Russia 110916

Basic Political Developments Russia protests Kosovo plans for customs posts on Serb border

o Russia protests UN refusal to discuss Kosovo Moscow to host consultations on Moldovan-Transdniester settlement - The

second round of consultations in the 5+2 format on the disputed Transdniester Republic will be held in Moscow on September 22, the Russian Foreign Ministry announced on Friday. The format includes both sides of the conflict – Moldova and its breakaway Transdiester Republic – as well as Russia and Ukraine as guarantors of the settlement, the OSCE as mediators and the EU and the US as observers. The meeting will take place at the level of political representatives in the negotiations on the settlement.

Russia backs lifting no-fly zone over Libya - "Judging from the change of the situation in Libya, Russia proposed to include in the resolution a clause about lifting the no-fly zone regime," Lukashevich said.

U.S. cautions Russia over joint naval drills with N. Korea Gazprom in gas talks with North Korea

o 2 Koreas, Russia Inch Closer to Pipeline Deal - Gazprom also said it signed a "roadmap" for future gas deliveries with South Korean gas pipeline operator KOGAS. There was no confirmation whether the energy chiefs of the two Koreas met as well.

Russia, Belarus begin air defense military exerciseo Belarus may buy outdated Su-30 fighters from Russia o Russia to deploy S-400 air defense systems in joint drills with Belarus

The Russian Shoppers Are Coming - Thousands of shoppers from Russia cross the Belarusian border every day to buy large quantities of cheap Belarusian goods. Shopping in Belarus became very attractive after Belarusian rouble lost over a half of its value in 2011. 

Candian warship to visit Murmansk - The joint exercise and naval vessel visits will take place in 2012.

Yanukovych to visit Moscow on Sept. 24 - "He will make a one-day visit to meet with Russian President Dmitry Medvedev," the source said.

o Ukraine's Yanukovich to visit Moscow on gas Kiev to slash Russian gas purchases by 5 bcm in 2012 Yanukovich says South Stream should run through Ukraine

o Ukraine proposes to build South Stream via its territory Russia Prepared to go to Court With Ukraine Over Gas Agreement Russia "considering discount" as gas price for Ukraine prepares to pass $500 Munich Conference Calls for Greater Bi-lateral Relations Between Germany and

Russia and for Closer Economic and Political Ties with the EU Soyuz lands safely in Kazakhstan, rattles nerves - Repeated calls to the Soyuz

TMA-21 capsule from Mission Control in Korolyov, outside Moscow, went unanswered for several minutes, well after the craft had de-orbited.

o ISS astronauts land in Kazakhstan, crew in good mood - Mission Control o U.S.-Russian space trio lands safely in Kazakhstan

Russia set to launch Glonass-M satellite on Oct. 1 Roscosmos recalls batch of space rocket engines for check Russia postpones next manned space flight to ISS Russia, Norway see new horizons for cooperation - According to Norwegian

business people, there exists a large potential for the development of bilateral partnership in shelf development of mineral resources, in transport and in tourism. They regard setting up joint ventures as the most acceptable way of cooperation in large science intensive projects.

Atomerergomash buys Czech cooling tower engineer - Russian state firm Atomerergomash, a subsidiary of Rosatom, buys stake in Czech provider of industrial cooling systems

France Lends $14 Billion for Russia Ski Resort, Kommersant Says First business talks take place at Sochi investment forum Unsettled relations with Russia hamper Georgia’s coop with US – deputy PM :

Unsettled relations with Russia hamper Georgia’s military cooperation with the United States, Georgian Deputy Prime Minister and Minister for European and North Atlantic Integration Georgy Baramidze told Itar-Tass on Friday.

Patriarch's Hope for 'Miracle' in Georgia-Russia Ties - Standing beside President Saakashvili in a newly opened church close to the Russian border, head of the Georgian Orthodox Church, Patriarch Ilia II, hinted on the need of talks between the Georgian and Russian leaders. 

Mosque imam killed in Dagestan - Zainudin Daiziyev, the imam of a mosque located in the village of Kadar, has been shot dead in the Buinaksk district of Dagestan, a spokesman for the republic's Interior Ministry told Interfax.Lebedev’s lawyers apply for interrogation of Novaya Gazeta editor

Putin’s Front Aims to Add 15% to Ruling Party’s Vote in December - By Henry Meyer

PRESS DIGEST - Russia - SEPT 16o www.vedomosti.ruo Russia's minister of industry and trade Victor Khristenko could move to

head a new ministry formed to oversee a customs union between Russia, Belarus and Kazakhstan.

o Europe's leading home improvement retailer Kingfisher is planning to invest up to $183 million in the next two years to open nine supermarkets for its Castorama unit, six of which will be located in Moscow and its outskirts.

o The number of Russians that approve of President Dmitry Medvedev's performance fell from 60 percent to 54 percent between January and August, Levada polling agency says.

o www.kommersant.ruo Ukraine's President Victor Yanukovich is due to visit Moscow next week

to discuss gas prices and the possibility of joining a customs union made up of Russia, Belarus and Kazakhstan, the daily says.

o Russian billionaire Mikhail Prokhorov has accused a top Kremlin official Vladislav Surkov of manipulating the political life of the country.

o www.izvestia.ruo Russia's key partners in launching the Skolkovo innovation center are

expected to invest up to 135 million euros ($187 million) on salaries and research equipment.

o Evidence of oil leaks affecting Black Sea regions between 20 and 420 square kilometers were discovered several kilometers from Russia's shore line, according to pictures registered by outer space satellites.

o Russia's stock market did not react to the criticism launched by metals magnate Mikhail Prokhorov against the Kremlin and a scandal with his political partners, the daily says.

o www.ng.ruo Prokhorov created a situation which has weakened the position of the

presidential administration and has raised the chances of Putin winning the presidential race in March, the daily says citing analysts.

o A group of ethnic Greeks living in the Volgograd region has issued an appeal to the Greek parliament inviting it to join Russia's customs' union if the troubled state is forced out of the European euro zone.

o www.rg.ruo More than 10 percent of Russia's commercial banks do not meet the

requirements of the country's banking regulator and some of them could lose their licences next year, according to a central bank official Mikhail Sukhov.

o The government is considering measures to help Russia's companies to return to Libya.

o www.rbcdaily.ruo Mikhail Prokhorov said on Thursday that he was ready to lead a new

political movement which could consolidate his supporters.o and may have gained about $200,000 from the sale, the daily says, adding

that the president of the company Edward Khudainatov remains the biggest shareholder among managers. He owns a 0,0047 percent stake.

o www.mk.ruo The popular daily says that Prokhorov has disappointed Russia's leaders

who "appointed" him to lead a liberal party to parliament, but then tried to declare independence from Kremlin authorities.

o The daily says everyone knows that a plane crash that killed the entire team of Lokomotiv Yaroslavl was caused by the pilot's mistake but aviation authorities refuse to admit the fact. ($1 = 0.722 Euros) (Reporting By Tatiana Ustinova)

RIA Russian Press at a Glance, Friday, September 16, 2011 Next US ambassador to Russia could face tough confirmation - By Aleksandr

Gasyuk RT: AMD ‘un-resets’ Washington’s relations with Moscow

Builders will take into account the threat of terrorism - Russian cities will turn into secured localities with checkpoints after the counterterrorism regulations for builders come in effect on September 20. The document obliges architects, builders and developers to consider the protection of buildings against the threat of terrorism at the design stages.

National Economic Trends Capital outflow from funds investing in Russian and CIS shares comes to $315

mln for week of Sept 8-14 – EPFR CBR's reserves decreased on currency revaluation - EUR and GBP depreciation

against USD explains much of the decline Russia rouble is neither overvalued nor undervalued-cbank INTERVIEW: Ctrl bank sees no need to narrow interest rate range - Interview

with CBR First Deputy Chairman Alexei Ulyukayev World Bank warns of impending economic crisis in Russia World Bank Cautions Russia About Oil Shock - By Irina Filatova RTS Futures Advance as Mechel, Yandex Climb Following ECB Lending

Proposal

Business, Energy or Environmental regulations or discussions Gazprom, Polymetal, Polyus, Russian Sea: Russian Equity Preview Japan’s leading bank concludes agt on coop with Sberbank Uralkali Refinances $1 Billion Loan From Sberbank

o Uralkali taps $1bn syndicated loan MTS BoD greenlights takeover of MGTS Abrau-Durso champagne maker keeps IPO plans despite volatility Novaport's IPO efforts target operations

Activity in the Oil and Gas sector (including regulatory) Crude Supplies to Russian Refineries Decline Rosneft, Lukoil move determination of joint projects to year-end Lukoil interested in production assets, eyes U.S., Vietnam – Alekperov LUKoil may buy foreign production assets by end of '11 Lukoil CEO hopes to start Iraq drilling by end '11 Exillon in new Siberia strike - London-listed explorer Exillion Energy has found

more oil at a West Siberia field that promises to give an additional lift to production, which hit a record in the first half of the year.

Russia a 'third party' on Trans-Caspian gas pipe - Russia should take into account that it can also be considered a third party, since Azerbaijan and Turkmenistan hold decision-making authority to implement the Trans-Caspian gas pipeline.

Gazprom Eni, Gazprom to sign option agreement on Libya oil-source: Eni and Gazprom

were expected to sign an agreement on Friday giving the Russian company the right to acquire half Italian group Eni's 33 percent stake in the Elephant oilfield in Libya, a source in Gazprom told Reuters.

Belarus-Russia oil talks continue o Belarus and Gazprom "Fruitfully" Discussing Beltransgaz Sale

Development minister meets Gazprom head over South Stream project - Hungary's National Development Minister Tamas Fellegi held talks with the president of Russia's energy group Gazprom in Moscow on Thursday, discussing the South Stream gas pipeline project, the Russian news agency ITAR-TASS reported.

Gazprom ready to invest in Murmansk oil refineryo Gazpromneft: Murmansk refinery? Doesn't appear attractive

------------------------------------------------------------------------------------------

Full Text Articles

Basic Political Developments

Russia protests Kosovo plans for customs posts on Serb borderhttp://rt.com/politics/news-line/2011-09-16/#id18351

10:24

The authorities in Kosovo moved to establish customs posts on two disputed border crossings with Serbia on Friday in a development backed by international missions. On the eve of the move, Russia’s ambassador to Serbia, Aleksandr Konuzin, left a regional UN forum on security, protesting against participants’ refusal to discuss the situation in Kosovo. He said NATO, KFOR and EULEX would violate their mandate by establishing Kosovar customs at the crossings. The envoy also asked why Serbs at the forum failed to question a move which would affect their compatriots in Kosovo.

Russia protests UN refusal to discuss Kosovohttp://rt.com/news/un-refusal-discuss-kosovo-681/

Published: 16 September, 2011, 03:18Edited: 16 September, 2011, 09:25

Russia’s ambassador to Serbia walked out of a UN Security Council meeting in Belgrade to protest the participants’ refusal to discuss Kosovo. Meanwhile, NATO’s chief vowed that the alliance would not let the Balkan region slip back into violence.

“I am most surprised,” Aleksandr Konuzin, the Russian ambassador, told the gathering in Belgrade. “NATO, KFOR and Eulex are planning to send Kosovo customs officers to border posts in northern Kosovo. This will be a breach of their own mandate, UN Resolution 1244, and the UN Security Council’s decision of 2008. And no one in the assembly raises a single question about that.”

Konuzin also rebuked the Serbian representatives for paying little attention to Serbia’s sovereign interests, reports RIA Novosti news agency.

But according to Reuters, the diplomat left the forum after one of the participants blamed the Kremlin for pursuing own interests in Serbia.

“We [Russia and Serbia] have common interests, and we will defend the country even though it seems that some Serbs wish to see their country under foreign control,” replied the diplomat, as quoted by the agency.

Kosovo customs officers mentioned by ambassador Konuzin are expected to start their work in northern Kosovo on Friday, to the great consternation of local ethnic Serbs, who comprise a majority in the region. The Serbs even built stone barricades in the city of Mitrovica to block roads on the border between the two lands, and succeeded in halting several UN trucks.

Violence in northern Kosovo sets back all progress – NATO chief

Another urgent Security Council session on the issue was held behind closed doors in front of the full council in New York. Serbia’s minister of foreign affairs, Vuk Jeremic, and his Kosovo counterpart flew to the United States to take part in the meeting. In statements made after the meeting, the UN called on Belgrade and Pristina to refrain from violence.

Thus, United Nations Secretary General Ban Ki-Moon expressed his concern over the creation of two customs control posts in northern Kosovo.

“I call on all concerned to refrain from unilateral actions which could escalate tensions in the area," he said. "I urge Pristina and Belgrade to continue the European Union-facilitated dialogue and build on its success so far, and to take practical steps toward the implementation of the agreements reached so far.”

But Russia’s ambassador to the UN, Vitaly Churkin, had to reiterate Russia’s concerns over the impression that international peacekeeping forces are taking sides with the Albanian authorities in this dispute.

"We have serious concerns about where all this is going," said Churkin. "[Serbia's Minister of Foreign Affairs Vuk] Jeremic made it very clear that the entire proposition of the EU playing this mediating role in the dialogue between Pristina and Belgrade may be put in question. So this sudden departure from the path of the dialogue at the moment

when it was beginning to show some promise, in our view, is completely unjustified, unwarranted and very dangerous."

This message was echoed by NATO chief Anders Fogh Rasmussen, who came to Kosovo on Thursday for a brief visit. Rasmussen said the recent violence in the disputed area was "bad for the image of Kosovo and a clear setback for the progress achieved."

"Let me be very clear: there can be no turning back," he added. "NATO has spent 12 years ensuring stability and security. We will not allow that achievement to be put at risk."

Tensions between the two paries have been growing since an incident in July in which Kosovo's authorities attempted to send police to border posts in the north to enforce a ban on imports from Serbia.

This led to clashes with local residents in which a border post with Serbia was burned down, a Kosovo policeman was killed and several others wounded.

NATO had to deploy peacekeepers in the area to break up the two parties.

The local UN Security Council meeting was convened in Belgrade on Thursday following requests by Russia and Serbia to address the whole issue. Serbia is urging the UN to prevent the Albanian authorities from reusing force in northern Kosovo to seize the two disputed border posts.

Kosovo broke away from Serbia in 2008 with the support of the US and some EU countries. But Serbia and the northern parts of Kosovo, as well as Russia, China and some other states, do not recognize their mandate.

Moscow to host consultations on Moldovan-Transdniester settlementhttp://rt.com/politics/news-line/2011-09-16/

11:10 permalink

The second round of consultations in the 5+2 format on the disputed Transdniester Republic will be held in Moscow on September 22, the Russian Foreign Ministry announced on Friday. The format includes both sides of the conflict – Moldova and its breakaway Transdiester Republic – as well as Russia and Ukraine as guarantors of the settlement, the OSCE as mediators and the EU and the US as observers. The meeting will take place at the level of political representatives in the negotiations on the settlement.

Russia backs lifting no-fly zone over Libyahttp://news.xinhuanet.com/english2010/world/2011-09/16/c_131141207.htm

2011-09-16 03:05:43

MOSCOW, Sept. 15 (Xinhua) -- Russia supports to lift the no-fly zone over Libya imposed by the United Nations, Russian Foreign Ministry spokesman Alexander Lukashevich said on Thursday.

The UN is currently drafting a resolution on softening sanctions against Libya, which would lift part of ban on financial operations and arms supply.

"Judging from the change of the situation in Libya, Russia proposed to include in the resolution a clause about lifting the no-fly zone regime," Lukashevich said.

He also said that Moscow has been making its best to release the Russian and Ukrainian citizens detained in Libya.

"Russian Foreign Ministry and the embassy in Tripoli are working on the release of the Russian citizens from custody as soon as possible, and will make sure their transfer to the Russian diplomatic mission until they are permitted to return to the home country," Interfax news agency quoted the diplomat as saying.

Two Russian and two Ukrainian employees of a Libyan company were captured by the rebel troops on Aug. 27 in Tripoli. They were released on Sept. 3 after the Russian embassy's intervention, but were arrested again on Sept. 6 in order to "verify their possible involvement in mending and modernization of Muammar Gaddafi's tanks," Lukashevich said.

So far, the detained citizens did not complain on any health problems and no charges have been brought against them, the Russian diplomat said.

U.S. cautions Russia over joint naval drills with N. Koreahttp://en.rian.ru/world/20110916/166877169.html

00:32 16/09/2011

WASHINGTON, September 16 (RIA Novosti)

Any form of cooperation with North Korea should not jeopardize international efforts to convince Pyongyang to halt its nuclear weapons program, the U.S. State Department said.

The Russian military said on Tuesday Russia and North Korea could hold joint naval drills in the Yellow Sea in 2012 with the focus on sea rescue and humanitarian missions.

The plans were outlined during the visit of Russia's Eastern Military District Commander Admiral Konstantin Sidenko to Pyongyang in August.

"We are aware from press reports that Russia and North Korea have announced their intention to hold joint naval exercises next year," the State Department commented on Thursday.

"Any engagement with the North Koreans should be conducted in a way that does not detract from the international community's clear message of concern about the North's weapons programs, and the necessity for Pyongyang to do what is necessary to return to the Six-Party talks," the State Department said.

North Korea is banned from conducting nuclear or ballistic missile tests under UN Resolution 1718, adopted after Pyongyang's first nuclear test on October 9, 2006.

However, the country carried out a second nuclear test on May 25, 2009, followed by a series of short-range missile launches, and has threatened to build up its nuclear arsenal to counter what it calls hostile U.S. policies.

The Six-Party talks on Pyongyang's nuclear ambitions involving the two Koreas, China, the United States, Russia and Japan came to a halt in April 2009 when North Korea walked out of negotiations to protest the United Nations' condemnation of its missile test.

Gazprom in gas talks with North Koreahttp://en.rian.ru/business/20110915/166874750.html

22:15 15/09/2011

MOSCOW, September 15 (RIA Novosti)

Russia’s energy giant Gazprom discussed on Thursday the construction of a pipeline to the Korean Peninsula with officials from North and South Korea.

The gas pipeline, expected to run through North Korea, is intended to supply Russian natural gas to South Korea.

Gazprom and North Korea's Ministry of Oil Industry signed a memorandum of understanding on Thursday and agreed to set up a working group on the project, the Russian company said.

Gazprom also said it had signed a road map on the project on Thursday with South Korea's gas pipeline operator Kogas.

The gas pipeline is expected to be over 1,100 km long, including 700 km to run across North Korea.

Russian natural gas deliveries to South Korea may start from 2017 and amount to at least 10 billion cubic meters a year. Gazprom currently supplies up to 1.5 million metric tons of liquefied natural gas a year to South Korea, which is the world's second largest LNG buyer after Japan.

2 Koreas, Russia Inch Closer to Pipeline Dealhttp://english.chosun.com/site/data/html_dir/2011/09/16/2011091601101.html

The energy chiefs of South and North Korea have discussed with Russian energy giant Gazprom a pipeline to funnel Russian natural gas across the peninsula to South Korea.

Gazprom on Thursday said it signed a memorandum of understanding with North Korea's Ministry of Oil Industry and agreed to set up a working group on the project.

Gazprom also said it signed a "roadmap" for future gas deliveries with South Korean gas pipeline operator KOGAS. There was no confirmation whether the energy chiefs of the two Koreas met as well.

The pipeline is expected to be over 1,100 km long, including 700 km across North Korea.

Arirang News / Sep. 16, 2011 12:48 KST

06:02 16/09/2011ALL NEWS

Russia, Belarus begin air defense military exercise

http://www.itar-tass.com/en/c154/226751.html

MOSCOW, September 16 (Itar-Tass) — Russia and Belarus will engage over 12 thousand men, 100 tanks and over a hundred aircraft and helicopters in a weeklong joint exercise that will begin on Friday in Russia.

The Union Shield-2011 exercise aims at “streamlining interaction between the Russian and Belarussian military in fulfilling the task of ensuring security of the Union State,” the press service of the Russian defense ministry said.

The air defense forces will train destroying helicopters and low-flying aircraft at the Gorokhovetsky range in the Western military district.

Besides, air defense troops of both countries will train at Ashuluk and Kapustin Yar firing ranges in Astrakhan region. They will use S-300 and Buk-M2 air defense complexes.

“The conditions of fire at flying targets will be close to combat to the maximum,” spokesman of troops commander of the Western military district Andrei Bobrun told Tass.

Belarus may buy outdated Su-30 fighters from Russiahttp://en.rian.ru/mlitary_news/20110916/166882507.html

07:46 16/09/2011

MOSCOW, September 16 (RIA Novosti)

Eighteen Su-30K fighter jets which were delivered by Russia to India in the 1990s could end up in service with the Belarusian air force, respected Russian business daily Kommersant said on Friday.

Russia and India agreed on the sale of advanced Su-30MKI fighters to the Indian air force in mid-1990s, but Moscow had not been able to deliver the aircraft until early 2000. The sides found a compromise - the first 18 fighter jets were delivered in downgraded version, Su-30K, on condition that they would be returned to Russia after being replaced with Su-30MKI.

According to Kommersant, the aircraft were formally returned to Russia's Irkut aircraft corporation, but never touched the Russian soil and ended up in Belarus.

The first 10 jets have been recently delivered to an aircraft plant in Baranovichi for a deep overhaul to the Su-30KN version, Kommersant cited a source close to Russian state arms exporter Rosoboronexport. The remaining eight are expected to arrive in November.

The source said Belarus was interested in buying the Su-30K because the country cannot afford new aircraft and the deal could be very cheap.

According to Russian experts, the current price for an outdated Su-30K after depreciation is about $10 million. An overhaul would require an additional $5 mln per plane.

"To buy a heavy fighter for $15 mln is a real bargain," Kommersant quoted Ruslan Pukhov, the head of the Russian Center for Analysis of Strategies and Technologies, as saying.

Despite the certain loss from such a deal, Irkut may be forced to sell the Su-30Ks to Belarus because the Russian Defense Ministry will not spend the money on old aircraft, and other potential buyers - Syria and Sudan - are out of the picture for political reasons.

Russia to deploy S-400 air defense systems in joint drills with Belarushttp://en.rian.ru/mlitary_news/20110916/166879603.html

03:52 16/09/2011

MOSCOW, September 16 (RIA Novosti)

Russia will deploy advanced S-400 air defense systems during joint military exercises with Belarus in September, a spokesman for the Russian Defense Ministry said.

The Union Shield 2011 drills will be held in central and southern Russia on September 16-22. The exercises are aimed at improving combat readiness of the Belarus-Russian regional joint force, as well as raising interoperability between the units of the two countries.

Col. Vladimir Drik said on Thursday that S-400 and Pantsir-S air defense systems will be deployed during the operational phase of the exercises at the Ashuluk firing range in the Astrakhan Region.

The Union Shield 2011 drills will involve a total of 12,000 troops, as well as up to 50 aircraft and 200 combat vehicles, including 100 tanks.

Defense and security cooperation is an important part of the Russian-Belarusian Union State's activities. The joint Russian-Belarusian regional military force was formed 10 years ago. Its main objective is to defend the Union State's western border and the member states of the Collective Security Treaty Organization (CSTO).

Moscow and Minsk also signed an agreement in February 2009 on the joint protection of the Russia-Belarus Union State's airspace and the creation of an integrated regional air defense network.

The Russian Shoppers Are Cominghttp://belarusdigest.com/story/russian-shoppers-are-coming-5749

Published: 16 September 2011

Thousands of shoppers from Russia cross the Belarusian border every day to buy large quantities of cheap Belarusian goods. Shopping in Belarus became very attractive after Belarusian rouble lost over a half of its value in 2011. 

Belarusian shops cannot satisfy demand of Russian consumers and often run out of stock leaving the locals without essential goods. Some shops began to introduce rationing. They refuse to sell more than a certain quantity of sausages or milk to satisfy as many people as possible. That results in quarrels and even clashes between local Belarusians and Russian shoppers.

Belarusian service of Radio Liberty reported last week that a quarrel between local and Russian buyers in Mahiliou region turned into a real fight. Similar scenes were seen in Vitsebsk and Mahiliou regions.  The Radio Liberty quoted a local resident who conveyed the general mood in his area: "The Russians are buying out everything. Perhaps it is good for the economy but it is certainly bad for us. It is frustrating that we cannot afford to buy what we want for our salaries".

Belarusian exporters sell even more products directly to Russia. Unlike Belarusian buyers, the Russians pay in a hard currency, not in Belarusian roubles which are rapidly losing their value. The Russian shoppers bring in the badly needed hard currency but often leave Belarusians with empty shops and frustration.

In the XIX century, the Great Famine in Ireland caused millions of deaths.  While people were starving large quantities of food were shipped to Britain. Then the poor had no money to buy food and the government did not ban exports. Although there is no famine in Belarus - many people struggle to afford basic things and the government can neither limit Belarusian exports not make their people richer. 

Export restrictions would contradict the Customs Union arrangement with Russia and Kazakhstan, which came into effect in 2011. Without any significant oil reserves, Belarus does not fit very well in the union with oil exporting Kazakhstan and Russia. 

But over the last two decades Belarus acted as if it had its own oil because Russia was happy to supply it at very cheap prices.  Belarusian authorities then redistributed revenues from processing and reselling cheap oil to the Western markets.  They had no incentive to modernize the Soviet-style economy.  When Russia reduced its subsidies, the Lukashenka economic model collapsed and the real income of Belarusians had fallen sharply.  

What lured Lukashenka to join the Customs Union was the opportunity to get cheap oil and gas. Not as in the good old days but still better than the market prices.  According to

Vladimir Putin, the gas price formula for Belarus now stipulates the same profit margin as supplies to the European Union. But it will also include an "integration-related" coefficient,  which will apparently depend on Lukashenka's conduct. Ukraine decided not to join the customs Union and according to Putin will continue to pay much higher gas prices. 

Lukashenka strikes deals with Russia not because of his ideological preferences. It is more simple than that - Russia is the only country in the region which is able and willing to waste billions to support its imaginary geopolitical goals.  Like a bad boy who wants to be noticed, many in the Russian elite want to be in charge in Belarus and pay for it. Like their Belarusian counterparts, the Russian political elite is not accountable to the Russian taxpayers. That makes it easy to engage in buying loyalty of neighboring dictators rather than building roads or modernizing Russia's own economy.  This is one of the ways the Russian elite is trying to heal the psychological trauma caused by the dissolution of the Soviet Union. 

But even with relatively Russian cheap oil and gas supplies, the Belarusian government can neither find a quick fix for its economic problems, nor is it capable of serious structural reforms. Nearly all senior officials in Minsk are in their late 50-s and worked most of their lives in the Soviet Union. When Russian subsidies helped to keep economy afloat they felt comfortable. Today they face a different economic reality and do not know how to deal with it. They are pathologically scared of market reforms and dislike the very idea of privatization. But they will have to do it because it looks that there will be no other way out. 

For a long time the Russian elite has been keen to engage in a different kind of shopping. Rather than buying Belarusian diary products and electronics, they hope to get control of major state-owned assets. Belarus already committed to sell the rest of its transit pipeline to Gazprom to ensure cheap gas prices. More state enterprises are likely to follow. Similar to consumer goods the prices for these assets are likely to be very low. 

YK

Candian warship to visit Murmanskhttp://www.barentsobserver.com/candian-warship-to-visit-murmansk.4960136-58932.html

2011-09-16 Ottawa and Moscow to improve military relationship in the Arctic.

The Chief of Canada’s Defence Staff has for the first time in almost a decade visited Russia and met with top military leaders this week. General Walt Natynczyk discussed a joint counter-terrorism exercise with head of Defence Staff Army General Nikolay Makarov.

- During my first meeting with General Makarov last January in Brussels, I received his invitation to visit Moscow to expand on our initial discussions, says General Natynczyk in a press-release posted at the portal of the National Defence Forces.

- This visit is an important opportunity to strengthen Canadian-Russian military ties, and exchange views on some of our common defence interests. I hope that General Makarov will honour us with a visit to Canada so we can continue to build on our relationship, the General says.

The two military top officials also agreed to exchange visits of their warships between Canada's Vancouver and the Murmansk port of Russia, reports Focus Information Agency.

The joint exercise and naval vessel visits will take place in 2012.

Text: Thomas Nilsen

Yanukovych to visit Moscow on Sept. 24http://www.kyivpost.com/news/nation/detail/112943/

Today at 09:47 | Interfax-Ukraine Ukrainian President Viktor Yanukovych will make a working visit to Moscow on September 24, a source in the administration of the Ukrainian president told Interfax-Ukraine on Friday.

"He will make a one-day visit to meet with Russian President Dmitry Medvedev," the source said.

Next week, Yanukovych will visit the United States to attend a high-level UN meeting on the prevention and control of non-communicable diseases at the invitation of UN Secretary-General Ban Ki-moon, as well as meetings of the UN General Assembly.

The Kommersant newspaper reported on Friday, citing a source in the Kremlin, that the Ukrainian president would visit Moscow on September 24. The newspaper wrote that Yanukovych's visit to Moscow should demonstrate whether Moscow and Kyiv are ready for reconciliation and whether Ukraine can get concessions from Russia in the gas issue.

Read more: http://www.kyivpost.com/news/nation/detail/112943/#ixzz1Y67Ez0hO

Ukraine's Yanukovich to visit Moscow on gashttp://af.reuters.com/article/energyOilNews/idAFL5E7KG0PY20110916

Fri Sep 16, 2011 8:26am GMT

By Olzhas Auyezov

YALTA, Ukraine, Sept 16 (Reuters) - Ukrainian President Viktor Yanukovich will visit Moscow later this month for talks with Russia's Dmitry Medvedev in a new attempt to solve a row over the price Ukraine pays for supplies of Russian gas, his aides said on Friday.

Yanukovich will go to Moscow on Sept. 24.

"There are a wide range of issues to be discussed that include those relating to gas and others," Iryna Akimova, Yanukovich's economic adviser, told Reuters on the sidelines of an international conference in the Crimean resort of Yalta.

Ukraine wants Russia to agree to a review of a January 2009 gas deal which it says has saddled it with an exorbitant price for gas supplies and obliges it to import more than it requires.

Russia has refused, saying a new deal can be worked out only if its former Soviet ally joins a joint customs union or lets Russian gas giant Gazprom buy into its gas transport system.

The gas row, which harks back to a deal signed between Ukraine's oil and gas firm Naftogaz and Russian gas giant Gazprom before Yanukovich came to power, has seriously rebounded on relations between Russia and the ex-Soviet republic.

Speaking at the Yalta European Strategy conference, Yanukovich made clear Ukraine intended to stick with its strategy of cutting back Russian gas imports.

"We have submitted an order to Gazprom for 27 billion cubic metres for next year," he said, adding that Ukraine had a programme aimed at "cutting gas consumption by 5 billion cubic metres a year".

The volume of gas which Ukraine intends to import is an important element in the dispute with Russia.

Gazprom says the 2009 deal, which Ukraine is now challenging, provides for gas imports by Kiev of 33 billion cubic metres.

Gazprom has said that Ukraine is obliged to pay for this quantity of gas irrespective of whether it imports it or not.

Yanukovich said he was confident a solution to the gas row would be worked out.

But he ruled out any major political concessions to Moscow, specifically on joining the Russia-led customs union which is incompatible with reaching an association agreement with the European Union.

"The issue of Ukraine joining the (Russia-led) customs union is not on the agenda," he told the conference.

He said talks were still continuing with Russia on upgrading Ukraine's gas pipelines. "We have been and will remain strategic partners with Russia. I am sure a solution will be found," he said. (Additional reporting by Yuri Kulikov; Writing By Richard Balmforth; Editing by Jon Boyle)

Kiev to slash Russian gas purchases by 5 bcm in 2012http://en.ria.ru/business/20110916/166888034.html

11:37 16/09/2011

YALTA, September 16 (RIA Novosti)

Ukraine has filed a bid to buy 27 billion cubic meters of gas in 2012 from Russia's gas giant Gazprom after a 33 bcm bid this year, President Viktor Yanukovych said on Friday.

"We have filed a bid for 27 bcm for next year," Yanukovych said.

Energy Minister Yuriy Boyko said last month that Ukraine, which is in a bitter row with Moscow over prices for gas, bought 40 bcm of gas this year. Gazprom said Kiev must pay for 33 bcm of gas a year regardless of actual purchases.

The 10-year gas export contract with Russia, signed in 2009, ties the price for gas to oil prices, which have been rising recently boosting Ukraine's bill. Former prime minister Yulia Tymoshenko is now on trial for signing the deal, and Kiev is at pains to revise it.

Yanukovich says South Stream should run through Ukrainehttp://rt.com/news/line/2011-09-16/#id18353

11:12

Ukrainian President Viktor Yanukovich has proposed that the South Stream pipeline run through his country instead of under the Black Sea, Interfax news agency reported on Friday. He added that it would be five times cheaper. The South Stream project was designed to reduce Russia’s dependence on Ukraine as a transit route for its gas. Kiev is set to lose a large slice of its gas transit revenues after the project’s realization.

Ukraine proposes to build South Stream via its territory

http://www.rbcnews.com/free/20110916122359.shtml

      RBC, 16.09.2011, Yalta 12:23:59.Ukrainian President Viktor Yanukovich has suggested that the South Stream natural gas pipeline should run on land across the Ukrainian territory, which will reduce the cost of the project five-fold.

      "South Stream should run across the southern Ukraine," Yanukovich said at an international forum in the Ukrainian Black Sea resort of Yalta today.

      Russia's Gazprom and its European partners plan to build part of the pipeline across the Black Sea. The offshore project is estimated at EUR 25bn, Yanukovich said.

16.09.2011

Russia Prepared to go to Court With Ukraine Over Gas Agreementhttp://www.oilandgaseurasia.com/news/p/0/news/12975

Officials in Moscow confirm that they are ready to defend their position on gas against Ukraine in any judiciary venue, Russian Foreign Ministry Spokesman Aleksandr Lukashevich said during a news conference on Thursday.

"The choice in favour of a court decision, if that is what the UKrainian side chooses, is not our choice. As the president's press secretary Ms Timakova said, - we will defend our position in any judicial venue".

The Russian President's press secretary Natalya Timakova stated on September 3 that the gas agreement between Russia and Ukraine "must without question be executed and cannot be reviewed unilaterally". "Russia is ready to defend its position on the agreement in any judicial venue and will act strictly in accordance with the document".

At the end of August, Ukrainian Prime Minster Nikolay Azarov said that Ukraine could back out the its gas agreement with Moscow in court. The idea was later repeated be several Ukrainian leaders.

Copyright 2011, Ukroil. All rights reserved.

Russia "considering discount" as gas price for Ukraine prepares to pass $500

http://www.bne.eu/dispatch_text16593

bneSeptember 16, 2011

The price of Russian gas exports to Ukraine is set to rise 12% in the fourth quarter of the year, to leave Kyiv paying �398 per 1,000 cubic metres, a unnamed Ukrainian government source told Interfax on Thursday. Meawhile, Kommersant reports that Russia is ready to consider a further discount as the two countries' presidents prepare to meet in Moscow.

The sharp step up in prices is only likely to harden the stalemate between the two countries over Kyiv's demands to renegotiate the pricing formula in the gas contract between them. Former Prime Minister Yulia Tymoshenko is currently on trial for signing the agreement in January 2009 - just after the last gas war which cut off European customers. The contract sets a base price of $450, which is then multiplied by a factor dependent on time lagged oil prices.

Ukraine receives a $100 discount via the Black Sea Accords of April 2010, and transit fees for shipping Russian exports to the EU are also subtracted. With that in mind, it appears that the price before these elements are included will reach over $500, as Gazprom CEO Alexei Miller suggested would happen in the summer.

Whilst Ukraine stocked up in the first half of the year in a bid to reduce its purchases as prices grew through the second half, the rise will hit just as the heating season starts, which is only likely to increase tensions unless a compromise is found.

"According to preliminary calculations, in the fourth quarter of 2011, the price of gas

imported by national joint-stock company Naftogaz Ukrainy will be around $398 per thousand cubic meters," the source said, before adding that the final price of Russian gas for the fourth quarter would be announced in early October after a thorough calculation of all of the parts of the formula has been performed.

Meanwhile, Kommersant reports that Russia is considering offering a further 30% discount, according to an unnamed source in the Foreign Ministry, as the sides prepare for a meeting between President's Medvedev and Yanukovych on September 24.

Whilst its a positive that the pair will meet to discuss things face to face, illustrating that the tension has eased somewhat since a series of mudslinging via the media in late August/early September, there are no details on the deal that Moscow is considering, save that the paper writes that the agenda of the meeting will include gas prices for Ukraine and cooperation on the Russia-Belarus-Kazakhstan Customs Union. The Russian Foreign Ministry only stated on September 15 that it is ready to defend the current contract in international arbitration should Kyiv take the matter to Stockholm.

Munich Conference Calls for Greater Bi-lateral Relations Between Germany and Russia and for Closer Economic and Political Ties with the EUhttp://www.prnewswire.com/news-releases/munich-conference-calls-for-greater-bi-lateral-relations-between-germany-and-russia-and-for-closer-economic-and-political-ties-with-the-eu-129889018.html

MUNICH, Germany, September 15, 2011 /PRNewswire/ --

European politicians and academics came together to discuss a variety of issues important to EU-Russia relations in light of the forthcoming Russian elections, at an international conference in Munich today. Topics discussed included the current geo-political and socio-economic landscapes in Europe and stability in European society; the Eurozone crisis and Arab Spring and how will the 2012 elections in Russia impact the European agenda.

An international panel stated that although the relationship between Germany and Russia has been strengthened in the past decade both nations, and Europe as a whole, could benefit from closer economic and political ties.

Wolfgang Ischinger, former German Ambassador to the UK and USA, explained how there has been, and continues to be an important shift of global power, and the relative weight of Europe on the global stage will decline further, because of the rise of others." Ischinger added: "This means that reasons for co-operation, financially, politically and economically, will increase not decrease. As a result the shared national interests of Germany and Russia dictates that we should seek out areas of closer co-operation."

"To do so we have to demilitarise our thinking. We don't have to develop defence hardware, on the contrary we have to develop a trusted relationship between Russia and NATO."

"Putin is well known in Europe," he added in an interview after the conference." We don't think that his return as President would be a problem."

Dr Srdja Trifkovic, Foreign Affairs Editor of 'Chronicles' Magazine, further emphasised that "The global re-distribution of power, and the continued crisis in the European Union, means that the EU and Europe must rediscover the benefits of togetherness."

In the wider context of the EU it was argued that there is a greater cause for European nations to build stronger and lasting relationships with one another. The conference addressed important issues including the future role of nations such as Russia and Germany in the global field, with reference to international intervention and economic assistance, discussing what closer ties might involve.

Dr Trifkovic continued: "The likely return of Putin will be beneficial to unlocking the untapped potential of German - Russian relations as well as with other European partners such as France and Italy." He added that this will be necessary in order to set Russia on the path to further modernization and help Russia "realize its full potential."

With the discussion turning to the outcome of the election Dr Mikhail Starshinov, Member of the Russian State Duma, noted how "there would be no surprises," stating how given the strong ratings of Putin it is likely that the parties who are now in power will remain so. "Stability is what Russia requires."

John Lloyd, contributing editor at the Financial Times, discussed how such a result would be received in Europe: "It is obvious to us that Vladimir Putin will come back to the Kremlin. This is stated by both politicians and sociologists. And the West will accept it without discomfort. He is a political and national leader….Putin's popularity remains."

"The impression that Europe is uniformly hostile towards Russia is wrong. In the last decade or so Russia has gone a long way in forming new relationships, through trade, tourism and more," he added.

Organised by the EU-Russia Centre think tank, and the Moscow based Institute of International Integration Studies, the conference, entitled 'The relations between the EU and Russia, expectations from Germany regarding the upcoming elections', was held at the Hotel Bayerischer Hof, Munich, Germany. The panel discussions were moderated by Dr Fraser Cameron of the EU-Russia Centre, who summarised the discussion and noted the reforms and steps taken to modernise by Russia in recent years:  "In the West it is common to imply that Russia's modernization was initiated by President Medvedev. Actually, this is not true. We have to remind everyone that it was Prime Minister Vladimir Putin who became aware of the need for political and economic reform. He did

it long before the article by Medvedev called on Russia to move forward. Moreover, he started these reforms. It is him who has to continue them."

Participants in the panel discussions included Dr Alexander Babakov, Deputy Chairman of the Russian State Duma, Dr Sergey Serebrennikov, Director of Institute of International Integration Studies, Dr Peter Duncan, Senior Lecturer in Contemporary Russian Politics and Society, University College London, John Lloyd, contributing editor at the Financial Times and Helen Teplitskaia, Founder and President of the American-Russian Chamber of Commerce & Industry.

SOURCE The Institute of International Integration Studies

Soyuz lands safely in Kazakhstan, rattles nerveshttp://www.kyivpost.com/news/russia/detail/112940/

Today at 07:38 | Associated Press MOSCOW (AP) — A Russian Soyuz capsule carrying three returning astronauts from the International Space Station has touched down safely in the central steppes of Kazakhstan, but not without rattling nerves after a breakdown in communications.

NASA astronaut Ron Garan and Russian cosmonauts Andrei Borisenko and Alexander Samokutyayev landed some 150 kilometers (93 miles) southeast of the city of Zhezkazgan at 10 a.m. local time (0400 GMT) after 164 days in space.

Repeated calls to the Soyuz TMA-21 capsule from Mission Control in Korolyov, outside Moscow, went unanswered for several minutes, well after the craft had de-orbited.

Communication was eventually established between the crew and an Antonov fixed-winged aircraft flying circling the landing site.

The next launch of a manned Soyuz spacecraft to the space station is scheduled for Nov. 12.

Read more: http://www.kyivpost.com/news/russia/detail/112940/#ixzz1Y5lcIJKC

ISS astronauts land in Kazakhstan, crew in good mood - Mission Controlhttp://en.rian.ru/world/20110916/166883527.html

08:31 16/09/2011

MISSION CONTROL (Moscow Region), September 16 (RIA Novosti)

A special search group on Friday opened the hatch to the Soyuz TMA-21 spacecraft and reported that all three crewmembers returning to Earth from the International Space Station are in good condition.

"The crew descended and landed [on Earth] just fine, the astronauts are in a good mood, and the weather in Kazakhstan where they landed is fine," the rescue group told Mission Control by radio.

The Soyuz TMA-21 spacecraft carrying ISS crewmembers Andrei Borisenko, Alexander Samokutyayev and Ron Garan landed at a designated area in Kazakhstan approximately at 08:00 a.m. Moscow time (04:00 GMT).

The return was originally set for September 8, but the failed launch of a Progress space freighter on August 24 forced the rescheduling.

The spacecraft undocked from the ISS earlier on Friday. Borisenko, Samokutyayev and Garan spent five months on board the orbital station.

The three crewmembers remaining on board the ISS - Russian cosmonaut Sergei Volkov, NASA astronaut Michael Fossum and Japanese astronaut Satoshi Furukawa - are scheduled to return to Earth in mid-November.

U.S.-Russian space trio lands safely in Kazakhstanhttp://in.reuters.com/article/2011/09/16/us-space-kazakhstan-idINTRE78F0LW20110916

10:53am IST

ALMATY (Reuters) - A Russian Soyuz space capsule with three astronauts on board landed safely in Kazakhstan on Friday, NASA television reported.

U.S. astronaut Ron Garan and Russian cosmonauts Andrey Borisenko and Alexander Samokutyaev, who had manned the International Space Station since April, landed on the Kazakh steppe at 0959 local time (0359 GMT).

"We now can confirm that Soyuz TMA-21 has landed," an announcer on NASA television said. He later described a "bullseye landing" 92 miles southeast of the city of Zhezkazgan.

The Soyuz capsule landed on its side, NASA television showed. Samokutyaev was first to emerge, appearing in good spirits as a doctor performed initial medical checks.

Former station commander Borisenko and Garan were later extracted from the capsule, both smiling. The three-man crew had spent 164 days in space, NASA said.

The returning crew's replacements -- NASA flight engineer Dan Burbank and cosmonauts Anton Shkaplerov and Anatoly Ivanishin -- were scheduled to arrive at the International Space Station on September 24.

But their flight was delayed following an August 24 launch accident involving an unmanned Russian cargo ship bound for the station, a recently completed $100 billion project involving 16 nations.

The upper-stage motor that failed on the Russian Progress rocket, causing it to burn up in the atmosphere and shower debris across part of Siberia, is virtually identical to one used to fly crew to the station on Soyuz rockets.

One crew, comprising station commander Mike Fossum, Japanese astronaut Satoshi Furukawa and Russian cosmonaut Sergei Volkov, remains at the station.

They will have little time to prepare the new crew to take over the station before heading home themselves around November 22.

(Reporting By Robin Paxton and Dmitry Solovyov; editing by Philippa Fletcher)

Russia set to launch Glonass-M satellite on Oct. 1http://en.rian.ru/russia/20110916/166878748.html

02:13 16/09/2011

MOSCOW, September 16 (RIA Novosti)

A Russian Soyuz-2.1B carrier rocket has been scheduled to lift off on October 1 to put another Glonass-M navigation satellite into orbit, a Space Forces spokesman said.

The launch has been postponed following two failed space launches in August which led to the loss of a Progress space freighter and the Express-AM4 communications satellite.

"A state commission has set the launch of a Glonass-M spacecraft on board a Soyuz-2.1B carrier rocket from the Plesetsk space center for October 1, 2011," Col. Alexei Zolotukhin said on Thursday.

Russia lost three Glonass satellites last year when a Proton-M carrier rocket veered off course and crashed in the Pacific Ocean in December.

Glonass is Russia's answer to the U.S. Global Positioning System, or GPS, and is designed for both military and civilian uses. Both systems allow users to determine their positions to within a few meters.

Russia currently has a total of 27 Glonass satellites in orbit, although only 23 of them are operational.

The complete Glonass grouping must have 24 operational and 2-3 reserve satellites for the Glonass network to operate with global coverage.

September 16, 2011 10:27

Roscosmos recalls batch of space rocket engines for checkhttp://www.interfax.com/newsinf.asp?id=273620

KOROLYOV, Moscow region. Sept 16 (Interfax-AVN) - The upper stages of Soyuz launch vehicles similar to the one that malfunctioned and led to the recent loss of a Progress space freighter will be returned to their producer for additional checks, including the upper stages of Soyuz ST rockets at the Kourou Space Center in Latin America.

"We will have to recall the entire batch of earlier manufactured engines and to send them back to the plant in Voronezh for more checks," director of the Russian Federal Space Agency (Roscosmos) Vladimir Popovkin said at a news conference at the Mission Control Center.

Plants in Samara and Voronezh will have to examine both the upper stages of Soyuz rockets placed at Russian cosmodromes and the upper stages and engines of Soyuz ST rockets.

"We are now holding negotiations with the European Space Agency on a procedure for their delivery first to the plant in Samara and then the engines to Voronezh," Popovkin said.

These rocket engines will undergo multiple checks and tests, he said.

tm

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

Russia postpones next manned space flight to ISShttp://en.rian.ru/world/20110916/166886061.html

10:24 16/09/2011

MISSION CONTROL (Moscow region)

The Russian Space Agency, Roscosmos, has rescheduled the launch of its next manned mission to the International Space Station (ISS) so that new crewmembers will take off for the station on November 14, the agency's head, Vladimir Popovkin, said on Friday.

One more manned space flight to the ISS has been postponed from December 20 to December 21, Popovkin added.

Three crewmembers of the ISS, Andrei Borisenko, Alexander Samokutyayev and Ron Garan returned to Earth safely on Friday morning. The Soyuz TMA-21 spacecraft carrying ISS crewmembers landed at a designated area in Kazakhstan approximately at 08:00 a.m. Moscow time (04:00 GMT).

The return was originally set for September 8, but the failed launch of a Progress space freighter on August 24 forced the rescheduling.

The three crewmembers remaining on board the ISS - Russian cosmonaut Sergei Volkov, NASA astronaut Michael Fossum and Japanese astronaut Satoshi Furukawa - are scheduled to return to Earth on November 22.

23:47 15/09/2011ALL NEWS

Russia, Norway see new horizons for cooperation

http://www.itar-tass.com/en/c154/226626.html

OSLO, September 15 (Itar-Tass) — The 90th anniversary of the establishment of official trade relations between Russia and Norway falls due this year. A reception was held in this connection at the Russian trade mission in Oslo, one of the five oldest trade missions

Soviet Russia opened abroad. Representatives of the economics ministries and business people of the two countries discussed prospects for further development of cooperation.

“Our countries are neighbors, having common border, and because of the geographic position we had contacts in a number of areas for a long time. These are, certainly, fisheries, shipbuilding, northern trade,” Tamara Chernyshova, the head of the mission, told Itar-Tass. The interest in cooperation reawakened in the recent decades, particularly in the extreme north, she said.

“The delimitation of marine expanses in the Barents Sea that was completed after 40 years of talks means that a new epoch begins,” she said. “The Arctic question is in the order of the day of world politics. There exist mechanisms of constructive cooperation in the region, and Russia and Norway are definite leaders.”

According to Norwegian business people, there exists a large potential for the development of bilateral partnership in shelf development of mineral resources, in transport and in tourism. They regard setting up joint ventures as the most acceptable way of cooperation in large science intensive projects.

Norway at the same time is engaged in developing a strategy of cooperation with Russia between ministries. Norway’s Minister of Trade and Industry Trond Giske said earlier that the five growing economic leaders BRICS (Brazil, Russia, India, China and South Africa) now mean for Norway a new important guide for further development of trade relations.

Atomerergomash buys Czech cooling tower engineer http://www.ceskapozice.cz/en/business/companies/atomerergomash-buys-czech-cooling-tower-engineer

Russian state firm Atomerergomash, a subsidiary of Rosatom, buys stake in Czech provider of industrial cooling systems

Companies|Energy & Green BizTom Jones | 15.09.2011 - 17:06

Atomerergomash, a subsidiary of the Russian state-controlled nuclear agency Rosatom, has acquired a 51 percent stake in Gardea, a.s., the sole owner of Chladicí věže Praha, a.s. — the largest builder and servicer of cooling towers and industrial cooling systems in the CEE region — the Czech company announced in a press release on Thursday.

“By acquiring a controlling stake in Chladicí věže Praha, Atomenergomash has made another step forward implementing its holding structure improvement strategy by adding companies that possess unparalleled production and engineering competencies, which is

also in line with its strategy for integration in the global technological chain,” Atomenergomash CEO Vladimir Kashchenko said.

“This deal [sealed in Prague on Sept 7] will help us to reinforce our positions in Russia and the CIS, our key markets for industrial cooling products, and in other promising regions where Rosatom is present, such as Europe and Pacific Asia” said Chladicí věže Praha’s general director Lukáš Chmel.

Chladicí věže Praha says it is the only company in Central and Eastern Europe to produce micro-coolers, fan cooling towers and manufacture its own cooling technology components. Established in 1951, it delivers complete cooling systems for both traditional and nuclear power plants. The company has built over 80 reinforced concrete cooling towers, including 28 for nuclear plants.

The Russian nuclear engineering company Atomstroyexport, which intends to participate in the multi-billion crown tender to build to two new reactor blocks at the Temelín nuclear plant in southern Bohemia, also belongs to Rosatom. Atomstroyexport claims that if it is awarded the contract, it will provide the more jiobs in the Czech Republic than the other two expected bidders: Japanese-owned  Westinghouse of the US, and Areva of France.

France Lends $14 Billion for Russia Ski Resort, Kommersant Sayshttp://www.bloomberg.com/news/2011-09-16/france-lends-14-billion-for-russia-ski-resort-kommersant-says.html

QBy Ilya Khrennikov - Sep 16, 2011 6:05 AM GMT+0200

Caisse des Depots et Consignations, France’s state bank, may lend as much as 10 billion euros ($14 billion) to finance the development of five ski resorts in Russian North Caucasus, Kommersant reported.

The agreement may be signed today at the Sochi Economic Forum in southern Russia, the Moscow-based newspaper reported, citing people it didn’t identify. The lender may get a 49 percent stake in the project, it said.

Separately, Russia’s state-owned North Caucasus Resorts Corp. may sign a 1 billion euro accord with Korea Western Power Co. on building power infrastructure for the resorts, Kommersant said.

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

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

10:56 16/09/2011ALL NEWS

First business talks take place at Sochi investment forum

http://www.itar-tass.com/en/c154/226869.html

SOCHI, September 16 (Itar-Tass) —— First business negotiations took place at the X Sochi international investment forum on Friday.

First Deputy Governor of the Krasnodar Territory Dzhambulat Khatuov and Italy’s Ambassador to Russia Antonio Zanardi Landi discussed further development of the Russia-Italy economic cooperation in the region, the governor’s press service reported on Friday.

Khatuov said that over recent eighteen months the trade turnover between Kuban and Italy had almost tripled and reached 1.17 billion dollars in 2010.

The ambassador stressed that Italy is interested in expanding investments of Italian businesses in Kuban’s various sectors and in more active participation of companies in big projects in the region. The sectors of interest are tourism /for example, Italians are ready to share experience in first-class ski resorts/, agriculture /including winemaking/, and technologies in construction and industries.

Italian experts may be useful at construction sites of Sochi’s Winter Olympic Games. The region has large-scale programmes to modernise industry and organise modern production. Italian technologies are being used now at Krasnodar’s plant of metal constructions.

“this experience may and should be developed,” Khatuov said.

The sides agreed to continue the dialogue with involvement of businesses from the Krasnodar Territory and from Italy.

The current forum in Sochi features over 7,000 participants – businesses and officials, 35 foreign countries and 60 Russian regions. During the days of the forum, the airport in Sochi will welcome 700 flights – twice more than it served during the forum of 2010.

11:23 16/09/2011ALL NEWS

Unsettled relations with Russia hamper Georgia’s coop with US – deputy PM

http://www.itar-tass.com/en/c154/226896.html

WASHINGTON, September 16 (Itar-Tass) — Unsettled relations with Russia hamper Georgia’s military cooperation with the United States, Georgian Deputy Prime Minister and Minister for European and North Atlantic Integration Georgy Baramidze told Itar-Tass on Friday.

“It is a secret to no one that the United States wants to avoid unnecessary tensions in relations with Russia and it impact, to a certain extent, our military cooperation with Americans,” he said, not specifying however whether he meant the U.S, refusal to sell its arms to Georgia or anything else.

According to U.S. media reports, Georgian President Mikhail Saakashvili asked the U.S. leaders to sell state-of-the-art missile defence complexes and anti-tank weapons. It looks like his requests were not met judging by the fact that certain U.S. lawmakers from time to time voice criticism of the Obama administration over its decision not to sell heavy armaments to Georgia.

Meanwhile, according to the Georgian deputy prime minister, “in general, it does not impede such big projects as training of our soldiers, neither it hinders our cooperation in Afghanistan or issues we are promoting within NATO.”

Georgia “is open for cooperation with the United States” in what concerns efforts to build a European missile defence shield, Baramidze stressed. A number of U.S. Congressmen once keenly advocated Georgia’s involvement in the project. “If the United States is interested in cooperation with Georgia in the area of missile defence, naturally, we will take this issue seriously,” Baramidze said. “However no proposals have come from the United States as of yet.”

In the Georgian government, Baramidze is responsible for Euro-Atlantic integration and often has meeting with U.S. officials to discuss his country’s NATO peospects. “Two or three years will be enough for us to get ready for NATO membership,” he said. “Further developments will depend on NATO itself, which will has to take a political decision to invite Tbilisi into its ranks.”

Baramidze also said his Washington program features meetings at the United States National Security Council, the Department of State, and at the Department of Defence, where he will meet with U.S. Assistant Secretary of Defence Alexander Vershbow.

Patriarch's Hope for 'Miracle' in Georgia-Russia Ties http://www.civil.ge/eng/article.php?id=23936

Civil Georgia, Tbilisi / 15 Sep.'11 / 20:47

Standing beside President Saakashvili in a newly opened church close to the Russian border, head of the Georgian Orthodox Church, Patriarch Ilia II, hinted on the need of talks between the Georgian and Russian leaders.   Ilia II said that the new church in the mountainous Kazbegi district was of special importance, because of its proximity to the border with Russia, which could even serve as a venue “for talks between the heads of states.”

Later in the same speech Ilia II also said: “I think this church will show us a miracle and I think that this miracle will be expressed in [the fact] that our countries will again be in peaceful relationship.”

This part of the Patriarch’s speech was also included in a press release, which the Georgian President’s administration released in connect to Saakashvili’s participation in the ceremony of opening the new church in Dariali gorge. It says: “His Holiness and Beatitude [Ilia II] expressed hope that with the blessing of this church the two countries [Georgia and Russia] will restore relations and the peace will be established again.” Ilia II, whom former U.S. ambassador to Georgia John Tefft described in one of the leaked cables as “astute diplomat”, called on the Georgian and Russian leaders in March “to show wisdom” and launch talks “on various levels” between the two countries.

The Georgian Patriarch met with Russia’s President Dmitri Medvedev in December 2008, when he was in Moscow to attend funeral of Russian Patriarch Alexy II. President Saakashvili at the time hailed the Church’s “diplomatic mission.”

According to a December 2008 confidential U.S. embassy cable, released by WikiLeaks, which details a meeting between then U.S. ambassador and the Georgian Patriarch, Ilia II “expressed his desire to serve a positive role in normalizing and stabilizing relations with Russia.”

16 September 2011, 10:01

Mosque imam killed in Dagestan http://www.interfax-religion.com/?act=news&div=8738

Makhachkala, September 16, Interfax - Zainudin Daiziyev, the imam of a mosque located in the village of Kadar, has been shot dead in the Buinaksk district of Dagestan, a spokesman for the republic's Interior Ministry told Interfax.

Daiziyev was attacked in the village of Chankurbe at around 10:20 p.m. on Thursday.

Two unknown men carrying firearms entered Daiziyev's house and fired several shots at him. The imam died from his wounds.

11:32 16/09/2011ALL NEWS

Lebedev’s lawyers apply for interrogation of Novaya Gazeta editor

http://www.itar-tass.com/en/c154/226910.html

ARKHANGELSK, September 16 (Itar-Tass) — The Arkhangelsk Regional Court starts considering cassation appeal of Platon Lebedev regarding Velsk’s Court turning down of his parole application.

The defence has presented three petitions, including that for interrogation of the Novaya Gazeta’s chief editor, Dmitry Muratov, who had arrived in Arkhangelsk. Earlier, he presented a bail for Lebedev, having promised to employ him as an economy observer in the newspaper.

Besides, the defence insists on filing a document from the Velsk colony, which proves that Platon Lebedev has been working there. Another application, the defence presents, refers to the scientific expertise of the decision, which Judge Raspopov had made. The expertise was made by the Independent Legal-Expert Council, which came to the conclusion that the decision of the Velsk Court contradicts with several provisions of Russia’s Constitution and the Convention for the Protection of Human Rights and Fundamental Freedoms.

Prosecution asked for some time to study the applications.

Chairing Judge Igor Kharitonov promised he would not apply time limits for participants in the court hearings.

“If we do not manage today, we shall continue the work on September 19,” he said.

Putin’s Front Aims to Add 15% to Ruling Party’s Vote in Decemberhttp://www.bloomberg.com/news/2011-09-16/putin-s-front-aims-to-add-15-to-ruling-party-s-vote-in-december.html

QBy Henry Meyer - Sep 16, 2011 9:33 AM GMT+0200

Prime Minister Vladimir Putin’s All-Russia People’s Front is seeking to raise support for his ruling party in December parliamentary elections by as much as 15 percentage points, a senior official said.

“If the front manages to achieve the task it was set up for, that is to consolidate civil society and to listen to the views of people who aren’t in United Russia, the front should be able to add 12-15 percentage points to the overall vote,” Mikhail Babich, deputy leader of the movement, said in an interview in Moscow yesterday.

Putin formed the nationwide coalition of supporters in May amid falling popularity of United Russia, whose rating has fallen close to 40 percent after it won almost two-thirds of the vote four years ago. The prime minister, 58, who handed the presidency in 2008 to his protege, Dmitry Medvedev, hasn’t ruled out a return to the Kremlin. Widening support of the party will bolster his standing, analysts say.

Putin “is our leader, in all senses of the word, our chief ideologue and the person who enjoys the highest rating in the country and the love and respect of the people,” said Babich, who is also a member of United Russia.

Falling Support

The next nationwide parliamentary vote is scheduled for Dec. 4, three months before the presidential election in March. Putin picked Medvedev, a 46-year-old former corporate lawyer, to replace him as president because of a constitutional ban on serving more than two consecutive terms.

While the two men have said they will decide jointly which of them will run for the Kremlin in 2012, advisers to Medvedev have urged him to seek the endorsement of United Russia to secure re-election.

Medvedev has the backing of more educated, urban voters, and “of course the president’s support is important to us so that this electorate will vote for our program,” said Babich.

United Russia’s support fell to 41 percent last week, the Public Opinion Foundation, also known by its Russian acronym FOM, said in a report on its website yesterday. The survey was based on interviews with 3,000 people Sept. 10-11. No margin of error was given. United Russia has a two-thirds majority in the State Duma, or lower house of parliament, after receiving about 64 percent of the vote in 2007.

Medvedev’s approval rating rose to 47 percent, the highest since May, the FOM survey published yesterday showed. Putin’s approval was unchanged at 52 percent.

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

PRESS DIGEST - Russia - SEPT 16http://af.reuters.com/article/commoditiesNews/idAFL5E7KG0RC20110916

Fri Sep 16, 2011 8:08am GMT

MOSCOW, Sept 16 (Reuters) - The following are some of the leading stories in Russia's newspapers on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

VEDOMOSTI

www.vedomosti.ru

- Russia's minister of industry and trade Victor Khristenko could move to head a new ministry formed to oversee a customs union between Russia, Belarus and Kazakhstan.

- Europe's leading home improvement retailer Kingfisher is planning to invest up to $183 million in the next two years to open nine supermarkets for its Castorama unit, six of which will be located in Moscow and its outskirts.

- The number of Russians that approve of President Dmitry Medvedev's performance fell from 60 percent to 54 percent between January and August, Levada polling agency says.

KOMMERSANT

www.kommersant.ru

- Ukraine's President Victor Yanukovich is due to visit Moscow next week to discuss gas prices and the possibility of joining a customs union made up of Russia, Belarus and Kazakhstan, the daily says.

- Russian billionaire Mikhail Prokhorov has accused a top Kremlin official Vladislav Surkov of manipulating the political life of the country.

IZVESTIA

www.izvestia.ru

- Russia's key partners in launching the Skolkovo innovation center are expected to invest up to 135 million euros ($187 million) on salaries and research equipment.

- Evidence of oil leaks affecting Black Sea regions between 20 and 420 square kilometers were discovered several kilometers from Russia's shore line, according to pictures registered by outer space satellites.

- Russia's stock market did not react to the criticism launched by metals magnate Mikhail Prokhorov against the Kremlin and a scandal with his political partners, the daily says.

NEZAVISIMAYA GAZETA

www.ng.ru

- Prokhorov created a situation which has weakened the position of the presidential administration and has raised the chances of Putin winning the presidential race in March, the daily says citing analysts.

- A group of ethnic Greeks living in the Volgograd region has issued an appeal to the Greek parliament inviting it to join Russia's customs' union if the troubled state is forced out of the European euro zone.

ROSSIISKAYA GAZETA

www.rg.ru

- More than 10 percent of Russia's commercial banks do not meet the requirements of the country's banking regulator and some of them could lose their licences next year, according to a central bank official Mikhail Sukhov.

- The government is considering measures to help Russia's companies to return to Libya.

RBK Daily

www.rbcdaily.ru

- Mikhail Prokhorov said on Thursday that he was ready to lead a new political movement which could consolidate his supporters.

- Rosneft Deputy Chairman Alexander Nekipelov has sold half of his stake in the company and may have gained about $200,000 from the sale, the daily says, adding that

the president of the company Edward Khudainatov remains the biggest shareholder among managers. He owns a 0,0047 percent stake.

MOSKOVSKY KOMSOMOLETS

www.mk.ru

- The popular daily says that Prokhorov has disappointed Russia's leaders who "appointed" him to lead a liberal party to parliament, but then tried to declare independence from Kremlin authorities.

- The daily says everyone knows that a plane crash that killed the entire team of Lokomotiv Yaroslavl was caused by the pilot's mistake but aviation authorities refuse to admit the fact. ($1 = 0.722 Euros) (Reporting By Tatiana Ustinova)

Russian Press at a Glance, Friday, September 16, 2011http://en.rian.ru/papers/20110916/166883446.html

08:28 16/09/2011

POLITICS

Russian tycoon Mikhail Prokhorov has been ousted from the post of the Right Cause party leader but the party will continue its run for parliamentary elections in December. (Vedomosti, Izvestia, Moscow News)

ECONOMY & BUSINESS

Russian and foreign companies have invested so far 135 million euros in the Skolkovo hi-tech hub being created near Moscow. (Izvestia)

Gazprom has signed preliminary agreements with South Korea and North Korea on building a pipeline across the peninsula to boost exports to Asia. (The Moscow Times)

Russia will build two additional reactors at the Tianwan Nuclear Power Plant in China to double its capacity. (Rossiiskaya Gazeta)

U.S. software giant Microsoft has announced its revenues in Russia average over $1 billion per year. (Kommersant)

TNK-BP is planning to invest $45 billion until 2020 in the development of oil deposits. (Vedomosti)

Russia’s automotive industry will not be ready to produce electric or alternative-fuel cars for quite a while - interview with AvtoVAZ Vice-President Yevgeny Shmelev (Rossiiskaya Gazeta)

DEFENSE

Belarus may get 18 Su-30K fighter jets sold by Russia to India in the 1990s. The first 10 aircraft are being overhauled at an aircraft plant in Baranovichi and the remaining eight are expected to be brought to Belarus by transport planes in November. (Kommersant)

The Russian Armed Forces will get rid of berets in most of the military branches only six months after their introduction as part of the uniform. They turned out to be uncomfortable and ineffective for most of the servicemen, except paratroopers and naval infantry. (Izvestia) 

CRIME

Investigators have finished questioning a suspect in the murder of Russian investigative journalist Anna Politkovskaya - former police officer Dmitry Pavlyuchenkov. The suspect described in detail the preparation of the attack and suggested that it could have been ordered by Russian tycoon in exile Boris Berezovsky. (Kommersant)

SOCIETY

Moscow has opened its first recreation vehicle camping park, equipped with European standards, as an alternative to mid-class hotels, but most of the parking spaces there remain empty because Russians are still not accustomed to this type of recreational activities. (Moscow News)

Moscow authorities are planning to spend over 328 billion rubles ($10.8 bln) or one-fifth of the 2012 city budget on the development of the transportation system in the Russian capital. (Izvestia)

SPORTSRussia will host the Rugby World Cup Sevens in 2013, a world championship for the condensed seven-a-side format three years before its Olympic debut. (The Moscow Times)

For more details on all the news in Russia today, visit our website at http://en.rian.ru.

Next US ambassador to Russia could face tough confirmationhttp://rt.com/politics/press/rossijskaya-gazeta/usa-russia-mcfaul-moscow/en/

Published: 16 September, 2011, 03:10Edited: 16 September, 2011, 03:17

By Aleksandr Gasyuk

As expected, the US president has submitted his nomination to the US Senate for a new top diplomat to represent Washington’s interests in Moscow. 

Michael McFaul, who is currently the president’s top Russia adviser and senior director of Russian and Eurasian Affairs at the US National Security Council, will soon appear before US senators, many of whom, say US experts, will try to delay the approval process of the new ambassador to Russia and condition it on various political demands made to the White House.   

McFaul’s journey to one of the key positions in the US foreign affairs establishment began from a strictly academic background in 2008. During the course of Barack Obama’s election campaign, the Stanford University graduate and professional expert in Russian language and literature was brought on to serve as the adviser on Russia and Eurasia to the future 44th president of the United States.    

McFaul was never employed with the State Department, but is nevertheless considered one of the most authoritative Russia experts in Washington. Indeed, in addition to his impressive scholarly background – McFaul received his PhD from Oxford University and a long-term fellowship at the Hoover Institution – the future resident of the Spaso House in Moscow also has a great amount of hands-on experience with Russian realities. After visiting our country for the first time as an Oxford University graduate student in 1983, McFaul spent the 1990s actively working at the Carnegie Center in Moscow.     

Reports that McFaul could be the future successor of the current US ambassador to Russia, John Beyrle, began to circulate in the US media in May. The matter was discussed during Obama and President Dmitry Medvedev’s last meeting at the G8 summit – at the time, Moscow issued an unofficial approval for the nomination. 

According to Rossiyskaya Gazeta’s (RG) experts, for McFaul, this turn of events came somewhat as a surprise, because his original plans included a return to his alma mater and a continuation of his academic work at Stanford University. In the end, the unofficial author of the US-Russian “reset” – in Washington, McFaul is being credited as a successful theoretician and practitioner of Russia policy – could not decline the US president’s proposal to travel to Moscow to continue the “reset” policy. 

It is no secret that it will now be much harder for the new US ambassador to Russia to progressively develop relations between Washington and Moscow. The remaining differences on missile defense, the stalling of Russia’s accession to the WTO, and removal of the Jackson-Vanik amendment will be some of the main issues which McFaul will be forced to deal with in the near future.   

On the eve of Vice President Joe Biden’s visit to Moscow in March, McFaul told RG that the Jackson-Vanik amendment is being considered in the White House as an issue “related to Russia’s accession to the WTO, but the two are not linked.”

“We have previously stated that we plan to remove the amendment in the near future,” he said. “We will plan for this, and this discussion will be related to the promotion and completion of Russia’s final negotiations on accession to the WTO.”

During Russian Foreign Affairs Minister Sergey Lavrov’s visit in July to Washington, McFaul told RG at a joint press conference of Russian and US foreign affairs representatives that he is confident that mutually beneficial agreements on missile defense will be made. However, to the question of whether or not we should expect to see any progress on this issue before he assumes his new position, McFaul jokingly responded that “this depends on how long it takes for the senators to approve my candidacy.” 

Meanwhile, McFaul’s confirmation hearings in the Senate could indeed become complicated and could possibly extend over several months. Obama’s political opponents on Capitol Hill do not deny that they are seeing the presidential nomination of the new ambassador to Moscow as an excellent opportunity to “undermine” the US administration on the foreign policy front in general, and its Russia policy in particular.

AMD ‘un-resets’ Washington’s relations with Moscowhttp://rt.com/news/amd-moscow-race-russia-683/

Published: 16 September, 2011, 02:50Edited: 16 September, 2011, 07:51

Russia has repeatedly voiced its concern about the US missile defense program in Europe. Journalist Pepe Escobar, while doubting the system’s capabilities, says Moscow has every right to be worried.

Escobar, a correspondent with Asia Times Online, declared that the recent anti-missile defense agreement the US signed with Romania was “un-resetting the relationship” with Moscow.

“Nobody knows if the anti-missile defense works,” he told RT. “It is a multi-billion, almost trillion, dollar program. It is typical of keeping the industrial-military complex running.”

The story has not changed over the last 10 years – Washington is still trying to encircle Russia, claimed Escobar. And Russia’s concerns that the shield is aimed against it are absolutely valid, he said.

“Some of the best military strategists in the world are in Russia,” says Escobar. “They know that Iran, first of all, does not have the capabilities to attack Europe even if they wanted to. And, number two, they may be a very hard line regime, but they are not suicidal. So this excuse against Ahmadinejad is ridiculous.”

The potential for an arms race depends on Russia’s reaction to Washington, he predicted. The AMD tests have not been successful so far, so anything really dangerous for Moscow is not expected to emerge from the system for at least seven years, he concluded.

Builders will take into account the threat of terrorismhttp://rt.com/politics/press/izvestiya/builders-threat-buildings-security/en/

Published: 16 September, 2011, 00:07Edited: 16 September, 2011, 00:11

By German Petelin

Russian cities will turn into secured localities with checkpoints after the counterterrorism regulations for builders come in effect on September 20. The document obliges architects, builders and developers to consider the protection of buildings against the threat of terrorism at the design stages. Naturally, the new initiative will have an effect on construction costs.      

The document, titled “On Ensuring Counterterrorism Protection of Buildings and Structures: General Design Requirements,” was developed by the Ministry of Regional Development together with the FSB, the Interior Ministry and the Federal Protective Service (FSO) at President Dmitry Medvedev’s request after the January 2011 terrorist attack at Domodedovo Airport.

“For now, the code is voluntary and advisory in nature. But already in October, it will be included in the list of mandatory national construction standards,” a representative of the

Regional Development Ministry told Izvestia. According to the source, the code was written from scratch.

Similar rules for the protection of buildings against the threat of terrorism did not exist in the past.    Now builders will need to develop possible threat models and counteractive measures at the design stages. They must also design a mass evacuation system.

The document divides all structures and buildings into three threat categories. According to its developers, the first and highest threat category includes seaports, train stations, airports and high-rise buildings, as well as museums, theaters, hospitals, business centers and other structures with a maximum capacity of more than 50 people. The damages sustained from a terrorist attack on these facilities could be on a federal scale.  

Facilities with a total maximum capacity of fewer than 50 people are included in the second category. The third includes temporary structures.

For facilities in the first category, builders will need to consider things such as location for security desks and surveillance units, a place for special equipment and security systems, including gas analyzers and explosive vapor detectors, as well as metal detectors.  

Moreover, if needed, buildings will need to have a protected security area and all structural connections will need to be equipped with video cameras and lighting systems. The adjacent areas need to be surrounded by a fence to prevent car bombs from entering the premises.

Buildings in the second and third category will be designed without security desks, gas analyzers and explosive vapor detectors, but will include surveillance cameras and emergency communication and alarm systems. 

The chairman of the State Duma Security Committee, Vladimir Vasilyev, says that these regulations should have been introduced a long time ago.

“If these rules had been in force, then the fire in the Khromaya Loshad (Lame Horse) café would have claimed far less victims,” he said. “Many terrorist attacks would have been prevented.”The deputy believes that owners of culture and entertainment establishments and directors of schools and state organizations should also ensure security." It is ideal, he said, when protective measures are developed at the early design stages. 

“The law under which facility owners must ensure their protection against the threat of terrorism has already been approved in its first State Duma reading,” stated Vasilyev. “The code of practice developed by the Ministry of Regional Development outlines how this protection should look like.”

Meanwhile, the business community has objected to the new initiative. According to the Ministry of Economic Development, counterterrorism protection of all facilities under construction in 2012 will cost between 27 billion rubles and 173 billion rubles. According to Sergey Gnedovsky, vice president of the Union of Architects, counterterrorism measures will lead to rising construction costs, and the code of practice itself leaves room for corruption.

“The new regulations place the responsibility for security on investors and builders, while the officials are getting new sinecures,” said Gnedovsky. “Now officials will be taking bribes for approval of designs in accordance with counterterrorism measures.”

Meanwhile, says the architect, Russian builders are already designing all buildings with due consideration to the threat of terrorism. For example, even residential housing walls are molded with reinforced concrete able to withstand artillery bombardment. And in the event of military hostilities, underground parking garages could serve as bomb shelters.

National Economic Trends

September 16, 2011 12:16

Capital outflow from funds investing in Russian and CIS shares comes to $315 mln for week of Sept 8-14 – EPFRhttp://www.interfax.com/newsinf.asp?id=273670

MOSCOW. Sept 16 (Interfax) - Capital outflow from funds investing in Russian and CIS shares continued and came to $315 million for the week of September 8-14 in comparison with $128 million in outflow for the previous week, according to Emerging Portfolio Fund Research (EPFR).

Total capital inflow to Russian funds between the start of 2011 to September 14 came to $1.453 billion.

According to an analytical note from Uralsib Capital, capital outflow from emerging market funds came to $21.9 billion. Russia is the sole emerging market with net inflow for the period, totaling $1.45 billion.

Ih

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

CBR's reserves decreased on currency revaluation - EUR and GBP depreciation against USD explains much of the decline

http://www.bne.eu/dispatch_text16593

VTB CapitalSeptember 16, 2011

News: CBR's international reserves decreased USD 4.6bn in the week ending 9 September to USD 538.8bn, having increased USD 59.4bn YTD.

Our View: We estimate that the combined currency, gold and bond portfolio revaluation explains much of the decrease in CBR's reserves (about USD 3.8bn). EUR and GBP depreciation against USD shaved approximately USD 4.8bn, while the hike in SDR prices and bond portfolio revaluation added only USD 0.2bn.

Thus, given the BASKETRUB performance that week (it fluctuated in the 34.50- 35.10 range) and a possible deviation from the model results due to the absence of a detailed breakdown of CBR's bond portfolio, we suggest that the regulator probably did not intervene on the FX market during the first week in September.

Russia rouble is neither overvalued nor undervalued-cbankhttp://www.reuters.com/article/2011/09/16/russia-cbank-idUSL5E7KG0MM20110916

3:36am EDT

SOCHI, Russia, Sept 16 (Reuters) - The Russian central bank does not believe that the rouble is overvalued or undervalued and is satisfied with its the current trading band, the central bank first deputy chairman Alexei Ulyukayev said on Friday.

"There is no basis to consider the rouble overvalued or undervalued," Ulyukayev said when asked to comment on the Economy Ministry's position.

Deputy Economy Minister Andrei Klepach told the Reuters summit in Moscow that the rouble is significantly overvalued, pushing Russia towards a current account deficit in the medium term.

Ulyukayev told an investment summit in Sochi that the central bank is "satisfied" with the rouble trading band which now stands at 32.15-37.15 versus the euro-dollar basket .

He also said that in September-December the balance of capital flows "will be approximately neutral." (Reporting by Katya Golubkova; Writing by Andrey Ostroukh)

INTERVIEW: Ctrl bank sees no need to narrow interest rate rangehttp://www.prime-tass.com/news/interviews/-202/%7B7F7DB33E-8C7B-4E9C-81DB-96672A486AF7%7D.uif

Interview with CBR First Deputy Chairman Alexei Ulyukayev

MOSCOW, Sep 15 (PRIME) -- The Central Bank of Russia (CBR) sees no need to further narrow its interest rate range, CBR First Deputy Chairman Alexei Ulyukayev said in an interview with PRIME Thursday.

On Wednesday, the CBR’s board of directors decided to increase rates on its deposit operations with fixed terms by 0.25 percentage points to 3.75%, and to decrease rates on some operations with liquidity by 0.25 percentage points to 5.25% effective Thursday.

Thus, the range between the bank’s interest rates narrowed to 150 basis points from the previous 200 basis points, Ulyukayev said.

“It is possible to take further steps in this direction, while we (the CBR) are not setting ourselves such a goal. I think 150 basis points are quite an acceptable and effective corridor,” Ulyukayev said.

He added that the narrowing of the CBR’s interest rate range is aimed at improving governance over the rates.

Ulyukayev said that in June–July, the CBR had shifted down the limits of the Russian ruble’s trading band against the dual-currency basket to 32.15 rubles–37.15 rubles from the previous 32.25 rubles–37.25 rubles.

“The current band is 32.15 rubles–37.15 rubles. Yes, we shifted (the limits) in June–July, while there are no movements in August–September,” he said.

Speaking about inflation, Ulyukayev said that the CBR expected Russia’s consumer price inflation at the officially projected level of 7.0% in 2011. At the same time, the growth of consumer prices in Russia is expected to slow to about 5.0%–6.0% in 2012; 4.5%–5.5% in 2013; and 4.0%–5.0% in 2014.

“…we are only targeting (the country’s) inflation rate. This is our only quantitative target,” Ulyukayev added, saying that the central bank planned to fully switch to a regime of inflationary targeting and Russian ruble free floating in 2012–2014.

The CBR’s board of directors approved Wednesday the bank’s draft monetary police envisaging switching to this regime, Ulyukayev added. He said that the document is expected to be considered by the Russian government on September 20.

“It is crucially important that this document states that we are going to complete switching to inflationary targeting and mechanisms of the ruble free floating,” Ulyukayev said.

Meanwhile, Ulyukayev said that the central bank still plans interventions on the domestic exchange market, which are to be aimed at eliminating the excessive volatility on the market.

The central bank also expects Russia’s money supply calculated under the M2 aggregate formula to decrease by around 13%–20% annually in 2012–2014, Ulyukayev said, adding that Russia’s foreign exchange and gold reserves are also not expected to increase in this period.

The national-definition M2 aggregate includes cash in circulation and Russian residents’ ruble accounts with Russian banks.

He added that the CBR sold about U.S. $200 million on the domestic market in the week starting September 12.

“We sold currency in small volumes twice this week – about $100 million each time,” Ulyukayev said.

He added that the CBR did not make any interventions on the domestic currency market from the beginning of September until the week starting September 12. “There were neither purchases, nor sales,” he said.

Ulyukaev said earlier in September that CBR net purchases of U.S. dollars amounted to $500 million in August, down about 87% on the month.

End

15.09.2011 19:35

World Bank warns of impending economic crisis in Russiahttp://rt.com/news/prime-time/world-bank-russia-crisis-651/

Published: 15 September, 2011, 20:56Edited: 15 September, 2011, 20:56

The World Bank is warning Russia that it will face another economic crisis as early as 2012 if the current global slowdown does not reverse.

The organization has cut Russia’s GDP growth forecast from 4.4 to 4.0 percent in 2011. GDP growth for 2012 is estimated at 3.8 percent.

The main reason for the downturn could be lower demand for oil; it is expected that oil prices will fall to $80 by 2012. As the world’s largest energy exporter, Russia will acutely feel the consequences.

Among other reasons are “downside risks to global growth and commodity prices” which have risen sharply since August, as well as “the impact of external conditions on domestic demand.”

The World Bank cut growth forecasts for Russia on Thursday. The bank said that it was cutting Russia’s GDP growth prognosis based on lower commodity prices and increased global uncertainty.

Economists, however, do not say Russian economy’s prospects in the near future are particularly gloomy.

“This could put Russia in a far stronger fiscal situation,” Zeljko Bogetic, the World Bank’s lead economist for Russia, told RT. “It will be able to respond much more powerfully to new shocks.”

“Everything in Russia depends ultimately on oil prices,” Yaroslav Lissovolik, chief economist at Deutsche Bank Russia, told RT. “Currently oil prices are relatively high, despite the global turmoil and nervousness in the financial market. This is a very comfortable spot for Russia in terms of budget. We’re quite some way from the abyss.”

World Bank Cautions Russia About Oil Shock http://www.themoscowtimes.com/business/article/world-bank-cautions-russia-about-oil-shock/443851.html

16 September 2011

By Irina Filatova

The domestic economy could shrink 1.5 percent next year if global oil demand falls sharply following a recession in Europe or the United States, the World Bank said Thursday.

The bank suggested three possible scenarios for the country's economic development in 2011 and 2012, with the severe shock scenario being the worst-possible case.

"The risks to the global economy are growing and so are the risks to Russia's growth," the World Bank said in a report. "The sharply rising uncertainties in the global economy call for thinking through alternative scenarios and their implications for the Russian economy," the report said.

Under the worst-case scenario, contraction in global demand is likely to result in oil prices sliding to $60 a barrel next year and Russia entering a recession, with unemployment rising to 7.5 percent and the budget deficit reaching about 5.3 percent of gross domestic product.

Such a situation "would clearly require measures to correct the budget" to finance the gap, said Zeljko Bogetic, the World Bank's chief economist for Russia.

This is, however, the least-probable scenario, since oil prices are likely to show a gradual decrease, he told a news conference in the World Bank's Moscow office Thursday.

"A new recession is still unlikely. … We expect a slow decrease of oil prices, which will exert a certain pressure on the budget," Bogetic said.

In the base case, the most-likely scenario, the country's economy will grow 4 percent growth this year — below the Economic Development Ministry's forecast of 4.1 percent — and by 3.8 percent in 2012.

The ministry expects the country's economy to grow 3.7 percent next year.

Although the major risks for Russia lie outside the country and are linked to the euro-zone debt crisis and the slowdown of the U.S. economy, "the country's short-term economic situation remains favorable because of high oil prices with an almost balanced budget this year," the World Bank said.

Under its base-case scenario, oil prices are expected to be $105 a barrel this year and fall slightly to $95 next year.

The country's budget deficit is projected to be 0.2 percent of GDP this year and reach 1.6 percent of GDP in 2012, while the unemployment rate will be 6.6 percent and 6.3 percent, respectively.

The Word Bank's budget deficit forecast for next year is almost in line with that of the Finance Ministry, which is aiming for a balanced budget this year, while the forecast for next year's deficit is 1.5 percent of GDP.

But Prime Minister Vladimir Putin said earlier this week that attaining a balanced budget in 2012 is key for the government.

"The estimates for next year are preliminary. I believe that the positive dynamic in the economy will allow these figures to be adjusted in the future to attain a balanced budget," he said at the government's budget commission meeting.

Despite the favorable economic situation, Russia is likely to face "middle-term and long-term challenges" because of higher budget expenditures, Bogetic said.

Russia's "significant downside risks are associated with global demand and highly volatile oil prices, and new expenditure pressures from the planned modernization of the army, spending on infrastructure and additional social spending, especially during the election period," the World Bank warned in the report.

The government plans to spend 1.8 trillion rubles ($59 billion) on defense next year, with the figure growing to 2.8 trillion in 2014, according to the projected federal budget on the Finance Ministry web site.

Social spending will grow from 3.8 trillion rubles in 2012 to 4.1 trillion rubles in 2014.

The government plans to consider the final version of the budget in the next several days and send it to the State Duma by Oct. 1.

The World Bank also presented a moderate shock scenario, involving oil prices of $100 a barrel this year and $80 percent a barrel in 2012.

This could result in Russia's economy showing modest growth of 3.5 percent and 2 percent in 2011 and 2012, respectively, with unemployment reaching 7 percent next year.

The budget deficit would stand at 0.5 percent this year, expanding to 3.1 percent in 2012.

"It's a significant worsening of the budget situation, but, according to our estimates, it would be a working situation, because it would be possible to finance such deficit," Bogetic said.

A possible option for financing the 2012 budget gap would be using money from the Reserve Fund and domestic borrowing, he said.

Meanwhile, even in the worst-case scenario, growth in domestic consumption is expected to support the country's economy, Bogetic said.

"We expect consumption growth to remain positive, even in the case of a recession," the World Bank said in the report.

The World Bank's forecast followed more optimistic projections by the International Monetary Fund, which expects Russia's economy to grow 4.8 percent this year, slowing to 4.5 percent in 2012.

Russia is facing growing risks amid the uncertainty on the global market, but the country could benefit from high oil prices, the IMF said Wednesday.

"High commodity prices create a window of opportunity to embark on bold and decisive reforms to strengthen growth prospects over the medium term," it said in a report.

The IMF called for the government to focus on reducing fiscal vulnerability, lowering inflation, strengthening the banking system and improving the investment climate, saying the country has a good chance to "introduce the reforms to support stronger growth" in the next 10 years.

Read more: http://www.themoscowtimes.com/business/article/world-bank-cautions-russia-about-oil-shock/443851.html#ixzz1Y69B7qxW The Moscow Times

RTS Futures Advance as Mechel, Yandex Climb Following ECB Lending Proposalhttp://www.bloomberg.com/news/2011-09-16/rts-futures-advance-as-mechel-yandex-climb-following-ecb-lending-proposal.html

QBy Belinda Cao - Sep 16, 2011 7:34 AM GMT+0200

Russia’s RTS futures rose, indicating the measure in Moscow may advance for the third day this week, as joint European and U.S. efforts to support banks bolstered the global economic outlook and helped lift shares of OAO Mechel (MTLR) and Yandex NV.

Futures on the dollar-denominated index expiring in December rose 0.3 percent to 157,685 yesterday, after the RTS index in Moscow jumped 2.1 percent to 1603.39, and the 30-stock Micex Index (INDEXCF) gained 1.4 percent to 1,525.28, its third day of increases. OAO Surgutneftegas climbed to a six-week high in New York after UniCredit SpA upgraded the stock to a “buy” on expectations the energy producer will benefit from tax changes. The Micex may rise 0.5 percent at the start of trading today, according to Alfa Bank.

Equities in Europe and the U.S. rallied yesterday after the European Central Bank said it would work with the Federal Reserve to ensure lenders have enough dollars amid the euro area debt crisis. Europe is Russia’s biggest trading partner and the largest market for natural gas export monopoly OAO Gazprom. Fed Chairman Ben S. Bernanke said last month that the Fed still has tools to stimulate the economy.

The increase in the RTS futures was due to “the concerted central bank intervention in money markets and the prospect of a new round of quantitative easing in the U.S.,” Julian Rimmer, a trader of Russian shares at CF Global Trading in London by e- mail, referring to the Fed’s bond buying policy. “A lot of people recognize the opportunity for a short-term reversal.”

Gazprom Futures

Futures on Moscow-based Gazprom, the world’s largest gas producer, rose for the third day, adding 0.1 percent as crude prices advanced 0.6 percent to $89.40 a barrel in New York. The contracts for OAO Lukoil, Russia’s biggest non-state oil producer, gained 0.2 percent.

In the U.S., the Standard & Poor’s 500 Index advanced for a fourth day, adding 1.7 percent to 1,209.11, the highest since Aug. 31. The Dow Jones Industrial Average also gained a fourth day, rising 1.7 percent to 11,433.18.

European finance ministers will meet in Poland today to discuss expanding the euro region’s new bailout fund for debt- stricken nations. U.S. Treasury Secretary Timothy F. Geithner will attend the summit to urge leaders to step up their efforts amid concern that the region’s woes may hurt the U.S. economy.

United Co. Rusal, the largest aluminum producer, slid 1 percent to HK$7.98 in Hong Kong trading as of 11:16 a.m. local time.

Oil Export Duty

The Bloomberg Russia-US 14 Index of Russian companies fell for the third day this week, slipping 0.4 percent to 279.0387. The American depositary receipts for Gazprom slid 1.4 percent to one-month low of $10.86, after dropping 0.1 percent to 166.01 rubles on the Micex. Lukoil’s ADRs lost 0.9 percent to $57, and gained 0.2 percent to 1734.10 rubles in Moscow.

Russia may reduce its export duty on most oil shipments by 7.4 percent on Oct. 1, after Prime Minister Vladimir Putin urged a tax measure to spur production, according to Bloomberg calculations based on Finance Ministry data.

Oil and gas explorer Surgutneftegas’s ADRs soared 2.5 percent to $4.95 yesterday after the upgrade from UniCredit SpA. Yandex, operator of the most popular Russian search

engine, climbed 2 percent to $29.74 while Mechel (MTL), the nation’s largest producer of coking coal, added 1.5 percent to $15.97 in New York trading.

The RTS Volatility Index, which measures expected swings in the index futures, declined 4.7 percent to 45.3 points. The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, climbed 0.8 percent to $31.45.

Members of the Bloomberg Russia-US 14 Index:

CTC Media Inc.OAO Gazprom NeftOAO LukoilOAO Mobile TeleSystemsOAO MechelOAO GMK Norilsk NickelOAO GazpromOAO Polyus GoldOAO RostelecomOAO RusHydroOAO SberbankOAO SurgutneftegasVimpelCom Ltd.Yandex NV

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Business, Energy or Environmental regulations or discussions

Gazprom, Polymetal, Polyus, Russian Sea: Russian Equity Previewhttp://www.bloomberg.com/news/2011-09-15/gazprom-polymetal-polyus-russian-sea-russian-equity-preview.html

QBy Ilya Khrennikov - Sep 15, 2011 10:01 PM GMT+0200

The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index rose for a third day, adding 1.4 percent to 1,525.28. The dollar-denominated RTS Index added 2.1 percent to 1,603.39.

OAO Gazprom (GAZP RX): The Russian natural-gas producer and Eni SpA are set to sign an agreement on the South Stream pipeline project to Europe with new participants Electricite de France SA and BASF SE in Sochi. Gazprom fell 0.1 percent to 166.01 rubles.

OAO Polymetal (PMTL RX): Gold dropped to a two-week low on signs that European banks will have enough cash through yearend, easing concern that the region’s debt crisis will worsen and eroding demand for the metal as an alternative asset. Silver also fell. Polymetal declined 0.7 percent to 598.70 rubles. Its rival, Polyus Gold International Ltd. (POLG LI), rose 0.9 percent in London to $3.45 a depositary receipt.

OAO Russian Sea (RSEA RX): The country’s largest producer of branded fish and seafood products is scheduled to report first-half earnings. Russian Sea fell 1.3 percent to 86.64 rubles.

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

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

10:37 16/09/2011ALL NEWS

Japan’s leading bank concludes agt on coop with Sberbank

http://www.itar-tass.com/en/c154/226851.html

TOKYO, September 15 (Itar-Tass) —— One of the leading banks in Japan Mizuho Corporate announced on Friday that it had concluded an agreement with Sberbank, which is first of all aimed at financing of Japanese investment projects in Russia. This undertaking, as a report of the corporation issued in Tokyo says, will most widely service Japanese clients beginning their activity in Russia.

“The agreement,” the document says, “is first of all aimed at cooperation in financial support of Japan’s firms in Russia.” The question is, in particular, of organizing for them a system of money transfers in roubles, financing trade and investment operations.

As the Toyo press reported, Mizuho would also like to get an access to the clients’ network of Sberbank - - the Russian biggest bank. The corporation plans to acquaint Japanese companies, which are interested in purchasing assets in Russia or creating joint ventures there, with these data. At present, about 300 firms from Japan are working in Russia already.

Mizuho Corporate is working in Russia since January 2008 when it bought a unit of the regional bank Minooka - - the pioneer of Japan’s financial business in the Russian market - - set up there back in 1999. Two other bank giants of Japan - - Tokyo-Mitsubishi UFJ and Sumitomo-Mitsui also have their daughter companies in Russia.

Uralkali Refinances $1 Billion Loan From Sberbankhttp://www.foxbusiness.com/industries/2011/09/16/uralkali-refinances-1-billion-loan-from-sberbank/

By Alexander Kolyandr

Published September 16, 2011

| Dow Jones Newswires

MOSCOW -(Dow Jones)- Russia's largest fertilizer producer OAO Uralkali (URKA.RS) said Friday it has secured a $1 billion loan from a group of international banks to refinance an earlier loan from Russian bank OAO Sberbank (SBER.RS).

The five-year loan has interest of LIBOR plus 180 basis points. The lead arrangers of the loan facility are Unicredit Group and ING Bank N.V.

"The new deal will allow us to make our credit portfolio more balanced with longer durability, less currency risks and lower average interest rate that will now amount to about 3%," Viktor Belyakov, Uralkali Chief Financial Officer, said.

The Sberbank loan was used for the acquisition of the license for the development of the Polovodovsky block of the Verkhnekamskoe potash and magnesium salt deposit.

Copyright © 2011 Dow Jones Newswires

Read more: http://www.foxbusiness.com/industries/2011/09/16/uralkali-refinances-1-billion-loan-from-sberbank/#ixzz1Y6AlV9PE

Uralkali taps $1bn syndicated loan

http://www.rbcnews.com/free/20110916104150.shtml

      RBC, 16.09.2011, Moscow 10:41:50.Uralkali has signed an agreement to take out an up to $1bn syndicated loan, the major Russian potassium fertilizer producer announced today.

      The lead managers of the loan are Unicredit Group and ING Bank N.V. The credit line carries a five-year term with an interest rate of LIBOR +1.8%.

      The funds will go towards refinancing a $1.5bn loan provided by Sberbank to Silvinit in October 2009 in order to buy a license for the Polovodovsky block of the Verkhnekamskoye potassium-magnesium salt field in the Perm Region. Uralkali merged with Silvinit in June.

MTS BoD greenlights takeover of MGTS

http://www.rbcnews.com/free/20110916105815.shtml

      RBC, 16.09.2011, Moscow 10:58:15.The board of directors of major Russian telecommunications operator Mobile TeleSystems (MTS) has approved a transaction in which MTS will consolidate 94.1% of share capital of fixed-line operator Moscow City Telephone Network (MGTS), MTS said in a statement late Thursday.

      Under the terms of the transaction, MTS' subsidiaries will buy 100% of Sistema Inventure, which owns 29% of voting shares or 24.2% of share capital in MGTS, from diversified holding AFK Sistema for RUB 10.56bn (approx. USD 346m). Sistema Inventure owes RUB 10.44bn (approx. USD 342m) to AFK Sistema.

      MTS currently owns 69.96% of voting shares or 69.93% of share capital in MGTS. AFK Sistema owns 52.8% of MTS.

Abrau-Durso champagne maker keeps IPO plans despite volatilityhttp://en.rian.ru/business/20110916/166887111.html

11:05 16/09/2011

SOCHI, September 16 (RIA Novosti)

Russia's leading premium sparkling wine producer Abrau-Durso has not changed its plans on an initial public offering at the end of 2011 or start of 2012 despite market volatility, the company's sole owner Boris Titov said on Friday.

Abrau-Durso, founded in 1898, will sell 15 percent of its shares on the Moscow Interbank Currency Exchange, Titov told reporters on the sidelines of an investment forum.

"We are offering a rather small stake, we need to fix our value. We would not even do a road-show. We need the IPO not to raise money for financing but to fix our value," said Titov adding the company has prepared its financial results for the IFRS.

An Abrau-Durso spokesman earlier said the company was valued at $100 million and the funds raised in the IPO would be used to develop production capacities and vineyards.

In early September, Titov's companies consolidated 100 percent of Abrau-Durso using a 500-million ruble loan ($16.4 million).

"To maintain normal ratios, we need to issue 500 million rubles worth of shares. We will do it either together with the IPO or first issue shares and then do the IPO," Titov said.

Novaport's IPO efforts target operationshttp://rt.com/business/news/novaport-ipo-smirnov-airport-637/

Published: 15 September, 2011, 16:25Edited: 15 September, 2011, 16:25

Russia’s largest private airport holding, Novaport, is planning to hold an IPO in 2015-2016, the company’s general director, Mikhail Smirnov, briefed journalists on Thursday in Novosibirsk.

"The development of Novaport's network includes the acquisition of two or three airports in the next five years. Our company is still consolidating purchases, unifying budget standards and carrying out strategic planning. We plan the IPO for around 2015-2016," Smirnov said.

Novaport plans to take part in a tender for the state stake in Samara's Kurumoch Airport with an official application to be submitted later this year.

“We are planning to submit our application in November. The application will include the company’s offer for the state stake, as well as its investment plans for the airport's

development.” Smirnov confirmed.   

With an aggressive strategy focused on the development of a passenger and cargo hub, the company expects to increase the volumes of cargo operations as well as passenger throughput and obtain operational efficiency in other locations, noted Smirnov.

“The company's strategy for Novosibirsk includes the development of stop-off points on routes between Southeast Asia and Europe. Novaport’s strategy for other airports foresees boosting operational efficiency, raising the share of navigation services and creating flexible conditions for airlines. It is our main target to reach a throughput of 5.122 million passengers at airports under Novaport’s control this year while total cargo throughput could reach 39.4 million tons. The company's sales revenue is expected to top 8 billion roubles.” Smirnov explained.

Novaport manages 38% of the shares in Tolmachevo Airport, 48% of the shares in Altai (Barnaul) Air Company, 74.9% in the managing company of Tomsk Airport and 100% in the Kadala Airport in Chita. Novaport also manages airports in Chelyabinsk and Astrakhan.

Activity in the Oil and Gas sector (including regulatory)

16.09.2011

Crude Supplies to Russian Refineries Declinehttp://www.oilandgaseurasia.com/news/p/0/news/12974

Since the beginning of the month through September 14, 10.0832 million tons of crude has been supplied to Russian refineries, or 509,500 ton less than in the same period in August of this year.

Primary refining hit 8.8659 million tons, down 509,000 tons on the same period in the previous month.

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

September 16, 2011 12:01

Rosneft, Lukoil move determination of joint projects to year-endhttp://www.interfax.com/newsinf.asp?id=273660

SOCHI. Sept 16 (Interfax) - Rosneft (RTS: ROSN) and Lukoil (RTS: LKOH) have pushed back their listing of joint projects to the end of this year, Lukoil chief Vagit Alekperov told the press.

"We have extended the timeframe to the end of the year," Alekperov said.

The negotiation process is not going smoothly, he said, and is complicated by the fact that existing law does not provide investors with the opportunity to have licenses reissued to joint ventures when Russia's continental shelf features in.

As reported, the two companies have inked a long-term cooperation agreement to unite forces in exploration and prospecting, development and transport of raw hydrocarbons at licensed sections in the Nenets autonomous district, geological prospecting at sections licensed to Rosneft on Russia's continental shelf, and the development of already-open deposits in accordance with existing Russian law.

Rosneft and Lukoil had been looking to work up final options for working together with specific calculations before September 1.

Cf

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

September 16, 2011 11:34

Lukoil interested in production assets, eyes U.S., Vietnam – Alekperovhttp://www.interfax.com/newsinf.asp?id=273649

SOCHI. Sept 16 (Interfax) - Russian oil major OJSC Lukoil (RTS: LKOH) is interested in the purchase of extraction assets, and is looking at potential buys in the United States and Southeast Asia, company chief Vagit Alekperov told reporters.

"We are discussing a range of new proposals, particularly in the United States, in Vietnam, and in Southeast Asia. The company is interested in acquiring extraction assets and developing geological prospecting work," Alekperov said.

Cf

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

LUKoil may buy foreign production assets by end of '11http://en.ria.ru/business/20110916/166888502.html

11:55 16/09/2011

SOCHI, September 16 (RIA Novosti)

Russia's largest private oil company LUKoil may purchase production capacities abroad by the end of the year, its head, Vagit Alekperov, told reporters on Friday.

"We are interested in buying Upstream assets in the United States, Vietnam, and Southeast Asia. The company is interested in the acquisition of assets, including geological exploration," Alekperov said.

When asked whether the acquisitions could be done by the end of 2011, he said: "Yes, I think so."

Alekperov has previously said LUKoil expected to invest $25 billion in oil refining and petrochemistry in the next 10 years.

Sept. 16, 2011, 4:28 a.m. EDT

Lukoil CEO hopes to start Iraq drilling by end '11http://www.marketwatch.com/story/lukoil-ceo-hopes-to-start-iraq-drilling-by-end-11-2011-09-16

By Nadia Popova

MOSCOW (MarketWatch) -- Russian oil major OAO Lukoil Holdings hopes the Iraqi government will approve tenders for the giant West Qurna-2 oil field by October and that drilling can begin by the end of the year, the company's Chief Executive Vagit Alekperov said Friday.

"We hope that by October, the Iraqi ministry will approve all our tender offers," Alekperov said.

Lukoil and Norway's Statoil ASA STO +3.49% were awarded a 20-year service contract for West Qurna Phase 2 in Iraq's second licensing round held in December 2009. The companies promised to get the southern field pumping at a rate of 1.8 million barrels a day for payment of $1.15 a barrel.

(Jacob Gronholt-Pedersen in Moscow contributed to this story.)

Exillon in new Siberia strikehttp://www.upstreamonline.com/live/article278434.ece

London-listed explorer Exillion Energy has found more oil at a West Siberia field that promises to give an additional lift to production, which hit a record in the first half of the year.

Steve Marshall  16 September 2011 07:41 GMT

The EWS I-44 probe, drilled in the south-eastern portion of the East EWS I field, flowed water-free oil at a daily rate of 768 barrels on a 10mm choke, the company stated in a drilling update.

It confirmed 7.3 metres of effective net oil pay in a Jurassic formation, having been directionally drilled to the west from an existing well pad.

The well will be connected to existing production facilities on completion of testing.

The Russia-focused player has been on an exploration roll of late at both its EWS I and EWS II fields and reported record output of 7860 barrels per day that fuelled its profits in the first six months.

However, it has been forced to cut its expected full-year production figure due to water intrusion on a trio of wells at EWS I.

West Siberia is the second largest oil region in the world with regional proven plus probable reserves of more than 70 billion barrels, according to the BP Statistical Review.

Published: 16 September 2011 07:41 GMT  | Last updated: 35 minutes ago

Russia a 'third party' on Trans-Caspian gas pipehttp://www.news.az/articles/economy/44580

Fri 16 September 2011 07:54 GMT | 9:54 Local Time

News.Az interviews Sabit Bagirov, president of the Foundation to Promote Entrepreneurship and Market Economy and SOCAR president in 1992-93.

Does the discovery of the large Absheron gas field in the Azerbaijani sector of the Caspian Sea improve the chances for construction of the Nabucco gas pipeline?

The increase in Azerbaijan’s gas reserves will promote the country's share in the Nabucco project, so it will make the implementation of Nabucco more realistic.

Naturally, this will bring additional revenues to Azerbaijan. I think that the government of Azerbaijan will probably negotiate the relevant schedule with a group of companies for gas production from this field, so production from the field will gradually increase by 2020.

What contribution can the Absheron field make to the energy security of Azerbaijan, and Azerbaijan make to European energy security?

Of course, the Absheron gas field will contribute to ensuring the energy security of Europe. However, it should be noted that the energy security of Europe through gas from Absheron is directly related to the construction of the Nabucco gas pipeline. As you know, recently the European Commission obtained a mandate of the EU Council to negotiate an agreement on a legal framework for a Trans-Caspian gas pipeline with Azerbaijan and Turkmenistan. Thus, I think that the gas produced from fields in Azerbaijan and Central Asia will increase Nabucco’s chances.

Russia interpreted the EU decision to give a mandate to the European Commission to negotiate a legal framework for an agreement on the Trans-Caspian gas pipeline with Azerbaijan and Turkmenistan as third party intervention in the problems of the Caspian Sea. Could this reaction by Moscow prompt a new "energy war" in the Caspian Sea?

Russia should take into account that it can also be considered a third party, since Azerbaijan and Turkmenistan hold decision-making authority to implement the Trans-Caspian gas pipeline.

N.H.News.Az

Gazprom

Eni, Gazprom to sign option agreement on Libya oil-sourcehttp://af.reuters.com/article/libyaNews/idAFL5E7KG0MO20110916

Fri Sep 16, 2011 8:09am GMT

MOSCOW, Sept 16 (Reuters) - Eni and Gazprom were expected to sign an agreement on Friday giving the Russian company the right to acquire half Italian group Eni's 33 percent stake in the Elephant oilfield in Libya, a source in Gazprom told Reuters.

The option replaces a $170 million deal struck in February and suspended in April amid the upsurge of violence in Libya where Russia, which had billions of dollars worth of arms, energy and construction deals, risks losing business with the end of Muammar Gaddafi's reign.

"The companies will sign an option agreement on Elephant. The option will not expire soon as there is war in Libya, and it won't end soon" the source said.

Spokesmen for Eni and Gazprom declined comment.

Eni's agreement to sell half its 33.3 percent stake in Elephant was part a strategic partnership signed between Eni and Gazprom in 2006.

Gazprom was expected to transfer its share in the project to its oil arm, Gazprom Neft .

A Gazprom Neft official has said the company will return to Libya once the war was over. (Reporting by Vladimir Soldatkin; Additional reporting by Katya Golubkova in Sochi and Svetlana Kovalyova in Milan; Editing by Dan Lalor)

09/16/2011 10:26 AM

Belarus-Russia oil talks continue

http://law.by/work/EnglPortal.nsf/0/510DE9C27F49CBA0C225790D0028D630?OpenDocument

MOSCOW, 16 September (BelTA) – First Vice Premier of Belarus Vladimir Semashko and Chairman of the Board of Directors of Gazprom Alexei Miller continued a constructive dialogue regarding Russian oil supplies to Belarus at another meeting in Moscow on 15 September, BelTA learnt from the Russian gas supplier.

“The sides discussed the conditions of Russian oil supplies and transportation across Belarus in terms of Gazprom acquisition of a 50% stake in Beltransgaz,” the Gazprom said.

Vladimir Semashko and Alexei Miller both left satisfied with the ongoing negotiations, the Russian company added.

16 September, 09:20http://telegraf.by/en/2011/09/belarus-i-gazprom-plodotvorno-obsujdayut-prodaju-beltransgaza

16 September, 09:20

Belarus and Gazprom "Fruitfully" Discussing Beltransgaz Sale 0

September 15, Gazprom chief executive Alexey Miller and the First Vice-Premier of Belarus, Vladimir Semashko, continued negotiations on the conditions of supply and transportation of Russian gas through Belarus, which is aligned…

September 16, 2011, 7:25 CET

Development minister meets Gazprom head over South Stream projecthttp://www.realdeal.hu/20110916/development-minister-meets-gazprom-head-over-south-stream-project

By MTI

Hungary's National Development Minister Tamas Fellegi held talks with the president of Russia's energy group Gazprom in Moscow on Thursday, discussing the South Stream gas pipeline project, the Russian news agency ITAR-TASS reported.

Fellegi and Alexey Miller agreed that the gas pipeline planned to connect southern and central European countries with Russia under the Black Sea will contribute vastly to boosting regional cooperation in South-Eastern Europe, ITAR-TASS said.

Hungary has expressed interest in participating in the South Stream project, designed to carry Russian gas to the west, bypassing Ukraine.

Gazprom ready to invest in Murmansk oil refineryhttp://www.barentsobserver.com/gazprom-ready-to-invest-in-murmansk-oil-refinery.4959869-16178.html

2011-09-15

Murmansk can get a state-of-the-art oil rafinery, if Gazprom plans go through.

Russian gas major Gazprom plans to invest $3-7 billion in an oil refinery in the Murmansk area.

The refinery, which probably will be located near the city of Murmansk, will get oil from fields in the Timano-Pechora basin – Prirazlomnoye, Dolginskoye, Varandeyskoye and Medynskoye. In the future, the Shtokman gas field and fields on the Yamal Peninsula can be included in the list.

- We are considering three options for the oil refinery, General Director of Gazprom Neft Shelf told RIA Novosti. – If the capacity of the refinery is going to be 5 million tons annually, then our investments will be $3-4 billion. If it’s 10 million tons, then they might be as high as $6-7 billion.

According to Mandel, Gazprom is now preparing a feasibility study for the refinery. - If we come to a conclusion, we will be able to deliver oil products directly to customers from the refinery, he said, adding that oil from the Prirazlomnoye field will go directly to exports the first two years. Production at the field is planned to start in 2012.

Text: Trude Pettersen

Gazpromneft: Murmansk refinery? Doesn't appear attractive

http://www.bne.eu/dispatch_text16593

CitiSeptember 16, 2011

According to RIA Novosti, Gazpromneft is considering building a refinery at the cold water port of Murmansk to process oil from the Timan Pechora fields, including crude from the company's offshore Prirazlomnoye field. The report, which quoted senior management, said the potential investment for a 5mtpa plant was estimated to be $3-4bn, although a feasibility study is still being conducted on the idea.

Our take: Using the numbers provided in the article, this project at first blush doesn't look very compelling. If the plant costs $4bn for 5mtpa of capacity, it is unlikely to earn large returns even under the still-generous export duty regime available after the passage of 60/66. In an $80/bbl oil environment, the effective subsidy from the export duty differential between crude and refined products is $12/bbl. After: 1) subtracting out, say,

$2.5/bbl of cash operating costs; 2) assuming the plant is relatively simple, adding no actual value to the crude it processes; and 3) assuming a 2.5% annual inflation in oil prices, then we calculate Gazpromneft would earn only a c5% unlevered IRR on the project. Hardly compelling. If the plant were able to add, say, a $6/bbl actual refining margin on top of the export duty arbitrage (with a projected output of 43% diesel, it would be substantially more sophisticated than the average Russian refinery), then returns would tick up to c8%, still not all that exciting, but closer to the company's cost of equity.