

But although Obama undoubtedly comes out of this election severely weakened domestically, he is still pretty much in charge of U.S. foreign policy. Can he make some headway in this area to help the country and himself in view of the upcoming presidential campaign?

It will of course not be an easy task, given that America, which only 20 years ago was the world’s only and undisputed superpower, has suddenly found itself in a very precarious geopolitical, economic and financial situation. Now, the story of America’s difficulties can be recycled endlessly and fingers pointed at those who were to blame for the current sad state of affairs. However, discussing the things that need to be done seems a much more meaningful pursuit.

As far as U.S.-Russian relations are concerned, one piece of advice coming from the Cold War school is to follow the Clinton-Bush strategy, or perhaps an even more extreme one: that of isolating and weakening Russia through NATO expansion, building oil and gas pipelines bypassing Russia, exerting pressure on Old Europe for being too soft on Russia while encouraging New Europe to be even tougher toward the same. Other aspects of this strategy include sponsoring “color revolutions” along Russia’s perimeter under the guise of promoting freedom and democracy while at the same time building economic and political-military alliances with even the most dictatorial regimes in the post-Soviet space.

In short, advocates of such a policy demand that Russia be seen as a clone of the Soviet Union. For champions of this approach, a slightly modified containment policy as well as continued ideological warfare under the neutral term of “public diplomacy” are logical and highly desirable.

Among this policy’s immediate goals are derailing the START treaty, building pipelines with little economic sense to transport the Caspian energy flow to Europe bypassing Russia, resisting Russia’s efforts to integrate into the European security architecture, bashing Russia for its poor human rights record, and so on and so forth. All this is presented as the best policy, putting America’s interests first. However, this approach appears highly dubious and even suspect on at least two counts.

First, given the situation America currently finds itself in. With astronomical national debt, close to ten percent unemployment, two endless and intractable wars, the rise of militant Islam, and myriad other problems, can the United States afford another Cold War and continue to claim to be the world’s policeman?

Second, even if the United States can still afford it, is it in the Americans’ best interest to add Russia to the already long list of enemies instead of luring it to the other side of the barricades, just as Old Europe is trying to do with some success? Instead of barking at Europeans for their willingness to engage Russia, obviously the biggest, most populous and arguably most powerful country in Europe, shouldn’t America join the process?

NATO Secretary General Anders Fogh Rasmussen is certainly not a paid Kremlin propagandist, but as the leaders of the former Cold War foes prepare to meet in Lisbon later this month he is saying that NATO sees Russia as a strategic partner and seeks to cooperate on missile defense. Presently NATO doesn't view Russia as an enemy, said Rasmussen, and there is an opportunity to turn a page in relations. President Medvedev responded in kind by saying: "We are pleased because it gives an opportunity to more

attentively develop cooperation and create a more sustainable system of security in Europe and in the world."

And this is not just an exercise in diplomacy. His words were linked to real deeds, like providing NATO supply routes to Afghanistan, helicopters, military personnel training, participating in joint military operations there, moving closer to U.S. positions on Iran, on nuclear non-proliferation, and many other security issues.

Those who disagree with Obama's reset policy should be advised that it is not a betrayal of U.S. national interests, as some of the Cold War warriors are saying, nor is it an act of charity for Russia's benefit. It is essential to the security of the United States itself.

As for east Europeans who do not like the United States’ Russia rapprochement, it is the time to tell them that they should stop crying wolf and begging for protection from the Russian bear. Instead, they should build strong trade and economic links with Russia.

There have been some positive shifts in this area as Poland and Ukraine have elected leaders that represent a drastic departure from old confrontational policies. Even in the Baltic countries there is a tendency to realize that normal relations with Russia are better for their economy and security than continuous appeals to Washington for more armaments and funds.

The main theme of the reset policy is simple, commonsensical and probably effective: cooperation is better than confrontation, compromises have to be worked out whenever there is a difference in interests, and overall security is paramount. Naturally, these goals are not easy to achieve, they will require a sustained effort by politicians on both sides of the Atlantic.

The first test for Obama’s post-election situation is quickly approaching. The Senate, which now makes Obama something of a lame duck, has to vote on the ratification of the START treaty very soon. Moscow is pretty nervous on this score. Konstantin Kosachev, chairman of the Russian Parliament’s International Affairs Committee, said it would withdraw its recommendation that the Russian Federation’s legislature ratify the U.S.-Russia START treaty until they are sure that the U.S. Senate is prepared to ratify it as well.

Should the Senate vote “yes,” it might be a good push to build up new momentum for the reset agenda. Should it vote “no,” we might as well get ready for a big chill in U.S.-Russian relations, which is bad for both countries and for mankind.

The old Cold War thinking leads to defense expenditures we cannot afford and which ultimately make America weaker. Both parties say that they want to reduce spending, and the major area for that is defense budget. START helps lower the deficit without weakening national security. In fact, it benefits national security by reducing the total number of nuclear arms in the world and by encouraging other nuclear nations to reduce

their stockpiles. START has been endorsed by practically all living former American Defense and State secretaries, who obviously see the importance of the treaty.

If we could only rid ourselves of the memories of the Cold War!

Alexandre Strokanov, Professor of History, Director of Institute of Russian Language, History and Culture, Lyndon State College, Lyndonville, Vermont:

Let’s begin with a simple question: what has this “reset” really brought to Russia so far, except for traditionally mixed rhetoric from Washington (sometimes nice words about Russia’s greatness and sometimes accusations of occupying a neighboring country) and lots of traditional promises, most of which were also made by the previous Republican administration of George W. Bush (Russia’s entry to the WTO, end of the Jackson-Vanik amendment, and finally cooperation in the civilian nuclear energy sector, or the so-called 123 agreement). The visible difference is that, instead of cars (that U.S. presidents brought as gifts for Brezhnev) we now have much smaller and cheaper toys like the iPhone, and instead of fancy dinners we see lunches with hot dogs (both presidents want to be seen as democrats and are eager to show their closeness to middle class people).

Unfortunately, for the last year and half, since March 2009, the reset, which is a great idea and has my wholehearted support, did not produce much in terms of real and palpable accomplishments. We should note that in that period of time, the Democratic Party had the majority in both houses of Congress. Neither did the reset bring the Russian and American people closer to each other. I will provide just one example: to visit Russia for a week-long study tour, my students will have to pay $190 ($140 consular fee and $50 service fee) just to get a Russian visa, which is plain ridiculous. This is the most expensive visa that I ever have had to deal with, although I have visited about a hundred countries around the world. In its turn the U.S. visa for Russian visitors is expensive also (although it is valid for a year and slightly cheaper, but on the other hand is more difficult to get). Maybe the reset should start here and make it easier for people, in particular young people, like students, from both countries to visit and see with their own eyes life on the other side of what is now a “money curtain” that came to replace the iron one. But why is this curtain there and moreover growing? Just a few months ago it was possible to get a Russian visa for only $131. Perhaps President Dmitry Medvedev will explain it to my students.

Another shortcoming of this reset is the obvious lack of an economic component. Russian and U.S. business communities need to develop closer ties and get involved in many profitable and mutually beneficial projects. Unless this happens, the relations between the two countries will be at the mercy of their politicians, who regardless of their party affiliations have their “dark sides,” - provincial radicalisms etc. U.S.-Russian relations obviously are in need of a good economic foundation.

In regards of the new START Treaty I personally am not so pessimistic and I still believe that it will be ratified by the U.S. Senate during the lame-duck session in November 2010, or even later. It seems to me that the so-called Republican threat to the treaty is

greatly exaggerated in the media. Both U.S. major political parties perfectly understand the necessity of some kind of agreement with Russia on this issue, and even if this version of the treaty is not ratified it would not be a tragedy, and work on a new treaty would begin soon after it.

The United States certainly does not need another crisis around Georgia, and I doubt that any change of U.S. policy towards this troubled Trans-Caucasian nation should be expected in Washington, as it did not really happen in the last two years. The United States needs people ready to fight for its interests in Iraq, Afghanistan and elsewhere, and consequently the U.S. government will continue to support countries that provide troops for American wars, regardless of whether it is Georgian president Saakashvili or someone else.

Anthony T. Salvia, Director, American Institute in Ukraine, Kiev:

The Republican Party used to be reluctant to intervene in world affairs. Senator Robert Taft was a principled non-interventionist. His rival, President Dwight Eisenhower, espoused internationalism, but one tempered by a keen awareness of the threat posed to republican institutions by a burgeoning military-industrial complex. For better or worse, Eisenhower ended the Korean War, warned his successor John F. Kennedy against involving U.S. ground forces in Vietnam, and resisted calls to intervene in the Suez crisis and the Hungarian uprising.

All of that was long ago and far away. Now many Republicans are more Democratic than the Democrats, having embraced the warfare/welfare state of Wilson and Roosevelt with unwonted zeal. Influenced by so-called “neo-conservatism,” they advocate a militarized foreign policy, the spread of democracy (often a euphemism for progressive ideology), and the stamping out of evil wherever they find it no matter the cost in blood and treasure. This is not your father's Republican Party.

In view of the president’s leadership role in formulating foreign policy, Republican influence over U.S.-Russian relations will be limited in the two years leading up to the next presidential election. Nevertheless, the new majority can be expected to portray any effort by Obama to accommodate countries it does not like (Russia, for example) as evidence of weakness and a lack of patriotic zeal on his part. Thus, while they are probably not in a position to force Obama to ditch his reset of US-Russian relations, they are in a position to make him pay a stiffer political price for it than he has to date.

Beyond this, the Republican gain of six seats in the U.S. Senate could well complicate ratification of the START treaty with Russia., making it harder for the White House to obtain the required two-thirds majority. In addition, with the Wall Street Journal criticizing Ukraine’s handling of the regional elections last month, and the chairmanship of the House Foreign Affairs Committee passing to a Russo-skeptic Florida congresswomen, the Republican leadership may well ramp up “democracy promotion” in the former Soviet Union. (According to the U.S. Constitution, spending bills originate in the House.)

While some Republicans would love to resume the encirclement of Russia, several factors will mitigate their ability to do so:

1) Republican non-interventionists are staging a comeback. The new Congress will include a healthy number of Ron Paul-style small government conservatives for whom foreign interventionism, and the military spending that enables it, are anathema. They can be expected to resist efforts to resume America’s push for global strategic predominance including “resetting Obama’s reset with Russia” (as a recent paper from the Heritage Foundation put it).

2) The United States is bankrupt. In view of looming pressure to reduce national security spending, Republicans may come to realize that they cannot afford to re-engineer the Middle East and encircle Russia at the same time.

3) Ukraine is no longer keen to serve as a club with which America can beat Russia. It has other fish to fry, not least promoting a new pan-European entente cordiale, which Ukraine helped launch with its declaration of non-aligned status earlier this year. As long as Ukraine is unwilling to play ball, U.S. options for encircling Russia are severely limited.

4) Europe is indeed moving toward a new entente, putting a definitive end to the division of the continent into hostile eastern and western sectors. French president Sarkozy met recently with German chancellor Merkel and Russian president Medvedev to discuss the creation of a new zone of European economic and security cooperation to supersede (though not annul) NATO. Europe will not look kindly on efforts to revive the divisions of the past.

The Republicans won the election, but do not possess executive power. That remains with the president, but he was repudiated. Republicans are loath to slash a defense budget on which many of their constituents depend; Democrats feel the same way about pet social welfare programs. As U.S. commentator Patrick J. Buchanan puts it: “The center has disintegrated. The result: a deadlock of democracy, with neither party responsible and neither accountable, as we drift toward the falls.”

The policy of encircling Russia was always a luxury rendered affordable by the economic bubbles of years gone by (and never did correspond to U.S. interests). In the event Republicans take the White House in 2012, and the Middle East remains the intractable mess it is today, and the global economy is beset by stagflation (entirely possible in view of current Federal Reserve policies), they will have their hands full. They may well come to appreciate Obama’s prudent handling of relations with Russia today, and to see in it the reflection of their fathers’ Republican Party.

Ethan S. Burger, Esq, Senior Lecturer, Centre for Transnational Crime Prevention, Faculty of Law, Innovation Campus, University of Wollongong, AUSTRALIA:

Although my recent search on Google of “Tea Party,” “foreign policy,” and “Russia” yielded over 400,000 hits, I doubt that many U.S. citizens cast their vote last week in order to express their frustration over President Barak Obama’s handling of the country’s foreign policy toward Russia.

Nonetheless, the results will embolden many of Obama’s public and behind closed doors critics. Some specialists who in 2008 were glad to see a Democrat in the White House may feel free to share their views regarding what they see as a misguided Carter-esque foreign policy (i.e. that of the pre-Soviet Invasion of Afghanistan era, but without a genuine commitment to the protection and promotion of human rights).

The Russian political establishment has good reason to be alarmed about the composition of the new Congress. The belief that Russia is too important to be held accountable for its transgressions through meaningful action rather than words or “quiet diplomacy” is now subject to challenge. This will create a new dynamic.

The Obama administration clearly prefers to deal with president Medvedev than prime minister Putin, but does its preference have any meaningful impact on Russian policy making (or even on its traditional allies’ policies toward Russia)? Unless the U.S. government can achieve some genuine and longstanding foreign policy successes in numerous realms, its foreign policy team will be forced to adopt new methods. This may be unfortunate as political change in Russia occurs slowly and generally occurs after setbacks too great to ignore.

As a result, it will take longer for a new START agreement to win Senate ratification, but it remains highly unlikely that it will be defeated. Perhaps more Americans will be willing to question publicly why the U.S. should be supportive of Russia’s efforts to join the WTO when it does not honor many of its existing treaty commitments, pursues an opportunistic foreign policy, and its progress toward greater civil/human rights domestically is marked daily by troubling developments.

Ira Straus, U.S. Coordinator, Committee on Russia in NATO, Washington, DC:

1. The probable outcome is more mixed: some losses for the reset, some gains for it as well.

Probably, the risks to START, as outlined by Frolov -- maybe overstated. Most likely START will be used to bargain for commitments out of Obama on other nuclear matters not affecting Russia.

The probable gains:

Afghanistan. There will be more constancy in support of the war effort, less pressure for suicidal deadlines, a continued welcome from the U.S. (although not from Karzai) for such involvement as Russia may choose.

More support for and ratification of trade agreements around the world. This may not help Russia, but then again, maybe it will. The question should be treated as open. Why not explore it?

It'd be worth considering a dramatic-sounding proposal that would play well ideologically with the Republicans, such as a U.S.-Russian free trade agreement. This would serve to scrap Jackson-Vanik en passant, by changing the ideological context, rather than fighting endlessly within the old context that keeps reminding people of their Cold War positions.

Other, more remote possible gains derive from greater flexibility in strategic concept. For example, Medvedev could welcome the evolving semi-alliance of the United States with India, as complementary to Russia's relations with both countries. He could revive the project of a U.S.-Russian-Indian triangle, which was discussed among Russian democrats in the late 1990s as an alternative to Primakov's China triangle; it would upgrade the cooperation on the three powers' shared problems in the Islamic space in-between them, and would have the symbolic significance of uniting the countries that in Cold War times were the core of the First, Second, and Third worlds.

Foreign policy is overwhelmingly in the hands of the president, not Congress. Policy in the CIS will remain in Obama's hands. And Obama needs the reset just as much as Medvedev does. It is Obama's only significant foreign policy success, amidst a sea of failures – Iran, where the outstretched hand brought contempt and increased aggressiveness; China, which too has become increasingly aggressive; Latin America, where bad has gone to worse; even Europe, where the Obama effect proved of no benefit, and good opportunities have been wasted. The only positive thing he can point to has been the increased unity of the international community vis-а-vis Iran; which has meant, mostly, Russia, i.e., the reset.

2. About "provincial radicals" in America: Here Frolov’s concern is well-justified, and shared by many Americans. But remember the context of American history. Provincial radicals have come close to power in America many times, occasionally rising to hold real power – George W. Bush, Andrew Jackson – but never with the devastating effects felt when similar groups have come to power in eastern European countries such as Russia.

Provincial radicals largely set the tone for the country in 1776, and ever thereafter we've had lots of provincial radicals around trying to ape them. Provincial radicals came to power in much of America during the Revolution, and afterwards largely returned to power with the triumph of Jefferson's Republicans; but they coexisted with and alternated with older elites. Not that no price was paid; one could judge the civil war of 1776 to 1783 a heavy price, along with the repressions which the radicals imposed during that war, repressions far more severe than in any of America's later wars (no one remembers that nowadays, when ignorant senators and journalists on the liberal-left give us an endless stream of alarmed comments about how we're losing our liberties through wartime restrictions, contrasted to the supposedly pristine, pure civil liberties records of

our Founding Fathers). One could add later costs -- the second civil war in the 1860s was a long-term consequence; a century of enemy relations with England; the disastrous isolationism of the 1930s. Yet all this pales when compared to the costs of most revolutions.

Today's Tea Party movement is another belated consequence of the idealization of America's bout of provincial radicalism in the 1770s; its ego-identity model, the Boston Tea Party, wrecked the prospects of conciliation between the colonies and Britain. Will we have a new revolution and civil war? No. Very few of even the wildest Tea Partiers would wish for that. They may idealize the most radical people of 1776, but in reality, fortunately, they have little in common with them. They have been utterly peaceful and law-abiding.

Violence in demonstrations continues to come almost exclusively from the far Left, provincial radicals in their own way and also acolytes of 1776, who vent their violent inclinations consistently against meetings for international cooperation. It is there that one finds the truer heirs to the Boston Tea Party, trying once again to set off a spark that would bring down the world order and plunge us into civil war. Terrorist violence and wishes for civil war continue to come almost exclusively from the far Left – notice the Greek Left at the moment with its letter-bombs and crippling strikes and demonstrations – alongside Islamist extremism. Islamism, despite its seemingly Rightist religious fundamentalism, has had a mutual semi-adoption relationship with the Western far Left.

Russia may find greater support from America's provincial radicals than from the older American elites for its difficult pacification efforts in the Caucasus. American provincial radicals often come from American activist churches, which have international charities and outreaches that give them some experience of the external world's conflicts. They report internally on their experiences in pro-Christian terms untroubled by any sense of relativism; they are anti-Islamic in terms that would be horrible for direct policy-formation, but are an antidote to the denial of the reality that has so often led each power, America and Russia, to fail to support the other in its conflicts with Islamists.

The Tea Party radicals in Congress are a minority faction of the Republican Party, which in turn controls one house of Congress; they add up to a fraction of a fraction of the several Federal institutions. They fancy themselves heirs to the American Revolution; they also, most of them, fancy themselves conservatives, and align with the existing Republican conservatism. A rising radicalism always has its dangers, well worth bringing up among us Americans, who need to act intelligently to prevent a further rise to a position where it could do real damage; for our foreign partners, well worth assessing accurately, without exaggeration -- assessing it primarily in its present condition, not primarily in its worst-case potential.

Medvedev Can Learn From Obama’s Errors http://www.themoscowtimes.com/opinion/article/medvedev-can-learn-from-obamas-errors/422956.html

15 November 2010By Vladimir Frolov

To the Kremlin’s chagrin, U.S. President Barack Obama suffered a stinging political defeat at the midterm congressional elections two weeks ago.

Moscow is worried over what the Republican revanche in Congress might mean for the “reset” in U.S.-Russian relations. The concern is not limited to foreign policy. President Dmitry Medvedev’s domestic political standing could be adversely affected if the reset goes south.

The noticeable improvement in U.S.-Russian relations under Obama has turned into a political asset for Medvedev, who can point to few other foreign or domestic policy successes during his first term in office. The partnership with Obama has strengthened Medvedev’s claim to be a real president and to be a candidate for a second presidential term in the eyes of the Russian elite.

Here, Medvedev risks committing the cardinal sin of a Russian ruler — trying to convert international adoration into a domestic political legitimacy that would compensate for failed policies at home.

There are other lessons for Medvedev to learn from Obama’s failures — above all, choosing priorities. Obama misjudged the public’s tolerance for big government. He focused on the long-term priorities, pushing through a complicated health-care and financial oversight reform, while the U.S. public, reeling from the recession, was hoping that Obama could deliver quickly on jobs.

Medvedev seems to be heading this way with Skolkovo with his calls for modernization that few Russians can relate to. His recent hint at pursuing political modernization before economic modernization makes a positive impact on people’s lives could be a fatal lapse of judgment.

Another lesson is of political style. Obama came across as an aloof and self-absorbed president who could not “feel voters’ pain.” “Obama is seen as the leader of an elitist, intellectual class that is out of touch with the mainstream,” a Washington insider recently told me.

Medvedev appears bent on imitating Obama’s worst stylistic faults: a cerebral, detached president surrounded by arrogant advisers with iPads who are convinced that their policies would be good for the people — someday. Increasingly, Medvedev comes across as the leader of an elitist and liberal intellectual class that is out of touch with the rest of the country.  

Medvedev is lucky that he doesn’t need to worry about midterm elections. Obama lessons could come in handy in 2012.

Vladimir Frolov is president of LEFF Group, a government-relations and PR company.

National Economic Trends

Russia's official unemployment up first time in 8 months - ministryhttp://en.rian.ru/business/20101115/161341226.html

11:24 15/11/2010

Russia's official unemployment increased by 0.2 percent to 1.526 million people over the week of November 3-10 for the first time in the past eight months, the Ministry of Health and Social Development said on Monday.

"Last week, from November 3 to November 10, 2010, the number of unemployed people increased 0.2 percent to 1,526,518 people," the ministry said in a statement.

The ministry explained the rise in official unemployment as seasonal.

"Last year, seasonal unemployment growth started on October 28 (from October 28 to November 4, 2009, the number of unemployed rose by 0.3 percent)," the ministry added.

A rise in unemployment was registered in 46 regions.

MOSCOW, November 15 (RIA Novosti)

November 15, 2010 09:15

Russian banks have 547.1 bln rbs on CBR correspondent accounts on November 15.http://www.interfax.com/newsinf.asp?id=201898

MOSCOW. November 15 (Interfax) - Russian banks have 547.1 billion rubles on correspondent accounts in the Central Bank as of November 15 including 386.6 billion rubles for Moscow banks

The balance on November 13 was 564.6 billion rubles and 401.2 billion rubles, respectively.

Banks had 384.8 billion rubles on deposit accounts in the Central Bank on November 15 against 315.4 billion rubles on previous day.

Kudrin Deputy Hits Narrow Tax Breaks http://www.themoscowtimes.com/business/article/kudrin-deputy-hits-narrow-tax-breaks/422944.html

15 November 2010Reuters

Russia's recent reintroduction of tax breaks for selected companies and oligarchs — a vogue practice of the 1990s — stalls the country's reforms and development, a senior tax official said over the weekend.

"We are again starting to move toward one or another tax break," said Sergei Shatalov, the Finance Ministry's top tax official. "In my opinion, this is not a correct position, it is a wrong logic. But this is the logic that's very prominent today.

"In our economy there are a lot of problems and some of them need big, serious decisions, but these decisions are not being made, and then it seems the simplest way is granting tax breaks," he told a conference.

Shatalov said such favoritism could lead to a wave of abuse and dubbed the practice a burden for businesses that had no government connections.

His remarks seem to be chiefly directed at the oil industry, where the government of Prime Minister Vladimir Putin has offered a series of tax relief, including a zero export duty for 22 oil fields in East Siberia this year.

The East Siberian breaks are to end in 2011, but the government has extended the preferential treatment to the Vankor oil field, run by Russia's largest oil producer, Rosneft, for at least four months.

Deputy Prime Minister Igor Sechin is chairman of Rosneft's board of directors.

Shatalov said granting tax breaks to large state companies often did not bring desired results and may hamper innovations in the economy.

Shatalov also sharply criticized proposals to get rid of profit tax from sales of stakes in companies by private parties.

"There is an opinion that this will contribute to the modernization of the economy," he said. "I do not see such a connection."

He said this practice reminded him of tax breaks given to "certain citizens" of Russia in the early 2000s, referring to oligarchs.

Shatalov said that instead of tax breaks, direct budget financing or tax credits would be much more effective.

"This is also a tax break after all, but based on different principles — this is a possibility to lower tax burden post-factum in conditions where these or other results … have been achieved," he said.

The worst practice was personal favoritism, Shatalov said.

"When these or other tax payers are being fully freed from tax obligations only because we like them — this variant I like the least," he said.

The government plans to offer North Caspian oil fields a discounted export tax rate from Dec. 8, Alexander Sakovich, a Finance Ministry adviser, said Saturday, Bloomberg reported.

LUKoil, Russia’s largest non-state oil company, began commercial output at the Korchagin field, the start of crude production in the Russian part of the Caspian Sea, in April.

MinFin suggests delaying hike in unified social tax http://www.bne.eu/dispatch_text13605

VTB CapitalNovember 15, 2010

News: Deputy Minister of Finance Sergei Shatalov announced last Friday that the government should reconsider hiking the unified social tax to 34% from 26% next year. He mentioned that the Ministry of Finance had suggested alternative ways of reforming the social and pension system which were less stressful for the economy. Shatalov also reiterated Minister of Finance Alexey Kudrin's position that one cannot reform the Russian pension system without gradually rising the retirement age.

Shatalov also stated that a differentiated tax on real estate (with much higher rates on high-end property) would help to alleviate income inequality and needs to be introduced as soon as possible. However, there are certain technical difficulties that prevent the MinFin from doing it.

Our View: The risk of layoffs due to the higher tax burden on the wage bill next year might prompt the government to respond to the MinFin's proposal, particularly as the budget deficit this year is likely to be smaller than the official forecast. A delay, or a more gradual increase, in the unified social tax would benefit labour intensive sectors, particularly retail trade.

Over 30 credit institutions disappearhttp://www.bne.eu/dispatch_text13605

bneNovember 12, 2010

Over 30 Russian credit institutions have ceased trading this year, reports Prime Tass. The number of credit institutions in Russia decreased by 33, to 1,025 as of November 1 from 1,058 as of January 1. According to the CBR, 967 of the surviving institutions are banks.

Many expected the financial crisis to provoke a lot more consolidation in Russia's overpopulated banking sector than was seen.

Bad year for Russian farmershttp://www.bne.eu/dispatch_text13605

Bank of Finland November 13, 2010

The agriculture ministry reports that, due to last summer's exceptional drought conditions, Russia's agricultural 2010 output will be about 10 % less than in 2009. Total crop production is about 20 % lower than last year. Grain production is expected to fall to around 61 million tons, or about a quarter less than the average of 83 million tons a year during the 2000s. Production hit 97 million tons in 2009, which was still below the record 2008 harvest of 108 million tons.

Wheat production is forecast to fall this year by a third to 41 million tons, while barley production will halve to 8 million tons. The worst crop losses were experienced in the Volga Federal District and the Central Federal District surrounding Moscow. Harvests in the North Caucasus Federal District and the Southern Federal District were about as large as last year.

The agriculture ministry said this year's grain harvest combined with the grain reserves built up from previous years is sufficient to satisfy domestic grain demand. Rus-sia is targeting a grain harvest of 85 million tons in 2011, even if the drought has delayed autumn sowing especially in the Volga Federal District, which may diminish next year's harvest.

The government would like to see a larger harvest next year in order to allow the country to resume grain exports, which have been suspended since August. The grain ex-port ban was originally to last through December, but has now been extended to spring 2011.

Business, Energy or Environmental regulations or discussions

AvtoVAZ, Rosneft and Severstal: Russian Equity Previewhttp://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aK9lv7cbdlEE

By Jason Corcoran

Nov. 15 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index fell 0.5 percent to 1,548.96 at the close in Moscow. The dollar-denominated RTS Index dropped 1.2 percent to 1,610.78.

OAO AvtoVAZ (AVAZ RX): Russia’s largest carmaker plans to strengthen its partnership with Japan’s Nissan Motor Co. and France’s Renault SA to boost their combined market share in Russia to 40 percent by between 2015 and 2016, Nikkei reported yesterday, citing President Igor Komarov at an investment forum in Japan. AvtoVAZ fell 4.6 percent to 33.41 rubles on the Micex stock exchange.

OAO Rosneft (ROSN RX): Oil slipped the most in more than three weeks, declining 3.2 percent to $84.97 per barrel on speculation China will raise interest rates, curbing demand growth in the world’s biggest energy-consuming country. Rosneft, Russia’s largest oil producer, fell 0.4 percent to 216.91 rubles on the Micex stock exchange.

OAO Severstal (CHMF RX): Russia’s largest steelmaker yesterday recommended paying a nine-month dividend of 4.29 rubles (14 cents) a share, the first payout in two years. Severstal rose 0.5 percent to 451.5 rubles on the Micex stock exchange.

To contact the reporter on this story: Jason Corcoran at Jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Last Updated: November 14, 2010 22:00 EST

RTS Stock Exchange May Seek $400 Million in IPO, Kommersant Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aQhhFyiGzQVg

By Ilya Arkhipov

Nov. 15 (Bloomberg) -- The RTS Exchange in Moscow may seek to raise as much as $400 million in an initial public offering next year, the Kommersant newspaper reported, citing an unidentified shareholder.

The RTS may seek to sell 40 percent to 70 percent of its shares in the IPO, Kommersant said, citing an unidentified person familiar with the matter. RTS chief Roman Goryunov said the bourse would seek to sell “at least” 20 percent of its shares, the newspaper said.

The exchange last week said it hired Morgan Stanley, Alfa Bank, Troika Dialog and Renaissance Capital to manage the share sale, without saying how much it planned to raise.

To contact the reporter on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

Last Updated: November 15, 2010 00:42 EST

Evraz enjoys rise in 9-month revenue

http://www.rbcnews.com/free/20101115120200.shtml

      RBC, 15.11.2010, London 12:02:00.Evraz Group's revenue under IFRS climbed 36.7 percent and amounted to $9.729bn in the first nine months of 2010 compared to $7.118bn for the same period a year earlier, the vertically integrated Russian metallurgical and mining company indicated in a statement today.

      Consolidated EBITDA totaled $1.766bn, double the figure for the first three quarters of 2009. EBITDA margin stood at 18.2 percent.

      Meanwhile, the company's outstanding debt amounted to $7.851bn as of September 30, 2010 and capital expenditures reached $584m.

EuroSibEnergo Seeks $1.5 Billion in Hong Kong IPO (Update2) http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=abuyKxj0IM94

By Lyubov Pronina, Maria Levitov and John Duce

Nov. 15 (Bloomberg) -- OAO EuroSibEnergo, Russian billionaire Oleg Deripaska’s power utility, said it’s seeking to raise $1.5 billion in an initial public offering in Hong Kong.

The sale will take place in December, Deripaska told reporters in Tokyo yesterday. EuroSibEnergo plans to sell a 25 percent stake by the year-end, a person familiar with the matter said on Nov. 10, declining to be identified as the information wasn’t public.

The offering would follow the sale of shares in January of United Co. Rusal, also controlled by Deripaska, as Russian businesses venture abroad for funding. “Investable

wealth” in Russia fell 19 percent to 3.4 trillion rubles ($110 billion) last year, when the economy shrank the most since the 1991 collapse of the Soviet Union, Citigroup Inc. said on April 8.

Several major Russian companies will raise funds in Hong Kong after Rusal, Sergey Gritsay, Russia’s Consul General in Hong Kong, said at an investment conference in the city today, without elaborating.

EuroSibEnergo sells more than half its electricity to Rusal and is Russia’s second-largest hydropower producer after OAO RusHydro. Deripaska owns EuroSibEnergo via the same EN+ Group holding company that holds his 48 percent stake in Rusal.

Rusal, the world’s biggest producer of aluminum, raised about $2.2 billion in the first IPO in China by a Russian company. Hong Kong is the best way for Russia to tap into Asia’s economic growth, according to Gritsay.

Rosneft, Gazprom

Rosneft Oil Co., Russia’s biggest oil producer, has no plan to sell shares in Hong Kong currently, Finance Director Anton Kozhinov said at the investment conference.

“We are not considering listing Rosneft shares on the Hong Kong stock exchange in the immediate future, but I would not rule out these plans for a more distant future,” Kozhinov said. “We probably need to see more cases of placing shares out of Russia before Rosneft would get to this stock exchange.”

OAO Gazprom, Russia’s gas export monopoly, has “little reason” to list in Asia now as market liquidity is still mainly in London, Peter Bakaev, head of capital markets, said at the conference. OAO Lukoil is considering the possibility, according to Andrey Gaidamaka, vice president of strategic development at Russia’s second-largest oil producer.

“We are currently considering a few Asian exchanges, and are doing cost-benefit analysis to see if it is possible to increase our liquidity,” Gaidamaka said.

In Hong Kong this year, companies have raised more than $40 billion through initial share sales, Financial Secretary John Tsang said at the conference today.

More than 80 businesses have applied to list their shares in Hong Kong over the coming months, Ronald Arculli, chairman of Hong Kong Exchanges & Clearing Ltd., said on Oct. 8.

To contact the reporters on this story: Lyubov Pronina in Yokohama, Japan, via the Moscow newsroom at lpronina@bloomberg.net; Maria Levitov in Moscow at mlevitov@bloomberg.net

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net.

Last Updated: November 14, 2010 23:22 EST

Rusal Aluminum Sale Price to Rise in 4th Quarter, Deripaska Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a6Ru2Q4Yb6qs

By Lyubov Pronina and Maria Levitov

Nov. 15 (Bloomberg) -- United Co. Rusal, the world’s largest aluminum company, estimates its aluminum price in the fourth quarter will rise on greater demand from Asia, Chief Executive Officer Oleg Deripaska said.

The price the company charges per ton of aluminum will be $200 higher in the fourth quarter than in the previous three months, Deripaska told reporters in Tokyo yesterday. “We believe our sales price will be $2,500” per ton, he said.

Greater development in China will stimulate demand as consumption in the Asian country gradually increases to 20-22 million tons of aluminum over the next 3 to 4 years, Deripaska said. The same is true of Korea, Japan and Taiwan, he said.

“Aluminum consumption will grow 4 to 5 percent a year in the next 7 to 8 years,” he said.

The market for alumina, the raw material for aluminum, has also picked up from last quarter’s levels, allowing Rusal to restart its Windalco-Ewarton alumina works in Jamaica in June. “We may consider next year more additional capacity to be put into operation,” billionaire Deripaska said.

Rusal isn’t interested in selling its 25 percent stake in Russia’s OAO GMK Norilsk Nickel, which is set to be worth more than $15 billion by mid-2011, according to Deripaska.

“We have a nice stake, which we do not plan to sell,” he said. “We believe Norilsk is worth much more than you have seen already.”

Rusal rebuffed a $9 billion offer from billionaire Vladimir Potanin to buy its stake in Norilsk Nickel. Rusal’s investment is “viewed as a critical component of Rusal’s future strategy of diversification,” Nathaniel Rothschild, chairman of EN+ Group, Deripaska’s investment company that controls Rusal, said in a statement on Oct. 22.

To contact the reporters on this story: Lyubov Pronina in Yokohama, Japan, via the Moscow newsroom at lpronina@bloomberg.net; Maria Levitov in Moscow at mlevitov@bloomberg.net.

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net.

Last Updated: November 14, 2010 19:00 EST

VTB denies BNE report of Home Credit and Finance Bank purchase http://www.bne.eu/dispatch_text13605

Renaissance Capital/Alfa BankNovember 15, 2010

Event: Business New Europe (BNE) reported on Saturday (13 Nov) that Czech Republic-based PPF Group has decided to sell Home Credit and Finance Bank's Russian business (one of the market leaders in consumer finance in Russia) as well as its operations in Belarus and Kazakhstan to VTB.

Action: VTB and PPF Group have officially denied the report.

Rationale: We are not surprised by speculations about VTB looking for or negotiating acquisitions in the Russian/CIS market; according to management, the bank is open to considering acquisitions in the Russian market provided potential acquisition targets offer attractive valuation and delivery in RoE terms. To recap, VTB is currently in the process of a phased acquisition of TransCreditBank, a top-20 Russian bank owned by Russian Railways.

Alfa writes: While we note that VTB has issued a press release on Saturday, 13 November, denying the information about the transaction that was published, it was not clear what precisely the bank was denying. Management declined to comment on the matter by phone this morning.

Home Credit is apparently seeking a price not less than two times book value. We believe that a potential deal is positive, given HCF Bank’s leadership position in a market segment that VTB is targeting.

Russian Standard to finally raise a glass to Nemiroff dealhttp://www.bne.eu/dispatch_text13605

bneNovember 15, 2010

Russian Standard is to buy a stake in Nemiroff, one of Ukraine's largest alcohol

producers, reports Vedomosti, although no official announcement on the sale has been made.

According to the newspaper, one source confirmed the news, whilst another would only say that Nemiroff has found a buyer "from Russia." None of the sources would name the size of the stake to be sold or the value of the deal. A Nemiroff spokesman said talks had not yet been completed, whilst a spokesperson for Russian Standard said the company would have no comment on the matter until today.

In February, Kommersant wrote that Nemiroff co-owners Yakov Gribov (who owns about 40%) and Anatoly Kipish (30%) were ready to sell, but that founder Stepan Glus (approx 30%) plans to remain a shareholder. A source close to Nemiroff confirmed to Vedomosti that Glus is not planning to leave the business completely.

There were initially several suitors for Nemiroff, including Britain's Stock Spirits, Poland's Central European Distribution Corporation (CEDC), and Russian Standard. CEDC stepped out of contention in July, with a senior executive from the Polish company saying the price was too high. In September, Stock Spirits also announced that it was ending talks.

A spokesperson for Russian Standard then said it had signed an "exclusive agreement with Nemiroff to hold talks for four weeks on the terms of a deal." Neither side elaborated on the negotiations, and in late October sources at Russian Standard said the talks could continue into mid-November.

Yelena Khromova, a partner at BDO in Russia, valued Nemiroff at $300-$400m, including debt. A representative from a Ukrainian vodka maker said Nemiroff could ultimately be sold for less - about $250m. An executive at a Russian liquor producer, meanwhile, suggested $180-$200m.

Nemiroff, whose brands include flavored vodkas, would allow Russian Standard to compete in a broader segment, thereby strengthening its position on the Russian market as well, said Ivan Kushch, an analyst at VTB Capital.

Russian Standard increased its sale volume by 4.8 percent in 2009, according to data from Euromonitor. The growth was entirely from strong gains in exports, while sales in Russia fell, it said.

Nemiroff owns two alcohol factories in Ukraine, while its production in Russia is done at Rosspirtprom's Yaroslavsky alcohol plant. The company has 26 products under the Nemiroff label and had first half revenue of $203.8m. Russian Standard Vodka had net income of RUB41.26m last year on revenue of RUB3bn, under Russian accounting standards.

Deputies May Liberalize Law On Illegal Entrepreneurship http://www.themoscowtimes.com/business/article/deputies-may-liberalize-law-on-illegal-entrepreneurship/422948.html

15 November 2010By Lilia Biryukova / Vedomosti

Entrepreneurs would no longer face prison sentences for incorrect paperwork if a bill proposed on Saturday by top United Russia lawmakers is approved.

Three State Duma deputies sent the bill to the government and the Supreme Court for their positions on the changes in Article 171 of the Criminal Code, which deals with illegal entrepreneurship.

The bill's authors — Legislation Committee Chairman Pavel Krasheninnikov and his two deputies, Vladimir Gruzdev and Andrei Nazarov — want to liberalize how violations of the article are punished.

Gruzdev said the bill could be submitted to the Duma within a month.

Doing business without registration or license that damages the public or the state can be punished by a fine of up to 300,000 rubles ($9,700) or administrative arrest for up to half a year. Under the article's second part, covering illegal entrepreneurship as part of a group, business people face as much as five years in prison.

The lawmakers proposed leaving just the fine in the first part of the article and making administrative arrest for up to half a year the top punishment in the second part.

People shouldn't be sent to prison just because of paperwork problems, Nazarov said.

About 1,000 businessmen are jailed annually for illegal entrepreneurship, according to statistics from Krasheninnikov's committee.

Deputies first said the law needed to be changed in 2009, and initially they planned to move the article from the Criminal Code to the Administrative Code while increasing the possible fine, Nazarov said.

But the deputies eventually decided to leave the article in the Criminal Code and raise the fine — which does not always make sense given the size of the crime. Entrepreneurship without state registration will draw fines of 1,000 to 3,000 rubles, up from 500 to 2,000 now. Operating without a license will be raised to 3,000 rubles to 4,000 rubles, from 2,000 to 3,000 rubles now.

Legal entities will also face higher fines of up to 70,000 rubles, from 40,000 rubles previously. In severe cases, the fine can be up to 100,000 rubles.

President Dmitry Medvedev introduced changes to Article 171 of the Criminal Code with a number of amendments in April, including the elimination of punishment for "violating licensing requirements and conditions," said Yana Yakovleva, head of Business Solidarity.

As the law stands now, it is still possible to extort bribes from small businesses under the threat of prison, so the changes should be beneficial she said. After Medvedev's amendments, the number of arrests and cases opened under the article declined, Yakovleva said.

Russia's MTS to buy Sistema Telecom for $380 mln - paperhttp://en.rian.ru/business/20101115/161340835.html

10:42 15/11/2010

MOSCOW, November 15 (RIA Novosti)

Mobile TeleSystems (MTS), a leading telecommunications provider in Russia and the CIS, will buy Sistema Telecom, the telecom's division of financial group Sistema, which owns all of the mobile operator's egg logotype brands, for $380 million, Kommersant business daily quoted two sources familiar with the situation as saying on Monday.

The board of directors of Sistema will consider on Monday the issue of selling Sistema Telecom to MTS, 52.8% of which belongs to Sistema, the sources were quoted as saying.

The deal will allow MTS, whose logotype is a white egg on a red background, to consolidate 100% of TS Retail, which owns certain mobile stores under the MTS brand and 45% of which belongs to Sistema Telecom.

Since Sistema Telecom also has about $60 million in debts, the deal may amount to $440 million.

Sistema and MTS declined to comment on the deal.

Renault: How Investors Can Tap Into AvtoVAZ's Growth Storyhttp://seekingalpha.com/article/236719-renault-how-investors-can-tap-into-avtovaz-s-growth-story

November 14, 2010

U.S. traders who have been frustrated with the lack of easy access to Russia's leading car maker just got a bit of extremely bittersweet news from Vladimir Putin himself.

Putin has reportedly given French car manufacturer Renault (thinly traded in ADR form as RNSDF.PK) permission to raise its 25% stake in AvtoVAZ (extremely thinly traded as AVTZF.PK) to at least 50%.

On the one hand RNSDF is a much more liquid ADR than AVTZF.PK, which technically has not moved a single share since early August. But that is still relatively cold comfort for traders who want a truly active stock in order to manage their risk while getting their taste of Russia's biggest native car company.

Moscow brokerage firm Troika has about 20% of AvtoVAZ that it could sell at the right price, while state-owned Russian Technologies could cough up the rest.

Renault partner Nissan (NSANY.Pk) could emerge as a net buyer of AvtoVAZ shares in its own right.

AvtoVAZ has raised its sales by a spectacular 40% so far this year, with only around 40% of its total output going into Russia's version of the "cash for clunkers" subsidy program. In October alone, the company boosted its sales of Ladas and other models by roughly 70% on a year-over-year basis.

Right now, RNSDF seems to be the best way U.S. investors can fight their way into that growth story.

Laser Zentrum Hannover adds two laser innovation centers in Russiahttp://www.optoiq.com/index/photonics-technologies-applications/lfw-display/lfw-article-display/articles/optoiq2/photonics-technologies/news/business-news/2010/11/LZH-Russia.html

Nov 15, 2010

Hannover, Germany--At the end of September, two new Testing, Consulting and Training Centers for the industrial use of laser technology opened in the regions Taganrog and Kaluga in Russia. The Network of Laser Innovative-Technogical Centers (LITC) now has expanded its activities to five centers in Russia.

The goal of the centers for the industrial use of laser technology in Russia under the leadership of the Laser Zentrum Hannover e.V. (LZH) and the Bavarian Laser Center (BLZ) is to modernize manufacturing in Russia with the help of laser technology and know-how from Germany. German enterprises, in return, hope to have easier access to the market in these economically interesting regions of Russia. The five laser centers of the network use modern laser equipment from leading German companies like Trumpf, LIMO Lissotschenko, Rofin Sinar, Jenoptik or the Maschinenfabrik Arnold. Depending on the available equipment, each site has specialized in certain areas of laser technology, for example cutting and welding of metals, plastics or other non-metal materials, or on

surface treatment.

At the LITC's, especially the small and medium sized enterprises from the region, but also research institutes and universities have the possibility to use modern laser equipment to push process development and training and education, and to open new fields of application. Support in training and education for specialists in the fields of laser technology and laser safety are given by the staff of the German laser centers in Lower Saxony (LZH) or Bavaria (BLZ)

The Southern Laser Innovative Technology Center (SLITC) in Taganrog is located near one of the important centers of the Russian aeronautic industry. Obninsk, on the other hand, site of the Kaluga Laser Innovative Technology Center, is well-known for its automotive industry. These two new innovation centers are joining the centers already established in Moscow, Saint Petersburg, and Jekaterinburg. At the opening ceremonies in Taganrog and Obninsk, head of the Training and Education Group at the LZH, Markus Klemmt said, "The main advantage is in the networking. The consulting competencies and the training and education courses in the new centers will also be available for the whole network."

The "Testing, Consulting and Training Centers for Laser Technology in Russia" project is supported by the German Federal Ministry of Education and Research (BMBF) in the framework of the programme "Optical Technoliges". The project aims at furthering the scientific and technical cooperation between Russia and Germany. The project management is carried out by the VDI-Technologiezentrum GmbH.

SOURCE: Laser Zentrum Hannover; www.lzh.de/en/publications/pressreleases/2010/2neuelitc

Rosatom's Wind Power Plan http://www.themoscowtimes.com/business/article/rosatoms-wind-power-plan/422966.html

15 November 2010

State nuclear corporation Rosatom is planning to expand into wind power and will look for foreign partners to help build farms in the Balkans, Eastern Europe and Ukraine, its equipment head said.

“We are looking for a technology partner. The desire of all world leaders [in wind technology] to take part in the Russian wind power market is there,” Vladimir Kashenko, chief executive of Rosatom’s equipment unit Atomenergomash, said late Friday.

Russia currently has almost no wind energy turbines because of its vast reserves of oil and gas, but the government has said it now wants 4.5 percent of power to come from

renewable resources by 2020. That compares with just 1 percent of total electricity being generated from renewable resources in Russia today, and a European Union 2020 target of 20 percent.

(Reuters)

Mongolia Uranium Dispute http://www.themoscowtimes.com/business/article/mongolia-uranium-dispute/422967.html

15 November 2010

TORONTO — Khan Resources has said it will use all available legal means, including international arbitration, to fight a decision by Mongolian authorities not to reinstate the Canadian miner’s licenses at the Dornod uranium deposit.

Mongolia chose Rosatom unit ARMZ Uranium Holding Company in August last year to develop the deposit as part of a 50-50 venture with Mongolia’s state-owned MonAtom.

Toronto-based Khan said Friday that Mongolia’s Nuclear Energy Agency had published a notice in Mongolian newspapers saying it would not reinstate the exploration and mining licenses.

It said there was no legal basis for the agency’s decision.

(Reuters)

Sheremetyevo fuelling complex to be sold

http://www.rbcnews.com/free/20101115105322.shtml

      RBC, 15.11.2010, Moscow 10:53:22.Sheremetyevo International Airport and Aeroflot - Russian Airlines are poised to sell 75 percent minus one share in Sheremetyevo Fuel Filling Complex as part of the implementation of a program on the management of subsidiaries and affiliates, the airport's press office announced today.

      As part of the offer, Sheremetyevo plans to sell 44 percent minus one share, while Aeroflot is expected to sell all of its shares. The airport currently owns a 69-percent stake in the complex's share capital, and Aeroflot holds 31 percent of shares.

      As reported earlier, both Sheremetyevo airport and Aeroflot were included in the program on the privatization of the government's assets for 2011-2015.

UTair posts stronger passenger transportation figures

http://www.rbcnews.com/free/20101115111803.shtml

      RBC, 15.11.2010, Moscow 11:18:03.UTair Aviation increased its passenger transportation by 31 percent, to 3.783 million people in the first 10 months of the year compared to the corresponding period of 2009, the company indicated in a statement today.

      The company's passenger traffic jumped 42 percent to 6.803bn passenger-kilometers, and the passenger load factor amounted to 78.2 percent, 6.3 percentage points greater than in January-October 2009. UTair's planes transported 9,797 tonnes of cargo (up 25.6 percent), and about 2,874 tonnes of mail (showing a 82.7-percent increase).

      Similarly, UTair's helicopters hiked up transportation of passengers by 27 percent to 370,195 people. The helicopters also transported 60,056 tonnes of cargo (up 23.5 percent).

Yakutia Parliament Greenlights Alrosa's OJSC Bid http://www.israelidiamond.co.il/english/News.aspx?boneId=918&objid=8224

15.11.10, 10:00 / Mining

Yakutia's State Assembly has approved amendments to regional legislation, which will allow Russian diamond giant Alrosa to pursue it aspiration to become an Open Joint Venture Company.

The amendments effectively lifted a ban on turning the mining conglomerate into an open joint stock company, by deleting a 2003 clause stating that it is in the Republic's interests for the company to remain a closed joint stock company. Diamond Intelligence reported.

Yakutia's President Yegor Borisov said Alrosa's transformation into an open joint stock company is a "key feature in radically changing the republic's economy."

Yakutia's government currently holds stake in Alrosa comes to 32%, and eight settlements in Yakutia hold 8% – the administrations of the so-called "diamond provinces."

According to the report, once the diamond conglomerate's transformation in an open joint stock company is complete, Alrosa would consider an additional IPO; which according to  CEO Fyodor Andreyev, may yield  up to $2 billion from the placement of 20% of the shares.

Activity in the Oil and Gas sector (including regulatory)

Kommersant: South Stream outpaces Nabucco http://www.focus-fen.net/index.php?id=n235284

15 November 2010 | 08:33 | FOCUS News AgencyHome / WorldMoscow. South Stream energy project received the support of almost all participants in the EU project. Bulgaria signed Saturday an agreement with Gazprom for joint venture on its territory. Such agreement should be signed with Austria by the end of the year. Bulgaria has failed to adopt Gazprom’s conditions for three years and in final reckoning the join venture will cost Russia three-four tomes increase in the price of the natural gas transit through Bulgarian territory, Russian Kommersant comments. Talks with Bulgaria continued for almost three years. Sofia laid three conditions for its participation in the project – assuming the control block of shares of South Stream Bulgaria AD, ownership rights of the land under the gas pipeline and rights to determine the transit rate. Bulgarian authorities had never hidden their consider as priority the rival project Nabucco, but in October Italian PM Silvio Berlusconi promised Russian PM Vladimir Putin commit personally with the issue ant to affect the decision of one of the parts in the project, which had reached no agreements yet.

Lukoil to invest USD 1 billion to USD 2 billion in Bulgarian refineryhttp://www.steelguru.com/russian_news/Lukoil_to_invest_USD_1_billion_to_USD_2_billion_in_Bulgarian_refinery/175201.html

Monday, 15 Nov 2010Dow Jones citing Mr Vladimir Putin Russian Prime Minister as saying that Russia biggest independent oil producer OAO Lukoil Holdings will invest between USD 1.5 billion and USD 2 billion in its Bulgarian refining asset.

He said that Lukoil has already spent USD 1 billion on its Lukoil Neftochim Burgas refinery and will invest another USD 1.5 billion to USD 2 billion.

The Lukoil Neftochim Burgas refinery which is located on Bulgaria Black Sea coast is the biggest in the Balkans and currently has capacity to refine 8.8 million tons of crude a year.

(Sourced from Dow Jones)

Surgutneftegas reports 3Q10 RAS results http://www.bne.eu/dispatch_text13605

Renaissance CapitalNovember 15, 2010

Event: Surgutneftegas reported 3Q10 results under RAS on Saturday (13 Nov). Despite a 1% decline in the oil price, the accounts show moderate top-line growth, which we attribute to a 2% QoQ increase in crude output and probably a better revenue mix, with a higher share of exports. EBITDA demonstrated a much more significant rise of 47% QoQ to RUB75.4bn, and the EBITDA margin reached 34%. The previously reported net income of RUB27.6bn was negatively affected by a RUB9.1bn non-operating loss (likely representing a currency loss on the revaluation of the company's FX- based cash position). For 1H10, reported EBITDA and net income represented 73% and 60%, respectively, of our full- year estimates under RAS.

Action: We retain our BUY rating on Surgutneftegas.

Rationale: Since the company stopped reporting audited US GAAP results in 2002, its RAS accounts represent the only available financial performance indicators: not only are these notoriously difficult to forecast, but the reported figures are also often misleading and lack disclosure, therefore carrying only limited information value. We believe the market will focus on estimating the company's alleged cash pile from these results, which we calculate at $24.2bn as of 3Q10, broadly unchanged from 2Q10.

Ildar Davletshin

TAIF May Use IPO to Fund $11 Billion Russian Refining Plan http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aeDgt_.OoREw

By Stephen Bierman

Nov. 15 (Bloomberg) -- TAIF, an investment group based in Russia’s Tatarstan region, will decide this year on a plan to sell shares in its refineries and chemical plants to help fund 347 billion rubles ($11 billion) of investments.

“Talks are ongoing with banks, there are offers,” said Albert Shigaboutdinov, general director of the group, which had almost $8 billion of assets at the end of last year. “We will choose the best way to do this: loans, bonds, an IPO.”

The group is considering selling equity in the TAIF-NK oil refinery and petrochemicals units OAO Nizhnekamskneftekhim and OAO Kazanorgsintez to fund the investment plan through 2016, Shigaboutdinov said in an interview in Tatarstan’s capital, Kazan. More detailed plans will be ready by the end of the first quarter, he said.

Demand for Russian equities rebounded in the third quarter after the 30-stock Micex Index in Moscow rallied to its highest since July 2008. Russian companies, including

Mail.ru, an investor in Facebook Inc., have sold $6.3 billion from $1.2 billion in 2009, Bloomberg data show. That compares with $36 billion in 2007, when Russia accounted for about one-third of IPOs on the London Stock Exchange, according to Morgan Stanley.

TAIF holds stakes in more than 70 companies in Tatarstan and sponsors the Rubin Kazan soccer club, which will play Barcelona in the Champions League next month. The group expects the three plants to generate net income of 15.6 billion rubles on revenue of 248 billion rubles this year, according to a presentation.

JPMorgan, Merrill Lynch

JPMorgan Chase & Co. and Bank of America Merrill Lynch have sent representatives to visit the Nizhnekamskneftekhim unit, Russia’s largest petrochemicals plant, according to an Oct. 28 statement on the plant’s website.

Prime Minister Vladimir Putin has urged Russian industry to produce more value-added goods and move away from reliance on sales of raw materials. The state sets a lower export tax burden on refiners than crude suppliers and has prepared an order to bar new oil refineries with a depth of less than 70 percent from using state-run OAO Transneft’s pipelines. Refining depth refers to the quality and range of products a plant is able to produce.

TAIF is planning 88 billion rubles of investment for the TAIF-NK oil refinery, which processed 7.75 million tons of oil (about 155,000 barrels a day) last year. The investment will be used to improve the plant’s refining depth to 98.5 percent from 72 percent now and increase capacity to 10.1 million tons a year in 2016, according to the group’s annual report.

TAIF may invest 149 billion rubles in Nizhnekamskneftekhim, Shigaboutdinov said. Another 110 billion is planned for the Kazanorgsintez petrochemical plant at, according to the presentation. The plants produce materials for plastics, pipes and tires among other products, he said.

Russian demand for petrochemicals will continue to grow as the country develops end-product manufacturing, he said.

To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.

Last Updated: November 15, 2010 02:48 EST

Gazprom

Gazprom expansion fuels hiring spreehttp://www.ft.com/cms/s/0/752eecec-f024-11df-88db-00144feab49a.html#axzz15KTBtP00

By Gill Plimmer and Sylvia Pfeifer in London

Published: November 14 2010 23:16 | Last updated: November 14 2010 23:16

Gazprom, the Russian state-controlled gas group, is mounting an aggressive hiring spree that could see it recruit up to 600 staff in London as it seeks to expand its energy and commodities trading operations worldwide.

The Kremlin-controlled oil and gas producer already employs 300 staff at its Hampton Wick premises in south London, but will move in the new year to larger headquarters near centrally located Regents Park. The new offices will house up to 900 employees.

Gazprom Marketing and Trading was set up a decade ago to manage its stake in the gas pipeline that connects Britain to the Continent. It is now the centre of Gazprom’s worldwide energy trading operations, with 11 subsidiaries in Britain, Europe, the Far East and North America.

The expansion is being fuelled by a boom in worldwide energy trading, driven by the liberalisation of national gas, power and oil markets.

The company opened a 20-strong Singapore office in March and is expanding its team in Houston. It also has offices in Berlin and Paris and is considering new trading opportunities in the south of France in the wake of the liberalisation of the French gas markets.

However, it will continue to be based in Britain, which will house its largest trading operation.

The company also has a 100-strong team in Manchester, which supplies gas and power to small and medium-sized businesses in the UK, Ireland and France.

The recruitment drive caps a remarkable transformation for the state-controlled energy company, which began its presence in Britain 10 years ago, with three employees in offices above a pub.

Speaking at an energy conference at the London Business School on Friday, Keith Martin, commercial director for the Gazprom trading operation, said: “GM&T has had years of successful growth and is always on the lookout for good new people.”

The company has transformed from a small UK-focused single commodity trader to a global multi-commodity and trading company with turnover of more than £9bn.

Gazprom, one of the world’s biggest energy companies, has in the past been linked to bids for big British companiess, including Centrica, the FTSE 100 parent company of British Gas. No offer has ever materialised.

The company supplies about a quarter of Europe’s gas needs, but its market share dropped last year due to increased European use of alternative energy sources, including liquefied natural gas.

Viktor Chernomyrdin, who served as Russia’s prime minister during the turbulent transition to a free-market economy in the 1990s and who founded Gazprom, died this month.

Gazprom May Hire 600 Workers as It Expands U.K. Unit, FT Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a4qTFjWSBEOE

By Blanche Gatt

Nov. 15 (Bloomberg) -- OAO Gazprom, Russia’s state-owned natural gas exporter, is planning to recruit up to 600 workers at a London-based unit in the next few years in an effort to expand its energy and commodities trading operations, the Financial Times reported, citing people familiar with the plans.

Gazprom Marketing and Trading, which currently employs 300 people in London, is to move to larger premises that can accommodate up to 900 employees next year, the newspaper said.

The unit, which was set up 10 years ago to manage Gazprom’s stake in a pipeline that connects the U.K. to continental Europe, now has 11 subsidiaries in the U.K., Europe, Asia and North America, the FT said.

To contact the reporter responsible for this story: Blanche Gatt in London at bgatt@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

Last Updated: November 14, 2010 21:21 EST

Gazprom Sells First Foreign Bond in 16 Months: Russia Credit http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aRz7yITlqNPQ

By Denis Maternovsky

Nov. 15 (Bloomberg) -- OAO Gazprom starts canvassing investors today as the world’s biggest gas producer prepares to sell bonds abroad for the first time in 16 months to take advantage of record-low borrowing costs for Russian companies.

Gazprom will meet fund managers until Nov. 17, a banker with knowledge of the transaction said. Average yields on Russian dollar bonds fell to 5.26 percent on Oct. 13, the lowest since JPMorgan Chase & Co. began tracking them in May 2002, and were at 5.63 percent on Nov. 12, down from 7.35 percent May 25.

“Yields are so low in absolute terms it makes huge sense to issue debt,” Jeremy Brewin, who helps manage $2 billion at Aviva investors in London, the fund management arm of the U.K.’s second-biggest insurer, said by telephone. “If they are not doing it this time, they are missing an opportunity.”

Companies in emerging markets are selling more debt as near-zero interest rates in the U.S. and Europe drive demand for higher-yielding assets. State-controlled Gazprom, based in Moscow, is likely to sell 10-year debt that may yield 6 percent to 6.2 percent rather than opting to sell bonds due in as long as 30 years, Brewin said.

Petroleo Brasileiro SA’s dollar bonds due in 2018 are yielding 4.299 percent, or 121 basis points less than similar- maturity Gazprom bonds. The spread has narrowed from 222 basis points on May 25, data compiled by Bloomberg show. The Brazilian state-run oil producer’s foreign-currency long-term debt is rated Baa1 by Moody’s Investors Service, the same as Gazprom’s.

Gazprom probably will be “flexible depending on potential demand” and may seek to sell debt with an “optimal maturity” of 10 or 15 years, according to Nikolay Podguzov, the head of fixed income research at VTB Capital, the investment banking arm of Russia’s second-biggest bank, in Moscow.

Benchmark Sale

Gazprom hired JPMorgan Chase & Co. and Credit Agricole CIB to organize a benchmark bond sale, according to the banker involved in the sale. The sale is Gazprom’s first on international markets since July 2009, data compiled by Bloomberg show.

The yield on Gazprom’s 8.125 percent dollar notes due in 2014, its last bond offering, fell to a low of 3.914 percent on Nov. 4 from this year’s high of 7.1 percent on May 25. The bond yielded 4.36 percent on Nov. 12.

OAO Lukoil, Russia’s biggest non-state oil company, sold $800 million of 10-year bonds that were priced to yield 6.25 percent on Oct. 29. The Moscow-based company is rated Baa2 by Moody’s, one step below Gazprom and the Russian government.

VEB Bonds

VEB, the Russian government’s development bank, sold $1 billion of 15-year bonds yielding 6.8 percent last week, the longest maturity for a Russian issuer since 2007, data compiled by Bloomberg show. Gazprom hasn’t sold dollar debt with a maturity of more than 10 years since 2007 when it offered investors $1.25 billion of 30-year securities.

The ruble fell 0.2 percent to 30.80 per dollar in Moscow trading on Nov. 13. Non-deliverable forwards, or NDFs, which provide a guide to expectations of currency fluctuations and interest rate differentials and allow companies to hedge against movements, show the ruble at 31.0378 per dollar in three months.

The cost of protecting Russian debt against non-payment for five years using credit-default swaps fell 2 basis points, or 0.02 percentage point, to 143 on Nov. 12, down from this year’s peak of 217, according to CMA prices. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.

Default Swaps

Credit-default swaps for Russia, rated Baa1 by Moody’s, its third-lowest investment grade rating, cost 10 basis points more than contracts for Turkey, which is rated four levels lower at Ba2. Russia swaps cost as much as 40 basis points less on April 20.

The extra yield investors demand to hold Russian debt rather than U.S. Treasuries fell 4 basis points to 198, according to JPMorgan EMBI+ indexes. The difference compares with 140 for debt of similarly rated Mexico and 172 for Brazil, which is rated two steps lower at Baa3 by Moody’s.

The yieldspread on Russian bonds is 39 basis points below the average for emerging markets, near the smallest difference since September 2009 and down from a 15-month high of 105 in February, according to JPMorgan Indexes.

Most of the borrowing by Gazprom is in dollars to match its earnings, as gas prices are linked to oil products denominated in the U.S. currency, Chief Financial Officer Andrey Kruglov said in an interview last month. The company and its units have $12.6 billion of dollar bonds, according to data compiled by Bloomberg.

Biggest Borrower

Gazprom, Russia’s biggest international corporate borrower, relies on export revenue to finance investment as prices in Europe are as much as 10 times higher than in Russia, Chief Executive Officer Alexei Miller said last month.

Revenue from domestic gas sales was 494.9 billion rubles ($16.2 billion) in 2009, or a quarter of the total, according to Gazprom’s annual report posted on its website.

The share of revenue from Russia may increase as the government plans to bring domestic gas prices in line with those for European customers, excluding transportation costs, by 2014. Gas prices in Russia climbed 34 percent in the first quarter, according to Gazprom.

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

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Last Updated: November 14, 2010 16:01 EST

Gazprom and the Bulgarian Energy Holding EAD have signed Shareholder Agreement and Charter on the joint project company South Stream Bulgaria ADhttp://www.gazprom.com/press/news/2010/november/article105478/

13.11.2010 18:50

South   Stream

Today, in Sofia (Bulgaria) in the presence of Russian Prime Minister Vladimir Putin and Bulgarian Prime Minister Boyko Borisov, Alexey Miller, Chairman of Gazprom's Management Committee, and Maya Hristova and Jordan Georgiev, Executive Directors of the Bulgarian Energy Holding EAD, signed a Shareholder’s Agreement and Articles of association of the South Stream Bulgaria AD joint project company, created on equal basis for implementation of the South Stream project in the Republic of Bulgaria. The formal registration procedure of the company will be completed before the end of November 2010.

South Stream Bulgaria AD will engage in the implementation of pre-investment stage of the project, as well as financing, construction and operation of the gas pipeline on the Bulgarian territory.

“Today's signing with our Bulgarian partners whom we have overcome thirty-five years cooperation confirms the mutual interest of the parties in securing the growing needs

of continental Europe for natural gas. Participation of Bulgaria in South Stream project proves the timeliness and the necessity for additional infrastructure of trans-European scale”, Alexey Miller noted.

“South Stream project is of upmost importance for Bulgaria as well as for the European energy market in view of route diversification for natural gas supplies and increase of European energy security. The project itself with no doubt will have a positive effect on end users not only in Bulgaria but in Europe as well”, said Maya Hristova, Executive Director of Bulgarian Energy Holding.

“By the signed today agreement for the South Stream project an important step has been taken towards realization of the project and heading towards the intensive development phase. The project will precondition energy security increase, will ensure reliability and continuity of energy supplies to Europe and Bulgaria in particular”, said Jordan Georgiev, Executive Director of Bulgarian Energy Holding.

Hydrocarbon reserves discovered in Algeria by Gazprom and Sonatrachhttp://www.gazprom.com/press/news/2010/november/article105467/

13.11.2010 16:30

Gazprom and Sonatrach have jointly discovered hydrocarbon reserves in the Berkine Basin in Algeria.

The discovery came as a result of drilling the first exploratory well Rhourde Sayah-2 (RSH-2) at the Block 236b of El Assel Perimeter in the Berkine Basin.

The well RSH-2 showed daily production rate from the Ordovician deposits in the following volumes: 60 thousand cubic meters of gas and 49.38 tons of oil.

For Gazprom it is the first discovery of hydrocarbon reserves in North Africa.

Sakhalin – Khabarovsk – Vladivostok GTS construction enters its final stagehttp://www.gazprom.com/press/news/2010/november/article105461/

13.11.2010 11:30

Eastern   Gas Program

The 1,000-kilometer string of the Sakhalin   –   Khabarovsk   –   Vladivostok gas transmission system (GTS) was welded making up some 75 per cent of the first GTS start-up complex

length. Thus, construction of the Sakhalin – Khabarovsk – Vladivostok linepipe entered its final stage.

“The tight construction schedule Gazprom adheres to stems from a strategic role the GTS plays. Sakhalin – Khabarovsk – Vladivostok is to become the first interregional gas transmission project in the Far East that will directly connect the Sakhalin gas production center with the Khabarovsk and Primorsky Krais consumers providing them with secure gas supply.

The project implementation will lay the groundwork for large-scale gasification of the entire Far East giving the required impetus to the regional energy, industry and municipal housing sectors development,” noted Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee.

WorleyParsons awarded Shtokman FEEDhttp://www.pennenergy.com/index/petroleum/display/4389281857/articles/offshore/field-development/russia/2010/11/worleyparsons-awarded.html

Offshore staff

NORTH SYDNEY, Australia -- Gazprom has contracted WorleyParsons for front-end engineering design (FEED) services for the Shtokman development phases 2 and 3 in the Barents Sea.

The Shtokman gas/condensate field is 600 km (373 mi) northeast of Murmansk. Present plans call for the field to be developed in three or more phases via a subsea production system tieback to an FPSO.

Produced gas will be treated onboard the vessel and exported to the Russian mainland via a subsea pipeline. Condensate will offload to shuttle tankers.

WorleyParsons and INTECSEA will perform FEED of the production vessel, which will comprise a ship-shape hull capable of withstanding sea ice build-up, and with topsides equipped to process 70 MMcm/d (2.47 bcf/d) of gas and associated liquids.

The scope includes design of the topsides, hull, marine systems, turret, and living quarters, and the overall FPSO system integration.

11/11/2010

11:04High-ranking Gazprom official beaten up in Moscowhttp://www.interfax.com/news.asp