Russia 110707

Basic Political Developments Itar-Tass news digest for Thursday, July 7.

o ULAN-UDE — All wildfires in Buryatia’s taiga were extinguished on Thursday. “Fire fighters extinguished nine wildfires, which occupied the area of over 520 hectares, and the emergency situation regime was lifted in two regions,” a source at the republic’s forestry agency said. Besides, the ban for visiting the Transbaikalia national park is eased.

o MOSCOW — The area of wildfires across Russia has reduced by 1,500 hectares over the past 24 hours, although the number of fires has grown, sources from the information department of the Russian Ministry for Emergency Situations (EMERCOM) told Tass on Thursday.

o MINSK — More than 25 reporters were detained in Belarus on July 6 during the protest action “Revolution through social networks” that was held in many Belarussian cities. These data were made public by the Belarussian Association of Journalists. According to the association, reporters were detained in Minsk, Brest, Grodno, Mogilev, Bobruisk and Novopolotsk. Detainees included both Belarussian and foreign pressmen.

o MOSCOW — Russia’s Emergency Situations Ministry /EMERCOM/ has sent another plane with humanitarian aid cargo to Libya. “Today at 09:01 Moscow time from the Moscow Region’s Ramenskoye Airport EMERCOM’s Il-76 plane took off for Tripoli, it carries about 36 tonnes of humanitarian aid, mostly food,” a source at the ministry said on Thursday.

o MAKHACHKALA — Two gunmen were destroyed, while one serviceman of interior troops was killed and another two were wounded in a night clash with a group of gunmen in the Kizlyar district, Dagestan. Seven civilians were also wounded, and one of them died, Itar-Tass learnt from a source at law enforcement bodies. According to data of the source, “a convoy of servicemen was fired on Wednesday night near the village of Serebryakovka by unidentified people from a forest. As a result, a firing engagement started”. Firearms were taken from the two killed gunmen, and they are being identified.

o STRASBOURG — The political situation in Russia ahead of the upcoming Duma elections slated for December 2011 was in the focus of the European Parliament’s attention on Wednesday, July 6. “Russia is already in pre-election mode, with new party alliances and increasing debate. There are some encouraging signs: President Medvedev is calling for economic and political modernisation, while Finance Minister Kudrin insists on free and

fair elections,” the European Union’s High Representative of the Union for Foreign Affairs and Security Policy and Vice President of the European Commission Catherine Ashton said at the hearings.

o VLADIVOSTOK — The Sakhalin Regional Duma will debate the nomination of Alexander Khoroshavin as the new governor on Thursday, July 7. On June 29, President Dmitry Medvedev nominated Khoroshavin to be the governor of the Sakhalin region for a second term. The committee on state development, regulations and local self-government in the Regional Duma discussed the nomination on Wednesday, July 6. Khoroshavin also met with representatives of all Duma factions.

o BAKU — Belarusian Prime Minister Mikhail Myasnikovich will visit Azerbaijan on Thursday, July 7, to discuss how to strengthen economic ties between the two countries. According to government sources, the Belarusian prime minister’s two-day official visit will begin in Gyandzhi, a big industrial city in the west of Azerbaijan, where he will arrive from Minsk. Myasnikovich will have talks with senior officials from the city administration and attend the opening ceremony for a joint Azerbaijani-Belarusian-German venture at the local automotive manufacturing plant that will make municipal vehicles.

o UNITED NATIONS — Rebel attacks on the U.N. office in Mazar-i-Sharif and the Intercontinental Hotel in Kabul confirm that the Taliban is seeking to destabilise the situation in Afghanistan, undermine international efforts towards post-conflict settlement and, despite some of its leaders’ statements, continues to ignore the needs of the Afghan people, Russia’s First Deputy Permanent Representative to the United Nations Alexander Pankin said.

o KRASNODAR — Governor of Russia’s Krasnodar Territory Alexander Tkachev will have on Thursday the first on-line conference with the citizens. “On the site antkachev.ru the governor will answer questions from the Internet users,” the governor’s press secretary Anna Minkova said. Tkachev will give replies in real time.

o MOSCOW— Beginning from next year, Moscow will check all printed and video materials for carrying signs of extremism. Moscow’s Mayor Sergei Sobyanin inked on Thursday an order on the procedure. From January 1, 2012, printed, audio and video materials will undergo psychological and linguistic analysis to reveal if they contain signs of extremism, the city administration said. The work is necessary “to raise effectiveness of fighting distribution of extremist view and urges, improvement of measures to reveal activities aimed at fomentation of race and ethnic conflicts in Moscow.”

o BEIJING — A Russian citizen has been sentenced to death in China with a two-year delay in execution for an attempt to smuggle drugs, head of the consumer section of the Russian Embassy in Beijing, Leonid Ignatenko, told Itar-Tass on Thursday, July 7. The man tried to import in China from a Central Asian country in May of the previous year 2.8 kilograms of heroin and was caught red-handed at the Urumqui airport. In November, the court in Urumqui found him guilty, and now the sentence was confirmed by China’s upper level court.

o ULAN-UDE — A court in Russia’s Transbaikalia sentenced on Thursday to different long terms of imprisonment 12 members of a criminal group, which had organised a large-scale distribution of heroin in the region. “All drug dealers were announced as guilty of committing over 30 crimes, including illegal turnover of drugs and attempts for it,” press service of Transbaikalia Prosecutor’s Office said.

Itar-Tass news outlook for Thursday, July 7. o MOSCOW – The Russian government discusses key issues for

forming the 2012 budget and for the planned period of 2013-2014. o MOSCOW – Prime Minister Vladimir Putin goes to St. Petersburg

on a working visit to participate in events on the occasion of the 50th anniversary of establishing twinned relations between St Petersburg and Dresden.

o MOSCOW – Two high-level working groups which are to work out proposals on decentralizing administration and redistributing powers between levels of authorities in Russia, gather for their first joint meeting.

o MOSCOW – The State Duma completes work on the government “anti-alcoholic” bill, equating beer to strong beverages. This document, triggering off a broad public discussion and generating numerous rumors, is put on the agenda of the Thursday additional plenary session of the lower house.

o STRASBOURG – The final voting on a resolution on the upcoming general elections in Russia is to be held during the session of the European Parliament.

o MOSCOW – A plane of the Russian Ministry for Emergencies with a humanitarian cargo has flown to the Libyan capital Tripoli on July 7, reported the Russian Foreign Ministry. The Libyan side is to receive foods: rice, sugar as well as canned dairy and fish.

o MOSCOW – The Russian-Norwegian Treaty on delimiting the sea border and cooperation in the Barents Sea as well as the Arctic Ocean comes into force. It was signed in 2010 and ended the 40-year talks on its conclusion.

o GENEVA-NICOSIA – UN Secretary-General Ban Ki-moon holds a meeting with the leaders of the two Cyprus communities in the framework of talks on a Cyprus settlement at the Palais de Nations.

Then, President of the Cyprus Republic Dimitris Christofias and leader of Cypriot Turks Dervish Eroglu hold separate news conferences.

o BEIJING – A Russian citizen has been sentenced to capital punishment in China with a two-year delay for an attempt to smuggle drugs, Itar-Tass learnt from head of the consular department of the Russian embassy in Beijing Leonid Ignatenko.

o TBILISI – The two-day NATO-Georgia conference “New challenges to security” opens in the Georgian capital. It is attended by over 100 experts and specialists from various NATO member states and partners who will discuss problems of cyber protection, energy security and struggle against terrorism.

o CHISINAU – Ukrainian Foreign Minister Konstantin Grishchenko comes on a visit to Moldova to discuss questions of stepping up bilateral relations and a Dniester settlement with the republican leadership.

o BAKU – Belarussian Prime Minister Mikhail Myasnikovich starts his visit to Azerbaijan. He plans meetings with President Ilkham Aliev and Prime Minister Artur Rasizade where the sides are to discuss questions of deepening economic relations.

o VLADIVOSTOK – The Sakhalin regional legislative assembly granted Alexander Khoroshavin powers of the governor of the insular region for the second term.

o TVER – The legislative assembly of the Tver Region examines on Thursday the question on granting Andrei Shevelev gubernatorial powers of this region.

o PARIS – Russian singer Alsou is to be awarded the title UNESCO Artist for Peace (Peace Artist) at a ceremony in the French capital. This decision was taken by director-general of the United Nations Organisation for Education, Science and Culture Irina Bokova.

o LONDON – The world premiere of the final part of the film series about Harry Potter is to be held in the British capital.

o MOSCOW – Former members of the American group The Doors – Ray Manzarek and Robby Krieger -- perform in Russia for the first time. They show their programme at Moscow’s Crocus City Hall.

Lavrov to meet with Obama in Washingtono Russian FM Lavrov heads to the US - “Lavrov and Clinton will

discuss the schedule for high-level bilateral contacts planned for 2011,” the foreign ministry said via its newly formed Twitter account (English version here). Guess that means another Medvedev-Obama summit is likely on the cards, as the “reset” continues to sputter along.

o Lavrov to visit US July 11-13 for talks with Clinton, Obama – FM. - The Russian minister will hold talks with Hillary Clinton and U.S. President Barack Obama, the American public and political scientists. The Russian foreign minister and the U.S. Secretary of

State “will discuss upcoming bilateral contacts at the high level in 2011”, the ministry said.

o RUSSIA-NATO COOPERATION IN EUROPEAN MISSILE DEFENSE COULD MARK BREAKTHROUGH IN RELATIONS, BECOMING RELATIONS BETWEEN ALLIES – LAVROV

Lavrov, Arab League head agree to continue efforts to settle Arab-Israeli conflict - Russian Foreign Minister Sergei Lavrov and Arab League Secretary General Nabil el-Arabi have discussed by telephone ways of re-launching the Palestine-Israel peace talks ahead of the Middle East Quartet's ministerial meeting in Washington on July 11.

MOSCOW DOES NOT RECOGNIZE SWEDISH COURT RULING UNDER WHICH RUSSIAN DIPLOMATIC REAL ESTATE IN SWEDEN COULD BE SEIZED - RUSSIAN FOREIGN MINISTRY

Coast guards practice joint efforts off Novororiisk - Coast guards from Russia, Bulgaria, Romania, Turkey and Ukraine rehearsed joint efforts to curb smuggling and illegal migration and help ships in distress during large-scale naval exercises that took place off the Russian Black Sea port of Novorosiisk.

Egypt's GASC seeks wheat, includes Russia - Egypt's main state wheat buyer set a tender to buy wheat from global suppliers on Wednesday, including Russia in the mix for the first time since Moscow's return to the world export market this summer.

Kremlin envoy brings message form Russian president to Angolan leaders. Dialogue with Taliban possible only under Afghan leadership –

ambassador. EMERCOM sends another plane with humanitarian aid to Tripoli.

o Russia to send another plane with humanitarian aid to Libya RF-Norwegian agt on delimitation of sea waters and Arctic coop takes

effect. o Arctic Treaty With Norway Opens Fields - By Howard Amoso Striking gold in the cold - Talks on who owns the territory

surrounding the North Pole are coming to a point. Russia has brought the request for the UN to look at Arctic borders forward by two years, as four other countries eye up getting access to the Arctic's natural riches.

Deputy Foreign Minister Alexander Grushko Meets with UK Minister of State for Europe David Lidington

'Russian reconnaissance and influence in Georgia is minimal' - Theme of spies is disclosure of Russia and not a scandal – Minister of Interior Affairs of Georgia Vano Merabishvili told Russia radio station Ekho Moskvi.

Europe presses Russia to lift fruit and veg ban - A representative of the body, Paola Testori, has pledged EC support for Warsaw’s strivings to re-open exports to the Russian Federation.

EU support Russia in mediation efforts in settlement of the Nagorno Karabakh conflict - EU support Russia and personally President Dmitri Medvedev's mediation efforts in settlement of the Nagorno Karabakh conflict, said EU High Representative for Foreign Affairs and Security Policy Catherine Ashton during a plenary session of European Parliament in Strasbourg on Wednesday… “Russia is already in pre-election mode, with new party alliances and increasing debate. There are some encouraging signs: President Medvedev is calling for economic and political modernisation, while Finance Minister Kudrin insists on free and fair elections,” the European Union’s High Representative of the Union for Foreign Affairs and Security Policy and Vice President of the European Commission Catherine Ashton said at the hearings.

Kremlin Human-Rights Panel Backs Pardon for Economic Crimes, Khodorkovsky - “An amnesty can’t exclude specific individuals,” Tamara Morshchakova, a member of the council, set up in February by President Dmitry Medvedev, told reporters today in Moscow. “It would apply to all people accused of these crimes.”

China sentences six Russian citizens for drug smuggling. - Another Russian citizen has been sentenced to death in China with a two-year delay in execution for an attempt to smuggle drugs, head of the consumer section of the Russian Embassy in Beijing, Leonid Ignatenko, told Itar-Tass on Thursday, July 7.

o Russian citizen sentenced to death in China for drug smuggling. Kommersant: Bulgaria looking for alternative to Russian gas Russian MFA demands Chisinau to explain reasons behind Bagirov’s

arrest Dead Russian sailors delivered to Vladivostok Saturday Medvedev appoints new deputy defense minister - Russian President

Dmitry Medvedev has signed a decree on the appointment of Mikhail Mokretsov as Deputy Defense Minister, RIANovosti reports.

Fears of state armaments program failure unfounded - Serdyukov o Defense industry managers will be dismissed for distorting

situation with state defense order – Serdyukov Sakhalin Duma to debate Khoroshavin’s nomination as new governor. Tver rgn parliament to debate Shevelev’s nomination as new governor. Bill on reduced vote threshold adopted in first reading Working groups to study power distribution proposals July 7. Tu-154 passenger jet makes emergency landing in Russia's Dagestan Four gunmen killed in Kabardino-Balkar Republic in one day. Five killed in shootout in Dagestan Two gunmen destroyed in Dagestan, one serviceman & civilian killed. One man killed in attack on motorized police convoy in Russia's Dagestan Moscow to analyse printed, video materials for extremism next year. Six forest fires remain active in Russia's Far East Buryatia extinguishes all wildfires, allows tourists in parks.

Transbaikalia court sentences 12 drug criminals. Aeroflot denies having sexual minority activist group among its personnel ITAR-TASS Russian press review. Interfax Moscow press review for July 7, 2011 Paying the High Price For Putin's Stagnation - By Kirill Rodionov Russia Rotting - By Konstantin Sonin INTERVIEW: Russia needs an Arab Spring, Kasparov says - Kasyanov

and Nemtsov spoke Wednesday at a news conference in the European Parliament, which was a day later expected to adopt a resolution calling on Russian authorities to reverse their decision against the People's Freedom Party.

The outflow of bread - While pouring grain overseas, are we forgetting about ourselves? By Darya Katina

Nabil Shaath: Russia will do its best so that ‘Quartet‘ supports Palestine‘s bid for UN membership - Ex-Palestinian Foreign Minister, now Fatah commissioner for international relations Nabil Shaath who visit Moscow on July 5 and had talks with Russian Foreign Minister Sergei Lavrov ahead of the ‘Quartet‘ meeting in Washington on July 11 has given an interview to Interfax in which he speaks about results of the talks with Lavrov, Palestine‘s plans regarding UN membership, and inter-Palestinian dialog.

Charities fear backlash as controversial fund stages Moscow gala

National Economic Trends Federal spending to grow on national defense-Russian Finance Ministry Russia gold, currency reserves up on June 24-July 1. Deputy finance minister to present key aspects of tax policy to govt July 7. MinFin does not expect to balance the budget, even in 2015 2012 Budget at $435Bln, With Deficit Reduced to 2.7% The budget cracks under public spending - To be completely happy, the

Finance Ministry needs $125 per barrel of oil By Igor Naumov

Business, Energy or Environmental regulations or discussions Severstal to roadshow Eurobond from July 8 –source HSBC Holdings Initiates New Russian Exchange-Traded Fund on LSE Russian Sberbank to sell China its shares in fall Metalloinvest Buys 4% Stake in Norilsk Nickel for $2Bln GAZ Group posts FY 2010 net profit of 2.1 billion roubles Russia’s Auriga recognized as world’s best provider of engineering

services Antivirus buster Kaspersky to sponsor NRL club Manly Sea Eagles

Activity in the Oil and Gas sector (including regulatory) MET holidays to be implemented for oil fields in the Black Sea and the

Sea of Okhotsk PetroNeft confirms 2P reserves in Western Siberia NOVATEK Production Reaches 150 Million Cubic Meters a Day

Tatneft Releases June Production Update Rosneft Increases APG Utilization To 95% At Sakhalinmorneftegaz Rosneft's new chairman casts doubt on sale to private investors

Gazprom GAZPROM, VEKSELBERG POWER ASSETS MERGER

UNDESIRABLE FROM ANTI-MONOPOLY LAW STANDPOINT - FAS CHIEF

Kommersant: Gazprom takes over the energy sector Gazprom Meets North Korean OFficials for Talks on Cooperation in

Energy Naftogaz Ukrainy transfers around $860 mln to Gazprom in June gas

payments Gazprom and Naftogaz Ukrainy meet on gas pricing 'Head start' for Bovavenkovo Gazprom and Microsoft ink corporate license agreement Lithuanian parliament: Gazprom should lose its pipelines in Lithuania Gazprombank reports upsurge in H1 net profit

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Full Text Articles

Basic Political Developments

11:16 07/07/2011ALL NEWS

Itar-Tass news digest for Thursday, July 7.

http://www.itar-tass.com/en/c154/180907.html

7/7 Tass 130

ULAN-UDE — All wildfires in Buryatia’s taiga were extinguished on Thursday. “Fire fighters extinguished nine wildfires, which occupied the area of over 520 hectares, and the emergency situation regime was lifted in two regions,” a source at the republic’s forestry agency said. Besides, the ban for visiting the Transbaikalia national park is eased.

MOSCOW — The area of wildfires across Russia has reduced by 1,500 hectares over the past 24 hours, although the number of fires has grown, sources from the information department of the Russian Ministry for Emergency Situations (EMERCOM) told Tass on Thursday.

MINSK — More than 25 reporters were detained in Belarus on July 6 during the protest action “Revolution through social networks” that was held in many Belarussian cities. These data were made public by the Belarussian Association of Journalists. According to the association, reporters were detained in Minsk, Brest, Grodno, Mogilev, Bobruisk and Novopolotsk. Detainees included both Belarussian and foreign pressmen.

MOSCOW — Russia’s Emergency Situations Ministry /EMERCOM/ has sent another plane with humanitarian aid cargo to Libya. “Today at 09:01 Moscow time from the Moscow Region’s Ramenskoye Airport EMERCOM’s Il-76 plane took off for Tripoli, it carries about 36 tonnes of humanitarian aid, mostly food,” a source at the ministry said on Thursday.

MAKHACHKALA — Two gunmen were destroyed, while one serviceman of interior troops was killed and another two were wounded in a night clash with a group of gunmen in the Kizlyar district, Dagestan. Seven civilians were also wounded, and one of them died, Itar-Tass learnt from a source at law enforcement bodies. According to data of the source, “a convoy of servicemen was fired on Wednesday night near the village of Serebryakovka by unidentified people from a forest. As a result, a firing engagement started”. Firearms were taken from the two killed gunmen, and they are being identified.

STRASBOURG — The political situation in Russia ahead of the upcoming Duma elections slated for December 2011 was in the focus of the European Parliament’s attention on Wednesday, July 6. “Russia is already in pre-election mode, with new party alliances and increasing debate. There are some encouraging signs: President Medvedev is calling for economic and political modernisation, while Finance Minister Kudrin insists on free and fair elections,” the European Union’s High Representative of the Union for Foreign Affairs and Security Policy and Vice President of the European Commission Catherine Ashton said at the hearings.

VLADIVOSTOK — The Sakhalin Regional Duma will debate the nomination of Alexander Khoroshavin as the new governor on Thursday, July 7. On June 29, President Dmitry Medvedev nominated Khoroshavin to be the governor of the Sakhalin region for a second term. The committee on state development, regulations and local self-government in the Regional Duma discussed the nomination on Wednesday, July 6. Khoroshavin also met with representatives of all Duma factions.

BAKU — Belarusian Prime Minister Mikhail Myasnikovich will visit Azerbaijan on Thursday, July 7, to discuss how to strengthen economic ties between the two countries. According to government sources, the Belarusian prime minister’s two-day official visit will begin in Gyandzhi, a big industrial city in the west of Azerbaijan, where he will arrive from Minsk. Myasnikovich will have talks with senior officials from the city administration and attend the opening ceremony for

a joint Azerbaijani-Belarusian-German venture at the local automotive manufacturing plant that will make municipal vehicles.

UNITED NATIONS — Rebel attacks on the U.N. office in Mazar-i-Sharif and the Intercontinental Hotel in Kabul confirm that the Taliban is seeking to destabilise the situation in Afghanistan, undermine international efforts towards post-conflict settlement and, despite some of its leaders’ statements, continues to ignore the needs of the Afghan people, Russia’s First Deputy Permanent Representative to the United Nations Alexander Pankin said.

KRASNODAR — Governor of Russia’s Krasnodar Territory Alexander Tkachev will have on Thursday the first on-line conference with the citizens. “On the site antkachev.ru the governor will answer questions from the Internet users,” the governor’s press secretary Anna Minkova said. Tkachev will give replies in real time.

MOSCOW— Beginning from next year, Moscow will check all printed and video materials for carrying signs of extremism. Moscow’s Mayor Sergei Sobyanin inked on Thursday an order on the procedure. From January 1, 2012, printed, audio and video materials will undergo psychological and linguistic analysis to reveal if they contain signs of extremism, the city administration said. The work is necessary “to raise effectiveness of fighting distribution of extremist view and urges, improvement of measures to reveal activities aimed at fomentation of race and ethnic conflicts in Moscow.”

BEIJING — A Russian citizen has been sentenced to death in China with a two-year delay in execution for an attempt to smuggle drugs, head of the consumer section of the Russian Embassy in Beijing, Leonid Ignatenko, told Itar-Tass on Thursday, July 7. The man tried to import in China from a Central Asian country in May of the previous year 2.8 kilograms of heroin and was caught red-handed at the Urumqui airport. In November, the court in Urumqui found him guilty, and now the sentence was confirmed by China’s upper level court.

ULAN-UDE — A court in Russia’s Transbaikalia sentenced on Thursday to different long terms of imprisonment 12 members of a criminal group, which had organised a large-scale distribution of heroin in the region. “All drug dealers were announced as guilty of committing over 30 crimes, including illegal turnover of drugs and attempts for it,” press service of Transbaikalia Prosecutor’s Office said.

11:30 07/07/2011ALL NEWS

Itar-Tass news outlook for Thursday, July 7.

http://www.itar-tass.com/en/c154/180923.html

7/7 Tass 99

Telephone: 8 (499) 791-00-18

Fax: 8 (499) 791-00-19

RUSSIAN GOVERNMENT

MOSCOW – The Russian government discusses key issues for forming the 2012 budget and for the planned period of 2013-2014.

MOSCOW – Prime Minister Vladimir Putin goes to St. Petersburg on a working visit to participate in events on the occasion of the 50th anniversary of establishing twinned relations between St Petersburg and Dresden.

MOSCOW – Two high-level working groups which are to work out proposals on decentralizing administration and redistributing powers between levels of authorities in Russia, gather for their first joint meeting.

STATE DUMA-MEETING

MOSCOW – The State Duma completes work on the government “anti-alcoholic” bill, equating beer to strong beverages. This document, triggering off a broad public discussion and generating numerous rumors, is put on the agenda of the Thursday additional plenary session of the lower house.

EU-RUSSIA

STRASBOURG – The final voting on a resolution on the upcoming general elections in Russia is to be held during the session of the European Parliament.

AID TO LIBYA

MOSCOW – A plane of the Russian Ministry for Emergencies with a humanitarian cargo has flown to the Libyan capital Tripoli on July 7, reported the Russian Foreign Ministry. The Libyan side is to receive foods: rice, sugar as well as canned dairy and fish.

RUSSIA-NORWAY

MOSCOW – The Russian-Norwegian Treaty on delimiting the sea border and cooperation in the Barents Sea as well as the Arctic Ocean comes into force. It was signed in 2010 and ended the 40-year talks on its conclusion.

CYPRUS-TURKEY

GENEVA-NICOSIA – UN Secretary-General Ban Ki-moon holds a meeting with the leaders of the two Cyprus communities in the framework of talks on a Cyprus settlement at the Palais de Nations. Then, President of the Cyprus Republic Dimitris Christofias and leader of Cypriot Turks Dervish Eroglu hold separate news conferences.

CHINA-RUSSIA

BEIJING – A Russian citizen has been sentenced to capital punishment in China with a two-year delay for an attempt to smuggle drugs, Itar-Tass learnt from head of the consular department of the Russian embassy in Beijing Leonid Ignatenko.

CIS COUNTRIES

TBILISI – The two-day NATO-Georgia conference “New challenges to security” opens in the Georgian capital. It is attended by over 100 experts and specialists from various NATO member states and partners who will discuss problems of cyber protection, energy security and struggle against terrorism.

CHISINAU – Ukrainian Foreign Minister Konstantin Grishchenko comes on a visit to Moldova to discuss questions of stepping up bilateral relations and a Dniester settlement with the republican leadership.

BAKU – Belarussian Prime Minister Mikhail Myasnikovich starts his visit to Azerbaijan. He plans meetings with President Ilkham Aliev and Prime Minister Artur Rasizade where the sides are to discuss questions of deepening economic relations.

RUSSIAN REGIONS

VLADIVOSTOK – The Sakhalin regional legislative assembly granted Alexander Khoroshavin powers of the governor of the insular region for the second term.

TVER – The legislative assembly of the Tver Region examines on Thursday the question on granting Andrei Shevelev gubernatorial powers of this region.

NEWS OF CULTURE

PARIS – Russian singer Alsou is to be awarded the title UNESCO Artist for Peace (Peace Artist) at a ceremony in the French capital. This decision was taken by director-general of the United Nations Organisation for Education, Science and Culture Irina Bokova.

LONDON – The world premiere of the final part of the film series about Harry Potter is to be held in the British capital.

MOSCOW – Former members of the American group The Doors – Ray Manzarek and Robby Krieger -- perform in Russia for the first time. They show their programme at Moscow’s Crocus City Hall.

RT News line, July 7

Lavrov to meet with Obama in Washingtonhttp://rt.com/politics/news-line/2011-07-07/#id13831

11:36

During his upcoming visit to Washington, DC, Russian Foreign Minister Sergey Lavrov will meet with US President Barack Obama, the ministry has said. Lavrov will also hold talks with Secretary of State, Hillary Clinton. The visit is scheduled for July 11-13. During the visit, Lavrov is expected to sign agreements concerning Russian-American adoptions and the facilitation of a new visa regime between the two countries.

Russian FM Lavrov heads to the UShttp://www.globalpost.com/dispatches/globalpost-blogs/bric-yard/russian-fm-lavrov-heads-the-us

Russia's foreign minister heads to the US next week. Talks on the Middle East, and a possible upcoming meeting between Medvedev and Obama, await.

Miriam ElderJuly 7, 2011 03:48

Russian Foreign Minister Sergei Lavrov is headed to the US next week (July 11-13, to be precise). Meetings with President Barack Obama and Secretary of State Hillary Clinton await.

“Lavrov and Clinton will discuss the schedule for high-level bilateral contacts planned for 2011,” the foreign ministry said via its newly formed Twitter account (English version here). Guess that means another Medvedev-Obama summit is likely on the cards, as the “reset” continues to sputter along.

There’s plenty to discuss.

Lavrov is flying in for the Monday meeting of the Middle East quartet on Israel/Palestine. Yesterday, Nabil Shaath, the head of a Palestinian delegation that met with Lavrov this week, said “our plan to go to the United Nations will get support from Russia.”

12:29 07/07/2011ALL NEWS

Lavrov to visit US July 11-13 for talks with Clinton, Obama – FM.

http://www.itar-tass.com/en/c154/180999.html

7/7 Tass 156

MOSCOW, July 7 (Itar-Tass) — Russian Foreign Minister Sergei Lavrov will make a visit to the United States on July 11-13 for talks with U.S. Secretary of State Hillary Clinton and for the Quartet meeting, the Russian Foreign Ministry said in the Twitter blog on Thursday.

The Russian minister will hold talks with Hillary Clinton and U.S. President Barack Obama, the American public and political scientists. The Russian foreign minister and the U.S. Secretary of State “will discuss upcoming bilateral contacts at the high level in 2011”, the ministry said.

Earlier, U.S. Ambassador in Moscow John Byerly said the Russian foreign minister and the U.S. Secretary of State would sign an adoption agreement in Washington next week.

Byerly said, “My task is to build more constructive and more fruitful relations between our countries. It can be said much: about the START Treaty, Russia’s upcoming to the WTO and ambitious economic deals.”

“But the most important thing for me is that next week, when I go to Washington, Sergei Lavrov and Hillary Clinton will sign an adoption agreement and an agreement on liberalising the visa regime. All of us should applaud it because this proves the depth of our relationship,” the U.S. diplomat said.

07/07 11:48   RUSSIA-NATO COOPERATION IN EUROPEAN MISSILE DEFENSE COULD MARK BREAKTHROUGH IN RELATIONS, BECOMING RELATIONS BETWEEN ALLIES – LAVROV

http://www.interfax.com/

July 07, 2011 11:42

Lavrov, Arab League head agree to continue efforts to settle Arab-Israeli conflicthttp://www.interfax.com/newsinf.asp?id=257488

Moscow. July 7 (Interfax) - Russian Foreign Minister Sergei Lavrov and Arab League Secretary General Nabil el-Arabi have discussed by telephone ways of re-launching the Palestine-Israel peace talks ahead of the Middle East Quartet's ministerial meeting in Washington on July 11.

"The main accent was put on the current stage in the Middle East settlement. The sides exchanged views on ways to deal with the current impasse in the talks between Palestine and Israel, and on efforts being made in this connection, including in the context of the Quartet's upcoming ministerial meeting on July 11," the Russian Foreign ministry said in a statement, posted on its website on Thursday.

"Given the current extremely important moment in the Middle East situation, Lavrov and el-Arabi agreed to continue active contacts for the sake of unblocking the Arab-Israeli settlement and further advancement toward comprehensive, just and strong peace in the Middle East," it said.

sd jv

(Our editorial staff can be reached at eng.editors@interfax.ru)

07/07 11:17   MOSCOW DOES NOT RECOGNIZE SWEDISH COURT RULING UNDER WHICH RUSSIAN DIPLOMATIC REAL ESTATE IN SWEDEN COULD BE SEIZED - RUSSIAN FOREIGN MINISTRY

http://www.interfax.com/

Coast guards practice joint efforts off Novororiiskhttp://english.ruvr.ru/2011/07/07/52895768.html

Jul 7, 2011 11:26 Moscow Time

Coast guards from Russia, Bulgaria, Romania, Turkey and Ukraine rehearsed joint efforts to curb smuggling and illegal migration and help ships in distress during large-scale naval exercises that took place off the Russian Black Sea port of Novorosiisk. The drills involved six coast guard vessels, ten speed boats, two helicopters and one plane.

Egypt's GASC seeks wheat, includes Russiahttp://af.reuters.com/article/investingNews/idAFJOE76601N20110707

Thu Jul 7, 2011 6:21am GMT

CAIRO (Reuters) - Egypt's main state wheat buyer set a tender to buy wheat from global suppliers on Wednesday, including Russia in the mix for the first time since Moscow's return to the world export market this summer.

The General Authority for Supply Commodities (GASC), one of the world's largest state importers of wheat, sought to buy an unspecified amount of the grain from suppliers including the United States, France, Australia, Britain and Argentina.

In the tender, GASC also sought offers from Russia, which lifted on July 1 its nearly year-long ban on wheat exports after a severe drought decimated its wheat crop last year.

Last month, GASC vice chairman Nomani Nomani said the agency's purchases of Russian wheat "are postponed until their new harvest is in place".

U.S. grain traders expected Russian wheat offered to GASC to be priced competitively, but added that they were waiting to see the quality of the grain being offered.

"I'm sure some of it will be cheaper, but there are some questions on quality ... they want to see the prices, which is why I think they included them (Russia)," an export trader said.

Tenders should reach GASC by noon local time (1000 GMT) on Thursday and the results should come out around 4:30 p.m. (1430 GMT) on the same day. Wheat bids should be free-on-board, with a separate freight offer.

05:33 07/07/2011ALL NEWS

Kremlin envoy brings message form Russian president to Angolan leaders.

http://www.itar-tass.com/en/c154/180745.html

7/7 Tass 392

MOSCOW, July 7 (Itar-Tass) —— Federation Council Committee on International Relations Chairman and the Kremlin’s special representative for Africa Mikhail Margelov presented a letter from Russian President Dmitry Medvedev to Angolan President Jose Eduardo dos Santos on Wednesday, July 6.

“The President of Angola and I discussed a wide range of issues of bilateral cooperation,” Margelov told Itar-Tass by telephone. “We talked mainly about contracts and arrangements signed under an agreement on economic cooperation between our countries.”

The document was signed during Medvedev’s official visit to Angola in 2009.

Russia and Angola have “many areas for cooperation”, Margelov said. “Thee are energy, geology, satellite communications, construction, mining industry, education.”

He stressed that Moscow “favours close coordination between the two countries in global energy markets”.

One of the topics discussed at the meeting with dos Santos was Libya. “The president of Angola is in agreement with other African leaders” that “foreign interference in Libya should be minimised, and negotiations between Tripoli and Benghazi should begin as soon as possible,” Margelov quoted the Angolan leader as saying.

He admitted earlier that “the situation in Libya remains acute, and there has been little progress in starting a dialogue between the warring factions”.

According to Margelov, the parties to the conflict “should start talking about national reconciliation”.

“Wars in the East do not end quickly. The more blood is spilled, the more reasons for blood feud. Confrontation only increases losses from the export of hydrocarbons and leads to devastation of infrastructure that is hard to rebuilt,” he said.

He confirmed Moscow’s stance that “only Libyans themselves can find a way out of this crisis, as no foreign recipes can help”.

Speaking about Libyan leader Muamar Gaddafi’s possible future, Margelov said, “There is a possible option where Gaddafi continues living in Libya as a private individual with his people and his tribe but relinquishes power and his family stays away from taking economic decisions.”

“Oriental countries have a strong tradition of forgiveness and reconciliation,” Margelov said. “Algeria’s former leader continued living quietly in his homeland after the overthrow of his regime, and a similar situation occurred with the former Sudanese President.”

Margelov believes that this solution could suit Libya as well.

“As for the outlooks of the Libyan opposition, it envisions Gaddafi’s departure from all the posts and the removal of his family members from the economic levers of power, but along with this they don’t make his departure from Libya a necessary condition,” he said.

“But all this is a subject of talks,” he added.

Margelov said that members of the Libyan National Transition Council would be content with any future for Gaddafi except for a political one.

“They do not need Gaddafi's head, and no one is going to scalp him and nail it to the wall in his office,” he quoted members of the Libyan National Transition Council as saying.

The Council will accept any future for Gaddafi “except one: neither he himself nor members of his family can engage in political activities in Libya or hold other positions”, Margelov said.

“I have the impression that the Libyan National Transition Council is ready for a dialogue,” he added.

He stressed that the decision of the pre-trial division of the International Criminal Court to issue an arrest warrant for Gaddafi does not close “the window of opportunity” for a political settlement in Libya.

07:35 07/07/2011ALL NEWS

Dialogue with Taliban possible only under Afghan leadership – ambassador.

http://www.itar-tass.com/en/c154/180779.html

7/7 Tass 26

UNITED NATIONS, July 7 (Itar-Tass) —— Rebel attacks on the U.N. office in Mazar-i-Sharif and the Intercontinental Hotel in Kabul confirm that the Taliban is seeking to destabilise the situation in Afghanistan, undermine international efforts towards post-conflict settlement and, despite some of its leaders’ statements, continues to ignore the needs of the Afghan people, Russia’s First Deputy Permanent Representative to the United Nations Alexander Pankin said.

Speaking at an open U.N. Security Council meeting on Afghanistan on Wednesday, July 6, the Russian diplomat stressed that in the light of the ever-growing number of terrorist sorties by the Taliban and al-Qaeda, “the call for a targeted and well-considered approach when implementing the national reconciliation programme assumes special importance”.

“The actions of the militants confirm that the Taliban, while continuing to pursue the purpose of destabilising the situation in Afghanistan and undermining international efforts towards post-conflict settlement in the country, and in defiance of the statements made by some of their leaders, has no regard for the needs of the Afghan population that is interested in lasting peace and accord, and prosperity of independent and democratic Afghanistan,” the Russian Foreign Ministry said earlier.

“We believe that international military presences in Afghanistan, acting strictly in compliance with the mandates issued by the U.N. Security Council, will continue, together with the government of Afghanistan, to effectively counteract terrorist sorties, and protect the civilian population in the context of efforts towards long-term stabilisation in the country,” the ministry said.

Russia believes that a dialogue with the Taliban “can be conducted solely under the Afghan leadership” and “any backstage contacts with them, let alone behind the back of the official authorities, would be fraught with wrong signals about the real intensions of the international community in the context of Afghan settlement”, Pankin said.

Speaking of the latest changes to the sanctions, he stressed that the Taliban members can be withdrawn from under them only if they give up armed resistance, recognise the Constitution of Afghanistan, and sever ties with al-Qaeda and other terrorist organisations.

Moscow “is deeply discouraged by illicit drug production and trade in the country”.

“There is no doubt left that Afghan drug trafficking poses a threat to global peace and stability, as clearly stated in Security Council Resolutions 1943 and 1974,” Pankin said.

“It must be neutralised collectively, using all available possibilities. Unfortunately, the coalition forces do not pays this proper attention,” he added.

The permanent representative noted that Russia’s proposals to pool efforts against drug production in Afghanistan “in a real-time mode together with partners from NATO, the Shanghai Cooperation Organisation and the Collective Security Treaty Organisation” remain in force.

Pankin recalled that the International Security Assistance Force (ISAF) are in Afghanistan in accordance with a U.N. Security Council mandate and “cannot leave Afghanistan without suppressing the terrorist activities and creating an efficient army and police force there”.

He referred to U.S. President Barack Obama’s recent decision to reduce the number of U.S. troops in Afghanistan and expressed hope that this reduction would be made up for by efforts to increase the combat capability of the Afghan Armed Forces that should be able to ensure security and counteract extremism and drug trafficking on their own.

“We would like the International Security Assistance Force in Afghanistan (ISAF) that has been deployed there with a U.N. mandate by a decision of the U.N. Security Council to effectively carry out their mission,” Deputy Foreign Minister Sergei Ryabkov said earlier.

“We do not need a pocket of tension near our southern border in the form of unstable and terrorist-controlled Afghanistan. Due to historical reasons, we have certain restrictions on how we can contribute to the resolution of these tasks in Afghanistan. We cannot send our troops there,” the diplomat said.

“The Afghan drug aggression into Russia is a big problem, and we will continue working with the Americans. By the way, the Federal Drug Control Service and the respective U.S. administration have established such contact. Work is also under way within the framework of the relevant group within the presidential commission,” he said.

The International Security Assistance Force is a NATO-led security mission in Afghanistan established by the United Nations Security Council on 20 December 2001 by Resolution 1386 as envisaged by the Bonn Agreement.

The transfer of power to the Afghan government before the end of 2014 does not mean full withdrawal of NATO troops from Afghanistan, NATO Secretary General's Special Representative for the South Caucasus and Central Asia James Appathurai said earlier.

NATO constantly assesses whether the Afghan civilian authorities are ready to take the reins and whether the national police and army are prepared to assume responsibility for security in the country, he said.

Appathurai noted that Afghan President Hamid Karzai has to approve a new schedule of transition.

He noted that it would be a long transition from the first half of 2011 till the end of 2014. The transfer of power to the Afghan government does not mean full withdrawal of the NATO troops. After the transfer, the alliance will play an auxiliary role by providing support to the Afghan authorities and continuing to cooperate with them, the official said.

10:50 07/07/2011ALL NEWS

EMERCOM sends another plane with humanitarian aid to Tripoli.

http://www.itar-tass.com/en/c154/180895.html

7/7 Tass 102

MOSCOW, July 7 (Itar-Tass) —— Russia’s Emergency Situations Ministry /EMERCOM/ has sent another plane with humanitarian aid cargo to Libya.

“Today at 09:01 Moscow time from the Moscow Region’s Ramenskoye Airport EMERCOM’s Il-76 plane took off for Tripoli, it carries about 36 tonnes of humanitarian aid, mostly food,” a source at the ministry said on Thursday.

On Wednesday, EMERCOM’s plane delivered humanitarian aid to Benghazi.

The aid is provided under the order of Russia’s president and in compliance with the Russian Federation’s governmental order.

Earlier, spokesman of Russia’s Foreign Ministry Alexander Lukashevich said that “the protracted armed conflict in Libya has caused a dramatic degradation of the country’s humanitarian situation, and Moscow is concerned about it.”

“This is why Russia has made a decision to provide urgently equal humanitarian aid to all those who need it in Libya, no matter in what part of the country they

are,” he said adding that “Russia has been contacting Tripoli’s authorities and representatives of Libya’s Transitional National Council to work out optimal ways to deliver and distribute such aid.”

Russia to send another plane with humanitarian aid to Libyahttp://en.rian.ru/world/20110707/165066099.html

04:55 07/07/2011

MOSCOW, July 7 (RIA Novosti)

Another plane from the Russian Emergencies Ministry with humanitarian aid for Libya will take off for Tripoli from Moscow on Thursday, a statement from the Russian Foreign Ministry said.

On Wednesday, a Russian Emergencies Ministry's Ilyushin Il-76 aircraft delivered 36 metric tons of humanitarian aid to the Libyan city of Benghazi. The aid included rice, sugar, canned milk and fish.

"Another flight of a Russian Emergencies Ministry's plane to Tripoli carrying a similar cargo is scheduled for July 7," the statement said.

Libya has been rocked by fighting between pro- and anti-Gaddafi forces since mid-February.

An international military operation in Libya began on March 19, following a UN resolution authorizing countries "to take all necessary measures" to help protect Libyan civilians from attacks by Gaddafi forces, and was extended until late September.

06:03 07/07/2011ALL NEWS

RF-Norwegian agt on delimitation of sea waters and Arctic coop takes effect.

http://www.itar-tass.com/en/c154/180755.html

7/7 Tass 9

MOSCOW, July 7 (Itar-Tass) —— The Russian-Norwegian agreement on the delimitation of sea waters and cooperation in the Barents Sea and the Arctic Ocean will officially take effect on Thursday, July 7.

The agreement signed by the foreign ministers of the two countries in Murmansk on September 15, 2010 and ratified by the national parliaments put a period to the 40-year-long negotiations between the neighbouring states.

The document opens up opportunities for unhindered development of offshore oil and gas fields in the Arctic in an area of 175,000 square kilometres and lays down the terms of cooperation in the field of fishing.

Russia will take control of the biggest part of the disputable area -- slightly more than 860,000 square kilometres. Norway will control about 510,000 square kilometres.

Russian Foreign Minister Sergei Lavrov believes that “the agreement is absolutely mutually advantageous, fair and consistent with all norms of international law”.

“Fishermen will be able to fish as they have been doing all this time. In addition, we will get new broad opportunities for strengthening strategic partnership in the oil and gas sector as well as cooperation in related industries such as transport and shipbuilding,” he said.

He noted that the entry into force of the agreement “underscores one more time that all questions in the North can be resolved peaceably, without interference of outside forces”.

Russia and Norway will continue to develop the region in environmentally sustainable manner, Norwegian Minister of Foreign Affairs Jonas Gahr Stoere said.

He expressed hope that bilateral cooperation would be effective.

Norway and Russia are active in their bilateral dialogue on pressing bilateral issues as never before, he said after talks with Lavrov in March.

“Never before have Norway and Russia had such an active dialogue before and such dynamic interaction on matters of mutual interest,” he said.

The minister stressed the fact that the two countries had signed last year the agreement on the delimitation of seawaters in the Barents Sea and the Arctic Ocean, which opens up big prospects for the development and expansion of bilateral economic cooperation.

Among important aspects of bilateral cooperation, Stoere named energy, where “cooperation is only beginning”, and fishing, where “cooperation will continue for the benefit of the two countries as has been the case for many years”.

Russian-Norwegian relations have been developing quite actively lately and been characterised by intensive political dialogue.

Interaction in the North occupies a traditionally important place in relations between the two countries. In December 2006, the Norwegian government adopted a strategy in respect of the northern regions, which calls for developing full-scale cooperation with Russia on a wide array of issues ranging from energy, transport infrastructure and fishing to environmental protection, education, culture, and contacts between people.

Agreements between the governments of Russia and Norway on the simplification of visa procedures entered into force in December 2008.

The agreement on trade and economic cooperation of March 26, 1996 regulates bilateral trade and economic relations, and governs the work of the Russian-Norwegian inter-governmental commission on economic, industrial, scientific and technical cooperation.

Norwegian Minister of Trade and Industry Trond Giske said earlier that his country would like to see more entrepreneurs from Russia.

“Their number is not as big as we would like. For Norwegian business, a key factor for moving to foreign markets is a predictable and stable situation. In my opinion, the absolute majority of Norwegian companies that have moved to Russia have worked out long-term plans and wish to contribute to the economic growth of your country,” Giske said.

“Norway and Russia have a tremendous potential for close economic cooperation, especially in such a sphere as energy, where positive experience has already been acquired in the oil and gas sector. This industry can be expanded further in such fields to improve energy efficiency, increase research activities, solve environmental problems, and use alternative sources of energy,” he said.

Norway accounts for 0.4 percent of Russia's foreign trade turnover. Russian export is dominated by resources (88 percent), including fuel and energy (57.1 percent), metals and products from them (22.4 percent), chemical industry products (4.7 percent), machinery, equipment and means of transport (4.2 percent), timber and pulp-and-paper products (1.4 percent).

Norway supplies mainly fish, fish products, agricultural produce (70.9 percent), machinery, equipment and means of transport (19.2 percent), metals and products from them (4.2 percent), and chemical industry products (3.5 percent).

About 120 enterprises with Norwegian capital are registered in Russia. Norwegian investments in Russia have reached about 1.9 billion U.S. dollars, mainly in the Murmansk, Arkhangelsk, and Leningrad regions. Priority is given to industry, wholesale trade, services, telecommunications, and mass media.

Russia's presence at Spitsbergen occupies a special place in bilateral relations. As a party to the international treaty of 1920, Russia is engaged in economic activities (coal mining) and conducts research on the archipelago. A government commission on the Russian presence in Spitsbergen has been working since April 2007. In February 2008, the Russian government upgraded the consulate on the archipelago to consulate general.

Arctic Treaty With Norway Opens Fields http://www.themoscowtimes.com/business/article/arctic-treaty-with-norway-opens-fields/440178.html

07 July 2011By Howard Amos

A 44-year border dispute between Russia and Norway in the icy expanses of the Barents Sea was finally laid to rest Thursday as a new delineation treaty entered force.

The agreement opens up a previously untouched 175,000-square-kilometer area for exploration, estimated to contain up to 6.8 billion tons of oil and gas.

The resolution of political tensions in the so called "gray zone" was the result of years of work by the Russian and Norwegian governments and comes at a time when Arctic nations are increasingly looking to assert sovereignty over the region's abundant offshore mineral resources. The treaty, signed in September 2010, found a geographical mid-point between the demands of both sides.

World Petroleum Council vice president Anatoly Zolutukhin told The Moscow Times that the "gray zone," previously off-limits for surveying or drilling, is "a very prolific area — maybe even more prolific than Shtokman."

Gazprom operates Shtokman, the enormous gas field holding about 3.9 trillion cubic meters of gas in the Russian half of the Barents Sea, in collaboration with Norway's Statoil and France's Total. However, uncertain long-term demand for gas and technical difficulties have caused repeated postponements, and analysts said the new treaty might be a further delay if it proved to be a catalyst for indirect competition with Shtokman.

Defocusing on Shtokman?

Fifty-seven deputies in the Duma voted against the ratification of the delineation treaty in March on the grounds that it could harm Russian economic interests. Communist Party Deputy Leonid Kalashnikov said during the debate that it would "put a cross on the Shtokman field."

In particular, Norway's Statoil, 67 percent state-owned, could find accessible hydrocarbon deposits in home waters more appealing than its minority stake in the Russian-controlled ventures.

"If Norway explores and develops the [former] gray zone at an accelerated pace, Statoil's focus will be on this area and they might divert some funds and resources from [their] participation in … Russia's Arctic offshore," said Valery Nesterov, an oil and gas analyst at Troika Dialog.

A Statoil spokesman, Bard Gladpedersen, told The Moscow Times that the company remained "committed to the Shtokman project," but added that "it is very important and positive that this treaty has been signed and comes into force. … The Barents Sea is an attractive prospect for us."

Norwegian companies, faced with a fast rate of reserve depletion, have superior technical expertise that leads to a greater capacity for quick development, compared with their Russian counterparts. As such, they are likely to take the lead over Russian companies in exploiting the newly accessible areas.

More Significant for Norway

The Norwegian sector of the former gray zone is likely to be twice as rich in resources as Norway's total oil and gas reserves in the neighboring North Sea, Leonid Surguchev, vice president for international business development at the Stavanger International Research Institute said Wednesday on the sidelines of the Next Generation Oil and Gas Summit.

In a sign of their interest, the Norwegian government has fast-tracked some of the bureaucratic approval processes for the new areas, and the Oslo-based company Petroleum Geo-Services has already been contracted to conduct seismic surveys when the area is ice-free during the summer months of this year.

While analysts estimate that it could take 12 to 15 years for commercial production to begin in the newly delineated Russian sector, Surguchev said the equivalent time frame for Norway was four to seven years.

Imminent seismic surveys will also go some way to addressing uncertainty over the exact quantity of oil and gas. Though official Russian estimates put the figure at 6.8 billion tons of oil equivalent in 10 unique blocks, U.S. figures are more

conservative at 1.7 billion tons. The Barents Sea as a whole contains about 30 billion tons, about 25 percent of the world's offshore shelf hydrocarbon resources.

But the treaty may also be a catalyst for collaboration between Russian and Norwegian energy companies as, in the case of hydrocarbon reservoirs that extend across the border, companies will be subject to standardized agreements that stipulate the use of geophysical and drilling data to decide what proportion of the reserves each side is entitled to.

De-Facto Partnership

"Under the provisions of the agreement, any cross-border [hydrocarbon] structure should be regarded as a single unit — we are obliged to develop deposits as a unified whole. Therefore Statoil is, by definition, our partner," Natural Resources and Environment Minister Yury Trutnev said in September 2010, Finmarket.ru reported.

Gennady Shmal, president of the Union of Oil and Gas Producers of Russia, told The Moscow Times that Russian companies stood to gain significant technical expertise from collaboration with Norwegians in the Barents Sea.

The Maritime Delimitation and Cooperation in the Barents Sea and the Arctic Ocean treaty between Norway and Russia was signed during a ceremony attended by President Dmitry Medvedev and Norwegian Prime Minister Jens Stoltenberg in September 2010.

Prior to the signing, Norway had argued for the boundary to be at a midpoint between the two landmasses: Russia's Novaya Zemlya and Norway's Svalbard archipelago, respectively. Russia pushed for a "meridian line" that would have run directly north from the mainland.

The agreed borderline, a compromise between the positions, runs almost to the North Pole and was ratified by the Norwegian and Russian parliaments.

"The establishment of clear legal borders in an area where our interests intersect is, without question, a very real and a very important step forward," Medvedev said at a news conference with Stoltenberg after the 2010 signing.

A ban on imports of Norwegian salmon in 2006 by the Agriculture Ministry was widely seen as retaliation for the repeated detentions of Russian fishermen alleged to have trespassed onto disputed Norwegian territory.

One Treaty Leads to Another

A report compiled by the U.S. Geological Survey in 2008 said almost one-quarter of the undiscovered — but technically recoverable — hydrocarbons in the world

may be located north of the Arctic Circle. The region is becoming more and more attractive for energy companies as global warming makes it increasingly ice-free and accessible for longer periods each year.

Russia is particularly keen to consolidate its grip on the Arctic in light of the projected decline in gas and crude oil output from existing fields. While Russia is the biggest producer of crude in the world, it has only 74.2 billion barrels of reserves compared with 264.6 billion barrels held by the world's second-biggest producer, Saudi Arabia.

Deputy Prime Minister Sergei Ivanov said Wednesday that Russia would formally submit an application to the United Nations in 2012 in another attempt to gain international recognition for its claim that the Lomonosov Ridge and its huge mineral resources is a part of its own Eurasian landmass — and does not belong to Canada or Denmark.

Troika analyst Nesterov said the new treaty in the Barents Sea might have been a geopolitical move by Russia to try and bring Norway onside in its bigger territorial claims.

It's a step to secure Norwegian support in the event of a progress regarding the division of the huge territory encompassed by the Polar circle, he said.

Striking gold in the coldhttp://rt.com/news/russia-fedorov-expedition-arctic/

Published: 7 July, 2011, 08:54Edited: 7 July, 2011, 09:55

Talks on who owns the territory surrounding the North Pole are coming to a point. Russia has brought the request for the UN to look at Arctic borders forward by two years, as four other countries eye up getting access to the Arctic's natural riches.

At the moment, Russia's Arctic “area of responsibility” is a sector stretching from the Kola Peninsula to the Bering Straight.

But it is what lies beneath the ice that is the big prize here.

If Russia can prove that the ocean floor is part of its continental shelf, it will be getting much more than just new territory.

Another Russian scientific expedition is making its way to the Arctic Ocean to explore the Arctic bottom.

According to estimates, the Arctic seabed holds 90 billion barrels of oil – a vast treasure trove, even for Russia.

“That's basically 20 to 30 years worth of Russia's annual energy resources production, is what this means,” says Ivan Glumov, head of the expedition.

The research ship Academic Fedorov will spend 60 days gathering evidence that could see Russia significantly expand its territory.

“This evidence will go to show that Russia should be expanded by 1.2 million square kilometers. That's ten per cent of the country's current area,” says Sergey Alekseev, director of the State Nautico-Hydrographic Institute.

This untapped reserve of natural resources is tempting to all states with Arctic territory.

Russia, Norway, Denmark, the United States and Canada are all staking claims.

And all five are locked in a tight race to gather evidence in support, as some scientists warn that global warming could leave the region ice-free in under 20 years.

PRESS RELEASE

Deputy Foreign Minister Alexander Grushko Meets with UK Minister of State for Europe David Lidington

http://www.ln.mid.ru/bdomp/brp_4.nsf/e78a48070f128a7b43256999005bcbb3/6d7e8e91e071126bc32578c6001cb12e!OpenDocument

1029-06-07-2011

Deputy Minister of Foreign Affairs of the Russian Federation, Alexander Grushko met on July 6 with British FCO Minister of State for Europe David Lidington in Moscow.

The parties discussed pan-European cooperation problems, including issues of Russia’s further interaction with the EU and NATO, Council of Europe themes and touched on topical Euro-Atlantic security problems.

'Russian reconnaissance and influence in Georgia is minimal' http://www.news.az/articles/georgia/39984

Thu 07 July 2011 07:36 GMT | 9:36 Local Time

Cases of spies are under his vigilant control, Georgia Minister says.

Theme of spies is disclosure of Russia and not a scandal – Minister of Interior Affairs of Georgia Vano Merabishvili told Russia radio station Ekho Moskvi.

He says that detention of 12 people in Batumi, Russian citizens among them, indicates that Georgian counter intelligence works effectively.

The Minister states that the cases of spies are under his vigilant control.

“I want to say that not all Russian agents and spies are detained yet, as there are those who are observed. Their activity plans and actions are observed. I’m satisfied with out counter intelligence”, Vano Merabishvili said.

He says that Russian spies encounter difficulties in working in Georgia. “If I’m more specific, they have been convinced that they have less possibility to manoeuvre in Georgia than they had before. It’s more difficult for them to work in Georgia, as we have blocked significant sources of getting information”, the minister said.

To the journalist’s question to specify what he meant, Merabishvili answered: “I’ll tell Russian prosecutor when he questions me”. To the question – “whether there is such possibility”, the minister says that anything is possible in life, adding that it was a joke.

“Russia is accustomed that former CIS is their territory; that they can act freely with impunity, that they control everything and have all information. They were not serious regarding Georgian special services. They would never expect Georgian special services could psychologically, technically and professionally disclose and close source of information. In reality, we can say now that Russian reconnaissance and influence in Georgia is minimal”, Merabishvili declared.

Merabishvili says that the tangible result was achieved last year, “after our agent was engrained in GRU. We obtained not only action plan by help of this person,

but codes and numbers of the files that were transferred. It made simpler to uncover the large acting net”, Merabishvili said.

He says the activity continues and will never end. What about Russian attempts to create new net in Georgia, Ministers says it will take time and energy.

InterPressNews

Europe presses Russia to lift fruit and veg banhttp://www.thenews.pl/9/7/Artykul/51107,Europe-presses-Russia-to-lift-fruit-and-veg-ban

07.07.2011 10:14 The European Commission will be pressing Russia to lift the embargo on imports of Polish fruit and vegetables, it has announced.

A representative of the body, Paola Testori, has pledged EC support for Warsaw’s strivings to re-open exports to the Russian Federation.

Moscow has upheld the ban on grounds of potential E.coli infection despite a positive opinion on screening methods employed by Polish sanitary inspectors.

Paola Testori stressed that already last week, the Commission had reached an agreement with the Russia on a complete lifting of the fruit and vegetable embargo for all EU countries.

The comments come as Poland’s Deputy Agriculture Minister, Jaroslaw Wojtowicz left for Moscow on Wednesday to try and negotiate an end to the ban.

Belgium, Holland and Spain have already resumed their deliveries to the Russian market, leaving 23 EU countries without access to Russian markets.

“We are continuing discussion with the Russian authorities together with [representatives of] Polish authorities,” Tesori said, adding that “we consider that maintaining the ban for exports of Polish vegetables to Russia is totally unjustified.”

Polish health minister Ewa Kopacz assured that agriculture minister Marek Sawicki has already received information on sanitary inspections carried out in more than 2,000 plantations across Poland which grow vegetables and fruit.

Meanwhile, speaking to Polish Radio on Thursday morning, Agriculture Minister Marek Sawicki said that the Russian embargo is part of a game played by the country in order to enter the World Trade Organisation.

“Russia will most probably not be praised for such a move,” Sawicki opined. (ss/jb)

July 6, 2011

EU support Russia in mediation efforts in settlement of the Nagorno Karabakh conflicthttp://en.trend.az/news/karabakh/1901836.html

[06.07.2011 23:29]

Azerbaijan, Baku, July 6 /Trend A.Askerov/

EU support Russia and personally President Dmitri Medvedev's mediation efforts in settlement of the Nagorno Karabakh conflict, said EU High Representative for Foreign Affairs and Security Policy Catherine Ashton during a plenary session of European Parliament in Strasbourg on Wednesday.

Ashton also said about work of OSCE Minsk Group Co-Chairs and the parties to make progress towards an agreement on the Basic Principles, the first step in a process leading to the drafting of a formal peace agreement.

According to her, the Deauville statement of Presidents Obama, Medvedev and Sarkozy made clear that the time had come for an agreement, failing which the parties’ commitment to a solution would be questioned.

"Relations between the two countries are difficult. The Co-Chairs keep me and the EEAS fully informed of their work and the many difficulties they face" - said Ashton.

According to her, the parties need to redouble their efforts to find an agreement before the end of this year.

Presidents Ilham Aliyev of Azerbaijan, Dmitry Medvedev of Russia and Serzh Sargsyan of Armenia discussed in Kazan the basic principles of the Nagorno-Karabakh conflict settlement. The meeting, which was the ninth in the last three years, ended without reaching an agreement on the basic principles of settlement. In a joint statement, the sides mentioned the progress towards this goal.

The conflict between the two South Caucasus countries began in 1988 when Armenia made territorial claims against Azerbaijan. Armenian armed forces have

occupied 20 percent of Azerbaijan since 1992, including the Nagorno-Karabakh region and seven surrounding districts.

Azerbaijan and Armenia signed a ceasefire agreement in 1994. The co-chairs of the OSCE Minsk Group - Russia, France, and the U.S. - are currently holding peace negotiations.Armenia has not yet implemented the U.N. Security Council's four resolutions on the liberation of the Nagorno-Karabakh and the surrounding regions.

Do you have any feedback? Contact our journalist at trend@trend.az

03:35 07/07/2011ALL NEWS

7/7 Tass 8

http://www.itar-tass.com/en/c154/180731.html

STRASBOURG, July 7 (Itar-Tass) —— The political situation in Russia ahead of the upcoming Duma elections slated for December 2011 was in the focus of the European Parliament’s attention on Wednesday, July 6.

“Russia is already in pre-election mode, with new party alliances and increasing debate. There are some encouraging signs: President Medvedev is calling for economic and political modernisation, while Finance Minister Kudrin insists on free and fair elections,” the European Union’s High Representative of the Union for Foreign Affairs and Security Policy and Vice President of the European Commission Catherine Ashton said at the hearings.

At the same time, “political pluralism still faces obstacles”, she noted, referring to the Russian Justice Ministry’s refusal on June 22 to register the new liberal opposition “People’s Freedom Party/PARNAS”.

“The main reason given for the refusal to register the party was that a few minors and ‘dead souls’ had been found among the party’s 46,000 members,” Ashton recalled.

Another of the Party’s leaders, Vladimir Ryzhkov, has rejected these claims as false or groundless. But even if these people were excluded, he says, the party would still have the required 45,000 members, she added.

“Ryzhkov’s earlier political party, the Republican Party of Russia, had met a similar fate in 2007, when Russian authorities ordered its dissolution,” the high representative said.

“On 12 April 2011, the European Court of Human Rights here in Strasbourg ruled that this dissolution was in violation of Article 11 of the European Convention on Human Rights. The Court also noted that minimum party membership requirements in Russia are the highest in Europe. The Court was not persuaded that these requirements are necessary, and stressed that small minority groups must also have an opportunity to participate in elections. It said that frequently changing membership requirements, coupled with regular checks, had imposed a disproportionate burden on political parties in Russia,” Ashton said.

She recalled that “we again emphasised the need for political pluralism” at the latest EU-Russia Summit and President Dmitry Medvedev had acknowledged that “a focus on too much stability risks resulting in stagnation”.

Two weeks ago, he introduced a bill that would lower the threshold for parties to enter the Duma from its current 7 percent to 5 percent - but only for the next Duma elections, in 2016, Ashton said.

She stressed, “The purpose of democratic elections is to give the voters a real choice, and a sense that their vote matters for the outcome.”

“We received encouraging signals at the summit in Nizhny-Novgorod, and I look forward to a request being sent soon from Moscow to the OSCE,” she said.

Ashton said that Partnership for Modernisation “opens new opportunities for cooperation in this field” and welcomed the joint project with the Council of Europe on reforming the appeal system for civil and criminal court cases in Russia, as well as the opening of new forms of dialogue with civil society, in particular the creation of an EU-Russia Civil Society Forum.

She made it clear that “Russia remains an essential EU partner, and a challenging one” with “an interesting debate is going on within the country about the best way for it to modernise its society and its economy”.

“Changing attitudes and expectations will materialise, and shape new realities. The nine months ahead will be decisive for Russia’s further development. Democratic progress can only come from within Russia,” she said.

“We will continue our engagement, building on our common interests while standing firmly by our values,” Ashton said.

Kremlin Human-Rights Panel Backs Pardon for Economic Crimes, Khodorkovskyhttp://www.bloomberg.com/news/2011-07-07/kremlin-council-urges-amnesty-for-economic-crimes-khodorkovsky.html

By Henry Meyer - Jul 7, 2011 10:29 AM GMT+0200

The Kremlin’s human rights council called for an amnesty for economic crimes that would apply to Mikhail Khodorkovsky, the jailed former billionaire head of Yukos Oil Co..

“An amnesty can’t exclude specific individuals,” Tamara Morshchakova, a member of the council, set up in February by President Dmitry Medvedev, told reporters today in Moscow. “It would apply to all people accused of these crimes.”

Khodorkovsky, Russia’s richest man when he was arrested on the tarmac of a Siberian airport in October 2003, was convicted of fraud and tax evasion in 2005 and oil embezzlement in December 2010. He will spend a total of 13 years in prison, including the eight years he is serving on previous charges, after the Moscow City Court rejected an appeal to overturn his conviction in May.

Last month, Khodorkovsky was sent to a penal colony in Segezh in the Karelia region, near Finland, after previously serving his sentence in a prison in the Chita region near the border with China.

Medvedev said May 18 that freeing Khodorkovsky wouldn’t be “dangerous” for Russia as he called for faster action to modernize the economy.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

07:54 07/07/2011ALL NEWS

China sentences six Russian citizens for drug smuggling.

http://www.itar-tass.com/en/c154/180790.html

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BEIJING, July 7 (Itar-Tass) —— Another Russian citizen has been sentenced to death in China with a two-year delay in execution for an attempt to smuggle drugs, head of the consumer section of the Russian Embassy in Beijing, Leonid Ignatenko, told Itar-Tass on Thursday, July 7.

The man tried to import in China from a Central Asian country in May of the previous year 2.8 kilograms of heroin and was caught red-handed at the Urumqui airport. In November, the court in Urumqui found him guilty, and now the sentence was confirmed by China’s upper level court.

Thus the total number of Russians sentenced in China for drug related crimes has reached six. Earlier, four Russians were detained and sentenced in the Yunnan Province in different times. Later on, all of them were moved to a prison in North-Eastern China, which is located at the territory bordering Russia. Another man had 1.9 kilograms of heroin as he was arrested. He remains in Beijing’s prison.

According to Chinese legislation, a death penalty with delayed execution may be changed for life or long-term imprisonment should the sentenced realises deeply the guilt and behaves perfectly. In China, a suspect having 50 or more grams of strong drugs may be sentenced to death.

Staff of Russia’s consular section had a meeting with the sentenced, Ignatenko said. Another meeting is due before he is sent to prison.

07:38 07/07/2011ALL NEWS

Russian citizen sentenced to death in China for drug smuggling.

http://www.itar-tass.com/en/c154/180781.html

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BEIJING, July 7 (Itar-Tass) —— A Russian citizen has been sentenced to death in China with a two-year delay in execution for an attempt to smuggle drugs, head of the consumer section of the Russian Embassy in Beijing, Leonid Ignatenko, told Itar-Tass on Thursday, July 7.

The man tried to import in China from a Central Asian country in May of the previous year 2.8 kilograms of heroin and was caught red-handed at the Urumqui airport. In November, the court in Urumqui found him guilty, and now the sentence was confirmed by China’s upper level court.

According to Chinese legislation, a death penalty with delayed execution may be changed for life or long-term imprisonment should the sentenced realises deeply the guilt and behaves perfectly.

Staff of Russia’s consular section had a meeting with the sentenced, Ignatenko said. Another meeting is due before he is sent to prison.

Kommersant: Bulgaria looking for alternative to Russian gas http://www.focus-fen.net/index.php?id=n253958

07 July 2011 | 08:06 | FOCUS News AgencyHome / BusinessMoscow. Gazprom may lose another client in Europe. After Croatia, Bulgaria is the next country considering drastic cut in the use of Russian gas, decreasing the volumes from the current 2 billion cubic meters to 500,000 cubic meters. The country hopes to boost its local production and purchase natural gas from Turkey, as well as to extract shale gas, Kommersant writes.The news about Bulgaria’s plans to give up on the long-term contracts with Gazprom has been announced by Bulgarian Minister of Economy, Energy and Tourism Traycho Traykov. In his words, the country aims at restricting the gas deals with Russia to no more than 500,000 cubic meters of gas annually, which is a four-time decrease in Russia’s export to Bulgaria.

Russian MFA demands Chisinau to explain reasons behind Bagirov’s arresthttp://www.news.az/articles/russia/39950

Thu 07 July 2011 04:23 GMT | 6:23 Local Time

Russian Foreign Ministry has demanded Chisinau to provide information about the reasons for arrest of Russia citizen Eduard Bagirov.

“In connection with detention of citizen of the Russian Federation Bagirov in Chisinau, a Russian side drew attention to the need to respect his rights and immediate provision of information about the reasons for his detention," it says in a statement issued on Wednesday by the Press and Information Department of Russian Foreign Ministry.

Bagirov was arrested in Chisinau on 16 June. At the request of prosecutors, he was sentenced to detention for a period of 30 days. After 11 days, his lawyer

attempted to challenge this decision, but the decision of the Chisinau Court of Appeal to change the preventive measure Bagirov was denied.

In Moldova, Bagirov is accused of involvement in riots in April 2009, when the building of the presidential administration and parliament of Moldova were attacked.

1news.az

Dead Russian sailors delivered to Vladivostok Saturday http://english.ruvr.ru/2011/07/07/52887858.html

Jul 7, 2011 06:37 Moscow Time

The bodies of four Russian sailors, poisoned with methanol in Indonesia, are scheduled to be delivered from Moscow to Vladivostok on Saturday. After that they will be transferred to relatives.

The shipping company covered the expenses of bringing the sailors home. This was reported by a spokesman for the company, who added that the expenses "amounted to hundreds of thousands of dollars." On Wednesday, the bodies were sent from Jakarta to Moscow.

Crew members of the multipurpose dry cargo vessel "Captain Kurbatskii" standing in the Indonesian port of Muara Asam-Asam, were drinking alcohol on June 23rd, after which 4 died from poisoning by counterfeit alcohol.

Three other crewmen received treatment in Banjarmasin, after which were able to resume work.

Medvedev appoints new deputy defense ministerhttp://vestnikkavkaza.net/news/politics/15589.html

Russian President Dmitry Medvedev has signed a decree on theappointment of Mikhail Mokretsov as Deputy Defense Minister, RIANovosti reports.

Mokretsov has been the head of the office of the Defense Ministry

since April 2010. He headed the Federal Tax Service for several yearsearlier. He was the deputy minister since July 2010.

Dmitry Medvedev also prolonged terms of office of police generals:General-Lieutenant Yuri Agafonov, General-Major Boris Bulatov,General-Major Sergey Zhevlakovich, General-Lieutenant Vasily Kudin,General-Colonel Nikolai Ovchinnikov, General-Lieutenant NikolaiRumyantsev and General-Major Yuri Toropin.

The law on police came into force on March 1. The Russian "militia"was renamed into "police". Public control over the police wasimproved. 22% of the police staff will be reduced.

Re-qualification of staff will end on August 1, 2011 (earlier planswere to end it on June 1). Only re-qualified staff will remain inoffice.

07/07 12:14   Fears of state armaments program failure unfounded - Serdyukov 

http://www.interfax.com/news.asp

07/07 12:13   Defense industry managers will be dismissed for distorting situation with state defense order – Serdyukov

http://www.interfax.com/news.asp

05:03 07/07/2011ALL NEWS

Sakhalin Duma to debate Khoroshavin’s nomination as new governor.

http://www.itar-tass.com/en/c154/180743.html

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VLADIVOSTOK, July 7 (Itar-Tass) —— The Sakhalin Regional Duma will debate the nomination of Alexander Khoroshavin as the new governor on Thursday, July 7.

On June 29, President Dmitry Medvedev nominated Khoroshavin to be the governor of the Sakhalin region for a second term.

The committee on state development, regulations and local self-government in the Regional Duma discussed the nomination on Wednesday, July 6. Khoroshavin also met with representatives of all Duma factions.

Khoroshavin was born on November 26, 1959 in the city of Svobodny in the Amur region. He graduated from the Far Eastern Institute of Economics, and holds a degree in economics.

He worked as an instructor in the Okha city committee of the Soviet Communist Party in 1987-1991.

In 1991 he became head the Aglomerat Association.

In 1993 Khoroshavin worked as director of the IVA limited liability partnership in the city of Okha in the Sakhalin region.

In 1997-2001 he was deputy mayor of the city of Okha and the Okha District.

In 2001 he headed the Okha municipality.

In 2005-2007 he was head of the Okha District administration.

In August 2007 Khoroshavin became governor of the Sakhalin region.

On August 9, 2007, the Sakhalin regional legislature confirmed his nomination as governor.

Khoroshavin is married with two children.

04:04 07/07/2011ALL NEWS

Tver rgn parliament to debate Shevelev’s nomination as new governor.

http://www.itar-tass.com/en/c154/180735.html

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TVER, July 7 (Itar-Tass) —— The Legislative Assembly of the Tver region will convene on Thursday, July 7, to debate the nomination of Andrei Shevelev as the new governor of the region.

Shevelev nominated by President Dmitry Medvedev to be the new governor of the Tver region has had consultations with all factions in the regional parliament.

“I hope for the support of deputies in the Legislative Assembly of the Tver Region,” Shevelev said after Medvedev had sent his nomination to the regional parliament.

Shevelev said he regarded his nomination as “responsibility to the president and the residents of the Tver region”.

If confirmed, Shevelev will replace Dmitry Zelenin, who resigned on June 16. Medvedev appointed Shevelev, deputy governor of the Ryazan region at that time, to be acting governor of the Tver region.

Shevelev was born in the Tver region. He graduated from the Ryazan Higher Airborne Command School in 1991 and was dispatched for military service to the 76th Chernigov Airborne Division stationed in Pskov. He served there until 1997 and then took up a position of officer at the St. Petersburg Suvorov Military School.

In December 2003, he was elected to the fourth State Duma in North-Western single-mandate constituency No. 210 (St. Petersburg) from the United Russia Party.

In 2007 he headed a development company in St. Petersburg.

In May 2008 Shevelev was approved vice-governor – first deputy prime minister of the Ryazan region.

Shevelev has the title of Hero of the Russian Federation; he was awarded the Medal for Distinction in Military Service, the First Degree Medal for Combat Valour and various jubilee medals of the Soviet Union and the Russian Federation.

He has been included in the reserve of the Russian presidential administrative staff.

Bill on reduced vote threshold adopted in first readinghttp://rt.com/politics/bill-reduced-vote-first/

Published: 7 July, 2011, 09:20Edited: 7 July, 2011, 10:52

Russia’s lower house, the State Duma, has approved a draft law on lowering the vote threshold by two per cent for the federal parliamentary election. This means that to make it to the Duma a party would need five per cent of the votes.

However, even if adopted before this year’s election scheduled for December 4, it will only apply to the parliament of the next convocation and would first be applied in 2016.

In fact it is a return to the norms that existed in the period from 1993 to 2003. The current seven per cent threshold was introduced at the time of Vladimir Putin’s presidency. In the last parliamentary election in 2007, four parties managed to overcome it.  

The new bill was submitted to the State Duma by President Dmitry Medvedev on June 24, shortly after his interview to the Financial Times in which he said that in the future the electoral threshold could be reduced even further, to three per cent.

Commenting on that interview, the State Duma Speaker and Chairman of United Russia’s Supreme Council Boris Gryzlov observed that he considers the seven per cent threshold justified and that lowering the barrier will be a task for the next convocation. Opposition members, on the contrary, stated that new rules should be used this December.

During the debate, a Fair Russia MP asked Garry Minkh, presidential envoy in the Duma, “why the threshold was raised from five to seven per cent before the 2007 election and there’s a need to return to the starting point?”

Minkh explained that earlier “the political landscape was made up of more than 150 political forces” and that thanks to the increased barrier “we stimulated the process of enlargement and structuring of political parties.

In general, the bill did not face serious obstacles in the lower house. All four factions supported Dmitry Medvedev’s proposal, although opposition continues to push for amendments allowing the law to be applied to the next parliamentary convocation.

08:04 07/07/2011ALL NEWS

Working groups to study power distribution proposals July 7.

http://www.itar-tass.com/en/c154/180799.html

7/7 Tass 3

MOSCOW, July 7 (Itar-Tass) —— Two high-level working groups that should draft proposals on decentralisation of administrative functions and distribution of powers between different levels of government will hold their first joint meeting on Thursday, July 7.

President Dmitry Medvedev earlier signed an executive order on the drafting of suggestions regarding redistribution of powers between federal executive bodies, regional executive bodies, and local authorities.

With a view to broadening the powers of the regional and local authorities, the president ordered the creation of a working group on legal issues, to be headed by Vice Prime Minister Dmitry Kozak, and a working group on financial and tax issues and inter-budgetary relations, to be headed by Vice Prime Minister and presidential representative to the North Caucasus Federal District Alexander Khloponin.

The heads of the working groups were instructed to submit to the president their preliminary reports containing the main principles of redistribution of powers by September 15, and the final reports by December 1.

Medvedev believes that these are “long-awaited changes” and the drafting new approaches to running the country is “a creative task the resolution of which will ultimately be crucial for the success of the policy pursued by the president and the government, social guarantees in regions, and the social welfare of people”.

The president said he was expecting relevant proposals and a look at the problem “from different angles” from the working groups.

“I chose a pattern involving two vice-prime ministers doing this intentionally. I understand that the financing of functions and legal support overlap. But I would like you to look at these problems from different angles,” Medvedev said Khloponin and Kozak on Wednesday, July 6.

“Eventually only one decision will have to be made, but I want a dispute on some approaches,” he added.

The president said he would watch the work and meet with the vice-prime ministers and governors on a regular basis.

According to Kozak, the working groups include officials from federal governmental agencies, regions and municipalities. A coordinating body will be set up to ensure interaction between the two working groups that will meet approximately once a month.

Tu-154 passenger jet makes emergency landing in Russia's Dagestanhttp://en.rian.ru/russia/20110707/165064773.html

01:54 07/07/2011

MOSCOW/MAKHACHKALA, July 7 (RIA Novosti)

A Russian Tupolev Tu-154 passenger jet with 165 people on board has made a safe emergency landing in Russia's North Caucasus republic of Dagestan, a spokesman for the local emergencies ministry said on Thursday.

"The Tu-154 aircraft en route from Moscow has made an emergency landing in Makhachkala at 0:02 Thursday [20:02 GMT Wednesday] after a failure in one of its engines. According to preliminary information, the aircraft carried 165 people, including the crew and 14 children," Kantemir Davydov, a spokesman for the North Caucasus Emergencies Ministry's department, said.

He said no one was injured upon the landing adding that "the crew's coordinated efforts prevented a possible emergency situation."

Rescuers, firefighters and ambulances were dispatched to the landing stripe at the Makhachkala airport after traffic controllers received an emergency warning from the aircraft on Wednesday at 23:30 Moscow time (19:30 GMT).

This is a second emergency landing of a Tu-154 aircraft in Russia in a week. Last Saturday, a Tu-154 passenger jet with 116 passengers on board made a safe emergency landing in the Urals city of Yekaterinburg after one of its engines failed.

12:08 07/07/2011ALL NEWS

Four gunmen killed in Kabardino-Balkar Republic in one day.

http://www.itar-tass.com/en/c154/180977.html

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MOSCOW, July 7 (Itar-Tass) — Four gunmen were destroyed in the Kabardino-Balkar Republic in one day, Itar-Tass learnt at the public relations centre of the National Anti-Terrorist Committee (NAC).

“Four active members of the underground mob were destroyed by forces of the NAC centre in the Kabardino-Balkar Republic on July 6 during search measures, including in areas of action of the legal regime of counter-terrorist operation,” said a NAC representative.

For instance an active member of an armed gang, Bogotov, was killed in Chegem when law enforcers tried to detain him, but he offered armed resistance. A bandit who was an active member of a religious and extremist group in Nalchik, opened fire on law enforcers when they attempted to detain him, tried to escape, but was killed.

“A pistol with a silencer was found on him, a magazine with cartridges, a grenade and a homemade explosive device with a yield of 800 grams in TNT terms,” the NAC reported.

An active member of an armed gang, Zhimukov, was destroyed in the city of Baksan by law enforcers. When they tried to detain him, Zhimukov offered armed resistance. “Officers of the FSB and the Interior Ministry in the same city blocked a car, driven by Zeushev. He offered armed resistance in an attempt to detain him; as a result, he was destroyed. Officers found a revolver, a grenade, a homemade explosive device with a yield of one kilo in TNT equivalent, a round to an under-barrel grenade launcher,” the NAC representative said.

The committee emphasised that there were no casualties among law enforcers or civil population during the above events.

Five killed in shootout in Dagestanhttp://en.rian.ru/crime/20110707/165065746.html

09:57 07/07/2011

MAKHACHKALA, July 7 (RIA Novosti)

Two civilians, a serviceman and two suspected militants were killed in a gunfight which broke out in Russia’s restive North Caucasus republic of Dagestan late on Wednesday, police said.

“According to the latest reports, one serviceman and two civilians have been

killed in a shootout in the village of Serebryakovka [near the city of Kizlyar]. One more servicemen and six civilians were wounded,” a police spokesman said.

He also said the identities of the two suspected militants were being established.Two of the injured civilians are now in intensive care in Kizylar. The wounded serviceman was taken to another hospital by helicopter.

09:31 07/07/2011ALL NEWS

Two gunmen destroyed in Dagestan, one serviceman & civilian killed.

http://www.itar-tass.com/en/c154/180852.html

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MAKHACHKALA, July 7 (Itar-Tass) — Two gunmen were destroyed, while one serviceman of interior troops was killed and another two were wounded in a night clash with a group of gunmen in the Kizlyar district, Dagestan.

Seven civilians were also wounded, and one of them died, Itar-Tass learnt from a source at law enforcement bodies.

According to data of the source, “a convoy of servicemen was fired on Wednesday night near the village of Serebryakovka by unidentified people from a forest. As a result, a firing engagement started”. Firearms were taken from the two killed gunmen, and they are being identified.

Civilians in personal cars were driving along a nearby highway during the clash with gunmen. Some of civilians were wounded in the firing engagement; one of them died later at a hospital.

An investigative group is working at the place of the operation; the area is being combed by interior troops.

One man killed in attack on motorized police convoy in Russia's Dagestanhttp://en.rian.ru/crime/20110707/165065746.html

03:58 07/07/2011

MAKHACHKALA, July 7 (RIA Novosti)

One man was killed and another wounded after a group of unknown suspects opened fire on a motorized police convoy in Russia's North Caucasus republic of Dagestan, a local police source said.

He said the attack took place on Wednesday at 22:20 Moscow time (18:20 GMT) near the village of Serebryakovka in the Kizlyar Region of the republic.

"It is still unknown how many militants attacked the motorized convoy and whether any of them were killed in return fire," the source said but did not specify whether the killed and wounded people were policemen.

More than a decade after the end of a war against separatists in Russia's North Caucasus republic of Chechnya, Russian security forces continue to fight militants in other regions in the area besides Chechnya, including Kabardino-Balkaria, Ingushetia, Dagestan, and North Ossetia.

11:11 07/07/2011ALL NEWS

Moscow to analyse printed, video materials for extremism next year.

http://www.itar-tass.com/en/c154/180904.html

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MOSCOW, July 7 (Itar-Tass) — Beginning from next year, Moscow will check all printed and video materials for carrying signs of extremism.

Moscow’s Mayor Sergei Sobyanin inked on Thursday an order on the procedure.

From January 1, 2012, printed, audio and video materials will undergo psychological and linguistic analysis to reveal if they contain signs of extremism, the city administration said. The work is necessary “to raise effectiveness of fighting distribution of extremist view and urges, improvement of measures to reveal activities aimed at fomentation of race and ethnic conflicts in Moscow.” The work will be done by the city’s Centre for Information and Analytical Technologies.

Earlier, a meeting of Moscow law enforcement made several decisions to prevent illegal activities and improve control over radical and ethnic groups, including those in the Internet. For example, the police together with the department of interregional cooperation, national policies and relations with religious

organisations of Moscow was to organise prophylactic activities with leaders of religious and ethnic groups to prevent ethnic and religious conflicts. The police were to provide timely information on planned illegal actions with participation of various ethnic groups and Russian nationalist organisations as well as on violations of law, which favour development of ethnic conflicts in Moscow.

Special attention will be paid to placement on the Internet of materials fomenting ethnic conflicts. They will be deleted by means the Moscow providers may offer, and those who make such Internet resources will be identified.

Earlier, the police and involved municipal authorities were ordered “to reveal and prevent illegal actions of social unions and individuals of attracting the youth and students to anti-Constitution activities.” Besides, it would be necessary to organise prophylactic work with students not to let them be involved in extremist activities.

Sobyanin ordered to the Prefect of the Moscow East Administrative District Nikolai Lomakin to stop selling of goods, which carry symbols of nationalism or fascism at the Vernisazh Market in Izmailovo.

Six forest fires remain active in Russia's Far Easthttp://en.rian.ru/russia/20110707/165067485.html

07:42 07/07/2011

MOSCOW, July 7 (RIA Novosti)

Firefighters and rescuers in Russia's Far East extinguished three forest fires over the past 24 hours and continue battling six more forest fires, a statement from the regional emergencies ministry said on Thursday.

"As of 8:00 local time on Thursday [21:00 GMT Monday] six forest fires continue raging in the Far East covering an area of 4.09 hectares," the spokesman said.

Wildfires in forested regions of Russia are common during the dry and hot summer season. Most of the time, the fires start because of the careless behavior of local residents in the woods.

Wildfires devastated a number of regions in central Russia last summer, killing 62 people and leaving thousands homeless.

09:03 07/07/2011ALL NEWS

Buryatia extinguishes all wildfires, allows tourists in parks.

http://www.itar-tass.com/en/c154/180831.html

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ULAN-UDE, July 7 (Itar-Tass) — All wildfires in Buryatia’s taiga were extinguished on Thursday.

“Fire fighters extinguished nine wildfires, which occupied the area of over 520 hectares, and the emergency situation regime was lifted in two regions,” a source at the republic’s forestry agency said.

Besides, the ban for visiting the Transbaikalia national park is eased. However, not all routes are open. One of the routes is still dangerous because of falling trees and stones, and two bridges across a river are ruined at another one.

In Transbaikalia, which neighbours Buryatia, has nine wildfires.

“Two of them are localised, and the total area of wildfires is above 760 hectares,” EMERCOM’s local division said. Over 190 firefighters and 40 specialised vehicles continue working there.

Russia’s federal forestry agency allocated to Transbaikalia over 200 million roubles for new firefighting equipment to be used in wildfires. The equipment is due before the year ends. At the same time, the region reconstructs forests.

“We have planted almost 3,000 hectares of pine and larch trees,” the regional administration reports.

08:31 07/07/2011ALL NEWS

Transbaikalia court sentences 12 drug criminals.

http://www.itar-tass.com/en/c154/180810.html

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ULAN-UDE, July 7 (Itar-Tass) — A court in Russia’s Transbaikalia sentenced on Thursday to different long terms of imprisonment 12 members of a criminal group, which had organised a large-scale distribution of heroin in the region.

“All drug dealers were announced as guilty of committing over 30 crimes, including illegal turnover of drugs and attempts for it,” press service of Transbaikalia Prosecutor’s Office said.

A local, Mikhail Voloshin, organised back in 2004 a criminal community and run it. His accomplice, Nina Kazayeva, managed the community’s groups. The other ten are responsible for participation in the criminal groups.

Boloshin was sentenced to 18 years imprisonment, Kazayeva – to 16 years, eight members of the group – to term between 5.5 and 12 years, two were put on an eight-year probation.

“The sentence for three prisoners at the bars, including Kazayeva, was voiced in their absence, as having signed the recognisance not to leave, they did not show up in the court,” the source said.

The investigation revealed that Mikhal Voloshin attracted to the criminal community members of his family and several individuals with previous convictions for distribution of drugs as well as drug addicts. He managed a system of strict conspiracy and discipline, thus the group remained for a long time. Voloshin and his accomplices were detained back in 2009. The police confiscated over 7.5 kilograms of heroin worth over 24 million roubles.

07 July 2011, 10:49

Aeroflot denies having sexual minority activist group among its personnel http://www.interfax-religion.com/?act=news&div=8572

Moscow, July 7, Interfax - Russia's flag airline, Aeroflot, has denied allegations that a sexual minority activist group has been set up within the company.

"This whole story is a patent lie and provocation directed by some ill-wishers against the Aeroflot steward Maxim Kupreyev. Maxim has never set up any LGBT [lesbian, gay, bisexual and transgender] group in Aeroflot, he has given no interviews to anyone nor has he complained about any restrictions on his rights or the like," Aeroflot told Interfax-Religion.

On Tuesday, one of the leaders of Russia's LGBT movement, Nikolay Alexeyev, said news had come on June 20 that Aeroflot personnel had formed a sexual minority activist association.

"Personnel associations of this kind already exist in other airlines across the world, including Air France-KLM, Aeroflot's main partner in the SkyTeam global alliance. Members of that group yearly take part in gay pride parades in Paris,"

Alexeyev said, adding that the group had been founded by a flight attendant.

Alexeyev said the Moscow city administration had forbidden LGBT activists to hold a rally outside an Aeroflot office in Moscow in support of the alleged group.

10:44 07/07/2011ALL NEWS

Russian press review.

http://www.itar-tass.com/en/c154/180891.html

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MOSCOW, July 7 (Itar-Tass) — ITAR-TASS World Service

Dmitry Medvedev urges to punish severely those responsible for disruption of state defence order

The meeting on fulfilment of presidential orders, which Dmitry Medvedev organized on Wednesday, had an unexpected ending – the president blew up Defence Minister Anatoly Serdyukov for disruption of the state defence order. It seems the reason originated from an interview the Kommersant newspaper published a day earlier. General Designer of the Moscow Institute of Heat Engineering Yuri Solomonov said in the interview that the state defence order for 2011 is disrupted. Medvedev ordered to Anatoly Serdyukov to prepare within three days a report about how the state defence order is being carried out.

“If the state defence order is disrupted, there should be organizational measures, regardless of ranks and positions, if the situation is different, it is necessary to clear out the situation with those who are panicking,” the Novye Izvestia quote Medvedev as saying. “You well know how scaremongers were treated in war times – they were shot.” The president allowed the defence minister to “fire everyone.” This was a reaction to Serdyukov’s confession that the ministry did not draw in 2011 contracts with defence industry worth over 100 billion roubles due to “wild growth” of prices for defence products.

The military’s biggest complaint was about the “unprofessionally overpriced” newest submarine, the Severodvinsk, which is being constructed at the Sevmash plant, the newspaper reports Commander in Chief of Russia’s Navy Admiral Vysotsky as saying. Producing enterprises explain that the problem has been provoked by the defence ministry itself, which delays timely payments for the state defence order. Another criteria, which fits the tendency, is the great growth

of natural monopolies’ tariffs, which cannot leave final prices unchanged. Independent experts say that shoulder-strapped corruption aggravates the situation. The astronomical military financing does not bring a notable result. Despite the fact that military expenses are to grow during the coming year by 1.5 percent of the GDP, the re-equipment of Russia’s Army, seems to be at a dead-lock, the newspaper writes.

The Komsomolskaya Pravda says that Dmitry Medvedev has been insisting for the fourth time over six month to punish those responsible for disruption of the state defence order.

Anatoly Serdyukov explains the disruption by growth of defence products prices, the RBC daily stresses. “During this year, the defence ministry has not filed contracts with the defence industry enterprises worth 108 billion roubles, or 18 percent, because of dramatic growth of prices for the military products,” he said. “Prices are growing madly.”

Anatoly Serdyukov promised that the ministry will have contracts for the remaining budget within several weeks. But experts doubt it. “The state order for 2011 is disrupted already, it will never be fulfilled,” General Designer of the Moscow Institute of Heat Engineering Yuri Solomonov said in the interview to the Kommersant. “The reason as of today is that there is not a single contract drawn, as far as the strategic nuclear forces is concerned.”

The Kommersant quotes the presidential Press Secretary Natalia Timakova, who did no rule out that Yuri Solomonov’s interview was the origin of the blow up.

The disruption of the state defence order has caused several administrative and discipline measures regarding managers of industrial enterprises, the RBC daily writes. Director generals of Izhmash and of the Research Institute of Electromechanics were fired. As military equipment and defence technologies were undersupplied, Russia’s Defence Ministry has fired several members of the staff who were responsible for placement of orders.

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Human rights council publishes expert analysis of the Magnitsky case

The Human Rights Council published on Wednesday results of the civil expertise of the case of the Hermitage Capital Management’s Lawyer Sergei Magnitsky, where his death could be caused by beatings. The council is adamant the entire judicial system should be changed. Experts stress that conditions of imprisonment of those suffering from serious diseases in Moscow pre-trial prisons remain horrible.

Sergei Magnitsky’s death is responsibility of investigators who were interested in isolating him. The investigators ignored claims from doctors and prosecutors, judges did their work formally, the presidential human rights council reported, the Vedomosti says.

The sick man was practically left to die without any medical assistance, the human rights experts state. “Besides, there are solid grounds to suppose that Magnitsky’ s death was caused by beatings: later on, relatives fixed broken bones of his fingers and bruises on the body,” the report reads.

The Moskovsky Komsomolets writes that experts are convinced the court did not have “sufficient reasons” to keep Magnitsky in prison, “courts did not check reasons for Magnitsky’s accusations” and followed up his complaints ineffectively, just like prosecution did.

A conflict of interests may have been reason of all violations of Magnitsky’s imprisonment, the Novye Izvestia writes. the case was investigated by the police and investigation committee’s staff, whom he accused of corruption.

The Nezavisimaya Gazeta is sure that the courts continue ignoring the presidential addendums to the Criminal Law, which were initiated to ease punishment for individuals under investigation, who suffer from serious diseases. Member of the Civil Supervisory Commission Zoya Svetova said that Judge Elena Stashina on the day the president met with human rights experts prolonged imprisonment of Natalia Gulevich, who is in hospital of the Matrosskaya Tishina prison. “Within a year, they have practically made an invalid of her,” Svetova said. “Her kidney is not working, nor is urinary bladder, all chronicle diseases are in acute conditions, she requires permanent cleaning of the catheter, and doctors of the Botkin Hospital confirm she needs surgery urgently.” At the same time, the Moscow Investigation Committee’s investigator Pavel Dimenko told Judge Stashina that Gulevich simulates and may escape justice, which Stashina supported gladly and left the woman under arrest for as long as till September 5. “How can she disappear if she can barely move?” Svetova protests.

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Every other carjacking gang involves police

The Chief Department of Internal Affairs of Russia’s Interior Ministry has announced revealing 30 gangs of carjackers, where 160 police were members of twelve of such gangs. Experts say that it is only logical that the police are involved in carjacking.

The police were after the carjackers for several months, the Moskovsky Komsomolets writes. Twelve gangs included the police staff. 3,533 cars were returned to their owners. The police, including traffic police, had special

responsibilities in the criminal groups. They were to provide smooth transportation of hijacked vehicles past the traffic police stations and to help in legalising the vehicles.

The twelve groups involved 160 police, including seven high-ranking “from Majors and higher”, the Novye Izvestia writes. The Internal Affairs Department’s spokesman Andrei Modkovkin told the newspaper that by the time they were detained none of them had past the certifying procedures. The police did not manage the carjackers, they merely fulfilled their responsibilities. Major responsibilities being to go past traffic police stations and to legalise vehicles.

Experts say that participation of the police in gangs of carjackers is only logical, the newspaper writes. Former Head of Russia’s Interpol division Vladimir Ovchinsky said that any major criminal group involves law enforcement staff: the police, FSB, prosecutors or drug control. Head of the Legal and Psychological Assistance Mikhail Vinogradov claims a share of the police associated with criminal communities makes 30 percent. “They both hijack vehicles and rob together with bandits.”

During the past year, over 40,000 vehicles were hijacked in Russia, where only about half of them were found later on, the newspaper reports. The most wanted cars for the bandits are Russian-made Ladas and Japan’s Mitsubishi and Toyota.

July 07, 2011 10:19

Moscow press review for July 7, 2011http://www.interfax.com/newsinf.asp?id=257452

MOSCOW. July 7 (Interfax) - The following is a digest of Moscow newspapers published on July 7. Interfax does not accept liability for information in these stories.

VEDOMOSTI

Two major investors in the energy sector Gazprom (RTS: GAZP) and Viktor Vekselberg have made up their minds to combine assets. The sides may announce the upcoming deal on Thursday. Gazprom and Vekselberg's KES-Holding plan to sign a memorandum of understanding, under which several months will be spent on drawing up a plan to combine the two companies' energy assets, a representative of one party in the talks told Vedomosti. When combined, the

assets will account for a quarter of Russia's energy capacities. (Energy Champion, see also Kommersant. Page 1. Gazprom UES of Russia.)

Metalloinvest has allotted dividends of 17.8% of last year's IFRS net profit, amounting to 6.5 billion rubles, the company said in an investment memorandum to its Eurobond issue. Another 7.4 billion rubles went to the holding company's co-owners for the first quarter of 2011, which accounts for 39.6% of the profit from January to March. On average, metallurgical companies hand the co-owners a quarter of the IFRS revenue, said BKS analyst Maxim Lobada. If Metalloinvest maintains payouts at the level of the first quarter, the company could be described as a highly profitable asset, the expert said.

A representative of Metalloinvest said the company has no dividend policy and it decides each time on the size of the payouts after assessing its debt and investment plans. (Billions for Usmanov).

KOMMERSANT

Gazprom (RTS: GAZP) may lose one more consumers in Europe. After Croatia, Bulgaria plans to cut purchases of Russian gas sharply, from the current 2 billion cubic meters to 500,000. The country pins hopes on growth in its own extraction, on gas purchases in Turkey, and on the development of shale gas fields, whose prospect arouses skepticism in Gazprom. (Page 9. Bulgaria Looking for Replacement for Russian Gas).

Sberbank (RTS: SBER) has a rival on the international acquisitions market. Hungary's OTP Bank has shown interest in acquiring a division of Austria's Volksbanken Group. Sberbank was the only bidder for this asset until recently, Kommersant has learned. But as usual, it is not prepared to buy at a high price. So if OTP Bank demonstrates insistence, it will get a field for price competition. (Page 8. Sberbank Gets Confronted with Austria-Hungary).

Russia's first holders of the MVNO license may lose them even before they start working. Five companies were expected to launch the MVNO in June and another 15 before the end of the year, among them Vimpelcom (RTS: VIMP) and MTT. Setbacks in launching the networks into commercial operation are a reason for revoking the licenses. But virtual operators cannot provide services in the absence of permits from the Mass Media and Communications Ministry. (Page 7. Virtual Operators Silent).

Paying the High Price For Putin's Stagnation http://www.themoscowtimes.com/opinion/article/paying-the-high-price-for-putins-stagnation/440156.html

07 July 2011By Kirill Rodionov

During the past two months, the public's attention has been drawn to Prime Minster Vladimir Putin's All-Russia People's Front.

Political analysts are wondering whether this election vehicle will help United Russia, whose ratings have dropped to nearly 50 percent, to maintain a constitutional majority in the State Duma after the December elections. Disappointing results for United Russia in the vote could also change the dynamics within the ruling tandem.

In any case, one thing is clear: Putin wants to retain power after 2012.

Putin's wish to remain in charge of the country is not a surprise. If the prime minister really wanted to leave, he would have done it in May 2008. Looking back, this option would have been optimal both for Putin himself and for the country as a whole.

If he had left the political stage in time, he would have surely been remembered fondly by most Russians for ushering in a decade of growth and prosperity that followed the government default of 1998.

But it looks more likely that Putin will remain national leader through 2018, and perhaps longer. This evokes a direct analogy to Soviet leader Leonid Brezhnev, who ruled for 18 years. Brezhnev, most often remembered for his era of stagnation, blocked reforms needed to adapt the socialist system to changing global realities.

In the 1970s, during an era of high oil prices and stagflation in the West, the Soviet Union's economic condition did not seem critical. But by the second half of the 1980s, the Soviet Union was already in a deep state of systemic crisis.

The transition to authoritarianism in the early 2000s was largely associated with the failures and chaos of the 1990s. The first decade after the Soviet collapse was a difficult period when the country broke away from socialism and instituted painful but much-needed free-market reforms.

But by 2000, after 10 years of transition, Russians were tired of political and economic instability.

At the end of his life, Yegor Gaidar, the architect of radical economic reforms, said: "We must pay the price for everything."

The Soviet Union paid dearly for the stagnation of the late 1970s and the first half of the 1980s. Time will tell how much today's Russians and  their children and grandchildren will have to pay for Putin's era of stagnation.

Kirill Rodionov is a research associate at the Gaidar Institute for Economic Policy in Moscow.

Russia Rotting http://www.themoscowtimes.com/opinion/article/russia-rotting/440154.html

07 July 2011By Konstantin Sonin

In many autocratic countries, the opposition's goal is to shake down the political institutions that the ruling elite have constructed to maintain their control. In Russia, it would seem that the opposite is true.

Take, for example, the opposition Party of People's Freedom. Despite almost universal predictions that the authorities would never register the Party of People's Freedom, the party's leaders — Mikhail Kasyanov, Vladimir Milov, Boris Nemtsov and Vladimir Ryzhkov — went out of their way to fulfill every requirement of the election law.

Even after the Party of People's Freedom included language from United Russia's charter in its own charter to make sure it was in compliance with election law, the Justice Ministry still found that the party's charter did not meet election law requirements.

Meanwhile, Prime Minister Vladimir Putin is building the All-Russia People's Front, which is trying to recruit new members en masse not only from Putin's own United Russia party, but from Russian Railways, the Russian Post, the Union of Composers and hundreds of other organizations.

The very existence of such a political structure not only makes a mockery of the Constitution and election laws, but it also destroys the political institutions that were constructed by the political leaders who initiated the front.

Take United Russia. For years, Putin tried to make it the ruling party of Russia, a modern version of the Communist Party of the Soviet Union. This is not an efficient system of governance. Almost all developed countries use competitive elections to provide their leaders with proper incentives. This is the most advanced technology to provide effective government.

Nonetheless, some countries use more backward political systems, such as a one-party state. Post-World War II Mexico and China since 1976 are good examples. Although these are one-party autocracies, they rotate the top leaders. It is the party, not an individual leader, who makes most of important decisions.

Although these are a less advanced form of government than an electoral democracy, this system is much more efficient than dictatorships such as Libya, North Korea and Zimbabwe, which are centered on the personalities of their leaders.

A modern one-party state is also better than the Soviet and or fascist types of totalitarian dictatorships, in which a leader's personality cult dominates. The creation of the All-Russia People's Front built around the popularity of Putin is a step backward from the one-party state.

The current state of Russia's presidency is a good example of how the country's institutions have rotted. It is clear that the current president does not hold the power that is provided to him by the Constitution. President Dmitry Medvedev has on multiple occasions floated ideas that he could have enacted by simply signing an order; the Constitution gives him this power.

At the same time, some of Medvedev's powers that are granted to him by the Constitution have been co-opted by Putin — for example, in areas concerning foreign policy. Other presidential powers have not been transferred to Putin but have simply vanished into thin air.

In the end, Putin has weakened a strong presidency — an institution he spent so many years building up.

Konstantin Sonin is a professor at the New Economic School in Moscow and a columnist for Vedomosti.

INTERVIEW: Russia needs an Arab Spring, Kasparov sayshttp://www.monstersandcritics.com/news/europe/news/article_1649592.php/INTERVIEW-Russia-needs-an-Arab-Spring-Kasparov-says

By Alvise Armellini Jul 6, 2011, 15:07 GMT

Strasbourg, France - Russia's beleaguered opposition should give up on rigged elections and emulate the 'Arab Spring' mass protests that brought down corrupt regimes in Egypt and Tunisia earlier this year, opposition leader Garry Kasparov argues.

Kasparov, a former world chess champion, was speaking in the wake of last month's refusal by authorities to register the opposition People's Freedom Party for a December 4 parliamentary vote.

'Russia has no elections, no free media and any opposition action is always met by police,' Kasparov told the German Press Agency dpa late Tuesday, during a visit to Strasbourg, France.

Kasparov was dismissive of billionaire Mikhail D. Prokhorov's Right Cause - another, more moderate opposition party, which seems to have got past the registration hurdle.

'The regime (of Prime Minister Vladimir Putin) is not going to change through the ballot box. So any attempt to create an opposition within the system is doomed,' he shrugged.

What is left is 'the Egyptian option,' Kasparov concluded.

'I am in favour of boycotting elections and mobilising people through the social networks ... it may take longer than people want, but you have to start telling the country that the regime is illegitimate and any participation in the so-called official procedures only adds legitimacy,' he said.

Other Russian opposition leaders, who on Tuesday traveled to Strasbourg alongside Kasparov for a charity concert funded by jailed energy tycoons Mikhail Khodorkovsky and Platon Lebedev, broadly agreed with the former chess champion, but were less sanguine.

Khodorkovsky and Lebedev were arrested in 2003, after their funding of opposition parties was seen by Putin as an attempt to challenge his leadership. Last year, they received new sentences for tax evasion, a year before they were due to be freed on parole.

'Such an (Arab) Spring could appear in three-four years,' said Mikhail Kasyanov, former prime minister. But it was better for Putin and his 'senior assistant' President Dmitry Medvedev to set 'an exit strategy' by allowing free elections to take place.

Kasyanov urged the two leaders 'not to follow the way' of Libya's Moamer Gaddafi or Syria's Bashar al-Assad, who are holding on to power through repression, but rather of Tunisia's Zine el-Abidine Ben Ali and Egypt's Hosny Mubarak, who relented to popular protests.

'We don't want to organize a revolution in Russia: Putin wants that, because he wants to keep power without elections,' Boris Nemtsov, a deputy prime minister in the late 1990s', chimed in.

'We will do everything to avoid such bloody scenario. We don't want it, because we know Russian history,' Nemtsov said, evoking the country's past turbulent revolutions.

Kasyanov and Nemtsov spoke Wednesday at a news conference in the European Parliament, which was a day later expected to adopt a resolution calling on Russian authorities to reverse their decision against the People's Freedom Party.

EU lawmakers would call 'on the Russian authorities to guarantee free and fair elections and to withdraw all decisions and rules that oppose this principle,' according to a draft that has wide cross-party support.

Kasparov, Kasyanov and Nemtsov all expect Putin to run for president in 2012, wrestling back from Medvedev the position he occupied for two terms during 2000-2008.

'He's still a puppet master, he is still in charge, but he needs to recover his official title,' Kasparov commented, pouring scorn on Medvedev's prospects once the changeover is completed: 'he will go where Putin tells him to go.'

The outflow of breadhttp://rt.com/politics/press/trud/bread-grain-tons-price/en/

Published: 7 July, 2011, 05:44Edited: 7 July, 2011, 05:47

While pouring grain overseas, are we forgetting about ourselves? By Darya Katina

Starting this month, the government has been allowing the export of domestic wheat. On the first day the embargo was lifted, exporters shipped hundreds of thousands of tons of grain abroad. Trud-7 decided to find out if we could be left without bread due to the merchants’ unrestrained appetites.

Some background information: While recovering from last year’s bad harvest, we, until recently, have been keeping the grains within the country. Many grain producers that make their living by selling wheat overseas, instead of choosing to sell it in Russia at a lower price, decided to wait until the borders were reopened. [Fortunately, Russia was able to avoid a deficit due to the fact that the government released a portion of state reserves into the domestic economy – Trud-7]. But the forecasts for this year’s crop yield are most optimistic. Vladimir Petrichenko, general director of the ProZerno analytical center, suggests that it

will be possible to collect up to 91.2 million tons, if not more, if nature remains gracious. Agriculture Minister Elena Skrynnik stops at 85 million tons. For comparison, last year’s “fruitless” harvest brought in a total of 60 million tons.

This means that now the time has come to sell last year’s reserves, especially considering the fact that we have plenty of surplus grain. In the fertile Rostov region alone there are about 3 million tons of grain that could be sold without fear of going hungry.

According to economists, about 1.5 million tons of grain could be exported this month – that is, if there are buyers, of course. It turns out that due to the embargo, foreign consumers have become wary of our products, and are in no rush to continue buying them even at a very competitive price. Meanwhile, before the export embargo Russia was the third largest producer and seller of grains. Now Egypt, one of the main consumers of our grain, insistently refused until the last minute to purchase Russian wheat in the hopes that exporters will continue lowering prices.

“Today prices on the global grain market are rapidly falling,” stated experts at the Sovecon agricultural analysis agency.

If the specialists are correct and, following the current trend, we collect a rich harvest as predicted, then the price of grain within Russia will also significantly decline. Common consumers, alas, will not benefit from this: The price of bread will not fall, as the percentage of grain in the cost of a loaf of bread amounts to 15-20 percent, and everything else is production costs.

Farmers, meanwhile, will be infuriated. They are already forced to sell their product to dealers below market price, and the general market decline will severely impact them – the most unprotected actors. Then the government will have no choice but to throw them a lifeline and purchase grain at a more or less acceptable price for a special investment fund, as was already done in 2008. Incidentally, experience shows that these types of “meal bins” could be very beneficial. After all, one year to the next differs, and 2012 could possibly not be as favorable as this year. That is when we could use the surplus grain. That is, of course, unless by that time it all floats away to Egypt.

July 06, 2011

Nabil Shaath: Russia will do its best so that ‘Quartet‘ supports Palestine‘s bid for UN membershiphttp://www.interfax.com/interview.asp?id=257417

Ex-Palestinian Foreign Minister, now Fatah commissioner for international relations Nabil Shaath who visit Moscow on July 5 and had talks with Russian Foreign Minister Sergei Lavrov ahead of the ‘Quartet‘ meeting in Washington on July 11 has given an interview to Interfax in which he speaks about results of the talks with Lavrov, Palestine‘s plans regarding UN membership, and inter-Palestinian dialog.

Question: As far as I understand the main issue of your today‘s talks with Foreign Minister Lavrov was the upcoming the ministerial meeting of the ‘Quartet‘. What other issues were discussed?Answer: We talked about the September program of the Palestinian leadership to go to the UN and seek full-time state membership in the General Assembly and to seek recognition by as many countries as possible. Russia of course recognizes the Palestinian state and has full diplomatic relations. We received a great support from Mr. Lavrov on Russia‘s support in the UN. And we also were briefed about the upcoming meeting of the ‘Quartet‘. Russia will do its best so that the ‘Quartet‘ supports [] our application for the membership in the UN and to come up with a statement that will facilitate going back the negotiations if Israel accepts it, stopping settlements and dedicating the terms of [] the borders of 1967. Now if the statement comes and Israel accepts it, we will go tomorrow to the negotiations. Of course, is the statement comes and it is not accepted, we will still I think find support of it.Q.: Not long ago Palestinian permanent observer in the UN said that Palestine will seek the recognition of its state even if talks quit Israel will start again. Is it real?A.: I think he is right. The two are not against each other. We can seek the membership in the UN and go to the negotiations at the same time. But really there is no chance that Israel will accept to go to the negotiations from now till September, I doubt very much. Therefore we are dedicated to this drive in September. Israel really makes it a precondition that it will go the negotiations by stopping all settlement activities and accepting the border of 1967, but it wants us to delay the recognition by the UN. First we have to see that Israel would stop all settlement activities and is accepting the terms []. I doubt very much that Israel will do it.Q.: The General Assembly session will start in September. When should Palestine submit documents to the UN on this issue?A.: This is a procedural matter. We have many options. The time is not just in September. We can apply on October or November, if we want to. The question of the exact time will be decided by the committee that is directing this affair. Strategically we are going, exactly how, starting with the General Assembly or the Security Council, what exactly is the form of the draft, all of these will be worked out by the committee.Q.: When?A.: I cannot say. We are working.Q.: Israel‘s permanent representative in the UN said that if the UN recognizes the Palestinian state this can provoke a war in the region. Do you agree with this?

A.: Is Israel wiling to wage a war on us? They have already occupied all of our country. They want to occupy some more? We are not going to wage a war.Q.: No long ago France proposes to convene a Middle East conference to raise money for Palestine. What do think of this conference?A.: We support it, of course. Any conference that will bring more support to the Palestinian authorities, we welcome. But that is not contrary to our desire that political international conference be held in Moscow because that was the decision of the Annapolis agreement. But a meeting in Paris to support the Palestinian authorities, we support.Q.: What do think about ‘peace flotilla‘ that are trying to deliver humanitarian aid to Gaza?A.: I think it‘s an excellent effort by people who are not carrying arms or anything and who submitted their boats to inspection by the UN and by European authorities to demonstrate to the world that they need to end embargo in Gaza. This is an excellent non violent demonstration.Q.: Why not to deliver humanitarian aid through Israel‘s territory?A.: Israel is sending less than one tenth of the needs of Gaza. Gaza is still under great siege by sea, by air, by land, not only humanitarian things, but also no spare parts for machines, no fertilizers for agriculture, no exports. Gaza is prohibited from exporting anything by Israel.Q.: I mean not Israel‘s but international aid, can it be brought to Gaza through Israel or there are some difficulties?A.: No. It is a great difficulty. It does not want to allow us [] by Israel.Q.: The meeting on June 21 between Hamas and Fatah was delayed, when it will take place?A.: We are in touch with each other by telephone and so on. I‘m really sorry that it has been delayed. But what President Abbas is suggesting is that Mr. Salam Fayyad continues the government of a temporary nation until the new election is coming. And Hamas does not accept it. This is what we are discussing all the time. I hope we will reach a solution some time soon. In fact I encourage Mr. Lavrov to help, if he can.Q.: Is there any alternative candidate who will satisfy both Hamas and Fatah?A.: There are four candidates. They were suggested by the third parties, but we are trying first to see if Hamas going to accept Salam Fayyad. If does not, we will have to look for others.Q.: My next question is about the story with the supply of Russian armored vehicles to Palestine. Has there been any progress on this issue?A.: Israelis are not allowing any Russian cars to come inside. These are for security people who really have maintained excellent security from any attacks on Israel. I don‘t understand why. I asked our Russian friends: what does Israel say? And they say Israelis don‘t trust you. But these cars have really light armor. In fact they have machine-guns, and Israelis asked that machine-guns be taken off. And Russia has taken off the machine-guns. They are just sending armored cars to Palestinians, but Israelis still do not accept this. They are still in Jordan.Q.: Is this question on the agenda of Palestinian-Israeli contacts?

A.: Every time.

Charities fear backlash as controversial fund stages Moscow galahttp://www.themoscownews.com/society/20110707/188817079.html

by Alina Lobzina at 07/07/2011 10:26

 

Backed by the PM but lambasted by critics, the Federation Fund is staging another star-studded charity bash this weekend.

But while the billboards all over Moscow’s streets promise another glittering gala, boasting international guest stars, too much is shrouded in mystery.

And with unanswered questions about last December’s event still in people’s minds, many charities are worried that their good work could be undone by another wave of scandal.

“This puts a bomb under everything we’ve been doing for the past nine years, with our own hands covered with blisters,” Yekaterina Bermant, director at Vse Vmeste (All Together), a union of Russian charities, and the foundation “Children’s hearts”, told the Moscow News.

 

Celebrity trend

“There is a trend in Russia for organizing all sorts of charity events,” Yelena Topolyova-Soldunova, Public Chamber member and the head of the Agency of social information, told the Moscow News. “And the Russian elite have started making appearances at them.”

But the Federation Fund, which is less than one year old according to the registration documents published on the official website, is probably not the best role-model to use the trend.

The fund hit the headlines after inviting the likes of Sharon Stone, Mickey Rourke, Monica Belucci and Vincent Kassel, and even Prime Minister Vladimir Putin to a St. Petersburg fundraiser for children’s hospitals, pictured above.

But the publicity coup turned into a PR nightmare amid allegations that promised equipment was never delivered to those in need.

The fund denied lining its own pockets, but the affair left lingering doubts about Federation – and charities in general.

“It’s quite bad when things like this happen, because it affects the whole sector in general,” Topolyova-Soldunova said.

“People believe that it’s normal for good things to be done, and it’s just a single bad thing that catches everyone’s attention,” she said.

 

Wrong approach

At the Naked Hearts foundation, set up by model Natalya Vodyanova to support children, there are concerns about the attention-grabbing tactics of Federation.

Executive Director Anastasia Zalogina believes that the Moscow advertising campaign is a waste of time and money.

“If you want to organise something for wealthy people who can donate considerable amounts of money, you need target your efforts on them,” she said.  

According to the fund’s website, neither the charity itself, nor any other organizations sell tickets to the concert scheduled for July 9 and 10.

“The concert will be broadcast live on the official web-site and on screens at Gorky Park’s Zelyonny Teatr. Admission is free,” the official announcement read.

Moskovskiye Novosti, however, reported that $100,000 donation to one of the supported hospitals – in money or equipment – is needed to attend the event, the venue of which has not been named.

 

Elusive presence

Since that first scandal the fund has made some progress. In March its president, Vladimir Kiselyov, held a press conference – although it answered few questions.

And an official website has been launched at last, although it cannot be easily found through most search engines and contains no financial information.

The fund’s press-service was not available for comments at the time of writing.

Currently, nine out of 20 state hospitals which the organisation claims to support say they haven’t ever received any donations; calls to four of the 20 went unanswered, Moskovskiye Novosti reported.

Only two medical institutions confirmed they had received expensive equipment, and four others said they had donations of presents for their young patients.

Representatives of hospital no. 31 in St. Petersburg – involved in the previous scandal – said they received an anonymous donation of 140 million rubles ($5.02 million) but didn’t know if it was anyhow connected with the Fund. 

 

Open and closed

One of the main principles of the fund’s work, as outlined on its web-site, is openness to the public and media – but the staff doesn’t seem to be willing to meet their colleagues in the charity sector.

“We are dreaming of meeting them just for a talk,” Bermant said. “If it’s just a lack of professionalism we are ready to help them.”

“And we are not just a union of small charities – we are the only professional union in Russia [for charities] and our advice is worth listening to,” she added.

“We filed a request to them on behalf of the Russian Public Chamber but haven’t received any reply – it seems that they just don’t care,” Topolyova-Soldunova said.

She warned that this lack of transparency could cost them the chance to benefit from potential tax breaks for NGOs, but added: “They don’t really need it – it looks like they are doing great without it.”

National Economic Trends

Federal spending to grow on national defense-Russian Finance Ministryhttp://english.ruvr.ru/2011/07/07/52887730.html

Jul 7, 2011 06:31 Moscow Time

Federal government spending on national defense in the next three years will grow. This information is contained in the draft guidelines of budgetary policy for 2012-2014, which the Finance Ministry has submitted for government consideration.

Expenditures under this section in 2012 would amount to 1 trillion 847.7 billion rubles; in 2013 - 2 trillion 334.7 billion, and another year later - 2 trillion 752.6 billion rubles.

The main increment in spending will target reequipping armed forces with new hardware and weapons.

11:53 07/07/2011ALL NEWS

Russia gold, currency reserves up on June 24-July 1.

http://www.itar-tass.com/en/c154/180961.html

(adds)

7/7 Tass

MOSCOW, July 7 (Itar-Tass) Russia's gold and foreign exchange reserves climbed by 2.4 billion US dollars from 524.3 billion dollars to 526.7 billion (or by 0.46 per cent) on June 24-July 1, the business news agency PRIME reported on Thursday with reference to the foreign and public relations department of the Central Bank of Russia (CBR).

The country's foreign exchange reserves record registered on August 8, 2008 was 598.1 billion US dollars.

Since January 1, when the gold and foreign exchange reserves amounted to 479.379 billion dollars, this index has been raised by 9.87 percent.

04:33 07/07/2011ALL NEWS

Deputy finance minister to present key aspects of tax policy to govt July 7.

http://www.itar-tass.com/en/c154/180738.html

7/7 Tass 5

MOSCOW, July 7 (Itar-Tass) —— Deputy Finance Minister Sergei Shatalov will present key aspects of tax policy at a government meeting on Thursday, July 7.

The Finance Ministry suggests reducing insurance premium rates from the current level of 34 percent to 30 and 20 percent for different categories of taxpayers, as has been proposed by President Dmitry Medvedev.

In 2010, the unified social tax was replaced with insurance premiums that were increased from 26 percent to 34 percent of the employer's payroll fund. They are paid from salaries under 463,000 roubles.

However, on March 30, 2011, President Dmitry Medvedev instructed the government to reduce insurance premiums from January 1, 2012. "The burden of costs for higher pensions and healthcare is not the best solution, but there are no ideal solutions," Medvedev said.

He believes that “the premium rate of 34 percent may be exorbitantly high”.

According to the president, a new rate should be “within the range close to the previous ones”.

The government has submitted two options after the president's order given in Magnitogorsk in May. “The first option is to keep the rate of 34 percent only for big business and reduce current rates for small manufacturing and social businesses (to 16-20 percent), and to a level close to 26 percent for medium-sized business,” Russian presidential aide Arkady Dvorkovich said earlier this month.

“The second option is to reduce the maximum rate to 30 percent, and that for small manufacturing and social businesses from 26 percent [to 16-20 percent],” he said, adding that the first option would have priority.

He said that the decision to be made would be effective for two years.

Prime Minister Vladimir Putin said the government would be “looking for ways to reduce the fiscal burden on premium rates. We should not apply simple, linear solutions, shifting the problem from businesses onto the shoulders of ordinary citizens. Because we cannot and must not deviate from the social standards. We cannot follow the path of some of countries that have done so,” he stressed.

Putin instructed the Finance Ministry and the Ministry of Economic Development to present concrete mechanisms and parameters for cutting insurance premium rates from January 1, 2012.

In a bid to make up for a shortfall of revenues from lower insurance premiums, the government plans to increase the tax burden on the gas industry by 150 billion roubles in 2012, by 168.3 billion roubles in 2013, and up to 185.9 billion roubles

in 2014, eventually moving on to a mechanism that will peg the tax on nature gas production to world hydrocarbon prices.

In the middle of 2010, the government commission on budget projections decided to raise the tax on the production of natural gas by 61 percent in 2011.

The tax will be further raised according to inflation in 2012 and 2013, Vice Prime Minister and Finance Minister Alexei Kudrin said back then.

The commission also decided to raise the oil production tax by 6.7 percent in 2012 and by 5.4 percent in 2013.

The Russian Finance Ministry suggested raising the oil and gas production tax in a bid to increase budget revenues.

“We believe it necessary to increase the natural gas production tax from next year,” head of the ministry's department of tax and customs policy, Ilya Trunin told Itar-Tass.

In his opinion, a higher natural gas production tax will increase budget revenues by more than 51 billion roubles from 2011, by 60.4 billion roubles in 2012, and by 69 billion roubles in 2013.

A high oil production tax will generate an additional 78 billion roubles in budget revenue in 2012, and 147 billion roubles in 2013.

The decision to raise the mining tax and some other payments charged to oil and gas companies was prompted by the need to replenish the federal budget and make up for growing expenditures.

Experts also suggested making up for a shortfall in budget revenues from the reduction of insurance premium payments by raising alcohol and tobacco excise duties.

They proposed a standard way: to impose additional excises for alcohol and tobacco products. “In other words, it is proposed to shift this burden from business to people,” one of the experts said at a meeting with Putin earlier.

In 2009, a draft law that trebles tobacco excises in 2011 and raises them time and a half in 2012 was submitted to the State Duma.

One of the authors of the draft law, Viktor Zvyagelsky of United Russia, a member of the Duma Committee for Economic Policy and Entrepreneurship, said.

He said tobacco excises in Russia were unacceptably low. While the least developed EU countries, such as Romania, Bulgaria and the Baltic states, have a

minimum excise of 1.28 euros (56 roubles) per pack, Russia' s excise in 2009 was 3.54 roubles per pack of filter cigarettes and 1.77 roubles per pack of non-filter cigarettes on the average, which is 16-32 times lower. Turkey, China, Transcaucasian countries, and even Ukraine have much high tobacco excises than Russia.

However, Dvorkovich made it clear that the government would not raise tobacco and alcohol excise duties next year.

He said the excise duties would not be raised “more than was announced”.

At the same time, he could not say whether tobacco and alcohol excise duties would be raised in 2013 and 2014.

MinFin does not expect to balance the budget, even in 2015

http://www.bne.eu/dispatch_text16094

Renaissance CapitalJuly 7, 2011

Yesterday (6 July), the Russian Ministry of Finance (MinFin) announced major budget assumptions for 2012-2014, following President Dmitry Medvedev's budget address to the government. The budget deficit is estimated at 2.7% of GDP in 2012, and is forecast to only slightly decrease to 2.3% of GDP in 2014, implying that real contraction in public spending is not expected in the coming years.

In addition, MinFin no longer expects the budget to balance, even in 2015, due to massive non-discretionary increases in public spending in the pre-election period (including the allocation of funds to compensate for a reduced pension tax rate, the indexation of pensions and public sector salaries, and military reform).

In 2011, the government estimated the budget deficit at 3.1% of GDP in 2012. Hence, at first glance, the draft budget assumptions are much better than in the previous version. However, this is not in fact the case, as MinFin seriously raised oil price assumptions from $76/bbl to $93/bbl, thereby technically inflating budget revenues.

We are seriously concerned that the non-oil-and-gas deficit is close to 10% of GDP and believe that the government has done practically nothing to secure long-term budget stability. Last year, the government planned to reduce the non-oil-and-gas budget deficit to 4-5% of GDP in the medium term. Pre-election initiatives will keep the non-oil and gas deficit at 10% of GDP in 2013. Longer

term, we do not believe the budget has the potential to successfully rely on oil and gas resources to close this gap, due to declining oil and gas revenues in relative terms to GDP (as oil output is constant) and contracting reserve funds relative to GDP. Thus we believe there is a natural tendency for there to be an increase in the breakeven oil price, which is estimated at $125/bbl in 2012 unless the government restrains public spending growth.

2012 Budget at $435Bln, With Deficit Reduced to 2.7% http://www.themoscowtimes.com/business/article/2012-budget-at-435bln-with-deficit-reduced-to-27/440147.html

07 July 2011The Moscow Times

The latest proposal from the Finance Ministry calls for federal spending to increase 10.5 percent next year over this year's amount, a senior government official said Wednesday.

Next year's budget, which the Cabinet will consider Thursday, foresees spending 12.2 trillion rubles ($435 billion), the official said on customary condition of anonymity for pre-Cabinet briefings.

The Cabinet's decision on spending, revenue and the deficit on Thursday will bring to a close the initial phase of government budget discussions. From that moment on, ministries will begin adjusting their plans.

The Finance Ministry is projecting the deficit to equal 2.7 percent of gross domestic product next year, a seemingly positive drop compared with its previous long-term goal of 3.1 percent.

The reduction comes even as the government plans new expenditures next year — like salary increases for military personnel — even though it is set to lose money after reducing the payroll taxes.

But the smaller deficit stems from a "technicality" — the increase of the oil price that underpins budget revenues, said Renaissance Capital economist Anton Nikitin. The government is basing its 2012 budget on a riskier price of $93 per barrel of Urals crude, the country's main export blend.

Tax revenues from the oil and natural gas industry comprise half of what the government takes in. The most recent official long-term budget deficit forecast, which came out last year, was based on oil at $78 per barrel in 2012.

The budget cracks under public spendinghttp://rt.com/politics/press/nezavisimaya/budget-government-period-rubles/en/

Published: 7 July, 2011, 04:06Edited: 7 July, 2011, 04:12

To be completely happy, the Finance Ministry needs $125 per barrel of oil By Igor Naumov

Today Prime Minister Vladimir Putin and other members of the government will be forced to once again delve into the world of numbers and percentages – the Finance Ministry will present the fiscal policy outline for next year and for the time period through 2014 for approval. The top news: Not only will we continue running a budget deficit in the next three years, but in 2015 as well. Thus, the goal of balancing the budget in the post-crisis period which the government had set for itself remains unaccomplished.

At a governmental meeting, Finance Minister Aleksey Kudrin will present the draft outline of the country’s main financial plan for the next three years. The fiscal policy outline contains dry assertions regarding the current economic status in Russia, as well as a forecast for its development through 2014. In essence, there is nothing fundamentally new in these assessments.

Yesterday, a high-ranking official in the Russian White House revealed to journalists some of the basic parameters of the federal budget. Many of last year’s estimates remain the same – in particular inflation, which is expected to amount to 6 percent in 2012, 5.5 percent in 2013 and 5 percent in 2014. The same applies to the forecast for the dollar exchange rate: 27.9 rubles per $1 in 2012 and 2013, and 28 rubles per $1 in 2014.

Federal budget earnings and spending were slightly corrected. Next year revenues are expected to equal 10.6 trillion rubles. In the future, they are predicted to rise by approximately 1 trillion rubles a year – which, however, does not cover expenses. In 2012, public spending should amount to almost 12.2 trillion rubles, in 2013 around 13.42 trillion rubles, and in 2014 just below 14.3 trillion rubles. Thus, for the next two years the country will continue running a budget deficit at 2.7 percent of GDP, and by the end of three years it will amount to 2.3 percent of GDP.

A source in the government honestly admitted that it will hardly be possible to enter 2015 with a balanced budget, as has been demanded by Putin. Instead of a deficit-free budget, according to him, the country will get a “period of transition.”

A balance between government spending and state revenues calls for a steadily high price of oil – at approximately $125 per barrel.

Experts consider the present state of affairs to be not normal.

“A budget which is critically dependent on oil prices cannot be considered stable,” said Igor Nikolayev, director of the Strategic Analysis Department at FBK.

At the same time, Nikolayev does not exclude the possibility that the global economic events may develop according to a scenario unfavorable to Russia. He noted that a number of southern European states are on the verge of default. The collapse threatens to cause a new crisis resulting in a decline in demand and in the prices of raw materials and energy – Russia’s main source of budget revenue.

The government is unable to supplement oil and gas revenues with other tax income. At the same time, taxes are stifling entrepreneurs. Social welfare deductions are unmanageable for the types of businesses for which wages are the biggest expense.

“Together with other taxes, it turns out that the government collects more than half of profits for itself,” noted the general director of Contour Components, Vladimir Nekrasov. It is not surprising that companies are not interested in working transparently.

“The tax burden on the business sector is still rather high,” noted the CEO of R.V.S., Denis Pokrovsky. “One of the main changes in 2011 was the increased size of contributions into the social, medical and pension insurance funds of up to 34 percent.”

According to Pokrovsky, the goals and objectives of increasing the tax burden are clear: to cover the state budget deficit. But that is of little consolation when it comes to the survival of the business sector.

Business, Energy or Environmental regulations or discussions

Severstal to roadshow Eurobond from July 8 –sourcehttp://af.reuters.com/article/metalsNews/idAFLDE7660CL20110707

Thu Jul 7, 2011 8:28am GMT

MOSCOW, July 7 (Reuters) - Severstal , Russia's largest steelmaker, will hold a roadshow for a dollar Eurobond in Europe and the United States from July 8-11, a financial market source told Reuters on Thursday.

In June, sources said Severstal was planning to issue a Eurobond worth at least $500 million.

Goldman Sachs and Barclays will organise the deal.

Severstal last tapped the Eurobond market in October when it raised $1 billion at 6.7 percent for seven years. (Reporting by Oksana Kobzeva; Editing by Andrey Ostroukh and Dan Lalor)

HSBC Holdings Initiates New Russian Exchange-Traded Fund on LSEhttp://www.bloomberg.com/news/2011-07-07/hsbc-holdings-initiates-new-russian-exchange-traded-fund-on-lse.html

By Jack Jordan - Jul 7, 2011 8:17 AM GMT+0200

HSBC Holdings Plc started a new exchange-traded fund listed on the London Stock Exchange yesterday, the lender said in a statement.

The HSBC MSCI Russia Capped ETF, domiciled in Ireland, will attempt to replicate the moves of the MSCI Russia Capped Index, HSBC said in the statement yesterday. The fund’s total expense ratio is up to 0.6 percent, HSBC said.

To contact the reporter on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net

To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net

Russian Sberbank to sell China its shares in fallhttp://english.eastday.com/e/110707/u1a5983233.html

2011-07-07 10:37

MOSCOW, July 6 -- The largest Russian state-owned bank, Sberbank, would offer its shares in China during a global roadshow this fall, CEO German Gref told local media Wednesday.

"We will meet investors around the world in August and September, including those in China," Interfax news agency quoted Gref as saying.

Sberbank plans to sell 7.6 percent of the Russian government's 57.6 percent stake to raise money for the federal budget.

The government stake is currently held by the Russian Central Bank. None of the minority shareholders possess more than 1 percent of the bank.

Earlier, China Investment Corp announced it was considering buying 5 percent of the Sberbank shares for 4 billion U.S. dollars.

Metalloinvest Buys 4% Stake in Norilsk Nickel for $2Bln http://www.themoscowtimes.com/business/article/metalloinvest-buys-4-stake-in-norilsk-nickel-for-2bln/440141.html

07 July 2011Bloomberg

Metalloinvest, Alisher Usmanov's iron ore producer, spent $2.2 billion that it raised in a loan from banks in May to buy a 4 percent stake in Norilsk Nickel, Moody's Investor Service said.

"The stake was bought at market price, and therefore is unlikely to provide any meaningful upside in the near term or be liquidated without loss in value, given its size," Moody's said in a report Tuesday. The transaction has negatively affected the company's debt load and financial leverage, it said.

Still, the agency improved Metalloinvest's debt rating to Ba3, citing a recovery in the company's 2010 sales and a "strong pricing environment for iron ore in the medium term."

Metalloinvest increased sales 53 percent last year to $7.24 billion, while earnings before interest, taxes, depreciation and amortization tripled to $2.59 billion. Metalloinvest borrowed $3.1 billion from banks including BNP Paribas and Deutsche Bank in May and spent more than 70 percent of it on Norilsk shares, according to Moody's.

The Metalloinvest will hold a roadshow for dollar eurobonds July 8-13, a financial market source told Reuters on Wednesday. BNP Paribas, Bank

of America Merrill Lynch, Credit Suisse, ING, JPMorgan, Royal Bank of Scotland, Societe Generale, Troika Dialog and VTB Capital will organize the roadshow. The company's chief executive Eduard Potapov said last week that the company was preparing to issue $1.0 billion to $1.5 billion in bonds in the second half of the year to refinance its debts.

GAZ Group posts FY 2010 net profit of 2.1 billion roubles http://rt.com/business/news/gaz-group-2010-result/

Published: 7 July, 2011, 11:54Edited: 7 July, 2011, 12:03

Russian commercial vehicle producer, GAZ Group, has posted a FY 2010 net profit of 2.1 billion roubles under IFRS.

The bottom line turned around from a FY 2009 net loss of 10.7 billion roubles, with EBITDA reaching 9.3 billion roubles and EBITDA margin reaching 9.7%, on the back of a 47% jump in revenues to 96.7 billion roubles.

The Company said the results reflected significant business process improvement, with better labour productivity, rising average wages, and better quality output. Bo Andersson, President of GAZ Group, was very positive about the results, but said a lot still needed to be done.

“I am proud to announce that the team of GAZ Group reached positive results в 2010. We had the following tasks: to improve product quality, to increase sales, to launch new products, to increase labour productivity, to raise EBITDA, to get net profit and to reinforce GAZ Group’s strategy. We have fulfilled these tasks. Still, we have a lot of things to do to achieve successful results in the future. Our main task remains to understand the customer needs and to develop our own commercial vehicles model range according to these needs and the specifics of the Russian market.”

Troika Dialog analysts, Mikhail Ganelin andIvan Belyaev, noted excellent cost control as underpinning a better result than consensus forecast.

“GAZ did a great job cutting costs, leading to an impressive EBITDA margin of 9.7% compared with a loss in 2009. The reported EBITDA margin was close to the solid level for 2006 and 190 bps higher than that of Sollers. At end 2010, GAZ's net debt was R43.3 bln ($1.4 bln), implying a net debt/EBITDA of 4.1.”

Russia’s Auriga recognized as world’s best provider of engineering serviceshttp://abc.az/eng/news/corporate/55717.html

Baku, Fineko/abc.az. Datamonitor (one of the world’s most reputable makers of business ratings in the world) has published the results of study The Black Book of Outsourcing. Within its framework it was made the global rating engineering provider services.

According to the rating, Russian company Auriga received 4.44 out of possible 5 points and was recognized as a world leader. Then follow Atos Origin (4.4 points), Altran (4.2), HCL (4.14), Dell (3.89), Capgemini (3.71), HP (3.63), IBM (3.57), Siemens IT Solutions & Services (3.2), and Wipro (2.83).

The rating reflects the trust of companies submitting developments of complex software for outsourcing. Datamonitor’s study shows the general level of client satisfaction with provider services and includes processing of 6,547 forms on indicators: financial attractiveness, risk, efficiency of problems solution, company’s resources and customer approach.

07.07.2011 09:37

Antivirus buster Kaspersky to sponsor NRL club Manly Sea Eagles http://www.theaustralian.com.au/news/sport/antivirus-buster-kaspersky-to-sponsor-nrl-club-manly-sea-eagles/story-e6frg7mf-1226089921152

Chris Griffith

From: The Australian

July 07, 2011 3:04PM

RUSSIAN IT entrepreneur Eugene Kaspersky's internet security firm has signed a deal to sponsor the Manly Sea Eagles in the NRL.

Kaspersky Lab will take its place on the NSW club's jersey for the first time in this Sunday’s Brookvale Oval clash with South Sydney.

A Sea Eagles spokesman would not reveal the size of the sponsorship but he said it was for a "very substantial amount".

"You don't get on the front of an NRL jersey these days unless it's for substantial money," he said.

Kaspersky Lab becomes a major sponsor for the Sea Eagles who were previously supported by club powerbroker Max Delmege, Quantum Echo Hot Water, and Sea Eagles chairman and co-owner Scott Penn.

The sponsorship deal is a further sign of Kaspersky Lab's intention to expand northward beyond its current Australian headquarters in Melbourne.

In 2009 the Moscow-based company signed a three-year multi-million dollar sponsorship deal with the Melbourne Demons AFL team.

The flamboyant Kaspersky also signed up martial arts expert and actor Jackie Chan as part of his global quest to add spice and breadth to the appeal of ridding computers of their virus woes.

"The Manly Sea Eagles have received a significant mid season and future financial boost with the announcement today of a new major sponsor, international IT security company Kaspersky Lab," the company said in a statement.

"Kaspersky Lab is firmly positioned as one of the world’s top vendors of endpoint security software and operates in more than 100 countries worldwide with its headquarters in Moscow, Russia."

Penn said the introduction of Kaspersky Lab broke new ground for the NRL.

"To attract such an international group, which employs more than 2300 highly qualified specialists worldwide in 29 countries with 300 million users, is a massive salute to the game and the iconic Sea Eagles brand," Penn said.

The Sea Eagles deal with Kaspersky Lab is for the rest of the 2011 season and 2012, with an option to extend further.

Kaspersky is a graduate of the Institute of Cryptography, Telecommunications and Computer Science in Moscow, an institute that was co-sponsored by the Russian Ministry of Defence and the KGB.

Kaspersky's discovery of the cascade virus on his institute computer triggered his interest in anti- virus software and the eventual formation of his software empire originally in partnership with ex-wife, Natalya.

Activity in the Oil and Gas sector (including regulatory)

MET holidays to be implemented for oil fields in the Black Sea and the Sea of Okhotsk http://www.bne.eu/dispatch_text16094

VTB CapitalJuly 7, 2011

News: According to Interfax, the Duma has approved the Mineral Extraction Tax (MET) holidays for fields partially or totally located in the Black Sea or the Sea of Okhotsk. MET holidays would be implemented for those fields with annual production of less than 20mn tonnes (Black Sea) or 30mn tonnes (Sea of Okhotsk) and with a production period of less than ten years (for development licences) and fifteen years (for exploration and production licences). The decision is to come into effect from the beginning of 2012.

Our View: Although oil has yet to be found in the Black Sea, and oil production to start in the Sea of Okhotsk (outside the existing PSA), the news is positive for the sector. In the long term, we see Rosneft as the primary beneficiary, since it already has licences in both areas and, as a state company, also has priority access to off-shore licensing. However, these tax holidays have been widely discussed and we do not expect any immediate stock reaction.

Dmitry Loukashov

PetroNeft confirms 2P reserves in Western Siberiahttp://www.scandoil.com/moxie-bm2/news/petroneft-confirms-2p-reserves-in-western-siberia.shtml

Published Jul 7, 2011

PetroNeft, owner and operator of Licenses 61 and 67, Tomsk Oblast, Russian Federation, provide an update on its operations.

Highlights •Kondrashevskoye No. 2 sidetrack well confirms 2P reserves •Lineynoye 206 contains thickest oil pay encountered to date •Lineynoye/West Lineynoye has materially thicker pay and extends significantly further north than originally anticipated •Several new oil bearing structures are now likely to the north of Lineynoye/West Lineynoye License 61 Exploration/Delineation program The Kondrashevskoye No. 2 sidetrack has been drilled down dip from the Kondrashevskoye No. 2 well and penetrated the oil water contact in the objective J1-1 sandstone interval at -2,465 m true vertical depth ("TVD"). The reservoir interval of 3 meters in the sidetrack section was slightly thicker than in the vertical well with the top meter of the reservoir oil bearing.

Based on the results, the well has most likely confirmed the existing independent Ryder Scott 2P reserves of 8.1 mmbo attributed to the field and we will now update the reserves with the Russian State Reserve committee in preparation for field development. The exact timing of development will depend upon how the economics of this field compares with other nearby fields, most notably Arbuzovskoye.

Production casing has been run and cemented in the well so it can be used when the field is developed. The drilling crew is in the process of moving to the potentially high impact Sibkrayevskaya exploration prospect which will commence drilling shortly.

License 61 Development program The Lineynoye 206 development well drilled from Pad 2 to the north contained 21.9 meters of gross sandstone with 18.5 meters of net pay which is the thickest net pay interval encountered to date in the drilling program. The reservoir interval was completely saturated with oil and confirmed an oil-down-to of -2,437.5 m TVD, some 15 meters deeper than the previously mapped structural spill point of the field to the north.

The results of this and other recent Pad 2 wells have shown that the northern part of the Lineynoye field has materially thicker pay and extends significantly further north than originally anticipated. This has positive implications for reserves and productivity in this region of the field and for the likelihood of several new structures north of Lineynoye/West Lineynoye to be oil bearing.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented, "We are pleased to have proved reserves for economic development at Kondrashevskoye and will incorporate this discovery along with Arbuzovskoye in our 2012 development planning. Pad 2 drilling continues to be very encouraging with the thickest oil pay encountered yet indicating an increased probability that oil has migrated north from the Lineynoye/West Lineynoye field into the various structures contained in the undeveloped Emtorskaya High area."

07.07.2011

NOVATEK Production Reaches 150 Million Cubic Meters a Dayhttp://www.oilandgaseurasia.com/news/p/0/news/11956

Gas producition at NOVATEK in the first few days of July was 149-149.5 million cubic meters a day after three months of hovering around 132 million cubic meters a day. Earlier, the company had been producing 150 million cubic meters a day.

The increase is linked to preventative maintenance which the company plans to

carry out in July. Consequently, the flow rate was increased int he beginning of the month to compensate, K2K NEWS reports. The average daily flow rate will grow 5 to 7 percent compared to June, "This regime is normal practice when maintenance is being carried out", a NOVATEK representative said.

Since the beginning of the year, NOVETEK has produced over 25 billion cubic meters of gas.

Copyright 2011, Oil and Gas Information Agency. All rights reserved.

07.07.2011

Tatneft Releases June Production Updatehttp://www.oilandgaseurasia.com/news/p/0/news/11953

Tatneft produced 2,130,339 tons of crude oil in June or 100.4 % versus June 2010, while the production from the beginning of the year amounted to 12,857,125 tons, which was 41.5 thousand tons more, than in 2010 (100.3 %). 12,572,671 tons of crude oil were delivered with the above-the-plan delivery amounting to 249,421 tons.

Tatneft Group of companies produced 12,981,195 tons of crude oil during the first six months of this year with the above-the-plan production amounting to 263,821 tons (102.1 %).

Totally the oil companies of the Republic of Tatarstan produced 2,679,233 tons of crude oil in June, which made 100.4 % versus the same period of the previous year. The production for six months amounted to 16,132,541 tons or 100.3% versus the same period of the previous year.

Copyright 2011, Tatneft. All rights reserved.

07.07.2011

Rosneft Increases APG Utilization To 95% At Sakhalinmorneftegazhttp://www.oilandgaseurasia.com/news/p/0/news/11952

RN-Sakhalinmorneftegaz LLC has launched a booster compressor station (BCS) and gas treatment facilities at the Odoptu-More deposit, Rosneft reported in a news release.

The launch of the BCS will boost associated petroleum gas (APG) utilization at the Odoptu-More deposit and generally across Sakhalinmorneftegaz to 95% from July 2011.

Gas is delivered through the Odoptu-More – Tungor field pipeline to the gas supply system of the north of the Sakhalin region.

Work was performed as part of Rosneft's targeted gas program. The total cost of work, including the construction of field pipelines, was more than 2.3 billion rubles.

OJSC Rosneft President Eduard Khudainatov noted: “The aim of the company's gas program is not just to increase APG utilization to 95% but also to ensure the maximum economic effect for our shareholders by using APG to generate electricity and providing it to the gas grid to meet domestic demands, as well as processing it for re-injection into oil reservoirs to maintain reservoir pressure.”

As part of the targeted gas program, which anticipates an APG utilization rate of 95%, over 1,000km of gas pipelines will be constructed by 2014, along with compressor stations at the Komsomolskoye, Kharampurskoye, Priobskoye, Vankorskoye and other fields. Total investments in the gas program, which has been running since 2006, will reach 120 billion rubles. In 2010, an APG-powered power complex was launched at the Priobskoye field. The complex includes a gas preparation facility and a 180 MWt gas turbine electric power station. The company is currently constructing a gas pipeline between the Vankorskoye and Khalmerpayutinskoye fields in a joint project with Lukoil to transport associated petroleum gas to Gazprom's system.

Increasing the value of Rosneft's gas business is a very important aspect of its strategic development. The company is well positioned to capitalize on this opportunity thanks to its significant gas reserves of 3.2 trillion cubic meters of gas under the Russian calculation system.

Copyright 2011, Rosneft. All rights reserved.

Rosneft's new chairman casts doubt on sale to private investorshttp://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8621161/Rosnefts-new-chairman-casts-doubt-on-sale-to-private-investors.html

The new chairman of Russia's state-owned oil giant Rosneft has hinted that he would rather the company is not sold to private investors as planned by the Kremlin.

By Rowena Mason, Energy Correspondent

6:10AM BST 07 Jul 2011

Alexander Nekipelov took over as chairman after Russian's deputy prime minister, Igor Sechin, stepped down when a presidential decree removed politicians from state-run companies.

Mr Nekipelov told Reuters: "Rosneft's assets are huge. Its capitalisation is around $90bn (£56bn). To allow some independent directors to manage such assets is a very exotic point of view."

Russia is currently planning to lower its stake from 75pc to 51pc and after 2015 sell off more shares to be left with minority ownership.

Rosneft has access to Russia's best oil reserves, including the possibility of exploration in the Arctic.

BP failed in its attempt to become Rosneft's partner looking for oil in northern Russia earlier this year.

The state-controlled giant is currently seeking another Western energy major to give its expertise to the project, which involves an area the size of the North Sea.

Gazprom

07/07 11:51   GAZPROM, VEKSELBERG POWER ASSETS MERGER UNDESIRABLE FROM ANTI-MONOPOLY LAW STANDPOINT - FAS CHIEFhttp://www.interfax.com/newsinf.asp?id=257488

Kommersant: Gazprom takes over the energy sector http://www.focus-fen.net/index.php?id=n253956

07 July 2011 | 07:55 | FOCUS News AgencyHome / WorldMoscow. Russia’s biggest private energy holding – KEF of Viktor Vekselberg, may go under Gazprom’s control, writes Kommersant daily.A company with a total capacity of 52GWh will emerge after the merger of the assets of Gazprom Energoholding and KES, which is twice more than the capacity of state-run Inter RAO and more than one-fourth of the capacity of the RAO UES, which has been liquidated in 2008.Analysts comment that the deal will be an end to the reforms in the energy sector of the country.

07.07.2011

Gazprom Meets North Korean OFficials for Talks on Cooperation in Energyhttp://www.oilandgaseurasia.com/news/p/0/news/11958

A Gazprom delegation headed by deputy chair Aleksandr Ananenkov conducted negotiations on July 4-6 with North Korean officials, the gas monopoly's press office reported.

During the visit, Ananenkov and North Korean Oil Minister Kim Chi En discussed issues related to energy.

The Gazprom delegation also met the North Korean Deputy Chair of the Cabinet of Ministers, Kan Sok Chu.

Copyright 2011, Russian Economy Ministry Statistics Department. All rights reserved.

July 07, 2011 11:17

Naftogaz Ukrainy transfers around $860 mln to Gazprom in June gas paymentshttp://www.interfax.com/newsinf.asp?id=257475

KYIV. July 7 (Interfax) - Ukrainian national oil firm Naftogaz Ukrainy transferred around $860 million to Russian gas giant OJSC Gazprom (RTS: GAZP), thereby fully paying for natural gas supply to the country in June 2011, the former company told Interfax on Thursday.

The natural gas price for the second quarter of 2011 came to $297 per 1,000 cubic meters, the company said.

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(Our editorial staff can be reached at eng.editors@interfax.ru)

Gazprom and Naftogaz Ukrainy meet on gas pricinghttp://www.steelguru.com/russian_news/Gazprom_and_Naftogaz_Ukrainy_meet_on_gas_pricing/213254.html

Thursday, 07 Jul 2011Gazprom headquarters hosted a working meeting between Mr Alexey Miller Chairman of the Gazprom Management Committee and Mr Yury Boiko Ukrainian Fuel and Energy Minister.

Following the meeting results, Mr Alexey Miller noted that “I have nothing new to say. The gas price adjustment for our Ukrainian friends may be considered upon the merger of Gazprom and NAK Naftogaz Ukrainy.”

'Head start' for Bovavenkovohttp://www.upstreamonline.com/live/article265707.ece

Russian gas monopoly Gazprom will start production on its huge Bovavenkovo gas field in the second quarter of 2012, a quarter earlier than planned, a company official said today.

News wires  06 July 2011 14:39 GMT

Bovavenkovo, the biggest gas field in the Yamal Arctic peninsula, has reserves of 4.9 trillion cubic metres of natural gas - enough to feed global demand for over a year.

Gas from the field will be exported to Europe.

Gazprom has delayed the commissioning of the field, discovered in the 1960s, several times on the back of slower gas demand, and in 2009 said it would postpone the launch by one year to the third quarter of 2012, Reuters reported.

"Bovanenkovo will be launched in the second quarter of 2012 with initial annual production of around 30 billion cubic metres," Alexander Gluhenky, deputy director of Gazprom Dobycha Nadym, Gazprom's subsidiary, said on the sidelines of the Next Generation Oil and Gas conference in Moscow.

"In 2014 it will produce 105 to 120 Bcm," he added.

Published: 06 July 2011 14:39 GMT  | Last updated: 06 July 2011 14:48 GMT

Gazprom and Microsoft ink corporate license agreementhttp://www.steelguru.com/russian_news/Gazprom_and_Microsoft_ink_corporate_license_agreement/213252.html

Thursday, 07 Jul 2011

Gazprom headquarters hosted a meeting between Mr Andrey Kruglov Deputy Chairman of the Management Committee Head of the Department for Finance and Economics of Gazprom and Mr Donald Charles Grantham Area Vice President for Central and Eastern Europe of Microsoft International. Based on the meeting results the parties signed a Corporate License Agreement.

The Agreement stipulates special purchasing terms and conditions for the Microsoft software use rights in the scope that would meet demand of the entire Gazprom Group between 2011 and 2013. The Agreement will considerably optimize the total cost of Microsoft software ownership by the Group.

The parties stated that the signed Agreement confirmed the reliability and constructive approach to the partnership relations and opened up the prospects for deepening cooperation between the companies.

Lithuanian parliament: Gazprom should lose its pipelines in Lithuaniahttp://www.baltictimes.com/news/articles/29001/

Jul 06, 2011 By Rokas M. Tracevskis

VILNIUS - On June 30, the Lithuanian Parliament, despite public protests by Russian PM Vladimir Putin, adopted amendments to the Law on Natural Gas, which means splitting of the gas supply company Lietuvos Dujos into three entities and the taking of Lietuvos Dujos-owned gas transportation pipelines into the ownership of the Lithuanian state after mid-2013 (this term can be prolonged in case of some difficulty in negotiations with the current owners over compensation). Now German E.ON Ruhrgas owns 38.9 percent of Lietuvos Dujos shares, Russian Gazprom - 37.1 percent, the Lithuanian state – 17.7 percent, and minor shareholders – 6.3 percent. Gazprom is the only supplier of gas to Lithuania at the moment.

According to the Lithuanian government’s plans, the construction of the Lithuanian state-owned LNG terminal in the Lithuanian seaport of Klaipeda will be completed in 2014 and the EU co-sponsored pan-Baltic LNG terminal in Riga is expected to start functioning at a similar time – the latter terminal causes some fears in Vilnius due to possible participation of Gazprom-related companies in that project. The parliament’s decision was made, implementing the European Union’s Third Energy Package of 2009, aiming to liberalize the EU’s energy markets by splitting big utility groups, which have the status of monopolies, and allowing for all gas suppliers unhindered access to EU infrastructure.

The victory of the Lithuanian PM Andius Kubilius-backed move was clear: 81 MPs voted in favor of amendments while 23 MPs voted against and seven abstained. Some MPs of the oppositional Order and Justice Party’s parliamentary

group spoke against the amendments, but the most vocal opponents to the Kubilius initiative during the parliamentary debates were the opposition Social Democrats.

Interestingly, the opposition Labor Party supported the ruling center-right coalition on the issue of these amendments. “We have some doubts, but we will support this project,” Vytautas Gapsys, head of the Labor Party’s parliamentary faction, said during the debates in the parliament.

“We are running from Ivan, but he will take our last trousers!” shouted Petras Grazulis, MP of the Order and Justice Party, pointing to prices of Gazprom’s gas supplies, which are 15 percent higher for Lithuania than for Finland, Estonia and Latvia, which postponed implementation of the Third Energy Package, avoiding in this way the gas price repercussions from Gazprom.“The EU expertise showed that it will be finally beneficial for our country,” Kubilius said. “The EU expertise forced Finland, Estonia and Latvia to choose another way,” Social Democrat MP Vytenis Andriukaitis disagreed. The Social Democrats are stating that such reorganization of the gas sector is foolish while Lithuania has no alternative for Gazprom’s gas supplies.

The Social Democrats were always more friendly towards Gazprom than their center-right opponents. For example, Social Democrat MP Birute Vesaite is known in the parliament mostly only for two reasons: a constantly and loudly expressed love for Swedish feminism and Gazprom. After the parliament passed the amendments, Algirdas Butkevicius, leader of the Social Democrat Party, stated that “there is too much politics in this decision.” The Social Democrats warned that this reorganization of the gas sector can cost the Lithuanian state some 1.5 billion litas (400 million euros) due to compensation for the pipelines’ current owners. It was the former Social Democrat-led government of PM Algirdas Brazauskas which privatized Lietuvos Dujos in two stages, with E.ON Ruhrgas (in 2002), and its traditional Russian partner, Gazprom (in 2004), taking more than a third of the gas company’s shares each.

“It was a big mistake to sell the transportation pipelines eight years ago,” Kubilius said after the vote on the amendments.The amendments provoked nervous reaction from the current owners of Lietuvos Dujos. “Once again we underline: if any undertaking has procured gas volumes at the Lithuanian border or seashore and has concluded a contract with any gas consumer in Lithuania, gas transmission to the respective gas user is guaranteed by the existing laws and legal acts.

Therefore, the new draft LoNG [Law on Natural Gas] is not related at all with ‘de-monopolization’ or ‘liberalization,’ but very much with nationalization. The splitting of the company into three undertakings (as it is envisaged) would only result in an increase in operating costs and consumer transportation tariffs,” reads Lietuvos Dujos’ statement of June 9.

Bronislovas Lubys, the biggest shareholder of the Achema Group (leading manufacturer of nitrogen fertilizers and chemical products in Lithuania) and president of the Lithuanian Confederation of Industrialists, expressed his skepticism about such an anti-Gazprom move, pointing out that the price of 1,000 cubic meters of Gazprom gas for Lithuania was 426 U.S. dollars in June, and the price will be 486 U.S. dollars in the coming December, while the price of Gazprom’s gas for Latvia is the following: 349 U.S. dollars in June and 425 U.S. dollars in December (according to a forecast by German banks and the Latvian gas company Latvijas Gaze). Lubys expressed his doubts that the reorganization of Lietuvos Dujos will cause a reduction of gas prices in Lithuania in the short term.

“The reorganization of Lietuvos Dujos will go on by arranging agreements with the Lietuvos Dujos’ shareholders on the terms of this process. The European Commission will participate in this dialogue because we are implementing the laws of the European Union,” Lithuanian Energy Minister Arvydas Sekmokas said in his press conference on June 30. He refused to speculate on the exact price which the Lithuanian government will pay to compensate shareholders of Lietuvos Dujos, stating that it is “a matter of negotiations.” Sekmokas said that the Lithuanian consumers will win due to the parliament’s amendments.

“I did consult with operators of the gas transporting system of the Netherlands and representatives of the Dutch government institutions regarding the implementation of the Third Energy Package. They confirmed that such reorganization needs certain efforts and investments in the short term, but the separation of ownership gives the best benefits to consumers in the long term,” Sekmokas said, emphasizing that the implementation of the Third Energy Package is a top priority for the European Commission. 

Gazprombank reports upsurge in H1 net profit

http://www.rbcnews.com/free/20110707104245.shtml

      RBC, 07.07.2011, Moscow 10:42:45.Gazprombank's net profit surged to around RUB 20bn (approx. USD 719m) in January-June, up from RUB 7bn (approx. USD 251m) in the same period of 2010, the bank's press office announced today.

      The main sources of net profit were net interest and commission revenues, revenue from transactions involving securities, including returns on investments, as well as dividends from subsidiaries. Shareholders' equity rose 12% in January-June to RUB 256.6bn (approx. USD 9.2bn).

      The lender's Deputy CEO Alexander Sobol attributed strong financial performance to optimization of the company's balance sheet with the aim of

cutting investments and increasing the proportion of assets generating stable interest income.

      Retail lending increased 25% during this period. The bank's corporate and retail loan portfolio, net of interbank loans, totaled RUB 1.04 trillion (approx. USD 37m).