Russia 110422

Basic Political Developments On 25-27 April Lavrov will visit South Ossetia and Abkhazia, the Russian

Foreign Ministry informed Azerbaijani, Armenian and Russian foreign ministers to meet in Moscow today -

The ministers will discuss preparations for the tripartite meeting between the presidents

U.S. to seek agreement with Russia on tactical nuclear weapons reduction - The U.S. cabinet is working intensively to increase transparency on tactical nuclear weapons (TNW) in Europe and secure an agreement with Russia on the reduction of such weapons, U.S. Assistant Secretary of State Rose Gottemoeller has said.

Russia urges UN to send international mission to Israel, PA - "In current circumstances, the Russian initiative to send a UN Security Council mission to the Middle East is especially relevant because it aims to bring the sides back to talks," Alexander Pankin, the first deputy of Russia's ambassador to the United Nations, said during a UN Security Council meeting on Thursday.

Medvedev, Ban Ki-moon to discuss situation in Middle Easto Medvedev, Ban Ki-moon to discuss security issues on Friday

Medvedev to discuss investment climate improvement Duma to ratify nuclear deal with Turkey - The agreement was signed in Ankara

on August 6, 2009. Companies urged to open branch offices in Russia - Establishing representative

offices in Russia would be a good way for Vietnamese companies to effectively penetrate the market and reduce business costs, said Viet Nam Chamber of Commerce and Industry (VCCI) vice chairman Pham Gia Tuc during a conference on Wednesday.

Weak Russian component downed Indian rocket: Ex-ISRO chief - "We did several simulation tests to find out why the connectors - the wires that carry command signals from the onboard computers at the top to the rocket's engines down below - snapped," former ISRO chief Madhavan Nair told IANS.

Russia Kills Alleged Al Qaeda Envoy In Chechnya – Reportso Russian anti-terror body says Al Qaeda rep killed in Chechnya o Al-Qaeda's main emissary and "religious authority" of armed bandits

killed in Chechnya Emir of Dagestan’s Sharia Jamaat Reportedly Killed in Russian Special Operation

- By: Mairbek Vatchagaev The kidnappers released Ivan Kaspersky

o Kaspersky Lab calls on media to stop kidnap speculation o Kaspersky Lab asks media not to spread rumours abut kidnappingo Son of leading Russian software tycoon reportedly kidnapped

Arkhangelsk investigators refute reports LUKoil mgr’s daughter found dead Praise for diplomat who died in Russia - Al-Jarallah praised the deceased for his

dedicated service to the nation and integrity in his work. He said Al-Iqab was best known for his sincerity and good relations with other members of the diplomatic

corps. He added the deceased was one of the most competent young public servants the ministry has ever had.

Moscow mayor denies his wife will become new Baturina Betting on Business - City Hall Wants Small Business Back in Business. By Tai

Adelaja Pope to contact ISS - The 84-year-old pontiff will communicate with astronauts

on the occasion of the last mission of the space shuttle Endeavour which is scheduled to be launched on April 29.

ISS oxygen generator will not be re-launched before next week Russian space freighter to be buried in Pacific after 5-day scientific mission Ratings of Medvedev, Putin and United Russia have fallen to record low INTERVIEW: Activist: Putin as president would be "Russia's ruin" - The re-

election of Prime Minister Vladimir Putin to the presidency would be 'Russia's ruin,' prominent civil rights activist Svetlana Gannushkina has told the German Press Agency dpa.

Over 40 wildfires registered in Russia – EMERCOM Duma Security Committee’s deputy chairman: corruption to break Russia into

pieces in 2 years Russia: Fools and Roads - There is no agreement of opinion for the origin of the

popular saying: "there are two problems in Russia - fools and roads". Yet most people agree on that and add that poor-quality roads come as a consequence of the first problem. Reuters PRESS DIGEST - Russia - Apr 22

o www.kommersant.ruo Officials in Russia's Penza region swap cars for scooters and bicycles in

an attempt to evaluate the condition of local roads, the paper writes.o Cameras and infrared sensors will be installed in forests across Russia to

prevent deadly forest fires, the paper says.o www.vedomosti.ruo Popularity ratings of the Russian ruling tandem and main political party

United Russia dropped to its lowest level in two years, the paper reports.o Russian oil company Bashneft (BANE.RTS) violated a number of licence

agreements for oil production in southwestern Bashkortostan region, according to regional accounting chamber, the paper says.

o www.ng.ruo Russia's Finance Minister said political competition in Russia is necessary

for economic development, the paper writes.o www.trud.ruo The number of Russians planning trips abroad has risen due to better

economic conditions while the prices for the most popular vacation spot rise, the daily reports.

o www.kp.ruo The paper runs an interview with Moscow mayor Sergei Sobyanin who

says 60,000 trees died in Moscow during the ice rain this winter. Russian Press at a Glance, Friday, April 22, 2011 Belarus Bailout Hinges On Russia - By Nikolaus von Twickel

Triple defense - Anatoly Serdyukov discussed a joint training plan with colleagues from Belarus and Ukraine Yury Gavrilov

Managing Russia’s Unsettled Borders - By Thomas Graham In the Absence of Accountability and the Rule of Law, No Freedom of the Press

in Russia - by Richard Rousseau

National Economic Trends Gov't greenlights 2012-2014 economic forecast Capital flow to funds investing in Russia, CIS totals $79 mln for week – experts Russian GDP up 4.2% in March - Klepach (Part 2) Putin's Cabinet Plans to Up State Spending - By Anatoly Medetsky Oil will never run out - But Russia will no longer be able to sustain itself on it Russian Fund Hopes to Lure World’s Private Equity Majors

Business, Energy or Environmental regulations or discussions Lukoil, Rosneft, RusHydro, Transneft: Russian Equities Preview KT CEO says in talks to sell Russian unit Foreign banks face hard slog in Russian push UPDATE 1-VTB protege takes the helm at Bank of Moscow Norilsk Considers Mining Copper, Nickel in Central Russia Dixy retailer to hold 11.4% SPO to buy Victoria chain

Activity in the Oil and Gas sector (including regulatory) Russian Econ Ministry suggests smoother change to net-back parity for gas prices China, Russia can solve energy problems through consultation: spokesman THE EAST SUDDENLY SEES RED — RUSSIA AND CHINA IN

CLASH OVER OIL PRICING AND OIL SUPPLY – TRANSNEFT CHARGES CHINA NATIONAL PETROLEUM WITH “SOCIALISM” - By John Helmer, Moscow

UPDATE 1-LUKOIL, Rosneft to join in offshore exploration Rosneft, Lukoil to tap 3 deposits Lukoil, Rosneft ink gas transport deal TNK-BP Abroad Not Daunted by Local Woes - TNK-BP aims to spend about $1

billion on an acquisition abroad even as a shareholder dispute rages over the company's future at home.

UPDATE 1-Russia's Bashneft Q4 net profit doubles to $570 mln Bashneft Q4 2010 profit soars 106% to $570 mln

Gazprom GAZPROM DIRECTORS DECIDE TO PLACE 3 ISSUES OF 3-YR

EXCHANGE BONDS TOTALING 15 BLN RUBLES Gazprom hot on thermal merger - Russian gas monopoly Gazprom is out to create

“the largest thermal generating company in Russia” through the planned merger of two affiliates.

China’s hunger for gas serves OGZPY - Gazprom is powering ahead today on news that Chinese energy giant Sinopec is buying its way into a massive Australian shale gas project.

Russian JSC Gazprom Co team meets PM - A delegation of the Russian JSC Gazprom company, the largest natural gas extractor of the country, led by its Chief Executive Officer Valeriy Gulev Thursday paid a courtesy call on Prime Minister (PM) Sheikh Hasina at the latter's office in the city, reports BSS.

Gazprom Purchase of Refinery Not ‘Appropriate’, Kocourek Tells Hospodarske - Gazprom OAO (GAZP)’s possible purchase of a stake in Ceska Rafinerska AS, a Czech-based refinery, would not be “appropriate at this time,” Czech Industry and Trade Minister Martin Kocourek told Hospodarske Noviny in an interview.

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Full Text Articles

Basic Political Developments

TRANSLATED FROM RUSSIAN

On 25-27 April Lavrov will visit South Ossetia and Abkhazia, the Russian Foreign Ministry informedhttp://www.itar-tass.com/level2.html?NewsID=16178838&PageNum=0

22.04.2011, 10.48 MOSCOW, April 22. Itar-Tass. Russian Foreign Minister Sergei Lavrov will visit South Ossetia and Abkhazia on 25-27. Department of Press and Information Ministry of Foreign Affairs informed ITAR-TASS today. "The Minister will hold meetings with leaders of these states - noted the department. - The focus of the talks is to develop cooperation in various fields."

Azerbaijani, Armenian and Russian foreign ministers to meet in Moscow todayhttp://en.apa.az/news.php?id=145574

[ 22 Apr 2011 11:17 ] The ministers will discuss preparations for the tripartite meeting between the presidents

Baku. Victoria Dementieva – APA. Minister of Foreign Affairs of Azerbaijan Elmar Mammadyarov left for Moscow to attend the meeting of the Azerbaijani, Armenian and Russian foreign ministers today, APA reports quoting the statement by spokesperson for the Ministry of Foreign Affairs of Azerbaijan Elkhan Polukhov.

The process of the settlement of Nagorno Karabakh conflict, as well as preparations for

the meeting of Azerbaijani, Armenian and Russian presidents will be discussed by the ministers.

Russian co-chair of the OSCE Minsk Group Igor Popov said that the tripartite meeting of the presidents for the settlement of Nagorno Karabakh conflict will be held in summer.

U.S. to seek agreement with Russia on tactical nuclear weapons reductionhttp://en.rian.ru/world/20110422/163641019.html

06:27 22/04/2011

The U.S. cabinet is working intensively to increase transparency on tactical nuclear weapons (TNW) in Europe and secure an agreement with Russia on the reduction of such weapons, U.S. Assistant Secretary of State Rose Gottemoeller has said.

"Consistent with the President's agenda to reduce the role and number of nuclear weapons, and the Senate's call for pursuing negotiations with Russia on tactical nuclear weapons, we are working intensively throughout our government on these issues while also consulting with our NATO allies," Gottemoeller was quoted as saying during her speech at the U.S. Naval Academy in Annapolis, as quoted in a statement issued on Thursday by the U.S. Department of State's press service.

"We will be working with NATO to shape an approach to reduce the role and number of forward-based U.S. non-strategic nuclear weapons in Europe, as Russia takes reciprocal steps to reduce its non-strategic nuclear weapons and relocate them away from NATO's borders," Gottemoeller said.

When ratifying the new strategic arms reduction treaty with Moscow in December 2010, the U.S. Senate adopted a resolution obligating the government to start bilateral talks on cutting the TNW stockpiles - landmines, artillery shells and short-range missiles. Washington says Moscow has a larger number of these systems.

The United States will seek to "include non-strategic nuclear weapons in the next round of U.S.-Russian arms control discussions alongside strategic and non-deployed nuclear weapons," Gottemoeller said.

President Barack Obama said in a message to the Senate in February his country expects to hold talks with Russia on TNW within a year after the New START arms reduction deal came into force on February 5.

Russian Deputy Foreign Minister Sergei Ryabkov said in January that it is too early to discuss limiting TNW with the United States because Russia needs to see the way the U.S. fulfills its commitments under the New START.

WASHINGTON, April 22 (RIA Novosti)

Russia urges UN to send international mission to Israel, PAhttp://en.rian.ru/world/20110422/163638414.html

01:13 22/04/2011

Russia has reiterated its call for the United Nations to send an international mission to the Middle East to try to bring the Israelis and Palestinians back to the negotiating table.

"In current circumstances, the Russian initiative to send a UN Security Council mission to the Middle East is especially relevant because it aims to bring the sides back to talks," Alexander Pankin, the first deputy of Russia's ambassador to the United Nations, said during a UN Security Council meeting on Thursday.

The Quartet of international mediators of the Arab-Israeli conflict was to meet on April 15 to discuss steps to be made to resume direct negotiations between the Israelis and Palestinians, but the meeting was postponed at the request of the United States. Russia, which comprises the Quartet together with the United States, the European Union and the United Nations, has expressed its regret over the decision to delay the talks, which had already been postponed from mid-March.

The Israeli-Palestinian talks have been stalled since September over Israeli Prime Minister Benjamin Netanyahu's refusal to halt settlement construction in the occupied West Bank and the Palestinians' unwillingness to continue dialogue unless the construction is stopped.

Pankin called on Israel on Thursday to stop settlements building in the West Bank and East Jerusalem and lift the blockade of Gaza. Pointing to a recent escalation of violence in Gaza, he also called on Palestinian movement Hamas controlling the enclave to make all efforts to assure security there.

Pankin also stressed the importance of inter-Palestinian reconciliation for the creation of an "independent, viable, territorially integral and sovereign Palestinian state."

UNITED NATIONS, April 22 (RIA Novosti)

Medvedev, Ban Ki-moon to discuss situation in Middle East

http://www.itar-tass.com/eng/level2.html?NewsID=16177947&PageNum=0

22.04.2011, 00.22

MOSCOW, April 22 (Itar-Tass) - Russian President Dmitry Medvedev is expected to receive UN Secretary General Ban Ki-moon in Moscow Friday, April 22, the presidential press service said.

In the course of their conversation, Medvedev and Ban “will pay special attention to the problems of ensuring international security.”

“This issue is especially pressing now in the context of dramatic events in the Middle East, Northern and Western Africa, including Libya, and in Cote d’Ivoire,” the press service said.

Russia proceeds from the assumption that “the choice of a pathway for Libya’s development is a doubtless prerogative of the Libyan people and the international community should, on its part, assist a peaceful untangling of this conflict without interference in Libya’s internal affairs.”

“In this context, the implementation of UN resolutions in full compliance and strictly within the limits of the Security Council’s mandate appears to be a key issue,” the press service said.

“This position is shared by all the countries making up Brics – Brazil, Russia, India, China, and South Africa – and this was confirmed by a declaration the leaders of this authoritative group endorsed upon the results of their summit in China April 14,” it said.

Apart from this, the agenda of the talks between Medvedev and Ban features the problems as pressing as the Middle East peace settlement, nuclear weaponry on the Korean Peninsula, international cooperation in fighting with new challenges and threats, including piracy.

“This will be the fourth meeting between Dmitry Medvedev and Ban Ki-moon,” the presidential press service said.

The previous meeting took place March 27, 2009, on the sidelines of the Moscow conference on Afghanistan, March 18, 2010 during Ban’s visit to Moscow, and December 1, 2010, in the course of the summit of the Organization for Security and Cooperation in Europe in Kazakhstan’s capital Astana.

“Russia pursues the line at strengthening the UN’s central role in the emerging multipolar system of international relations and it renders all-round support to the UN in the efforts to settle the problems of climate change, sustainable development and food security,” the press service said.

Medvedev, Ban Ki-moon to discuss security issues on Fridayhttp://en.rian.ru/world/20110422/163639209.html

02:49 22/04/2011

Russian President Dmitry Medvedev and UN Secretary General Ban Ki-moon will discuss international security issues, including the situation in the Middle East and North Africa, nuclear security and sea piracy, during their talks in Moscow on Friday, the Kremlin said.

Ban arrived on a three-day visit to Russia on Thursday as part of his 15-day tour across Eastern Europe. The Friday talks will be Ban's fourth meeting with Medvedev.

"Russia has been consistently pursuing a strategic course towards the strengthening of the United Nations' leading role in the multipolar system of international relations, giving a full support to the organization in addressing the problems of climate change, sustainable development and food security," the presidential press-service said in a statement.

Situation in Libya

During the talks, Medvedev and Ban are expected to address the situation in Libya, where forces loyal to Muammar Gaddafi continue their attacks on rebel-held towns after five weeks of allied airstrikes.

Russia has repeatedly called for a diplomatic solution to the conflict, warning against foreign interfering in Libya's internal affairs. Ban has also called for the conflicting sides to declare a ceasefire and begin political dialogue.

Amid rumors that France was pushing EU countries to the ground campaign in Libya by sending an EU humanitarian-military mission to the troubled North African state, Russia has warned western allies against going beyond the provisions of a UN resolution authorizing military action against Gaddafi.

"The implementation of UN resolutions in full compliance with their letter and spirit, without abusing mandates given by the [UN] Security Council, is one of the key issues," the Kremlin's statement said. This position is shared by the leaders of the BRICS bloc of developing countries, comprising Brazil, Russia, India, China and South Africa, which was declared during their summit in China, it said.

Nuclear security

Ban is also expected to discuss with Medvedev the issue of security at nuclear power plants, which has been in the focus of international attention since a devastating

earthquake and tsunami damaged Japan's Fukushima Nuclear Power Plant, causing a nuclear disaster. Ban has already discussed the issue with foreign leaders during a nuclear security summit in Ukraine on April 19.

Medvedev's aide Arkady Dvorkovich has said the Russian president is going to announce several initiatives aimed at preventing nuclear disasters in the near future. Moscow expects the initiatives to be discussed by leaders of the G8 and G20 countries, he said.

Sea piracy

The Russian president and UN secretary general will also address the issue of sea piracy during their talks.

The UN Security Council approved last week a resolution aimed at preventing sea piracy off the coast of Somalia. The resolution, which was initiated by Russia, promises to urgently consider the establishment of specialized courts to consider piracy cases and asks Ban to report back within two months on how to prosecute suspects.

According to the UN, the number of pirate attacks on merchant ships reached 400 in 2010. A total of 790 sailors and crew members were captured by pirates last year. Russia is involved in international anti-piracy operations off the coast of Somalia and in the Gulf of Aden.

 

MOSCOW, April 22 (RIA Novosti)

Medvedev to discuss investment climate improvement

http://www.itar-tass.com/eng/level2.html?NewsID=16178153&PageNum=0

22.04.2011, 05.03

MOSCOW, April 22 (Itar-Tass) -- President Dmitry Medvedev will chair an economic conference on Friday to discuss the implementation of measures he proposed to improve investment climate to Russia.

It is expected that Prosecutor General Yuri Chaika will report about the implementation of the presidential instruction on enhanced anti-corruption fight and improved state services. The deadline expired on April 15.

The Kremlin and the government differ on the necessity to decrease obligatory pension, health and social payments by companies in 2012. While Medvedev urged to provide proposals to decrease the tax burden on companies, the government said it will have to shift the burden on the population by raising tobacco and alcohol excises and other taxes to compensate for the losses. The Kremlin instead called to use additional revenues from rising oil prices.

Medvedev’s economic aide Arkady Dvorkovich admitted no compromise had been reached so far.

Duma to ratify nuclear deal with Turkey

http://www.itar-tass.com/eng/level2.html?NewsID=16178209&PageNum=0

22.04.2011, 06.04

MOSCOW, April 22 (Itar-Tass) -- The Russian State Duma will consider on Friday the ratification of the 2009 nuclear cooperation agreement with Turkey.

The document outlines a wide range of cooperation guidelines in peaceful nuclear energy, including research and development, controlled thermonuclear fusion, design, construction, operation and decommissioning of reactors, nuclear materials supply.

It also opens possibilities for services provision in nuclear fuel cycle, prospecting and development of uranium deposits, nuclear safety and radioactive protection.

The agreement was signed in Ankara on August 6, 2009.

Updated April, 22 2011 10:09:07

Companies urged to open branch offices in Russia

http://vietnamnews.vnagency.com.vn/Economy/210609/Companies-urged-to-open-branch-offices-in-Russia.html

HA NOI — Establishing representative offices in Russia would be a good way for Vietnamese companies to effectively penetrate the market and reduce business costs, said Viet Nam Chamber of Commerce and Industry (VCCI) vice chairman Pham Gia Tuc during a conference on Wednesday.

Several Vietnamese corporations have already opened representative offices in Russia, but the number was still modest, said Tuc, adding that more and more domestic firms wanted to do business in Russia.

Bilateral co-operation between Vietnamese and Russian businesses were enjoying new advantages due to increasing attention from both countries' leaders, Tuc said.

Attending the conference on helping Vietnamese companies open offices in Russia, Deputy head of the Russian Justice Ministry's National Registration Bureau Vladimir Vorobiev said Russia was willing to create the most favourable conditions for Vietnamese businesses to speed up bilateral co-ordination.

Vietnamese enterprises still encountered challenges in doing business in Russia, and so we were here in Viet Nam to help these firms solve the difficulties, he said.

During the event, the delegation introduced legal procedures on representative offices in Russia and services to assist foreign businesses to obtain visas and labour licences.

In September, 2010, VCCI inked a co-operation agreement with the bureau in a move aimed at better supporting domestic businesses in launching operations in Russia.

To date, 60 firms have received assistance from the chamber in fulfilling necessary procedures and were awaiting approval from Russian authorities.

Vietnamese businesses last year carried out 20 projects in Russia with capital totalling US$1.6 billion.

Noodle and fast food production by Vietnamese firms made up 60 to 70 per cent of market share in Russia while textiles, garments and footwear also enjoyed a strong market presence in terms of reputation for quality, said vice chairman of the Viet Nam-Russia Business Council Nguyen Van Pham.

Bilateral trade ties have developed significantly, rising from $350 million to $400 million in the mid-1990s to $2.4 billion last year.

Viet Nam exported garments, footwear, tropical agricultural products, seafood and handicrafts to Russia, while importing petroleum, fertiliser, chemicals and machinery.

Two-way trade is expected to reach $3 billion by 2012, according to the Viet Nam-Russia medium-term action plan on trade and investment. — VNS

Weak Russian component downed Indian rocket: Ex-ISRO chiefhttp://mangalorean.com/news.php?newstype=local&newsid=234229

Chennai, April 22 (IANS) The destruction of India's Geosynchronous Satellite Launch Vehicle (GSLV) in mid air in 2010 was due to an inherent weakness in a component in the Russian supplied cryogenic engine.

"We did several simulation tests to find out why the connectors - the wires that carry command signals from the onboard computers at the top to the rocket's engines down below - snapped," former ISRO chief Madhavan Nair told IANS.

Nair, who headed the Failure Analysis Committee, said the 12-member panel submitted its report to ISRO two weeks back.

According to ISRO, the failed component, called shroud, was made of composites and is part of the Russian cryogenic engine. It got deformed due to the flight load.

ISRO's 418-tonne GSLV rocket (cost Rs.175 crore) carrying advanced communication satellite GSAT-5P (weight 2,310 kg, cost Rs.150 crore) veered off its flight path and began disintegrating within a minute after lift-off from Sriharikota in Andhra Pradesh last Christmas day.

As the weakness was inherent in the shroud, Nair said ISRO should have a dialogue with the Russians to see how the component could be strengthened.

Informed sources told IANS that even in the GSLV-F04 rocket launched in 2007, one of the connectors got snapped due to weak shroud.

"The fault was there from the first GSLV that flew with the Russian cryogenic engine in 2001. The weakness in the shroud caught ISRO on December 25 last year," a source told IANS.

Experts told IANS that the first 15 km of a rocket's flight was very crucial as it is subjected to heavy atmospheric loads. It is more so when the rocket is escaping the earth's gravitational pull at 330 metres per second.

The flow of air along the rocket will be turbulent at the transonic speed - when the rocket crosses the speed of sound. At that point the air will attach to the rocket at some places and detach at some spots in a haphazard manner.

Out of the seven cryogenic engines supplied by Russia, India has used six. One remains to be used.

According to Nair, it is Russia's responsibility to set right the shroud in the remaining cryogenic engine as it is their engine and technology.

"The matter has been discussed with them. But the question of compensation from Russia for the loss does not arise," he said.

The Russians had earlier pointed their fingers at the rocket's bigger heat shield (4 metre) as the proximate cause for high atmospheric load on the rocket that broke it.

The 2010 GSLV's heat shield measured 4 metres in diameter as against 3.4 metre in most earlier GSLV rockets.

A retired ISRO scientist with over two decades of experience with rocket motors told IANS that the GSLV most likely broke due to instability caused by the heavy payload - heavier than what the rocket had lifted in earlier missions.

At 2,310 kg, the GSAT-5P communication satellite was the heaviest payload ever lifted by a GSLV.

It was 180 kg heavier than the INSAT-4CR launched in 2007, 360-kg heavier than Edusat launched in 2003 and about 780 kg heavier than GSAT-1 launched in 2001.

All GSLV's that flew with Russian cryogenic engine have encountered problems carrying a payload of over 2,000 kg.

In 2006, a GSLV rocket carrying INSAT-4C satellite weighing around 2,168 kg was blown mid air after the rocket became unstable.

In 2007, one of the connecters of the GSLV rocket got snapped and the rocket's performance was considered as below par. The rocket had carried 2,130 kg INSAT-4CR satellite.

Refuting that GSLV is facing a 2,000 kg jinx, R.V. Perumal, a retired ISRO rocket scientist, told IANS: "The increase in the weight of the satellite is only a fraction of the rocket's total weight (418 tonne). It is well within the scatter mass of the rocket. Hence the satellite weight is not the reason for the rocket's instability."

ISRO officials also discounted the possibility of the rocket becoming unstable because of the two-tonne increase in its overall weight as compared to the April 2010 GSLV rocket that weighed 416 tonnes.

"By the time the problem started, the rocket would have burned around 100 tonnes of first stage fuel. So a mere addition of two tonnes to the rocket's weight would not make it unstable," an official said.

Russia Kills Alleged Al Qaeda Envoy In Chechnya – Reportshttp://www.automatedtrader.net/real-time-dow-jones/57353/russia-kills-alleged-al-qaeda-envoy-in-chechnya-_-reports

First Published Friday, 22 April 2011 05:42 am - © 2011 Dow Jones

MOSCOW (AFP)--Russian security forces in Chechnya killed a Saudi militant who was the top envoy of al Qaeda in the Northern Caucasus, news agencies quoted the national antiterror committee as saying Friday.

The militant--known by the nom-de-guerre of Moganned--was one of three rebels killed in a clash with Russian security forces around the village of Serzhen-Yurt in Chechnya on Thursday afternoon, it said.

"One of the eliminated bandits has been identified as the main emissary of the international terrorist organization al Qaeda in the Northern Caucasus, a citizen of Saudi Arabia by the name of Moganned," the committee said.

It said that alongside Chechen militant leader Doku Umarov--Russia's most wanted man who security forces have repeatedly failed to kill over the last years--Moganned was a leading figure among rebels in the region.

After waging two wars against separatists in Chechnya after the collapse of the Soviet Union, the Kremlin is now battling an insurgency that has spread to the neighboring regions of Dagestan and Ingushetia.

Russian anti-terror body says Al Qaeda rep killed in Chechnyahttp://en.rian.ru/russia/20110422/163642661.html

09:56 22/04/2011

A militant leader who was the top representative of Al Qaeda in Russia's North Caucasus has been killed in Chechnya, the National Antiterrorism Committee said on Friday.

The committee said three militants, including a Saudi national known as Mohanad, were killed in a shootout with Interior Ministry troops after a group of up to six militants was found during a search operation in the Shali district.

"Along with Doku Umarov, Mohanad was the most well-known figure among the bandits," the committee said. "He was seen as an unquestioned 'religious authority' and a powerful 'field commander.'"

It said that intelligence from detainees in recent years identified Moganned as a rival to Umarov as the main leader of Islamic militants in the North Caucasus.

Umarov has claimed responsibility for all the main terror attacks in Russia in recent years, including the bombing at Domodedovo Airport in January that killed 37 people and last March's twin suicide attacks on the Moscow Metro in which 40 people died.

Earlier on Friday, a law enforcement source told RIA Novosti that two militants, including an Al Qaeda operative, were killed in a shootout with police in the Kurchaloi district of Chechnya.

The source identified the dead men as gang leader Khaled Youssef Mohammed Al-Emirate, born in Jordan in 1969 and a Grozny resident named Sultygov.

Russian security forces have been battling Islamic militants groups in the North Caucasus for two decades. The violence was centered in Chechnya, the site of two bloody separatist wars in the 1990s and early 2000s, but has spread to neighboring republics, where there are now more attacks than in Chechnya itself.

MOSCOW, April 22 (RIA Novosti)

22 April 2011, 10:16

Al-Qaeda's main emissary and "religious authority" of armed bandits killed in Chechnyahttp://www.interfax-religion.com/?act=news&div=8399

Moscow, April 22, Interfax - Russia's National Anti-terrorist Committee (NAC) has said that an Arab mercenary, who was Al-Qaeda's chief emissary also known as Mohanned, has been killed in Chechnya.

"One of the slain militants has been identified as the chief emissary of the international terrorist group Al-Qaeda in North Caucasus, a native of Saudi Arabia nicknamed Mohanned," the NAC said in a statement obtained by Interfax on Friday.

"A group of up to six armed bandits" was found in a wooded mountain area east of the village of Serzhen-Yurt, Shali District, Chechnya, by local police forces at 11:50 a.m. on Thursday, April 21, the report said.

"A pursuit was organized to detain the criminals. At 5:30 p.m. three of the spotted bandits were neutralized after they opened fire. There are no injuries or fatalities among law enforcement officers," the report said.

"Along with Doku Umarov, Mohanned was the most notorious figure among bandits and was perceived as an absolute "religious authority" and the so-called influential "field commander," the NAC said.

"According to the information obtained from the militants held earlier, in recent years Mohanned had competed with Umarov in leading the insurgency. He was directly involved in virtually every suicide terrorist attack committed in the Russian Federation over the past few years," the NAC said.

"The materials at the disposal of the Russian FSB (Federal Security Service) show that in the spring-summer of 2011 Mohanned was planning to send more militants to North Caucasus from Georgia and to ensure his own full control over the North Caucasus insurgency through his subordinate militants," the statement said.

"Along with Umarov, Mohanned was a priority target for security and law enforcement services. This is why he had gone deep into hiding since the Russian security and police forces began a constant search for him last fall and was found thanks to the well-coordinated efforts by the local and federal law enforcement and security forces," the NAC said.

Further search operations and necessary investigative procedures continue in the Shali and Vedeno districts.

Last night Interfax reported about the Arab mercenary's elimination, citing Chechen leader Ramzan Kadyrov.

Emir of Dagestan’s Sharia Jamaat Reportedly Killed in Russian Special Operationhttp://www.jamestown.org/programs/edm/single/?tx_ttnews[tt_news]=37823&tx_ttnews[backPid]=27&cHash=c83afb28df69e8a7b0b4989de63a1b62

Publication: Eurasia Daily Monitor Volume: 8 Issue: 78April 21, 2011 03:04 PM Age: 28 minCategory: Eurasia Daily Monitor, North Caucasus Analysis, Home Page, Terrorism, Military/Security, Domestic/Social, The Caucasus, North Caucasus , Russia By: Mairbek Vatchagaev

Russia’s intelligence services reported on the night of April 18 that they had identified the body of Israpil Validzhanov, who was better known as Emir Hassan, the head of Dagestan’s Sharia Jamaat armed resistance movement, among four militants killed near the village of Tashkapur in the republic’s Levashinsky district. The area is near Dagestan’s Gunibsky district, where the local jamaat is led by Emir Rappani (www.rosbalt.ru/kavkaz/2011/04/18/840300.html). Emir Hassan became the militant leader in September 2010 following the killing of his predecessor, Magomedali Vagabov, in August of that year (www.rosbalt.ru/kavkaz/2011/04/18/840300.html).

Emir Hassan is already the sixth head of the Dagestan jamaat liquidated by the Russians since 2007. The average lifespan of a leader of the Sharia Jamaat is no more than a few months. It shows both the active character of the rebel leaders of the armed resistance movement in Dagestan and the relative success of the operations carried out by Russia’s

intelligence services, which have repeatedly managed to locate the Sharia Jamaat leaders. According to a police source, Interior Ministry and Federal Security Service (FSB) officers stopped two Russian-made cars near the village of Tashkapur late at night and demanded that the cars’ occupants show their identification documents. In response to the demand, the occupants opened fire and the security officers returned fire, killing all four men in the cars (http://gazeta.ru/politics/2011/04/18_a_3587177.shtml). One of those killed turned out to be Emir Hassan. If this official account of what happened is true, then the success of Russian security services was a mere accident and the killing of Emir Hassan was not part of a preplanned special operation specifically designed to neutralize the leader of the Dagestani jamaat. Already by the evening, Russia’s National Anti-Terrorism Committee (NAK) formally confirmed the death of the leader of Dagestan’s militants (http://nak.fsb.ru/).

Born in 1968, Emir Hassan, an ethnic Dargin, was accused of all the high-profile operations carried out by rebels over the past five years in Dagestan. Russia’s law enforcement agencies did not rule out that he was involved in the bombing at Moscow’s Domodedovo Airport in January of this year. Emir Hassan was wanted by the federal authorities on charges under Article 210, part 2 of the Criminal Code of the Russian Federation – organization of a criminal association (criminal organization) or participation therein (www.ubiytsa.ru/index.php/89-2010-09-07-15-49-56/38833-89-2010-09-07-15-49-56.html).

As a native of the village of Sangi in the Kaytagsky district near the city of Derbent in southern Dagestan on the Caspian Sea, Emir Hassan was believed to be capable of revitalizing the Azerbaijan jamaat as well, which was established in 2007-2008 by Emir Abdul-Malik (aka Ilgar Mollachiev), but never became an active part of the armed resistance movement as a whole. In his first video message in which he spoke Emir Hassan was surrounded by his field commanders. Among them was the emir of the Azeri jamaat, and this likely stirred considerable concern within the government of Azerbaijan.

Now that Emir Hassan is dead, it is up to Doku Umarov, the Emir of the North Caucasus Emirate, to select a new Emir for Dagestan’s Sharia Jamaat. The process usually takes some time, from a few weeks up to several months, and not a few days, as some experts have erroneously claimed (www.regnum.ru/news/kavkaz/dagestan/1396005.html).

It is also worth refocusing on the quality of those who are in the ranks of the armed opposition to the Russian rule. One of those killed with Emir Hassan was identified as Magomed Adalaev, a 21-year-old native of the village of Balakhani in Dagestan’s Untsukulsky district. According to the Russian authorities, in 2010 Adalaev returned to Dagestan from Egypt, where he had studied at an Islamic school. This is proof once again that people joining the ranks of the rebels are not because of social dysfunction, as Russian authorities and pro-Moscow experts and analysts always claim, but exclusively from an ideologically-motivated desire to fight the Russian government. The conclusions drawn by the Memorial human rights organization are prone to the same type of mistaken characteristic of any superficial approach to the problem, focusing all too much on social injustices committed by the local leaderships in the North Caucasus republics. Memorial

suggests negotiations and the establishment of a social contract between the Russian government and the rebel, and Dagestani society as a whole, as a way to resolve the confrontation (www.caucasustimes.com/article.asp?id=20819).

But the participants in the armed resistance movement do not seem to see this offer as a viable solution to the existing problem. Peace at any price is simply not acceptable to them. They go into the forests and mountains not in order to avenge someone: they simply do not consider themselves to be members of society and are trying to change society in their own way and understanding.

Against the background of the latest reports from Dagestan – including killings, attacks, bombings, defusing of explosives on railroads and counterterrorism operations carried out in various parts of the republic – serious attention should be given to last week’s strange news reports concerning one of the insignificant Russian military bases in the mountainous part of Dagestan. Six years after the garrison was ceremoniously opened in 2005 in the mountainous village of Botlikh – in Dagestan’s Botlikh district bordering Chechnya’s Vedeno district and in close proximity to the Georgian border –Russian troops have suddenly started to leave the base (www.islamnews.ru/news-49501.html). This base was originally established as a major point of deployment for one of the two mountain brigades in the North Caucasus (the other one is in Karachaevo-Cherkessia in the northwestern Caucasus). These brigades were charged with preventing events similar to the incursion by radical Salafist forces in August 1999 led by Mukhmed Kabedov, who proclaimed himself as the ruler of the Islamic Republic of Dagestan with its temporary capital in the village of Botlikh.

The military said the reason for the troops’ departure from Botlikh was the lack of a training field (www.kavkaz-uzel.ru/articles/183795/) that was supposed to be set up in the adjacent Chechen territory, where a historical and cultural reserve is located. Chechen experts and enthusiasts managed to convince Moscow that the establishment of a tank field within the range of the reserve would violate Russian laws on the preservation of historical monuments of the medieval period (towers, crypts, pagan and early Muslim cemeteries, etc.) which are found in this area in quite large numbers.

However, the residents of Botlikh disagree. They claim that it was their vigorous efforts that forced the Russian military to leave the territory, where the distribution of land plots for building houses for villagers was planned. An anonymous military source also confirmed that the Russian withdrawal was related to the hostile attitude on the part of the villagers, who showed their hatred of the Russian military even more openly than the residents in neighboring Chechnya.

The only explanation that lies on the surface, however, is that the base, originally seen as a strategic location for a military invasion of Georgia from Dagestan, apparently is no longer relevant. Maintaining a base amid enraged local residents has become a headache for Russia’s military command. Without the prospect of invading the neighboring country, a base in this mountainous part of Dagestan would be absolutely meaningless. In

any case, the Russian military command and Dagestan’s authorities have yet to confirm officially that the base has been shut down.

TRANSLATED FROM RUSSIAN

04.22.2011 11:32 "Radio" Mayak "The kidnappers released Ivan Kaspersky

http://www.radiomayak.ru/doc.html?id=239341

The kidnappers released the son of the programmer, developer of antivirus programs Eugene Kaspersky. According to the online edition of Life News, a source close to the investigation, was seeking youths, a 20-year-old Ivan returned home for his release was paid a ransom. The amount was not specified.

Previously reported that the attackers stole Kaspersky Jr. on April 19, demanding 3 million euros. Official information about the release of a young man has not been confirmed.

The police of the capital ITAR-TASS reported today that Moscow's police statement about the abduction of her son Eugene Kaspersky has been reported.

Kaspersky Lab calls on media to stop kidnap speculationhttp://en.rian.ru/russia/20110422/163642510.html

09:38 22/04/2011

The global anti-virus software firm of Russian computer entrepreneur Yevgeny Kaspersky asked on Friday that Russian media "stop speculation" about his son, who has reportedly gone missing in Moscow.

"Kaspersky Lab calls on the media to stop spreading rumors and speculation about the events related to the family members of Yevgeny Kaspersky," the firm said in a statement. "Yevgeny Kaspersky is working normally, but he commented that the information being circulated is harmful for the company."

Ivan Kaspersky, 20, was reportedly kidnapped while on his way to work on Tuesday.

Russian news site Life News says kidnappers are demanding 3 million euros ($4.3 million) in return for freeing Ivan.

Kaspersky Lab - one of Russia's few stand-out successes not related to its energy sector - has neither confirmed nor denied the report.

MOSCOW, April 22 (RIA Novosti)

Kaspersky Lab asks media not to spread rumours abut kidnapping

http://www.itar-tass.com/eng/level2.html?NewsID=16178898&PageNum=0

22.04.2011, 11.02

MOSCOW, April 22 (Itar-Tass) - Kaspersky Lab has asked media to refrain from spreading “rumours concerning members of the family” of Russia’s leading anti-virus software engineer Yevgeny Kaspersky.

A statement of Kaspersky Lab has also said that the founder of the company “works in a routine regime,” but believes that the circulation of rumours about his son “causes damage to his company”.

It was reported on Thursday that his 20-year old son Ivan Kaspersky was abducted on his way to work. There has been no official confirmation to the information as of yet.

Ivan Kaspersky, a four-year student of the Moscow State University went missing on Tuesday and Kommersant daily reported on Friday kidnappers demanded three million euros as ransom.

However senior Kaspersky and his wife refused to give any comment to the newspaper.

Kommersant said Kaspersky had not filed an official statement to law enforcers as kidnappers demanded, but the news spread after Ivan’s university mate disclosed it to friends.

The newspaper quoted unnamed police and security experts in the fight against kidnapping as saying they hope media coverage of the incident may force kidnappers free the boy as it happened with the 17-year old son of Rosneft Vice President Mikhail Stavsky in 2009.

Junior Stavsky was kidnapped on orders of North Caucasus terrorist warlord Said Buryatsky and was released after the incident was widely covered by media. Buryatsky was killed in March 2010.

Kaspersky Lab is regarded as one of Russia's few business success stories outside the energy sector.

Son of leading Russian software tycoon reportedly kidnapped

http://www.itar-tass.com/eng/level2.html?NewsID=16178281

22.04.2011, 07.31

MOSCOW, April 22 (Itar-Tass) -- 20-year old son of Russia’s leading anti-virus software engineer Yevgeny Kaspersky is missing and could be kidnapped, Russian media reported however law enforcers and senior Kaspersky refused comment.

Ivan Kaspersky, a four-year student of the Moscow State University went missing on Tuesday and Kommersant daily reported on Friday kidnappers demanded three million euros as ransom.

However senior Kaspersky and his wife refused to give any comment to the newspaper.

Kommersant said Kaspersky had not filed an official statement to law enforcers as kidnappers demanded, but the news spread after Ivan’s university mate disclosed it to friends.

The newspaper quoted unnamed police and security experts in the fight against kidnapping as saying they hope media coverage of the incident may force kidnappers free the boy as it happened with the 17-year old son of Rosneft Vice President Mikhail Stavsky in 2009. Junior Stavsky was kidnapped on orders of North Caucasus terrorist warlord Said Buryatsky and was released after the incident was widely covered by media. Buryatsky was killed in March 2010.

Kaspersky Lab is regarded as one of Russia's few business success stories outside the energy sector.

Arkhangelsk investigators refute reports LUKoil mgr’s daughter found dead

http://www.itar-tass.com/eng/level2.html?NewsID=16179240&PageNum=0

22.04.2011, 12.03

ARKHANGELSK, April 22 (Itar-Tass) - The Russian Investigation Committee’s administration for the Arkhangelsk region and Nenets autonomous area has refuted media reports alleging police had found the dead body of a LUKoil top manager’s daughter, a spokesman for the investigation administration told Itar-Tass on Friday.

On Thursday, one of the news agencies posted information on its website saying Arkhangelsk police found the dismembered body of Viktoria Kislyuk, a daughter of one of LUKoil’s top managers, who had been reported missing in the Moscow region since March. The news agency referred to a source in the Arkhanglesk investigation committee, who allegedly said a bag with the body had been left at one of the city’s garages by a group of youngsters.

“The Arkhangelsk region and Nenets autonomous area administration of the Russian Investigation Committee has never furnished such information, which has nothing to do with the real state of things,” the spokesman stressed.

Praise for diplomat who died in Russia http://www.arabtimesonline.com/NewsDetails/tabid/96/smid/414/ArticleID/168263/t/Praise-for-diplomat-who-died-in-Russia/Default.aspx

KUWAIT CITY, April 21: Third Secretary of the Kuwaiti Embassy in Moscow Saleh Mohammad Al-Iqab, who died in a Moscow hospital a few days ago, was laid in his final resting place at the Sulaibikhat Cemetery on Thursday.Acting Deputy Premier and Minister of Foreign Affairs Sheikh Dr Mohammad Al-Sabah led the funeral procession, while the eulogy was led by acting Interior Minister Sheikh Ahmad Al-Hamoud, along with Foreign Affairs Minister Undersecretary Khalid Al-Jarallah, dignitaries and officials among others.An Amiri plane, which transported Al-Iqab’s body, arrived in Kuwait at 2:00 am Thursday and was received by Al-Jarallah, Director of Protocols in the Foreign Affairs Ministry Ambassador Dhoorii Al-Ajran and other diplomats. Al-Jarallah praised the deceased for his dedicated service to the nation and integrity in his work. He said Al-Iqab was best known for his sincerity and good relations with other members of the diplomatic corps. He added the deceased was one of the most competent young public servants the ministry has ever had.

Moscow mayor denies his wife will become new Baturina

http://www.itar-tass.com/eng/level2.html?NewsID=16177974&PageNum=0

22.04.2011, 01.33

MOSCOW, April 22 (Itar-Tass) -- Moscow Mayor Sergei Sobyanin denied allegations his wife Irina will follow suit of Yelena Baturina, the spouse of his predecessor Yuri Luzhkov, and make a fortune thanks to her husband.

“She is incapable of doing business. I believe it is good for Moscow,” Sobyanin smiled at a meeting with journalists on Thursday.

Baturina was considered to be the richest Russian businesswoman thanks to lucrative contracts and huge credits received with her husband’s support. Luzhkov however rejected the claims saying his wife was simply a gifted business lady.

After Sobyanin replaced Luzhkov, Russian media said his wife owned a road construction company in Tyumen. In April Sobyanin reportedly decided to replace four million square kilometers of asphalt-paved pedestrian sidewalks in downtown Moscow by tiles. Rumors immediately spread in the capital city alleging Sobyanin was eyeing a lucrative contract for his wife’s company.

The mayor said he was aware of the rumors and denied them. “They claim my wife is actively engaged in business and repairs sidewalks. Thanks God she is not! She is no businesswoman like I am no ballerina,” the mayor commented.

According to Sobyanin’s family income declaration reported by Vedosmoti business daily, his wife earned only 21,800 rubles (7000 dollars) in 2008 and even less in 2009 – 18,586 rubles.

Russian media said Irina Sobyanina’s company installed marble and granite kerb stones in Tyumen streets when her husband was the regional governor.

Betting on Businesshttp://russiaprofile.org/business/35217.html

City Hall Wants Small Business Back in Business By Tai Adelaja Russia Profile 04/21/2011

Moscow Mayor Sergei Sobyanin gave a long-awaited backing to the development of small and medium-sized enterprises (SME) on Tuesday, in what experts say could prove to be the only effective tool in promoting economic growth and expanding employment in Russia’s largest metropolis. “City Hall is interested in further enhancing the role of small and medium-sized businesses,” Sobyanin told a government meeting on Tuesday. He said that small and medium-sized businesses currently employ about 2.5 million people in the city.

City Hall currently allocates about 2.3 billion rubles ($89 million) to support small and medium-sized businesses in the city, but Sobyanin said the money is hardly sufficient to expand the small business sector. He said City Hall would increase grants and subsidies to private entrepreneurs and double the refunds it pays for interest rates on loans. Municipal loan guarantees to small businesses could also go up by 80 percent, he said. City Hall estimates that such an increase will raise the total volume of loans given to

SMEs from the current four billion rubles ($142 million) to seven billion rubles ($250 million), and could double the number of potential beneficiaries of such loans.

Some of the measures announced on Tuesday could have far-reaching benefits for the mayor, whose administration is struggling to shake off an anti-business image, experts say. Weeks after he was appointed mayor in October, Sobyanin toured the city's streets inspecting kiosks – the ubiquitous symbol of small enterprises in the capital. He said he was "appalled" by what he saw. Within days hundreds of kiosks were removed from the capital's streets, parks, and metro stations. Another of his first actions in office was to freeze the existing program for financing small and medium-sized businesses. He said the administration of the funds has been plagued with corruption and bureaucratic barriers. Sobyanin promised to hold a comprehensive audit of administrative barriers at all levels of society, in order to create "a modern investment climate." "The main problems faced by small and medium-sized businesses are bureaucratic barriers," he said. "The investment climate will change completely if they are eradicated."

President Dmitry Medvedev, who appointed Sobyanin as mayor in October, has consistently said that "support for small and medium-sized businesses is a priority task" that should be geared toward "the creation of the middle class in [the] country.” In March, Medvedev called for addressing unemployment by financing small businesses, promising to continue state subsidies for startups. The president proposed tax breaks estimated at 41 billion rubles ($1.45 billion) for the small business sector over the next two years. Small enterprises provide about 25 million to 30 million jobs nationwide, including more than 2.5 million in Moscow, according to the Russian Association of Small and Medium Enterprises.

The federal budget has allocated 20.8 billion rubles ($742 million) to support small businesses this year, 15 percent more than it allocated last year. About 4.8 billion rubles ($171 million) will be spent on capital projects such as the construction of business incubators, technology parks, industrial parks and purchasing equipment. But the lion share will be transferred to municipalities like Moscow as subsidies to small companies and the formation of the financial infrastructure to support small businesses. The money will also be used to subsidize the operating costs of a wide range of innovative companies, as well as support modernization and microfinance.

Sobyanin not only expressed support for such initiatives on Tuesday, but he also came up with a few initiatives of his own. He said City Hall is mulling ways to increase the size of office spaces that could be privatized by entrepreneurs in municipally-owned buildings. He said that the area of redeemable property has recently been increased from 100 square meters to 300 square meters, and that the city has also extended the lease of its office spaces to private businesses at a minimum rate of 1,800 rubles per square meter. The mayor promised to reduce the administrative burden for businesses and said he would give preferences to SMEs in the procurement of products for the city. In the first quarter of 2011, small and medium-sized businesses in the city received orders worth about 14 billion rubles ($500 million), he said.

However, the mayor still appears to be directing most of his energies to right the wrongs purportedly committed by his predecessor, former Mayor Yury Luzhkov. Sobyanin said on Tuesday that up to 75 percent of the funds allocated in 2010 to support small and medium-sized businesses in Moscow were misused. "Together with the Audit Chamber and other relevant departments, we have analyzed the effectiveness of spending in support [of small and medium-sized businesses] for last year and concluded that 75 percent of allocated funds were spent inefficiently,” Sobyanin told a government meeting on Tuesday. There is a need, he said, to change the way small and medium-sized businesses receive state support “so that the funds actually reach their destination.”

Alexei Komissarov, who heads City Hall’s department for the development of small and medium-sized businesses, confirmed that only 315 million rubles ($11.2 million) in state subsidies were distributed to roughly 453 businesses out of the 2.3 billion rubles ($82 million) allocated for the purpose last year. He said the previous administration was able to keep private businesses out of the scheme by deliberately concealing information about the program. In an apparent effort to change the status quo, Sobyanin ordered Komissarov’s department on Tuesday to prepare documents explaining the pr

Pope to contact ISShttp://english.ruvr.ru/2011/04/22/49290578.html

Apr 22, 2011 05:03 Moscow Time

On May 4th Pope Benedict XVI will contact the crew of the International Space Station.

The 84-year-old pontiff will communicate with astronauts on the occasion of the last mission of the space shuttle Endeavour which is scheduled to be launched on April 29.

On board the ISS will also be two Italian astronaut; Roberto Vittori and Paolo Nespoli, which is in and of itself a rarity. there has only been one such meeting.

The launch of Endeavour will be the penultimate in the history of the shuttle program, which should end on June 28th, when the Atlantis will fly to the ISS.

April 22, 2011 11:29

ISS oxygen generator will not be re-launched before next weekhttp://www.interfax.com/newsinf.asp?id=238714

MOSCOW. April 22 (Interfax-AVN) - The Russian oxygen generation system Electron-VM on the International Space Station (ISS) is not operating at the moment, the Mission Control Center near Moscow told Interfax-AVN.

"We are going to switch it on on Monday (April 25)," said Vladimir Solovyov, ISS Russian mission coordinator and first deputy general design engineer at Rocket Space Corporation Energia.

He was commenting on the NASA report that the Electron system on board the Russian segment of the ISS is not functioning.

The oxygen generation system was switched off due to maintenance checks on other ISS system, the official said. "To repair and test other systems, we switched off some of the equipment, including the Electron system. It was a routine system shutdown," Solovyov said.

The oxygen level at the ISS is above the average, he said. If the crew "have eaten up" excessive oxygen by Monday, the Electron system will be switched on, he said. "We do not know what to do with the oxygen," Solovyov said.

There is no need to fully use the Electron system in the near future as European ATV-2 has brought a large amount of oxygen in its tankers and it has to be used up before the ship undocks.

NASA said earlier that the oxygen generator in the Zvezda Module failed to switch back on Wednesday after the crew completed the repair of the Regul-OS radio control and communications system.

The treadmill in the Zvezda Module also broke down on Wednesday. The oxygen partial pressure inside the ISS Modules is within the crew's comfortable limits, NASA said.

kk

Russian space freighter to be buried in Pacific after 5-day scientific missionhttp://en.rian.ru/science/20110422/163640349.html

05:13 22/04/2011

Russia's Progress M-09M cargo spacecraft will undock from the International Space Station (ISS) on Friday to be buried in the Pacific after conducting a five-day scientific mission, a Mission Control spokesman said.

The undocking is scheduled for 3:41pm Moscow time (11:41 GMT), the spokesman said. The spacecraft will remain in orbit well away from the station to conduct several scientific experiments before being deorbited on April 26.

During the flight, scientists will continue the Radar-Progress experiment, aimed at defining the density, sizes and reflectivity of the ionosphere environment around the spacecraft, which is caused by the operations of its liquid propellant engines.

The spacecraft will burn up in the Earth's atmosphere as soon as the experiment is over. Its fragments will fall in remote areas of the Pacific Ocean.

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

The next Progress cargo craft will be launched from the Baikonur Space Center in Kazakhstan and dock with the ISS on April 27.

MOSCOW, April 22 (RIA Novosti)

GOOGLE TRANSLATION

Ratings of Medvedev, Putin and United Russia have fallen to record low

http://www.newsru.com/russia/22apr2011/tandem.html

Published: 8:49Last update: 10:01Ratings of President Dmitry Medvedev, Prime Minister Vladimir Putin and United Russia party "fell to a record low.According to the nationwide survey conducted by fund "Public opinion", the popularity of the president in the eyes of the Russians in January 2010 declined from 62% to 46%, confidence in the Prime Minister declined from 69% to 53%.At the same time, the rating of the ruling party reached a minimum over the past two years - 44%. At the same time reached a record level of distrust of the party in power - he rose from 29% in January to 38% in April, according to Vedomosti.In late 2010, approval ratings for Prime Minister Putin has remained stable, while the number approve of President Dmitry Medvedev is constantly growing. In late 2010, for the first time observations of sociologists president caught up in the approval ratings of Prime Minister.However, in January the position of Medvedev and Putin's trust rating of Russians decreased by 6-7%, showed the poll by the Levada Center. As noted by the media if such swings were not even in the midst of financial crisis.

Prior to that, the confidence index fell to a tandem in the summer of 2010, and it was due, according to sociologists, with record heat and the devastating fires that raged across Russia.According to the observations of sociologists in Russia, when happen any shocks, loud attacks or armed conflicts, the population begins to gravitate toward "dictatorship" and supports Putin, and when the situation is stable and the need to resolve issues, people are more supportive of liberal policies Medvedev.Russian experts also point out the dangerous tendency for the authorities: focusing only on herself, she pointedly ignores the views of the middle class - is, in their opinion, "a big political mistake."According to a report a month ago, "The political crisis in Russia and the possible mechanisms of its development", prepared by the Center for Strategic Research (CSR), the population is growing distrust of the key "label" government: Medvedev, Putin and United Russia.As noted in the report CSR, a growing trend, "vote for some third party, not for Putin or Medvedev. People not only lost their fear of the "third", but also begin to wish for its occurrence. It is often heard saying that really such a third yet, but if it appears that the authorities will do everything to prevent it in the elections.The report's authors have expressed doubts about the viability of the mechanism of succession in Russia, as even the first experience of its application (transfer of power from Putin to Medvedev) has caused outrage in many different sectors of society. "Assuming that the election campaigns 2011 - 2012's will be scheduled, they will pay in any case a very strong blow to the legitimacy of power due to the obvious fact of political manipulation", - experts believe.To avoid the negative consequences of the crisis of legitimacy, CSR advises authorities to "gradually and legitimately change the political institutions," upgrade "political content" with the first three echelons of politicians. This will help reduce "the risk of uncontrolled development of the situation in Russia, where" the growing population's demand for a breakthrough semi-official rhetoric and the transition to political content, reflecting the "truth of life."

INTERVIEW: Activist: Putin as president would be "Russia's ruin"http://www.monstersandcritics.com/news/europe/news/article_1634585.php/INTERVIEW-Activist-Putin-as-president-would-be-Russia-s-ruin

By Ulf Mauder Apr 22, 2011, 6:46 GMT

Moscow - The re-election of Prime Minister Vladimir Putin to the presidency would be 'Russia's ruin,' prominent civil rights activist Svetlana Gannushkina has told the German Press Agency dpa.

'Putin has not one ounce of respect for the population,' the 69- year-old head of refugee organization Civil Help said. 'He's a person who doesn't understand - perhaps really doesn't understand - what democracy is.'

Gannushkina, a mathematician by training, has been regarded for years as a likely candidate for the Nobel Peace Prize for her work on human rights. She is also a member of President Dmitry Medvedev's human rights committee.

The current situation in Russia is 'catastrophic' because all the structures of a democratic administration had been destroyed, she said.

She hopes that Medvedev, will be re-elected, despite 'his mistakes.'

'Despite everything, Medvedev seems to be a person for whom a scale of good and bad still exists,' she added.

Putin, on the other hand, has no such understanding.

'Having a person in power who has so many personal weaknesses is very dangerous,' she said, saying that for example, Putin could not forgive people and would always seek revenge.

Medvedev and Putin have repeatedly said that they will work out between themselves which of them will become a candidate for 2012 presidential elections.

Medvedev had allowed those who believe in democracy to hope that he wouldn't just talk about reform, but may also follow up his words with actions, Gannushkina said.

But Medvedev, a qualified lawyer, had not yet fulfilled his promise to create an independent judiciary, she said. 'He doesn't understand that we need courts with juries.'

Russian judges are either bribable or constantly find themselves in a conflict of interest, Gannushkina said.

'Our judges lost the ability to make judgements based on their inner convictions long ago,' she said.

The activist was also concerned about extreme nationalistic tendencies among Russians, in particular against migrants from Central Asia, and about the ongoing conflict between Russian-backed forces and Islamist separatists in the North Caucasus.

Gannushkina has done a lot of work with refugees from the North Caucasus region, which includes the Russian republics of Chechnya, Ingushetia and Dagestan.

Over 40 wildfires registered in Russia – EMERCOM

http://www.itar-tass.com/eng/level2.html?NewsID=16178884

22.04.2011, 11.03

MOSCOW, April 22 (Itar-Tass) - Over 40 wildfires covering the area of almost 1,000 hectares are registered across Russia, a source from the information department of the Russian Ministry for Emergency Situations reported on Friday.

“A total of 134 wildfire centres covering the area of over 2,000 hectares have been registered in Russia’s regions over the past 24 hours,” the source said. “Ninety-one of them have been put out and 43 wildfires covering the area of 959.8 hectares were registered as of 6 am, Moscow time on Thursday,” the source added.

He said 14 fires have been localized. “There are no major wildfires,” ministry sources stressed.

Over 1,000 people assisted by 238 units of hardware are combating the fires.

Duma Security Committee’s deputy chairman: corruption to break Russia into pieces in 2 years

http://abc.az/eng/news_22_04_2011_53393.html

22.04.2011 10:48

Baku, Fineko/abc.az. Russia faces the threat of disintegration into "principalities" to interact with each other forcedly.

Yesterday on the air of RBC TV Gennady Gudkov, deputy chairman of Russian State Duma Committee on Security, said that monthly corruption costs for each citizen of Russia from the frail elders to babies in 5,500 rubles (about $180), reaching a volume of $300 bn a year.

"Either we are now beginning to change the situation or there will not be Russia, but some parts of the former Russian state to interact with each other somehow. If Russia does not adapt to modern conditions, which preclude the widespread corruption as a way of economy running, we will collapse maximum in a year or two years. We have not more time for fight,” Gudkov said.

In his view, the only salvation for Russia can be assistance of the West, if the latter decides to check-out the origin of wealth of all the major Russian men of property, as corrupt officials do not associate their future with Russia and fear only that they will be denied entry to the west, where they have business, accounts, and property.

Russia itself, in Gudkov’s opinion, for a start should at least ratify Article 20 of the UN Convention against Corruption, which obliges to add the issue of illegal enrichment to the Criminal Code, put revenues and expenses under control, introduce absolute transparency in work of the authorities.

Gudkov finds it impossible to apply Georgia’s method of dealing with corruption when 85% of police personnel was sacked in Russia, as the latter would have to fire 90% of the state, regional and municipal apparatus. Russia will simply hardly be able to ensure such a large number of new officials.

Russia: Fools and Roadshttp://barentsnova.com/node/1007

Apr 22 2011

There is no agreement of opinion for the origin of the popular saying: "there are two problems in Russia - fools and roads". Yet most people agree on that and add that poor-quality roads come as a consequence of the first problem.  However, Russian Transport Minister dares to break the established pattern: asphalt on the roads is to be replaced by concrete.

Russia does not produce asphalt of proper quality, admits Igor Levitin to Rossia 24, then Russia should either improve the quality of bitumen or take up cement concrete for road construction.

Concrete roads are cheaper. Stepping away from traditional bitumen will significantly curtail construction costs, says Nikita Krichevsky, Dr.of Economics and chairman of Opora Rossii expert council, to Izvestia: The most expensive part of the road is the base layer. Using reinforced concrete plates as the base material will decrease the costs by 8 times, he says.

Nonetheless, some experts doubt the success of new construction material. Asphalt solution is a funds cornucopia for construction slackers who steadily get their "pork" money from different state-owned appropriations. The road repair seems to be a non-stop process revived after each winter period. In 2011, Russia is to repair 5,500 km of federal roads.

According to the analysis of World Bank, roads repair in Russia is quite a wasteful business: $27,000-$55,000 for 1 km of the road surface. In comparison to that, Finland (the country of alike climate conditions) spends a bit over $9,000 per 1 km. Trying to find the cause of this costs discrepancy, the bank's experts suggested that "factors contributing to high costs of maintaining roads in Russia are likely to come from insufficient competition in the road industry, as well as leakage of funds and corruption".

PRESS DIGEST - Russia - Apr 22http://af.reuters.com/article/energyOilNews/idAFLDE73L03E20110422

Fri Apr 22, 2011 7:25am GMT

MOSCOW, April 22 (Reuters) - The following are some of the leading stories in Russia's newspapers on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- Officials in Russia's Penza region swap cars for scooters and bicycles in an attempt to evaluate the condition of local roads, the paper writes.

- Cameras and infrared sensors will be installed in forests across Russia to prevent deadly forest fires, the paper says.

VEDOMOSTI

www.vedomosti.ru

- Popularity ratings of the Russian ruling tandem and main political party United Russia dropped to its lowest level in two years, the paper reports.

- Russian oil company Bashneft (BANE.RTS) violated a number of licence agreements for oil production in southwestern Bashkortostan region, according to regional accounting chamber, the paper says.

NEZAVISIMAYA GAZETA

www.ng.ru

- Russia's Finance Minister said political competition in Russia is necessary for economic development, the paper writes.

TRUD

www.trud.ru

- The number of Russians planning trips abroad has risen due to better economic conditions while the prices for the most popular vacation spot rise, the daily reports.

KOMSOMOLSKAYA PRAVDA

www.kp.ru

- The paper runs an interview with Moscow mayor Sergei Sobyanin who says 60,000 trees died in Moscow during the ice rain this winter.

Russian Press at a Glance, Friday, April 22, 2011http://en.rian.ru/papers/20110422/163642065.html

08:41 22/04/2011

POLITICS

In his state-of-the-nation address on Thursday, Belarusian President Alexander Lukashenko blamed a recent deadly terrorist attack on the Minsk metro on external forces aiming to “dictate their will to the Belarusian people,” denouncing superfluous “democracy” and promising to eradicate the “fifth column” in the country. (Kommersant, Nezavisimaya Gazeta)

Approval ratings of Russian President Dmitry Medvedev, Prime Minister Vladimir Putin and his pro-Kremlin United Russia party have dropped to their lowest levels in two years, two Russian pollsters said.  (Vedomosti)

The United States will allocate $90 million for democratic reforms in Georgia, the U.S. ambassador to the South Caucasus country said. Georgian opposition leader Nino Burdzhanadze said the West had finally begun treating Tbilisi “adequately.”

Giorgi Baramidze, the Georgian deputy prime minister and minister for Euro-Atlantic integration, explained why it is important for Georgia to join NATO.(Moskovskiye Novosti)

Obama’s decision to replace outgoing U.S. Defense Secretary Robert Gates with current CIA Director Leon Panetta was motivated by Leon’s ability to implement harsh financial policies, experts said. The new defense secretary will face a challenge of cutting the Pentagon’s expenditures by $400 billion while continuing operations in Iraq, Afghanistan

and Libya. (Kommersant)

Nikolai Denin, the governor of the Western Russian city of Bryansk, and his wife have increased their land holdings over the past year - to 8,400 hectares in 2010 from 11.6 hectares in 2009.(Vedomosti)

ECONOMY

High oil and gas prices are no longer boosting the development of the Russian economy, Finance Minister Alexei Kudrin said during a meeting of the Russian Union of Industrialists and Entrepreneurs on Thursday. The minister again called for the development of political competition in Russia, which he said would allow drawing up an effective economic strategy. (Nezavisimaya Gazeta)

The Russian government has approved amendments to Russia’s 2011 budget. The country’s expenses are likely to exceed previous estimates by 418.4 billion rubles ($14.9 billion). Inflation in Russia has been estimated to stand at 6.5-7.5 percent this year, but experts say it may reach 8.7 percent.                                                                                     (Vedomosti)

BUSINESS

Russian Prime Minister Vladimir Putin met on Thursday with Russian oligarchs - members of the Russian Union of Industrialists and Entrepreneurs - and promised them to consider the lowering of fiscal charges. (Kommersant)

The Russian government discussed on Thursday the indexation of taxes for natural monopolies in 2012-2014. The increase in taxes may be 1.5-3 times less then previous estimates.(Vedomosti)

The Russian Human Rights Council has begun looking into the case of Russian oligarch Mikhail Khodorkovsky, the former head of oil company Yukos, serving 14 years in prison for embezzling oil from Yukos and laundering over 3 billion rubles ($97.5 million) in revenues.  (Nezavisimaya Gazeta)

Switzerland has opened a money-laundering probe against a former Russian tax official at the request of British investment company Hermitage Capital Management Ltd.(Kommersant, Vedomosti)

U.S. investor Stephen Lynch, known for buying a subsidiary of Russian energy company

Yukos during the company’s bankruptcy procedure, is in talks on the purchase of a stake in Russia’s Lenta hypermarket network.(Kommersant)

Shareholders in Bank of Moscow elected former VTB employee Mikhail Kuzovlev as the bank's president on Thursday, ending a dramatic fight for control over the capital's lender.(Kommersant)

CRIME

The son of software tycoon Yevgeny Kaspersky has been kidnapped in Moscow. Ivan Kaspersky, 20, is believed to be being held for a 3 million euro ransom.  (Kommersant, Izvestia, Moskovskiye Novosti)

Belarus Bailout Hinges On Russia http://www.themoscowtimes.com/news/article/belarus-bailout-hinges-on-russia/435566.html

22 April 2011By Nikolaus von Twickel

For the second time in two years, Belarus is facing bankruptcy. And for the first time, it seems that Russia will be mainly alone in picking up the tab.

Belarus' currency reserves are running dangerously low, having slid from $6 billion to $3.7 billion over the past six months, according to the web site of the country's central bank.

The situation is reminiscent of summer 2009, when a $2 billion loan from Russia and a $3.5 billion credit from the International Monetary Fund helped Belarus survive the financial crisis.

But this time the political situation is much more volatile.

On Tuesday, the central bank announced that it would allow the Belarussian ruble to float freely, heightening fears of devaluation and public unrest as people line up outside currency exchange booths.

President Alexander Lukashenko, the country's authoritarian leader, has few alternatives to turning eastward for assistance.

A tentative rapprochement with the West was shattered after the presidential election last December, when police brutally cracked down on the opposition, which complained that the vote, re-electing Lukashenko to a fourth term, was rigged.

In response, the European Union has frozen assets and restricted visas for the Belarussian leadership.

"The EU is frustrated with Lukashenko, [though] they held out an olive branch before the election," said Fraser Cameron, director of the EU-Russia Center, a Brussels-based think tank. The poll "turned out to be a complete fraud," he added.

The situation is likely to deteriorate further after Lukashenko implicitly accused the West of being behind a mystery bombing that hit the Minsk metro on April 11, killing 13 and wounding more than 200.

In his state-of-the-nation address to parliament Thursday, Lukashenko suggested that the sanctions and bombing were part of a foreign plot against Belarus. "These are all links of one chain," he said, Interfax reported.

The president added that the blast was possible because the government had allowed too much "unnecessary" democracy. "We had so much democracy that you and I got sick," he was quoted as saying.

And while the 27-member European bloc is currently hit by its own financial worries — having to avert a credit crunch in Greece, Ireland and Portugal — Russia, by contrast, is awash with cash as rising oil prices promise more than $51 billion in extra budget revenues this year.

Finance Minister Alexei Kudrin said earlier this week that Moscow would finalize talks with Minsk within a month on terms for a $2.7 billion loan, of which $1.7 billion would be released from the Russian-led $10 billion anti-crisis Eurasian Cooperation Fund.

The prospect of the Kremlin bailing out Lukashenko with another billion-dollar loan spurned concerns that Belarus is sliding into even deeper dependence.

"Financially, Belarus is becoming another South Ossetia," said Alexei Malashenko, an analyst with the Carnegie Moscow Center, referring to the breakaway Georgian region that is largely bankrolled from Moscow.

Malashenko said the money was largely wasted on Belarus' Soviet-style economy.

Analysts have said the present financial woes stem in large part from a state spending spree in the run-up to the December presidential election.

But two influential pro-Kremlin State Duma deputies said it was right to support the country's western neighbor.

"After all, we are not helping Lukashenko personally, but the people of Belarus," said Konstantin Zatulin, a member of United Russia and long-standing expert on policy toward former Soviet states.

He added that Russia was morally and politically obliged to help, just as the EU was bailing out Portugal and Greece. "After all, we have political and economic integration with Minsk," he said.

However, Zatulin admitted that the Belarussian leader had been a difficult partner in the past.

Last year, Lukashenko angered the Kremlin by courting the EU and boycotting institutions like the Russia-led Collective Security Treaty Organization.

In return, he was mocked by state-controlled NTV television and President Dmitry Medvedev, who openly accused him of sowing hostility between Moscow and Minsk.

"I cannot say that I like him very much, but show me one other [Belarussian] politician with whom you can deal responsibly," Zatulin said in a reference to the split Belarussian opposition, which failed to settle on a single candidate to run against Lukashenko in December and put forth a whopping nine nominees.

Sergei Markov, another United Russia lawmaker and political pundit, went one step further by saying Lukashenko's "demonization" in the Western press was unfounded.

"Maybe he is no stable ally, but he is a strong politician who has impressively survived the past 17 years," he told The Moscow Times.

Carnegie Moscow Center's Malashenko was also pessimistic about replacing Lukashenko. "Maybe they do not like him, but they also fear to lose him," he said about the Russian government's support for the incumbent Belarussian leader.

He added that, while the Belarussian opposition was too weak and divided, the economic aid should at least be tied to political conditions to gradually facilitate change. "Sooner or later Lukashenko will fall," he said.

Finance Minister Kudrin said earlier that the Russian loan would be issued on terms similar to those of IMF programs.

Sergei Musiyenko, a Minsk-based analyst who works as an adviser to Lukashenko, said the Belarussian government would meet all requirements for economic reform.

"We have been reforming for three years and we are known to be a sound borrower," he said by telephone, adding that Belarus was a net donor to the budget during the Soviet Union. "There is huge potential in our economy," he said.

Musiyenko pointed out that there were other potential creditors. As an example, he named China, which has promised long-term aid worth some $16 billion.

Analysts have speculated that China could buy a stake in potash miner Belaruskali. They have said that selling 25 percent of the firm could raise up to $7 billion.

Duma deputy Markov also said Lukashenko should also hope for help from Iran and Venezuela, which have both established close ties with Belarus in the past years.

Triple defensehttp://rt.com/politics/press/rossijskaya-gazeta/defense-military-joint-serdyukov/en/print/

Published: 22 April, 2011, 06:58Edited: 22 April, 2011, 06:58

Anatoly Serdyukov discussed a joint training plan with colleagues from Belarus and Ukraine Yury Gavrilov

Russia’s Defense Ministry is summarizing the results of the joint discussion between Belarus and Russia’s military departments.

Anatoly Serdyukov visited Minsk for several hours. In this time, he managed to speak to his Belarusian colleague, Yury Zhadobin, on the prospects of military and military-technical cooperation between the two countries. Various questions were raised, but the main topics of discussion were related to consolidation of the north-west sector of the united regional air-defense system and the upcoming 2011 Union Shield military exercises.

In particular, the ministers decided to supplement the arsenal of air- defense systems, which are currently on alert in Belarus, with improved S-300 complexes.

“Last year, the first phase of the renovation and modernization of the Belarusian S-300 anti-aircraft missile system was completed. We agreed to accelerate the work on the next delivery of this weapon to the republic,” said Anatoly Serdyukov.

The desire of our generals to create a secure ballistic missile defense umbrella at the western frontiers of the Union State is understandable. The threat of aerial attacks from this direction has not been eliminated, and Russia is highly interested in intercepting them far from its border. The first strike threatens our neighbors, and in order to neutralize it, Russia is ready to provide the Belarusian army with not only military, but also technical support.

About five years ago, the first S-300PS division went on combat duty near Brest. Now, the Belarusian army has a number of such units. Each S-300 team is able to

simultaneously monitor six air space violators and intercept any target, at heights of 20 meters to 20 km, and within 40 km with conventional ammunition. If an upgraded rocket is installed into the launcher, then the firing range will increase significantly. The modernization of the Belarusian complexes aims to do just that – to increase the capabilities of its air defense. The neighbor has more than once expressed the desire to obtain the more advanced S-400 system from Russia. But we will, most likely, consider making these supplies to our partners after we re-equip our air-defense regiments and brigades with new equipment.

The ability to use and manage the anti-missile defense system technologies will be tested by the ministers in September at the 2011 Union Shield military exercises. According to Anatoly Serdyukov, it will be this year’s largest joint military operational training event of the two countries. Training battles will unfold at the combined-arms Gorokhovetsky training ground in the Nizhny Novgorod region and the Ashuluk Airfield in Astrakhan. The combat scenario is currently being developed by the Defense Ministries of Moscow and Minsk. But it is already known that the training will include a total of about 12,000 soldiers and officers, 200 units of military equipment, and more than 50 jets and helicopters.

After Serdyukov and Zhadobin’s talks it became known that Ukrainian troops will participate in the joint Russian-Belarusian maneuvers. The republic’s defense minister, Mikhail Yezhel, traveled to Minsk to discuss this possibility with the colleagues. He also wanted to understand as to how the experience of the reform of the Russian and Belarusian Armed Forces may be applied to the modernization of the Ukrainian army.

In recent months, Mikhail Yezhel has been meeting with Anatoly Serdyukov rather frequently. Not long ago, the two of them traveled to Russia’s Far East, where Yezhel had served for many years and completed his service as admiral and submarine division commander. Meanwhile, the Russian minister just recently traveled to Ukraine on a working trip. Anatoly Serdyukov visited the aviation building enterprise in Kiev, which designs the An-grade aircraft. In Saki, he visited the NITKA complex, where our carrier aviation pilots are undergoing training.

The minister also visited two ship-building factories in Nikolayevo and Ukraine’s Naval Academy in Sevastopol.

At the end of this trip, the Russian defense minister made a number of important announcements. The first is regarding the Russian-Ukrainian An-70 transporter. According to Serdyukov, this aircraft is very much needed by our army, and its procurement is included in the State Armament Program –2020. The order for new aircraft equipment is measured at 60 units; their serial procurement may start in 2015-2016. But prior to this, Russia wants to resolve the issue of the joint production of the An-70 on its territory. The Russian Defense Ministry has already made a decision regarding the An-124-100 heavy weight strategic transport aircraft. It is possible to resume its production on Russian territory after 2015. As for the Ruslan jets, Serdyukov is hoping to upgrade them within the next five years.

Managing Russia’s Unsettled Bordershttp://en.rian.ru/valdai_op/20110422/163642105.html

08:43 22/04/2011

By Thomas Graham

All of Russia’s borders are unsettled today – in Northeast Asia, Central/South Asia, Southwest Asia, Europe, and the Arctic.  This is hardly surprising.  Unsettled borders have been a constant throughout Russian history, which could be written as a long struggle for stable, defensible borders, with the Russian state steadily pushing outward from its core in all directions until it met countervailing forces.

But today, in contrast to the past, Russia is no longer the dynamic core of Eurasia.  Rather, it is surrounded beyond the former Soviet space by states and regions of greater energy.  Chinese power, radical Islamic fervor, and European prosperity are penetrating into Russia’s historical space or acting as powerful poles of attraction for former Soviet states, including regions of Russia proper. This reversal of the traditional flow of power has now lasted a generation, since the Gorbachev era, many times longer than any other reversal since Russia emerged as a great power 300 years ago.  And it is far from certain that a return to the traditional pattern is imminent despite Russian leaders’ repeated assertions that Russia has returned to the world stage as a great power.

The Situation along the Borders

What is the nature of the challenge Russia faces?  The borders share common features, but each is unsettled in its own way. 

In Northeast Asia, for example, three large consolidated nation-states with vivid memories of historical antagonisms compete for geopolitical and economic advantage.  All of them want to tap into the vast natural resources of east Siberia and the Russian Far East.  The region lacks an effective multilateral security organization; security and stability has depended on bilateral arrangements, with the United States playing an essential role in maintaining the regional balance.  The swift rise of China, with its insatiable thirst for resources and its recent more assertive behavior, is reshaping the region. 

•    The challenge for Russia is to hold its own in this dynamic region.  In particular, Moscow needs to reinforce its writ over its sparsely-populated, resource-rich, far-flung provinces east of Lake Baykal, the economic future of which lies in full integration into the robust economy of Northeast Asia.      In Central/South Asia, by contrast, nation-states are fragile, impoverished, and poorly governed.  Armed conflict within states is a greater danger to stability than conflict

between states.  Afghanistan is mired in chaos; Kyrgyzstan and Tajikistan are candidates for near-term state failure; Kazakhstan and Uzbekistan face transfer of powers, for which they are ill prepared.  Most worrisome, Pakistan is a strife-ridden, nuclear power of some 170 million people that supports the Taliban in Afghanistan, harbors various Islamic extremist groups with designs on Central Asian states, and faces its own home-grown extremist threat.  The United States has a growing military presence, and China has moved aggressively into the region and now rivals Russia’s commercial presence there.  The Shanghai Cooperation Organization (SCO), which includes the key regional actors as members or observers, has yet to congeal as an effective regional security organization.

•    This is Russia’s most volatile and dangerous border: the chaos in Afghanistan, the high risk of internal upheaval elsewhere, and the presence of nuclear-armed powers with competing interests make this region perhaps the only place in the world where an armed confrontation between great powers is imaginable in the next decade, even if the risk is low.  The immediate challenge for Russia is to work with other powers to stabilize Afghanistan, to remove it as a major source of narcotics for the Russian market, as a harbor for terrorists, and as an arena of destabilizing geopolitical competition.  The long-term challenge is three-fold:  (1) to maintain a solid Russian presence in an increasingly competitive commercial and ideological environment, (2) to help consolidate Central Asian states and lay a solid foundation for stable long-term growth, and (3) to help build an effective regional security architecture, most likely based on the SCO.

In Southwest Asia, as befitting a crossroads of civilization, states are riven by ethnic and sectarian cleavages, as evidenced by the ‘frozen conflicts” in the Caucasus and the continuing deep unrest in the Arab world.  Iran competes with Turkey and Saudi Arabia for regional preeminence, and its nuclear program raises the specter of nuclear proliferation and an accelerating regional arms race.  Poor governance, corruption, and widespread poverty have spawned radical Islamic terrorist groups with regional and international ambitions, while unrest in the South Caucasus reinforces the turbulence in Russia’s own North Caucasus.  There is no adequate regional security organization. 

•    The challenge for Russia is to ensure the continued existence of, and bolster, a north-south axis of communication from Russia through the Caucasus into Turkey and Iran and beyond.  This will require a concerted effort to bring stability to the North Caucasus, to build constructive relations with the South Caucasian states, including Georgia, the pivotal state in the region; and to maintain good relations with both Iran and Turkey. 

In Europe, traditional nation-states share sovereignty with supranational organizations.  While some multilateral organizations include Russia as a member, the two main pillars of the European order, the EU and NATO, do not.  For the past two decades, they have moved their borders steadily eastward.  Although the ongoing economic crisis and developments in Ukraine and Georgia have cooled the earlier ardor for expansion, neither organization has renounced ambitions to move further into the Balkans and the former Soviet space.  No matter how configured, for at least the next decade, Europe will remain Russia’s largest trade partner and the key destination for its energy exports.

•    Russia faces a dilemma in Europe.  On the one hand, economic growth, and the further consolidation of the EU, would act as a powerful magnet on Ukraine and other former Soviet states, complicating Russia’s effort to rebuild its own influence in those states.  On the other hand, Europe’s continued economic growth is critical to Russia’s own well-being, given the close trade ties.  A similar situation exists with regard to security matters.  On the one hand, NATO reduces Russia’s influence on these matters in Europe; on the other, NATO provides assurances that a major conflict will not erupt inside Europe.  The challenge for Russia is to build relations with both the EU and NATO that ensure that its interests are taken into account in their decisions, while not eroding their ability to act effectively to advance Europe’s prosperity and security. 

Finally, in the Arctic, five nation-states surround a vast frontier, which is gaining in prominence as climate change opens up Northern maritime routes and makes the region’s resources more accessible and global economic growth creates demand for both the routes and the resources. 

•    The challenge for Russia is to extend its sovereignty over as large a swath of the Arctic and its resources as consistent with international law, to acquire the technology to develop those resources profitably and in an ecologically safe way, and to reduce the risk of destabilizing geopolitical competition.

Mastering the Challenges

Each border will require a unique set of policies.  It is impossible to delve into the details in a short essay, but two general points merit attention.

First, Russia will need to rethink its relationship with the other former Soviet states.  Traditionally, as Russia expanded across Eurasia, it turned borders into barriers against foreign penetration behind which it gathered its own forces for further expansion.  Driven by an ideology that posited an implacably hostile outside world, Soviet leaders took this approach to an extreme:  They sought to create an autarkic socialist economic system on the territory of the Soviet Union and its satellites in Europe, and they built a fortress state to protect it.  To a great extent, this traditional thinking shaped Russia’s policy as its leaders sought to contain the centrifugal forces that burst forth with the demise of the Soviet Union by creating first the Commonwealth of Independent States (CIS) and then various other bodies uniting subsets of the CIS.  Nevertheless, borders remain unsettled and Russia’s primacy in the region contested. This should not be surprising, for Russia’s traditional approach is inappropriate to the realities of the 21st century.  In a globalized economy, prosperity comes from active engagement in world trade and investment, power grows not so much from seizing and holding territory as from enhancing access to global markets, and a country’s success depends on its skill in manipulating interdependence to its own advantage.  This is true of Russia, as it is true of all the other former Soviet states.  Consequently, while a greater presence in the former Soviet space will enhance Russia’s well-being and security, any

effort to turn that region into an exclusive zone of Russian influence, to limit the former Soviet states’ access to the global economy, will prove counterproductive. 

Today, Russia’s interests are best served by thinking of the former Soviet states not as barriers against a threatening outside world, but as bridges to dynamic, lucrative commercial markets.  Russia will still want to be the dominant power in the former Soviet space for economic and security reasons, but there is ample room for outside powers to pursue their interests there without eroding Russia’s.  Infrastructure should be designed to move goods and people between Russia and South Asia, Southwest Asia, and Europe across former Soviet space, with the proviso that a concerted effort must be made simultaneously to build infrastructure that binds Russia itself together. In addition, Russia should take the lead in promoting and managing regional security structures and organizations that include former Soviet states and states without Soviet pasts, as a way of stabilizing unsettled borders and containing security threats.

Second, the sine qua non for Russia to play this role in Eurasia is recreating Russia as the dynamic core of the region.   A dynamic, attractive Russia transforms the dynamism of surrounding regions from a threat into a resource for enhancing Russia’s own power and prosperity as Russia links up with these other centers of dynamism to mutual benefit.

Recreating the dynamic core entails thorough-going modernization, as the Russian political elite understands.   So far, however, efforts as modernization have proceeded fitfully, and the challenges are only growing.  This slow, uncertain progress leads other countries to question Russia’s commitment to maintaining itself as a major power, and thereby makes them less inclined to invest in serious long-term relations with Russia, even if they have to deal with it in the short term.  Without a creditable modernization effort, Russia will be relegated to a secondary role in any effort to build economic and security structures along its periphery – as was the case in Europe as the EU and NATO once expanded without much regard for a strategically weak Russia.     

Dealing with the United States

There is one final matter that Russia cannot ignore as it considers its unsettled borders:  the United States.  Everywhere Russia turns, it finds the United States.  This situation will not change soon.  Despite current difficulties – unsustainable budget deficits, a mounting national debt, an overstretched military – the United States will remain for years to come the one truly global power, with significant strategic interests at stake along Russia’s entire periphery.

Since the breakup of the Soviet Union, and especially for the past decade, Russia has seen America’s presence along its borders as a major threat to its great-power aspirations.  This fear is not unfounded.  The United States, as a matter of policy, has sought to prevent the reemergence of a threat of Soviet dimensions in Eurasia.  Since only Russia could form the core of such a renewed threat, U.S. policy has sought to limit Russian options in the former Soviet space and to enhance the independence of all the

former Soviet states.  Not surprisingly, Russia has pushed back.  The question is whether intense geopolitical competition in Eurasia makes sense for either country now, given the myriad challenges both face in an era of great global turbulence.  Recent steps suggest both countries are reconsidering their positions.  Under President Obama, the United States put NATO membership for Ukraine and Georgia on hold, reversed the decision to locate missile defense facilities in Poland and the Czech Republic, and refused to rearm Georgia.  Under President Medvedev, Russia opened a transit corridor across Russia to supply American and NATO forces in Afghanistan and welcomed U.S. cooperation in containing unrest in Kyrgyzstan.  These are all positive developments, but the improved situation remains fragile.  Neither country has articulated a strategy that would justify a more cooperative relationship along Russia’s borders.  And they have not done so in large part because neither is fully convinced that a cooperative relationship is strategically desirable or possible.

Yet the main lines of the argument for a more cooperative relationship are straightforward.   The United States and Russia are no longer two hostile superpowers locked in an ideologically-driven, life-or-death global struggle.  Each must advance its interests in an increasingly non-ideological multipolar world.  In such a world, intense U.S.-Russian competition tends to play to the advantage of third countries.  In Northeast Asia, China gains increased leverage over the United States and Russia as a result.  In Central/South Asia, regional states play the United States and Russia off against one another to their own benefit.  In Southwest Asia, Iran advances its regional ambitions along the fault lines of U.S.-Russian rivalry.  Everywhere, the competition complicates the emergence of the stability that would benefit both the United States and Russia.  Conversely, cooperation between a strong, confident, dynamic Russia and a powerful United States would ease the task of creating stable balances and promoting economic development along Russia’s entire periphery.

After years of bitter competition and profound mutual suspicion, it is perhaps hard to believe that the key to settled borders that Russia needs may lie in Washington, while the key to stability in Eurasia that the United States seeks may lie in Moscow.  But global trends are quickly creating such a situation.  It is time to recognize – and act on - that reality. 

Thomas Graham was the senior director for Russia on the U.S. National Security Council staff 2004-2007

This article was originally published in Nezavisimaya Gazeta

In the Absence of Accountability and the Rule of Law, No Freedom of the Press in Russiahttp://www.foreignpolicyjournal.com/2011/04/22/in-the-absence-of-accountability-and-the-rule-of-law-no-freedom-of-the-press-in-russia/

by Richard Rousseau

April 22, 2011

“Freedom is better than lack of freedom,” declared President Dmitry Medvedev, President of the Russian Federation, in a speech delivered before the Krasnoyarsk Economic Forum in February 2008, a few months before becoming president. “This principle must be the cornerstone of all our policies…. I mean freedom in all its forms—personal freedom, economic freedom and freedom of expression.” The speech was broadcast on state-controlled TV channels.

In the wake of attacks on two Russian journalists in early November 2010, the issue of press freedom has returned to the spotlight. In Russia, widespread impunity among the authorities is nothing new. The high-profile killings of two prominent Kremlin critics, Anna Politkovskaya and Alexander Litvinenko, in 2006 and 2007 respectively, gained much international attention. Besides the largely known connections to the Russian leadership, such crimes are reflective of a more systemic phenomenon: the corruption of the Russian criminal justice system. The precarious situation of journalists—and anyone critical of the regime—in Russia today has been confirmed in recent reports by international non-governmental organizations such as Freedom House and Transparency International, and is widely acknowledged around the world. The least one can say is that, with regards to freedom of the press and expression and the separation of powers, Russia is not living up to the expectations President Medvedev expressed a few months before he became the third president of the Russian Federation.

The Russian law on freedom of information

According to Article 29 of the 1993 Russian Constitution, “Everyone has the right to seek, obtain, describe, produce or disseminate information using all legal means at its disposal. Restrictions on freedom of information are determined by the federal law.” As stated by Marina Savintseva, coordinator of the program “Access”—supported by Transparency International-Russia—citizens’ access to information is not guaranteed by any effective mechanism, making it difficult to live up to Constitutional provisions. It is clear that “The Russian law is very chaotic and the lack of a detailed government policy for development of the information sector makes the situation even more difficult.”

The Russian Mass Media Law is highly detailed and inclusive. A long list of information protected by state secrecy or regarded as “confidential” is contained within its many pages. Four major areas are covered: military, economy, science & technology, and foreign policy. The law is particularly restrictive when it comes to the premature

dissemination of information that could be perceived as threatening state security or interfering with intelligence gathering, which includes on-going criminal investigations.

In terms of “confidential information”, it was President Yeltsin (1991-1999) who signed the presidential decree approving the list of confidential information, which includes information on legal processes and those covered by official secrecy and trade under the Civil Code, as well as information concerning inventions and know-how (to prevent it from being exported without appropriate safeguards). It also covers medical confidentiality, notaries, postal services, and telephone conversations.

However, in the wake of the “Color Revolutions”, there were several high-profile cases in which the Kremlin clamped down on the media and their access to “confidential information.” For example, Russian citizens should be very careful to talk with a foreign journalist. It could even be considered as treason under legislation passed in December 2008. The new law also criminalizes, with equal severity, the sharing of “sensitive information” with non-governmental organizations (NGOs). This 2008 law is reminiscent of a by-gone era within Russia’s history.

Russian legislators state that this law aims to discourage any form of civil opposition, and it serves to silence the independent press and criticism. It can be compared to typical Soviet practice: dissenters are oppressed by blaming them of betrayal of national interests. The Kremlin justified its measures based on the need to support State Security Agencies more effectively in the face of their growing infiltration by foreign NGO agents and other vested interests. The law is the Kremlin’s tool to prevent “subversive” activities as practiced by Western intelligence services in “near abroad” countries, as has been the case in Ukraine, Georgia, Armenia, and Belarus. The Kremlin fully understands the potential threat. It continues to take radical measures to prevent “Color Revolutions” from taking place in its backyard. When Russian leaders have to make a choice between democratization and the defense of the “empire” (or Russia’s “privileged interests”), the choice is very pragmatic. Holding the remnant of “empire” together encroaches on fundamental democratic rights. It can be described as wishful thinking on the part of the international community as to Medvedev’s pledge of support for positive changes in media-related legislation and freedom of information.

Prime Minister Vladimir Putin is proceeding with administrative reforms to computerize and modernize old state information systems. Supposedly, the purpose is to allow greater transparency and a more empowering civil society. All these benefits are laid out in the “Federal Law on Information, Computerization and Information Protection” of 1995.

However, in spite of the criticism of the perceived benefits there are those, including governmental officials, who question the actual intent. There are questions as to the effectiveness of the legislation in practice. According to the Secretary of the Ministry of Commerce and Economic Development, Andrei Sharonov, “The inefficiency of the state in its management of the reform has resulted in the practical implementation of a policy of sharing and protection of information with no priorities. Consequently, all the reform processes are disjointed with duplication of effort.”

Actual freedom of information in Russia

In early November 2008, two Russian journalists were assaulted while attempting to cover a story on the construction of a highway through the Khimki forest, north of Moscow. One of the journalists, Oleg Kashin, who covered political movements and protest activities for the respected newspaper Kommersant, is now in a drug-induced coma, or “under sedation,” as this is called in the medical field. The other, Anatoly Adamchuk, a reporter for Zhukovskiye Vesti (a local newspaper in the Moscow suburb of Zhukovsky), suffered severe concussion. In terms of this overt intimidation, President Dmitry Medvedev said that “the style of attack is not typical of those who want to steal a wallet. These acts were targeted; those involved should be arrested and punished.”

The most accepted theory about the motive for the attacks centers on the investigation both journalists were carrying out, namely the nature of the highway construction projects in northern Moscow, their environmental impact, and the dubious legality of the tenders for these public contracts.

According to April 2010 data provided by the Committee to Protect Journalists (CPJ), Russia was the fourth most dangerous country in the world to work in as a journalist. Fifty-two journalists have been murdered since 1992, 19 of those murders have taken place since 2000, and 18 of these remain unsolved to this day. These incidents have put Russia eighth on the CPJ’s Impunity Index, an evaluation which compares the number of murders of journalists in various countries with the number of these murders going without investigation or prosecution. With regard to freedom of information, Russia has been ranked by international organizations as being on a par with countries such as Myanmar, Cuba, and North Korea.

Such an assessment is also confirmed by Freedom House, which ranked Russia as “not free” in its Freedom in the World 2010 survey. The organization’s freedom index uses a scale from one (“free country”) to seven (“non-free country”), and Russia scored a dismal six for political rights and five for civil liberties. Russia has not fared better as regards to press freedom, being classified as “non-free,” having obtained a score of eighty-one on a scale from zero (free country) to one hundred (not free). This assessment takes into account the political, economic, and legal environment in which the press does its job.

In terms of recent attacks on Russian journalists, Freedom House executive director, David J. Kramer, said in November 2010 that “This ongoing pattern of violence against journalists in Russia is perpetuated, if not outright encouraged by the utter lack of accountability in bringing the perpetrators to justice,” said David J. Kramer, executive director of Freedom House. “President Medvedev’s welcome condemnation of this weekend’s attack on Kashin will ring hollow, however, without serious follow through in the justice sector.  Absent accountability and rule of law, the current environment is unlikely to change and Russia will continue to be one of the most dangerous countries in the world for journalists.”

Since 1999, that is, under Putin’s and Medvedev’s administrations, 24 journalists have been killed in Russia (three in 2009 only), most of whom dealt with controversial issues, such as organized crime or corruption in the state apparatus. Despite the opening of prosecution proceedings, investigations have rarely resulted in the identification of those responsible, as in the case of the journalist Anna Politkovskaya in 2006, the political opponent Alexander Litvinenko in 2007, and the human rights activist in Chechnya Natalya Estemyrova in 2009.

According to surveys conducted by non-governmental organizations, the fragility of press freedom is compounded by astronomical levels of corruption in the judicial system and the Russian government as a whole, which makes the criminal prosecution of journalists’ attackers and murderers more difficult. For Transparency International, Russia is country handicapped by a continued trend of endemic corruption in the government, police and judiciary administrations. The corruption perception index (CPI) is a score that fixes the perception of a country’s corruption in the public sector and politics, based on interviews and research carried out by business persons and institutions operating in different countries. It is mainly a poll of polls. Each state is ranked according to an index ranging from zero (highest perceived corruption) to ten (lack of perceived corruption). In 2010, Denmark, New Zealand and Singapore obtained the best scope, 9.3, followed by Finland and Sweden with 9.2. Somalia came at the bottom of the list (1.1), after Myanmar and Afghanistan (1.4) Russia made it only to the 154th position on the 178-country survey, with an integrity score of 2.1., on a par with countries such as Cambodia, the Central African Republic, Congo-Brazzaville, Guinea Bissau, Kenya, Laos, Papua New Guinea and Tajikistan. Russia’s worsening of the corruption perception situation is confirmed by the fact that for the previous year it took the 146th position, with an index of 2.2.

 

The 2009 Freedom House report remains very critical of the Kremlin’s entire policy on media freedoms, summing up the country’s media predicament with these words: “Although the constitution provides for freedom of speech, the authorities continue to put pressure on the dwindling number of media outlets that are still critical of the Kremlin. Since 2003, the government has controlled, directly or through state-owned companies, all of the national television networks.”

Over the two terms of Putin’s presidency (2000-2008), the Kremlin undertook efforts to increase government control over the media. The first battles were waged against NTV television channel and later against TV-6 and TVS, which are now both directly under the control of Russia’s state-owned gas company Gazprom. These TV channels devoted 75% of their broadcasting time to the United Russia Party (Edinstvo) during the 2008 presidential election campaign, while Russian authorities concurrently blocked the BBC Russian Service (part of BBC World Service) access to the airwaves.

The worsening atmosphere prevailing outside the state-controlled media is exemplified by the increasing number of private security guards contracted to protect Novaya Gazeta

journalists (Anna Politkovskaya was murdered while working for that newspaper) against possible violence organized either by state authorities or private business interests.

Russia’s media freedom situation is not what the Constitution implies it should be. The constitutional provisions, while at first sight promoting media freedom, actually give the state great leeway to restrict it. This, combined with extrajudicial action on the part of the Russian authorities, made possible by endemic corruption in the judiciary and government itself, ensures that Russia has one of the least free media in the world, a situation which is ever worsening.

Richard Rousseau, Ph.D. is a professor of international relations at the Azerbaijan Diplomatic Academy in Baku. Read more articles by Richard Rousseau.

National Economic Trends

Gov't greenlights 2012-2014 economic forecast

http://www.rbcnews.com/free/20110422114711.shtml

      RBC, 22.04.2011, Moscow 11:47:11.The Russian government has approved the social and economic forecast for 2012-2014.

      Under the forecast on which the federal budget for 2012-2014 will be based, the price of Urals blend oil is expected to average $105 per barrel in 2011 amid tensions in Arab countries, a rebound in oil consumption in developed economies, strong demand for oil in developing economies and high liquidity on global markets.

      The price of oil is expected to fall to $93 in 2012 due to anticipated stabilization of oil supplies and slower economic growth in oil importing countries and increased tightening of benchmark interest rates on the part of central banks. In 2013 and 2014, oil prices are expected to retrace to $95 and $97, respectively, on the strength of higher oil consumption.

      Under this forecast, bank lending is expected to increase and the government is expected to remain committed to moderate tariff regulation. Russia's GDP is projected to expand by 3.5%-4.6% in 2012-2014.

April 22, 2011 10:56

Capital flow to funds investing in Russia, CIS totals $79 mln for week – expertshttp://www.interfax.com/newsinf.asp?id=238693

MOSCOW. April 22 (Interfax) - The inflow of capital to funds that invest in Russian and Commonwealth of Independent States company stocks totaled $79 million April 14-20 after it reached $262 million the week before, according to Emerging Portfolio Fund Research (EPFR).

Analyst at the investment company UniCredit Securities Vladimir Kuznetsov said that since this year began - or over the past 16 weeks - there was only one week when an outflow of capital from funds investing in Russia was observed. Total inflow to Russian funds came to $4.2 billion from Jan 1 to April 20.

These funds have already attracted 25% more this year than they did in all of last year, Kuznetsov said.

Capital flow into Global Emerging Markets funds also continued and totaled $615 million last week versus $1.643 billion the week before.

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April 22, 2011 10:19

Russian GDP up 4.2% in March - Klepach (Part 2)http://www.interfax.com/newsinf.asp?id=238681

MOSCOW. April 22 (Interfax) - Russia's GDP increased by 4.2% year-on-year in March 2011, Deputy Economic Development Minister Andrei Klepach said at a briefing at the White House following a government meeting on Thursday.

Excluding seasonal and calendar factors, GDP increased by 0.3% in comparison with February.

Russia's GDP grew 4.4% year-on-year in the first quarter as a whole.

March produced a slight growth in investments, Klepach said - 1.5% from February adjusted for seasonal and calendar factors. "There was no surge in March, investment growth was not steady," he said.

Retail trade (adjusted for seasonal factors) was roughly flat with the previous month in March.

Klepach pointed out that construction had begun to grow and that production of domestically made equipment is on the rise. "As a result, we expect that this will produce a serious surge in investment, and then we will move to roughly 6% growth in investments in fixed capital for the year," he said.

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Putin's Cabinet Plans to Up State Spending http://www.themoscowtimes.com/business/article/putins-cabinet-plans-to-up-state-spending/435559.html

22 April 2011By Anatoly Medetsky

The Cabinet agreed Thursday to boost spending by 4 percent this year as soaring oil prices push revenues up.

Federal expenditures would grow by 420 billion rubles, Prime Minister Vladimir Putin said, bringing the total to about 11.1 trillion rubles.

The measure has to pass the parliament and gain President Dmitry Medvedev's approval — a mere formality — to take effect.

A significant part of the additional spending, Putin said, would go toward raising retirement pensions later this year — a decision the government will make depending on the inflation rate in the year's first half. Some of the money will pay for higher salaries for schoolteachers, renovation of museums and libraries and provision of technical aids to the handicapped, he said.

Putin said 180 billion rubles would be used to support the economy's industrial sector, with another 13 billion rubles going to the agricultural sector. He didn't elaborate.

Another 62 billion rubles will serve as the government's contribution to the international equity fund Medvedev ordered to be created jointly with foreign capital to foster foreign investment in non-energy businesses. VEB, which has been designated to manage the government's involvement in the fund, and Putin, as its chairman, will discuss the issue Friday.

The Cabinet also started working on next year's budget Thursday by approving anticipated scenarios for economic development for the period — assumptions the Economic Development Ministry often rewrites several times a year, given the country's dependence on the volatile oil price.

The basic scenario backed Thursday assumes that Russian oil will sell for an average of $93 a barrel, down from the latest official estimate of $105 for this year, which gained the Cabinet's endorsement at the same session, Deputy Economic Development Minister Andrei Klepach said after the meeting.

The economy will expand by 3.5 percent, down from the 4.2 percent expected this year, he said.

One of the reasons for the slower growth will be swelling imports, he said. This year alone, imports are projected to increase 20 percent, while demand will only be 10 percent higher, Klepach said.

"Our products are not competitive so far," he said.

Before the Cabinet session, Putin met with senior members of the Russian Union of Industrialists and Entrepreneurs, a big business lobby group, to discuss — among other things — the ruble exchange rate, which could harm exporters if it stays at the current level or strengthens further on the back of expensive oil. Putin ordered the Central Bank and the Finance and Economic Development ministries to get together to consider ways of influencing the rate, said billionaire union member Viktor Vekselberg.

Oil will never run outhttp://rt.com/politics/press/izvestiya/oil-carbon-russian-petroleum/en/

Published: 22 April, 2011, 06:43Edited: 22 April, 2011, 06:43

But Russia will no longer be able to sustain itself on it

The high oil prices no longer advance the Russian economy. This unsettling conclusion was drawn by Deputy Prime Minister and Finance Minister, Aleksey Kudrin, at a meeting of the Russian Union of Industrialists and Entrepreneurs (RSPP). Meanwhile, the price of “black gold” continued to spike, reaching $124 per barrel. Oil remains the foundation of the Russian budget, and has even made it deficit-free. Izvestia decided to find out how long this resource will last.

This year’s Russian budget was formulated based on the price of oil being at $75 per barrel. Anything higher than that brings surplus revenue to the budget, and with the price exceeding $120 per barrel, the budget becomes deficit-free. Seemingly, we ought to be happy. But a further increase in oil prices will have a negative effect on the Russian economy, Aleksey Kudrin said on Thursday. According to him, the economic model, which is based solely on the oil and gas sector, “has failed”.

But this, in itself, is not news – something else is important. If, until recently, the Russian economy, albeit incorrectly, grew due to the high oil prices, then now, it no longer does. The government, said Kudrin, has prepared several hypothetical scenarios for the Russian economy, which include various prices of oil. But in all of the scenarios, “the economic growth rate remains the same,” said Kudrin. “And that is the problem; this is confirmation of the unfortunate fact that the price of oil, which before the crisis was an impetus for growth, is no longer such.”

This means that the oil and gas industry stops being the locomotive of economic growth, which reached the annual rate of 10%. It continues being a vitally important source of budget replenishment, Russia’s main fortune, and a major export item. The country can earn profits on hydrocarbons for many more years to come, but it is important to know for exactly how many. People have been frightened by the exhaustibility of hydrocarbon resources – oil and gas – for about 50 years already. However, there is an opinion that Russia’s oil resources are limitless – mainly because hydrocarbons continue being formed today.

Carbide in a puddle

The organic theory of oil origin states that this mixture of hydrocarbons was formed as a result of the heating of ancient organic matter, dinosaur remains and decayed plants, and in this case, oil reserves will inevitably end – after all, organic matter is exhaustible. But there is also the non-organic theory of petroleum origins, which was first presented by Russian scientist Dmitry Mendeleyev.

Based on the experiments he, himself, had conducted, Mendeleyev determined that when heavy metal carbides react with water, they form hydrocarbons with a large number of hydrogen atoms in the molecule. This can be explained with the following example. The simplest carbide metal is carbide of calcium, which is usually referred to simply as carbide. Not long ago, in acetylene welding, instead of using acetylene from cylinders, people used acetylene formed in special apparatus in which carbide reacted with water. Young boys tossed pieces of off-white carbide into puddles, and set fire to the resulting emission of acetylene. To this day, carbide lamps that operate based on the same principle continue to be used by cave explorers and remote lighthouse keepers, who work in places where pulling a power line or putting a diesel tank is not practical.

Acetylene is one of the simplest hydrocarbons, and when water reacts with metal carbides that are heavier than calcium, more complex hydrocarbons are formed. Dmitry Mendeleyev believed that water seeps through the crevices of the Earth’s crust to its liquid core, which mainly consists of metals, and the hydrocarbons that are produced as a result are raised to the surface. However, the carbide theory was not confirmed in recent studies, although the non-organic theory for the origins of petroleum has not been fully rejected, and is based on a somewhat different formation mechanism of petroleum hydrocarbons.

Not from above, but from below

Neither should we seriously consider the exotic theory that petroleum was brought to Earth in the form of a discharge from the head and tail of a comet when it came in contact with the planet. Today, geologists are able to examine the depths of the Earth down to dozens of kilometers at the pressure of 20,000-30,000 atmospheres – and there, they discovered carbon: the basis of oil and gas. It has even been estimated that all of the fluid carbon – carbon dioxide in the atmosphere, dissolved carbon in the oceans, carbon-bearing surface minerals (chalk, limestone) – amounts to no more than 0.1% of all the carbon in the world, and 99.9% is located in the depths of the Earth in the form of carbonates, dolomites, and so on. Hydrocarbons are formed from the carbon.

However, the truth, as always, lies somewhere in the middle. In this case, this means that both theories ought to be combined as follows: during radioactive decay in the Earth’s core, hydrogen is formed, which in turn reacts with carbon to form petroleum-like substances. They rise to the surface. During the economic blockade, imposed due to apartheid, the South African company SASOL had used this method to produce synthetic gasoline from coal, and continues to do so today. But petroleum has bio-markers – compounds that are, certainly, of organic origin, which “non-organic” petroleum comes into contact with. Thus, the organic and non-organic theories of the origin of petroleum “work” simultaneously.

Commentary

Academician Salambek Khadzhiyev, director of the A.V. Topchiyev Institute of Petrochemical Synthesis at the Russian Academy of Sciences:

“Today, the developed oil reserves are as follows: 180 billion tons of low-density oil, 820 billion tons of heavy-density oil, 700 billion tons of oil-equivalent coal, 300 billion tons of oil-equivalent gas. This will supply the world for 300-350 years. Cheap oil is running out, but carbon resources are infinite. For our country, the problem of deep oil processing is more relevant than the sale of raw petroleum. Today, we develop 490 million tons of oil, of which 260 million are exported, and 230 million are processed. But even of the 230 million processed tons of oil, we sell 80 million tons. Thus, we consume 150 million tons of oil, about a ton per person. In the US, this figure is 2 tons, in Europe, 2.5 tons.

In terms of the development of basic sciences, we are ahead of the West, but we have destroyed sectorial research, and our oil-processing depth equals 73%, while in the US it’s nearly 90%. Worldwide, the production of polymers uses up to 7% of petroleum, and here it is only 1%. In the production of polyethylene and polypropylene, we significantly lag behind Europe. We have 5 kg per person, and there it’s 15 kg. Although, we do have

some achievements – 94% of the equipment used at plants in Bashkiria and other petrochemical centers is domestic. The petrochemical sector needs to be developed, without worrying about the raw material reserves. Oil will never run out.”

Vitaly Flid, PhD in Chemistry, director of the Physical Chemistry Department at the M.V. Lomonosov Moscow Institute of Fine Chemical Technology:

“In some countries, the US, Japan, here in Troitsk, installations have been constructed which simulate the build-up process of hydrocarbons from carbon and hydrogen with ferrous iron. If calcium carbonate and magnesium are mixed with iron salts and heated under high pressure then, as was shown by our experiments, hydrocarbons are formed – or at least methane. This gas travels from to the surface from the depths of Earth through the ground, while having various reactions along the way and forming heavier hydrocarbons – that is, oil.

That is the non-organic method of the origination of petroleum. Geologists argue that there are oil deposits which were fully exhausted, and then petroleum reappeared in them. Perhaps that is the petroleum from the depths of the Earth, which is unlikely to ever run out.”

Vladimir Arutyunov, PhD in Chemistry, director of the Laboratory of Hydrocarbon Oxidation at the N. N. Semyenov Institute of Chemical Physics of the Russian Academy of Sciences:

“Before, in Baku for example, petroleum was simply raised in tubs out of a pit, and these oil resources did indeed run out. There is significantly less oil, which we are specifically able to produce today. Sedimentary rocks contain a large amount of organic matter, up to dozens of the percentage of their weight. New technologies are being developed, and some radical changes have just recently happened in the US. Americans have learned to produce hydrocarbons that, until now, had remained untouched. And the global oil reserves were suddenly increased by 1.5 to 2-fold. I am referring to heavy bituminous oil in Canada and shale gas. However, a shale gas deposit can be developed for only a few years, but these deposits stretch over vast territories. 'The shale revolution' will change geopolitics, and the US and Europe will be able to do without fuel oil.”

Russian Fund Hopes to Lure World’s Private Equity Majorshttp://blogs.forbes.com/kenrapoza/2011/04/21/russian-fund-hopes-to-lure-worlds-private-equity-majors/

Apr. 21 2011 - 5:27 pm

Global private equity giants managed to convince the Russian government to set up an investment fund this year, whereas the government will agree to put up some money in foreign direct investment – providing it meets certain criteria. For starters, natural resources are basically off limits as Russia tries to attract more FDI into other sectors it considers key for development.

Says Deputy Minister of Economic Development, Stanislav Voskresensky, “We won’t invest at all in the oil and gas sector. We see no need for that because all of the necessary institutions are already created for that to invest in oil and gas. It’s going to invest mainly in pharmaceuticals, telecom, aerospace, energy efficiency and infrastructure. The fund is not going to substitute the investment environment as a whole. We didn’t stop creating policies to invite foreign investors by using this fund instead. The key idea was just to bring in those big players who have not invested yet, but want to be in Russia.”

The fund’s total commitment for this year is $2 billion, going to $10 billion over the next few years. The fund will invest as much as 25% in a project, but probably 15% will be the average, Voskresenksy says.

Voskresenksy added that the 2008 economic crisis was actually good for Russia.

“The crisis forced our rich business men to come down to earth and make intelligent business deals. Before 2008, you would see all kinds of wacky projects take off that had no chance of a return on revenue. But once the markets crashed and oil went to $40 a barrel, it forced Russia to focus on reality and we realize that we cannot just be an oil and gas economy,” he told Forbes this weekend at the St. Regis in New York.

Business, Energy or Environmental regulations or discussions

Lukoil, Rosneft, RusHydro, Transneft: Russian Equities Previewhttp://www.bloomberg.com/news/2011-04-21/lukoil-rosneft-rushydro-transneft-russian-equities-preview.html

By Stephen Bierman - Apr 21, 2011 11:00 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 fell 0.2 percent to 1,780.60. The dollar-denominated RTS Index gained 0.5 percent to 2,040.60.

OAO RusHydro (HYDR RX): Russia’s biggest producer of renewable energy is selling 15 billion rubles ($536 million) of domestic bonds puttable after five years. RusHydro fell 0.1 percent to 1.44 rubles.

OAO Rosneft (ROSN RX): Russia’s largest oil producer will seek joint projects with Russia’s second-largest oil producer, OAO Lukoil (LKOH RX), offshore and in the Nenets region. Rosneft shares fell 0.8 percent to 251.80 rubles. Lukoil fell 0.7 percent to 1,954.20 rubles.

OAO Transneft (TRNFP RX): Russia’s oil pipeline operator said that payments for gas sold to China since the start of the year have been short by about $20 million a month. The Moscow- based company was little changed at 42,140 rubles.

To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.

KT CEO says in talks to sell Russian unithttp://in.reuters.com/article/2011/04/22/ntc-kt-idINL3E7FM01520110422

6:36am IST

SEOUL, April 22 (Reuters) - KT Corp , South Korea's top fixed-line and No.2 mobile company, is in talks to sell its Russian unit New Telephone Company (NTC), its chief executive said on Friday.

"We are in talks to sell the business," KT chief executive Lee Suk-chae told Reuters. Lee declined to comment on the potential buyer or the size of the deal.

In November, KT appointed Credit Suisse to sell a 80 percent stake in NTC it bought in 1997.

Bankers said at the time that NTC was worth around $500 million, and that Vimpelcom , Russia's second-largest cellphone company, said it would be interested in buying the asset. [ID:nLDE69L1OJ] (Reporting by Hyunjoo Jin; Editing by Jonathan Hopfner)

Foreign banks face hard slog in Russian pushhttp://in.reuters.com/article/2011/04/21/russia-investmentbanks-idINLDE7331N120110421

Thu, Apr 21 2011

* Barclays, Citi among banks expanding again in Russia

* But foreign banks face meagre fees, revenue pressures

* Rise of domestic investment banks a tough challenge

By Sarah White

LONDON, April 21 (Reuters) - Foreign investment banks expanding in Russia will be confronted by increasingly sophisticated home-grown rivals and have to settle for anaemic deal fees if they are to crack an ever more crowded market.

The lure of $35 billion worth of mooted privatisations in the next three years is leading most banks with a Moscow presence to bulk up again after scaling back after the financial crisis.

Barclays Capital (BARC.L: Quote, Profile, Research) and Citigroup (C.N: Quote, Profile, Research) are two of the banks now making the biggest push to grow their operations in Russia, according to insiders at the firms and rivals.

But while the reputational boost from government-brokered asset sales is attractive, the fees are not. And more than ever before, these must be shared with domestic banks.

The backdrop adds to the pressure to succeed. Banks are grappling with new global regulation that will erode profitability and force them to take a hard line on businesses that do not cut it.

"The times when banks could afford to pursue an expansion strategy that didn't pay off are over," said Michael Ganske, head of emerging market research at Commerzbank. "Even in the short term if it doesn't work out, banks will probably reverse this (Russia growth) strategy."

Barclays is reviewing its portfolio of businesses and has put its Russian retail unit up for sale, saying it was unable to compete in this local field.

But new Chief Executive Bob Diamond instead wants to expand the investment bank and focus on government entities and multinationals in Russia.

There are plenty who have doubts, however, about Russia's potential as a lucrative hub, even as most recognise the need to have a relationship with such a major commodities exporter.

"It's a very, very trying market. It's a very difficult place to make real money, there are no fees and salaries are huge," said the head of investment banking at a top European bank, which worked on several M&A deals in Russia this year.

"The expectation is that at some point in the future things will work out and it will be worth it." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a

graphic on Russian investment banking fees: r.reuters.com/neg29r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Governments are able to command lower fees from investment banks than the private sector, and in Russia and other emerging market hotspots companies are also known to be fierce negotiators when it comes to paying advisers.

Russian companies have dominated the stream of equity raisings and initial public offerings across Europe, the Middle East and Africa in the last four months -- despite some being pulled -- but they made up just 2.2 percent of the fees.

The Russian M&A fee pool only adds up to $335 million so far this year, or 10 percent of the total EMEA pot, according to data from Thomson Reuters and Freeman Consulting.

The meagre fees must then be split with local advisors and government-backed lenders in particular, such as VTB Capital (VTBR.MM: Quote, Profile, Research).

Sberbank (SBER03.MM: Quote, Profile, Research), which snapped up brokerage Troika Dialog in March, is also cementing its grip on merger and acquisitions, bond and equity deals.

Although always a staple of the Russian banking world, the two are expanding into investment banking like never before, and have the ability to lure bankers with pay packages others struggle to match.

This leaves cooperation with the likes of VTB as the only option to make money, according to Commerzbank's Ganske. That attitude is echoed in the approach some of the established banks in Russia are already taking.

"International banks should not necessarily perceive local banks to be in direct competition, because they will always have a piece of the pie," said Andrew Chulack, head of global banking at Deutsche Bank in Russia.

"On many transactions they are a must-have due to relationship reasons and at the same time not a substitute for an international bank."

Chulack said he was hopeful of a "great year" even if just half his planned pipeline of deals gets done.

In the scrap for deal mandates between local and foreign lenders, Russia's private banks will also end up being bruised, said Ganske.

Renaissance Capital, for example, was ranked as the top adviser on equity and M&A deals this time last year but has fallen to third place behind VTB Capital and Morgan Stanley (MS.N: Quote, Profile, Research) now, Thomson Reuters data shows.

(Editing by David Cowell)

UPDATE 1-VTB protege takes the helm at Bank of Moscowhttp://in.reuters.com/article/2011/04/21/vtb-bankofomoscow-ceo-idINLDE73K19G20110421

Thu, Apr 21 2011

* Mikhail Kuzovlev appointed as CEO

* VTB restates aim to consolidate 100 pct of Bank of Moscow

* Yusufov may also increase his stake

(Adds quotes, background)

By Oksana Kobzeva

MOSCOW, April 21 (Reuters) - Bank of Moscow (MMBM.MM: Quote, Profile, Research) shareholders have elected a former VTB (VTBR.MM: Quote, Profile, Research) executive as their new CEO, effectively handing Russia's second-biggest lender victory in the battle for control of its smaller peer.

Now VTB, which paid $3.5 billion for a near 50 percent stake in Bank of Moscow, will revert to its initial plans to gain full control over Russia's fifth-biggest lender, VTB's chief executive Andrei Kostin said.

"We are planning to consolidate 100 percent in the future," he told journalists after Bank of Moscow's extraordinary shareholders' meeting, which appointed VTB candidate Mikhail Kuzovlev as CEO.

Earlier in April, Kostin said he saw no need to buy out all minority shareholders, after facing strong resistance to takeover attempts from Bank of Moscow's former CEO Andrei Borodin. [ID:nLDE7371A9]

On Thursday, shareholders elected Kuzovlev to replace Borodin, whose deputy Dmitri Akulinin was also in the running for the post.

The appointment of Kuzovlev, who became acting CEO last week after a court barred Borodin and Akulinin from taking management decisions, marks the end of the corporate battle for Moscow's main investment vehicle.

State-owned VTB has been circling Bank of Moscow since last autumn, after Russian President Dmitry Medvedev sacked the capital city's mayor Yuri Luzhkov. [ID:nN28229662]

In March, Luzhkov's ally Borodin, who had headed Bank of Moscow since 1995, left Russia for London after selling an around 20 percent stake in the lender, which he owned together with Lev Alaluyev.

That stake, worth $1.3 billion based on current market values, was bought by businessman Vitaly Yusufov, who may be acting on behalf of VTB, Vedomosti daily said. [ID:nLDE73A0DV]

Yusufov, also an owner of Germany's Nordic Yards, said on Thursday he might increase his stake, saying he is not in talks with VTB on a possible sale.

"I think that the stake increase might be strategically interesting. We did not have and are not currently in talks with VTB about selling the stake," he told journalists after Kuzovlev's appointment.

Yusufov, the son of a former special envoy of the Russian president, later added that he did not rule out selling his stake in Bank of Moscow in the future. (Writing by Katya Golubkova; Editing by Jon Loades-Carter)

Norilsk Considers Mining Copper, Nickel in Central Russiahttp://www.bloomberg.com/news/2011-04-21/norilsk-considers-mining-copper-nickel-in-central-russia.html

By Ilya Khrennikov - Apr 21, 2011 5:15 PM GMT+0200

OAO GMK Norilsk Nickel, a Russian miner with production north of the Artic Circle, is considering mining copper and nickel in Voronezh region, central Russia.

Norilsk is asking the government to tender rights for unallocated subsoil reserves, the company said today in an e- mailed statement. Norilsk had already planned to invest 2.7 billion rubles ($97 million) by 2018 on exploration, it said.

Once exploration is completed, Norilsk may seek to build a processing plant with capacity of 2 million to 5 million metric tons of ore a year at the Elansk and Elkinsk deposits. It would make copper-nickel pellets that could be further refined at the company’s facilities in Murmansk, it said.

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

To contact the editor responsible for this story: Amanda Jordan in London at ajordan11@bloomberg.net

Dixy retailer to hold 11.4% SPO to buy Victoria chainhttp://en.rian.ru/business/20110422/163643574.html

11:09 22/04/2011

Russia's Dixy Group food retailer is to hold an 11.4 percent issue of new shares in a secondary public offering to finance the acquisition of the Victoria retail chain.

The new issue will amount to 14.19 million shares. The May 18 EGM will discuss an underwriting agreement with VTB Capital, a source familiar with documents prepared for an upcoming emergency shareholders' meeting told RIA Novosti late on Thursday.

Dixy wants to buy Victoria for 25.6 billion rubles ($890 million) to create Russia's fifth largest food retailer by sales and third largest by the number of stores.

Last week Dixy agreed a 4.5 billion ruble ($160 million) loan from UniCredit Group to pay for Victoria. The company said the acquisition was also to be financed by share capital.

MOSCOW, April 22 (RIA Novosti)

Activity in the Oil and Gas sector (including regulatory)

April 22, 2011 11:46

Russian Econ Ministry suggests smoother change to net-back parity for gas priceshttp://www.interfax.com/newsinf.asp?id=238724

MOSCOW. April 22 (Interfax) - The Russian Economic Development Ministry proposes a smoother transition to net-back parity for gas prices inside and outside Russia.

"We're not rejecting net-back, but will just be moving more slowly towards it, and when we get there also depend show world gas prices will be moving," Economic Development

Minister Elvira Nabiullina told reporters, commenting on the alternative option for raising natural monopoly tariffs in 201202014.

Net-back parity for gas was supposed to be achieved by 2015.

Pr

China, Russia can solve energy problems through consultation: spokesmanhttp://english.people.com.cn/90001/90776/90883/7358385.html

09:10, April 22, 2011

Chinese Foreign Ministry spokesman Hong Lei said on Thursday that China and Russia can solve emerging energy cooperation problems through friendly consultation and mutually beneficial cooperation.

Hong's remarks came in response to reports about payment disputes between PetroChina, China's largest oil and gas producer, and Transneft, Russia's state pipeline operator.

Energy cooperation is an important part of the Sino-Russian strategic partnership of coordination and draws great attention from both sides, said Hong.

The Sino-Russian crude oil pipeline, launched on Jan. 1 this year, runs well and is reliable, according to Hong.

"I believe the two sides can solve the emerging energy cooperation problems through amicable consultation and win-win cooperation," said Hong.

Source: Xinhua

THE EAST SUDDENLY SEES RED &#8212; RUSSIA AND CHINA IN CLASH OVER OIL PRICING AND OIL SUPPLY – TRANSNEFT CHARGES CHINA NATIONAL PETROLEUM WITH “SOCIALISM”

http://www.businessinsider.com/the-east-suddenly-sees-red-8212-russia-and-china-in-clash-over-oil-pricing-and-oil-supply--transneft-charges-china-national-petroleum-with-socialism-2011-4

By John Helmer, Moscow

Just four months since the first Russian crude oil started pumping into Daqing, the northeastern Chinese oil town, the Russian pipeline company Transneft has charged the China National Petroleum Company (CNPC) with violating their supply contract, and is threatening to open court proceedings in London.

The state-owned Transneft revealed to Fairplay today that the breakdown in trust between Russia and China is focused on the pricing for the oil which Transneft is pumping by its new Siberian pipeline from Skorovodino to the Chinese border, according to a contract signed in 2008 with CNPC. The presidents of China and Russia officially inaugurated the completion of the pipeline on both sides of the border on September 25, last year.

The pipeline project was first conceived by Mikhail Khodorkovsky’s Yukos more than a decade ago, and initial negotiations with Beijing were conducted by Khodorkovsky’s representatives. Their attempt to break the Transneft monopoly on pipeline oil exports was one of many problems that triggered the arrest of Khodorkovsky in October of 2003, and his subsequent prosecution and imprisonment.

The takeover of Yukos by Rosneft, and the replacement of Khodorkovsky as the prime mover in the project by Deputy Prime Minister Igor Sechin did not clear the many negotiating obstacles that arose from both sides. When finally completed in 2009, the Sino-Russian negotiations carried a $25 billion financing from Beijing, the largest loan ever made to a Russian company. Repayment is tied to the oil flow, its volume and also its price.

Ahead of the ceremonial completion of the pipelaying, Prime Minister Vladimir Putin said last year: “For China, these are stable deliveries to the country’s energy balance, and for us an exit to new promising markets and in this particular case, to the expanding Chinese market.

It now appears this was wishful thinking.

On January 1, this year, according to a CNPC announcement, “At 6:30 am local time, the oil supply valve at Russia’s Skovorodino off-take station was turned on. At 5:48 am January 1st, 2011 Beijing time, the Russian crude was pumped into oil tanks in Mohe County in China. At about 11:00 am, the Mohe transfer station started to delivery the oil to Daqing, marking the official run-through of the crude inlet channel. After arriving Linyuan station at Daqing, the Russian crude will be transported to refineries at Dalian and Fushun through the northeast pipeline network and then become refined products for market. China used to import crude oil from Russia via railroad. The operation of the Russia-China Crude Pipeline will not only boost transportation capacity but also enhance security and reduce transportation cost.”

The Chinese have also been planning to extend their section of the pipeline from Daqing to Tainjin, where a new oil refinery is planned.

However, now, according to Transneft in Moscow, the Chinese are demanding that the piped crude should be priced the same as crude delivered for tanker loading at Kozmino Bay, on the Sea of Japan.

Kozmino port commenced loading oil tankers in 2010, and by year’s end had despatched 15.3 million tonnes of crude (about 300,000 barrels daily). Destination for the cargoes were: Japan, 30%; South Korea, 29%; US, 16%; Thailand, 11%; China, 8%; Philippines, 3%; Singapore, 2%. The port is now operating at full capacity, so that when the second stage of the East Siberia-Pacific Ocean (ESPO) oil pipeline reaches Nakhodka in 2014, with up to 30 million more tonnes of crude, the plan is to deliver at least a third of that to a new petrochemical refinery.

Transneft spokesman Igor Dyomin told Fairplay: “We signed a contract with CNPC to value the oil [we deliver] at the market price with the use of market mechanisms. So Transneft uses the Petro-Argus prices to measure the oil cost at the Pacific Ocean. The Chinese side have agreed on that. Now they go back on their word, claiming that the pricing mechanism is unfair and pointing out the difference in oil prices between Skovorodino and Kozmino. The fact is that the oil price does not include extraction and transportation costs, but the market situation alone. Most East Siberian-Pacific Ocean [ESPO] pipeline oil is taken from the [Rosneft] Vankor field. But there are other fields closer to Kozmino, and still the price is the same.

“Even if we admit that transportation costs do count, Russia applied the uniform tariff for East Siberia and the Far East, and there is no price difference for oil companies as to where they enter ESPO and where they exit, the tariff is the same. So that means the Chinese side would like to interfere in Russia’s domestic affairs and enforce their socialism upon us. Russia is long out of socialism — we want fair market pricing.”

Dyomin also reveals there is a dispute over oil shipment volumes with CNPC. “Now CNPC wants us to increase oil shipments from 15 million to 30 million tonnes a year. The agreement we signed provides the yearly volume of 15 million tonnes for a period of 20 years, and we cannot revise the agreement soon. Right now CNPC is failing to pay about $20 million a month, and if we supply twice as much, their payment shortfall is likely to double. We have given them very good reasons for the prices, and all we hear is that the prices are “unfair”. The Pacific region is one of our current goals. The top Transneft’s customers are Japan and South Korea; China is number three and the US is number four. The ESPO oil is seen as a good replacement for the Alaskan oil, so we believe the US will soon rank higher than China among our customers.”

CNPC has yet to respond. Instead, a Chinese Foreign Ministry spokesman, Hong Lei, said in Beijing yesterday: “At present all operations are going smoothly, and oil supplies are stable. As for some concrete problems encountered during cooperation, we believe both sides can fully resolve this in a positive way via friendly negotiations and on a mutually beneficial, win-win basis.”

Read more: http://www.businessinsider.com/the-east-suddenly-sees-red-8212-russia-and-china-in-clash-over-oil-pricing-and-oil-supply--transneft-charges-china-national-petroleum-with-socialism-2011-4#ixzz1KEoVg8Cb

UPDATE 1-LUKOIL, Rosneft to join in offshore explorationhttp://af.reuters.com/article/energyOilNews/idAFLDE73K1PP20110421

Thu Apr 21, 2011 5:21pm GMT

* LUKOIL CEO says deal gives access to new deposits

* Rosneft says deal helps profitability as costs high

(Changes sourcing, adds quotes, details on deal)

MOSCOW, April 21 (Reuters) - Russia's two largest oil companies, state-owned Rosneft (ROSN.MM) and independent producer LUKOIL (LKOH.MM), have signed a deal for joint exploration and production offshore, the companies said.

Under the deal, Rosneft will open its licensing zones to Lukoil off of Russia's oil-and-gas-rich Arctic Yamal peninsula, the companies said in a statement on Thursday.

"It is clear that under the current tax conditions, given infrastructure limitations and a growth in the number of hard-to-reach deposits, it is necessary for us to broaden our cooperation and join forces to increase the profitability of projects," Rosneft Chief Executive Eduard Khudainatov was quoted as saying.

LUKOIL CEO Vagit Alekperov said the deal would offer access to "major new deposits of hydrocarbons".

This marks LUKOIL's first offshore deal in Russia since launching the Korchagin oil field in the Caspian Sea last year, while top producer Rosneft has clinched a flurry of offshore partnerships with foreign majors including BP (BP.L), Chevron (CVX.N) and Exxon (XOM.N).

LUKOIL has said all of its future output growth will come from its foreign projects, because Russian brownfields are quickly maturing and the country's taxation system does little to stimulate investment.

According to current legislation, private Russian oil companies cannot operate on the Arctic continental shelf. Production and exploration licences in the Arctic offshore zone,

which holds Russia's largest untapped oil and gas reserves, are only available to Rosneft and energy giant Gazprom (GAZP.MM).

(Writing by Jessica Bachman and Alissa de Carbonnel, editing by Jane Baird)

Rosneft, Lukoil to tap 3 deposits

http://www.rbcnews.com/free/20110422120347.shtml

      RBC, 22.04.2011, Moscow 12:03:47.Rosneft and Lukoil intend to jointly tap three deposits in the Nenets Autonomous District, Rosneft President Eduard Khudaynatov told reporters late Thursday.

      The companies plan to team up for prospecting, exploration, development and transportation of hydrocarbons from the Naulskoye, Sovetskoye and Labaganskoye deposits, under their long-term cooperation agreement. Rosneft is soon expected to obtain a license to the Naulskoye deposit and it already holds licenses to two other fields.

      Lukoil is the only company that has developed transportation facilities in the Nenets Autonomous District.

Lukoil, Rosneft ink gas transport deal

http://www.rbcnews.com/free/20110422104807.shtml

      RBC, 22.04.2011, Moscow 10:48:07.Russian oil majors Lukoil and Rosneft announced late Thursday that they had concluded an agreement to jointly transport natural gas from Rosneft's Vankor field in the Krasnoyarsk Region and Lukoil's Bolshekhetskaya Depression fields in the Yamalo-Nenets Autonomous District.

      Under the agreement signed on April 12, Rosneft is to ensure gas transportation from the Vankor field to Lukoil's pipeline. Lukoil will transport gas to the gas pipeline system controlled by gas monopoly Gazprom. Lukoil and Rosneft are currently building their sections of gas pipelines.

      In early March, Lukoil agreed to provide Gazprom with gas from the Bolshekhetskaya Depression fields in 2012-2016. In 2012, Lukoil is expected to deliver 8.35 billion cubic meters.

TNK-BP Abroad Not Daunted by Local Woes http://www.themoscowtimes.com/business/article/tnk-bp-abroad-not-daunted-by-local-woes/435551.html

22 April 2011Bloomberg

TNK-BP aims to spend about $1 billion on an acquisition abroad even as a shareholder dispute rages over the company's future at home.

TNK-BP, which is owned by BP and a group of billionaires, is looking for opportunities in Africa, the Middle East and Latin America to diversify operations away from Russia, deputy chief executive Maxim Barsky said. Russia's third-largest oil producer agreed last year to acquire fields in Vietnam and Venezuela from BP.

Barsky set out the company's strategy as the shareholders remained locked in a legal dispute. AAR, the company that represents the billionaire partners in TNK-BP, has gained an injunction halting a deal for BP to swap $7.8 billion of its shares and explore the Arctic with Russia's largest oil producer Rosneft. AAR, led by TNK-BP's interim chief executive Mikhail Fridman, claims that the deal violates exclusivity rights inside Russia.

"It has not stopped any of our projects," Barsky said, declining to comment on the shareholders' disagreement. The company has the capacity to handle a third international deal, he said, adding that, within 10 years, TNK-BP should have 30 percent of its production outside Russia.

Barsky was tapped to head the company in 2009 after an earlier shareholder dispute led to the departure of then chief executive Bob Dudley. The timing of Barsky's appointment as chief executive, delayed from Jan. 1, will depend on completing a share option plan and resolution of the shareholder conflict, he said. Dudley is now chief executive of BP.

TNK-BP may attempt to gain blocks around the offshore field in Vietnam it agreed to buy from BP in October. It will also try to raise its share in Venezuela's PetroMonagas to 40 percent once it completes a deal with BP to buy almost 17 percent of the Venezuelan heavy oil producer. It may swap assets it holds in Russia to expand internationally, Barsky said in an interview last week.

TNK-BP agreed to buy the Vietnamese and Venezuelan assets from BP for $1.8 billion in October as the British producer spun off assets to cover costs linked to its Gulf of Mexico oil spill.

TNK-BP has submitted agreements to become operator of the Vietnam project to the state, Barsky said. An approval from Venezuela on its deal will likely come only after

Rosneft finishes its purchase of a stake in German refiner Ruhr Oel from Venezuela's state oil producer, he said. BP hasn't impeded any of the sales, he said.

TNK-BP management insists that it has the expertise and the capital to replace BP in its agreement with Rosneft to explore the South Kara Sea, Barsky said. TNK-BP has no offshore projects in Russia.

The geology in the Kara Sea appears similar to West Siberia, where TNK-BP has plenty of experience. The challenges will involve creating ice-resistant rigs and building artificial islands. Additionally, icebreakers will be needed to lead convoys of tankers that would get oil to markets, Barsky said.

UPDATE 1-Russia's Bashneft Q4 net profit doubles to $570 mlnhttp://in.reuters.com/article/2011/04/22/bashneft-idINLDE73L02N20110422

12:31pm IST

* Full-year net profit jumps to $1.429 bln

* Shares outperform broader market (Adds details, share price)

MOSCOW, April 22 (Reuters) - Russian mid-sized oil company Bashneft said its net profit more than doubled in the fourth quarter, year-on-year, to $570 million on the back of rising oil prices.

Bashneft, owned by oil-to-telecoms holding company Sistema (SSAq.L: Quote, Profile, Research) , also said full-year 2010 net profit rose to $1.429 billion from $420 million in 2009.

The company's Moscow-traded shares rose almost 1 percent as of 0700 GMT, outperforming the broader market , which edged up 0.1 percent.

After Sistema acquired Bashneft from the regional authorities in 2009 for around $2.5 billion, the company achieved the highest production growth level among its Russian peers.

In 2010, its daily crude production jumped 15.6 percent to 276,000 barrels, while refining volumes last year rose 2 percent to 21.193 million tonnes.

The full-year refining output was offset by maintenance works in the last quarter, when Bahneft's refining volumes fell 5.5 percent compared with the previous three months. (Reporting by Katya Golubkova; writing by Vladimir Soldatkin; Editing by Vinu Pilakkott)

Bashneft Q4 2010 profit soars 106% to $570 mlnhttp://en.rian.ru/business/20110422/163643754.html

11:20 22/04/2011

MOSCOW, April 22 (RIA Novosti) - Russian mid-sized oil firm Bashneft's fourth quarter 2010 net profit soared 106 percent compared to the previous quarter to $570 million to IFRS, the company said on Friday.

Fourth quarter revenue increased 2.5 percent to $3.595 billion, whilst revenue for the year 2010 jumped 97 percent to $13.341 billion.

Fourth quarter OIBDA increased 46 percent on the previous quarter to $992 million, whilst OIBDA for the year rose 139 percent to $2.981 billion.

On Thursday, Vladimir Yevtushenkov, chairman of Sistema, which holds 76.5 percent in Bashneft, said it could sell 25 percent plus one share in Bashneft to India's ONGC oil and gas company this year.

Bashneft won a tender at the end of 2010 to develop the giant Trebs and Titov oilfield in the Arctic

Bashneft was the only company admitted to participate in auction for the Trebs and Titov, the most promising in the Timan-Pechora province with C1 reserves estimated at 78.9 million tons (578 million barrels) and 63.4 million tons (465 million barrels) of oil respectively.

The government disqualified all other contenders, including Russia's largest private oil firm LUKoil, which has infrastructure in the region where the fields are located, and ONGC. Last Friday LUKoil's head Vagit Alekperov said the company would pay Bashneft 4.7 billion rubles for 25.1 percent plus one share in the Trebs and Titov development project.

Gazprom

10:52GAZPROM DIRECTORS DECIDE TO PLACE 3 ISSUES OF 3-YR EXCHANGE BONDS TOTALING 15 BLN RUBLEShttp://www.interfax.com/news.asp

Gazprom hot on thermal mergerhttp://www.upstreamonline.com/live/article253340.ece?WT.mc_id=rechargenews_rss

Russian gas monopoly Gazprom is out to create “the largest thermal generating company in Russia” through the planned merger of two affiliates.

Eoin O'Cinneide  21 April 2011 12:13 GMT

The gas giant is looking to slash costs and cut down on red tape as it merges power generation outfits OGK-2 and OGK-6.

D Day for the mooted merger is set for Monday when OGK-2 will host a board meeting, the company wrote in a statement in Russian on its website.

Under the planned deal OGK-2 will look to increase its authorised share capital through the conversion of shares in affiliate WGC-6 which, if the merger goes through, “will cease to exist”.

OGK-2 said the planned merger was aimed at: optimising the financing of investment activities; streamlining and centralisation of procurement activities; reducing duplicate functions and staff in the administrative apparatus; implementing a unified sales strategy and warehouse management; implementing effective management of fuel costs in the distribution of the load between the stations in favor of capacity with a lower specific fuel consumption; and unifying services provided by outside contractors.

The deal would have to be given the go-ahead by Russia’s Federal Anti-monopoly Services, however.

Italian energy giant Eni revealed on Wednesday that a planned sale of shares in one of its Libyan operations to Gazprom had been put on hold due to continued military action in the North African country.

Published: 21 April 2011 12:13 GMT  | Last updated: 21 April 2011 12:16 GMT

China’s hunger for gas serves OGZPYhttp://community.nasdaq.com/News/2011-04/chinas-hunger-for-gas-serves-ogzpy.aspx?storyid=72159

Posted 4/21/2011 1:54 PM by Emerging Mone

Gazprom is powering ahead today on news that Chinese energy giant Sinopec is buying its way into a massive Australian shale gas project. Sinopec ( SNP , quote ) 4.3 million tons of liquefied natural gas a year for the next 20 years from the gigantic coal seam gas project owned by Australia Pacific LNG. Australia Pacific itself is a joint venture between ConocoPhillips and Origin Energy. The deal will represent about $90 billion in gas for SNP over its lifetime and will also give the Chinese company a 15% equity stake

in the venture. Meanwhile, Russian gas producer Gazprom ( OGZPY , quote ) is ready, able and working toward pumping more gas into China's thirsty new pipelines. News like this only demonstrate just how crucial to the global economy OGZPY is. But the stock has underperformed in the last year, so has plenty of room left to catch up.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Read more: http://community.nasdaq.com/News/2011-04/chinas-hunger-for-gas-serves-ogzpy.aspx?storyid=72159#ixzz1KECgmqtt

Russian JSC Gazprom Co team meets PMhttp://www.thefinancialexpress-bd.com/more.php?news_id=133365&date=2011-04-22

A delegation of the Russian JSC Gazprom company, the largest natural gas extractor of the country, led by its Chief Executive Officer Valeriy Gulev Thursday paid a courtesy call on Prime Minister (PM) Sheikh Hasina at the latter's office in the city, reports BSS.

During the meeting, they discussed energy situation in Bangladesh and the issues relating to power generation and gas exploration, said PM's Press Secretary Abul Kalam Azad after the meeting.

The PM told the delegation that her government is working relentlessly to improve the country's existing energy situation at the shortest possible time.

Foreign Minister Dr Dipu Moni, PM's Energy Ad-viser Dr Tawfiq-E-Elahi Chowdhury, Ambassador at Large M Ziauddin, Principal Secretary to the Prime Minister MA Karim, PMO Secretary Mollah Waheeduz zaman, Energy Secretary Dr Mezbauddin, Prime Minister's Press Secretary Abul Kalam Azad, Chairman of Petro Bangla Prof Hossain Monsur, Bangladesh Ambassador to Russia Dr SM Saiful Hoque, among others, were present on the occasion.

Russian Ambassador in Bangladesh Gennady P Trotsenko accompanied Valeriy Gulev during the meeting.

Gazprom Purchase of Refinery Not ‘Appropriate’, Kocourek Tells Hospodarskehttp://www.bloomberg.com/news/2011-04-22/gazprom-purchase-of-refinery-not-appropriate-kocourek-tells-hospodarske.html

By Lenka Ponikelska - Apr 22, 2011 8:31 AM GMT+0200

Gazprom OAO (GAZP)’s possible purchase of a stake in Ceska Rafinerska AS, a Czech-based refinery, would not be “appropriate at this time,” Czech Industry and Trade Minister Martin Kocourek told Hospodarske Noviny in an interview.

Still, it is necessary to wait for “clear” signals that the purchase may happen before evaluating possible impacts of the Russian investor entering the company, Kocourek told the newspaper.

Eni SpA (ENI), Italy’s biggest oil company, may be in talks to sell its 32.5 percent stake in Ceska Rafinerska to Gazprom. Ceska Rafinerska is controlled by Poland’s Unipetrol AS. Royal Dutch Shell Plc (RDSA) also holds a stake in the refinery.

To contact the reporter on this story: Lenka Ponikelska in Prague lponikelska1@bloomberg.net.

To contact the editor responsible for this story: James Gomez at jagomez@bloomberg.net