Russia 101123

Basic Political Developments Personnel changes in the Armed Forces - Dmitry Medvedev signed a decree on

dismissal and dismissal from military service, members of the Armed Forces of the Russian Federation.

Moscow concerned over conflict on Korean peninsula - Moscow is concerned over a conflict situation on the Korean peninsula, a diplomat from the Russian Foreign Ministry said on Tuesday.

o Artillery duel in Korea will hopefully not aggravate tension o Korean clash worries China, Russia - Russia on Tuesday warned against

an escalation of tensions on the Korean peninsula, a foreign ministry official told Interfax. "It's important that this does not lead to an aggravation of the situation on the Korean peninsula," the official, who was not named, told Interfax.

o US envoy: to consult with Russia on N. Korea - "We are also reaching out to consult with Russia, and a number of initiatives are underway with Russians," the U.S. Special Representative for North Korea, Stephen Bosworth, told reporters in Tokyo.

China, Russia Sign Accords to Boost Energy Partnership - China and Russia signed agreements to expand cooperation in oil, gas, coal and nuclear power as economic growth in the Asian country drives energy demand. Russia will start export supplies of crude to China through a pipeline on Jan. 1, the Ministry of Foreign Affairs in Beijing said in a statement on its website today.

o Rosneft, CNPC mull acquisition of upstream assetso Russia, China to discuss gas pricing disputeo Putin to hold talks with Chinese State Council Premier Wen Jiabaoo Russia's Putin, China's Wen to discuss gas prices - Gas prices

disagreement likely to be discussed; Gas price deal key to gas pipeline project to China

o Russia, China to Settle Trade in Ruble and Yuan, Kommersant Says o Rouble launches in China as emerging economy giants club together to

snub dollaro Russia's Putin, China's Wen To Discuss Range Of Issues o China, Russia Reach Consensus on Energy Cooperationo New Power Bridge across Russia-China Border Completed - With the

completion of the bridge, the Eastern Energy Company has finished preparations for construction of new 500-kilovolt(KV) power lines from Amurskaya Substation to Khabarovskaya Combined Cycle Station, a steam and gas station, with a capacity of between 400MW and 500 MW.

EU, Russia seek 'common language' on energy - Officials from Russia and the European Commission yesterday (22 November) marked the 10-year anniversary of EU-Russia energy dialogue and devised ways to overcome the present "lack of trust," as Russian Energy Minister Sergei Shmatko described the state of relations.

Joint collegium of Russian, Belarusian FMs held in Minsk - According to Martynov, the main task of the Tuesday meeting is to analyse the fulfilment of the programme of joint actions of Belarus and Russia in the sphere of foreign policy. Senior officials of the two foreign ministries will establish whether or not there are “bottlenecks” in the process and in what way they could be overcome.

o Russian, Belarusian foreign ministries to hold joint session in Minsk o Lavrov told by Medvedev not to meet Lukashenko - Kremlin sourceo Lukashenko refuses to meet with Lavrovo Lukashenko has refused to meet with Lavrovo Ban on high-ranking Russian officials meeting certain Belarus colleagues

shows 'Kremlin weakness' – sourceo Belarus on the Way of Russian Oil Exports to EU, "Transneft"

Georgia to Make an Overture to Russia - Mr. Saakashvili told the French newspaper Le Figaro that he would make the offer in a speech to the European Parliament in Strasbourg on Tuesday. He said he would “make a pledge to not use force.”

o Saakashvili to renounce use of force, invite Russia to talks - Georgian President Mikheil Saakashvili has said he will make a unilateral "pledge not to use force" over South Ossetia and Abkhazia and invite Russia to talks without preconditions.

Russian sailors recuperate in Lagos - A cook from Russia’s tanker NS Spirit who was wounded during an armed attack off Nigeria has been operated on and is in stable condition in a hospital in Lagos. 

Medvedev to hold State Council presidium meeting on utilities - Russian President Dmitry Medvedev will hold in Syktyvkar (Komi republic) on Tuesday a visiting meeting of the presidium of the State Council on the problems of housing and communal services. The head of state announced this on Monday answering citizens’ requests at the presidential reception office.

Over 5,500 tons of drugs seized during operation Mak in RF - More than 11,000 tonnes of drug containing plants, as well as over 5,500 tonnes of drugs and psychotropic substances have been seized during the anti-drug operation Mak, ITAR-TASS learnt at the press service of the Criminal Investigation Department of the Russian Interior Ministry on Tuesday.

Trial of ‘black lumbermen’ starts in Primorsky reg - The trial of “black lumbermen” who caused losses of 56.5 million roubles for the state has started in the Primorsky Territory. There are 14 members of a criminal group on the dock; each of them faces imprisonment for a term of 3 to 15 years and a fine of up to 1 million roubles. The whole excellent quality wood illegally cut by them was exported to China.

European Rights Court Agrees To Hear Russian Policeman's Case - The European Court of Human Rights in France has agreed to hear a case filed by a whistle-blowing policeman in Russia, RFE/RL's Russian Service reports.

No religious inequality in Russiao Moscow rejects U.S. allegations about religious inequality

Kaliningrad's Orthodox Christians accuse Catholics of proselytizing plot Russian network says TV crew arrested by U.S. police

o Russia Today Reporters Detained in U.S. New ski resort to appear in Chechnya - The Vaduchi slopes will be situated 3,000

metres above the sea. It will come into full operation in five years, ready to receive up to 12,000 visitors per hour, says the Republic’s head Ramzan Kdyrov.

More Than 1 Million Russians Refuse To Take Part In Census - Aleksandr Surinov, the chief of the Federal Statistics Service, told journalists that people's refusal to talk to census takers was motivated mainly by religious reasons. He said others who rejected taking part in the census wanted to make a social protest, while others mistrust the authorities.Russian Press at a Glance, Tuesday, November 23

o Russian President Dmitry Medvedev held on Monday an on-line conference, answering questions from residents of various Russian regions(Vremya Novostei, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

o Russian President Dmitry Medvedev believes that one of the problems of the Russian judicial system is that judges are overloaded with work(Vremya Novostei)

o The Russian State Statistics Service says Russia’s economic development pace is the slower than fellow members of the BRIC organization - Brazil, India and China(Nezavisimaya Gazeta)

o Brussels hosted on Monday Russia-EU conference, which was attended by Russian Energy Minister Sergei Shmatko. The participants discussed the formation of a new energy space in the region(Rossiiskaya Gazeta)

o China is still interested in purchasing Russian military hardware and equipment, although it is rapidly developing its own technology(Vedomosti)

o Khusein Shaidiyev, the editor-in-chief of Ingushetia’s Serdalo government newspaper, was hospitalized with a gun wound on Monday after his car came under fire as he was returning home from work(Kommersant)

o Over 180 residents of the southern Russian village of Kushchevskaya, which recently saw a bloodbath in which 12 people were slain, were received by Russia's top investigator Alexander Bastrykin on Monday. They complained to him about the current situation in the village(Vremya Novostei, Kommersant)

o Alexander Surinov, the head of the Russian State Statistics Service, says that according to preliminary results of the recent census the population of Russia decreased by 2.2 million people over the last eight years(Vedomosti, Rossiiskaya Gazeta)

o The social network Facebook closed the main account of former Yukos CEO Mikhail Khodorkovsky. Facebook says the network needs to verify the authenticity of the account(Kommersant)

o New Moscow Mayor Sergei Sobyanin continues efforts to resolve ongoing traffic problems in the Russian capital and this time he inspected work on an expansion of Moscow subway system(Vremya Novostei, Kommersant, Rossiiskaya Gazeta)

o Moscow authorities published a draft resolution that bans trucks with a payload of over 1.5 tons within the Moscow Ring Road during the

daytime starting January 15, 2011. The move is intended to ease traffic problems in the Russian capital.(Kommersant)

o Russia’s businessman Ruslan Baisarov promised to invest 12 billion rubles (about $400 million) in the construction of a mountain skiing resort in the Chechen village of Veduchi, where he was born(Kommersant)

o Suspended Russian figure skater Evgeni Plushenko met with officials from the Russian Figure Skating Federation. As a result of the meeting the federation has allowed the Olympic champion to participate again in competitions(Rossiiskaya Gazeta)

Russia to Sell Stalin-Era Builder of Moscow’s Subway System BRICKS & MORTAR: Moscow's future - a wish list: One of the first orders from

Moscow's new mayor, Sergei Sobyanin, when he assumed office in November was for a revamp of the development plan for the city to 2025. What do the people who will actually be implementing the plan – architects, developers and real estate consultants – hope to see in this document when it lands on the mayor's desk in March?

LSR Group: New large-scale development announced for the Moscow area Criminal group that stole 1 bln rbls of Pension Fund money arrested Police busts two underground plush casinos in downtown Moscow Hermitage Woos Eli Broad, Loses Hirst Skull, Seeks Postwar Art - Mikhail

Piotrovsky, director of Russia’s State Hermitage Museum, came through New York recently looking for money and art.

New dams bring hope for dying Aral Sea - In just a few short years the small dams have turned part of the Kazakh desert, back into a seascape and dotted it with beaches. The hope is that as the project progresses the dams will be built even higher, keeping more water in, extending the boundaries and the bounties of the lesser Aral sea back to the city of Aralsk.

Dmitry Trenin: Russia suffers from a security deficit in relations with NATO - Valdaiclub.com interview with Dmitry Trenin, director and chairman of the research council at the Carnegie Moscow Center, a subdivision of the Carnegie Endowment for International Peace.

Cold War Hangover - Russia and NATO Have Reached a Partnership Agreement This Weekend, but Many Russians Still Believe International Organizations Are Enemies Rather Than Friends

Zoning Responsibility - If Moscow Insists on Demarcating Separate Russian and American Spheres of Responsibility for Joint Missile Defense, Then the Project Stops There, Say Analysts

The Nuclear Treaty Rush - Senate Republicans are right to trust but verify President Obama's missile promises.

National Economic Trends RUSSIA HAD $21 BLN CAPITAL OUTFLOW IN 10M -IGNATYEV  RUSSIA HAD CURRENT ACCOUNT SURPLUS OF $66 BLN IN 10 MTHS -

CB'S IGNATYEV RUSSIAN CENTRAL BANK DOES NOT RECOGNIZE VALUATION OF

PUGACHEV'S SHIPYARDS PERFORMED BY BDO - IGNATYEV

Ruble Slides to One-Week Low Versus Dollar, Steady Against Euro

Business, Energy or Environmental regulations or discussions Russian Stocks Decline Second Day on Crude, Korea ‘Aggravation’ Russian markets -- Factors to Watch on Nov 23 India Offered Role in Uranium Mining Titanium Orders to Increase - VSMPO-Avisma, the world’s largest producer of

titanium, said Monday that sales may climb between 20 percent and 25 percent next year on orders from Siemens and U.S. specialty-metals producer Allegheny Technologies.

Strong increase in transit goods to Russia via Finland - The estimated value of goods transported through Finland to Russia has a value of almost € 4.5 billion in the third quarter of 2010.

Russian grocer Dixy 10-month sales up 18 pct UTair eyeing Moskva Airlines Russia's GAZ, Daimler to invest 120 mln euros in Mercedes van output in Russia Nissan to purchase 10 per cent of AUTOVAZ shares GAZ to launch assembly of Mercedes LCV Acron sees IFRS earnings plummet 30% in 9M to 4 bln rubles, better than

forecast Skolkovo Fund, Cisco announce Innovation Award Kuzbass Fuel Company swung to net income of 349 million rubles ($11.3

million) in the third quarter from a loss of 275 million rubles in the previous quarter, the coal producer said Monday, while revenue rose 44 percent to 3.93 billion rubles. (Bloomberg)

Ingosstrakh said last week that it plans to follow the lead of American International Group and expand into aircraft leasing in Russia. (Bloomberg)

Polyus Gold billionaire owners Mikhail Prokhorov and Suleiman Kerimov may sell stakes in the gold miner in the second quarter after the shares rose 26 percent this year, Alfa Bank said Monday.  (Bloomberg)

Activity in the Oil and Gas sector (including regulatory) Shipbuilding major looks towards Yamal LNG TNK-BP Plans $3.8Bln Gas Investment

Gazprom GAZPROM WILL PRODUCE 507 BCM OF GAS IN 2010 – SOURCE Russian agreed sale of gas distribution assets to Gazprom Government approves the sale of Rosneftegaz-held stakes in gas distribution

entities to Gazprom Gazprom may become sole operator of Sakhalin-2 project Gazprom May Buy Japanese Stakes in Sakhalin-2, RBC Daily Says KES repays $516mn loan to Gazprom and recovers 11% TGK7 stake EU benefits from Russia partnership – Schroder

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Full Text Articles

Basic Political Developments

Personnel changes in the Armed Forceshttp://kremlin.ru/acts/9588

GOOGLE TRANSLATIONNovember 23, 2010, 10:30Dmitry Medvedev signed a decree on dismissal and dismissal from military service, members of the Armed Forces of the Russian Federation. "Full text of the Decree:1. Dismissed:Gulin Colonel Vladimir G., chief of armored service of the North Caucasian Military District;Colonel Alexander Nikolayevich Ivanov, chief of weapons - the Deputy Commander of Space Forces armament;Mordvins Colonel Anatoly Mikhailovich, head of intelligence - Deputy Chief of Staff of the Leningrad military district for exploration;Ostrin Colonel Nikolai Borisovich, head of the missile and artillery the North Caucasus Military District;Major-General Rukovichnikov Yuri Ivanovich, Chief of the rear - the Deputy Commander Combined Arms Army in 1958 on the rear.2. To dismiss from military service:Vice-Admiral Sergei Viktorovich KuzminRear Admiral Litenkov Aleksandr Sergeyevich. November 23, 2010, 10:30

Moscow concerned over conflict on Korean peninsula

http://www.itar-tass.com/eng/level2.html?NewsID=15706760&PageNum=0

23.11.2010, 12.01

SEOUL, November 23 (Itar-Tass) - Moscow is concerned over a conflict situation on the Korean peninsula, a diplomat from the Russian Foreign Ministry said on Tuesday. North Korea on Tuesday fired dozens of rounds of artillery towards South Korean waters and the island of Yeonpyeong in the Yellow Sea, which prompted South Korea to return fire.

The shelling “cannot but cause concern, all the more against the background of lingering hope for the resumption of six-way talks,” the diplomat stressed.

“The recent news is rather distressing. We expect that it was a local, single incident, which will have no development, and all parties will be able to return to peaceful coexistence,” he emphasized.

The incident took place at 14:34 local time (08:34 Moscow time), Colonel Lee Bung-woo, spokesman for the South Korean Joint Chiefs of Staff, said earlier.

Some North Korean shells exploded directly on the island, he noted. The Republic of Korea returned fire. Reports say four military from the Republic of Korea were injured. The shelling came when a South Korean routine military drill on the western coast was in progress. The South Korean military is on its highest peacetime alert, Lee Bung-woo stressed.

Artillery duel in Korea will hopefully not aggravate tension http://english.ruvr.ru/2010/11/23/35460061.html

Nov 23, 2010 12:18 Moscow TimeThe RIA-Novosti news agency quotes the Russian Foreign Ministry as saying that Moscow hopes that an exchange of artillery fire between South Korea and the Democratic People’s Republic of Korea in the Yellow Sea earlier today will not result in aggravation of tension on the Korean Peninsula. According to reports from Seoul, Yong Pyong-do Island came under artillery fire from North Korea. One South Korean soldier was killed and 13 other received shrapnel wounds. Some 50 buildings caught fire. South Korea returned the fire. Seoul does not rule out that North Korea’s shelling came as Pyongyang’s reaction to the military exercise that South Korea has held in the immediate vicinity of the place.

Korean clash worries China, Russia http://news.smh.com.au/breaking-news-world/korean-clash-worries-china-russia-20101123-185hs.html

November 23, 2010 - 6:59PM

AFP

China has expressed concern over Tuesday's exchange of fire between North and South Korea and urged the two sides to work toward peace and stability on the Korean peninsula.

"We have taken note of the relevant report and we express concern over the situation," China's foreign ministry spokesman Hong Lei told reporters.

"We hope the relevant parties do more to contribute to peace and stability on the Korean peninsula."

China said it was "imperative" that six-nation talks aimed at ending North Korea's atomic ambitions be restarted, after Pyongyang's latest nuclear claims sparked international alarm.

"What's imperative now is to restart six-party talks as soon as possible," foreign ministry spokesman Hong Lei told reporters when asked to comment on North Korea's claims it has an operational uranium enrichment program.

Russia on Tuesday warned against an escalation of tensions on the Korean peninsula, a foreign ministry official told Interfax.

"It's important that this does not lead to an aggravation of the situation on the Korean peninsula," the official, who was not named, told Interfax.

© 2010 AFP

US envoy: to consult with Russia on N. Koreahttp://www.reuters.com/article/idUSTOE6AL03C20101123

7:13pm EST

TOKYO, Nov 23 (Reuters) - The top U.S. envoy on North Korea said on Tuesday that the U.S. would consult with Russia in response to fresh concerns about Pyongyang's uranium enrichment programme.

"We are also reaching out to consult with Russia, and a number of initiatives are underway with Russians," the U.S. Special Representative for North Korea, Stephen Bosworth, told reporters in Tokyo.

The latest flurry over Pyongyang's nuclear ambitions follows comments over the weekend by Siegfried Hecker of Stanford University that he had been shown more than 1,000 centrifuges during a tour of the Yongbyon nuclear complex this month. North Korea said they were operational. [ID:nTOE6AL00E]

Pyongyang's nuclear programme is seen as a threat to U.S. allies Japan and South Korea, and a proliferation risk given North Korea's long history of selling missile technology abroad. (Reporting by Chikafumi Hodo; Editing by Nathan Layne)

China, Russia Sign Accords to Boost Energy Partnershiphttp://www.businessweek.com/news/2010-11-23/china-russia-sign-accords-to-boost-energy-partnership.html

November 23, 2010, 3:18 AM EST

By Bloomberg News

(Adds Rosneft-CNPC accord in ninth paragraph.)

Nov. 23 (Bloomberg) -- China and Russia signed agreements to expand cooperation in oil, gas, coal and nuclear power as economic growth in the Asian country drives energy demand.

Russia will start export supplies of crude to China through a pipeline on Jan. 1, the Ministry of Foreign Affairs in Beijing said in a statement on its website today.

Chinese Premier Wen Jiabao is meeting Russian leaders this week as the countries seek to deepen cooperation in areas including technology, finance and energy. Bilateral trade will likely exceed $50 billion this year, the official Xinhua News Agency reported yesterday.

Wen may seek to bridge a divide in pricing expectations under a gas supply deal. The Chinese premier will hold talks with President Dmitry Medvedev in Moscow today, after meeting with Prime Minister Vladimir Putin in St. Petersburg yesterday.

The gap is about $100 per thousand cubic meter, Gu Jun, deputy director-general of the international department at China’s National Energy Administration, said on Nov. 18.

The mission to Russia follows Medvedev’s visit to China in September during which he and President Hu Jintao launched the cross-border oil pipeline.

Coal imports from Russia may exceed 12 million metric tons this year, the Chinese foreign ministry said, without giving a comparative number.

Rising Trade

China overtook Germany as Russia’s second-largest trading partner in the first six months, helped by exports from Russian commodity producers including United Co. Rusal and OAO GMK Norilsk Nickel.

OAO Rosneft said yesterday it will expand cooperation with China National Petroleum Corp. through an upstream venture in Russia and will consider joint acquisition of assets.

The world’s fastest-growing major economy started allowing the yuan to trade against the Russian ruble from yesterday to help internationalize the Chinese currency.

Regulators have already permitted the yuan to trade in China against the dollar, euro, yen, British pound, Hong Kong dollar and Malaysian ringgit.

--Wang Ying. Editors: Ryan Woo, Torrey Clark.

To contact the reporter on this story: Ying Wang in Beijing at ywang30@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

11:33Rosneft, CNPC mull acquisition of upstream assetshttp://www.interfax.com/news.asp

Russia, China to discuss gas pricing disputehttp://www.google.com/hostednews/afp/article/ALeqM5hGVtKJo6BfnzxG-wLOmn-QXIOtcA?docId=CNG.a36c20fecf84254d28bd7d6b22adfb1e.a31

(AFP) – 1 hour ago

MOSCOW — Russian Prime Minister Vladimir Putin and his Chinese counterpart Wen Jiabao will tackle pricing disputes in gas cooperation when they meet in Saint Petersburg on Tuesday.

"A large package of intergovernmental, interministerial and commercial agreements is being prepared for signing," the Russian government said in a statement, adding the leaders would also discuss joint work in trade, science and ecology.

Putin and Wen, who also briefly met on Monday, are meeting on the heels of President Dmitry Medvedev's three-day visit to China in September during which he and President Hu Jintao launched a cross-border pipeline linking the world's biggest energy producer with the largest energy consumer.

According to the Kremlin, the oil Russia will send to its neighbour from next year over the next 20 years could be worth 150 billion dollars.

Russia's gas giant Gazprom signed a framework agreement with the China National Petroleum Company (CNPC) last year on shipments of natural gas to China.

The deal could see 70 billion cubic metres of Russian natural gas sent to China each year but talks have been bogged down over pricing.

Chinese officials said the differences between the two sides was now 100 dollars for 1,000 cubic metres, expressing hope last week that they could be resolved during Wen's visit to Russia.

Wen and Putin will also attend a 13-state summit that aims to save the tiger and double the big cat's population by 2022.

Energy supplies account for the bulk of Sino-Russian trade but Moscow also wants to secure Beijing's help in modernising the Russian economy and is seeking broader Chinese investments and know-how in various sectors.

Vedomosti business daily reported on Tuesday that after Defense Minister Anatoly Serdyukov's recent visit to China, Beijing submitted requests to buy a range of Russian arms including state-of-the-art S-400 missile defense systems and Il-476 heavy transport planes.

Vyacheslav Davidenko, spokesman for Rosoboronexport arms exporter, declined to either confirm or deny the report.

Putin to hold talks with Chinese State Council Premier Wen Jiabao

http://www.itar-tass.com/eng/level2.html?NewsID=15706301&PageNum=0

23.11.2010, 09.35

ST. PETERSBURG, November 23 (Itar-Tass) - Russian Prime Minister Vladimir Putin on Tuesday will hold talks with Premier of the Chinese State Council Wen Jiabao.

As many as 12 bilateral documents are expected to be signed within talks with the participation of the two countries’ delegations. “The agenda of the 15th meeting of the two countries’ heads of government is rather busy, it includes issues of cooperation in the sphere of energy, including nuclear, cross-border cooperation, cooperation in the field of telecommunications and intellectual property protection, as well as other issues,” press secretary of the Russian government head Dmitry Peskov said.

According to the Chinese Assistant Foreign Minister Cheng Guoping, the sides “will identify priority cooperation spheres at the new stage, as well as will study new approaches to practical cooperation between the two countries.” “Being the largest

neighbouring countries and important strategic partners, China and Russia are also countries with emerging markets,” said Cheng. “The maintenance of friendship from generation to generation, development of mutually beneficial cooperation, strengthening long-term and stable strategic partnership serves the fundamental interests of both nations,” he stated.

Vladimir Putin and Wen Jiabao, who arrived in Russia on an official visit, have already held at a banquet in Strelna on Monday.

According to the China Daily newspaper, Chinese Premier Wen Jiabao and his Russian counterpart Vladimir Putin held talks Monday evening during which they vowed to strengthen bilateral ties. They made the commitment in small-scale talks after Wen arrived in the evening for an official visit to Russia. Wen said that with the organisation of a series of cultural activities including the language year programmes, China-Russia ties have developed to an unprecedentedly high level. This is in line with the fundamental interests of both countries and their peoples, contributes vigorously to world peace and promotes development of both countries, Wen said.

“I hope to inject new vigour into the comprehensive deepening of Sino-Russian strategic partnership of coordination through my visit,” said the Chinese premier.

Putin said that Russia attaches great importance to bilateral ties with China and expressed his satisfaction with the development of these ties.

At present, both economies are facing with precious opportunities of development and therefore cooperation between Russia and China is conducive to rapid development of their economies, said Putin. He expressed the hope that both countries would make concerted efforts to ensure that bilateral cooperation can bear more fruit. The two leaders also exchanged views on promoting cooperation in key sectors.

Russia's Putin, China's Wen to discuss gas priceshttp://in.reuters.com/article/idINLDE6AL0YY20101123

5:31am IST

* Gas prices disagreement likely to be discussed

* Gas price deal key to gas pipeline project to China

By Alissa de Carbonnel

ST PETERSBURG, Russia, Nov 23 (Reuters) - Russian Prime Minister Vladimir Putin will meet his Chinese counterpart Wen Jiabao on Tuesday for talks that are likely to focus on a long-running disagreement over gas pricing.

Russia, the world's biggest energy producer, is eager to increase sales of oil, gas and metals to the world's fastest growing major economy but wrangling over gas prices has delayed the construction of a key gas pipeline to China.

Russia says China should pay prices similar to those Gazprom (GAZP.MM: Quote, Profile, Research) charges European customers, but Beijing wants a discount. The sides were about $100 per 1,000 cubic metres apart, according to Chinese officials last week. [ID:nTOE6AH01I]

"This topic will figure in the negotiations but it is too early to speak of any possible results," Putin's spokesman Dmitry Peskov said.

Peskov said that a total of 11 agreements, ranging from oil supplies and refining to intellectual property and border issues would be signed during Wen's visit to Russia.

Putin, Russia's paramount leader, has called for boosting sales of natural resources -- Russia's main exports -- to China, whose gas consumption is forecast to soar over the next decade.

But at the talks, Putin will have to grapple with China's drive to secure gas supplies from Central Asian producers such as Turkmenistan and Uzbekistan and the implications of shale gas for expensive pipeline projects.

At stake is access for Russian companies including Gazprom and Rosneft (ROSN.MM: Quote, Profile, Research) to China's booming economy, which the International Energy Agency says is the world's biggest single consumer of energy.

Russia is due to start exporting crude oil to China next year via the new East Siberian-Pacific Ocean pipeline, but there is still no Russian gas pipeline to China.

FEEDING THE DRAGON?

Gazprom signed a preliminary agreement to build a major gas pipeline -- known as the Altai gas pipeline -- from Siberia to China's Western border with Russia in 2006, but the price has been under discussion ever since.

Under a deal signed between Gazprom and China National Petroleum Corp <CNPC) on Sept 27, Gazprom will sell 30 billion cubic metres (bcm) of gas per year to China from 2015 via this route, though the price has still not been agreed.

Deputy Prime Minister Igor Sechin, who holds sway over Russia's energy sector, said in September that commercial contracts could be signed by the middle of 2011. [ID:nTOE68Q05J] (Additional reporting by Darya Korsunskaya and Katya Golubkova in Moscow; writing by Guy Faulconbridge, editing by William Hardy)

Russia, China to Settle Trade in Ruble and Yuan, Kommersant Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aNvDY2qM5.WA

By Emma O’Brien

Nov. 23 (Bloomberg) -- Russian Prime Minister Vladimir Putin and Chinese Premier Wen Jiabao will amend an existing agreement to allow trade between the two countries to be calculated and settled in yuan and ruble, Kommersant reported. The amendment will be signed when the two leaders meet this week in St. Petersburg, the newspaper reported, citing Bank Rossii Deputy Chairman Viktor Melnikov.

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

Last Updated: November 23, 2010 00:59 EST

Rouble launches in China as emerging economy giants club together to snub dollar

http://www.bne.eu/dispatch_text13704

bneNovember 23, 2010

The rouble began trading in China on Monday in a move reflecting both expanding bilateral trade between the pair and the increasing calls from both Moscow and Bejing to replace the US dollar with local currencies in regional trade relations.

The China Foreign Currency Trading Center announced that the interbank yuan-ruble trade will be conducted in the form of spot exchange transactions and will follow the market maker rule.

The pair will be allowed to float 5% above or below the middle rate; wider than the 3% trading band currently in place for yuan trading against most other currencies, and significantly so against the 0.5% leeway given dollar trade. The wider band for yuan/rouble reflects the greater volatility of currencies of emerging economies, CFETS claimed.

The rouble is the seventh currency traded against the yuan and the second from an emerging economy, after trading in the Malaysia's currency began in August; the ringgit joined the U.S. dollar, Hong Kong dollar, yen, euro and sterling.

The step is part of Beijing's efforts to expand the use of the yuan for trade and even investment purposes, as a way of reducing reliance on the dollar and thereby simplifying the settlement of trade, writes Reuters. For its part, Moscow has practically the same aim,

only replacing the yuan with the rouble as the currency of choice, as it hopes to raise its profile.

Both countries are unhappy that their export-led economies are so exposed to fluctuations in the US currency, a complaint only emphasized by the latest round of quantative easing from the Fed. For its part, Washington's complaints against the yuan's trading level has led the recent currency war, whilst reports claim that the CBR is surreptitiously suppressing the rouble whilst talking up its neutrality. China is also the biggest holder of US Treasuries.

Speaking at a press conference on Monday, the superintendent of China's Foreign Currency Trading Center said that China's currency trade with other emerging economies is a "necessary experience" and believes the yuan-ruble trade will strongly bolster bilateral trade and investment between China and Russia, reports China Briefing. He also mentioned that China will consider opening up the yuan-ruble forward exchange or swap transaction depending on market demand.

"China is now vigorously promoting the yuan's use in the region and in the world partly because it is unhappy with the dollar's performance since the latest global financial crisis," a dealer at a major European bank in Shanghai told Reuters. "To achieve that goal, it needs to allow more currencies to trade against the yuan at the CFETS, with the won likely to be the next to be introduced."

Increasing the number of currencies traded against the yuan will gradually help reduce the dollar's weight in the yuan's nominal real exchange rate (NEER), or the currency's value against a trade-weighted basket, traders said.

Among other steps to regionalise and internationalise the yuan, China has launched a programme to use the yuan for settlement in exports and imports, and allowed the development of a nascent offshore yuan market in Hong Kong.

Beijing last month also started a pilot programme for allowing some inbound and outbound foreign direct investment in the far western region of Xinjiang to be settled in yuan.

The plan to initiate direct currency trading was announced in April by the Russian Central Bank. At the time, the Russian side expected to begin operations first, in light of its experience with other nonconvertible currencies such as the Kazakh tenge and Belarussian ruble, reports The Moscow Times. However, now the start of yuan trading on MICEX has been rescheduled for the middle of December, Gao Yang, vice president of the Bank of China (Eluosi) in Moscow.

"Volume will not be large at first, but we expect it to grow steadily," Gao said. "Both Chinese and Russian entrepreneurs will have greater opportunities and will reduce the costs and risks associated with currency exchange."

Russia's Putin, China's Wen To Discuss Range Of Issues http://www.rferl.org/content/russiasPutinChinasWenToDiscussRangeOfIssues/2227550.html

November 23, 2010 Russian Prime Minister Vladimir Putin sits down for talks with his Chinese counterpart Wen Jiabao today in the northern Russian city of St. Petersburg. 

Russian officials say 11 agreements, ranging from oil supplies to border issues will be signed during Wen's visit to Russia. 

China is looking for a cheaper price for Russian gas, with the two sides reportedly apart by about $100 per cubic meters. 

Putin has called for boosting sales of natural resources to China, the world's fastest growing major economy.

Next year, Russia is due to begin shipping oil to China via the new Eastern Siberia-Pacific Ocean pipeline, but there is still no Russian gas pipeline to China.

Gazprom signed a preliminary agreement to build a gas pipeline -- known as the Altai gas pipeline -- from Siberia to China's western border with Russia in 2006.

The project, however, has been held up by differences over cost. 

compiled from agency reports

23.11.2010

China, Russia Reach Consensus on Energy Cooperationhttp://www.oilandgaseurasia.com/news/p/0/news/9611

Visiting Chinese Vice-Premier Wang Qishan met with his Russian counterpart Igor Sechin in St. Petersburg on Monday, exchanging views on Sino-Russian bilateral energy cooperation and reaching consensus on further development.

Wang spoke highly of bilateral energy cooperation between the two countries, saying it has witnessed a development of all-round, wide-range and deep-level since the establishment of Sino-Russian energy negotiation mechanism.

He said the mechanism upgraded the level of bilateral practical cooperation with rich fruits, including the completion of Sino- Russian pipeline which is expected to be put into

operation by the end of 2010, the foundation-laying of China-Russia Eastern Petrochemical (Tianjin) Oil Refinery and the completion of the negotiation on extension of Tianwan nuclear plant.

Cooperation in electricity and natural gas was also promoted, Was said, adding that coal export from Russia to China is expected to exceed 12 million tons in 2010.

Wang said Sino-Russian energy cooperation with significant strategic nature has been maintaining momentum, stressing that China is willing to jointly endeavor with Russia to promoted bilateral energy cooperation by the mechanism.

China, by the principle of market-oriented and mutual benefits, is ready to further strengthen Sino-Russian strategic partnership of coordination and boost bilateral cooperation in oil, natural gas, nuclear power, electricity, new energy and other fields, Wang said.

Sechin attached great importance of bilateral energy cooperation between the two countries, saying it plays an important role in the development of Sino-Russian strategic partnership of coordination.

He said both countries are effectively carrying out interlocal outlines issued before and being paid back rich fruits, including the completion of Sino-Russian oil pipeline which is seen as a landmark of Sino-Russian friendly cooperation.Russia will work together with China to comprehensively boost bilateral cooperation in the fields of natural gas, nuclear power, coal, electricity, new energy and other fields, he said.

After the meeting, Wang and Sechin also attended signing ceremony of several energy cooperation documents.

At the invitation of Deputy Prime Ministers Alexander Zhukov and Igor Sechin, Wang arrived in St. Petersburg on Nov 21, kicking off his visit to Russia.

Copyright 2010, Xinhua. All rights reserved.

New Power Bridge across Russia-China Border Completed http://english.cri.cn/6909/2010/11/23/2722s606571.htm

    2010-11-23 15:36:08     Xinhua      Web Editor: haodi

The construction of a new power bridge across the Russian-Chinese border, through which electric energy would be exported to China, had been completed, local media reported recently.

With the completion of the bridge, the Eastern Energy Company has finished preparations for construction of new 500-kilovolt(KV) power lines from Amurskaya Substation to Khabarovskaya Combined Cycle Station, a steam and gas station, with a capacity of between 400MW and 500 MW.

Eastern Energy Company plans to construct new generation facilities with total capacity of 10,800 MW as well as AC and DC power transmission spanning more than 3,000 kms.

The new power line construction will make it possible to export to China up to 4-5 billion kwh per year, which will cut power prices for Far East consumers.

EU, Russia seek 'common language' on energyhttp://www.euractiv.com/en/energy/eu-russia-seek-common-language-energy-news-499909

Published: 23 November 2010

Officials from Russia and the European Commission yesterday (22 November) marked the 10-year anniversary of EU-Russia energy dialogue and devised ways to overcome the present "lack of trust," as Russian Energy Minister Sergei Shmatko described the state of relations.

Speaking in Brussels at a high-profile event gathering many representatives of major European energy companies and federations, Shmatko called for "equal treatment" by the European Commission of all planned gas pipeline projects.

In particular, Russia would like the Gazprom-sponsored South Stream gas pipeline to receive the same level of EU support as Nabucco, a pipeline project designed to bring gas to Europe from sources other than Russia.

Shmatko stated that the EU was conducting an "excessive" policy of diversifying its gas supply sources, which in his words would result in higher prices for European consumers. Conveying the message that Moscow could lose patience with Brussels, he said that his country was eager to "diversify" its own gas sales and was taking a growing interest in Asian markets.

However, he added that he still hoped a balance could be found in relations with the EU, "between freedom of choice and cost efficiency".

Overcoming hostility

In the gas sphere, there is a backlog of problems, but also a need to learn to listen to each other and to speak the same language, Shmatko said, speaking in Russian.

Russian diplomats have been publicly complaining of negative stereotypes in Brussels, where Moscow is largely seen as willing to use energy as a political tool vis-à-vis individual EU countries.

At a public event on EU energy policies held recently, a diplomat from the Russian Permanent Representation to the EU said he had counted the word 'Russia' being mentioned two dozen times by different speakers, most of the time in a negative context.

Shmatko said he had proposed to Energy Commissioner Günther Oettinger that Moscow and Brussels should establish a joint body to help alleviate this negative bias.

He described the project as a permanent platform between governments, involving corporate businesses, which would deal with gas statistics, analytical studies and drawing up common recommendations on energy policy.

Asked by EurActiv to elaborate, Shmatko said he saw this in the form of a joint centre in which experts from both sides would help better prepare political dialogue and contacts at different levels. He said he had already received Oettinger's positive reaction to the initiative.

Shmatko also spoke of the need for a "media strategy" in the field of EU-Russia relations, "so that the European and Russian public could be better informed". However, he did not elaborate.

'Ups and downs'

"We have ups and downs in our relations," Oettinger recognised, speaking after Shmatko. He said the EU and Russia had "different interests which cannot always be brought to a common denominator".

However, this should not be seen as an obstacle to forging a close partnership and cooperating, the commissioner added.

Oettinger confirmed that next February, under the Hungarian EU Presidency, EU heads of state and government will hold a special summit on energy, at which the external dimension of EU energy policy would be an obvious topic.

The Russian Federation is the EU's most important energy partner, Oettinger said. He specified that the bloc sourced 30% of its gas imports from Russia, 27% of its crude imports and 24% of its coal imports. A large proportion of the uranium in the EU is imported from Russia, he added.

Similarly, the EU is Russia's largest trading partner. 47% of all Russia's trade imports come from the EU and about 75% of foreign investment in the country comes from European investors, Oettinger said.

'No alternative' to Russia

"The EU's domestic gas resources are depleting and Brussels expects an increase of gas imports until 2030. There is no alternative to further strengthening relations and thinking jointly about strategies for next decades," Oettinger said.

The commissioner further argued that the EU, which was putting together a common understanding of an energy roadmap for Europe until 2050, needed better information about Moscow's strategies.

"For the EU, it is important to know what Russia's production capacities for oil and gas for the next decades will be. Will the investment climate be attractive to European investors?" Oettinger asked, speaking in English.

The commissioner was rather categorical in stating that the present legal basis of EU-Russia relations, a Partnership and Cooperation Agreement signed in 1994, no longer meets the needs of the current level of relations, especially in the energy sector.

"We should therefore include into the new agreement which is currently being negotiated between the Russian Federation and the EU a strong and comprehensive energy chapter, which goes beyond the provisions of the current agreement. A first step would be the accession of the Russian Federation to the World Trade Organisation, which will become a reality very soon," Oettinger said.

The recently agreed EU-Russia Partnership for Modernisation will be a framework to promote concrete energy projects between the EU and the Russian Federation, Oettinger said.  

The Partnership for Modernisation is a shared agenda which the EU hopes will bring about reform in the fields of the economy and society in Russia, with due respect for democracy and the rule of law. Its priority areas include for instance the alignment of technical standards, the promotion of a sustainable low-carbon economy and dialogue with civil society.

Oettinger also welcomed the early warning mechanism established in early 2009 to avoid disruptions of gas supplies, like the one in January 2009 over a payment dispute between Moscow and Kyiv. He said the mechanism had proved to be helpful in June this year, when Belarus stopped gas flows to Lithuania, Poland and Germany following a payment dispute with Russia.

Pipeline unbundling

The energy commissioner also hailed the first steps towards introducing transparent and market-based relations between producers, transit countries and consumers, citing the recent 'legitimisation' of a Polish-Russian gas treaty as a step in the right direction.

Oettinger also named a more recent request by the Commission for Bulgaria to change a 2008 bilateral agreement with Russia on building the Bulgarian section of South Stream as an example of the policy the EU executive was determined to follow.

"New pipelines are welcome. We are ready to combine our different interests – the investment decision for pipelines with the Third Energy Package of the internal market, meaning competition and unbundling," Oettinger said.

Asked if the EU would give South Stream the priority project status under the Trans European Networks initiative, he said:

"South Stream is a project of major importance, maybe 65 bcm [billion cubic metres of annual capacity when fully operational] and we are in a moderation of this project. My interest is not to block it, but to combine it with European regulation. Today South Stream is maybe in competition with Nabucco, but in the long term, maybe we need both," he said.

Positions

Malcolm Brinded, executive director for exploration and production at Shell, said energy demands were expected to grow by 20% by 2030 globally and to double by 2050.

"Hydrocarbons will remain the most important source of that energy throughout the first half of that century. All that opens new opportunities for Russia and in Russia. Gas, which is central to EU-Russia relations, is also central to moving to a low-carbon economy while maintaining competitiveness," he said.

He also advocated the development of liquefied natural gas (LNG).

"By 2020 LNG can fit one fifth of the world's gas needs. LNG can be thought of as the ultimate pipeline, as it can come from almost anywhere and go almost anywhere."

"In terms of the cost of power generation, gas is one, coal is two to three, nuclear is five, onshore wind is from seven to ten, and offshore wind is ten to fifteen," he said.

Brinded also described gas as a climate-friendly energy source.

"For most EU countries, it will be impossible to meet the 20/20/20 emission targets without prioritising gas as an energy source. Natural gas replacing coal is the surest, fastest and cheapest way of reducing CO2 emissions over the next ten years," he said.

Alexander Medvedev, deputy CEO of Gazprom and CEO of Gazprom Export, made ironic comments with regard to the Commission's attitude toward Russian gas.

"I wonder why the organisers of the 10-year celebration have not organised a gala ball, so that natural gas could appear dressed as Cinderella," he said, speaking in English.

"Why Cinderella? In spite of being the most attractive lady both sexually and economically, the European Commission is trying to find out who Cinderella is using a shoe of the size 45," Medvedev said, amid laughter from the audience.

Medvedev also hailed gas as a climate-friendly energy source. He said that increasing the natural gas share in the EU by 1% would reduce CO2 emissions by 3%.

"The annual capacity of South Stream together with Nord Stream delivers enough energy in Europe to shelve the construction of around 50 nuclear power plants, it allows for cancelling the deliveries of 121 tankers per year, or taking down 100 coal electricity power plants […] I think in this distinguished audience this figure is impressive enough to decide if preference should be given to natural gas," Medvedev said.

Valerij A., Jazev, deputy chairman of the State Duma (the lower house of Russia's parliament) and president of the Russian Gas Society, called for South Stream to receive EU priority status.

"Otherwise we have a paradox: Nord Stream has it, Nabucco has it, and South Stream for some obscure reason is discriminated against," he said, speaking in Russian.

Jazev also criticised technology transfer myths, according to which Russia needed Western technology. Russia is much more advanced than the West in developing nuclear energy, he argued.

Jazev also advised against too much dependency on wind energy, where rare earths are a key resource. China is responsible for 95% of global rare earth production and about 60% of consumption currently originates from there, according to the US Geological Survey, a federal agency.

"Don't fool people about renewable energy. For the production of one wind generator, of 1.5 megawatts, there is a need for 350kg of rare earths, of which there is a huge deficit in the world," Jazev said.

He also downplayed the importance of his country's relations with Europe in a global context.

"All the decisions in Europe will be taken in relation to what turn Asia will take. Oettinger speaks of Europeanisation of energy, but this takes place against a background of global Asiatisation of energy," Jazev said.

The deputy chair of the Duma also criticised the EU's policy of unbudling gas transportation systems.

"The Third Energy Package, in our perspective, will slow down investment in gas transport infrastructure, because it would result in lowering the interest of investors and will decrease its profitability," Jazev said.

He also spoke out against the EU's Energy Charter and advocated its replacement by the concept for international energy security proposed by Russian President Dmitry Medvedev. In April 2009 in Helsinki, Medvedev proposed new rules on global energy cooperation to replace the 1991 Energy Charter.

Joint collegium of Russian, Belarusian FMs held in Minsk

http://www.itar-tass.com/eng/level2.html?NewsID=15706815&PageNum=0

23.11.2010, 12.16

MINSK, November 23 (Itar-Tass) - Present-day challenges and threats only strengthen cooperation of the Russian and Belarusian foreign ministries, Belarusian Foreign Minister Sergei Martynov said at a joint meeting of the collegiums of the two ministries, which opened here on Tuesday.

“The challenges only intensify our cooperation and by no means weaken it,” he said.

According to Martynov, the main task of the Tuesday meeting is to analyse the fulfilment of the programme of joint actions of Belarus and Russia in the sphere of foreign policy. Senior officials of the two foreign ministries will establish whether or not there are “bottlenecks” in the process and in what way they could be overcome.

Commenting on cooperation with the European Union, Martynov said it was very important for EU and the Customs Union “not to drift apart in the development process, and to maintain economic cooperation on some stage of their development.”

Martynov expressed heartfelt gratitude to Russia for the support it gave to the efforts of the Belarusian officials in many directions of foreign policy, specifically measures to eradicate trade in humans and the establishment of closer relations with the EU member countries.

Russian Foreign Minister Sergei Lavrov said, in his turn, that the integration processes taking place on the Euro Atlantic territory, including the CIS territory, were acquiring special importance today. He added that some new phenomena should be carefully analysed, and coordinated approaches to them should be worked out. “We appreciate the

opportunity to coordinate our efforts with Belarus on the work of the integration structures and preparations for the summit meetings of CIS, CSTO, EurAsEC and the Supreme Authority of the Customs Union, which are planned to be held early in December,” Lavrov said.

Russian, Belarusian foreign ministries to hold joint session in Minsk

http://en.rian.ru/world/20101123/161452125.html

02:08 23/11/2010

Russian Foreign Minister Sergei Lavrov will attend on Tuesday a joint session of top Russian and Belarusian diplomatic bodies in Minsk.

"The session is intended to focus on a number of issues aimed at the further integration of processes on the post-Soviet area, primarily in the format of the Customs Union of Belarus, Kazakhstan and Russia. Other issues of mutual interest will be also discussed," the Russian Foreign Ministry said.

The Customs Union between the three ex-Soviet neighbors became fully operational in early July, when the countries ratified the Customs Code. The states plan to scrap their customs borders on July 1, 2011.

Lavrov, who arrived in Minsk on Monday night, is also scheduled to hold a bilateral meeting with his Belarusian counterpart Sergei Martynov and attend an opening of the Russian Science and Culture Center in the capital of Belarus.

Relations between Moscow and Minsk have been strained over several economic and political disputes, including gas transits, and Belarusian President Alexander Lukashenko's failure to honor his promise to recognize the former Georgian republics of Abkhazia and South Ossetia.

MINSK, November 23 (RIA Novosti)

10:56Lavrov told by Medvedev not to meet Lukashenko - Kremlin source

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

Lukashenko refuses to meet with Lavrovhttp://www.aysor.am/en/news/2010/11/23/lukashenko-lavrov/

Russian Foreign Minister Sergey Lavrov arrived in Belarus Monday evening. Officially, Lavrov is due to attend a joint session of Russian and Belarusian Foreign Ministries. However, experts suppose Lavrov’s visit comes as “Moscow’s last warning” to Alexander Lukashenko who is “delighted with the contacts with EU.” According to Kommersant, Lukashenko refused to meet with Lavrov.

“Belarusian President’s decision to ignore Lavrov’s visit is a demonstrative gesture since earlier, Lukashenko used to meet even with Russian governors visiting Minsk,” newspaper said.  

TODAY, 11:35

Aysor.am

Lukashenko has refused to meet with Lavrov

http://www.rosbalt.ru/2010/11/23/792612.html

GOOGLE TRANSLATIONMINSK, November 23. Belarus president refused to meet with Russian Foreign Minister Sergei Lavrov, who is on visit in Minsk. In this case, according to Kommersant, the experts believe this visit "last warning to Moscow, Alexander Lukashenko, who" dwells in Courage from the contacts with the EU. "The fact that Lukashenko has no plans to meet with the Russian minister, told reporters spokesman for the Belarusian president Paul Light. Decision of the Belarusian president's visit to ignore the Russian foreign ministry - clearly demonstrative gesture, as previously Lukashenko has always met even arrived in Minsk Russian governors. It is worth noting that Lavrov even before his arrival in Minsk said that, unlike their Western counterparts, he will not meet with the leaders of the Belarusian opposition.Recall, European ministers promised to Minsk financial assistance of $ 3 billion, if Presidential elections will be conducted honestly. And the President of Lithuania stated that the continued reign of Mr Lukashenko's Belarus is a guarantee of stability, and the fact that the country "will not turn in Russia."According to experts, if Minsk continue anti-Russian escapade, then next year will face a very real trade war with Russia.

November 23, 2010 12:27

Ban on high-ranking Russian officials meeting certain Belarus colleagues shows 'Kremlin weakness' – sourcehttp://www.interfax.com/newsinf.asp?id=203894

MINSK. Nov 23 (Interfax) - The Belarusian administration is aware of the ban imposed on some Russian ministers and governors on contacts with their Belarusian colleagues and other officials, a source close to Belarusian President Alexander Lukashenko told Interfax.

This decision was made "because the thoughts considered by the Kremlin to be 'bad' are solidly taken in by Russian ministers and governing after meetings with their Belarusian partners and they begin to understand and support the Belarusian administration's policies," the source said.

"Clearly, the Russian president can't like that," the source said, adding that the "ban on communication with the 'junior ally' is a clear sign of the Russian administration's weakness."

Belarus on the Way of Russian Oil Exports to EU, "Transneft" http://telegraf.by/2010/11/belarus-on-the-way-of-russian-oil-exports-to-eu-transneft.html

The Russian company "Transneft" has warned about the possible failure of oil supplies from Russia to Europe due to the use of Belarusian Odessa-Brody pipeline in the direct mode. "Russian oil deliveries to Czech Republic, Hungary, Slovakia, Croatia and southern Germany can also be affected," the representative of "Transneft" Igor Demin said.

"Our observer at "Mihalki" oil pumping station in Belarus has confirmed that there are no technical failures, related to the obverse mode. However, we are concerned about the pipeline, running on the absolute limit towards our customers. We intend to inform our consumers in Western Europe, as well as the transit countries, with official letters," he said, RIA "Novosti" news agency.

In this regard, "Transneft" does not exclude the interrupting of oil exports to Europe or the inability to increase their volume when needed.

According to Telegraf, Odessa-Brody pipeline started to operate in direct mode on November 20. This is a trial pumping of about 80 tons of Venezuelan oil by pipeline through Ukraine. As of the data of November 22, Mazyr already received about 45 thousand tons of oil.

Georgia to Make an Overture to Russiahttp://www.nytimes.com/2010/11/23/world/europe/23georgia.html

By REUTERS

Published: November 22, 2010

PARIS (Reuters) — President Mikheil Saakashvili of Georgia said Monday that his government planned to renounce the unilateral use of force and to invite Russia to begin talks.

Mr. Saakashvili told the French newspaper Le Figaro that he would make the offer in a speech to the European Parliament in Strasbourg on Tuesday. He said he would “make a pledge to not use force.”

“This is a controversial initiative because every country, when it is occupied, has the right and even the obligation to fight, including by military means, to defend its sovereignty,” he said in the interview, which was published on the newspaper’s Web site. “But I see things differently.”

He added: “Georgia must become a modern, European country. We cannot end up like Afghanistan.”

Georgia and Russia fought a brief war in 2008 that resulted in the regions of Abkhazia and South Ossetia breaking away from Georgia. Russia recognizes both regions as independent, although most nations do not. Tension between Russia and Georgia has run high since the war.

Saakashvili to renounce use of force, invite Russia to talkshttp://en.rian.ru/world/20101123/161455307.html

10:05 23/11/2010

Georgian President Mikheil Saakashvili has said he will make a unilateral "pledge not to use force" over South Ossetia and Abkhazia and invite Russia to talks without preconditions.

In an interview with France's Figaro published on Tuesday, he also said he would make the announcements during his speech to the European Parliament in Strasbourg later in the day.

"We tried everything to speak directly with the Russians. Every time we invited them to begin a dialogue, they refused in quite a rude manner. I have no choice but to turn to the moral authority of the European Parliament to make this unilateral declaration not to use force," the Georgian leader said.

"This is a controversial initiative, because every country, when occupied, has the right and even the obligation to fight for its sovereignty, including by military means. But I see

things differently," Saakashvili said. "Georgia should become a European country, a modern country. We can not end up like Afghanistan or Chechnya."

He also said that Russia and Georgia, who broke off diplomatic ties after the 2008 five-day war over South Ossetia, should begin talks without any preconditions.

"We should start talking to each other," the Georgian leader said. "The situation [in Abkhazia and South Ossetia] is illegal from the point of view of international law, both in legal terms and at the local level. I don't think this is in Moscow's interests."

He described the situation in its former republics as "unbearable," with almost 500,000 people displaced, "20% of our territory occupied and two thirds of our coastline lost."

Georgia and Russia fought a brief war in South Ossetia in August 2008 after Georgian forces attacked the republic in a bid to bring it back under central control. Russia recognized South Ossetia and Abkhazia as independent states shortly after the end of the fighting.

MOSCOW, November 23 (RIA Novosti)

Russian sailors recuperate in Lagoshttp://english.ruvr.ru/2010/11/23/35446944.html

Nov 23, 2010 09:53 Moscow Time

A cook from Russia’s tanker NS Spirit who was wounded during an armed attack off Nigeria has been operated on and is in stable condition in a hospital in Lagos. 

The ship’s captain and two crewmembers who were also injured in the attack have also received medical attention.  Ten armed people attacked the tanker on Sunday night and opened fire from automatic rifles wounding several crewmembers and forcing others to hide.

Soon after the attack the pirates left the tanker and no further attack attempts had been taken, local officials said.  

Medvedev to hold State Council presidium meeting on utilities

http://www.itar-tass.com/eng/level2.html?NewsID=15706309&PageNum=0

23.11.2010, 09.15

MOSCOW, November 23 (Itar-Tass) - Russian President Dmitry Medvedev will hold in Syktyvkar (Komi republic) on Tuesday a visiting meeting of the presidium of the State Council on the problems of housing and communal services. The head of state announced this on Monday answering citizens’ requests at the presidential reception office.

“We understand how important it is to reform the housing and public utilities sector and to make its operation effective. So on Tuesday we will consider this issue at the presidium of the State Council of Russia,” said Medvedev.

The president noted that the housing and public utilities issues are within the competence of regional and municipal authorities that have to deal with them on a permanent basis. “But I specially draw attention to it today so that all colleagues who are engaged in this sphere in regional bodies of authority and local self-government bodies, gave this work a priority. If I spend my time on it, then you should even more do it,” the RF head of state stressed.

Medvedev is permanently aware of the housing and communal services issues. Last month he held a meeting in the Kremlin on the development of the local self-government system, which also raised questions of the housing and public utilities sphere. The president signed on the results of this meeting a list of instructions, which, among others, deal with improving the quality of housing and communal services for the population. In particular, the Russian government was charged with the task to develop the legal mechanisms designed to ensure responsibility of management organisations, homeowners associations, housing, housing-construction cooperatives or other specialised organisations for the proper fulfilment of their obligations, as well as the exercise of control over their activities on management of apartment houses. The same applies to the procedures linked with establishing the rights and responsibilities of homeowners in the sphere of public services and amenities. This includes both the maintenance of the common property in an apartment building and the house site improvement. It is also proposed to expand the list of administrative offences in the improvement spheres, specify the list of performance indicators for local self-government bodies.

The Russian president charged the government with submitting proposals on reducing the time after which the public utility services provision could be stopped in case of failure to pay for them, with developing a unified electronic form of technical documentation for apartment buildings. The Cabinet of Ministers is invited to make suggestions for improvement of Russian legislation in respect of “empowering the heads of municipalities in cases of extreme necessity to take measures aimed at preventing and eliminating emergency situations, saving lives and health of citizens, protection of property.” The president also recommended to work out the legal mechanisms that will prevent abuses of this right.

Each of the president’s instructions on issues of local self-government and improvement of legislation in the housing and public utilities sector has specific deadlines - from December 201 to December 2011.

In addition, in October Medvedev also held a meeting with his plenipotentiary representatives in the federal districts, on the results of which he also approved a list of instructions. In particular, according to the instructions, the plenipotentiary representatives and the Russian Federal Financial Monitoring Service are to check before April 1, 2011 the effectiveness of the use by the housing and public utilities organisations of financial resources earmarked for the modernisation and development of this sphere.

Over 5,500 tons of drugs seized during operation Mak in RF

http://www.itar-tass.com/eng/level2.html?NewsID=15706794&PageNum=0

23.11.2010, 12.07

MOSCOW, November 23 (Itar-Tass) - - More than 11,000 tonnes of drug containing plants, as well as over 5,500 tonnes of drugs and psychotropic substances have been seized during the anti-drug operation Mak, ITAR-TASS learnt at the press service of the Criminal Investigation Department of the Russian Interior Ministry on Tuesday.

According to the press service, “the operation was aimed to find and destroy illegal drug containing crops and wild drug containing plants.” Some 55,000 policemen took part in the operation.”

"During the operation, personal plots of citizens, as well as land plots of different enterprises and organizations were inspected," a representative of the press service said. "A total of 2,290 facts of illegal crops, including some 700 facts of opium poppy and 1,500 facts of hemp, were registered. Criminal proceedings were instituted against more than 28,000 people, over 42,000 people were administratively punished."

Besides, in the cause of the operation, 2,822 orders were issued with regard to leaders of organizations, enterprises, as well as land owners and land users on the territory of which nidi of drug crops were found. Administrative protocols were issued with regard to almost 1,500 people.

Thus during the operation Mak-2010, operatives of the Altai Territory detained 34 people involved in gathering hemp, 32 criminal proceedings were instituted over the facts of illegal keeping, transportation and gathering of drug containing plants. More than 18 kilograms of dugs of vegetable origin, mainly marihuana, were confiscated.

Effective work was also carried out in the Krasnodar Territory. A total of 124 nidi of wild hemp on an area of 436 hectares were found and over 11 kilograms of drugs of vegetable origin were seized there. Criminal proceedings were instituted against 94 residents of the territory for illegal drug trafficking.

During the operation, 137 drug addicts were registered and the activity of two drug dens was stopped.

Trial of ‘black lumbermen’ starts in Primorsky reg

http://www.itar-tass.com/eng/level2.html?NewsID=15706872

23.11.2010, 12.29

VLADIVOSTOK, November 23 (Itar-Tass) - The trial of “black lumbermen” who caused losses of 56.5 million roubles for the state has started in the Primorsky Territory. There are 14 members of a criminal group on the dock; each of them faces imprisonment for a term of 3 to 15 years and a fine of up to 1 million roubles. The whole excellent quality wood illegally cut by them was exported to China.

According to the press service of the Russian Interior Ministry’s main department for the Far Eastern Federal District, three officially not employed residents of the Krasnoarmeisky district of the Primorsky Territory, born in 1957, 1959 and 1964, headed the criminal group. At different times they simultaneously supervised the work of three to eight poaching brigades that had at their disposal three tractors, three timber carriers and a jeep. During the investigation all the equipment was seized and arrested. The “black lumbermen’s” property worth over 11 million roubles has also been arrested.

The criminal community developed a system of secrecy that allowed its participants to evade responsibility for a long time. Starting another lumbering operation the leaders of the “black lumbermen” gang surrounded the place of work by a network of observation posts with radio stations. The loggers were dispersing in the taiga with the first alarm signal. Fighters of special police task force trained in reconnaissance operations and with skills of covert actions in the taiga conditions had to be used for tracking down the criminal group. All the operatives, special task force fighters and investigators were working in life-threatening conditions, as the majority of the criminal group members were armed and engaged in hunting during intervals between loggings. All these weapons could be used against police officers any time.

Over the first 10 months of 2010, the interior bodies of the Far Eastern Federal District have exposed 556 crimes in the forest industry, and 295 “black lumbermen” have been brought to criminal responsibility. The total damage inflicted by their actions on the forest fund and the state has amounted to more than 224.5 million roubles.

European Rights Court Agrees To Hear Russian Policeman's Case http://www.rferl.org/content/article/2227789.html

November 23, 2010 The European Court of Human Rights in France has agreed to hear a case filed by a whistle-blowing policeman in Russia, RFE/RL's Russian Service reports.

Aleksei Mumolin was sacked from the Tolyatti city police force one year ago, shortly after he put a video online addressed to Interior Minister Rashid Nurgaliev. In the video, Mumolin described the Tolyatti police force as being corrupt.

Mumolin told RFE/RL that being fired for putting a video on the Internet is against international conventions on human rights.

He added that all his complaints regarding his sacking for his critical stance about the police in Tolyatti have been rejected by courts in Tolyatti and Samara Oblast.

Mumolin said that is the reason he took his case to the European Court of Human Rights.

He said that in order for ordinary Russians to trust the police, the law enforcement system has to change.

No religious inequality in Russiahttp://english.ruvr.ru/2010/11/23/35441718.html

Nov 23, 2010 00:37 Moscow Time

Moscow calls reproaches concerning religious inequality in Russia groundless.

Earlier in its report the US Department of State praised the recent improvement in religious freedom in Russia, but also reminded of everlasting complaints concerning a privileged position of Russian Orthodox Church.

In its turn Moscow suggested paying attention to a central role of Catholic Church in Italy, Islam in Turkey and Buddhism in India.The leading position of the Orthodox congregation is defined by the number of followers.

Moscow rejects U.S. allegations about religious inequalityhttp://www.interfax-religion.com/?act=news&div=7941

Moscow, November 23, Interfax - Russia's Foreign Ministry rejected allegations by the U.S. State Department that there exists inequality between religious communities representing different faiths in Russia.

The State Department made its allegations in the 2010 Report on International Religious

Freedom.

"The authors of the State Department report were unable to ignore positive trends in our country relating to religious freedoms," the ministry spokesman said in a statement.

However, "the American experts tried to dilute this impression by listing hackneyed complaints about the 'persecution' of totalitarian religious sects and the allegedly privileged status of the Russian Orthodox Church," he said.

If the Orthodox Church enjoys a privileged status in Russia, "one should speak about the same status of the Catholic Church in Italy or Poland, the Muslim [community] in Turkey or Jordan, or the Buddhist [community] in India or Japan," the spokesman said.

"The crux of the matter is apparently not privileges but social status. Such status above all depends on what proportion of the population wants to join a specific church. The Orthodox Church in Russia has traditionally commanded the largest flock, and the State Department report mentions it, by the way," he said.

"The Muslim denomination is second in our country in terms of the number of believers, etc.," the spokesman said.

"Consequently, different denominations and religions may have different representation in civil society institutions. But that is a human factor," he said.

"Legally, the various denominations are equal in status in our country. The growth of the number of registered religious communities, of which there already are 23,500 in Russia, is evidence of this," the spokesman said.

"Interdenominational peace and harmony is an invaluable asset of Russia, something that we treat very carefully, making all necessary efforts to preserve it," he said.

23 November 2010, 10:19

Kaliningrad's Orthodox Christians accuse Catholics of proselytizing plothttp://www.interfax-religion.com/?act=news&div=7942

Kaliningrad, November 23, Interfax - More than 600 Orthodox Christians in Kaliningrad issued a statement accusing the city's Roman Catholic community of a scheme to proselytize Orthodox believers.

The statement followed a heated debate over an order by the city administration to hand over 15 buildings to the Orthodox community including the former Catholic Church of the Holy Family.

Angered Catholics and members of opposition parties have held several street

demonstrations and have written an open letter to the head of the Russian Orthodox Church, Patriarch Kirill, and the Russian government.

The Orthodox statement, which came as a response to those protests, said the Catholic community's letter represented "not as much the voice of citizens who are seeking ministry for their religious needs as a desire on the part of the Catholic community to enlarge what is already a noticeable local presence of their faith, for some reason citing the historical truth."

Catholics were a religious minority in East Prussia, the former German province that is today's Kaliningrad Region, and are a religious minority in Russia today, the statement said.

Russian network says TV crew arrested by U.S. policehttp://www.reuters.com/article/idUSTRE6AL5PN20101122

Mon, Nov 22 2010

ATLANTA (Reuters) - Several members of a Russian network news crew were arrested on Saturday and detained for 32 hours after covering a protest near a U.S. Army base in Columbus, Georgia, the network reported.

The Russia Today (RT) crew was filming the annual protest by human rights activists against a U.S. Defense Department training program for Latin American police and military personnel.

Critics say the Western Hemisphere Institute for Security Cooperation promotes torture and murder. A spokesman for the institute on Monday denied the allegations, saying no graduate has ever used information learned at the school to commit a crime.

RT crew members were arrested "despite complying with the police demand not to come close to the gates of the base," the network reported. They were charged along with demonstrators, with taking part in unlawful assembly, insubordination to authorities and failure to disperse, the network reported.

The crew members were detained overnight Saturday in a Columbus jail and were released late Sunday after paying fines, according to the network.

Columbus police did not immediately return several phone calls seeking comment.

RT is a television network begun in 2005 to broadcast primarily outside of Russia. Its programing includes English-language broadcasts available in parts of the U.S.

(reporting by David Beasley, editing by Matt Bigg and Greg McCune)

Russia Today Reporters Detained in U.S. http://www.themoscowtimes.com/news/article/russia-today-reporters-detained-in-us/424145.html

23 November 2010The Moscow Times

A reporter and cameraman for the English-language Russia Today television channel spent 32 hours in custody after being detained during an unsanctioned rally at the Fort Benning military base in the state of Georgia, RIA-Novosti reported Monday.

Kaelyn Forde and Jon Conway were covering an annual protest staged by activists hoping to close the School of the Americas, a U.S. military center accused of training Latin American police and military personnel to torture and kill.

Forde and Conway were detained along with about two dozen protesters when police swooped in on the gathering illegally blocking a road.

The reporters were fined and released after pleading guilty to participating in a banned public event, RIA-Novosti said. A check into possible charges of disobeying police orders was ongoing.

New ski resort to appear in Chechnyahttp://english.ruvr.ru/2010/11/23/35443174.html

Nov 23, 2010 05:32 Moscow Time

The mountains of Chechnya will see the creation of a new world-class ski resort.

The Vaduchi slopes will be situated 3,000 metres above the sea. It will come into full operation in five years, ready to receive up to 12,000 visitors per hour, says the Republic’s head Ramzan Kdyrov.

More Than 1 Million Russians Refuse To Take Part In Census http://www.rferl.org/content/article/2227808.html

November 23, 2010 MOSCOW -- Russian officials say more than 1 million people refused to take part in the census held in mid-October, RFE/RL's Russian Service reports.

Aleksandr Surinov, the chief of the Federal Statistics Service, told journalists that people's refusal to talk to census takers was motivated mainly by religious reasons. He said others who rejected taking part in the census wanted to make a social protest, while others mistrust the authorities.

Surinov said preliminary calculations show that there are 143 million people living in Russia. He said the number of people living in Moscow increased considerably, but did not give any further details.

He said the population in Russia's small towns did not change appreciably but decreased in villages and rural areas.

Russia's population peaked at about 148.6 million in 1991 but began a sharp decline in the mid-1990s. The reduction has slowed in recent years due to a rise in immigration, an increased birthrate, and a decline in the mortality rate.

Russian Press at a Glance, Tuesday, November 23http://en.rian.ru/papers/20101123/161454247.html

08:33 23/11/2010

A brief look at what is in the Russian papers today

POLITICS

Russian President Dmitry Medvedev held on Monday an on-line conference, answering questions from residents of various Russian regions

(Vremya Novostei, Nezavisimaya Gazeta, Rossiiskaya Gazeta)

Russian President Dmitry Medvedev believes that one of the problems of the Russian judicial system is that judges are overloaded with work

(Vremya Novostei)

ECONOMY

The Russian State Statistics Service says Russia’s economic development pace is the slower than fellow members of the BRIC organization - Brazil, India and China

(Nezavisimaya Gazeta)

Brussels hosted on Monday Russia-EU conference, which was attended by Russian Energy Minister Sergei Shmatko. The participants discussed the formation of a new energy space in the region

(Rossiiskaya Gazeta)

DEFENSE

 

China is still interested in purchasing Russian military hardware and equipment, although it is rapidly developing its own technology

(Vedomosti)

CRIME

Khusein Shaidiyev, the editor-in-chief of Ingushetia’s Serdalo government newspaper, was hospitalized with a gun wound on Monday after his car came under fire as he was returning home from work

(Kommersant)

Over 180 residents of the southern Russian village of Kushchevskaya, which recently saw a bloodbath in which 12 people were slain, were received by Russia's top investigator Alexander Bastrykin on Monday. They complained to him about the current situation in the village

(Vremya Novostei, Kommersant)

SOCIETY

Alexander Surinov, the head of the Russian State Statistics Service, says that according to preliminary results of the recent census the population of Russia decreased by 2.2 million people over the last eight years

(Vedomosti, Rossiiskaya Gazeta)

The social network Facebook closed the main account of former Yukos CEO Mikhail Khodorkovsky. Facebook says the network needs to verify the authenticity of the account

(Kommersant)

MOSCOW

New Moscow Mayor Sergei Sobyanin continues efforts to resolve ongoing traffic problems in the Russian capital and this time he inspected work on an expansion of Moscow subway system

(Vremya Novostei, Kommersant, Rossiiskaya Gazeta)

Moscow authorities published a draft resolution that bans trucks with a payload of over 1.5 tons within the Moscow Ring Road during the daytime starting January 15, 2011. The move is intended to ease traffic problems in the Russian capital.

(Kommersant)

INVESTMENTS

Russia’s businessman Ruslan Baisarov promised to invest 12 billion rubles (about $400 million) in the construction of a mountain skiing resort in the Chechen village of Veduchi, where he was born

(Kommersant)

SPORTS

Suspended Russian figure skater Evgeni Plushenko met with officials from the Russian Figure Skating Federation. As a result of the meeting the federation has allowed the Olympic champion to participate again in competitions

(Rossiiskaya Gazeta)

Russia to Sell Stalin-Era Builder of Moscow’s Subway System http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aZBD3T.f6h1M

By Emma O’Brien

Nov. 23 (Bloomberg) -- Russia’s government plans to sell the 79-year-old company that built Moscow’s subway system as Mayor Sergei Sobyanin seeks to expedite the expansion of the capital’s transportation network to ease traffic congestion.

OAO Moscow Metrostroy will be sold at auction on Dec. 28, the Federal Property Agency said on its website. Bids will start at 2.2 billion rubles ($70.5 million) and rise in increments of 20 million rubles.

Metrostroy has built 177 stations and almost 300 kilometers (185 miles) of track for the Moscow Metro since it was founded in 1931, when Josef Stalin ruled the Soviet Union, according to the company’s website. Sobyanin yesterday ordered the city government to

expand the underground network by 50 kilometers within four years, Kommersant reported. The system is one of the world’s busiest, carrying as many as 9 million a day, according to the operator’s website.

President Dmitry Medvedev in September fired Sobyanin’s predecessor, Yury Luzhkov, after 18 years running Europe’s largest city, citing in part his failure to curb worsening traffic congestion. Sobyanin was chief of staff for Prime Minister Vladimir Putin before the appointment.

To contact the reporter on this story: Emma O’Brien at eobrien6@bloomberg.net

To contact the editor responsible for this story: Brad Cook in Moscow at Bcook7@bloomberg.net

Last Updated: November 23, 2010 01:52 EST

BRICKS & MORTAR: Moscow's future - a wish list http://www.bne.eu/storyf2417/BRICKS__MORTAR_Moscows_future__a_wish_list

Tim Gosling in Moscow November 23, 2010

One of the first orders from Moscow's new mayor, Sergei Sobyanin, when he assumed office in November was for a revamp of the development plan for the city to 2025. What do the people who will actually be implementing the plan – architects, developers and real estate consultants – hope to see in this document when it lands on the mayor's desk in March?

It's no surprise in a city with some of the worst traffic jams in the world that transport is top of the list for most. With President Dmitry Medvedev having directed the new mayor to relieve commuters' misery, Sobyanin has already called for more roads. According to Maxim Perov, vice-president of the Union of Russian Architects, he should be aiming to practically double the volume of tarmac. "At the moment, no more than 8% of Moscow's land is used for roads, whilst the European average is around 15%," Perov says.

Clearing the multitude of parked cars that block so many traffic lanes is also a popular suggestion, although there's a vicious circle at play. With few car parks in the city, the authorities treat drivers who litter the roads and pavements with their vehicles leniently. At the same time, private investment to build parking facilities is unlikely to arrive as long as drivers face little motivation to pay to park. That's why commentators say that the city or federal government must make the running at first by building public car parks. Meanwhile, Petr Isaev of developer Capital Group says that permitting should make new projects pull their weight. "There's not enough control at the moment. We aim for the European average of one parking space for every 50-60 [square metres], but the average

in Moscow is around one space for every 100 sqm."

However, as Tim Millard, head of real estate consultants Cushman and Wakefield in Russia, points out, "European cities are now restricting the amount of parking attached to new developments in an attempt to push people onto public transport."

This is a prime example of an assertion from Yuri Moiseev, professor of city planning at the Moscow Institute of Architecture, that due to different levels of political and social development, the plan can't just import models from one city to another. That's why few commentators believe a congestion charge restricting access to the city centre would work in the Russian capital. For a start, Moscow's ageing public transport is already under great strain. Perov points out that the metro needs not just large-scale expansion, but also an upgrade from the "80-year-old technology" that it runs on to make it more efficient.

Millard, meanwhile, points out that there's a huge volume of surface railway that could contribute a great deal more to reducing the gridlock on the roads.

Bringing the mountain to Mohammed

However, whilst getting more people into the city centre more easily is a vital goal in the short term, commentators say that in the longer run the city should be trying to decentralize. Perov claims that "90% of activity in Moscow takes place on just 10% of its territory."

The mayor has already said he wants to ban major new commercial developments inside the Third Ring Road. Millard warns that a total ban would be "the quickest route to damage Moscow's competitiveness. Leases would become even more expensive, and it would derail ambitions such as making Moscow an international financial centre."

However, everyone agrees that large business hubs should be established towards the edges of the city, as is the model throughout Europe. Tigran Hovhannisyan, a real estate analyst at Uralsib Financial, suggests there's "plenty of older buildings that could be renovated and converted to satisfy demand for office in the centre."

"Both distant business hubs and renovation projects would help cut costs and therefore leasing costs," points out Isaev. "But there would be added bonuses. It would help raise the aesthetics of the centre, and also help stimulate the investment market - more product and smaller projects would help bring international investment funds back."

A bigger challenge for the plan is to encourage more affordable, higher-quality residential between the Third Ring Road and MKAD ring road that marks the city boundary. Currently, this vast realm is populated by Soviet-era schemes, but as Hovhannisyan points out, many people avoid living there due to the poor quality not only of the housing stock, but the retail and social infrastructure also. "You can't overestimate the importance of affordable, quality housing," says Millard. "If you want the economy to

grow, then you need a pool of affordable labour that can get into work in the centre."

At the same time, he notes, it would also help with traffic issues, as people would move into the city from the surrounding Moscow Region, and could therefore use public transport instead of their cars to get to work.

Hovhannisyan says that a better property tax system could help persuade the city to zone more land for lower-cost residential schemes in the plan. A cadastre that values properties according to market rates is being built (the current one is based on cost rates), and that will boost city revenues, possibly by 2013. Meanwhile, Finance Minister Alexei Kudrin proposed raising property taxes and cutting exemptions on November 19. With property City Hall's major source of income, higher taxes will allow it to offer cheaper land to developers.

It's not just the city itself that needs decentralizing though, suggests Moiseev. Planning authorities also need structural reform to implement and police zoning and permitting. "There's not enough power given to planners at the local level," he claims - something which has also played into the antagonistic relationship between Moscow City and the surrounding Moscow Region, from where millions commute into the city every day.

Every single commentator highlights improving the relationship – which has often been soured by bickering over real estate under previous Moscow mayor Yuri Luzhkov - as key to successfully developing the Russian capital, and also its surroundings. It's a two-way road.

However, with Sobyanin now in City Hall, it's hoped that the two sides can start to cooperate. They are making efforts now, having already held official meetings since Sobyanin took office, "but it's disappointing that they haven't for the last few years," says Isaev.

Meanwhile, both Perov and Moiseev complain that the new development plan misses a fundamental base. "I think we need to take a step back," says Perov. "We lack a full set of development goals; we need to ask what is the future of Moscow. At the moment, the only guiding principle is to maximize revenue from each square metre - quality of life, or environmental concerns are not really taken into account."

At the same time, the new development plan can't direct Moscow's future on its own. As each commentator mentions at some point, if corruption continues to allow developers to sidestep zoning or drains funds for public schemes, then there'll be little progress, whatever ends up on Sobyanin's desk. As Moiseev points out, "you need local authorities to enforce any plan that is developed."

LSR Group: New large-scale development announced for the Moscow area http://www.bne.eu/dispatch_text13704

UralSibNovember 23, 2010

Investment contract obtained for development near Moscow Yes- terday, LSR Group (LSRG - Buy) announced that it had signed an in- vestment contract to develop a high quality mass-market mid-rise neighborhood in the Moscow region. The site is located 1.5 km south- west of Yasenevo and Severnoe Butovo and has total residential and non-residential net sellable area (NSA) of 248,000 sqm and 100,000 sqm, respectively (LSR's net share in the project is 85% or 293,000 sqm of NSA). The project will be developed on a 60 ha land plot.

Extra $710 mln of cash sales in 2011-14. The development is planned to be complete within four years. LSR estimates that this project will re- quire investment of about $440 mln. We estimate cash revenues from this project, if fully complete and sold, to reach $710 mln in 2011-14, which is based on a conservative price of $2,600 per sqm. This project will increase LSR's total portfolio by 4% to about 9.2 mln sqm NSA, and will increase the land bank of its Moscow-based development by 65% to over 740,000 sqm of NSA.

Improves the company's fundamental value. We believe the news will add positive sentiment to the stock. This is not the first project that the company has invested in the attractive mass housing market in Moscow. Since the spring, the developer has al- ready acquired the rights to develop about 450,000 sqm of NSA of business and economy class apartments in four projects in and around Moscow. In our view, LSR has the necessary capacity and experience to rapidly expand into the Moscow residential market, and we view this news as an additional driver for the company's fundamental value. The upside of this project to the de- veloper's fair value is limited to 3.2% over our current target price, and we estimate the project's NPV at $210 mln. We therefore confirm our Buy recommendation on the stock with a target price of $13.0/GDR.

Tigran Hovhannisyan

Criminal group that stole 1 bln rbls of Pension Fund money arrested

http://www.itar-tass.com/eng/level2.html?NewsID=15706517

23.11.2010, 11.22

MOSCOW, November 23 (Itar-Tass) - Police detained members of the criminal group that stole 1.2 billion roubles of Pension Fund money, the press service of the Investigations Committee (SK) told Itar-Tass on Tuesday.

"The SK personnel, jointly with the Department of Economic Security and the Federal Security Service, detained senior and ordinary members of the criminal group which stole 1.2 billion roubles from Pension Fund's accounts," an SK official said.

Among the detainees is a former employee of the OPERU-1, Bank of Russia and three former police officers.

Police busts two underground plush casinos in downtown Moscow

http://www.itar-tass.com/eng/level2.html?NewsID=15706021&PageNum=0

23.11.2010, 09.02

MOSCOW, November 23 (Itar-Tass) - Police officers stopped operations of two underground plush casinos in downtown Moscow, Itar-Tass learnt on Tuesday from press service head of the economic security division of the Moscow police department Filip Zolotnitsky.

According to the press service head, the operation was carried out by the economic security division along with Moscow commandos and representatives of the Moscow branch of the Federal Migration Service. “Two casinos that illegally operated in the Ordynka Street and in the area of the Paveletsky rail terminal, were closed down in Moscow,” the source said.

"While searching the joints, police seized considerable quantities of cash, chips and secret recordings, confirming illegal operations of casino owners.”

According to Zolotnitsky, the casinos had their own bars and several dozens of people on their payroll. “Casino workers are now being interrogated by investigators, and prosecution is mulling over the question on instituting a criminal case,” the source emphasised.

Zolotnitsky noted that Moscow police had carried out several similar operations on closing down underground casinos over the past few months. “These measures will be done in future too,” the press secretary said. “It is not by chance that Moscow commandos are involved in such operations, since casino workers often offer resistance to police officers and bar them from underground joints.

Hermitage Woos Eli Broad, Loses Hirst Skull, Seeks Postwar Art http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ayqTTcnALX14

By Katya Kazakina

Nov. 23 (Bloomberg) -- Mikhail Piotrovsky, director of Russia’s State Hermitage Museum, came through New York recently looking for money and art.

Occupying a former royal palace in St. Petersburg, the Hermitage boasts 24 Rembrandts and 37 Matisses among its 2.9 million artworks. Yet postwar and contemporary art is conspicuously missing.

“We don’t have our own collection, so we are showing works from other museums and private collections,” said Piotrovsky. “We have very little money to buy contemporary art.”

So he met with art dealer Larry Gagosian and billionaire collector Eli Broad, checked up on art loans to the Metropolitan Museum of Art, and greeted about 120 guests at a dinner at Christie’s auction house, aiming to raise $200,000 for his museum.

He was focused on bringing 20th- and 21st-century art into the Hermitage. As the museum gears up to celebrate its 250th anniversary in 2014, it is completing the restoration of a wing that will house contemporary art.

“It doesn’t have anything American from World War II onwards,” said Chauncie Rodzianko, a board member of the Hermitage Museum Foundation. “I don’t mean that they only have 100 pieces, I mean, they have nothing.”

The Christie’s dinner was part of the effort to attract gifts and long-term loans from American collectors. Some women arrived in Uzbek and Asian robes. Guests sipped champagne and munched blinis and risotto puffs.

Cy Twombly

In recent years, the Hermitage has mounted exhibitions of works by Cy Twombly, late de Kooning and pieces from the Saatchi collection. While in New York, Piotrovsky met with artist Anselm Kiefer and people representing the estate of Sol LeWitt to discuss possible projects. The museum is planning to show some of Broad’s collection, Piotrovsky said.

One contemporary-art exhibition that fell through in recent years was to feature Damien Hirst’s $100 million diamond- encrusted skull.

“We had to provide so much security, as if we were showing the golden mask of Tutankhamun,” said Piotrovsky. “It turned out to be too expensive for us.”

While it ended 2009 with a $2.1 million surplus, the museum relies heavily on federal funds, which accounted for 82 percent of the $100 million that the museum refers to as

revenue in a financial statement for 2009. Russian corporations and individuals, including billionaire Vladimir Potanin, donated between $2 million and $5 million, Piotrovsky said.

“It’s a lot for Russia, where philanthropy is disliked and even hated,” said Piotrovsky.

One way the Hermitage can’t raise money is by selling any of its art. The museum still rues the time in the early 1930s when the cash-strapped Soviet government sold many of its masterpieces to Western museums.

“The 21 best works in the National Gallery used to be the 21 best Hermitage pieces,” said Piotrovsky about the Washington, D.C. museum. “It’s a tragic story.”

To contact the reporter of this story: Katya Kazakina in New York at kkazakina@bloomberg.net.

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.

Last Updated: November 22, 2010 19:00 EST

New dams bring hope for dying Aral Seahttp://rt.com/news/features/dam-hope-aral-sea/

Published: 23 November, 2010, 08:51

Decades ago, an agricultural bid to boost the Soviet economy nearly destroyed Central Asia's Aral Sea. Now, there is an even more ambitious plan underway to reverse one of the world's worst man-made environmental disasters.

There are people living in the former port city of Aralsk in Kazakhstan who have never seen the water which once lapped at the harbor walls.

It was once a bustling hub of business and human activity. But in the 1960s, rivers feeding massive cotton fields for the Soviet Union began to divert water away from rivers that fed the sea.

”When I came here the sea was close to the city,” recalled one resident, Kuralay Kaishegulova. “My husband and I had boats and we would swim to the islands for picnics on the weekend. It was a good time back then. We swam and lay in the sun. Later the sea started moving away, the waters became shallow and then just dried up.And my children saw it only in the pictures.”

Until then the waters were so aggressively diverted that the Aral Sea was the size of Ireland. The disappearing sea took with it fishing, jobs, commerce and an entire way of life.

Now, when you drive across the former seabed, all you see are abandoned villages, abandoned ships and camels. Locals call it Aral-Kum or Aral Desert.

“Soviet planned economy is largely to blame for the drying of the Aral Sea,” said Nazhbagin Musabaev, Head of Aral District. “All decisions were made in Moscow which took no account of the ecological balance of that region. The consequences of that could be felt as early as in the 1960s. The Aral Sea region defines the terms ‘pre-crisis’, ‘crisis’, and ‘disaster’.”

It was after the collapse of the Soviet Union that people were faced with the seriousness of the disaster. The sea had split in two.

In 2005, experts harnessed what little water still flowed into the lesser Aral Sea from the Syr Darya River by building the Kok-Aral Dam. It was an 87 million dollar project, funded in-part by the World Bank. The smaller body of water had become the great hope for the future.

”We had over 200 people here from Russia and Kazakhstan, and Uzbekistan,” explained Aleksandr Semin, Executive Director of the construction company. “The work was very hard and many of us lived here on site for two and three years. But now we are happy to say the time has come to pack up. The structure is working perfectly.”

This is welcome news after years of failed dam projects and wasted water.

In just a few short years the small dams have turned part of the Kazakh desert, back into a seascape and dotted it with beaches. The hope is that as the project progresses the dams will be built even higher, keeping more water in, extending the boundaries and the bounties of the lesser Aral sea back to the city of Aralsk.

”When the Sea left us, my husband did not want to leave this place,” Kuralay Kaishegulova said. “He used to say, our children would grow to see it with their own eyes. Even before he died he believed that the sea would come back.”

Now, as the excess water flows through the sluices it disappears out into the nearly empty Greater Aral Sea. No grand scheme for saving that exists, yet.

For the one million people living in Kazakhstan's poorest region, measurable improvement will only come when these shores once again fill with boats.

Dmitry Trenin: Russia suffers from a security deficit in relations with NATOhttp://en.rian.ru/valdai_op/20101123/161441583.html

09:32 23/11/2010© POOL

Dmitry Trenin

Joint efforts by Russia and the EU or Russia and NATO to mediate specific conflicts in the region could help build up mutual trust, which is the cornerstone of any partnership.

Valdaiclub.com interview with Dmitry Trenin, director and chairman of the research council at the Carnegie Moscow Center, a subdivision of the Carnegie Endowment for International Peace.

Q.: With the United States and Russia working to “reset” relations, do you think it’s possible, in a similar way, to reset relations between the post-Soviet countries and to reconfigure the roles of Russia and NATO in the European security architecture? A.: A reset in relations between post-Soviet republics has already begun. The reset announced by Russia and the United States was not a binding agreement like the START treaty – it was Barack Obama’s voluntary decision to abandon George W. Bush’s policy, which Moscow viewed as an attempt to oust Russia from its neighboring countries, to undermine Russian influence in post-Soviet republics. Therefore, I would say that situation has already been reset, and this has led to further positive changes.The current U.S. administration has, in fact, halted NATO’s expansion and is not providing substantial military assistance or unqualified political support to Georgia. There are the fruits of the reset. Cooperation in the post-Soviet space has become a reality, for example in Kyrgyzstan.

As for the European security architecture – actually, I don’t like the term “architecture” here, because any piece of architecture must be built on a solid foundation. I believe that laying a solid foundation is more important than all the rhetoric about architecture. The foundation must be built on trust, and this is still missing in U.S.-Russian relations. Moscow still has concerns over the United States’ long-term plans regarding Russia, such as the proposed missile defense system. Russia’s neighbors are also wary of its growing role in the region. Their fears are largely ungrounded, but they are a reality and have to be reckoned with. These, I believe, are the two central problems that prevent us from laying a foundation for a new European security architecture.

Q.: What are you views on NATO’s new path? How has the alliance’s attitude toward the Security Council and the UN as a whole changed? Has the new “comprehensive approach” smoothed over the controversy between NATO and the United Nations?

A.: I believe NATO is once again trying to find its place in a rapidly changing world. It is trying to assure its members that they still need the alliance. NATO may have a confidence deficit now that the support of West European members for its operation in Afghanistan has waned. Therefore, NATO’s first priority is to find a new role for itself, and its second priority is to improve relations with Russia, as Secretary-General Anders Fogh Rasmussen said.NATO’s attitude toward the UN Security Council is largely shaped by Russia and China’s veto power. I don’t think anything has changed here. If there is a need, NATO is

as prepared as ever to act on decisions of its member countries’ leaders. That is to say if an international conflict breaks out, NATO will act independently without waiting for UN approval and while ignoring a veto from Russia or China.

Q.: What do you think about the NATO-Russia Council’s role as a basic tool of cooperation and a safeguard of European and global security?

A.: I do not think the NATO-Russia Council is a safeguard of global security, but it does play a global role. As for European security, the council does not reflect all countries with potential hotspots in Europe, especially considering the trust deficit between the partners. Russia suffers from a security deficit in relations with NATO and the United States; in a similar way, smaller countries in Eastern Europe have a security deficit in relations with Russia. There needs to be more trust.

Q.:New European and global challenges require new, effective tools to counter these threats. What kind of Russia-NATO partnership would most effectively resolve frozen territorial disputes between former Soviet countries?

A.:Working together to achieve a peaceful settlement in Transnistria could mark the beginning of a true partnership. Joint efforts by Russia and the EU or Russia and NATO to mediate specific conflicts in the region could help build up mutual trust, which is the cornerstone of any partnership. Effective joint projects could bring our relations to a new level. We are already witnessing this kind of productive cooperation between Russia and NATO in Afghanistan. Similar efforts should be made in dealing with other shared problems.

Q.: Do you think it’s wise to pursue NATO-Russian cooperation on cyber security? How immanent is this threat at present?

A.: This area of cooperation is not burdened by any Cold War-era experiences. If we do not start cooperating here, we might soon find ourselves opponents in cyber space, which would not be good at all. This problem is quite real and the threat is global, therefore everyone should be concerned. We should all cooperate to fight this threat.

Q.: Which of Russia’s strategies regarding NATO is the correct one?

A.: I would like to emphasize two aspects of our strategy regarding NATO. The first is peace in Europe, because, despite all the rhetoric about strategic partnership and cooperation, Russia and the United States stopped just short of an open clash in the Black Sea two years ago. War could have broken out in the region. Peace can only be guaranteed by political efforts and negotiations between Russia and NATO. A security body should be formed with the participation of all European countries, especially those involved in frozen conflicts. Second, NATO can play a role in reforming Russia’s army. When discussing modernization, we should not forget that it is not limited to optimization and rearming. It should also involve “modernizing” military personnel and changing their mentality, to escape the old confrontational clichés. NATO could be of help here, because

they have had success organizing a next-generation army. Russia could learn from that experience. Joint military operations against piracy and other threats will promote NATO-Russia cooperation. By the way, I believe that the missile-defense issue has helped transform relations between Russia and the West from institutionalized hostility to real cooperation. This mechanism could also reassure our neighbors and avoid baseless panic in those countries.

Q.: Do you see Russia as a full member of the North Atlantic alliance in the medium term?

A.: No, I don’t. And there are two important reasons why I don’t. First, I do not expect Russia to join NATO, and second, I do not support this idea because Russia’s accession to the alliance would fuel tensions. These tensions won’t go away. They will come out at some other level.

NATO has an unofficial leader; for Russia to join NATO would mean to lose its strategic independence, which is highly important for our country. Since this is unacceptable, the inevitable haggling with the United States would continue, and this wouldn’t do anyone any good. Essentially Russia’s membership in NATO would turn the alliance into another OSCE with the same format of peaceful coexistence.

China would also be a problem, because Russia’s membership in NATO would seem to the Chinese like encirclement. This would inevitably cause tension in Russia-China relations, the last thing Russia needs, considering that the alliance would not be willing or able to protect the Russian-Chinese border. By joining NATO, Russia would be on a potential collision course with China, something Russia wouldn’t want to risk.

To summarize, Russia:

a) must maintain its strategic independence in any and all partnerships, be it with NATO or other partners;b) must not turn NATO into another OSCE; andc) shouldn’t provoke China.

November 22, 2010Cold War Hangoverhttp://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1290432286

By Svetlana KononovaSpecial to Russia ProfileRussia and NATO Have Reached a Partnership Agreement This Weekend, but Many Russians Still Believe International Organizations Are Enemies Rather Than Friends

Most Russians are not interested in cooperation with such powerful international

organizations as the World Trade Organization (WTO) and the North Atlantic Treaty Organization (NATO), a recent poll conducted by the independent Levada Center found. They believe that the WTO and NATO pursue goals that go against Russia’s interests.

Levada’s survey established two alarming trends. Firstly, the number of people who support the idea of cooperation with large international organizations has significantly decreased over the last several years. For example, only 22 percent of respondents said that rapprochement with NATO might be beneficial for Russia. This is the lowest rate documented since 2004. NATO is the least popular potential partner for Russia, the pollster found: forty-five percent of respondents said that Russia should not build a relationship with this organization. Men and people with a higher education have the most negative attitude toward NATO.

Public opinion about the WTO is more positive. Only a quarter of respondents are strictly against Russia becoming a WTO member. People with a university education and residents of big cities believe that joining the WTO would benefit Russia’s economy. But the number of people who like this idea has decreased during the past several years as well. Meanwhile, the number of respondents who doubt that Russia should become a member of the WTO has grown. Russians with low incomes said that they have no opinion on the issue.

The EU is the most wanted partner on the list of international organizations Russians would like to see a partnership with, the survey found. The number of people who support this idea has remained the same over the last several years. Fifty-six percent of respondents want to see Russia become a member of the EU, while only 23 percent of respondents are against the idea. Paradoxically, most respondents who sympathize with the EU are residents of small towns and people in the 40 to 54 age group. As a rule, both of these groups have low incomes in Russia.

So why do so many Russians believe that influential international organizations are not potential partners, but enemies? “The Russian society is now experiencing a so-called ‘post-imperial syndrome,’ political analysts say. This situation is exemplified by the deep contradictions that appear in social life, politics and culture. On the one hand, we got used to spending holidays abroad, watching Hollywood movies and buying foreign brands. But on the other hand, we are nostalgic for the Soviet Union and the times when ‘everybody in the world was afraid of us’,” said Ilya Yashin, a leader of the Solidarity opposition movement. “The authorities ably play on these controversial attitudes using state propaganda. People from the Kremlin build a partnership or even a friendship with the representatives of NATO and the WTO in the area of foreign policy, but then discredit these organizations inside Russia, juxtaposing them with Russian uniqueness. Creating such a ‘slightly hostile’ image of the West gives the leaders of the state the opportunity to increase their popularity in politics,” he added.

The second trend revealed by the poll is that most young people are opposed to the idea of cooperating with international organizations. This may mark the appearance of a

young “pro-Kremlin” generation, which tends to reject the values of the West. “Young people are more influenced by such propaganda than people of age. That’s probably because the personalities of young people, who are now in their mid-20s, were shaped during an era of sweeping changes. That influenced the mentality of an entire generation,” Yashin said.

The negative attitude toward international organizations may also be ascribed to the long-lived images of “enemies,” which are deeply rooted in the Soviet past. Another poll conducted by the Newsland.ru Internet portal found that most respondents are simply scared of NATO. Sixty-four percent of those polled opined that if Russia were to become a NATO member, it would no longer be a sovereign democratic state. Only seven percent believe that membership in NATO might mean decreased military spending and ensure professional military protection of the country.

“Some people are also concerned that membership in NATO would oblige young men to do military service in such hot spots as Afghanistan. They still remember the long Soviet war in Afghanistan, where so many soldiers died,” said Vladimir Lobanov, an independent political analyst. “The respondents’ negative attitude toward the WTO is also easy to explain. The Russian economy can hardly compete with the quickly developing economies of other countries. Many goods in Russia are still much more expensive than in west European countries or the United States. Russia still has a low labor capacity. If Russia joins the WTO, the market will be flooded with cheap foreign goods, and those businesses that survive by reselling overpriced goods would lose their profits,” Lobanov added.

Meanwhile, this weekend NATO and Russia agreed to cooperate on a range of issues, notably a missile shield to protect Europe. The accords reached between Russian President Dmitry Medvedev and 28 NATO leaders could be the beginning of a long-term strategic and security partnership, many news outlets reported. However, Medvedev pointed out that Russia’s cooperation must be “a full-fledged strategic partnership between Russia and NATO,” and not just a nod in Moscow’s direction to spare Russia’s feelings while Europe tends to its own defense alongside the United States.

November 22, 2010Zoning Responsibilityhttp://www.russiaprofile.org/page.php?pageid=International&articleid=a1290458118

By Tom BalmforthRussia Profile

If Moscow Insists on Demarcating Separate Russian and American Spheres of Responsibility for Joint Missile Defense, Then the Project Stops There, Say Analysts

NATO and Russia passed a historic milestone in relations at the Lisbon Summit, despite failing to forge breakthrough partnership projects such as the much-touted joint missile defense system in Europe. Important but more modest joint deals were

agreed, including a new transit corridor for non-lethal cargo to Afghanistan through Russia. Encouragingly, leaders from both sides say they back joint missile defense. Nonetheless, Moscow proposes that Russia and NATO each deal with separate zones of responsibility on each other’s behalf in a puzzling “zonal” joint missile defense system. Military analysts say it will not work.  An unprecedented number of pledges for concrete but limited cooperation were reached at the Lisbon Summit between Russia and NATO on Saturday, but of more significance was the change of mood in relations that they signify. “The summit has had a philosophical and theoretical impact in that it puts an end to the period that Foreign Minister Sergei Lavrov called the ‘post-Cold War.’ Now we are in a sort of ‘post-post-Cold War’,” said Alexander Konovalov, the president of the Institute of Strategic Analysis. “The old stereotypes survived the end of the Cold War and with them old suspicions and lack of trust. This is now over.” At the key summit in Lisbon, the two old foes agreed that they face a raft of common threats, including piracy, arms control, terrorism, and Afghanistan. "Our security is indivisible. We share important interests and face the same threats to our common security,” NATO Secretary General Anders Fogh Rasmussen said. Long cliché in liberal Western foreign policy rhetoric, NATO’s new strategic concept published on November 19 formally says that NATO-Russia cooperation is “of strategic importance as it contributes to creating a common space of peace, stability and security.” It affirms that “NATO poses no threat to Russia.”  NATO revealed Saturday that it aims to hand over full control of Afghanistan to the local army by 2015 and (prevailing conditions permitting) withdraw its troops. Later that day Russia and NATO agreed two joint projects for the NATO and ISAF mission in Afghanistan, a fortnight after the United States and Russia conducted a joint counter-narcotics mission.  A new joint NATO-Russia Council Fund to be functional next year will collect money for “Helicopter Maintenance,” which will go toward buying Russian Mi-17 helicopters (ideal for Afghanistan’s rugged conditions), training Afghan pilots and servicing helicopters already in the field. The joint statement also hailed “the revised arrangements aimed at further facilitating railway transit of non-lethal ISAF goods through Russian territory,” due to be active by December 1, as of “particular value.”  NATO and Russia are working together on technology to detect explosives, as well as diffusing terrorist threats on civil planes. Russia also gave its formal backing to NATO resuming counter-terrorist operations in the Mediterranean, known as “Active Endeavor.” Missile defense, once the thorn in the side of the alliance’s Russia relations, was hugely hyped up before the summit, as suggestion circulated of a joint missile defense system. And missile defense rhetoric was duly warm at the weekend. NATO reaffirmed that it “will actively seek cooperation on missile defense with Russia and other Euro-Atlantic partners.” And President Dmitry Medvedev promised “dialogue” on a future defense

system in Europe, after saying: "We have large-scale plans, we will be working in all areas, including European missile defense." But Konstantin Kosachev, the head of the State Duma’s Foreign Affairs Committee, was perhaps the most accurate when he called the summit a “positive” event, while adding that it was still premature to speak of “positive” results, Voice of Russia reported.  Analysts too were less impressed by the summit in breakthrough, concrete terms. “In terms of practical achievements, I was a little less struck by the summit’s lack of agreement on joint missile defense,” said Konovalov. “Here, we are just at the beginning of the road.” Indeed, already the two sides appear to have hit an obstacle while discussing the possible next step down that road and the technicalities behind such a joint project. Moscow left military analysts puzzled on Saturday when Medvedev said he favors a “zonal” joint missile defense system. Quoting Russian Envoy to NATO Dmitry Rogozin, Moskovsky Komsomolets explained what Medvedev meant: “Put simply, if there is a missile flying over our territory, which is heading toward the United States then we will shoot it down. If there is a missile coming toward Russia over America’s zone of responsibility, then the Americans will shoot it down.”  This poses clear problems. The missiles that NATO seeks defense from originate in the Middle East (read Iran and Syria) and, as a cursory glance at a map of the region shows, that means that Russia intends to take full responsibility on itself for all the missile threats to NATO – a “daring decision,” said Alexander Golts, an independent military analyst and the deputy editor of the Russian news weekly Yezhenedelny Zhurnal.  In a detailed article today in his news weekly, Golts explains that Russia is not currently capable of mass producing suitable ballistic missile interceptor systems. While the American systems can intercept ballistic missiles with its “Aegis” and “Standard 3M” systems, Russia only has the S-300 system, of which it has only two, just outside Moscow, writes Golts. Moreover, American and Russian missile defense systems are simply not compatible, which, again, torpedoes the notion of Russia and NATO each coordinating spheres of responsibility with separate systems.  The “reset” culture appears to have caught on with Russia’s NATO vector and the Lisbon Summit marks the end of a phase in post-Cold War mistrust at least at a formal level, even if old attitudes prevail in various social segments. But if analysts and politicians hoped that a joint military project would take the sting out of future barbed political confrontation, it seems there is still a long way to go. It is early days, but Russia appears to have made its demands known on missile defense. “If this is the case, then Moscow has practically asked NATO to drop missile defense,” said Golts.

NOVEMBER 23, 2010

The Nuclear Treaty Rush http://online.wsj.com/article/SB10001424052748704207504575129481334456778.html?mod=googlenews_wsj

Senate Republicans are right to trust but verify President Obama's missile promises.

Democrats lost the House and six Senate seats on November 2, but you wouldn't know it from their lame duck agenda. Majority Leader Harry Reid has told Republicans that in a mere three weeks he wants to pass a food safety bill, the immigration Dream Act, a repeal of "don't ask, don't tell" for gays in the military, a 9/11 rescue workers relief act, a spending bill for fiscal 2011, an extension of some Bush tax cuts and estate tax reform. Oh, and the New Start nuclear treaty with the Russians.

Yet somehow Republican Jon Kyl is getting kicked around for saying he doubts there's time to ratify the arms treaty this year. Who's really playing the political games here?

***

As the Senate's leading Republican on nuclear security issues, Mr. Kyl has warned the White House for months that it couldn't get its treaty ratified without addressing his concerns on warhead modernization and missile defenses. For months, the Administration gave him mere lip service. Now that it has discovered it doesn't have the votes, the Administration is finally getting serious about Mr. Kyl's concerns even as it is trying to bully him over immediate ratification. Republicans are right to take their time and debate this thoroughly.

The treaty reduces allowed U.S. nuclear launch vehicles to 800, from a ceiling of 1,600, and cuts the number of warheads by 30%, to 1,550, even as years of neglect have undermined confidence in the quality of the U.S. nuclear arsenal. Mr. Kyl won a commitment from the Bush Administration to modernize U.S. warheads, but the Obama Administration's first Sect. 1251 report on the issue was shoddy, and it also kept GOP Senators and staff from speaking with scientists who maintain the U.S. nuclear stockpile.

Recently, the White House has been more forthcoming, and in the last week it has promised $4.1 billion in new spending to update nuclear warheads. But that commitment needs to be signed, sealed and delivered before the treaty gets a vote. All the more so because the U.S. hasn't tested a weapon in 18 years. (The U.S. abides by the Comprehensive Nuclear-Test-Ban Treaty though the Senate hasn't ratified it.)

The Administration also doesn't help its credibility by hinting that Senate Democrats will only cooperate on modernization if New Start is ratified. Nearly every nuclear nation in the world is modernizing its arsenal, and the Pentagon says modernization is crucial whether or not New Start becomes the law of the land. If the Administration is willing to threaten to deny modernization money if New Start isn't ratified, how much can Republicans trust its sincerity on the issue?

Missile defense is another obstacle, not least because the treaty preamble explicitly says either party can drop out if future missile defenses are developed. The Russians say this prevents future U.S. defenses without Russian consent, but the U.S. says this is merely a traditional opt-out clause contained in every treaty.

At a minimum, this strikes us as a re-coupling of offensive and defensive weapons that the Bush Administration worked hard to de-couple. Our guess is the Russians will use defenses as a bargaining chip in the next negotiations over tactical (shorter-range) nuclear weapons that New Start ignores. Will Mr. Obama go along?

The question is relevant given that Mr. Obama campaigned against missile defense and his first budget cut spending for missile defenses by 15% before restoring half of that under pressure this year. To win the Russians over on New Start, the Administration also pulled the plug on President Bush's plans to deploy 10 ground-based interceptors in Poland and a radar site in the Czech Republic that would have protected the U.S. by 2015.

In its place, Mr. Obama supports the phased deployment of a system that will defend Europe before extending the umbrella to the U.S. at the earliest by 2020. But that full land-based Aegis anti-missile system now exists only on a drawing board. Meanwhile, the Pentagon recently reported that Iran may have a missile able to hit the U.S. by 2015. Republicans should win Mr. Obama's commitments to restore more robust missile defense funding before voting on New Start.

***

Against these substantive concerns, the Administration is playing the diplomatic scare card. It claims that if New Start isn't ratified in a month, Russia might retaliate and refuse to help us on Iran's nuclear program or it might block U.S. supply routes to Afghanistan. But if Russia's cooperation depends on a single treaty, how much can we trust the Russians anyway? A treaty bearing on U.S. security deserves to be judged on its merits, not on related political issues.

The Administration is also saying that the longer the treaty is delayed, the longer we won't have inspectors on the ground in Russia. Yet the Administration created this problem. The U.S. and Russia could have agreed to abide by the old Start treaty, which expired last December, and at the time both sides said they would do so. The Russians quickly changed their minds to keep negotiating pressure on the U.S., and now the Obama Administration wants to play the same pressure game to get the treaty through the Senate. The GOP shouldn't fall for it.

New Start is a relatively minor treaty that lacks the nuclear high drama of the Cold War era. Russia is no longer an adversary, its arsenal is going to shrink in any case from cost and decay, and the U.S. will have enough missiles to maintain its nuclear deterrent even under New Start. We would nonetheless probably oppose it on grounds that it furthers the illusion that arms control enhances U.S. security.

The larger issue is whether Mr. Obama still conceives of New Start as the first step toward his dream of total nuclear disarmament. If he does, then it is crucial that Republicans use their leverage on New Start to lock in Mr. Obama's commitments on nuclear modernization and missile defense so he can't later trade those away too. Republicans should take their time and follow Ronald Reagan's advice to trust but verify—not so much Russian promises as Mr. Obama's.

National Economic Trends

11/23 12:38   RUSSIA HAD $21 BLN CAPITAL OUTFLOW IN 10M -IGNATYEV http://www.interfax.com/

11/23 12:38   RUSSIA HAD CURRENT ACCOUNT SURPLUS OF $66 BLN IN 10 MTHS - CB'S IGNATYEVhttp://www.interfax.com/

12:20RUSSIAN CENTRAL BANK DOES NOT RECOGNIZE VALUATION OF PUGACHEV'S SHIPYARDS PERFORMED BY BDO - IGNATYEVhttp://www.interfax.com/news.asp

Ruble Slides to One-Week Low Versus Dollar, Steady Against Euro http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aJrYpsY8tDi8

By Emma O’Brien

Nov. 23 (Bloomberg) -- The ruble dropped to the weakest level in almost a week against the dollar, sliding as much as 0.7 percent to 31.3 per dollar at the start of Moscow trading. It was little changed at 42.3720 per euro by 10:03 a.m. in Moscow.

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

Last Updated: November 23, 2010 02:04 EST

Business, Energy or Environmental regulations or discussions

Russian Stocks Decline Second Day on Crude, Korea ‘Aggravation’ http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aNKsgXiS7a4c

By Jason Corcoran

Nov. 23 (Bloomberg) -- Russian stocks fell for a second day after oil and metals slid and North and South Korea exchanged artillery fire, curbing investor appetite for riskier assets.

OAO Novolipetsk Steel, Russia’s largest steelmaker by market value, retreated 1.6 percent and oil producer OAO Gazprom Neft lost 0.7 percent. The country’s two biggest lenders, OAO Sberbank and VTB Group, both declined by at least 1 percent, helping push the Micex Index down 0.6 percent to 1,541.03 as of 10:51 a.m. in Moscow.

Oil, Russia’s main export earner, fell as much as 84 cents, or 1 percent, to $80.90 a barrel in electronic trading in New York. North Korea fired “several” artillery shells into South Korea near the two nations’ western border, prompting a return of fire, the South’s Joint Chiefs of Staff said in a statement. The confrontation added to earlier losses in Asian equities after Moody’s Investors Services warned of a downgrade of Ireland and amid concern that China may intensify effort to contain inflation.

“Markets don’t like uncertainty and there could be a big uncertainty if the aggravation in Korea develops,” John Heisel, a sales trader at Citigroup Inc. in Moscow, said by phone. “The Irish bailout and China’s moves on inflation also don’t encourage investors to take risk in emerging markets.”

Copper on the London Metal Exchange dropped 1.8 percent to $8,140 a metric ton. Aluminum, zinc, nickel and lead also declined. OAO GMK Norilsk Nickel, Russia’s largest miner, slipped 1.2 percent to 5,851 rubles.

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

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

Last Updated: November 23, 2010 03:21 EST

Russian markets -- Factors to Watch on Nov 23http://af.reuters.com/article/metalsNews/idAFLDE6460BT20101123

Tue Nov 23, 2010 7:11am GMT MOSCOW, Nov 23 (Reuters) - Here are events and news storiesthat could move Russian markets on Tuesday. You can reach us on: +7 495 775 1242

STOCKS CALL (Contributions to moscow.newsroom@reuters.com): OLMA: A downward correction in the RTS .IRTS index ispossible at the market open today following Asian markets andglobal oil prices. Troika: We are opening our prices this morning down 0.5-0.7percent. EVENTS [RU-DIA] (All times GMT): ST PETERSBURG, Russia- Russian Prime Minister Vladimir Putinwill meet his Chinese counterpart Wen Jiabao at theInternational Tiger Forum. MOSCOW- Russian central bank Governor Sergei Ignatyev tospeak at the Duma lower house of parliament on monetary policy. MOSCOW- The Moscow City government meeting. MOSCOW- Adam Smith Conferences' Russian Power Finance andInvestment Forum (to Nov. 24). MOSCOW- Gazprom (GAZP.MM) board meeting on investments. MOSCOW- RusHydro (HYDR.MM) H1 2010 results. MOSCOW- Acron (AKRN.MM) Q3 2010 results. IN THE PAPERS [PRESS/RU]: Vedomosti runs an interview with gold miner Kinross (K.TO)Chief Executive Tye Burt who expects gold prices to keep risingamid uncertainty on global markets. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS:* Russian, Chinese PMs to discuss gas prices [ID:nLDE6AL0YY] COMPANIES/MARKETS:* TNK-BP investing blns to raise gas output [ID:nLDE6AL0YC]* Russia to cut Sberbank,VTB stakes below 50pct [ID:nLDE6AL0FA]* Rouble up on liquidity squeeze, mood bearish [ID:nLDE6AL1LJ]* RenCap plans top up Eurobond issue [ID:nLDE6AL1A3]* Bank Vozrozhdeniye Q3 net seen down 25 pct [ID:nLDE6AL18A]* Russian grocer Dixy 10-month sales up 18 pct [ID:nLDE6AL1I9]* KTK swings to Q3 profit on strong coal demand [ID:nLDE6AL0NF]* Kalina plans 2.5 bln rouble share buyback [ID:nLDE6AL0CG]* Novatek picks arrangers for Eurobond -sources [ID:nLDE6AL09K] ECONOMY/POLITICS:* Russia to roadshow rouble Eurobond next wk [ID:nLDE6AL1WK]* PM Putin is Russia's real leader - poll [ID:nLDE6AL18I]

* Russia could shun European rights court-judge [ID:nLDE6AL1J3] COMMODITIES:* Russian grain prices rise, led by milling rye [ID:nLDE6AL03H]* Russia says grain crop enough for local needs [ID:nLDE6AL1V6]* Caucasus sows winter wheat,Russia imports loom[ID:nLDE6AL0CV] MARKETS CLOSE/LATEST: RTS .IRTS 1,601.5 +0.08 pct MSCI Russia .MIRU00000PUS 840.7 -0.65 pct MSCI Emerging Markets .MSCIEF 1,102.8 -0.98 pct Russia 30-year EurobondRU011428878= yield: 4.520 pct EMBI+ Russia 11EMJ 217 basis points over Rouble/dollar RUBUTSTN=MCX 31.2598 Rouble/euro EURRUBTN=MCX 42.3720 NYMEX crude CLc1 $81.05 -$0.69 ICE Brent crude LCOc1 $83.20 -$0.76 For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU] Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE]

India Offered Role in Uranium Mining http://www.themoscowtimes.com/business/article/india-offered-role-in-uranium-mining/424125.html

23 November 2010By Alexandra Terentyeva and Alisa Fialko / Vedomosti

Rosatom and state-owned Uranium Corporation of India Limited have been negotiating the joint development of a large uranium reserve in the republic of Sakha, Sergei Kiriyenko, the Russian state nuclear holding's head, said Friday.

A proposal has already been made and now "the ball is with the Indian side," Kiriyenko said, Interfax reported. The terms of the possible deal were not disclosed. A Rosatom spokesman said only that Russia must retain a controlling stake in the project.

The Elkon group of uranium deposits in Sakha is second in size only to Australia's Olympic Dam, which is being developed by BHP Billiton and contains 34 percent of the world's known reserves of uranium.

The total reserves of uranium in one of the parts of the Elkon group were evaluated this summer at 229,800 tons, according to Joint Ore Reserves Committee standards.

Development of the Elkon fields is being carried out by one of Rosatom’s units, Atomredmetzoloto, or ARMZ, which has already established a subsidiary called Elkon Mining. The projected capacity of the future mine is 5,000 tons of uranium annually, which is 50 percent more than is now being produced in all of Russia.

In addition to uranium, Elkon Mining will also produce gold, silver and molybdenum. The total project cost is estimated at 91 billion rubles ($3 billion). Construction is scheduled for 2012-2019, with pilot production running from 2014-2016, and a ramp-up to full capacity from 2017-2031.

Rosatom has long been searching for co-investors because of the project's huge cost.

Four years ago, Polyus Gold, Basic Element and Renova Group all considered participation in the Elkon project, but ARMZ would not comment on whether negotiations with those companies were still taking place.

ARMZ has already signed memoranda of understanding on the project with Japan’s Mitsui and a South Korean consortium of LG International, Cores and Kepco. The documents allow for the possibility of participation of foreigners in the development of Elkon, but so far there are no specific agreements. The plan was for Mitsui to receive 25 percent of the development of the South Elkon zone, a spokesman for Rosatom said.

A spokesman for ARMZ did not comment on the possible Mitsui arrangement, but said the company continues to seek investors and is considering several options. In any case, it will maintain a controlling stake, he said.

India and Rosatom have worked together for some time. TVEL, Rosatom’s fuel company, supplies nuclear plants in India. Rosatom is building two nuclear power plants in the country, and hopes to build a third.

Uranium mining in Elkon is a risky project, said Troika Dialog analyst Mikhail Stiskin. It would only be profitable if the cost of uranium were more than $60 a pound, which happens to be the price currently, according to Bloomberg.

Rosatom’s proposal may be interesting for India, anyway. The country only has a small supply of uranium, 73,000 tons, but it has big plans for developing its energy sector, including nuclear power.

India might participate in the development of Elkon just for the sake of securing a source of fuel for its nuclear power plants, Stiskin said.

Titanium Orders to Increase http://www.themoscowtimes.com/business/article/titanium-orders-to-increase/424161.html

23 November 2010

VSMPO-Avisma, the world’s largest producer of titanium, said Monday that sales may climb between 20 percent and 25 percent next year on orders from Siemens and U.S. specialty-metals producer Allegheny Technologies.

VSMPO’s joint venture with Allegheny will double orders in 2011, while Siemens may sign a three-year contract to buy welded pipes, the company said.

(Bloomberg)

Strong increase in transit goods to Russia via Finlandhttp://www.barentsobserver.com/strong-increase-in-transit-goods-to-russia-via-finland.4850315-16175.html

2010-11-23 The volume is up more than 30 percent since last year, but there is still a long way from the peak before the economical crises.

According to the foreign trade statistics published by Finnish Customs, the shipments of cars and vans from Europe to Russia via Finland almost doubled in July-September. Almost 56,000 cars were transported to Russia.

Finland’s main border-crossing points to Russia are Imatra, Vaalimaa and Nuijamaa, on the roads between Helsinki and St. Petersburg.

The Finnish road authority has online web-cameras from both border crossing points from where the public can see the current traffic and possible queues.

Two years ago, the queues of lorries and trucks could be several kilometre long, but nowadays such long waiting queues less frequent, according to the overview published on the road administrations designated web portal for the Russian-Finnish borders in the south. But, for instance last Sunday, the queue at Vaalimaa border crossing point was 8 kilometre long.

It is not only European car-makers that use Finland as transit for entering the Russian market. Also, the transportation of beverages, sugar, cocoa, chocolate and sweets have increased sharply over the last year, according to the overview from Finnish Customs.

The estimated value of goods transported through Finland to Russia has a value of almost € 4.5 billion in the third quarter of 2010.

In 2009 passed a total of 309,000 trucks Finland’s border crossing points to Russia.

Russian grocer Dixy 10-month sales up 18 pcthttp://www.reuters.com/article/idUSLDE6AL1I920101123

1:34am EST

MOSCOW, Nov 23 (Reuters) - Russian food retailer Dixy (DIXY.MM: Quote, Profile, Research, Stock Buzz)(DIXY.RTS: Quote, Profile, Research, Stock Buzz) said on Tuesday its ten-month sales grew 18 percent in rouble terms compared with a year ago.

Sales amounted to 52 billion roubles ($1.68 billion) in the January through October period, Dixy said in a statement.

Growth accelerated from 17.1 percent for the nine months and 16.3 percent for the January through August period.

In dollar terms, revenue rose 25.4 percent to $1.7 billion. (Reporting by Maria Kiselyova; editing by John Bowker)

UTair eyeing Moskva Airlines

http://www.bne.eu/dispatch_text13704

AtonNovember 23, 2010

UTair is interested in buying a controlling stake in Moskva Airlines, which is currently controlled by the Moscow city government, Vedomosti reports today (23 Nov). UTair wants to gain access to Moskva's routes to Central Asia and its fleet of new Boeing airliners. However, in our view, purchasing the stake will require extreme gearing_up by UTair. Moskva Airlines itself is heavily geared and loss_making at the moment, so the purchase could negatively affect UTair's financial position. We assess the acquisition as highly risky and potentially negative for the company.

Russia's GAZ, Daimler to invest 120 mln euros in Mercedes van output in Russiahttp://en.rian.ru/business/20101123/161457870.html

12:19 23/11/2010

Russian vehicle maker GAZ Group and German car giant Daimler AG plan to invest more than 120 million euros in the production of Mercedes vans in Russia, while the group's management has requested the government to provide exclusive benefits for the project, Kommersant business daily reported on Tuesday.

GAZ Group and Daimler AG have worked out a joint investment project for the production of Mercedes Sprinter commercial vehicles at the Russian carmaker's facilities. The expected annual output amounts to 60,000 cars, with production launch scheduled for 2012.

GAZ Group Chairman SiegfriedWolf claims the project has export potential, while partnership with Daimler will allow GAZ to fully utilize its capacities, stabilize its financial and economic position and develop its own engineering competence on the basis of western innovative technologies. GAZ expects to create its own model based on Daimler vehicles in the future, Wolf said.

In March 2007, GAZ signed an industrial assembly agreement with the Economic Development Ministry on producing British Maxus commercial vehicles in Russia. GAZ controlled Maxus vehicle producer LDV and expected the deal to go ahead. However, the project was stalled due to LDV's bankruptcy, Kommersant quoted Wolf as saying, adding that GAZ wanted to use the Maxus production agreement for the manufacture of Mercedes vehicles.

Putin instructed Deputy Prime Minister Igor Sechin, Industry and Trade Minister Viktor Khristenko and Economic Development Minister Elvira Nabiullina to examine Wolf's request on the same day he wrote to the Russian premier about the joint project, the paper said.

MOSCOW, November 23 (RIA Novosti)

Nissan to purchase 10 per cent of AUTOVAZ shares

http://www.itar-tass.com/eng/level2.html?NewsID=15706284&PageNum=0

23.11.2010, 10.22

TOKYO, November 23 (Itar-Tass) -- The Japanese automobile-making concern Nissan has decided to purchase 10 per cent of shares of AUTOVAZ, the Nikkei, the leading business newspaper of Japan, reported on Tuesday.

This is the first time the Japanese automobile producer is going to finance the big Russian automobile-making company. The French Renault has already purchased 25 per cent of AUTOVAZ shares. So, the Renault-Nissan automobile-making alliance will become the owner of the block of shares exceeding one third of shares of the Russian firm. In the opinion of the Nikkei, this will make it possible for Renault-Nissan to influence rather effectively the commercial activities of AUTOVAZ.

According to the Nikkei, Renault-Nissan “is planning to begin jointly with AUTOVAZ in 2012 a mass production of small-size cars and to deepen financial cooperation with its Russian partner, which will permit to expand its presence on the growing Russian market.”

GAZ to launch assembly of Mercedes LCV

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VTB CapitalNovember 23, 2010

News: In 2012, GAZ plans to launch a joint venture with Daimler AG assembling up to 60,000 Mercedes Sprinter LCVs a year. The investment required to launch the project is EUR 120mn (USD 160mn), while adding localisation costs increases this to EUR 210mn (USD 285mn). According to Kommersant, GAZ's Chairman of the Board Siegfried Wolf has applied to Prime Minister Vladimir Putin for tax benefits for the project under the industrial assembly agreement.

Our View: This is the first time that GAZ has disclosed details of its project with Daimler. Given its heavy USD 1.6bn debt burden, the company does not have the financial resources to invest in the project and its input is likely to be production facilities only, while the majority of investments will be done by Mercedes. We also are not convinced that the Russian government will break the rules and provide benefits under the industrial assembly regime to a project with half the required volume of investments.

The project will help GAZ to load its production facilities, but the company will just be assembling Mercedes kits for a fixed fee, which does not imply any transfer of technology. So, in contrast with its assembly project with VW, GAZ will be making a competitor for its own flagship LCV, the Gazelle (the capacity of the joint venture is comparable with its annual sales) accelerating the decrease in the market share of its core

brand, instead of making any radical attempt to modernise. That counterbalances the positive impact of the project and we see it as neutral at the moment.

Elena Sakhnova

November 23, 2010 11:08

Acron sees IFRS earnings plummet 30% in 9M to 4 bln rubles, better than forecasthttp://www.interfax.com/newsinf.asp?id=203851

MOSCOW. Nov 23 (Interfax) - Acron (RTS: AKRN) saw its net profit to International Financial Reporting Standards (IFRS) plummet 30% year-on-year in January-September to 4.029 billion rubles, the fertilizer producer said in a statement.

This was better than the 3.682 billion rubles that analysts predicted in a consensus forecast.

Skolkovo Fund, Cisco announce Innovation Award

http://www.itar-tass.com/eng/level2.html?NewsID=15706748&PageNum=0

23.11.2010, 12.01

MOSCOW, November 23 (Itar-Tass) - Skolkovo Fund and U.S.-based technology and network company Cisco have announced the Skolkovo Innovation Award to attract talented specialists and ideas that can be applied in the Skolkovo high-tech research hub and help to set the pace for innovation in Russia.

Russian entrepreneurs, innovators, students and technologists who are both citizens and residents of the Russian Federation are invited to participate.

The competition will collect ideas in three specific areas: information technologies, energy efficiency and healthcare technologies. It will run around five months.

“During the first three months Cisco specialists will collect new ideas on a new community website. Applications will be filtered proceeding from the quality of submission, the opportunity to be used on the Russian market and on the degree of innovation,” the organizers said. “Later authors of twenty-four ideas will be given another two months to develop their ideas further and defend them.”

Each of twenty-four competing teams in the first round will get a Flip Video camera and Cisco WebExT collaboration capabilities.

“These tools will allow competitors, especially those who live in remote areas to jointly work over these ideas,” the organizers said adding that all participants have to provide their ideas in the video-format. Finalists will demonstrate their ideas for a panel of judges that will choose three winners who will receive monetary prizes of 3 million, 1.5 million and 750,000 roubles.

“The most important result of the competition is not the victory or monetary prize, but an opportunity to translate their projects into reality in a cluster or laboratory of the Skolkovo innovation centre,” chief cluster officer Alexander Turkot said.

The innovation contest was organized within the framework of the memorandum of understanding signed by Skolkovo Fund and Cisco last June during Russian President Dmitry Medvedev’s visit to California.

For the Record http://www.themoscowtimes.com/business/article/for-the-record/424163.html

23 November 2010

Kuzbass Fuel Company swung to net income of 349 million rubles ($11.3 million) in the third quarter from a loss of 275 million rubles in the previous quarter, the coal producer said Monday, while revenue rose 44 percent to 3.93 billion rubles. (Bloomberg)

Ingosstrakh said last week that it plans to follow the lead of American International Group and expand into aircraft leasing in Russia. (Bloomberg)

Polyus Gold billionaire owners Mikhail Prokhorov and Suleiman Kerimov may sell stakes in the gold miner in the second quarter after the shares rose 26 percent this year, Alfa Bank said Monday.  (Bloomberg)

Activity in the Oil and Gas sector (including regulatory)

Shipbuilding major looks towards Yamal LNGhttp://www.barentsobserver.com/shipbuilding-major-looks-towards-yamal-lng.4850281-16178.html

2010-11-23

The United Shipbuilding Corporation intends to bid for contracts in the Yamal LNG project.

The state-owned corporation, which includes a number of big Russian shipyards, among them the Sevmash and Zvezdochka yards in Severodvinsk, plans to bid for several contracts in the Yamal LNG project, company director Igor Ryabov told RBC.ru. The corporation is interested in contracts both on plant construction, local sea port development, as well as LNG carriers.

A tender on the LNG plant development is due mid-2011, Oilru.com reports.

The Yamal LNG will be based on gas from the South Tambey gas field, a deposit owned by Novatek (80%) and Gazprom (20%). The field contains an estimated 1,25 trillion cubic meters of gas and is located in the northern part of the Arctic peninsula.

The project includes a major upgrade of local infrastructure, including of the local Sabetta sea port.

The United Shipbuilding Corporation is in its bids for Yamal LNG stakes likely to take use of the Sevmashshelf unit established recently by Sevmash. The Sevmashshelf is planned to become Sevmash’ main unit for development of oil and gas installations.

TNK-BP Plans $3.8Bln Gas Investment http://www.themoscowtimes.com/business/article/tnk-bp-plans-38bln-gas-investment/424160.html

23 November 2010Reuters

TNK-BP said Monday that it would invest $3.8 billion in its gas business over the next three years as it aims to more than double production to 30 billion cubic meters by 2020.

“The most significant element is associated gas. It will give over half of that production level, or 15 bcm,” said Alastair Ferguson, the head of TNK-BP’s gas business.

TNK-BP, half-owned by British major BP, will invest $1.8 billion between now and 2013 on developing the associated gas from its oil deposits to meet a government target of increasing associated gas utilisation to 95 percent by 2012.

“Critical to achieving this [95 percent utilisation rate] is getting associated gas priority access to the gas pipeline. But you also need to have customers for it, so access to the power market is another important element,” Ferguson said.

The firm will also invest $2 billion on regular gas extraction projects over the next three years.

TNK-BP, which is set to produce 13 bcm of gas this year from 143 fields, already processes 85 percent of the associated gas that it extracts from the ground together with oil. The rest is flared into the atmosphere.

Gazprom

11/23 12:35   GAZPROM WILL PRODUCE 507 BCM OF GAS IN 2010 – SOURCEhttp://www.interfax.com/

Russian agreed sale of gas distribution assets to Gazpromhttp://www.steelguru.com/russian_news/Russian_agreed_sale_of_gas_distribution_assets_to_Gazprom/176796.html

Tuesday, 23 Nov 2010Interfax reported that the Russian government has approved the sale of 72 regional gas distribution assets owned by OJSC Rosneftegaz to Gazprom.Mr Vladimir Putin Russian Prime Minister signed the relevant order on November 13.The assets are being transferred to enable the state to gain direct control of more than 50% of the shares in Gazprom. They are being transferred at a price not below the market value as determined by an independent valuer.The assets were valued at approximately RUB 70 billion at the end of 2008.

Government approves the sale of Rosneftegaz-held stakes in gas distribution entities to Gazpromhttp://www.bne.eu/dispatch_text13704

VTB CapitalNovember 23, 2010

News: According to Interfax, the government has approved the sale of the Rosneftegaz-held stakes in gas entities to Gazprom, in line with the Prime Minister's resolution. Thus, Gazprom will get shares in 72 gas distribution entities. In exchange, the government is to receive 0.87% in Gazprom, which would allow for direct control over more than 50% in Gazprom through the State Property Agency and fully-owned Rosneftegaz. Under the government order, Gazprom is to acquire the shares in the distribution entities at a price not lower than the market price (as defined by an independent appraiser).

Our View: Consolidating distribution entities into Gazprom has been on the cards for the past three years. Having acquired the stakes (which are blocking to controlling), Gazprom will have to make buyout offers to the distribution companies' minority shareholders. The fair value for each company is to be determined by an independent appraisal.

We note that the last appraisal was made two years ago and it might be out of date now. However, we do not think that the new valuation will differ materially from the previous

one, since we have seen a fairly stable trend in the sector's financials throughout the crisis (obviously due to the regulated nature of the gas distribution business). Hence, we see no reason for a downward revision of the valuation. We therefore believe that the potential consolidation into Gazprom, with the timing limited to one-two years, provides for a substantial upside of over 100% across the sector.

Lev Snykov

Gazprom may become sole operator of Sakhalin-2 project

http://www.rbcnews.com/free/20101123105143.shtml

      RBC, 23.11.2010, Moscow 10:51:43.The Russian government is currently giving serious consideration to the idea of boosting the stakes of Russian companies in the leading oil production projects, the RBC Daily newspaper reported today. According to the publication's source at the Audit Chamber, Russian companies are likely to increase their stakes in the Sakhalin-1 and Sakhalin-2 projects. Gazprom is already in talks with Japanese companies Mitsui & Co and Mitsubishi, shareholders of the Sakhalin-2 project, on the purchase of their shareholdings, according to the newspaper's sources. The Russian gas monopoly has even set its sights on becoming the sole operator of the Sakhalin-2 oil and gas project, which is currently operated by Sakhalin Energy. The company's shares are divided between Gazprom (50 percent plus one share), Shell (27.5 percent) Mitsui (12.5 percent), and Mitsubishi (10 percent). The publication's sources believe that the two Japanese companies are not especially interested in the project and would be willing to hand over their stakes if offered an equal replacement.

      The Russian holding's desire to become the sole operator of the project may be attributed to its gas purchases in the project at global prices. The company currently purchases gas at over $300 per 1,000 cubic meters, but is forced to cut the price two or three times for sales on the domestic market.

Gazprom May Buy Japanese Stakes in Sakhalin-2, RBC Daily Says http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a6ErzVDPbNBU

By Stephen Bierman

Nov. 23 (Bloomberg) -- OAO Gazprom, Russia’s gas-export monpoly, is in talks to buy out Sakhalin-2 partners Mitsui & Co. and Mitsubishi Corp., RBC Daily reported, citing an unidentified official from Russia’s budget watchdog.

The two Japanese companies and Royal Dutch Shell Plc in 2007 sold control over the liquefied natural gas venture off Russia’s Pacific coast to Gazprom.

Click here for web link

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

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

Last Updated: November 23, 2010 00:51 EST

KES repays $516mn loan to Gazprom and recovers 11% TGK7 stake

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Renaissance CapitalNovember 23, 2010

Event: Prime-TASS reported yesterday (22 Nov), quoting a company press release, that KES Holding had repaid a RUB16bn ($516mn) loan to a Gazprom subsidiary and in return had recovered an 11% stake in TGK7, which had been used as collateral for the loan. As a result, KES now controls 49% of TGK7.

Action: Negative in the short term, but fundamentally positive for TGK7, in our view.

Rationale: In our view, the recent rise in TGK7's share price reflects a race for control between InterRAO (due to become the holder of a 30% TGK7 stake) and KES Holding. We judge that KES's achievement of a 49% shareholding stake in TGK7 will dampen InterRAO's enthusiasm, with consequent removal of the main driver of recent share-price strength. In the longer term, we believe that the presence of the state-controlled InterRAO as a significant and active minority shareholder is likely to result in improved corporate governance at TGK7 and will reduce the probability of TGK7 minority shareholders being offered unfavourable terms during the potential consolidation of TGK7 into a KES generation company, which could happen as early as 2011.

Vladimir Sklyar

EU benefits from Russia partnership – Schroderhttp://english.ruvr.ru/2010/11/23/35443207.html

Nov 23, 2010 05:16 Moscow Time

Russia should be given opportunities for tighter cooperation with Europe.

Ex-chancellor of Germany, Gerhard Schröder, made the statement addressing at a ceremony timed for 20 years of cooperation between Russia’s gas giant Gazprom and Germany’s chemical giant BASF. He believes Russia’s further integration with Europe

would do good for the EU’s economy and, as a result, would improve its political climate.