Russia 110812

Basic Political Developments Prime Minister Myasnikovich to attend meeting of Union State's Council of

Ministers in Moscow on August 15 - Speaking to reporters on August 11, Pavel Borodin, state secretary of the Union State, said that the meeting's agenda would include 18 issues, including the establishment of state corporations for the manufacture of quarry trucks.

No gas talk breakthrough apparent after Yanukovych-Medevedev meetingo Moscow and Kiev fail to reach gas deal - Besdies talks on merging of

Gazprom and Naftogaz and Ukrainian membership in the Customs Union, the two states discussedestablishment of a joint aviation factory Antonov, entrance of the Russian capital in Ukrtelecom, the SIBUR port factory in Odessa, Gazprom-neft refineryin Kremenchug, Zaporozhstal (Severstal) and Luganskteplovoz

o Echo of Moscow: New gas war may burst out between Russia, Ukraine o Medvedev keeps quiet on Yulia after Sochio An-70 aircraft program reported delayed due to financing lack

Russia seeks further extension of talks over Belene nuke project – report: According to the report, Atomstroyexport has sent draft amendments to the main agreement to Bulgaria's National Electricity Company (NEK) and is currently awaiting its response. Bulgaria is expected to decide on the proposed amendments by August 15.

US condemns Russian arms sales to Syria - US Secretary of State Hillary Clinton called on Russia to stop selling arms to the Syrian government.

Medvedev signs decree backing UN SC resolution against Libyao Russia 'backs' NATO action in Libya - In a decree posted on the Kremlin's

website on Friday, President Medvedev banned all Libyan flights in Russian air space with the exception of humanitarian flights and authorized searches of ships for weapons or military personnel.

o Medvedev signs decree on UN SC Libya sanctions Medvedev to participate in CSTO summit in Kazakhstan - Earlier, Bordyuzha said

that presidents of all member countries will come to Astana, except for Uzbekistan’s President Islam Karimov. The CSTO unites seven countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

o Medvedev to participate in CSTO summit in Kazakhstano CSTO to discuss regional, international security issues in Kazakhstan -

"The heads of state are expected to exchange opinions on urgent issues of the modern international situation, including in the Middle East and North Africa, as well as in the CSTO responsibility zone," the Kremlin said.

Russian First Deputy PM: Russia offers Turkmenistan more stable dynamics of interstate relations - First Deputy Prime Minister of the Russian Federation Viktor Zubkov at a meeting in the Caspian Avaza briefed the Turkmen President

Gurbanguly Berdimuhammadov "about the Russian side’s proposals aimed at giving the traditional inter-state relations higher, stable dynamics", the Turkmen government said.

o Russia makes proposals to Turkmenistan - The Turkmen-Chinese gas pipeline was launched in 2009. Gazprom is the main purchaser of Turkmen gas. Russia's Zarubezhneft became the operator of the 21 blocks of the Turkmen sector of the Caspian Sea. A deal was signed on joint activities with Iter that had started research in the area in 2009. The investment project is worth $6 billion.

Russian, Azerbaijani defense ministers meet in Moscow - Russian Defense Minister Anatoly Serdyukov and Azerbaijani Defense Minister Safar Abiyev met in Moscow, APA reports quoting the website of the Russian Defense Ministry.

Russia: Immigration Bulletin – Free Movement Established Between Russia, Belarus and Kazakhstan

The list of products which can be exported to Russia from Serbia without paying customs has been expanded

Thailand launches inquiry into Viktor Bout's extradition - In Thailand the affair is apparently being used as a pretext to attack the country's former prime minister, who honored the extradition request.

N.Korea Favors S.Korea-Russia Gas Pipelineo Pyongyang plays on Moscow's desire - By Yong Kwon

Vietnam, Russia agree to boost cooperation - During his stay from August 9-17, Melnikov and the delegation of Russian State Duma will pay working visits to the central cities of Da Nang and Hue, the Mekong Delta province of Kien Giang and Ho Chi Minh City

Russia to pay tribute to sailors of Kursk submarine Wreath-laying ceremony to be held at Kursk submariners’ memorial Russia celebrates Air Force Day - "From December 1, I will be released from the

responsible for operational and strategic command of air and space defence" Zelin said. "The whole system is structured to optimise management and to concentrate the main forces and resources in the armed forces."

Sukhoi Superjets to star at MAKS-2011 air show Fog forces Moscow-bound Polish plane to return to Krakow Investigators to start working on An-12 crash site in Russian Far East Russia Presses Ahead With Chemical Arms Disposal - "As of yesterday, 20,957

[metric] tons of chemical agents had been destroyed," Interfax quoted Federal Special Construction Agency Deputy Director Vasily Bogomolov as telling reporters.

Boeing-737 makes emergency landing in Sochi Left Front plans Day of Wrath despite ban by Moscow authorities - The

protesters will gather near the Teatralnaya metro station at 7:00 p.m. MSK on August 12 to march towards the Presidential Administration's building and hand over their demands

Russia Says Militant Commander Killed In Daghestan Raid - The Counterterrorism Committee also accuses Magomedaliyev of having "contacts with Georgian secret services," who assisted his terrorist activities.

o Commando militant gang leader killed - Abdulla Magomedaliev, 33, was believed responsible for several terrorist attacks against law enforcement officers in the country’s south. His gang was well-trained in commando tactics and some of his targets were senior officials.

Two female extremists detained in Chelyabinsk - Police in Chelyabinsk detained two women, both of them local residents, who led the local cells of the Nurjular international religious extremist organization, whose activity is banned in Russia.

Movement on Chelyabinsk region railway to be restored soon - On Thursday evening two persons were killed, when coal-loaded freight carriages derailed and turned upside down.

Emergency situation declared in Russia’s Volgograd Region Members of intl human trafficking group detained in Vladivostok Moscow Hyppodrome Will Join World Parimutuel, Vedomosti Says - Russia’s

President Dmitry Medvedev ordered 27 state-owned racehorse stables to join the Central Moscow Hyppodrome and form a single company, which will be fully privatized to develop a horse-breeding industry and enter world pari-mutuel betting system, Vedomosti said, citing a presidential decre United Russia goes down the regions for support

United Russia goes down the regions for support - Disappointing ratings of Russian political driving force - United Russia - nudge the political party to adjust its pre-election strategy towards region-specific interests.

RIA Russian Press at a Glance, Friday, August 12, 2011 Achieving reciprocity from the homeland - Glamorous patriotism is the new

national cause Andrey Nikolaevich Serenko – Nezavisimaya Gazeta’s correspondent in the Volgograd region

Russia's Dead Soul - A case of absurd Moscow justice. Surreal Politik - Russia enters its political silly season a little early. But what do all

the bikini babes and music video hymns to Putin really tell us about a system gone horribly, horribly wrong? BY JULIA IOFFE

National Economic Trends RUSSIAN MONETARY BASE UP TO 6196.8 BLN RUBLES IN A WEEK TO

AUGUST 8 - CB Russia Stocks Head for Biggest Weekly Loss in a Year on Economy Russia. Grain harvest seen at 92mn tonnes in 2011/2012 MY Russia Offers Land for Southeast Asian Farmers to Make Food - “We suggested

today to companies in the region to enter the Russian market given its large scale and to establish themselves to produce food for your own supply,” Deputy Economy Minister Andrei Slepnev said yesterday in an interview in Manado, Indonesia, where he is attending a meeting of the Association of Southeast Asian Nations trade ministers.

Russian capital finds refuge in Switzerland and Monaco - According to the Bank of Russia, the volume of cross-border transfers to Switzerland has increased 3.4-fold in one year.

Business, Energy or Environmental regulations or discussions Novatek, Norilsk Nickel, Uralkali: Russian Equities Preview Banks nearly double profit in 7M Rosatom registers foreign branch - According to acting CEO Alexey Kalinin, the

company will focus on the state corporation's business development as regards phasing in projects on the construction of nuclear power stations on foreign markets based on the BOO model (build-own-operate).

GENERALI - The insurance group will reach an agreement with Russian bank VTB (VTBR.MM) after the summer that could create a joint-venture based on a Czech unit of Generali, Il Corriere della Sera said.

Rostelecom to Complete Privatization by 2013, Kommersant Reports Russia offering major iron ore license for RUB 2 billion - Interfax - 12 Aug, 2011 Irkutskenergo boosts RAS sales revenue 19% in H1 Uralkali generates strong margins in H1 Kemerovo Azot boosts net profit by 360% in H1 Moscow becomes home to Best Western's largest property yet More traffic along the Northern Sea Route - Russia’s Ministry of Transport

believes cargo transport through NSR will increase from last year’s 1.8 million tons to 64 million tons by 2020.

Siberia Container Train Link Speeds Asia-Europe Trade: Freight Markets Chris Weafer said to return to Troika Dialogue

Activity in the Oil and Gas sector (including regulatory) Lukoil Bulgaria Downs Fuel Prices, Far from Enough LUKOIL drills new well in Uzbekistan

Gazprom Gazprom Neft to acquire Uzuralneftegas NOVATEK: Regional gas distributor could be bought from Gazprom Gazprombank upgraded to BB+ by S&P A Promise Made to Be Broken - Is The Trial of Yulia Tymoshenko a Pretext by

Ukrainian Leaders to Start Another Gas War With Russia? By Tai Adelaja Ukraine to cut Gazprom's umbilical cord? - Written by John Daly   

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Full Text Articles

Basic Political Developments

Prime Minister Myasnikovich to attend meeting of Union State's Council of Ministers in Moscow on August 15http://naviny.by/rubrics/english/2011/08/11/ic_news_259_374253/

Prime Minister Mikhail Myasnikovich and his Russian counterpart, Vladimir Putin, will co-chair a meeting of the Belarusian-Russian Union State's Council of Ministers in Moscow on August 15.

The agenda of the meeting includes a wide range of issues of bilateral relations, said the Russian government's press office.

Messrs. Myasnikovich and Putin are scheduled to hold talks in the framework of the event.

Speaking to reporters on August 11, Pavel Borodin, state secretary of the Union State, said that the meeting's agenda would include 18 issues, including the establishment of state corporations for the manufacture of quarry trucks. //BelaPAN

No gas talk breakthrough apparent after Yanukovych-Medevedev meetinghttp://www.ukrainianjournal.com/index.php?w=article&id=12983

Journal Staff Report

KIEV, Aug. 11 – President Viktor Yanukopvych and his Russian counterpart Dmitry Medvedev, after their meeting in Sochi, provided no signs of breakthrough in talks over natural gas prices, an issue that may undermine Ukraine’s economic stability.

Shortly before the meeting, Yanukovych said the issue will be one of the most important to be discussed with Medvedev.

“Of course, we will mandatorily discuss this issue,” Yanukovych said in comments posted by his press service. “I believe it is in the interests of both, Ukraine and Russia, to find a compromise decision. We will seek to do that.”

The failure to report any progress at the talks may be an early sign that the parties have failed to strike a compromise, a scenario that may have negative economic impact on Ukraine as soon as next month.

Moscow and Kiev fail to reach gas dealhttp://vestnikkavkaza.net/news/economy/16782.html

Russian and Ukrainian Presidents Dmitry Medvedev and Victor Yanukovychfailed to reach an agreement on the gas price, Ukrainian membership inthe Customs Union and other issues discussed at the Bocharov RucheyResidence on Thursday, Kommersant reports.

The newspaper believes that a new "gas war" may start in 2012. Thepresidents admitted that their states have problems.

No progress is expected at the coming session of the interstatecommission in September.

Besdies talks on merging of Gazprom and Naftogaz and Ukrainianmembership in the Customs Union, the two states discussedestablishmentof a joint aviation factory Antonov, entrance of the Russian capitalin Ukrtelecom, the SIBUR port factory in Odessa, Gazprom-neft refineryin Kremenchug, Zaporozhstal (Severstal) and Luganskteplovoz(Transmashholding).

Echo of Moscow: New gas war may burst out between Russia, Ukraine http://www.focus-fen.net/index.php?id=n256939

12 August 2011 | 08:50 | FOCUS News AgencyHome / WorldMoscow. A new gas war may break out between Russia and Ukraine. The relations between the two countries have accumulated series of economic and political contradictions, the Echo of Moscow writes.The time of rapprochement and stability in the relations between Moscow and Kiev is over, Kommersant daily comments in an article.The newspaper writes further that the meeting between Russian President Dmitry Medvedev and Ukrainian counterpart Viktor Yanukovych in Sochi is a clear evidence of this.The major problem in the two countries’ relations is the merge between Gazprom and Naftogaz of Ukraine.

Украина с одного газа не понимаетhttp://www.kommersant.ru/

Виктор Янукович превращается в непростую проблему для Москвы, как и его предшественникПериод сближения и стабильности в отношениях России и Украины, начавшийся с приходом к власти в Киеве Виктора Януковича, завершился. Это отчетливо показала вчерашняя встреча Дмитрия Медведева с президентом Украины в Сочи. Украинский лидер начал переговоры с намека…

 

Medvedev keeps quiet on Yulia after Sochihttp://www.ukrainianjournal.com/index.php?w=article&id=12984

Journal Staff Report

KIEV, Aug. 11 – Russian President Dmitry Medvedev, following a meeting with his Ukrainian counterpart Viktor Yanukovych in Sochi on Thursday, made no public comments over the arrest of Ukrainian opposition leader Yulia Tymoshenko.

This comes after a Kremlin source told Interfax-Ukraine on Wednesday that Medvedev had been specifically seeking to discuss the issue with Yanukovych.

Yanukovych, however, in his first official reaction to the Aug. 5 arrest, said Thursday he will not interfere in the work of the court, because otherwise “the problems would be even greater.”

"The Ukrainian judicial system is independent and without prejudice and is guided solely by the constitution and laws of Ukraine," Yanukovych said in a letter to Czech President Vaclav Klaus, who had earlier asked Yanukovych for assurances that the trial of Tymoshenko was not politically motivated.

"Political or any kind of interference in the work of the court is unacceptable," he added.

"Not one of the current judicial processes involving former officials is, and cannot be, politically motivated. I am responsible for this personally, as a guarantor of the Ukrainian constitution," said Yanukovych.

Tymoshenko's arrest sparked concern in the United States and EU members about the rule of law in Ukraine and also fears the controversy could endanger an association agreement Kiev hopes to sign this year with the European Union.

Tymoshenko, who was arrested for contempt of court during her trial on charges of abuse of power, has insisted she is the victim of a political vendetta led by Yanukovych.

Tymoshenko is tried for negotiating and ordering to sign a 10-year natural gas agreement

with Russia in January 2009 that Yanukovych and his Prime Minister Mykola Azarov had said was “extremely favorable” for Ukraine.

Russia was one of the first countries to respond to the arrest by issuing a statement assuring that the agreement had been signed in accordance with the laws of both countries and backed by presidents of both countries.

Viktor Yushchenko, the president of Ukraine at the time, has never approved nor supported the agreement. Prosecutors plan to question Yushchenko at the trial later this month.

In his response to Klaus, Yanukovych also said Ukraine had taken a irreversible path towards establishing European principles of "law, human rights and democratic development".

Tymoshenko, who is being held in Kiev's Lukyanovsky detention centre, risks being jailed for up to 10 years if convicted of abuse of power over gas deals she signed with Russia in 2009.

She is transported through central Kiev in a prison van for the daily hearings of her trial. (tl/ez)

An-70 aircraft program reported delayed due to financing lack http://www.ukrainianjournal.com/index.php?w=article&id=12982

Journal Staff Report

KIEV, Aug. 11 – The completion of research and design work for the Ukrainian-Russian An-70 medium transport aircraft program could be postponed due to the absence of financing from Ukraine, President and Chief Designer of Antonov state enterprise, Dmytro Kiva, said in an exclusive interview with Interfax-Ukraine.

Commenting on cooperation with Russia on the An-70 program, he said Ukraine and Russia last year signed documents to continue cooperation in the An-70 project, in particular, for the completion of research and design work with financing on a parity basis.

Russia seeks further extension of talks over Belene nuke project – reporthttp://www.sofiaecho.com/2011/08/12/1138155_russia-seeks-further-extension-of-talks-over-belene-nuke-project-report

Fri, Aug 12 2011 10:20 CET

by Dnevnik.bg

Russian company Atomstroyexport, the contractor on Bulgaria's Belene nuclear power station project, has proposed to Bulgaria to further extend the agreement for the plant's construction until December 1, Russian news agency RIA Novosti reported on August 11, quoting a company statement.

According to the report, Atomstroyexport has sent draft amendments to the main agreement to Bulgaria's National Electricity Company (NEK) and is currently awaiting its response. Bulgaria is expected to decide on the proposed amendments by August 15.

NEK was not available to comment when contacted by Dnevnik.

Earlier, the parties agreed to freeze the project till September.

RIA Novosti also quoted a letter sent by NEK's head Mikhail Andonov to Atomstroyexport, saying that the company had examined the draft amendment and that it was now subject to review by project consultant HSBC.

According to Russian media reports, Atomstroyexport has said it would withdraw its claim against Bulgaria should the parties agree to proceed with the plant's construction.

US condemns Russian arms sales to Syria http://english.ruvr.ru/2011/08/12/54538933.html

Aug 12, 2011 02:46 Moscow Time

US Secretary of State Hillary Clinton called on Russia to stop selling arms to the Syrian government.

In her interview to CBS, Mrs Clinton notes that the US has not been urging Syrian President Assad to resign only because the world community is not ready to openly accuse the Syrian regime of violence against its own people.

The US has been clear about its disappointment with Assad losing his credibility from the start but it wants other countries to see it for themselves, the Secretary of State concludes.

10:32 12/08/2011ALL NEWS

Medvedev signs decree backing UN SC resolution against Libya

http://www.itar-tass.com/en/c154/202910.html

MOSCOW, August 12 (Itar-Tass) — Russian President Dmitry Medvedev has signed a decree backing UN Security Council Resolution 1973, which imposes a no-fly zone over Libya and toughens a sanctions regime against the country, the Kremlin press service said on Friday.

In particular, the decree bans all Libya-bound and Libyan flights in Russia’s air space, except for humanitarian missions.

It also authorities searches of vessels sailing from or to Libya if Russia obtains information that ships are used for carrying military personnel or weapons.

Moreover, Medvedev banned any financial operations engaging assets of Muammar Gaddafi’s family members, aides and Libyan legal entities as well as the entry of some individuals to the Russian territory.

On March 17, Russia abstained from voting on the UN SC resolution.

Russia 'backs' NATO action in Libyahttp://en.rian.ru/world/20110812/165729976.html

09:57 12/08/2011

MOSCOW, August 12 (RIA Novosti)

Russian President Dmitry Medvedev on Friday gave his backing to a UN Security Council resolution which authorized international military action in Libya.

UN Resolution 1973, which Russia abstained from voting on in March, authorizes a no-fly zone over Libya and the use of "all necessary measures" to protect Libyan civilians. The UN vote followed a deadly crackdown on protests against the regime of Colonel Muammar Gaddafi.

In a decree posted on the Kremlin's website on Friday, President Medvedev banned all Libyan flights in Russian air space with the exception of humanitarian flights and authorized searches of ships for weapons or military personnel.

The decree also bans all financial operations involving the assets of Gaddafi and members of his family and his aides.

Thousands of people have been killed since the uprising against Gaddafi's rule began in February.

The UN resolution on Libya seemed to cause a split between Medvedev and powerful Prime Minister Vladimir Putin in March after the premier said it resembled "medieval calls for crusades." Medvedev said such comments were "unacceptable" and could lead to a "clash of civilizations."

August 12, 2011 09:39

Medvedev signs decree on UN SC Libya sanctionshttp://www.interfax.com/newsinf.asp?id=265421

MOSCOW. Aug 12 (Interfax) - Russian President Dmitry Medvedev has signed a decree on measures to implement the UN Security Council's Resolution 1973 dated March 17, 2011, the presidential press service reported on Friday.

The UN Security Council's Resolution 1973 imposes a no-fly zone over Libya and tightens the sanctions in relation to this country introduced by the UN Security Council's Resolution 1970 dated February 26, 2011.

tm

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

03:18 12/08/2011Top News

Medvedev to participate in CSTO summit in Kazakhstan

http://www.itar-tass.com/en/c32/202782.html

MOSCOW, August 12 (Itar-Tass) — Russia’s President Dmitry Medvedev is leaving on Friday for Kazakhstan, where he will participate in an informal summit of the Collective

Security Treaty Organisation /CSTO/. Leaders of the member-countries plan to discuss first of all the situation in the Middle East and Northern Africa.

Earlier, Medvedev said he would update his counterparts on Russia’s efforts to normalise the situation in Northern Africa and in the Middle East.

“The situation in Northern Africa and in the Middle East influence directly the situation in the CSTO,” he said. “I will positively inform the partners on the intermediate efforts we are undertaking.”

Medvedev is also planning to discuss the situation in Kyrgyzstan, to talk about “major regional threats, and generally about the situation in the region.”

“Russia is interested in building up the CSTO’s potential,” he stressed.

Belarus’ President Alexander Lukashenko, who chairs the organisation now, agrees with him.

“We should discuss the emerging situation, the issues which may arise,” Lukashenko said. “They are serious and they are numerous. With the events happening in the world, the military-political bloc should coordinate and even pre-plan its activities.”

“It is not worth hiding that the entire Muslim world is boiling up, and we may not rule out a situation where tension may occur in our Muslim countries – in Tajikistan, there are enough problems in Kyrgyzstan, Kazakhstan.”

The Kremlin’s press service said that “the countries’ leaders will exchange views on current problems of modern international situation, including the situation in the Middle East and in Northern Africa, as well as in the CSTO’ s area of responsibility, they will discuss various aspects of the organisation’s activities, and raising its effectiveness.”

“Though the discussions will be of free character and there will not be a strict agenda, it is supposed that the presidents will give orders to the CSTO’s Secretary General Nikolai Bordyuzha regarding preparations for the organisation’s next session /due before the yearend in Moscow/, and, possibly, regarding the double jubilee in 2012 – 20th anniversary of the Treaty on Collective Security and 10th anniversary of the organisation,” the press service said.

It is planned, that the summit will begin on Friday in Astana, and after the official part, Kazakhstan’s President Nursultan Nazarbayev will invite the presidents to the Borovoye to continue their work.

Earlier, Bordyuzha said that presidents of all member countries will come to Astana, except for Uzbekistan’s President Islam Karimov. The CSTO unites seven countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

The upcoming meeting will be the fifth event of the kind in the organisation’s history. This forum started in the Borovoye /Kazakhstan/ on December 19-21, 2008 and later on it was developed in Cholpon-Ata /Kyrgyzstan/ on July 31- August 1, 2009, in Moscow on May 8, 2010, and in Yerevan on August 20, 2010.

The Collective Security Treaty Organisation is an intergovernmental military alliance which was signed on 15 May 1992. On 7 October 2002, the Presidents of Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan signed a charter in Tashkent founding the CSTO. Nikolai Bordyuzha was appointed secretary general of the new organisation. On 23 June 2006, Uzbekistan became a full participant in the CSTO; and its membership was formally ratified by the Uzbek parliament on 28 March 2008. The CSTO is currently an observer organisation at the United Nations General Assembly.

The CSTO charter reaffirmed the desire of all participating states to abstain from the use or threat of force. Signatories would not be able to join other military alliances or other groups of states, while aggression against one signatory would be perceived as an aggression against all. To this end, the CSTO holds yearly military command exercises for the CSTO nations to have an opportunity to improve inter-organisation cooperation. The largest-scale CSTO military exercise held to date were the Rubezh 2008 exercises hosted in Armenia where a combined total of 4,000 troops from all 7 constituent CSTO member countries conducted operative, strategic, and tactical training with an emphasis towards furthering efficiency of the collective security element of the CSTO partnership.

The CSTO employs a “rotating presidency” system in which the country leading the CSTO alternates every year. Belarus currently has the CSTO presidency.

The CSTO grew out of the framework of the Commonwealth of Independent States, and first began as the CIS Collective Security Treaty (CST) which was signed on May 15, 1992, by Armenia, Kazakhstan, Kyrgyzstan, Russian Federation, Tajikistan and Uzbekistan, in the city of Tashkent. Azerbaijan signed the treaty on September 24, 1993, Georgia on December 9, 1993 and Belarus on December 31, 1993. The treaty came into effect on April 20, 1994. The CST was set to last for a 5-year period unless extended. On April 2, 1999, only six members of the CST signed a protocol renewing the treaty for another five-year period - Azerbaijan, Georgia and Uzbekistan refused to sign and withdrew from the treaty instead. At the same time Uzbekistan joined the GUAM group, established in 1997 by Georgia, Ukraine, Azerbaijan, and Moldova, and largely seen as intending to counter Russian influence in the region. Uzbekistan later withdrew from GUAM.

On February 4, 2009, an agreement to create the Collective Rapid Reaction Force (KSOR) was reached by five of the seven members, with plans finalised on June 14. The force is intended to be used to repulse military aggression, conduct anti-terrorist operations, fight trans-national crime and drug trafficking, and neutralize the effects of natural disasters. Belarus and Uzbekistan initially refrained from signing on to the agreement; Belarus because of a trade dispute with Russia, and Uzbekistan due to general concerns. Belarus signed the agreement the following October while Uzbekistan has yet

to sign it. However a source in the Russian delegation said Uzbekistan would not participate in the collective force on a permanent basis but would “delegate” its detachments to take part in operations on an ad hoc basis.

Medvedev to participate in CSTO summit in Kazakhstanhttp://engnews.gazeta.kz/art.asp?aid=346513

News / Politics 10:40 12.08.2011 text: Kazinform

Russia’s President Dmitry Medvedev is leaving on Friday for Kazakhstan, where he will participate in an informal summit of the Collective Security Treaty Organisation /CSTO/. Leaders of the member-countries plan to discuss first of all the situation in the Middle East and Northern Africa; Kazinform refers to Itar-Tass.

Earlier, Medvedev said he would update his counterparts on Russia’s efforts to normalise the situation in Northern Africa and in the Middle East.

“The situation in Northern Africa and in the Middle East influence directly the situation in the CSTO,” he said. “I will positively inform the partners on the intermediate efforts we are undertaking.”

Medvedev is also planning to discuss the situation in Kyrgyzstan, to talk about “major regional threats, and generally about the situation in the region.”

“Russia is interested in building up the CSTO’s potential,” he stressed.

Belarus’ President Alexander Lukashenko, who chairs the organisation now, agrees with him.

“We should discuss the emerging situation, the issues which may arise,” Lukashenko said. “They are serious and they are numerous. With the events happening in the world, the military-political bloc should coordinate and even pre-plan its activities.”

“It is not worth hiding that the entire Muslim world is boiling up, and we may not rule out a situation where tension may occur in our Muslim countries – in Tajikistan, there are enough problems in Kyrgyzstan, Kazakhstan.”

The Kremlin’s press service said that “the countries’ leaders will exchange views on current problems of modern international situation, including the situation in the Middle East and in Northern Africa, as well as in the CSTO’ s area of responsibility, they will discuss various aspects of the organisation’s activities, and raising its effectiveness.”

“Though the discussions will be of free character and there will not be a strict agenda, it is supposed that the presidents will give orders to the CSTO’s Secretary General Nikolai Bordyuzha regarding preparations for the organisation’s next session /due before the yearend in Moscow/, and, possibly, regarding the double jubilee in 2012 – 20th anniversary of the Treaty on Collective Security and 10th anniversary of the organisation,” the press service said.

It is planned, that the summit will begin on Friday in Astana, and after the official part, Kazakhstan’s President Nursultan Nazarbayev will invite the presidents to the Borovoye to continue their work.

Earlier, Bordyuzha said that presidents of all member countries will come to Astana, except for Uzbekistan’s President Islam Karimov. The CSTO unites seven countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

The upcoming meeting will be the fifth event of the kind in the organisation’s history. This forum started in the Borovoye /Kazakhstan/ on December 19-21, 2008 and later on it was developed in Cholpon-Ata /Kyrgyzstan/ on July 31- August 1, 2009, in Moscow on May 8, 2010, and in Yerevan on August 20, 2010.

CSTO to discuss regional, international security issues in Kazakhstanhttp://en.rian.ru/russia/20110812/165724401.html

01:57 12/08/2011

MOSCOW, August 12 (RIA Novosti)

Leaders of the Collective Security Treaty Organization (CSTO) member states will discuss regional and international security issues at an informal summit in Kazakhstan on Friday, the Kremlin reported.

"The heads of state are expected to exchange opinions on urgent issues of the modern international situation, including in the Middle East and North Africa, as well as in the CSTO responsibility zone," the Kremlin said.

The CSTO is a regional security organization. Its seven member states are Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

CSTO to discuss regional, international security issues in Kazakhstanhttp://en.trend.az/regions/world/russia/1917295.html

[12.08.2011 04:08]

Leaders of the Collective Security Treaty Organization (CSTO) member states will discuss regional and international security issues at an informal summit in Kazakhstan on Friday, the Kremlin reported.

"The heads of state are expected to exchange opinions on urgent issues of the modern international situation, including in the Middle East and North Africa, as well as in the CSTO responsibility zone," the Kremlin said, RIA Novosti reported.

The CSTO is a regional security organization. Its seven member states are Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

Russian First Deputy PM: Russia offers Turkmenistan more stable dynamics of interstate relationshttp://en.trend.az/regions/casia/turkmenistan/1917307.html

[12.08.2011 10:37]

Turkmenistan, Ashgabat, Aug.12 / Trend, H. Hasanov /

First Deputy Prime Minister of the Russian Federation Viktor Zubkov at a meeting in the Caspian Avaza briefed the Turkmen President Gurbanguly Berdimuhammadov "about the Russian side’s proposals aimed at giving the traditional inter-state relations higher, stable dynamics", the Turkmen government said.

Moscow’s senior official conveyed Russian President Dmitry Medvedev and Prime Minister Vladimir Puti’s greetings to Berdimuhammadov, confirming the "Russian side’s true commitment to full cooperation with Turkmenistan".In addition, appreciating Ashgabat’s international initiatives, in particular, aimed at ensuring global energy security, Zubkov said "Russia sees wide field for building mutual potential and its further effective implementation in common interests."

In turn, Berdimuhamedov said "cooperation with Russian partners has been and remains one of the strategic priorities of Turkmenistan's foreign policy". "According to report, the sides discussed a wide range of issues of mutual interest and progress in "the achieved agreements and opportunities for progressive establishing of business contacts".The report also says that at the meeting Zubkov also touched upon the main directions of cooperation in the near and long-term perspective. The speech was particularly about deepening of partnership in trade, energy sector, agribusiness and other spheres.

He said "Russian business circles express desire to expand their presence in the promising Turkmen market, where a number of well-known Russian companies already operate successfully".

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

Russia makes proposals to Turkmenistanhttp://vestnikkavkaza.net/news/economy/16777.html

Russian deouty chairman of government Victor Zubkob met Turkmen President Gurbanguly Berdimuhamedov and made proposals on improving ties, the Turkmen government reports.

Russian President Dmitry Medvedev and Prime Minister Vladimir Putin expressed devotion to full-fledged cooperation with Turkmenistan, especially in the energy sphere, agriculture and trade. Russian companies want to expand activities in Turkmenistan.

The Altyn Asyr TV Channel noted that trade turnover between the two states had improved in the last years. Cooperation expanded with Tatarstan, Saint-Petersburg and the Astrakhan Region.

The Turkmen-Chinese gas pipeline was launched in 2009. Gazprom is the main purchaser of Turkmen gas.Russia's Zarubezhneft became the operator of the 21 blocks of the Turkmen sector of the Caspian Sea. A deal was signed on joint activities with Iter that had started research in the area in 2009. The investment project is worth $6 billion.

Russian, Azerbaijani defense ministers meet in Moscow

http://en.apa.az/news.php?id=153195

[ 12 Aug 2011 10:31 ] Baku. Habil Suleymanzadeh – APA. Russian Defense Minister Anatoly Serdyukov and Azerbaijani Defense Minister Safar Abiyev met in Moscow, APA reports quoting the website of the Russian Defense Ministry.

The ministers discussed topical issues of the bilateral military cooperation and focused attention on the prospects of the use of Gabala radar station.

Russian Defense Minister Anatoly Serdyukov was on a visit to Azerbaijan on July 24-25. He had talks over the prolongation of lease term for the Gabala radar. Following the meeting with Safar Abiyev in Baku, Serdyukov told journalists that Russia prepared proposals on further exploitation of the Gabala radar station. “We prepared our proposals on Gabala radar station. We propose to modernize the station and Russia has certain plans on it. We will establish a working group and send it to Baku in the near future and within two weeks, the group will discuss the technical issues concerning the exploitation of the station with their Azerbaijani colleagues”.

Defense Minister also said Russia proposed to Azerbaijan to increase quota for personnel training for the Azerbaijani Armed Forces. Serdyukov met with President of Azerbaijan Ilham Aliyev and then visited Gabala radar station.

Russia: Immigration Bulletin – Free Movement Established Between Russia, Belarus and Kazakhstanhttp://www.moveoneinc.com/blog/europe/enrussia-immigration-bulletin-free-movement-established-russia-belarus-kazakhstan/

Agreement lifts restrictions on movement between the three countries

By Agnes Emri August 12, 2011Share...   

A Russian federal law came into force on July 26, 2011 ratifying a reciprocal agreement between Belarus, Kazakhstan and Russia. While provisos affecting Kazakh nationals are to become effective from January 1, 2012, nationals of Belarus have been eligible for immigration benefits since 1999. Therefore, the new law mainly impacts the process of employment for nationals of Kazakhstan while at the same time reaffirms procedures for nationals of Belarus.

The agreement from the Russian perspective states that Belorussian and Kazakh nationals are permitted to enter Russia without a visa, however for a stay longer than 30 days registration must be arranged. In case of entry for work purpose, Kazakh and Belorussian foreigners holding signed employment contracts with local employers are not required to obtain a work permit and they are exempt from the quota requirement as well.

The agreement also declares that in case of contract termination after a stay of 90 days, nationals of the two countries have the right to sign a new contract within 15 days and continue their stay without interruption in Russia.

Moreover legislation defines rules for family members of Kazakh and Belorussian foreigners. One of the articles defines that accompanying children may access state education on equal terms with local residents.

In return for the above provisions, Belarus and Kazakhstan are to offer simplified employment procedures for Russian citizens as well.

Move One continues to monitor the changes.

The list of products which can be exported to Russia from Serbia without paying customs has been expandedhttp://www.balkans.com/open-news.php?uniquenumber=115639

Balkan Business News Correspondent - 12.08.2011

Serbia's Minister of Economy and Regional Development Nebojsa Ciric and trade representative of Russia in Serbia, Mr. Yevgeny Kudinov, signed a protocol defining exceptions from the free trade regime between the two countries as well as rules on how origin of goods for products is determined. This is of great importance not only for Serbian exporters, but also for companies that want to establish manufacturing operations in Serbia in order to supply Russian market.The list of products which can be exported to Russia from Serbia without paying customs has been expanded to include carpets and floor coverings, furniture, cash registers, monitors and projectors, television sets, starch and glucose syrup. Almost 99% of trade with Russia has been liberalized.  Therefore, customs duties will be paid only for a small number of products that are exported from Serbia: meat and edible waste from poultry, certain kinds of cheese, sugar, sparkling wine, un-denatured ethyl alcohol, tobacco, cotton yarn, cotton fabrics, certain kinds of compressors, tractors, passenger cars and used motor vehicles.  Trade between Serbia and Russia is constantly on the rise: In the first five months of this year, total trade between the two countries amounted to $1.357.8 billion, a 40.2% increase relative to the same period last year. Serbian exports totaled $280 million, which marks an increase of 64.3% compared to the same period last year. The overall external trade of the Republic of Serbia for the period January-May 2011 amounted to $12.7 billion, which is a 27% increase compared to the same period 2010.  Source; SIEPA

Thailand launches inquiry into Viktor Bout's extraditionhttp://en.rian.ru/analysis/20110812/165732853.html

12:08 12/08/2011

RIA Novosti political commentator Dmitry Kosyrev

A court in Bangkok on Wednesday looked into the circumstances of Viktor Bout's extradition to the United States. The alleged Russian arms dealer will stand trial there in October, and the American court assigned to hear Bout's case is unlikely to give any serious attention to the details of his handover. In Thailand the affair is apparently being used as a pretext to attack the country's former prime minister, who honored the extradition request.

Who is Mr. Bout?

Thailand found itself involved in the Bout case in 2008 when the Russian businessman was arrested in Bangkok's Sofitel hotel following a sting operation staged by American special services. It may be standard practice in the U.S. for secret agents disguised as potential buyers to goad a suspected arms dealer into an on-record confessions. But in Thailand and other countries, incriminating people using such methods is seen as rather controversial. This is why Bout's arrest and the two-year proceedings on his U.S. extradition have raised so many questions in Thailand.

Bout's story is a complicated one. In the eyes of the American public, he is an arms baron, perhaps the world's most infamous. His infamy does not mean, however, that he is guilty of the arms smuggling charges brought against him in the U.S.

Some observers argue that the Bout affair was fabricated by a group of American investigators who had spent a lot of time and money trying unsuccessfully to find conclusive evidence that this man is, indeed, an arms dealer. They say the sting operation at Sofitel was a face-saving measure.

The true story may take years to uncover, and we may never learn the whole truth. There is much more clarity on the extradition procedure, though. An analysis of Thai court rulings - which upheld the U.S. extradition request and then rejected it - suggests that the country's judiciary could see no legitimate grounds for Bout's extradition and considered his case far-fetched. But under heavy pressure from Washington, they eventually agreed to surrender Bout to the U.S.

It looks like Bout's fate was decided by Abhisit Vejjajiva, who became the new prime minister of Thailand in December 2008.

Who is Mr. Vejjajiva?

At the request of Bout's lawyers, the inquiry focuses on the actions taken by Vejjajiva and members of his cabinet ahead of the extradition. It is still unclear who decided to extradite the Russian businessman to the U.S. and how the decision was made. Vejjajiva and some of his ministers admitted to the cabinet's involvement while others denied it. But whoever made the final decision, the Americans eventually got their way - largely in violation of Thai law.

It is former Prime Minister Vejjajiva and his inner circle that the inquiry panel aims to bring to justice. And it seems to be a mere coincidence that the attack on Vejjajiva's legacy has begun with the Bout case. This process could have just as well started with an investigation into the government's May 2010 crackdown on opposition protesters, which left at least 91 people dead.

The supporters of Vejjajiva, seen as a pro-Western politician and a representative of the liberal elite, are in opposition to the majority of the Thai population, who back former premier Thaksin Shinawatra and his allies. The fierce standoff between these two camps has not escalated to a civil war so far, but it has moved far beyond a normal political struggle. Characteristically, Vejjajiva never ran for prime minister but instead came to power through legislative maneuvers. Now, at last, he will be replaced by Thaksin Shinawtra's sister, Yingluck, whose party won the national election in July.

Vejjajiva is dubbed, quite aptly, Thailand's Yushchenko. Indeed, he and the former Ukrainian leader have quite a lot of things in common. Both men's rise to power was tainted by controversy. Both want to orient their countries toward the West. And both resorted to persecuting political opponents.

Curiously, such people often get away with things for which others are punished severely. The Thai government's crackdown on the Bangkok riots in May last year is not much different from the current violent campaigns that the authorities in Syria and Libya have unleashed against protesters. Yet, Vejjajiva - a man with dual Thai and British citizenship - benefits from the West's double standard.

Consequences and lessons

Traditionally, Thailand's society is neither anti-Western, nor anti-American. It respects tolerance and moderation.

Anti-Western sentiment has emerged recently only as a reaction to Vejjajiva's excessive efforts to make Thailand pro-Western. As a result of this policy, vehement opponents of Thaksin Shinawatra have now come to accept the exiled premier. Now he can return to his country, have himself cleared of all charges, and again become a key figure in national politics. Even in exile he has continued to be a major political player in Thailand.

In countries neighboring Thailand and in some distant Asian nations, few people know Yushchenko. Vejjajiva, by contrast, is a household name across the continent. A careful

analysis of the effects of his actions could make other Asian nations better equipped to handle U.S. extradition requests that may come their way some day.

The views expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

N.Korea Favors S.Korea-Russia Gas Pipelinehttp://english.chosun.com/site/data/html_dir/2011/08/12/2011081201093.html

North Korea is "positive" about a project to lay an overland gas pipeline transporting Russian natural gas to South Korea, Russian Foreign Minister Sergey Lavrov said Thursday.

Lavrov, who met with his South Korean counterpart Kim Sung-hwan in Moscow on Monday, added he is optimistic about the success of the project, according to a South Korean government official.

Executives from Gazprom, Russia's largest extractor of natural gas, met with North Korean officials recently and agreed to meet again to discuss the details, Russian officials told their South Korean counterparts.

During President Lee Myung-bak's first visit to Russia in September 2008, South Korea and Russia signed a memorandum of understanding whereby Seoul will import 7.5 million tons of natural gas from Siberia every year for 30 years from 2015.

Once completed, the pipeline would reduce transportation cost for Russian natural gas to a mere 30 percent of the current cost of transporting it by ship.

Meanwhile, diplomatic sources speculated that there is a chance that North Korean leader Kim Jong-il will visit Vladivostok to meet with Russian Prime Minister Vladimir Putin, probably next month when Putin is in Siberia to mark the completion of a gas pipeline from Sakhalin to Vladivostok.

englishnews@chosun.com / Aug. 12, 2011 12:53 KST

Pyongyang plays on Moscow's desire

http://www.atimes.com/atimes/Korea/MH12Dg02.html

By Yong Kwon

Analysts are rightfully skeptical of recent efforts to reboot the six-party talks on North Korea's nuclear program. [1] Neither Seoul's offer of a "grand bargain" nor Washington's "partial approach" will fundamentally change Pyongyang's historical position on nuclear weapons.

However, the North will continue to use the spotlight as a forum to express its world views and advance its political agenda. Consistent with this traditional trend, Pyongyang's newest foreign policy agenda appears to be aimed at leveraging Moscow's desire to retain influence in Northeast Asia for political and economic gain.

Despite Russia's refusal to undermine North Korea's position in the frequent clashes between the two Koreas, North Korea has offered to engage in denuclearization talks under a new framework that excludes Japanese and Russian participation. [2]

Analysts have suggested that North Korea may be focused on replacing the armistice at the end of the Korean War in 1953 with a formal peace treaty while keeping the double attacks on South Korea off the table; however, if this is the case, removing Russia from the table will reduce maneuverability in keeping the Cheonan and Yeonpyeong Island attacks out of the negotiations. Another, more convincing and direct, objective must be at play in Pyongyang's purposeful decision.

Pyongyang proposed the new framework days before Russian officials revealed that President Dmitry Medvedev was due to travel to Vladivostok to meet with the ailing North Korean leader. It also comes after years of Russian efforts to move closer to South Korea, cooperating in not only trade matters but also in military collaboration; both endangering North Korea's position in the existential conflict.

Russia's proximity to South Korea is no secret. Even before the collapse of the Soviet Union, the Kremlin moved to establish a close relationship with Seoul. The Soviet Union took massive loans from South Korea and, to North Korea's dismay, participated in the 1988 Seoul Summer Olympic Games. These ties were deepened when the new Russian Federation advanced plans for greater economic and military cooperation.

Russia's shift towards the Republic of Korea in the early 1990s had ideological and practical motives; first, it was consistent with president Boris Yeltsin's and foreign minister Andrey Kozyrev's policy of integrating Russia with the West; second, South Korea's loans to Russia and Moscow's ability to play the "Korean card" against Japan in its territorial dispute proved politically advantageous. [3] In addition, it was the dominant viewpoint that Seoul would control the entirety of the Korean Peninsula in the near future. With Kim Il-sung's death in 1994, further investment in ties with North Korea appeared counter-intuitive.

However, Russia's and South Korea's ties slowly deteriorated alongside Russia's increasing economic problems and fallout with the West in the mid-1990s. Old issues such as the downing of Korean Airlines Flight 007 over Sakhalin Island in 1983 resurfaced to further complicate the relationship.

Finally with the rise of a more independent and nationalist foreign policy doctrine under Yevgeny Primakov and Vladimir Putin, Russia began concentrating its efforts in balancing its relationship with the two Koreas. By 2000, the Kremlin's "Foreign Policy Concept of the Russian Federation" explicitly stated Moscow's focus on maintaining both economic partnership with Seoul and security guarantees with Pyongyang. [4]

However, managing this balance continued to be a serious challenge. Both the Soviet Union and the Russian Federation had vehemently discouraged North Korea from building nuclear weapons. The Russian Foreign Ministry rightly recognized that North Korea's nuclear weapons capacity will create a condition where both South Korea and Japan will seek the same capability. At the same time, in order to preserve the image of an "honest broker", Moscow had to prevent Washington from descending on Pyongyang unopposed.

During the 2002 crisis following US assistant secretary of state James Kelly's visit to Pyongyang, Russia stood by North Korea and demanded hard evidence of Pyongyang's nuclear activities from the United States. In part, Moscow has convinced itself that Pyongyang sought nuclear weapons not to establish nuclear deterrence, but to ensure regime survival in reaction to the overthrow of Saddam Hussein's regime in Iraq by the United States. [5]

Whether the Kremlin actually believes that North Korea is comparable to Iraq, where the dissolution of the state or its absorption by Iran were farfetched ideas, remains dubious. Nonetheless, the situation facilitated Russia's move to propose its own "package deal" solution to secure stability and denuclearize the Korean Peninsula.

In 2003, Russian ambassador Alexander Losyukov proposed the following measures to resolve the crisis: 1. Both the United States and North Korea observe the "North-South Joint Declaration on the Denuclearization of the Korean Peninsula" and the Agreed Framework of Geneva. 2. Both the United States and North Korea resume bilateral and multilateral talks and provide security assurance for North Korea. 3. The United States and other states resume humanitarian and economic support to North Korea.

These measures were proposed as a realistic option as a total non-aggression pact or a peace treaty between North Korea and the United States and South Korea seemed out of reach. At the same time, the Kremlin pushed the view that a framework that excluded the Russian Federation was insufficient to create a lasting solution. In a way, Moscow benefits from both peace and conflict on the Korean Peninsula; however, exclusion from

the process will be to the detriment of Russia's newly asserted political influence in Northeast Asia.

The problem with Russia's position is that ties to South Korea are far more lucrative and North Korea remains far too volatile for Moscow's balanced position to be maintained. Starting with increasing economic exchange to the joint space program, South Korean-Russian relations appear to be getting stronger under Medvedev's administration while Russia's tolerance for North Korea's belligerent behavior grows thinner by day.

One major sign of this inevitable shift can be seen in the changes in Russia's college-level history curriculum, which now openly admits to North Korea's initiation of the Korean War (1950-1953) and reevaluates president Park Chung-hee's military coup in 1961 as having yielded economic progress and having established the foundations for democratization. [6]

In essence, Russia cannot protect North Korea forever. Moscow does disavow the Stalinist nature of Pyongyang's regime and wants to prevent proliferation of nuclear arms in East Asia. Furthermore, Russia cannot carte blanche defend North Korea's provocations without risking its own standing in the international community.

North Korea probably recognizes Russia's desire to maintain influence while standing with the moral majority. If this is the case, then North Korea's interest in excluding Russia from the denuclearization process is nothing short of political extortion. And it seems to have succeeded in producing a positive result for Pyongyang.

Following Medvedev and Kim Jong-il's meeting in Vladivostok and in response to devastating floods in North Korea, Moscow promised Pyongyang 50,000 tons of grain in aid. [7] While the floods were devastating, Russia's food aid to North Korea had never exceeded 10,000 tons.

In addition, the new amount surpasses the amount of food aid that Seoul promised to Pyongyang by 20 times. Considering Russia's interests in Northeast Asia, its "humanitarian effort" constitutes a US$17.7 million investment towards regaining Moscow's traditional influence on the Korean Peninsula.

Two things are evident from this whole situation. First, North Korea is adroitly playing its nuclear card. Second, Russia will remain a significant party in the whole process as long as the North Korean state holds on.

Notes 1. North Korea: Calculus of an Existential War Asia Times Online April 20, 2011. 2. "N Korea proposes new framework for nuclear talks: report." July 25, 2011. Kyodo News. Online. 3. Bazhanov, Eugene; Bazhanov, Natasha. "The Evolution of Russian-Korean Relations: External and Internal Factors." Asian Survey, Vol 34, No 9 (Sep, 1994), pp 789-798.4. Ha, Yongchool; Shin, Beonshik; "Non-proliferation and political interests: Russia's

Policy Dilemmas in the Six Party Talks." (Sapporo: Slavic Research Center Hokkaido University, 2007): 173-198. 5. Cited in Ha and Shin; from Nikitin, Alexander. "The Changing Priorities of Russian Foreign Policy and new mechanisms for security in Eurasia," the First KPSA-RPSA/MGIMO Joint Annual Conference Proceedings. Korean-Russian Cooperation for Peace and Prosperity in Northeast Asia (Seoul: IFANS, Nov 30-Dec 1, 2005). 6. Kwon, Gyeongbok. "Russian College Curriculum, Korean War shifts from Southern Invasion to Northern Invasion." September 20, 2010, Chosun Ilbo Online (Article in Korean). 7. "Russia to send 50,000 tons of food aid to North Korea." August 8, 2011. Voice of America. Online.

(Special thanks to Luke Fisher, a Los Angeles/Washington DC-based analyst of international affairs, for his notes on the formative years of USSR/Russian federation's ties with South Korea.)

Yong Kwon is a Washington-based analyst of international affairs.

(Copyright 2011 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Friday ,Aug 12,2011, Posted at: 13:12(GMT+7) Vietnam, Russia agree to boost cooperation http://www.saigon-gpdaily.com.vn/National/2011/8/95693/

Vietnam and Russia will speed up cooperation, especially in the fields of trade, education and training, and nuclear power, in an effort to continue inheriting and promoting existing friendly relations and fine cooperation tradition between the two peoples.

The agreement was reached by Vice Chairman of the Russian State Duma Melnikov Ivan Ivanovich and Deputy Prime Minister Hoang Trung Hai at a reception in Hanoi on August 10.

Melnikov also spoke highly of cooperation between the two countries in many fields.

Deputy PM Hai expressed his delight at fine cooperation successes in the fields of science - technology, trade, energy and oil and gas between the two countries over the past time.

He added that Vietsovpetro oil and gas joint venture was an example of effective projects and a symbol of comprehensive cooperation between

Vietnam and Russia.

During his stay from August 9-17, Melnikov and the delegation of Russian State Duma will pay working visits to the central cities of Da Nang and Hue, the Mekong Delta province of Kien Giang and Ho Chi Minh City

02:24 12/08/2011ALL NEWS

Russia to pay tribute to sailors of Kursk submarine

http://www.itar-tass.com/en/c154/202773.html

MOSCOW, August 12 (Itar-Tass) — On Friday, Russians will pay tribute to sailors of the Kursk nuclear submarine, who died eleven years earlier, on 12 August 2000, in the Barents Sea. This tragedy claimed lives of 118 sailors of the Northern Fleet.

Ceremonial formation and laying of wreaths and flowers to the memorial to the dead sailors of the Kursk will be organised in the Vidyayevo garrison to mark this sad anniversary. Mourning ceremonies will be held on all fleets of the Russian Navy, as well as in military districts. Ships and submarines will have half mast flags.

"A wreath-laying ceremony will take place in the Barents Sea at the Gulf of Motovskiy where the fleets command will participate, as well as relatives and family members of dead sailors," press service of the Defence Ministry said.

In Moscow, a ceremony of laying wreaths will be organised at the memorial to submariners who died, which is by the Central Museum of the Armed Forces, the source said.

The Russian Orthodox Church will pray for repose of the souls of dead submariners. Commemoration events will take place in Kursk, Makhachkala, Voronezh, Sevastopol and other cities of Russia, Ukraine and Belarus.

According to conclusions of the governmental commission, a torpedo explosion in the forward compartment of the submarine was the cause of the disaster. The commission, which worked for more than two years, established the exact time of the submarine’s end. By the time the submarine was detected on August 13, it was not possible to save 23 sailors who remained in the ninth compartment.

10:47 12/08/2011ALL NEWS

Wreath-laying ceremony to be held at Kursk submariners’ memorial

http://www.itar-tass.com/en/c154/202920.html

KURSK, August 12 (Itar-Tass) —— Wreaths and flowers will be laid this Friday in Kursk at the burial place of 12 submariners who died in the nuclear powered cruise missile submarine wreck in the Barents Sea in August 2000.

Regional and city administration officials, clergymen, the sailors’ relatives and friends and many city residents will come to the cemetery to pay tribute to the memory of the 118 Kursk submarine crewmembers who died in the disaster, which occurred on August 12, 2000.

The chairman of the regional veteran submariners' council, Anatoly Bezmen, told an Itar-Tass correspondent about the sailors buried here. Seven of them are natives of the Kursk Region. The eldest, warrant officer Viktor Kuznetsov, was 28, and the youngest, sailor Alexei Nekrasov, was 19.

A priest of the Kursk diocese will lead a religious service for the dead near the memorial.

Then, wreaths and flowers will be laid at the tree-lined walk Alley of Glory, where 118 white birches have been planted in memory of the submariners. There is a monument made of fragments of the submarine lifted from the seabed after the wreck.

02:48 12/08/2011ALL NEWS

Russia celebrates Air Force Day

http://www.itar-tass.com/en/c154/202776.html

MOSCOW, August 12 (Itar-Tass) — Russia celebrates the Day of the Air Force on Friday.

Russia’s president made the decision to celebrate the day on August 29, 1997. Russian Air Force was established 99 years ago, on 12 August 1912. On that day, the military authority introduced aeronautical staff.

Present-day Russian Air Force has aircrafts equipped with reliable means of detecting the enemy and of fire control, improved navigation equipment and missile weapons. The Russian Air Force is able to influence major operations on land as well as in seas.

Russia’s Air Force Commander Colonel General Alexander Zelin said that the Air Force continue to be part of the Armed Forces.

"From December 1, I will be released from the responsible for operational and strategic command of air and space defence" Zelin said. "The whole system is structured to optimise management and to concentrate the main forces and resources in the armed forces."

Zelin also said that the Air Force organise a unified military and training research centre with two branches for focused specialists not only for the Air Force, but also for the Armed Forces as a whole. This centre will be situated in Voronezh.

RT News line, August 12

Sukhoi Superjets to star at MAKS-2011 air showhttp://rt.com/news/line/2011-08-12/#id16133

04:26

The Sukhoi Company has announced that two Sukhoi Superjet 100 planes will be displayed at the MAKS-2011 international aerospace show. The Sukhoi Company is Russia's major manufacturer of aircraft, and is also ranked third in the world in numbers of modern fighters produced. The first serial Superjet 100 was given to Armenia's Armavia Company on April 19, the second one to Aeroflot. Producers also plan to design a business version of the Superjet, the Sukhoi Businessjet.

Fog forces Moscow-bound Polish plane to return to Krakowhttp://en.rian.ru/world/20110812/165727165.html

07:10 12/08/2011

MOSCOW, August 12 (RIA Novosti)

The crew of a Moscow-bound Polish plane has canceled the landing in Sheremetyevo Airport outside the Russian capital in thick fog and returned to the city of Krakow, an airport spokeswoman said.

Two more aircraft from Russia's south and Egypt had to land in other airports in the Moscow Region because of the fog, she added.

On April 10, 2010, then Polish President Lech Kaczynski's Tu-154 plane crashed in heavy fog as it attempted to land at an airfield near the western Russian city of Smolensk. Kaczynski, his wife and a host of other top officials on board were killed.

Investigators to start working on An-12 crash site in Russian Far Easthttp://en.rian.ru/russia/20110812/165728238.html

08:00 12/08/2011

KHABAROVSK, August 12 (RIA Novosti)

Investigators will on Friday start working on the site where an aging Antonov An-12 cargo plane crashed in Russia's Far East on Tuesday, an Investigative Committee spokeswoman said.

The crash site is located in a remote and hard-to-reach area. Investigators are waiting for Moscow-based Interstate Aviation Committee experts to arrive so that they could join them and head to the site together, spokeswoman Natalya Salkina said.

The plane, flying from the city of Magadan to the Chukotka Autonomous Area in Russia's extreme northeast, was carrying 11 people and around 18 metric tons of cargo. It disappeared from radars some 300 km (186 miles) from its takeoff point shortly after reporting a fuel leak and engine fire.

No survivors were found when rescuers reached the crash site in helicopters on Wednesday morning.

The Emergencies Ministry reported that the flight recorders have been discovered and that debris from the plane was scattered across a radius of several kilometers.

All Russian An-12s were grounded on Wednesday.

Russia Presses Ahead With Chemical Arms Disposalhttp://www.globalsecuritynewswire.org/gsn/nw_20110811_8292.php

Thursday, Aug. 11, 2011

Russia remains on track to eliminate its entire stockpile of chemical warfare materials before the end of 2015, a senior official said on Wednesday (see GSN, May 31).

"As of yesterday, 20,957 [metric] tons of chemical agents had been destroyed," Interfax quoted Federal Special Construction Agency Deputy Director Vasily Bogomolov as telling reporters.

The Chemical Weapons Convention requires Moscow to destroy its entire 40,000-metric-ton chemical arms arsenal. Russia has acknowledged, though, it will be unable to meet the convention's deadline of April 2012.

"The program envisions that these stockpiles will be destroyed completely by 2015," Bogomolov said.

He said a new chemical weapons destruction plant at Leonidovka in the Penza region is anticipated to begin disarmament work next year. Six of Russia's seven planned disarmament facilities have been completed (see GSN, Aug. 9; Interfax, Aug. 10).

RT News line, August 12

Boeing-737 makes emergency landing in Sochihttp://rt.com/news/line/2011-08-12/#id16147

10:30

A passenger aircraft Boeing-737 has made an emergency landing in Sochi due to a loss of cabin pressure, Interfax news agency reports on Friday. The plane was en route from the Georgian port of Batumi to the Belarusian capital Minsk, no casualties have been reported.

10:06

Left Front plans Day of Wrath despite ban by Moscow authoritieshttp://www.kyivpost.com/news/russia/detail/110694/

Today at 10:27 | Interfax-Ukraine Moscow, August 12 (Interfax) - The opposition will hold a protest rally in downtown Moscow on August 12, even though the city authorities have not allowed it, a source in the Left Front movement told Interfax.

He said the city authorities had officially banned the action.

"In spite of this pressure, the organizers still plan the Day of Wrath. The protesters will gather near the Teatralnaya metro station at 7:00 p.m. MSK on August 12 to march towards the Presidential Administration's building and hand over their demands," he said.

The protesters will bring a variety of black objects "to symbolize their mistrust in official policy.

The organizers recommend the protesters to wear black clothes and sunglasses," he said.

Left Front coordinator Sergei Udaltsov is in custody at the first detention center, the source said.

Read more: http://www.kyivpost.com/news/russia/detail/110694/#ixzz1Unak9Opp

Russia Says Militant Commander Killed In Daghestan Raid http://www.rferl.org/content/russia_says_militant_commander_killed_in_daghestan/24294620.html

August 12, 2011 Russia says its forces in the North Caucasus have killed at least six suspected militants, including an alleged top commander responsible for a number of deadly attacks on Russian servicemen.

Russia's Counterterrorism Committee said on August 11 that Abdullah Magomedaliyev was among those killed in what was described as a special operation in Daghestan's capital, Makhachkala.

Russian reports say Magomedaliyev is believed responsible for masterminding an attack at a police base in Buinaksk in September 2010 that killed 56 Russian servicemen. The report also blames him for a number of other attacks.

The Counterterrorism Committee also accuses Magomedaliyev of having "contacts with Georgian secret services," who assisted his terrorist activities.

No comment from Georgian authorities was immediately available.

Russia and Georgia regularly accuse each other of interference in each other's affairs.

Russia's North Caucasus region, which includes Daghestan and neighboring Chechnya, sees near-daily attacks by suspected militants.

compiled from agency reports

Commando militant gang leader killedhttp://rt.com/news/commando-gang-leader-killed/

Published: 12 August, 2011, 10:06Edited: 12 August, 2011, 10:06

Six gunmen, including a terrorist cell leader, have been killed in Russia's southern republic of Dagestan in a two-day operation, reports the National Counter-Terrorism Committee.

Abdulla Magomedaliev, 33, was believed responsible for several terrorist attacks against law enforcement officers in the country’s south. His gang was well-trained in commando tactics and some of his targets were senior officials.

Nicknamed Daud, Magomedaliev is thought to have helped train the suicide bomber who blew himself up at an Interior Ministry base in September 2010, and a twin suicide bombing in the village of Gubden in February 2011.

Daud’s other crimes include kidnappings fro ransom, the report says. He has been involved in terrorism activity since at least 2004, and has been on the most wanted list for a number of years.

Russia's Anti-Terrorism Committee claims that he was assisted by Georgia's intelligence service, but did not provide any additional detail.

12 August 2011, 10:27

Two female extremists detained in Chelyabinsk http://www.interfax-religion.com/?act=news&div=8650

Moscow, August 11, Interfax - Police in Chelyabinsk detained two women, both of them local residents, who led the local cells of the Nurjular international religious extremist organization, whose activity is banned in Russia.

The detainees founded two schools in Chelyabinsk and a madrasa in the village of Aznalino in the Kurgan region, where extremist religious books were studied, a spokesman for the Russian Interior Ministry's chief anti-extremism department has told Interfax.

Seven teenage girls from Chelyabinsk and Yekaterinburg, 11 to 17 years old, were in the Aznalino madrasa, which looked more like a children's recreation camp, when police arrived.

The investigators found notebooks with lecture notes taken by more than 20 girls.

The notes contained, among other things, a detailed description of how to make ammonal, an explosive consisting of a mixture of powdered aluminum and ammonium nitrate.

09:26 12/08/2011ALL NEWS

Movement on Chelyabinsk region railway to be restored soon

http://www.itar-tass.com/en/c154/202872.html

CHELYABINSK, August 12 (Itar-Tass) — Movement on the first track of the Yeral-Simskaya railway stretch in Russia’ s Chelyabinsk region, where 70 coal-loaded carriages derailed will be restored at 10:00 Moscow time, the press service of the Emergencies Ministry’s regional department told Itar-Tass on Friday.

At present, trains on the Kuibyshev railway use bypass routes.

On Thursday evening two persons were killed, when coal-loaded freight carriages derailed and turned upside down.

The repair works are underway. They engage 554 people, four repair trains and 29 machinery units. The Emergencies Ministry provided 38 rescuers and ten equipment units.

The investigation is underway.

Emergency situation declared in Russia’s Volgograd Region http://english.ruvr.ru/2011/08/12/54546284.html

Aug 12, 2011 10:45 Moscow Time

Raging wildfires have prompted the authorities of the Volgograd Region, in the Volga River basin, to declare a state of emergency. Some 1,000 firefighters and more than 200 firefighting vehicles are being used in putting out the fires. Two people have already been arrested on charges of careless handling of fire and torching.

08:45 12/08/2011ALL NEWS

Members of intl human trafficking group detained in Vladivostok

http://www.itar-tass.com/en/c154/202848.html

VLADIVOSTOK, August 12 (Itar-Tass) — Members of an international criminal group involved in human trafficking and slave labour have been detained in Vladivostok. According to the press service of the Primorsky Territory police department, Russian policemen were informed about the gang activity from their colleagues from Uzbekistan. One month later they managed to get on the trail of the suspects.

A total of two citizens of Uzbekistan have been detained in Vladivostok, and several more in that country’s territory. The criminals recruited workers in Uzbekistan, helped them with the documents, to cross the border and get to Vladivostok, where they took from them their passports and by force and threats made the people work for free at construction sites and in the sphere of agriculture.

“Powerless and frightened, involuntary migrant workers were doing any work: building, repairing, cultivating fields. The employers and criminals did not care that the pseudo workers did not have any qualification,” the press service noted.

Officials of the Prosecutor’s Office of the Pervomaisky district of Vladivostok are currently preparing documents for extradition of the detainees to Uzbekistan.

Moscow Hyppodrome Will Join World Parimutuel, Vedomosti Sayshttp://www.bloomberg.com/news/2011-08-12/moscow-hyppodrome-will-join-world-parimutuel-vedomosti-says.html

QBy Marina Sysoyeva - Aug 12, 2011 6:10 AM GMT+0200

Russia’s President Dmitry Medvedev ordered 27 state-owned racehorse stables to join the Central Moscow Hyppodrome and form a single company, which will be fully privatized

to develop a horse-breeding industry and enter world pari-mutuel betting system, Vedomosti said, citing a presidential decree.

To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

United Russia goes down the regions for supporthttp://barentsnova.com/node/1199

Aug 11 2011

Disappointing ratings of Russian political driving force - United Russia - nudge the political party to adjust its pre-election strategy towards region-specific interests.

According to different polls, rating of the United Russia keeps floating around 40-50%. The party's mission is to gain public favour by at least September in view of oncoming State Duma elections dated to December 4, 2011.

- People are fed up with motivational slogans, says an unnamed source to Izvestia. It is quite difficult to hook people through television, so the party takes a turn towards regions: to woo interest through local specific features.

Thus in St.Petersburg, the United Russia is planning to play around 'renewal of political circles', Chechnya will focus on investments and fight against illegal armed gangs, Olympiad 2014 inspired the party to put major emphasis on construction in the Krasnodar region, etc.

In due course, Murmansk branch of the United Russia is likely to be headed by Valery Yazev, whose strong points are believed to be connected with oil and gas. A lobbyist for Gazprom and an energy sector, president of Russian Gas Society, and the vice-speaker of the State Duma - Valery Yazev - will obviously target Shtokman development and gas supply to the region - the ideas that have already turned into a certain ideology for the area. 

Valery Yazev was initially expected to take a leading party position in the Sverdlovsk region, though the plans were destined to change. Yazev was assigned to head towards Murmansk to try his luck at local primaries and take leadership of the local United Russia political community. Yazev is not to be a local political leader only but to be personally responsible for the Murmansk results of parliamentary elections 2011. Notably, Dmitry Dmitrienko, the Governor of the Murmansk region and a party member, has discarded

himself from the primaries elections over a week ago "for the sake of stronger competition".

The chairman of Murmansk Regional Duma and a party member - Evgeny Nikora - has already publicly expressed his attitude to Valery Yazev: - He [Yazev] represents good possibilities for the Murmansk region. I think that it would be interesting to have him as a deputy of the Murmansk branch of the United Russia in the State Duma. I think highly of him as a deputy of our region.

As one of the legislative pushers for tax benefits in the Russian Arctic oil exploration, Yazev appeals to speed up construction of infrastructure in the name of shelf development and revival of the Northern Sea Route. Ice-proof oil platforms, servicing vessels, icebreakers fleet, polar aviation, and shore nuclear-driven navigation systems are most important things that we should focus on, he said at the recent visit to Murmansk.

Another United Russia member - Artur Chilingarov, the Arctic explorer and the State Duma deputy - obtained good results in Arkhangelsk primaries and made his way through five election rounds. However on August 2, he abruptly refused to proceed with primaries procedure due to his engagement in Security Council session. Artur Chilingarov is a prominent public figure in the Arkhangelsk region who openly stands for promoting the region as the capital of the Northern Sea Route. Despite his recession from the primaries, he is still eligible for elections to the State Duma on behalf of the Arkhangelsk region: the election points he has already scored remain valid. However, the situation about Arkhangelsk elections turns unpredictable with Ilya Mikhalchuk, the Governor of the region, who created a local political sensation: he lobbied Elena Vtorygina - a strong opponent to Vladimir Putin and Mikhalchuk himself - to run for the primeries.

The political system is in need for decentralisation, said Medvedev in July at the meeting session with political parties, and the decentralisation strategy has been obviously taken up by the United Russia. The political elite understands that election campaign should be held in consideration of local economic and political context to gain strength and bleach the controversial reputation of the United Russia. A growing number of opponents to the United Russia can be illustrated by an expanding internet community of supporters to Alexey Navalny, a lawyer and a popular blogger whose anti-corruption online project has collected about 7 mln RUB (as of June 2011) from different internet users in an attempt to stem the corruption flood.

Frustrated voters need fresh incentives to get recharged and inspired for brighter future. In an attempt to provide the United Russia "with new ideas and a new face", Vladimir Putin - the Party's leader - established an All-Russia People's Front in May this year. A newly-established coalition is supposed to attract representatives of different Russian political forces into a single union. The Front's members are eligible to run for the State Duma elections, yet their chances are not clear. An online poll launched by Echo Moskvy reports that 94-95% would not join the Front, however by mid-June 5.5 thousand people

were reported to have joined the coalition, later on biggest Russian employers - Russian Railways and Russian Post - applied for membership as well.

Murmansk regional office of the People's Front is presided by the deputy Chairman of the Regional Duma - Aleksander Krupaderov. Dmitry Dmitrienko and a number of local public figures are in the coordination council of the Front. Aleksander Lebedev, the president of the Union of Industrialists and Entrepreneurs, is listed there as well, however he officially denies his participation in the council.

On May 30, a group of 14 celebrities in culture expressed their concern to the Russian President about weak political competition. The appealers diagnosed 'almost total lack of democracy in elections.' Medvedev did not respond to the letter. In July 2011, the Resolution of European Parliament called on the Russian authorities 'to guarantee free and fair elections and to withdraw all decisions and rules that oppose this principle'.

Photo: United Russia top management: Vladimir Putin and Boris Gryzlov

Russian Press at a Glance, Friday, August 12, 2011http://en.rian.ru/papers/20110812/165729222.html

09:09 12/08/2011

A brief look at what is in the Russian papers today

POLITICS

The period of rapprochement and stability in the relations between Russia and Ukraine that started when Viktor Yanukovych was elected Ukrainian president has ended. This was demonstrated at yesterday's meeting between President Dmitry Medvedev and his Ukrainian counterpart in Sochi.

(Kommersant)

Visa-free travel to Europe and replacing the ruble with the euro will be two campaign pledges for the pro-business Right Cause in the State Duma elections, its billionaire leader Mikhail Prokhorov said Thursday.

(Moscow Times)

The Central Election Commission said Thursday that the number of foreign observers for the State Duma elections should be small because their work could be done from afar.

Commission chairman Vladimir Churov refused to say how many observers would be invited but suggested that he disliked high numbers.

(Moscow Times)

ECONOMY & BUSINESS

Privatization of united Rostelecom, Russia's leading long-distance call operator, will be held no earlier than in two years.

(Kommersant)

The state statistics service said the economic growth in the second quarter of 2011 was 3.4%, lower than expected.

(Kommersant)

Rail monopoly Russian Railways will have double-decker trains with three classes of cars.

(Vedomosti, Moscow Times)

Russian tycoon Roman Abramovich's son Arkady is seeking to buy oil and gas assets in Russia and the CIS.

(Vedomosti, Moscow Times)

SOCIETY

Federal marshals will be running license plate numbers at the site of the MAKS air show, and they will be entitled to seize property unless debtors pay their debts.

(Moscow Times)

IT

Uzbek authorities have blocked dozens of Internet sites in an apparent attempt to further stem the flow of information into Uzbekistan, online media said.

(Moscow Times)

Moscow's broadband internet access market is oversaturated: providers have started offering subscription plans at discounts for longer loyalty on the part of subscribers.

(Kommersant)

Achieving reciprocity from the homelandhttp://rt.com/politics/press/nezavisimaya/glamorous-patriotism-national-cause/en/

Published: 12 August, 2011, 05:40Edited: 12 August, 2011, 05:40

Glamorous patriotism is the new national cause Andrey Nikolaevich Serenko – Nezavisimaya Gazeta’s correspondent in the Volgograd region

As we approach the official launch of another campaign cycle, glamorous patriotism starts to gain momentum on the Internet. Fairly well-formed, anatomically, young Muscovites, who claim to admire Putin and Medvedev, are promising to tear off every piece of clothing possible in the name of love for the country’s leaders. A young Volgograd resident writes on his Live Journal page about his readiness to create a “blogosphere NKVD” – a movement “to fight against the enemies of the people and the state”. One can be confident that this is only the beginning. A true glamorous patriotism boom is yet to come to the Russian blogosphere. 

Most likely the current surge of the glamorously-patriotic sentiments is just the warm-up. Its highpoint will be during the climactic point in the intrigue regarding who will ultimately take the main chair in the Kremlin – Putin, Medvedev, or someone else. In this situation, the demand for young women, screaming “hurrah” and tossing their caps or other items of clothing into the air will rise significantly, and we will witness many more accounts of even more freely manifested glamorous patriotism.      

The point of the current glamor and patriotism discourse – getting satisfaction from love for self and the Kremlin through the Internet – rests in a simple formula: the distribution of manifestations of basic instinct with indispensible demonstration of loyalty for the current regime. “I’ll tear it up for Putin”, “I’ll conceive for Medvedev”, “I’ll give birth against NATO”… Unlike traditional patriotism, there are a lot more specific displays of glamorous patriotism, which are solely limited to the imagination of the “political leaders”, who design the heroic acts for their online volunteers”.         

Glamorous patriotism is perhaps the great invention of our time. It makes it possible to restore Russia’s greatness with just a few clicks of the mouse. It allows us to identify the enemies of the state, as well as the enemies of the people, with a simple Live Journal post. For now, however, it’s difficult to shoot the identified spies and diversionists by a firing squad, and that is one of the unfortunate technological limitations, but the first step is half the battle…   

Apparently, glamorous patriotism has a pretty good chance of becoming Russia’s long-awaited national cause – for now – on the Internet. And then, sooner or later, it will mature together with its numerous adherers, and in a couple of election cycles cross the virtual barrier.  

Today, glamorous patriotism mainly performs defensive political functions. That is its tactical objective – to stop the spread of opposition sentiments in the Russian segment of the web. There is already so much opposition activity online that it fails to surprise most people. The Russian leadership is scolded on a regular basis, but to no avail. Glamorous patriotism feeds on this weariness from the futile criticism. If it is impossible to alter the reality, then we should be able to find the delight in it, to look for prospects for oneself, be it through “Putin’s Army”, a list of enemies of the state, and various other ways of professing love to the leadership.       

Glamorous patriotism is a mirror alternative to individual terror, popular in Russia’s history. It gives an individual the opportunity to manifest his loyalty to the political regime, replacing the futile individual terror.

The principal difference between glamorous patriotism and the traditional outlook on love for the country is the attitude towards life. And that is the strongest aspect of the new movement. Collective patriotic upbringing in the pre-glamor period steered its adherents towards sacrifice and readiness to, if need be, give one’s life away for the country. Contrarily, glamorous patriotism is not only individualized but is also focused on saving lives by cooperating with the government, by giving the chance to get noticed by the leadership. A social elevator is a great alternative to a mass grave for the young generation of Russia, where love for the country has never been mutual.

The need for a new political trend, new standards of political and intellectual behavior, are distinctly felt, and not only on the web. Glamorous patriotism is one of the possible answers for this need. And the fight for the best places in the glamorous patriotism movement seems to have already begun.

AUGUST 12, 2011

Russia's Dead Soul http://online.wsj.com/article/SB10001424053111904888304576476031508652162.html?mod=googlenews_wsj

A case of absurd Moscow justice.

The Vladimir Putin era sometimes calls to mind Nicolai Gogol, a master of absurdist and biting social critiques of Czarist Russia. In the latest chapter, the prosecutor's office in Moscow recently announced the reopening of a tax evasion case against Sergei

Magnitsky, who has been dead for two years. A week earlier the Constitutional Court had declared that death was no impediment to the pursuit of justice, and the prosecutor even claimed that this investigation was for Magnitsky's own good—to clear his name. The dead man's family expressed "great wariness" on hearing the news.

Magnitsky was a lawyer at an American firm in Moscow whose clients included a Jewish rights group and an investment company, Hermitage Capital. In 2008, Magnitsky had claimed to unearth evidence of police corruption and embezzlement. Shortly thereafter, the police detained him on suspicion of helping Hermitage evade taxes. Magnitsky died after 11 months in police custody, at the age of 37.

His case illustrates Russia's contempt for law and human rights, but it couldn't be ignored when people outside Russia made a fuss. Senator Ben Cardin, the Maryland Democrat, last year called for officials implicated in Magnitsky's case to be put on a visa blacklist and have their assets in the U.S. frozen. The State Department late last month slapped a visa ban on 60 Russians but minimized the impact by refusing to name them.

An organization called the Russian Council for Civil Society Institutions and Human Rights investigated and found that Magnitsky was beaten and denied proper medical treatment, including for possible pancreatitis. The council, which reports to President Dmitry Medvedev, recommended that criminal cases be opened against the doctors who tended to Magnitsky and police investigators who interrogated him.

Mr. Medvedev says he wants to improve Russia's rights record, but his efforts haven't gotten far. That may have something to do with the reality that Mr. Putin—previously president and now prime minister—calls the shots in Russia. Another arm of the state that reports to Czar Putin, the ministry of interior, rebuffed the Medvedev council in a letter released last week, saying it saw "no reasons" to investigate, much less punish, police officials in connection with the Magnitsky case. So now it looks like the interrogators won't be held to account for his death.

The title of Gogol's classic "Dead Souls" refers indirectly to the deadened soul of Russia itself. It was published in 1842, and for obvious reasons it remains popular in Russia.

Surreal Politikhttp://www.foreignpolicy.com/articles/2011/08/11/surreal_politik

Russia enters its political silly season a little early. But what do all the bikini babes and music video hymns to Putin really tell us about a system gone horribly, horribly wrong? BY JULIA IOFFE | AUGUST 11, 2011

It's been a busy summer in Russia, electorally speaking. The malaise and tea-leaf reading of the spring have started to dissipate as the December parliamentary elections and the March presidential elections draw near. Powerful constituencies have emerged, and they've been lobbying hard for their interests and their candidates. Best of all? They are really, really hot.

First came Putin's Army. It was led by Diana, a self-proclaimed college student in vertiginous heels and cleavage to match, a girl who claimed to have "lost my mind for a person who has changed the life of our country. He's a good politician and a fabulous man." That man, shockingly, was Vladimir Putin, Russia's prime minister, and decider of the question of the year: Will he change his status from "basically in charge" back to "officially in charge"? While Putin spends his time deciding whether he or current President Dmitry Medvedev will become president (for six years) in 2012, Putin's Army has not shied from making its feelings very clear. Last month, Diana and the girls of Putin's Army announced a contest to "Tear it up for Putin!" -- "it" being, say, your shirt -- a contest in which you can win an iPad, even if you can't win Putin's election for him. Putin's Army even had an official draft day in the center of Moscow, where two dozen young ladies, wearing teensy undershirts printed with Putin's face in pop-art pink, gathered to parade on a makeshift catwalk and draft other soldiers to their cause. 

Medvedev's supporters, however, were not to be left behind. They formed an army, too -- an army of three -- called it Medvedev's Girls, and came out to another square in central Moscow with a different gimmick. In support of Medvedev's anti-beer initiative, they asked the strollers-by: "Choose beer or us!" What this meant in practice was that people could dump their beers into waiting buckets, and, for each beer dumped, Medvedev's Girls would dump an article of clothing. 

Then there's "I Really Do Like Putin," which staged a bikini car wash in Moscow to support the premier. If that didn't convince undecided Russian voters, the group's next event definitely didn't. On Monday, it held a Tandem Ride with Medvedev's Girls. They paired off on tandem bikes and cycled around Moscow. (This, mind you, was not in order to express support for the two-man tandem presidency of Putin and Medvedev, but because Putin promised Nashi, the Kremlin-made youth group, that he would lose a pound and learn how to ride a tandem bike with Medvedev.)

And then there's my personal favorite, a music video by the group Girls for Putin. The video ends with a bang -- the smashing of a watermelon with a baseball bat -- but it's more a pastiche of black panties, Jack Daniels, and tears of heartbreak, fitting for a raging rock ballad called "I Want to be Your Koni." 

"I want to be your Koni / on the table and on the balcony," the girls sing. Koni, in case you're wondering, is Putin's beloved black Labrador. 

It's funny, this stuff, and yet it betrays something deeper even than the predominance of sex in Russian public life or in Russian youth politics. That part is obvious: Sex sells. More important is what this says about the current incarnation of the Russian political system. 

When the Kremlin created Nashi, the first of its youth groups, in 2005, Russia -- rightly or wrongly -- felt under attack. The so-called Color Revolutions had swept through one former Soviet republic after another, bringing -- in Russia's perception -- American influence right into its backyard. George W. Bush had started a war with Iraq, Russia's long-time, lucrative ally, and lectured Moscow on democracy and human rights.

Russia itself, although no longer the hobbled post-Soviet country of just a few years before, was still in transition. The power vertical -- the political system in which all power flows to and from Vladimir Putin -- was still under construction, a relatively easy task given Russians' bewilderment at the version of democracy they experienced in the 1990s. Any real opposition in parliament had been routed in the previous two election cycles, and yet there were still burblings of discontent. 

Hence, Nashi. Formed to engage an otherwise apathetic youth luxuriating in new oil profits, the group protested and agitated, it spoke of "sovereign democracy" and Russia's territorial integrity, it terrorized opposition journalists. Its members were brainwashed, yes, and they certainly weren't going to do anything -- the Kremlin guards the levers of power closely -- but they were well-trained and they were keenly political. Even though the Kremlin was just gesturing at issues politics, in other words, at least they were gesturing. 

Six years later, the country has far more on its plate than a sanctimonious U.S. president: monumental corruption, creeping stagnation, mounting ethnic tensions, a breakdown of safety oversight for civilian transportation systems, a stumbling reform of the rapidly decaying military, continued insurgency in the North Caucasus, continued dependence on resource extraction, an atrophied industrial sector, moribund and corrupt education and health systems. There is a lot of work to be done, and therefore, a lot to talk about.

And yet, somehow, with only four months to go until the Duma elections, and seven months until Russians elect a president, we are not hearing anything about it. All we get from the two supposed candidates for president is how and when they will make the decision to even run. Since they haven't announced even that, speculating on the issue is the only issue this election season. Even at this year's Nashi youth retreat -- not perhaps a bastion of substance, but at least, in past years, a chance to bang on about solving the country's problems -- the emphasis was on things accomplished, not on future tasks. And youth politics more generally have devolved into a parody of a latter-day Britney Spears video. One would be a fool to even suggest a comparison between Russia and the United

States, but shouldn't even a simulacrum campaign season have at least simulacrum campaign issues?

We don't even have those. Instead it's a fake party here, a staged election stunt there, and all around the ceaseless chatter of anonymous sources "tipping off" journalists that Putin has finally made up his mind one way or the other. 

Until Putin announces his historic decision and some level of reality on this very unreal question enters the campaign, we can either spend our time tearing our hair out guessing and twisting -- or we can relax, forget about the mess that is the Russian economy and political system, and enjoy the fluff that has come to replace even the mirage of an election campaign. Because there is lots to be done. We can, for example, ogle the nubile young loyalists, we can watch in amazement as Putin, on his third scuba dive ever, magically pulls up a sixth-century Greek urn (and happens to have an archaeological expert right there to identify it), and we can marvel at the refreshing honesty, the release in acknowledging that, much to the relief of Russians rattled by their brief, post-Soviet taste of democracy, that finally, there are no more politics in Russia.

National Economic Trends

10:06RUSSIAN MONETARY BASE UP TO 6196.8 BLN RUBLES IN A WEEK TO AUGUST 8 - CBhttp://www.interfax.com/news.asp

Russia Stocks Head for Biggest Weekly Loss in a Year on Economyhttp://www.bloomberg.com/news/2011-08-12/russia-stocks-head-for-biggest-weekly-loss-in-a-year-on-economy.html

QBy Jason Corcoran - Aug 12, 2011 9:24 AM GMT+0200

Russia’s Micex headed for its biggest weekly loss in more than a year as oil and commodities plunged on fears the global economic recovery is fading.

The Micex Index of 30 stocks added 0.2 to 1,411.82 by 11:03 a.m. in Moscow, fluctuating between a gain of as much as 1.1 percent and a loss of as much as 0.3 percent. This took its weekly loss to 9.4 percent, the worst since May 2010.

OAO Rosneft, Russia’s largest oil producer, fell 0.6 percent. OAO GMK Norilsk Nickel, the country’s biggest miner, jumped 1.7 percent after Citigroup Inc. said the stock was “oversold.” OAO Sberbank, the nation’s largest lender, slid 1.9 percent. The dollar-denominated RTS Index added 0.2 percent to 1,547.09.

Oil, Russia’s main export revenue earner, fell as much as $1.08 to $84.64 a barrel in New York. Stocks have tumbled globally since July 26 after Standard & Poor’s downgraded the U.S. credit rating for the first time and as concern persisted that Europe’s debt crisis is worsening.

“Volatility remains high on equity markets as investors are quite sensitive to any news developments from the U.S. and Europe,” Maria Kalvarskaia, who heads equity research at TKB Capital, said in an e-mailed report today.

Investors withdrew $412 million from Russia-focused equity funds in the week to Aug. 10, according to UralSib Financial Corp., citing data from EPFR Global. Leonid Slipchenko, an equity analyst at UralSib, described the weekly outflow as “one of the biggest losses in its history,” according to a report e- mailed today.

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

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

Russia. Grain harvest seen at 92mn tonnes in 2011/2012 MY http://www.blackseagrain.net/photo/russia.-grain-harvest-seen-at-92mn-tonnes-in-2011-2012-my

Grain harvest is expected to be between 90mn and 92mn metric tonnes this marketing year, with exports possibly exceeding 20mn tonnes, the Institute for Agricultural Market Studies said. During last month grain exports totaled 2mn tonnes, while this month the exports are expected to reach 3mn tonnes, announced Dmitry Rylko, general director of the Moscow-based institute, also known as Ikar. To remind you, the grain exports were resumed in July, after banning exports in August 2010. The government raised its grain-export forecast to 23mn tonnes this year. 

world-grain

Russia Offers Land for Southeast Asian Farmers to Make Foodhttp://www.bloomberg.com/news/2011-08-12/russia-offers-land-for-southeast-asian-farmers-to-make-food-1-.html

QBy Karl Lester M. Yap - Aug 12, 2011 6:24 AM GMT+0200

Russia is offering agricultural land to Southeast Asian nations to grow crops and help secure reliable food supplies, part of wider efforts to foster trade and investment ties in new markets.

“We suggested today to companies in the region to enter the Russian market given its large scale and to establish themselves to produce food for your own supply,” Deputy Economy Minister Andrei Slepnev said yesterday in an interview in Manado, Indonesia, where he is attending a meeting of the Association of Southeast Asian Nations trade ministers.

Russian President Dmitry Medvedev is turning to Asia to boost exports as his country’s economy struggles to grow at the pace it did before a 2009 recession. Russia is targeting grain buyers in Southeast Asia to regain its share of the world market after lifting an export ban in July, the Moscow-based Institute for Agricultural Market Studies said Aug. 1.

“Many Asian governments are exploring alternatives to secure food supplies over the long term given that the demographic and environmental pressures in Asia could lead to structural food shortages in the years to come,” said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. “In fact, it’s already showing up in greater inflation pressures in the agricultural sectors in the region.”

Asian nations are seeking stable food supplies after data compiled by the United Nations Food and Agriculture Organization showed global prices surged to a record this year. India’s food inflation accelerated to a three-month high, a report showed yesterday.

Food Prices

Indonesia, the world’s third-largest rice consumer, may seek to negotiate an agreement with India and Pakistan to secure rice supplies, the Southeast Asian nation’s Trade Minister Mari Pangestu said in a separate interview yesterday.

Food prices will remain higher in the next decade than in the past 10 years as agricultural production slows and demand increases, the OECD and the United Nations said in a joint report in June.

Russia, the world’s largest energy exporter, is exploring possible investments with Southeast Asian nations in power generation, alternative energy and natural-resources exploration as it seeks to boost demand for the commodities it produces, Slepnev said.

“The center of world development is shifting to the Asian region,” he said. “Of course, the region will become an even bigger energy consumer.”

Russia’s economy, which grew at an average of 7 percent annually from 2000 to 2008, expanded 3.4 percent from a year earlier in the second quarter, missing economists’ forecasts, a report showed yesterday.

To contact the reporter on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

Russian capital finds refuge in Switzerland and Monacohttp://rt.com/politics/press/izvestiya/russian-capital-switzerland-monaco/en/

Published: 12 August, 2011, 05:36Edited: 12 August, 2011, 05:36

Maria Sarycheva

On Wednesday the Swiss National Bank could no longer resist and so turned to the global financial community urging it to think again and stop using the country’s national currency as a “safe haven”. Due to the fact that investors have rushed to invest in the Swiss franc, since the beginning of the year it has risen by 30%, which the National Bank says “undermines economic development and threatens price stability.” 

Interestingly, a significant role in this has been played by Russians, who have flooded the global “savings banks” with money. According to the Bank of Russia, the volume of cross-border transfers to Switzerland has increased 3.4-fold in one year. This country has traditionally attracted investors by keeping their hard-earned money safe. In this sense, Russians have outdone everyone else. In the first quarter of 2011, $1.3 billion flowed out of Russia to Zurich and Geneva. This is only slightly less than in the equivalent time periods of the last three years combined.     

No other country in Europe is able to attract Russians to such an extent. And if feelings toward the second most-favored place, Great Britain, are consistent – with the transferred sums being relatively equal – feelings toward Switzerland vary, especially in times of financial turmoil.      

For example, in the first quarter of 2008, Russians transferred $837 million to Europe’s most stable country. The crisis, which had not yet officially manifested itself on our territory, was at that time already sweeping across the United States. US banks began to crumble one after another as investors searched for places to hide from the storm. Investing in the unaffected Swiss franc, while pouring the risky dollars and rubles into the state, was a logical step. A year later, the flow of funds had decreased by 40%, and two years later by another 24%. And in 2011, interest in Switzerland has suddenly re-emerged.      

According to the head of Nord Capital’s Analytical Department, Vladimir Rozhankovsky, the dynamic of cross-border transfers from Russia very accurately reflect the emerging trends in the foreign exchange and stock markets. 

“As soon as things start to ‘smell fishy’, investors start securing funds in safe assets,” explains the analyst. “There are not that many stable currencies left in the world. There is the Canadian dollar, but the Canadian economy is too dependent on the US.”  

Australian and New Zealand dollars are tied to commodity markets. The franc, meanwhile, does not depend on anyone or anything. Naturally in times of market uncertainty investors try to resort to the franc. In early 2011, the situation with the United States was already predictable. Dollars were no longer to anyone’s liking, so people rushed to flood Switzerland with money.

This is confirmed by the director of the Banking Institute at the Higher School of economics, Vasily Solodkov. “There are three reasons that lead to the outflow of capital from the country. The first is political uncertainty; the second an unfavorable investment climate in the country; aAnd third the threat of a new recession, which implies falling prices on energy products and reduction of the national currency value. These three factors have intensified since early 2011,” says the expert. 

In addition to the ardent desire to “carry bags of money” out to Switzerland, another interesting trend is emerging. This year Monaco has been discovered. The first transfers to the country were recorded in the first quarter of this year and amounted to $166 million. Vasily Solodkov believes that these transfers were made by a close circle of people with significant financial resources. Vladimir Rozhankovsky recalls that, traditionally, funds of ambiguous origin flow to Monaco – such as revenue earned from gaming clubs and casinos. Therefore, the view on the origin of funds is less judgmental there. Moreover, Monaco is a stable state with a high credit rating, but it is not a member of the EU, which saves it from some of the known risks. Due to a combination of these reasons, people could choose to use it as a “safe haven”.

Business, Energy or Environmental regulations or discussions

Novatek, Norilsk Nickel, Uralkali: Russian Equities Previewhttp://www.bloomberg.com/news/2011-08-11/novatek-norilsk-nickel-uralkali-russian-equities-preview.html

QBy Yuliya Fedorinova - Aug 11, 2011 10:01 PM GMT+0200

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

The 30-stock Micex Index (INDEXCF) climbed 0.5 percent to 1,438.91 yesterday. The dollar-denominated RTS Index added 0.5 percent to 1,544.83, rising for the first time in eight days.

OAO Novatek (NOTK RX): Russia’s largest private natural-gas producer is scheduled to report financial results for the second quarter today. Novatek shares advanced 3.5 percent to 368.34 rubles.

OAO GMK Norilsk Nickel (GMKN RX): Russia will link the export duty on copper to the market price of the metal, according to an e-mailed statement from the government press service late yesterday. Norilsk, Russia’s second-largest copper producer by output in 2010, fell 1.9 percent to 6,480 rubles.

OAO Uralkali (URKA RX): Belarusian Potash Corp., a trading arm of Uralkali, will supply 400,000 metric tons of potash to India at $490 a ton from September to March, after the sale of 1.2 million tons last week at the same price, market researcher FMB said in a note yesterday, which was confirmed by the company. Uralkali shares rose 1.2 percent to 250.91 rubles.

To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net;

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

Banks nearly double profit in 7M

http://www.rbcnews.com/free/20110812122329.shtml

      RBC, 12.08.2011, Moscow 12:23:29.The aggregate profit of all lending organizations in Russia (not including Sberbank) amounted to RUB 278.5bn (approx.

USD 9.8bn) in January-July 2011, 1.6 times more than in the same period of 2010, according to the Bank of Russia's report.

      In July, total assets of the banking sector edged up 1.2%, primarily thanks to an increase in loan provisions. The loan portfolio (net of interbank lending) climbed 2.5%. At the same time, loans to non-financial organizations and households rose 2% and 4%, respectively.

Rosatom registers foreign branch

http://www.rbcnews.com/free/20110811141214.shtml

      RBC, 11.08.2011, Moscow 14:12:14.Rosatom state nuclear energy corporation has registered joint-stock company Rusatom Overseas for the implementation of projects abroad. The company's share capital is RUB 1bn (approx. USD 30m), the corporation's communications department announced today.

      According to acting CEO Alexey Kalinin, the company will focus on the state corporation's business development as regards phasing in projects on the construction of nuclear power stations on foreign markets based on the BOO model (build-own-operate). The new company will be responsible for expanding the order book for the construction of nuclear power stations and act as an investment project manager.

Italian Stocks - Factors to watch on Aug 12http://in.reuters.com/article/2011/08/12/italy-markets-factors-idINLDE77A11W20110812

Fri Aug 12, 2011 12:28pm IST

MILAN, Aug 12 (Reuters) - The following factors could affectItalian markets on Friday. Reuters has not verified the newspaper reports, and cannot vouch for their accuracy. New items are marked with (*).

GENERALI (GASI.MI)

* The insurance group will reach an agreement with Russian bank VTB (VTBR.MM) after the summer that could create a joint-venture based on a Czech unit of Generali, Il Corriere della Sera said.

Rostelecom to Complete Privatization by 2013, Kommersant Reportshttp://www.bloomberg.com/news/2011-08-12/rostelecom-to-complete-privatization-by-2013-kommersant-reports.html

By Marina Sysoyeva - Aug 12, 2011 6:17 AM GMT+0200

OAO Rostelecom, Russia’s dominant fixed-line telephone operator, won’t complete its privatization before 2013, Kommersant reported, citing a government document.

Deputy Prime Minister Sergei Ivanov has approved the schedule for the second stage of the reorganization of state- owned OAO Svyazinvest that provides for a transfer of company assets, including stakes in Ingushelektrosvyaz, Bashinformsvyaz, MMTS-9, Central Telegraph, and Chukotkasvyazinform, to Rostelecom by September 2013, the newspaper said.

To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Russia offering major iron ore license for RUB 2 billion - Interfax - 12 Aug, 2011

http://www.steelprices-china.com/news/index/2011/08/12/Mjc2NDM%3D/Russia_offering_major_iron_ore_license_for_RUB_2_billion_-_Interfax.html

Interfax reported that the Russian Federal Subsurface Resources Agency is offering the license to a major iron ore field, thought to contain over RUB 6 billion of rich ore in the Belgorod region at a starting price of RUB 2.254 billion this autumn.

The deadline for applications to bid at the tender for the Chernyanskoye field is September 12. Technical and economic proposals must be submitted by October 21 and the tender results should be unveiled November 24. The field is 5 kilometers from the Chernyanka station in the Belgorod region which is home to some of Russia biggest iron ore fields.

The Chernyanskoye field contains two main seams, Tsentralnaya and Perifericheskaya. Resources were appraised in keeping with the State Reserves Commission guidelines valid for 1967-1971. The field contains 170.253 million tonnes of rich ores to A+B+C1 classification and 5.966 billion tonnes C2; and off-balance C1 - 448.8 million tonnes and C2 - 28.5 million tonnes. The field's A+B+C1 quartzite ores total 1.738 billion tonnes and off-balance reserves are C1 - 449 million tonnes and C2 - 1.163 billion tonnes.

The license area is 5.97 square kilometers.

The winner must draft and obtain approval for a technical project within three years of the license being registered and start building within 42 months. Commercial mining of rich ores must begin in 90 months and design capacity must be achieved in 114 months. Commercial mining of quartzites must begin in 138 months and capacity must be achieved in 162 months.

Reports said in the spring of 2011 that Ukraine Industrial Union of Donbass was thinking of developing the Chernyanskoye field as a source of iron ore for its Alchevsk steel works in Luhansk.

(Sourced from Interfax)

August 12, 2011 11:02

Irkutskenergo boosts RAS sales revenue 19% in H1http://www.interfax.com/newsinf.asp?id=265445

IRKUTSK. Aug 12 (Interfax) - Sales revenues at power company OJSC Irkutskenergo (RTS: IRGZ) increased 18.9% year-on-year to 31.635 billion rubles in the first half, as calculated to Russian Accounting Standards (RAS), the company's second-quarter financial report says.

Income from the production of electric power came to 24.466 billion rubles, representing 77.3% of overall sales revenue (72.3% in H1 2010). That "was due to an increase in electrical energy sales volume on the wholesale energy market, as well as to the tariff increase on January 1, 2011," the report says.

Revenue from the production of thermal energy came to 6.375 billion rubles, representing 20.2% of overall income (24.9% in H1 2010). That was due to a decrease in sellable heat output even though tariffs here were also increased at the start of the year.

The report points out that consumers' energy-saving measures contributed to the drop in thermal energy sales. Another reason was Irkutskenergo needing to cut "unpaid for" energy output for consumers owing money for energy resources consumed. With these

factors operating, the company will either impose restrictions on heat consumption or keep heat-network temperatures to the minimum levels permitted.

As reported, Irkutskenergo increased net profits 60% to year-on-year to 7.598 billion rubles in the first half.

Irkutskenergo is one of Russia's biggest coal and power companies, with thermal energy and electrical power stations and heating networks, coal mines, transport companies, repair plants, and a beneficiation plant. The company's power stations have installed generating capacity of 12.9 gWt. The mines have combined production capacity of 15.3 million tonnes of coal per year.

The genco is controlled by EuroSibEnergo, which belongs to Russian Aluminum's main shareholder Oleg Deripaska. The state holds 40% of the company's stock.

Cf

Uralkali generates strong margins in H1

http://www.rbcnews.com/free/20110812105530.shtml

      RBC, 12.08.2011, Moscow 10:55:30.Uralkali's net profit under RAS surged more than 2.4 times to RUB 15.64bn (approx. USD 551m) in the first half of 2011, the Russian fertilizer producer said in its official documents today.

      Revenue increased nearly 1.5 times to RUB 31.65bn (approx. USD 1.11bn) and gross profit rose 1.6 times to RUB 24.01bn (approx. USD 845m). Operating revenue skyrocketed 78% to RUB 17.12bn (approx. USD 603m) and pretax profit jumped 2.3 times to RUB 18.26bn (approx. USD 643m).

August 12, 2011 12:16

Kemerovo Azot boosts net profit by 360% in H1http://www.interfax.com/newsinf.asp?id=265475

KEMEROVO. Aug 12 (Interfax) - Kemerovo-based OJSC Azot (RTS: AZKM) posted 2.;904 billion rubles in net profit for January-June 2011, which is a year-on-year increase of 360% from 633.653 million rubles posted for the same period of 2010, the company said in its quarterly reporting.

The plant's sales revenue went up by 70% to 14.543 billion rubles.

The company's net profit soared thanks to increasing production, sales and product prices. Exports counted for 74.8% of total product sales.

The report said that the company is obliged for maintaining the entire protection area around its industrial hub, which includes the relocation of all residents of three settlements. The company values is own costs for the relocation of around 3,500 people from the zone at 2 billion-3 billion rubles.

Kemerovo-based Azot is a major supplier of ammonia nitrate and carbamide for Russia's domestic market. The company supplies around 80% of ammonia nitrate to agricultural and industrial consumers in Siberia and Russia's Far East.

As of June 30, SIBUR-Mineral Fertilizers owned 76.79% of the common shares in the company.

Ih

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

Moscow becomes home to Best Western's largest property yethttp://www.independent.co.uk/travel/news-and-advice/moscow-becomes-home-to-best-westerns-largest-property-yet-2336427.html

Relaxnews

Friday, 12 August 2011

Global hotel chain Best Western has opened its largest property in the world in the Russian capital, Moscow.

The chain, which runs over 4,000 hotels globally, announced August 9 that the Best Western Vega Hotel & Convention Center had officially opened its doors in the historical district of Izmaylovo in Moscow.

Originally built in 1980, the building has been significantly remodeled and will now operate as a three-star hotel, with 970 guest rooms.

It features three restaurants and a lobby bar, including a full service Russian restaurant, a mid-scale buffet and French pastry cafe and coffee shop, as well as a fitness facility and spa with Turkish baths and a Finnish sauna.

It is also the first Russian property operated by Best Western, which holds the title of the world's largest hotel brand and has recently been targeting growth in eastern Europe, opening hotels in Moldova and Ukraine.

However, with local reports suggest Moscow's budget accommodation sector is currently soaring, Best Western is likely to have some stiff competition to attract travelers.

According to The Moscow Times, there are now 59 hostels in the city, a number that has jumped by 30 percent in the last two months as 14 new hostels opened their doors in the Russian capital.

http://www.bestwestern.com

More traffic along the Northern Sea Routehttp://www.barentsobserver.com/more-traffic-along-the-northern-sea-route.4947500-16178.html

2011-08-12 Cargo transport through the Northern Sea Route is expected to skyrocket in course of the next decade. Climate change makes it possible to use larger vessels than before and the largest tanker ever to use the passage is expected to leave Murmansk in August.

Russia’s Ministry of Transport believes cargo transport through NSR will increase from last year’s 1.8 million tons to 64 million tons by 2020.

All of Russia’s ambitious plans for development of the Arctic are connected with the Northern Sea Route (NSR), or North-East Passage. Recently the Russian Security Council held a meeting in Naryan-Mar in the Nenets region to discuss the future of this important transport corridor.

The main challenges for a more use of the sea route are the need for new icebreakers and the lack of infrastructure, first of all instruments for navigation and communication and bases for search and rescue services. According to the Security Council’s secretary Nikolay Patrushev, the infrastructure along the route does not meet demands for protection of Russian interests:

-Because of this [poor infrastructure] the investment attractiveness of the country’s largest resource base is low, Patrushev told Izvestiya.

Russia plans to build a series of new search and rescue vessels and make the port of Amderma into a main base for a new emergency unit, as BarentsObserver reported.

Russia plans to build six new icebreakers – three nuclear powered and three with engines, as Deputy Prime Minister Sergei Ivanov informed in July.

One of the companies planning to increase its use of the NSR is Novatek, Russia’s second largest producer of natural gas, who plans to ship six times as much gas condensate as the previous year along the route, Oilru.com reports.

Novatek plans to send the largest tanker ever through the Northeast Passage in August, says Deputy Chairman of the board Mikhail Popov. This is the 120 000 tons Suezmax class tanker “Vladimir Tikhonov”. Novatek plans to ship a total of 420 000 tons of gas condensate through the NSR in 2011.

Novatek’s tankers are now using a new route through the NSR – to the north of the New Siberian Islands. This is now possible because of the melting sea ice. According to Popov, using this route makes it possible to use tankers with a draught of over 12 meters.

While 2009 was a kind of test year for vessels sailing the entire route from Asia to Europe via the Arctic, 2010 was the breakthrough for commercial shipping along the Northern Sea Route. See BarentsObserver’s overview of vessels that have sailed the Northern Sea Route during the 2010 season.

Text: Trude Pettersen

Siberia Container Train Link Speeds Asia-Europe Trade: Freight Marketshttp://www.bloomberg.com/news/2011-08-11/siberia-container-line-speeds-flow-of-car-parts-to-europe-freight-markets.html

QBy Chris Jasper and Steve Rothwell - Aug 11, 2011 10:00 PM GMT+0200

Russia’s biggest privately owned train company is tapping the world’s longest rail network to move high-value auto parts and electronics from East Asia to Europe, slashing 30 days from ship-borne delivery times.

Globaltrans Investment Plc (GLTR), part of Moscow-based transport group N-Trans and listed in London since 2008, is running four container trains a day from Vostochny port on the Sea of Japan to move goods for Japanese, Chinese and Korean customers including Hyundai Motor Co., South Korea’s largest carmaker.

N-Trans, which runs the VSC container terminal in Vostochny through its Global Ports Investments Plc unit, aims to steal time-sensitive, high-value shipments away from maritime routes using the 6,000-mile trans-Siberian railway. Journey times of about 11

days compare with a month for sea transfers from Korea and Japan to Hamburg and as many as 40 days to St. Petersburg, where congested infrastructure can stretch times further.

“The volumes you can carry by train are obviously much lower than on the smallest container ships, and one of the drivers for the trans-Siberian venture is as a solution to the congestion in St. Petersburg and the Russian ports,” said Marc Pauchet, an analyst at Maritime Strategies International Ltd.

Globaltrans has advanced 3.4 percent to $13.70 since first trading on the London Stock Exchange on May 1, 2008, valuing it at $2.17 billion even after a 14 percent slump on Aug. 8 as global stock markets plunged on concern about the euro and U.S. debt ratings. The company almost doubled profit before minority interests to $226 million last year on sales of $1.38 billion.

Fledgling Service

Globaltrans’s seven time-zone trans-Siberian service remains a fledgling one, utilizing just 450 box wagons, compared with the company’s 30,000 gondola cars used for bulk transport and 21,000 oil tanks.

Customers include Hyundai, for which the company ships parts to a Russian factory that opened last September and is increasing output of the Accent model to 200,000 cars a year.

“It will provide a good service for certain kinds of cargo, but in terms of the volumes it’s just not there yet,” said Fred Doll, managing director of the Forrest Row, England- based Doll Shipping Consultancy and a former director at Clarkson Plc, the world’s biggest shipbroker.

Still, growth rates for container volumes at Russia’s ports suggest the potential is there for a step change, according to Nikita Mishin, the joint owner and co-founder of N-Trans, who said in an interview that the box market is booming and the trans-Siberian route underutilized.

Foodstuffs, Steel

Russia last year had a throughput of 4.1 million 20-foot equivalent units, or TEUs, as standard containers are known, according to Drewry Maritime Advisors, with volumes forecast to increase to 13.1 million by 2020. The market expanded at 3.9 times the pace of the Russian economy in the decade to 2010.

Inward flows are dominated by consumer goods, foodstuffs and spare parts, N-Trans says, with outbound traffic including exports from OAO Severstal, Russia’s second-biggest steelmaker, which is using containers after a two-year Globaltrans campaign to win the business.

Box volumes have recovered from the recession, surpassing peak 2008 levels by the first quarter of last year. Still, Russia’s road and rail infrastructure -- the country has a limited freeway network and its 53,000-miles of track still uses shunting yards -- requires upgrading if containerization is to penetrate far beyond the ports, according to N-trans.

Inland Site

Global Ports opened its first inland site, Yanino, in 2009, 50 miles from St. Petersburg, helping to bypass congestion in Russia’s second-biggest city which MSI’s Pauchet says can be “atrocious” as inadequate road links combine with insufficient storage space in a “vicious circle” of backed up containers.

Yanino can handle 200,000 TEUs a year and covers 51 hectares, with the same space again available for expansion.

The VSC or Vostochnaya   Stevedoring Co. terminal at Vostochny port in the city of Nakhodka has direct access to the trans-Siberian railway, with 85 percent of cargo using the site moved by train. The terminal, 25 percent owned by Dubai-based DP World Ltd. (DPW), the third-largest port operator, is the biggest in Russia’s Far East, with an annual capacity of 550,000 TEUs.

Kia Custom

One of the primary attractions of the overland route is as a mechanism for returning empty containers from Europe to East Asia, said Pauchet, who previously worked at Hyundai and DHL Global Forwarding. Because of the balance of trade, companies can’t fill all east-bound boxes, and sending them by rail may be preferable to loading ships full of non-revenue-earning cargo.

Global Ports, Russia’s No. 1 container-terminal operator by throughput with a 30 percent market share in the first four months of 2011, also counts Korea’s Kia Motors Corp. among its customers, and there may be scope for further parts flows to switch to rail, Mishin said.

The ports unit competes with Moscow-listed Fesco Transport Group, known as Far East Shipping Co. and based in Vladivostok, 70 miles from Vostochny, OAO Novorossiysk Commercial Seaport or NCSP, which is based in Novorossiysk on the Black Sea and trades in London, and National Container Co. or NCC, the operator of St. Petersburg’s biggest container terminal.

London IPO

Global Ports, which also handles more than one-quarter of fuel exports from Russia, raised $534 million in an initial public offering of global depositary receipts in London on June 24 and has a market value of $2.35 billion. That compares with a $1.62 billion valuation for NCSP.

The sale was the third in as many years by N-Trans owners Mishin, Konstantin Nikolaev and Andrey Filatov after Globaltrans and infrastructure unit OAO Mostotrest (MSTT), which floated in 2010.

Globaltrans is interested in acquiring stakes in state- owned OAO Russian Railways divisions OAO TransContainer and OAO Freight One, VTB Capital said in a note last month.

Following the unit disposals Russian Railways may consider a share sale from 2012 to raise funds for work including better port access, it said last year, when valuing itself at “several times” authorized capital of 1.5 trillion rubles ($48 billion).

To contact the reporters on this story: Chris Jasper in London at cjasper@bloomberg.net; Steve Rothwell in London at srothwell@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

Chris Weafer said to return to Troika Dialogue http://www.bsr-russia.com/en/human-resources/item/1803-chris-weafer-said-to-return-to-troika-dialogue.html

Written by John Bonar on Friday, 12 August 2011 04:53 | Published in Human Resources

By John Bonar

Chris Weafer, the top-rated Russian markets strategist, is poised to join Sberbank-owned Troika Dialogue in a surprize move. Weafer earlier this year moved from a four-year stint with Uralsib Capital to become chief strategist at ING Bank Russia. His move from a similar position in June was hailed at the time as a key part of the Dutch Bank's plan to rebuild its business in Russia after senior executive departures and other adversities.

Now however Weafer is understood to be on leave from ING and an announcement that he will join Troika Dialogue as chief strategist is expected imminently according to Moscow market sources. The sources told BSR that Weafer's latest move is subject to regulatory approval.

With much of Moscow on holiday, the approval process is delaying Weafer's move but he is expected to join Troika in September.

For Weafer it will be a return to once-familiar ground. He started his Moscow career in the summer of 1998 as  head of research at Troika Dialogue. After four years he was lured to Alfa Bank as head of Research and in 2007 joined Uralsib Capital.

Before coming to Russia, the Irish economist served two years as head of equity research in South East Asia for NatWest Markets, based in Thailand. Prior to that he was Senior Investment Manager for the Abu Dhabi Investment Authority, one of the largest self-managed investment funds in the world. He held this position for seven years and was based in Abu Dhabi city. He has been working in emerging markets for twenty-five years. Mr. Weafer was voted Russia’s top country strategist in the 2007 All-Russia survey carried out by the financial service group, Thomson-Extel.

Weafer started his investment career in 1979 as an analyst with the Irish Life Assurance Company in Dublin, then the country’s largest mutual and pension fund manager, leaving as Senior Portfolio Manager and Head of Research eight years later.

Sberbank, Russia's biggest lender and oldest bank, earlier this year purchased the private investment banking outfit, Troika Dialog, for $1 billion. The acquisition of Troika Dialog will allow Sberbank to develop a global presence as the investment bank has branches in in New York, London, Kiev, Almaty and Nicosia.

Activity in the Oil and Gas sector (including regulatory)

Lukoil Bulgaria Downs Fuel Prices, Far from Enoughhttp://www.novinite.com/view_news.php?id=131041

Energy | August 11, 2011, Thursday

Dominant fuel seller Lukoil Bulgaria decreased on Thursday petrol and diesel prices by some 2%, turning a blind eye to the much sharper drop in crude oil costs on global markets.

The A-95H, the most widely used and lowest octane gasoline in the country, will see a decrease of 2.72% and its price will be BGN 2 274, 00  per 1,000L.

The A-98H gasoline will be sold at BGN 2 334, 00 per 1,000L. Diesel fuel will cost BGN 2 239,20 per 1,000L.

This is the second time that Lukoil reduces fuel prices since the beginning of the month. For the same period of time the price of Brent crude oil in London fell by nearly 4.7 percent, while in New York even lighter crude oil dropped by nearly 10%.

Bulgaria's Neftochim, the only oil refinery in the country, controlled by Russia's giant Lukoil, won on Wednesday the first round of a court battle with the state over its licenses.

Bulgaria's top court ruled that Lukoil's Bulgarian refinery can continue operating until a final decision is taken on the tax dispute with the customs office.

The refinery reduced crude processing earlier this month and was threatened with effectively stopping production after the customs office revoked its licenses over failure to install fuel flow metering to make possible monitoring by the customs officials.

The refinery has been widely accused for the high fuel prices in Bulgaria.

LUKOIL drills new well in Uzbekistanhttp://en.trend.az/capital/energy/1917400.html

[12.08.2011 13:08]

Uzbekistan, Tashkent, Aug. 12 / Trend D. Azizov /

"LUKOIL" national company has started drilling the third exploration well on the Shege structure, Kungrad block in Karakalpakstan (north-west of Uzbekistan), LUKOIL subsidiary in Uzbekistan - "LUKOIL Uzbekistan Operating Company" reported.

According to the press-service, the design depth of the well is 3,100 meters.

Two exploratory wells were drilled in the Shege structure. A hydrocarbon field was discovered.

The seismic surveys were also conducted.

According to the results of seismic studies, the reserves were recounted. The reserves hit 5.4 million tons of fuel by C3 category.

It was reported that the Czech group Eriell became a winner of the contest conducted by "LUKOIL Uzbekistan Operating Company" to construct the third exploration well on the Shege field.

The Shege deposit is included in Kungrad block (a part of Kandim-Khauzak-Shadi-Kungrad).

The block is situated near Kungrad and Muinak regions of Karakalpakstan on the left bank of the Amu Darya River. The land area is 3,700 square kilometers.

PSA on the "Kandim-Khauzak-Shadi-Kungrad" project was signed on June 16, 2004 for a period of 35 years. The partners are "LUKOIL" (with the status of the operator and a 90 percent share) and the National Holding Company "Uzbekneftegaz".

The agreement provides for the development of Khauzak, Shadi and Kandim fields. Their proven reserves hit 214 billion cubic meters of gas and 8 million tons of condensate.

"LUKOIL" plans to get more than 12 billion cubic meters of gas and 200,000 tons of liquid hydrocarbons.

At present, the company produces more than three billion cubic meters of gas per year from gas fields in Uzbekistan.

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

Gazprom

Gazprom Neft to acquire Uzuralneftegashttp://www.bne.eu/dispatch_text16343

VTB CapitalAugust 12, 2011

News: According to RBC-Daily, the Federal Anti-Monopoly Service has approved Gazprom Neft's request to acquire an 87% stake in Uzuralneftegas. The paper reports that Uzuralneftegas' 2010 production amounted to 0.3mmnt of crude oil and 0.2bcm of associate gas. The recoverable reserves are 5.5mmnt of crude oil and 2.6bcm of associated gas.

Our View: No information is available about the possible price of the acquisition, therefore it is impossible to evaluate the efficiency of the possible deal. From the perspective of crude oil production and reserves, Uzuralneftegas has an increasing production profile equal to about 1% of Gazprom Neft's 2010 production, while reserves are less than 1%.

Dmitry Loukashov

NOVATEK: Regional gas distributor could be bought from Gazpromhttp://www.bne.eu/dispatch_text16343

UralSibAugust 12, 2011

Gazprom could sell Chelyabinsk subsidiary to NOVATEK. Accord- ing to a Kommersant report, NOVATEK plans to buy a controlling stake in Gazprom's regional distribution

subsidiary, Gazprom Mez- hregiongaz Chelyabinsk, before the start of this year's heating season. The price range is estimated at $50-100 mln.

NOVATEK to dominate Chelyabinsk gas market. The Chelyabinsk region consumes about 16 bcm per year, equal to one-third of NOVATEK's expected 2011 gas production. NOVATEK accounted for 25% of this consumption in 2010, with Gazprom Mezhregiongaz supplying most of the remaining 75%. In May 2011, NOVATEK agreed to supply an additional 3 bcm per annum to Fortum's Chelyab- insk power plant, potentially bringing its share in the regional market to 40-45% in 2012. This acquisition may increase NOVATEK's market share to almost 100%.

Buying into distribution to increase market share. We believe NOVATEK is looking to secure access to a greater range of end- customers through distribution networks. This partly explains NOVATEK's reported interest in Itera, which dominates gas sales in the Sverdlovsk region with annual consumption at close to 20 bcm. NOVATEK has also secured 3.5-4.0 bcm per annum of dry gas from Sibur for 2012-2016, also intended for sale in the Urals. However, we do not expect a major improvement in NOVATEK's earnings as a result of direct market access. We reiterate our Hold recommendation for NOVATEK with a target price of $140/GDR.

Gazprombank upgraded to BB+ by S&Phttp://www.bne.eu/dispatch_text16343

VTB CapitalAugust 12, 2011

News: Yesterday, S&P upgraded Gazprombank (GPB) to BB+, citing the bank's improving asset quality position, decreasing appetite for trading risks and divestment of the bank's non-core assets. At the same time, the agency noted that the current rating factors in a 3-notch uplift from the standalone assessment, driven by the bank's status as a government-related entity.

Our View: We tend to agree with the view that GPB's asset quality looks quite strong, driven by its active post-crisis lending expansion in metals and mining and other blue-chip sectors, but the flipside of this coin is that the bank's interest margins are significantly weaker than those of its peers. As a result, the bank is still highly dependent on trading/asset revaluation results. We also tend to view the state support factor as significantly weaker for GPB than for its peers. For instance, when GPB incurred large-scale trading losses back in 2008, it did not get access to Tier-1 capital, unlike the banks directly controlled by the state. Overall, we see yesterday's action by S&P as being of a little relevance given that GPB has an investment-grade rating from Moody's (Baa3). We see GPB's bonds that trade flat to the VTB curve as fundamentally overvalued.

A Promise Made to Be Brokenhttp://russiaprofile.org/politics/42897.html

Is The Trial of Yulia Tymoshenko a Pretext by Ukrainian Leaders to Start Another Gas War With Russia?

By Tai Adelaja Russia Profile 08/11/2011

The ongoing trial of Yulia Tymoshenko, Ukraine's charismatic opposition leader, is being widely interpreted as a ploy by President Viktor Yanukovich to bar a formidable political rival from politics. But there could be far more sinister motives, experts say, as Ukraine becomes more desperate in its efforts to unilaterally tear up a controversial 2009 gas supply contract with Russia.

In a trial that has become a little more than a courtroom soap-opera in recent weeks, Ukrainian prosecutors say that Tymoshenko abused her office powers by signing a costly natural gas import contract with Russia in 2009, without proper authorization from her Cabinet. Tymoshenko says the contract ended weeks of natural gas disruptions to Ukrainian and European consumers, and that as the country's prime minister she did not need any special permission to sign the contract.

At issue is a controversial January 19, 2009 gas agreement signed between Russia and Ukraine. According to the ten-year gas supply deal, Ukraine would move from paying a subsidized rate for its gas to the market rate in 2010. Russia too would pay a discounted rate to Ukraine for carrying its gas through pipelines to European customers in 2009, before paying the market rate starting from 2010.  In 2009, however, Ukraine was required to pay the market rate of $360 per 1,000 cubic meters less 20 percent. That compared then to about the $450 market rate paid by European customers, but it was a major hike for Ukraine, which until December 2008 was paying only $179.50. A relieved Tymoshenko had hoped, however, that the $360 figure will fall dramatically as oil prices plunged from record highs, and Ukraine would end up paying less than $250 per 1,000 cubic meters.

Her optimism was never justified. While Ukraine initially paid $264 in early 2009, the price quickly went up to $296 per 1,000 cubic meters in the same year. "From the moment the gas agreement was inked in 2009, Ukraine has paid Gazprom $22.7 billion," Alexander Shtok, a department head at the 2K Audit - Business Consulting/Morison International, said. "The country paid around $6 billion in 2009, about $9.2 billion in 2010 and more than $7.5 billion this year." With gas prices linked to prevailing oil prices, whatever Ukraine pays for gas is expected to rise, Nezavisimaya Gazeta reported on Wednesday.

Such a market situation has been putting pressure on top Ukrainian officials, including president Yanukovych, who has been urging Russia to review the pricing formula. The Ukrainian Prime Minister Mykola Azarov said after a meeting with his Russian counterpart, Prime Minister Vladimir Putin, in April, that both had agreed to discuss the

possibility of revising the gas pricing formula that ties the gas price to oil prices, which have been steadily rising – a statement Putin denied. "We reached no agreement on a price formula revision. Our position is that we have a contract, this contract is in force and it must be implemented," Putin said.

Since 2009, when Russia cut gas supplies to Ukraine on New Year's Day, Ukraine has been trying to talk Russia into negotiating the renewal of gas supply contracts every year. However, the two countries have not only failed to agree on the price of gas supply to Ukraine, but they also harbor differing opinions on how much Russia would pay Ukraine for gas transit to Europe. With the resolution of the dispute going nowhere, experts say Ukraine is frantically looking for legal loopholes that will enable it to tear up the 2009 agreement, thereby triggering a new gas war that could see some European countries shutting down industrial plants and domestic heating systems.

Whether or not a court ruling will give Kiev the necessary legal backing to unilaterally tear up the agreement, Moscow these days holds all the aces, experts say. Gazprom is currently pursuing two major gas pipeline projects, Nord Stream and South Stream – and both are expected to bypass Ukraine by supplying gas directly to customers in Europe. Nord Stream will run for 1,200 kilometers along the bed of the Baltic Sea, and South Stream – under the Black Sea. Gazprom has also been careful enough to bring major European partners on board, and that includes Italy's ENI for South Stream and German companies E.ON Ruhrgas and Wintershall along with Dutch provider Gasunie for Nord Stream. While the EU still has major concerns about the security of supply and is moving ahead with Nabucco, the pipeline may never have enough capacity to provide for Europe's needs. That means that the outcome of the chaotic trial of the Ukrainian former prime minister would hardly be a game changer for Ukraine, industry executives said.

Ukraine to cut Gazprom's umbilical cord?http://oilprice.com/Energy/Natural-Gas/Ukraine-to-cut-Gazprom-s-umbilical-cord.html

Written by John Daly    Thursday, 11 August 2011 12:31

Sometimes it's not easy being Russia's neighbor - just ask Ukraine. Ever since the 1991 implosion of the USSR, Ukraine's relations with Russia have appeared between coldly formal and outright hostility, with a major irritant being the increasingly high prices Gazprom charges for natural gas.  Gazprom in turn needs access to Ukraine’s pipeline network in order to reach its profitable European customers. Faced with this symbiotic relationship, Kiev has been assiduously looking for ways to break out of its dependency on Russian energy imports, and now it looks as if this may in fact be coming true. 

The head of Ukraine’s state geology and subsurface resource service Gosgeonedr Eduard Stavitsky said, "Today, the state fund of subsurface resources is about 1.1 trillion cubic meters of gas and about 130-150 million tons of oil with gas condensate. In from seven to ten years, Ukraine will be able to fully supply itself with gas and oil, excluding the purchase of imported energy resources."   TNK-BP is ready to invest $2 billion in the development of shale gas in Ukraine by 2020. Shell has already prepared a project for extraction at the Yuzovsky gas field and is ready in the next three years to pump several billions of dollars into opening it, hoping within ten years to be extracting around 8-10 billion cubic meters of gas per year there. In Western Ukraine, investors, particularly Chevron, are showing interest in the Olessky field, straddling the Lviv, Ivano-Frankivsk, and Ternopol regions, covering around 2,700 square miles. According to Ukrainian Deputy Fuel and Energy Minister Serhiy Chekh, Ukraine’s state-run Naftogaz energy company is drafting an agreement with global oil and gas group Shell to develop the Black Sea shelf. Chekh said Ukraine could boost oil and gas production in the Black Sea and the Sea of Azov but it would require significant investment, but nevertheless Ukraine plans to raise oil output on the Black Sea shelf to 2.9 million tons a year by 2015, including gas condensate.   If Ukraine is in fact able to achieve energy independence, it will rob Moscow of one of its major bargaining holds over Kiev. Quite aside from the fractious issues involved in the transiting of Gazprom natural gas through Ukraine, another issue that has roiled Russian-Ukrainian relations for the past two decades still remains unresolved, Russia's continuing use of the Crimean port of Sevastopol for its Black Sea Fleet. In the past Moscow has played hardball over continued use of the port, most notably by using its “natural gas weapon.”

Given energy's centrality to the country’s prosperity, this has proven a major obstacle for many of Ukraine's previous political leaders, including Viktor Yushchenko.   More than any other former Soviet state, Moscow desires a “friendly” Ukraine. Among other things this means for Ukraine, no NATO membership, a high priority of President Yushchenko. Should Kiev step out of line, Moscow still has a number of cards to play, including the country’s ethnic Russian population, roughly 17 percent of the country’s citizenry. For the European Union, however, Ukrainian self-sufficiency in energy production could prove to be a significant lessening, as it could put an end annual brinkmanship laid by Russia and Ukraine over natural gas exports, which has disrupted winter supplies over the past several years.

By. John C.K. Daly