Russia 110915

Basic Political Developments Russian envoy predicts UN ground forces in Libya - The Russian envoy revealed

that the UN is currently working on a resolution that would enable the organization to issue a mandate for UN forces to enter the country and pacify opponents of the new government.

Iranian interior minister to visit Russia - Iranian Interior Minister Mostafa Mohammad-Najjar plans to visit Russia on September 19 and 20 at the invitation of the Federal Drug Control Service of the Russian Federation.

o ran Interior Minister to visit Russia - "During his two-day stay in Moscow, next Monday and Tuesday, the interior minister will also discuss scientific and practical ways to promote Iran-Russia cooperation on preventing and fighting drug trafficking with other Russian officials,"

Russia, Germany meet on missile defenceo Russian, German defense ministers to discuss military cooperation - "The

heads of the defense ministries will discuss the state and perspectives of military cooperation, will exchange experience on the reformations armed forces as well as discuss issues of international and regional security, including the issue of the European missile shield," the ministry said in a statement.

Senate set to approve McFaul's candidacy for post of U.S. ambassador to Russia o Obama nominates new ambassador to Russia

Pravda: USA and NATO tighten Anaconda loop around Russia China, Russia pledge to build deeper, sustainable trade relations Russia ready to take Chinese oil debt to court - The latest round of talks between

Russia and China over the price of oil sold to Beijing have finished without any progress and the issue could now head to arbitration, reports Interfax.

KEPCO unit to build cogeneration power plant in Russia - Under the memorandum of understanding with state-run Northern Caucasus Resorts Co., KWP will construct a 180 megawatt cogeneration power plant in a resort complex to be built in Sochi, the venue for the 2014 Winter Olympics

Iranian firms taking part in World Food Moscow exhibition Russia, Lithuania to sign agreement on bridge construction across Niemen RF Days of Culture to take place in Moldova – Moldovan Culture Minister Russia launches next stage of Center - 2011 strategic military training -

Representatives of the Airmobile Forces of the Kazakh Armed Forces arrived in Russia’s Ashuluk landfill with AN-26 aircrafts, to participate in the next stage of the large-scale joint strategic training Center - 2011, the Kazakh defense ministry reported.

Georgian FM informs U.S. diplomat about talks with Russia on WTO - The fifth round of the WTO negotiations was held on Sept.12 in Geneva.

Lavrov: Russia-Ukraine relations should be free from ideology-driven approaches Moscow Patriarch arrives East-Ukrainian region, no protests reported Armenian-Russian gas company to receive government allocation to supply low-

priced gas

Defrosting Conflict - Alarmism over Russia’s Role in Transdnestr Belies the Potential of an Upcoming Moscow Conference. Comment by Sergei Markedonov

Sailing-ship Mir returns to St Petersburg after long voyage Selling of Filin aerial surveillance drones to begin next year Armed deserter found in Russia’s Far Eastern Primorsky territory Radical Islamists have no chances to succeed in FSU – analyst Støre, Lavrov to Tromsø in October - Russia’s and Norway’s foreign ministers

Sergey Lavrov and Jonas Gahr Støre will meet in Norway to be conferred as Honorary Doctors of the University of Tromsø.

A little piece of the Motherland far from Russia - Russia’s vast territory extends over both land and sea, even reaching into foreign lands. A tiny part of the Spitsbergen Archipelago, officially belonging to Norway, is governed by Russian law. RT took a trip to Russia’s remote and icy outpost.

ISS crew to have restful sleep Thurs ahead of Fri landing Russian press review (FOCUS News Agency) RIA Russian Press at a Glance, Thursday, September 15, 2011 Right Cause alternative congress sacks Prokhorov from head post

o Right Cause has forfeited right to run in elections – Prokhorovo Prokhorov urged followers to leave Right Cause partyo Party over - Prokhorov wants allies to abandon Right Causeo Russian billionaire accuses Kremlin of sabotaging political career o Signs of Faux Foul Play in Russian Politics - By ANDREW E. KRAMER

Surveillance of social networking sites - Yesterday Russia’s prosecutor general, Yury Chaika, declared the need to have greater control over social networking sites. 

Russia’s Federal Drug Control Service is recruiting an army - Drug police are planning to purchase motor boats, armored vehicles and small arms.

Putin’s anti-missile offer is worth a second look – by DAVID JUDSON

National Economic Trends Unemployment falls Russia cautious on buying euro zone bonds Rouble's band not to widen in Sept - cbank source IMF Sees Russian Economy Growing 4.8% in 2011 Rouble overvalued, Deputy Econ Minister says Economist Says Russia Could Be Safe From Euro Debt Crisis

Business, Energy or Environmental regulations or discussions Russian markets -- Factors to Watch on Sept 15 Kenya Government Endorses Renaissance-Funded Residential Complex Russia VEB says not in Raspadskaya deal financing-report EuroChem interested in BASF fertiliser ops – report MRSK Holding considers selling MRSK Siberia to Deripaska's EuroSibEnergo Sistema could divest controlling stake in MTS

o Sistema may sell MTS Carrefour reportedly considers second attempt to enter Russia via franchising

Gearing Up for Russian IPOs - The Institute for Development of Financial Markets is holding IPO&SPO Forum on September 22, 2011 at the MICEX Conference Hall in Moscow.

Moscow bourse takes on London for Russia listings Foreign Investor Interest Crystallizing in $15-Billion Tourism Project in Russia Russian investors should buy EU banks: Deutsche Tatarstan Islamic finance hub ambitions boosted

Activity in the Oil and Gas sector (including regulatory) Russia Oct oil duty to fall 7.4 pct to $411.4/T Putin to Review 60% Oil Export Tax Each Month, Vedomosti Reports 60-66 reforms: 60 component may not be firmly legislated Kommersant: EC gives vent to its anger on South Stream

o Russia not to abandon South Stream - — Kommersant writes about the problems that Gazprom’s South Stream project could be facing in the short run. The signing of a shareholder agreement with the project participants – Italy’s ENI, France’s EDF and Germany’s Wintershall – on their entry into the project and guarantees of its launch that is scheduled for September 16 created the news topic.

o South Stream agreement to be signed tomorrow Rosneft board chairman cuts stake in company by 60% (Part 2) Alfa exerting pressure on Rosneft management - Rosneft TNK-BP: Plans $45 Bln In Upstream Investment By 2021 Russneft Production Grows 4 Percent in First Half 2011 Alliance Oil Company launches production at Kolvinskoye Greenfield Will Exxon Be Safe in Russian Hands? - By David Lee Smith

Gazprom Iran, Gazprom Neft to mull other firms for Azar project Gazprom reports rise in reserves at Sakhalin-3 Gazprom OAO : Alexey Miller and Kairat Boranbayev discuss prospects for

geological exploration of Imashevskoye field Gazprom plans to wrap up OGK-2, OGK-6 merger Nov 1 Gazprom Neft Finishes Construction of Housing Complex in Iraq

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

Full Text Articles

Basic Political Developments

Russian envoy predicts UN ground forces in Libyahttp://rt.com/news/russian-un-ambassador-churkin-615/

Published: 15 September, 2011, 11:48Edited: 15 September, 2011, 11:48

A failure to properly implement UN resolution 1973 aimed at protecting civilians in Libya crystallized into a full-scale civil war and foreign invasion, argues Russia’s UN ambassador, Vitaly Churkin. He says only the UN can break the stalemate.

The Russian envoy revealed that the UN is currently working on a resolution that would enable the organization to issue a mandate for UN forces to enter the country and pacify opponents of the new government.

The tragic and dangerous situation in Syria increasingly resembles the Libya scenario, the ambassador believes. Russia has consistently opposed sanctions against Syria’s leadership, preferring to give it time to fulfill promised reforms, and calling on both sides to sit down at the negotiating table.

Russia will neither join the sanctions already imposed on Syria bypassing the decisions of the UN Security Council, nor will it heed Western reassurances that the latter has no plans to use military force against Syria – because exactly the same was promised ahead of UN resolution 1973 on Libya that led to a full-scale military intervention against the regime of Colonel Muammar Gaddafi.

“In order not to plunge the country [Syria] into major bloodshed, dialogue [between Damascus and the opposition] must happen,” said Churkin.

Speaking about the new conflict between Serbs and Albanians in Kosovo, Churkin revealed that the Kosovo Albanian authority in Pristina has announced plans to take over Serb-populated Northern Kosovo by force while the NATO force in the region – KFOR – and EU representatives deployed there to restore peace seem to be going along with what appears to be a very dangerous plan on the part of the Albanian authorities.

Serbia has called for an emergency meeting of the UN Security Council to discuss the issue and Russia fully supports the initiative, so “this will be a reality check for the UN Security Council.”

The same double standards appear when it comes to discussions over Israeli settlements, Churkin believes. The US supports its Middle East ally and always vetoes any Security Council resolutions against Israel so the American role as the leading mediator of the Middle East peace process has proven to be counterproductive, as such a partisan position does not really help to move matters ahead.

“It is going to be one of the interesting challenges for the UN General Assembly and the Security Council if the Palestinians decide to bring [their independence] matters to one of those main bodies of the UN or both,” predicts Churkin, saying that negotiations between Israelis and Palestinians must start one way or another.

In the opinion of the Russian ambassador, “pressures of various sorts are going to grow in Israel, especially now that we cannot be sure about where the situation in the Arab world is going,” he said, adding that “a positive scenario is not assured at all.”

So far, both the Israeli and Palestinian sides in the conflict “have been beating about the bush,” making requests knowingly unacceptable to the other side.

15 Sep 2011

Iranian interior minister to visit Russia http://www.zawya.com/story.cfm/sidZAWYA20110915040203

TEHRAN - Iranian Interior Minister Mostafa Mohammad-Najjar plans to visit Russia on September 19 and 20 at the invitation of the Federal Drug Control Service of the Russian Federation.

 He is scheduled to hold talks with a number of Russian officials on a range of bilateral issues, particularly security issues.© Tehran Times 2011

Iran Interior Minister to visit Russiahttp://www.presstv.ir/detail/199121.html

Wed Sep 14, 2011 3:1PM GMTInterior minister Mostafa Mohammad Najjar is visiting Moscow next week to discuss a joint operation to chase drug smugglers along Afghanistan-Iran-Europe-Russia route.

The Iranian Embassy in Moscow's military liaison for fighting drugs Mousa Ali-Mohammadi, said on Wednesday that the visit is an official response to a recent visit by Director of Russia's Federal Drug Control Service Victor Ivanov, IRNA reported.

"During his two-day stay in Moscow, next Monday and Tuesday, the interior minister will also discuss scientific and practical ways to promote Iran-Russia cooperation on preventing and fighting drug trafficking with other Russian officials," he added.

Ali-Mohammadi said that Najjar, as Secretary-General of Iran Drug Control Headquarters, would also visit rehabilitation centers for drug addicts while in Russia.

Iran has spent more than USD700 million to seal its borders and prevent the transit of narcotics destined for European, Arab and Central Asian countries.

According to UNODC's World Drug Report 2011, Iran has the world's highest rate of opium and heroin seizures standing at 89 and 41 percent respectively.

SS/HGH

Russia, Germany meet on missile defencehttp://www.monstersandcritics.com/news/europe/news/article_1663096.php/Russia-Germany-meet-on-missile-defence

Sep 15, 2011, 8:01 GMT

Moscow - Russian Defence Minister Anatoly Serdyukov was scheduled to meet with his German counterpart Thomas de Maiziere on Thursday to discuss a controversial NATO plan to station anti-missile systems in East Europe.

The talks came in the wake of a Tuesday agreement between the US and Romania to deploy Aegis missiles to the East European nation, as part of a wider Washington strategy to increase missile intercept capacity around the Middle East.

Russia is sharply at odds with NATO over a US initiative to field a missile defence network in Poland and the Czech Republic to defend against a missile attack from the south.

US and NATO officials have said growing missile capacity in Middle Eastern nations, particularly Iran, make a defence system in East Europe necessary.

A missile defence system positioned on Russia's western frontier would give Brussels and Washington the ability to shoot down Russian missiles while, at present, no Middle Eastern nation possesses missiles capable of reaching Europe, Russian officials have said.

NATO would obtain a possibly decisive advantage in a potential confrontation with Moscow, they have said.

Russia has threatened to deploy nuclear weapons to its enclave Kaliningrad between Poland and Lithuania, and to return conventional forces in western Belarus to Cold War strengths, if NATO goes forward with the missile defence plan.

Russian ambassador to NATO Dmitry Rogozin in Wednesday evening comments to Interfax called the US-Romania agreement 'an attempt by the US to force NATO's hand ... about which we can only be greatly concerned.'

Russian, German defense ministers to discuss military cooperationhttp://en.rian.ru/mlitary_news/20110915/166853148.html

02:53 15/09/2011

MOSCOW, September 15 (RIA Novosti)

Russian and German defense ministers will meet on Thursday in Moscow to discuss issues of military cooperation as well as the controversial issue of the European missile shield, the Russian Defense Ministry said.

The German military delegation, led by Defense Minister Thomas De Maiziere, arrives in Moscow for a one-day official visit on Thursday and the main focus of the visit is the meeting with Russian Defense Minister Anatoly Serdyukov.

"The heads of the defense ministries will discuss the state and perspectives of military cooperation, will exchange experience on the reformations armed forces as well as discuss issues of international and regional security, including the issue of the European missile shield," the ministry said in a statement.

Russia and NATO agreed to cooperate on the so-called European missile shield during the NATO-Russia Council summit in Lisbon in November 2010. NATO insists there should be two independent systems that exchange information, while Russia favors a joint system with full-scale interoperability.

Russia has retained staunch opposition to the planned deployment of U.S. missile defense systems near its borders, claiming they would be a security threat. NATO and the United States insist that the shield would defend NATO members against missiles from North Korea and Iran and would not be directed at Russia.

Senate set to approve McFaul's candidacy for post of U.S. ambassador to Russiahttp://en.rian.ru/world/20110915/166854970.html

05:23 15/09/2011

WASHINGTON, September 15 (RIA Novosti)

U.S. President Barack Obama introduced to the Senate for approval several candidacies for key administration posts, including the candidacy of Michael McFaul for the post of the U.S. ambassador to Russia.

"I am pleased to announce that these experienced and committed individuals have agreed to join this Administration, and I look forward to working with them in the months and years ahead," the White House quoted Obama as saying.

Michael A. McFaul, 48, is a Special Assistant to the President and Senior Director, Russia and Eurasia Affairs for the White House National Security Staff. He speaks fluent Russian.

McFaul was born and raised in Montana. He received his B.A. in International Relations and Slavic Languages and his M.A. in Slavic and East European Studies from Stanford University in 1986.

Obama nominates new ambassador to Russiahttp://www.kyivpost.com/news/russia/detail/112838/

Today at 06:35 | Associated Press WASHINGTON (AP) — President Barack Obama has nominated his top Russia adviser as the next U.S. ambassador to that country. The adviser, Michael McFaul, helped the administration's work to "reset" the two countries' relationship.

McFaul is considered one of the nation's foremost experts on U.S.-Russia relations and has become a trusted policy adviser as the president has sought to ease long-standing tensions with Russia. Among the recent moves to begin the relationship anew was the signing of the New START treaty to reduce strategic warheads.

McFaul's nomination has been expected since May.

He was a campaign adviser to Obama on Russia and Eurasia before moving to the National Security Council to become the president's chief Russia adviser.

Read more: http://www.kyivpost.com/news/russia/detail/112838/#ixzz1Y00F1VXl

USA and NATO tighten Anaconda loop around Russiahttp://english.pravda.ru/world/europe/15-09-2011/119052-romania_usa_missile_defense-0/

15.09.2011  

The U.S. and Romania signed an agreement on deployment of the elements of a U.S. missile defense system. Earlier it was reported that some elements of EUROPRO system

will appear in Turkey. Everything indicates that the U.S. military machine and NATO are inexorably approaching the Russian borders.The US-Romanian agreement was signed on September 13 during a visit to Washington of Romanian President Traian Basescu. The document was signed by the foreign ministers of two countries - Hillary Clinton and Theodore Baconschi. Later Barack Obama met with the participants of the talks, although initially he was not planning to meet with Basescu.

According to the document, by 2015 elements of a U.S. ground-based missile defense system will appear at the former Romanian Air Force Base in Deveselu. They will include radar (SAR) complex Aegis, an operational control center, and mobile missile batteries with interceptor missiles SM-3 Standart-3. Approximately 200 U.S. military will reside at the base, but if necessary, this number will be increased to 500.

Nothing was said with regard to the fact who the missile base will be directed against. Earlier, U.S. officials and Basescu have repeatedly reiterated that the missile defense is not directed against Russia. However, recently there was another event that made the Russian side doubt that statement.

Some time ago the United States and Turkey announced that the Turkish territory would host an early warning radar system EUROPRO. Spokesman of the Turkish Foreign Ministry Selcuk Unal said that the decision to implement a project system of protection against missile attack of the U.S. and NATO was adopted at the Lisbon summit in 2010. Turkey has actively contributed to these original plans and made a significant contribution to the work. He added that there have been negotiations on the extent of Turkey's participation in this system, which have finally entered into the final stage.

According to the Turkish diplomat, the radar will be located in the southeastern part of the country. This will allow "scanning" the area with a radius of several thousand kilometers. Turkey insists that the new object is not directed against anyone, especially against Russia. This will only allow the country to contribute to the development of a new security system of NATO.

According to the American plans, Turkey will first host a mobile radar detection system AN/TPY-2. By 2015 there will be a new sea-and land-based modification of the SM-3. Subsequently, the system will be improved further so that it successfully reflects the threat against the United States and Europe from missiles of medium and long range.

The appearance of the two similar objects in the immediate proximity of Russian borders could not but worry the leadership of the country. In his statement the Russian Foreign Ministry stressed the need to sign a special agreement clearly stipulating that the elements of a U.S. missile defense are not directed against Russia. "The developments only increase the urgency of the need to obtain solid, legally binding assurances from the U.S. and NATO that missile defense facilities being deployed in Europe are not directed against Russia's strategic nuclear forces," commented MFA.

"The agreement with Romania to deploy a ground-based version of SM-3 missile system and Aegis at the former air base Deveselu, as well as the recent announcement of the impending deployment of the U.S. forward based anti-missile radar AN/TPY-2 in Turkey, suggests that the implementation of U.S. and Europe's missile plans is quick and smooth. This is happening amid a lack of progress in the NATO-Russian and Russian-American dialogue on the subject of missile defense," the Ministry commented.

"Scheduled for deployment in Romania by 2015, regardless of the evolution of the real missile challenges, missile defense base is another link in the strategic infrastructure of the global missile defense system developed by the U.S. NATO-Russia Council needs to develop effective and targeted decisions about the purpose and architecture of the missile defense in the region", stressed the Russian Foreign Ministry.It may be added that the objects in Romania and Turkey are not the only ones of this kind. The United States and Poland agreed to deploy interceptor missiles Patriot at a Polish base in the town of Morong. The distance from this object to Kaliningrad is no more than 100 kilometers. As in the case of Romania, the Polish authorities also have repeatedly stated that Russian missile defense is not threatened. Initially it was planned to place these missiles near Warsaw, but they were eventually "pushed" to the Russian border.Finally, further north there is American radar in Norway, in the town of Varde, located near the Russian border.

Although officially its function is to monitor space debris, the Russian military and diplomats suspect that it was placed in violation of the ABM Treaty of 1972. Russia conducts regular talks on the operation of this facility with both the U.S. and Norway.

What does the emergence of a chain of objects of a U.S. missile defense system at the Russian borders mean? Military expert and senior vice president of the Academy of Geopolitical Issues Konstantin Sivkov spoke on this subject in an interview with Pravda.ru:"The U.S. and NATO continue the policy of encirclement of Russia with their bases in the framework of the project "Loop of Anaconda." Our country is still perceived by the Americans as the main strategic adversary, and they do not even make any secret of it. Their task is to neutralize our nuclear weapons and push us out of the major areas of the world's oceans. In this case - even from the Black Sea.Turkey, of course, has its own views on the missile defense system, but Romania is a pawn in the hands of the U.S., and its elite exist only because of the American support. The same can be said about Poland. As a result, there is a chain of U.S. missile defense sites along the Russian border, stretching from Turkey through Romania and Poland to Norway."

Vadim TrukhachevPravda.Ru

China, Russia pledge to build deeper, sustainable trade relationshttp://news.xinhuanet.com/english2010/china/2011-09/15/c_131138883.htm

2011-09-15 04:26:50

MOSCOW, Sept. 14 (Xinhua) -- Visiting Chinese top legislator Wu Bangguo said here Wednesday that China would work with Russia to deepen pragmatic cooperation and build a close, long-term and sustainable economic and trade relationship.

Wu, chairman of the Standing Committee of China's National People's Congress (NPC), made the remarks in a meeting with Russia 's Prime Minister Vladimir Putin.

Wu arrived in Moscow earlier Wednesday for an official goodwill visit, his fourth tour to Russia as chairman of the Chinese NPC Standing Committee.

Wu first conveyed greetings from Chinese President Hu Jintao and Premier Wen Jiabao to Putin, saying China is ready to make joint efforts with Russia to lift bilateral ties, better maintain common interests of both countries and bring benefits to the two peoples.

"Sino-Russian relationship has seen unprecedented progress and bilateral cooperation in various fields has reached an unprecedented level" since the two countries signed the China- Russia Treaty of Good-Neighborliness, Friendship and Cooperation in 2001, said Wu.

Given the complex and volatile international situation, Wu said it is of vital importance to enhance Sino-Russian strategic trust and cooperation for safeguarding core interests of both countries, such as sovereignty, security and development.

Russia ready to take Chinese oil debt to court

http://www.bne.eu/dispatch_text16582

bneSeptember 15, 2011

The latest round of talks between Russia and China over the price of oil sold to Beijing have finished without any progress and the issue could now head to arbitration, reports Interfax.

Transneft and Rosneft have been locked in talks with China National Petroleum Corp.

since the Chinese spur of the ESPO pipeline opened at the start of the year, with Beijing refusing to pay the full price demanded by Russia as it claims it is being overcharged for transportation costs.

"The talks are over, the positions of the sides are unaltered," Transneft vice president Mikhail Barkov said. Preparations for possible arbitration proceedings were completed with this round of talks, he added.

The opening of the first pipeline of any kind linking Russia and China was granted great fanfare in January, carrying as it did the hope that energy relations between the world's largest producer and hungriest consumer were finally about to take off. The 2009 intergovernmental agreement to deliver 15m tonnes per year to China was meant to open the floodgates, but hit problems immediately.

China simply stopped paying the full price demanded by the Russian companies, racking up a large debt. Moscow threatened to take legal action in the spring, which saw Beijing quickly pay off a large chunk - presumably to avoid a scene ahead of a high publicity summit between President's Hu and Medvedev in the summer. However, it has persevered in underpaying by $3 per barrel since.

Officials on both sides announced that the long-winded talks over a gas deal, which have been ongoing in one form or another for well over a decade, would finally be out to bed when the two country's president's met in St Petersburg this summer, but no announcement was made, and the pair appear as far apart as ever on a pricing agreement today.

2011/09/15 16:20 KST

KEPCO unit to build cogeneration power plant in Russia http://english.yonhapnews.co.kr/news/2011/09/15/0200000000AEN20110915009200320.HTML

SEOUL, Sept. 15 (Yonhap) -- The Korea Western Power Corp. (KWP), a unit of the state-run Korea Electric Power Corp. (KEPCO), said Thursday that it will build a cogeneration power plant in central Russia.

Under the memorandum of understanding with state-run Northern Caucasus Resorts Co., KWP will construct a 180 megawatt cogeneration power plant in a resort complex to be built in Sochi, the venue for the 2014 Winter Olympics. Cogeneration refers to the simultaneous production of heat and power.

15 Sep 2011

Iranian firms taking part in World Food Moscow exhibition http://www.zawya.com/story.cfm/sidZAWYA20110915035758/Iranian_firms_taking_part_in_World_Food_Moscow_exhibition

TEHRAN - The 20th edition of the World Food Moscow exhibition kicked of in Moscow on September 13.

According to IRNA news agency, 15 Iranian companies are taking part in the event. The World Food Moscow covers all the sectors of the food industry. The exhibition is divided into eleven specialized sectors: meat and poultry, fish and seafood, fruit and vegetables, confectionery and bakery, groceries, oils, fats and sauces, frozen production, preservation, dairy, tea and coffee, and drinks.

55 countries are represented at the exhibition. International producers account for over 40% of all exhibitors at World Food Moscow.  A significant part of the exhibition is taken up by the national pavilions of individual countries.

The exhibition will close on September 16.

17:39 14/09/2011ALL NEWS

Russia, Lithuania to sign agreement on bridge construction across Niemen

http://www.itar-tass.com/en/c154/225590.html

VILNIUS, September 14 (Itar-Tass) — Russia and Lithuania will sign an agreement on the construction of a motor bridge across the river Niemen, which separates the two countries, in October, an official from the Lithuanian Foreign Ministry said on Wednesday.

“Talks are over, all the details have been successfully squared with our Russian partners,” Zenonas Kumetaitis, a deputy director of the ministry’s eastern policy department, told journalists.

According to the Lithuanian diplomat, the Lithuanian-Russian bridge project is geared to facilitate the development of transport links and border infrastructure between Lithuania and Russia’s easternmost Kaliningrad exclave. It is planned that the agreement will be signed at a next session of the Russian-Lithuanian intergovernmental commission.

The new bridge will link Lithuania’s town of Panemune and Russia’s city of Sovetsk. The old Queen Louise Bridge between the cities was built in 1907. Badly scarred by

World War II and rebuilt in 1946 now is in technically poor condition. The new bridge will be built just stown throw from the old one. The Russian part of the project is estimated at 15 million euros, the Lithuanian part – at 17 million euros. A total of ten million euros will come from the European Union’s funds.

18:15 14/09/2011ALL NEWS

RF Days of Culture to take place in Moldova – Moldovan Culture Minister

http://www.itar-tass.com/en/c154/225619.html

CHISINAU, September 14 (Itar-Tass) — The Russian Days of Culture will take place in Moldova after a two-year break, Moldovan Culture Minister Boris Focsa said.

Speaking at a joint press conference with Russian Ambassador to Moldova Valery Kuzmin on Wednesday, Foksa said such events had not been held due to economic and political problems that the republic faced.

Ahead of the Russian Days of Culture the ministries of both countries signed a treaty of cooperation. “I’d like to express my deep gratitude for signing the treaty. The Moldovan society missed its favourite artists. Within the events the Russian Film Week will take place. We are also planning to show modern movies of Russian directors,” Kuzmin said.

He noted that the events would be held in Chisinau, as well as in Beltsy, Comrat and in Tiraspol. Next year the Moldova Days of Culture will be held in Russia, Kuzmin added.

“Cultural cooperation between Russia and Moldova develops permanently. For a long time our people lived in one state. Thousands of mixed families live both in Russia and in Moldova,” the Russian ambassador stressed.

Russia launches next stage of Center - 2011 strategic military traininghttp://en.trend.az/regions/casia/kazakhstan/1931883.html

[15.09.2011 10:38]

Kazakhstan, Astana, Sept. 15 / Trend A.Maratov /

Representatives of the Airmobile Forces of the Kazakh Armed Forces arrived in Russia’s Ashuluk landfill with AN-26 aircrafts, to participate in the next stage of the large-scale joint strategic training Center - 2011, the Kazakh defense ministry reported.

"The Deputy Commander of Airmobile Forces of Kazakh Armed Forces Viktor Zhitnik is leading a group of Kazakh paratroopers. Representatives of the Joint Chiefs of Staff of the Kazakh Defense Ministry and leadership of the Air Force and Air Defense Forces of Kazakhstan will also attend the training," the report reads.

"Roughly 100 Kazakh military servicemen are attending the next stage of the large-scale joint strategic training Center - 2011, held in Russia. At this point, the objective of the Kazakh paratroopers is to capture and maintain the border. The Kazakh soldiers will conduct the operation jointly with the departments of participating countries. During the trainings, the Kazakh Air Force will use the Mi-17 aircraft and Su-27 frontline aircrafts," the report reads.

As reported earlier, the Center - 2011 strategic military trainings will be held in four countries, particularly in the Oymasha landfill of Kazakhstan, Ashuluk landfill of Russia, Podgornaya landfill of Kyrgyzstan, and Lyaur landfill of Tajikistan. Kyrgyzstan and Tajikistan will host exercises that will involve units of the Collective Rapid Reaction Force and the CSTO Collective Rapid Deployment Forces of the Central Asian region. Kazakh armed forces are engaged in all stages of the trainings.

The Central Military District Headquarters of the Russian Armed Forces in Yekaterinburg will lead the trainings. The Deputy Chairman of the Joint Chiefs of Staff, Major-General Mukan Dyusekeev, will lead the Kazakh group of officers in the operational control, which is included in the Joint Staff leadership.

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

Georgian FM informs U.S. diplomat about talks with Russia on WTOhttp://en.trend.az/regions/scaucasus/georgia/1931914.html

[15.09.2011 10:43]

Georgia, Tbilisi, Sept. 15 / Trend N.Kirtzkhalia /

Georgian Foreign Minister Grigol Vashadze hold a meeting with U.S. Ambassador to Georgia John Bass, the Georgian foreign ministry reported.

During the meeting, the parties discussed the principal issues of bilateral relations and the state of the ongoing Swiss-mediated negotiations between Georgia and Russia on Russia's accession to the World Trade Organization (WTO), the report reads.

The fifth round of the WTO negotiations was held on Sept.12 in Geneva.

Vashadze said Georgia is ready to compromise, but "Russia refuses and does not want to concede".

Georgia demands from Russia legalization and transparency on the borders on the Russian-Abkhaz and South Ossetian-Russian areas.

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

Lavrov: Russia-Ukraine relations should be free from ideology-driven approachesToday at 10:41 | Interfax-Ukraine Moscow, September 15 (Interfax) - Moscow and Kyiv need to avoid any ideology-driven approaches in their relations, Russian Foreign Minister Sergei Lavrov said in Moscow on Wednesday.

"In modern-day conditions, each country should be de-ideologized and pragmatic, and should do things that will actually bring tangible benefits to ordinary people," he said.

Lavrov said he was confident that cooperation between Russia and Ukraine could and should be mutually beneficial.

"The broader use of our advantages will help both Russia and Ukraine seriously improve their competitiveness amid present-day globalization processes worldwide," the Russian foreign minister said.

Read more: http://www.kyivpost.com/news/nation/detail/112850/#ixzz1Y0TTUgE0

23:26 14/09/2011ALL NEWS

Moscow Patriarch arrives East-Ukrainian region, no protests reported

http://www.itar-tass.com/en/c154/225774.html

LUGANSK, September 14 (Itar-Tass) – Patriarch of Moscow and all Russia Kirill I has arrived on a two-day ministerial visit in Ukraine’s easternmost region of Lugansk, which is part of the vast Donetsk Coalfields /Donbass/ industrial area.

“This is the first time I’m visiting the land of Lugansk but far from the first time I’m visiting Donbass, and I came here for a reason that’s quite notable – I mean the 20th anniversary since the foundation of the Eastern Orthodox diocese of Lugansk,” His Holiness Kirill I said.

He called Lugansk and Donbass a very special place.

“This is a region where the country’s economic might is molded, where the really hardworking people live, and where material values meaning much for the nation, society and the state are produced,” the Patriarch said.

“Also, it’s a place where the hardworking and tolerant people maintains and safeguards the Orthodox Christian faith,” he said.

The Ukrainian national flag and the Patriarchic standard were hoisted at Lugansk airport where His Holiness Kirill I was greeted by the ruling hierarch of the diocese, Metropolitan Joannicius.

Right after the meet-and-greet ceremony, the Patriarch went to the St Vladimir’s Cathedral where more than a thousand believers had gathered to welcome him. The roadway leading to the cathedral was bestrewed with flowers and green grass.

At 09:30 local time Thursday, Kirill I will lead a divine liturgy on Teatralny Square, the city’s largest. Upon the end of it, he will address the believers.

The organizers of the prayer expect it will likely bring together 15,000 or so disciples of Eastern Orthodox Christianity.

The other functions Kirill I is expected to participate in are a trip to the Pylon of Fame and the laying of flowers at the Unknown Soldier’s Tomb and a meeting with local veterans of World War II.

Also, he is expected to consecrate the first stone that will be laid in the foundation of a future church of the Virgin Mary’s Icon ‘Tenderheartedness’ and to take part in the blessing of newlywed couples.

No actions of protest on the part of Ukrainian nationalists were noticed when the Patriarchic motorcade moved along the city streets but activists of the Ukrainian Popular Party plan unfolding Ukraine’s national flag in a downtown area in front of the monument to the 19th century poet Taras Shevchenko.

The latter is located in a stone’s throw from the square where Kirill I will address the congregation with the preachment.

At the same time, the activists of the ultra-nationalistic Svoboda /Freedom/ party have promised to take crowds of their supporters to the streets despite the ban on actions.

“A week before Kirill I’s visit, the leader of a breakaway religious faction, Mikhail Denisenko, who is called by his adepts the Patriarch of Ukraine Filaret, came here,” a source at the Lugansk diocese told Itar-Tass.

“His adepts swiftly purchased six houses here, laid down three churches and called on the local residents to protest against Patriarch Kirill’s arrival,” he said.

The absolute majority of churchgoers in the eastern regions of Ukraine belong to the traditional canonical Ukrainian Orthodox Church that reports to Moscow Patriarchate and is governed by Metropolitan Vladimir of Kiev.

The latter Church is a highly autonomous unit within the structure of the Russian Orthodox Church.

Armenian-Russian gas company to receive government allocation to supply low-priced gas

http://news.am/eng/news/74199.html

September 15, 2011 | 11:54

YEREVAN.- The Armenian government resolved on Thursday to allocate 184 million drams ($491,297 US) to Armenian-Russian ArmRusGazprom gas company for the latter’s supply of low-priced (100 drams; 27 cents US/m3) gas to Armenia’s socially disadvantaged families in April-June of this year.

On April 1, 2011, it was decided that gas would be supplied to the population for 132 drams (35 cents)/m3. The government, however, resolved to set—between April 1, 2011 and March 31, 2012 and for using up to 300m3 of gas—a discount price for the socially disadvantaged class of society.

According to Armenian PM Tigran Sargsyan, the Ministry of Labor and Social Affairs now must present the list of those families that need social assistance. This program will encompass 1 billion drams ($2,670,094).       

The money will be allocated to ArmRusGazprom not from the budget, but  from the profits of state-run enterprises of the energy sector.

Defrosting Conflicthttp://russiaprofile.org/comments/45317.html

Alarmism over Russia’s Role in Transdnestr Belies the Potential of an Upcoming Moscow Conference

Comment by Sergei Markedonov Special to Russia Profile 09/14/2011

Once again Transdnestr has become the focus of attention among specialists across the post-Soviet space. On September 9, under the auspices of the Organization for Security and Cooperation in Europe (OECD), an international conference was held during which the Moldovan Prime Minister Vlad Filat met the President of the Unrecognized Transdnestr Moldovan Republic Igor Smirnov.

Contact between representatives of Tiraspol and Chisinau over the past ten years has been fitful. In 2001 Moldovan President Vladimir Voronin was reelected on a ticket of reintegrating the country. He criticized his predecessors harshly for provincial nationalism and a lack of flexibility. The Voronin of 2001 was even ready to legally acknowledge aggression from Chisinau against the left bank of the Dnestr. However, slogans and real politics do not always coincide. Rejecting a Russian plan (known as the Dmitry Kozak Plan) to reunite the country on federal principles, Moldovan leaders in 2003 gave up talks with Transdnestr’s de-facto leadership as lost. It was only at the end of 2008 that the conflicting sides made timid steps toward each other once again.     

But the long-awaited meeting of the leaders of Moldova and Transdnestr did not make the negotiating process irreversible, especially since in 2009 the Moldovan political system suffered a crisis. A series of parliamentary campaigns failed to result in the election of a head of state (Moldova is a parliamentary republic). In this context, the peace process was relegated to secondary importance. Since this time there has been no

official attempt to renew the “5 + 2” format, which envisaged a resolution between the two conflicting sides and five other interested parties – two guarantor-states – Ukraine and Russia, an OECD mediator and two observer states – the United States and the EU.   

At the latest meeting in Germany, the sides agreed to meet in Moscow on September 22, 2011, to make provisions for a return to fully-fledged talks. However, the very fact that Igor Smirnov agreed to be drawn into the negotiating process (albeit half-heartedly) already means a lot. Firstly, for many years he was forbidden to travel in Europe. In September of 2011, this ban was lifted in the hopes that the Transdnestr leader would take up constructive positions. Secondly, in December 2011 presidential elections are set to take place in Transdnestr, and Smirnov is expected to take part in what will be his fifth election campaign. It is not hard to understand that for a politician who has counted on separation from Moldova, taking part in negotiations with Chisinau is not a simple choice.   

And as often happens in such cases, experts are looking for “Moscow’s footprint.” In reality, not long before the September conference in Germany, Russian law enforcement agencies showed interest in the business of certain members of Smirnov’s family. And the fact that Russia is not interested in prolonging the leader’s time in power is no secret. Recent announcements from representatives of the Russian Consulate have also caused a stir: they have said that inhabitants of Transdnestr applying for Russian citizenship can no longer do so in Tiraspol and now have to go to the Moldovan capital. Those who do not have Moldovan citizenship are also obliged to apply for a Moldovan residence permit.

It has to be noted, however, that the meeting of Filat and Smirnov, as well as pressure from Moscow, can be interpreted as an attempt by Russia to act to resolve an old conflict by diplomatic means. It is not the first year that Russia has taken part in either relations with Transdnestr (for example the March 18, 2009 meeting of the presidents of Russia, Moldova and Transdnestr) or the Nagorno-Karabakh peace process (three-way meetings between Armenia, Azerbaijan and Russia have already become a regular occurrence). And although there have been no obvious breakthroughs, the negotiating process in itself can be seen as positive. But in the case of Transdnestr, in contrast with Nagorno-Karabakh, Moscow’s diplomacy is frequently taken as a sign of weakness. Recent events led to critical media response in both Russia and Transdnestr. It is not the first time that this kind of alarmism has emerged. Two years ago criticism was directed at the joint statement issued on March 18, 2009, which stated that Russia was ready to transform the current peace process to a “peace-guaranteeing process.” This position was then described as a practical defeat for Russian diplomacy, although Moscow only started talking about such a transformation after achieving a compromise between the conflicting factions, and not a day earlier! 

In 2011 pressure on president Smirnov was called “a loss” and “a defeat.” But if we put emotions aside, recent events have hardly revealed anything new. Did Moscow really ever make public promises to recognize a de-jure Transdnestrian state? The celebrated

Kozak Plan of 2003, which failed following the decisive participation of the Moldovan elite together with Western diplomats, by no means suggested secession. It was based on a suggestion to create a federative Moldovan state (officially Chisinau prefers the autonomy of Transdnestr in a unitary formation), but this did not encompass self-determination of the disputed territory. The same is true of all the preceding documents linked to the peace process that were prepared with Russian participation. 

Where is such alarmism coming from? Russia itself has certainly played a role, with its policies in Abkhazia and South Ossetia. Three years ago Russia recognized their independence and today it is increasing its military-political and economic presence in the two previously autonomous Georgian states. But this move was necessary – it is not the consequence of implementing an imperial plan, but a reaction to the process of frozen conflicts thawing, which began in Tbilisi in that year. Within the narrow corridor of possibilities Moscow took a decision that created many potential political risks. But this does not mean that the main aim of Russian politics in the post-Soviet space should be direct clashes with all of the former republics of the Soviet Union and their Western partners. Is this a priority for Russian foreign policy? Hardly. Conducting a narrow diplomatic game, maintaining its strong position in both Chisinau and Tiraspol is much more promising. The rupture between Russia and Georgia only happened when room for maneuver in the Georgian-Abkhazian and Georgian-Ossetian conflicts had been exhausted.      

But such possibilities do remain on the Dnestr! It’s also important to remember that Russia is not the only player in the Moldova-Transdnestr peace process. And if Chisinau fails to understand Russia’s moves, or they spur an inadequate action from the Moldovan government, there is always the option to freeze this or that diplomatic activity, particularly as Moscow has shown more than once that it is ready for one-sided concessions, which are not in its interests (such as the rapid withdrawal of its troops from the area or agreeing to a Unitarian Moldova, without taking into account Transdnestr’s interests.)     

Therefore it is unreasonable to push Russian diplomacy toward a tough choice: revisionism or maintaining the status-quo. It will be much more productive for Russia to act based on the situation and not sticking to one plan, maintaining the status quo where it is convenient and breaking it where there is no alternative.  

Sergei Markedonov, Ph.D., is a political analyst and a visiting fellow at the Center for Strategic and International Studies (CSIS), Russia and Eurasia Program, Washington, DC.

09:48 15/09/2011ALL NEWS

Sailing-ship Mir returns to St Petersburg after long voyage

http://www.itar-tass.com/en/c154/225965.html

ST PETERSBURG, September 15 (Itar-Tass) — The crew of the training sailing-ship Mir (peace) of the State Maritime Academy (SMA) named after Adm. S.O. Makarov will be welcomed back home by brass band music at the Lieutenant Schmidt Embankment on Vassiliyevsky Island here on Thursday

The ship arrives in the native city after a four-month voyage along the shores of Scandinavia and Western Europe. During the voyage, the sailing-ship called at 20 ports of nine countries.

The cadets of the SMA, one of Russia's oldest transport institutions of higher learning, and their age-mates from related educational establishments of Europe, Asia, and Africa took part in the voyage. The youths and girls not only engaged in studies under the instructional programme, heard lectures and took credit tests but also got thorough systematic marinization training.

Professor Ivan Kostylev, SMA president, has told Itar-Tass, "We are proud of the fact that the Mir has an official status of St Petersburg Messenger abroad. This is confirmed by its regular participation in various events there".

In 2011, the sailing-ship's mission was to introduce Russia and the city of St Petersburg during the 11th Assembly of the International Association of Maritime Universities in the city of Gdynia (Poland) from June 12 to 16.

When the ship visited the port of Greenock (Scotland), guided tours were organized on board the Russian ship. The visitors were able to enjoy the performing skills of a Russian folklore ensemble. The sailing-ship crew took part in arranging a presentation event on the theme of "The Russian Museum: Virtual Affiliate" that embodied the idea of the accessibility of the world's major collection of Russian arts to broadest viewership outside St Petersburg.

The sailing-ship Mir was built in 1987 and since then it has been actively used as a floating school for hundreds of SMA cadets and to the students of maritime educational establishments of Russia and other countries. During this voyage the seamen made a successful showing in large-scale international regattas.

Selling of Filin aerial surveillance drones to begin next year http://www.interfax.co.uk/

15/09/11 8:39AM GMT

MOSCOW. Sept 15 (Interfax-AVN) – R.E.T. Kronshtadt is preparing to start serial production of Filin aerial surveillance drones, head of the company’s department…

10:44 15/09/2011ALL NEWS

Armed deserter found in Russia’s Far Eastern Primorsky territory

http://www.itar-tass.com/en/c154/226003.html

VLADIVOSTOK, September 15 (Itar-Tass) — An armed serviceman who deserted from his unit in Russia’s Far Eastern Primorsky territory was found early on Thursday, a spokesman for the command of the Eastern military district told Itar-Tass.

The young man, private first class Ivan Vasilyev, 18, had an AK-74M automatic rifle with no munitions, the spokesman said.

According to previous reports, Vasilyev left his unit deployed at a shooting ground near the settlement of Sergeyevka early on Wednesday, when his company left the camp. Each of the servicemen had a submachine gun but no ammunition. While the servicemen were heading for the shooting ground, Vasilyev returned to the camp. Duty servicemen who stayed at the camp said the young man claimed he had left his helmet. He emerged from his tent wearing one and rushed to join his fellow servicemen. His absence was noticed by lunchtime and search was launched.

15 September 2011, 10:01

Radical Islamists have no chances to succeed in FSU – analysthttp://www.interfax-religion.com/?act=news&div=8733

Baku, September 15, Interfax - The threat of radical Islam to former Soviet republics is exaggerated, Russian political analyst Gumer Isayev believes.

"One cannot deny the existence and active operations of certain radical religious and political organizations, of course, but a study of their operations in different parts of the former Soviet Union indicates that they pose no real threat to the authorities and don't enjoy broad public support," he said to Interfax commenting on the degree of influence of Islamists on the Muslim population of former Soviet republics, Russia and Azerbaijan in particular.

"Even in Central Asian countries radials have little chances of succeeding in their

confrontation with the authorities today," Isayev said.

At he same time he is convinced that the religious factor will play an increasingly important role in the Middle East, including political life.

"But that doesn't mean that radicals or fanatics will definitely come to power. 'Radical religious groups' is a stereotype, a phrase denying the possibility of Islamists being moderate. Muslim Brothers in Egypt are an influential force enjoying support from the people and even having experience of working in parliament despite the many years' long ban," the analyst said.

In Isayev's opinion, the age of radicals is ending, "in the Middle East the future belongs to Islamic parties of a new type - pragmatists who are ready to tackle the social and economic problems of their countries."

Støre, Lavrov to Tromsø in Octoberhttp://www.barentsobserver.com/stoere-lavrov-to-tromsoe-in-october.4959310-116320.html

2011-09-14 Russia’s and Norway’s foreign ministers Sergey Lavrov and Jonas Gahr Støre will meet in Norway to be conferred as Honorary Doctors of the University of Tromsø.

The world’s northernmost university is preparing to receive high-ranking visitors next month, as both ministers have confirmed their presence at the conferring ceremony on October 12.

The two frontmen for the Agreement on Delimitation of the Barents Sea were appointed Honorary Doctors earlier this summer. - Lavrov and Støre are a symbol of peaceful cooperation and I am very glad the university board has decided to make them Honorary Doctors, Rector of University of Tromsø Jarle Aarbakke said when the appointment was announced.

As reasons for appointing Støre and Lavrov as Doctor Honoris Causa, the board names the important work they have done on the delimitation agreement and the goal-oriented and deliberate efforts they have laid down in placing the High North on the international map, the university’s web site reads.

Before the ceremony the Centre for Peace Studies at the University of Tromsø will hold a symposium called "Negotiating borders in the North. Neighbourly Asymmetry: Norway and Russia 1814-2014".

Sergey Lavrov is the second Russian to be appointed Honorary Doctor at UiT. The first was Former President of the Soviet Union Mikhail Gorbachev, in 1998. Other famous honorary doctors at UiT are Dalai Lama, Salman Rushdie, Rigoberta Menchu Tum and Desmond Mpiko Tutu, according to the university's web site.

Text: Trude Pettersen

A little piece of the Motherland far from Russiahttp://rt.com/news/russia-spitsbergen-mining-in-arctic-605/

Published: 15 September, 2011, 10:26Edited: 15 September, 2011, 10:26

Russia’s vast territory extends over both land and sea, even reaching into foreign lands. A tiny part of the Spitsbergen Archipelago, officially belonging to Norway, is governed by Russian law. RT took a trip to Russia’s remote and icy outpost.

Russia owns about a third of the territory of the Spitsbergen Archipelago, having developed a chilly coal-mining community there during the Soviet period.

And since the collapse of the USSR, the area has become even more important for Russia.

A cluster of islands between the devil and the deep blue sea: for the USSR, Spitsbergen was a lot like Puerto Rico for the US – not entirely its own, yet not fully foreign. A former outpost between North America and Western Europe and, as many hope, a future base for Russia’s advance into the Arctic.

To Western eyes, the statue of Lenin which still looms over the town of Barentsburg  is a monument to failed Soviet ambitions. The settlement, once a flourishing mining community, is in a sorry state. Yet behind its peeling façade one can see freshly-painted writing on the wall that the Russians are not leaving.  On the contrary, they intend to come back.

“There was a time when the Soviet Union was feared and respected. You can’t turn back time, but Russia should also position itself as a strong state. People who visit Barentsburg should feel like they have stepped on Russian soil”, says Vitaly Troshenkov, who is busy painting an elaborate mural on the wall of a local kindergarten.

It is the second summer in a row that Vitaly is spending on Spitsbergen. His mural depicting Russia as an ark is meant to project an image of an unshakable state emerging from the dire straits of a troubled history. In a town that still experiences difficulties with

running water and electricity, this choice of priorities would have been questionable if it was not geopolitically timely.

Technically, that is already the case. Russian settlements on Spitsbergen have greener grass because of the several loads of black soil that were brought here from Siberia in Soviet times.

However legally, this territory belongs to Norway, but a 1920 agreement guarantees its signatories the right to conduct industrial activity on the archipelago – an option fully utilized only by Moscow which has been mining coal here for decades.

Soviet methods die hard. The mine’s equipment has not changed much in the last 50 years. The coal produced here has always been pretty expensive, but no-one ever thought of quitting. It has never been an issue of economics, but rather of politics. Moscow wanted to maintain its base on Spitsbergen at any cost. Now, production volumes have dwindled to just a fraction of what they used to be, but keeping a Russian presence on the archipelago is still considered a matter of strategic importance, RT’s Oksana Boyko reports.

The settlement, which appears to have been frozen in time, retains much of the Soviet spirit and culture.

“I’m 27 years old so I don’t have clear memories of the Soviet Union but I guess the Soviet spirit is very well preserved here. We have people here from Ukraine, Belarus, Central Asia and we all feel like citizens of one country,” confesses Dmitry Fitsura, one of the miners.

Ironically, the attitude toward the mine’s profitability is also inherently Soviet. It has been a loss-making venture for decades, yet making it more efficient is politically inconvenient.

“Coal mining is what allows Russia to be present on Spitsbergen. To be profitable, we need to mine three times as much coal as we do now, but since the deposits are finite we have to go slow,” says Alexander Veselov, director of ArcticUgl, the operator of the mine.

Meanwhile, Russia has notably increased funding of scientific expeditions on Spitsbergen in an effort to explore the archipelago’s natural riches.

Nikita Boutoma is a geologist who first arrived in Barentsburg in the early 80s. The collapse of the Soviet Union made him trade geology for business but the recent increases in state funding allowed him to come back. 

“Spitsbergen is a key to all the Arctic. Geographically, it’s a place where the global weather is being formed. Geologically, it’s a unique ground for science and mining. It’s

rich in oil, gas and other minerals. It’s a place we simply can’t afford to lose”, stresses Nikita. 

And his country seems to agree, keeping this “key” close to its heart.

11:35 15/09/2011ALL NEWS

ISS crew to have restful sleep Thurs ahead of Fri landing

http://www.itar-tass.com/en/c154/226049.html

MOSCOW, September 15 (Itar-Tass) — The ISS-27/28 combined crew of the personalized spaceship Soyuz (named "Yuri Gagarin") have been given an opportunity of restful sleep until Thursday evening ahead of the spaceship's Friday return to Earth.

An official at the Flight Control Center (FCC) outside Moscow has told Itar-Tass, "At 4 a.m. on Thursday, the cosmonauts went to sleep until 5 p.m., Moscow time".

"Of course, usually, the cosmonauts do not sleep so long. They may have a rest and engage in some useful psychological-release pursuits,' said Irina Alfyorova, head of the FCC medical group.

The crew's schedule of work and rest has been changed Thursday in view of the forthcoming nightly landing, Alfyorova pointed out. This past Wednesday was a day of high-powered work for Russian cosmonauts Alexander Samokutyayev, Andrei Borisennko and Sergei Volkov, American astronauts Ronald Garan and Michael Fossum, and Japansese astronaut Satoshi Fukurawa: upon getting up as usual at 10 a.m., they worked until 4 a.m. Thursday.

Upon getting up, Samokutyayev, who together with Borisenko and Garan will return to Earth on Friday morning aboard the Soyuz TMA-21 spaceship, will engage in stowing returnable equipment and the results of scientific experiments performed in the Russian segment of the International Space Station. The American astronaut will also engage in the concluding loading operations, in public relations arrangements, and will prepare for a transfer to the spaceship.

At about 23:00, Moscow time, the combined crew will get together for a farewell supper, after which the cosmonauts will put the cold-stored results of the medico-biological experiments pm board the spaceship and set about reactivating the Soyuz spaceship systems.

The Soyuz TMA-21 spaceship is to undock from the ISS at 04:38, Moscow time, on September 16 and land at 08:00, the FCC official said.

Russian press review (FOCUS News Agency) http://www.focus-fen.net/index.php?id=n259610

15 September 2011 | 09:24 | FOCUS News AgencyHome / WorldThe last group of about 100 Russian tourists stranded in Bulgaria in the recent days headed back home on Wednesday evening, announced the spokesperson for the Russian Federal Agency for Tourism Oleg Moseyev, Izvestia writes.Flight FB-783 of Bulgaria Air departed at about 8:40 p.m. local time. 600 Russian tourists could not leave the seaside cities of Varna and Burgas to Moscow and Saint Petersburg on September 9. Airline company Bulgaria Air cancelled all flights of tour operator Alma Tour as a result of a financial dispute between them.

On Friday in the presence of Russian Prime Minister Vladimir Putin shareholders and participants in South Stream gas pipeline – Italy’s ENI, France’s EDF and German’s Wintershall – will sign a legally binding agreement about their involvement in the project, Kommersant writes.But the document, which is a guarantee that the project will be implemented, exerts pressure on the European authorities.European Energy Commissioner Günther Oettinger directly described the project as contradicting to the EU’s interests and threatened Gazprom with problems with contracts, if South Stream impedes the construction of the European pipeline Nabucco. The European Commission will be able to create similar problems, because it plans to grow into a key side in all gas talks in Europe soon, the newspaper reports.

U.S. citizens’ incomes have been thrown 15 years back, while in terms of poverty level the country is half a century back, as 46 million people live below the poverty line, Vedomosti reports.More than 15% of people live below the poverty line – this is unbelievable, said Alice O’Conner, a professor at the University of California, Santa Barbara.The poor are more than they were before the 1960s war on poverty. The data prove “the depth of the recession and inadequate economic recovery,” said O’Conner.

Russian Press at a Glance, Thursday, September 15, 2011http://en.rian.ru/features/20110915/166857018.html

08:39 15/09/2011

A brief look at what is in the Russian papers today

POLITICS

Russian tycoon Mikhail Prokhorov denies rumors of a split in his Right Cause party(Vedomosti, Rossiiskaya Gazeta, Nezavisimaya Gazeta, The Moscow Times)

Russian Prosecutor General Yury Chaika says it is necessary to monitor social networks in Russia(Rossiiskaya Gazeta)

An interview with Russian Deputy Prime Minister Viktor Zubkov, who celebrates his 70th birthday on Thursday(Rossiiskaya Gazeta)

Europe's top elections watchdog said that it wants to send a 260-member observer mission for the upcoming State Duma elections, but the Central Elections Commission retorted that the figure was too high(The Moscow Times, Vedomosti)

ECONOMY & BUSINESS

Greece's departure from the European Union would help boost its competitiveness but could trigger a domino effect that would wreck the euro zone(Kommersant, Rossiiskaya Gazeta)

Crisis-hit Belarus may abandon plans to raise an $8-billion loan from the International Monetary Fund and will put a $1-billion credit from Russian bank Sberbank to a local company into state reserves(Kommersant)

Russian Railways is completing the paperwork for the government to announce a tender for four international consortiums to build a high-speed link between Moscow and St. Petersburg(The Moscow Times, Nezavisimiaya Gazeta, Rossiiskaya Gazeta)

OIL & GAS

The European Commission has harshly criticized Russia’s $21.5-billion South Stream pipeline project(Kommersant)

DEFENSE

Turkey and the United States signed a memorandum on the deployment of a U.S. radar system on Turkish territory as part of a "missile shield" to protect NATO allies from

potential ballistic missile threats(Rossiiskaya Gazeta)

WORLD

Eduard Bagirov, a Russian writer and blogger arrested in June in Chisinau, Moldova, goes on a hunger strike(Nezavisimaya Gazeta)

SPORTS

Two goals in two minutes from Apoel Nicosia condemned Zenit St. Petersburg to a 2-1 defeat in Cyprus in their opening 2011/12 Champions League group game(Rossiiskaya Gazeta)

An interview with basketball expert Vladimir Gomelsky ahead of the Russia vs. Serbia quarterfinal match at the 2011 EuroBasket(Rossiiskaya Gazeta)

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

11:49 15/09/2011Top News

Right Cause alternative congress sacks Prokhorov from head post

http://www.itar-tass.com/en/c32/226071.html

MOSCOW, September 15 (Itar-Tass) —An alternative congress of the Right Cause party, organized by head of the party federal executive committee Andrei Dunayev and former leader of the Democratic party Andrei Bogdanov, has sacked Mikhail Prokhorov from the head post in the party.

Besides, delegates to the alternative congress have voted to repeal a previous resolution, adopted by Prokhorov on Wednesday, on the expulsion of Bogdanov and the two Ryavkin brothers- Sergei and Alexander, from the party.

At the initial congress of the Right Cause party being held in the building of the Academy of Sciences Mikhail Prokhorov called upon his fellow party members to quit the Right Cause and create their own party.

Yevgeny Roizman, head of the City without Drugs Fund, who had been included into the Right Cause election list, which is believed one of the causes of a split within the party, declared that both Prokhorov and himself had already given a notice that they are quitting the Right Cause.

Right Cause has forfeited right to run in elections – Prokhorovhttp://rt.com/news/line/2011-09-15/#id1828111:36

Right Cause leader Mikhail Prokhorov arrived at the Russian Academy of Sciences on Thursday morning on the second day of the party's congress. Following a split in the party, he cast doubt on its fitness  to participate in the upcoming parliamentary election. “The party has forfeited the legitimate right to run in State Duma elections,” Prokhorov said. Yesterday the Russian billionaire terminated the mandate of the party's executive committee and expelled Andrey Bogdanov and other key members of the party who had moved against him. Prokhorov’s opponents are holding an alternative congress at the International Trade Center in Moscow.

Prokhorov urged followers to leave Right Cause partyhttp://rt.com/politics/news-line/2011-09-15/#id18277

10:47

Right Cause leader Mikhail Prokhorov on Thursday urged his followers to leave the party. A day earlier, the pro-business party split following internal disagreements. Prokhorov’s opponents started their own congress on Thursday. The pro-business politician told Ekho Moskvy radio he would launch a new party.

Party over - Prokhorov wants allies to abandon Right Causehttp://rt.com/politics/prokhorov-wants-right-cause-611/

Published: 15 September, 2011, 11:08Edited: 15 September, 2011, 11:14

In a video address published on the Internet, Mikhail Prokhorov suggested that his allies quit Right Cause and found a new political party.

On the second day of the Right Cause convention in Moscow, its recently-elected leader, Mikhail Prokhorov, said that the party had discredited itself and then called on his allies to quit and form a new party.

“The convention has been falsified. From the formal point of view it is difficult to take the case to court. I have a different suggestion – to refuse to participate in this party. The reason is clear –Right Causehas discredited itself. This is not the party our supporters voted for,” Prokhorov said before the convention opened its second session on Thursday.

“After this we will calmly – and I will talk to the country’s leaders – build a public movement from the ground up and then we will work on the political party,” Prokhorov said.

Prokhorov was addressing the official convention that gathered in the Academy of Sciences building in Moscow, as an opposing faction within Right Cause gathered for an alternative congress in the International Trade Center. Their leader, the head of the Russian freemasons, Andrey Bogdanov, who was expelled from the party by Prokhorov on Wednesday, told journalists that the alternative congress would change the party’s charter and decide on a new party leader.

Russian billionaire accuses Kremlin of sabotaging political career http://www.telegraph.co.uk/news/worldnews/europe/russia/8764113/Russian-billionaire-accuses-Kremlin-of-sabotaging-political-career.html

Russian oligarch Mikhail Prokhorov has accused the Kremlin of trying to sabotage his fledgling political career ahead of key polls.

7:00AM BST 15 Sep 2011

The billionaire leader of the Pravoe Delo (Right Cause) party spoke hours after his allies and spokespeople complained people close to the Kremlin had conspired against the party leader to boot him out.

"There are attempts by employees of the presidential administration to put the Right Cause party under control," Mr Prokhorov told a news conference.

"Who is behind this, I will say tomorrow," he said, referring to the second day of the party congress scheduled for today.

In May, Mr Prokhorov, the charismatic owner of the NBA's New Jersey Nets basketball team, made a splash on Russia's lethargic political scene by announcing his readiness to lead a small pro-reform party in parliamentary polls.

In June, he easily won the party's leadership at a congress, setting the goal of challenging the dominance of Vladimir Putin's ruling United Russia faction.

The move marked the first foray into politics by a top businessman since the 2003 arrest of Mikhail Khodorkovsky who critics say was punished for daring to challenge the Kremlin.

Analysts have said Mr Prokhorov could not have assumed the party leadership without the tacit support of the Kremlin, which stands to benefit from a semblance of political competition ahead of parliamentary polls in December and presidential elections three months later.

Mr Prokhorov, who is described as Russia's most eligible bachelor and enjoys a reported fortune of $18 billion, has denied he had to obtain the Kremlin's permission to head the party and insists he was his own man.

He had become increasingly bold in his statements over the past weeks, slamming Russia's "autocratic power" and attacking the Kremlin's model of government.

A party source said the billionaire might have overplayed his hand and angered the Kremlin.

The source said Mr Prokhorov wants to put Yevgeny Roizman, the founder of a controversial treatment programme for drug addicts, on party lists, a decision that apparently displeased the Kremlin.

Earlier, the first day of the party's pre-election congress kicked off with a scandal as Mr Prokhorov's allies and spokespeople accused the Kremlin of manoeuvring to force him out.

"There are forces who are seeking to split the party apart," the party source told AFP.

"We believe that these people are close to the presidential administration."

Party spokeswoman Olga Stukalova told AFP the party congress was "hijacked by people close to the presidential administration".

Party member and prominent journalist Alexander Lyubimov said Kremlin-connected political consultants and several party members were seeking to form a majority to oust Mr Prokhorov.

Mr Prokhorov told reporters later in the day that one of top Kremlin officials in charge of domestic politics, Radiy Khabirov, was behind the attack on him, adding that the Kremlin's top ideologue Vladislav Surkov was also watching the congress closely.

A source in the Kremlin administration, speaking to the Interfax news agency, dismissed the tycoon's statements as "hysterics".

Analysts said Mr Prokhorov's confrontation with the Kremlin is likely to nip in the bud his political ambitions.

Signs of Faux Foul Play in Russian Politicshttp://www.nytimes.com/2011/09/15/world/europe/signs-of-faux-foul-play-in-russian-politics.html?_r=1

By ANDREW E. KRAMER

Published: September 14, 2011

MOSCOW — In a Russian political campaigning season known for monochrome and monotony, a spectacle of sorts unfolded Wednesday when the businessman Mikhail D. Prokhorov announced a scramble to stop what he called a Kremlin-orchestrated takeover of his party.

The assertion met with a good deal of skepticism in Moscow, since his party is already generally pro-Kremlin, while he is considered beholden to the government for the success of his business ventures.

Mr. Prokhorov, the Russian oligarch who bought the New Jersey Nets basketball team last year, becoming the only foreign owner of a National Basketball Association franchise, said he had to expel from the party a number of members who had been conspiring with a political adviser to Russia’s president.

“There is no schism in the party,” Mr. Prokhorov said Wednesday evening at a hastily convened news conference. “There is an attempt by certain presidential administration workers to seize the party.”

Mr. Prokhorov said the adviser, Radi Khabirov, the deputy chief of the presidential office of domestic policy, had encouraged the members of Mr. Prokhorov’s Right Cause party to try to maneuver him out of the leadership at a party convention that opens here Thursday.

There was no immediate comment from President Dmitri A. Medvedev or his aides on the accusation. Efforts to reach Mr. Medvedev’s spokeswoman on Wednesday were unsuccessful. While hardly unusual in its particulars — Mr. Prokhorov’s accusation was the type routinely leveled by dissidents and opposition figures paranoid about infiltration — it was peculiar coming from a powerful businessman.

Since Mr. Prokhorov assumed the leadership of Right Cause in May, with the Kremlin’s blessing, some members of the party had indeed been venting frustration about changes in the institution’s structure. Mr. Prokhorov had dismissed the heads of several regional branches.

During the day on Wednesday, many of Russia’s major political news outlets reported that Mr. Prokhorov would resign. Then he gathered reporters in his office to relate a tale of skulduggery.

The rebellious faction in the party, he said, took control of the committee on credentialing ahead of the convention. As delegates arrived from regional party offices, 21 were denied credentials, and replaced with Kremlin loyalists.

“It was a raiders’ attack, just like a raid on a business in the 1990s,” Mr. Prokhorov said, before signing a paper that he said expelled disloyal members of the party, and then demonstratively holding it before cameras.

“You are all waiting for me to step down,” he said. “Keep waiting.”

His accounts seemed to counter one of the signal objections to his candidacy: that people tend to see him and his party as a simulation of competition and pluralism rather than the real thing. Mr. Prokhorov has acknowledged that he consulted with the government before deciding to lead the party.

Reviving the Right Cause party appeared to be a key project to show the existence of a marketplace of ideas in the coming parliamentary elections. And the appointment of Mr. Prokhorov, whose extensive wealth gives him a high profile, formed its centerpiece.

“Too many rumors went around that Prokhorov is a Kremlin project,” Konstantin Remchukov, the editor of the newspaper Nezavisimaya Gazeta and a former member of Parliament, said in an interview.

“But now he will be in conflict with the Kremlin,” Mr. Remchukov said. “It is about improving his legitimacy.”

To stir up interest, Right Cause issued a news release on Tuesday explaining that he is, in fact, independent from the Kremlin.

“The Kremlin is not in a position to control Prokhorov or his close associates working on the new project of the party,” the release said.

This summer, the party accused regional leaders of tearing down posters.

After the accusations were made public on Wednesday, Mr. Remchukov said, “Everybody will say, ‘The Kremlin attacked and he didn’t surrender. Prokhorov is a real muzhik,’ ” the Russian word for a tough guy.

“When people ask, are you a Kremlin project? He will say, ‘Didn’t you see that big fight we had?’ ”

Olga Slobodchikova contributed reporting.

Surveillance of social networking siteshttp://rt.com/politics/press/rossijskaya-gazeta/social-networking-russia-prosecutor/en/

Published: 15 September, 2011, 03:24Edited: 15 September, 2011, 03:26

By Vladislav Kulikov

Yesterday Russia’s prosecutor general, Yury Chaika, declared the need to have greater control over social networking sites. 

The announcement was made in Minsk during the meeting of the Coordinating Council of Prosecutors General of the CIS.

“You saw what happened in London,” said Chaika. “In my opinion, the problem is evident: there needs to be control over this activity, and I think this will be reasonable and in the interests of protection of the freedoms of our citizens.”

Social networking sites in and of themselves are not dangerous; they make it possible for millions of people to find new friends, meet new people, find a significant other, and simply reestablish lost contacts. Who would be threatened by two former classmates, for example, who reconnected on a social networking site nine years after graduation and decided to go fishing together, like in the old days? Some are publishing their music, and becoming stars. Others are unsuccessfully trying to interest the public in their amateurish prose. The only thing that’s dangerous about this activity is that it could be rather wearisome.

However, the Internet unites not only the good, but also the bad people, enemies of society and the state. For example, the internet has recently become a meeting place for pedophiles. Several years ago, the FBI created an entire cyber division that specializes in investigating online predators. Special agents worked undercover, posing as teenage girls in online communities. The US agents were consulted by their own daughters, who taught their fathers the teen online slang. This problem is not any less relevant here. For

example, as was recently stated by the St. Petersburg prosecutor, pedophiles actively use social networking sites to lure children in the Northern Capital.     

“The use of social networking sites by adults to communicate with children to subsequently force them into sexual relations is no less dangerous than publishing illegal information,” said the city’s prosecutor, Sergey Zaitsev. “For example, in March 2011, a criminal lawsuit was filed in the Nevsky District of St. Petersburg against an adult man who raped a 12-year-old girl after longstanding online communication with the victim. And this is not an isolated case.”

Moreover, prosecutors regularly expose extremists advocating their passionate (and criminal) ideas online. There was a wild incident in which a group was created on a well-known social networking site in which members discussed ways to create an explosive device. Meanwhile, prosecutors recently discovered an online video posted on the social networking page of a teenager from the town of Dolgoprudny in which a young man urged people to destroy citizens with "incorrect” ethnicities.

Russia’s Federal Drug Control Service is recruiting an armyhttp://rt.com/politics/press/izvestiya/drug-russia-police-special/en/

Published: 15 September, 2011, 02:52Edited: 15 September, 2011, 08:04

By Vladimir Barinov

Drug police are planning to purchase motor boats, armored vehicles and small arms.

Russia’s Federal Drug Control Service plans to fight against the international drug mafia with its own mini-army. The agency plans to acquire armored vehicles, motor boats, special arms and even shooter mats for snipers. Next year alone, the agency plans to purchase 2.8 billion rubles worth of equipment. Experts believe that the armed drug police could conduct autonomous special operations overseas, including in Afghanistan.      

The chief financial expert with the Federal Drug Control Service, Lieutenant General  Mikhail Kiyko, addressed an application to the government’s Military-Industrial Commission for additional funds for the purchase of motor boats, armored vehicles and special arms between 2012 and 2014.  

The drug police are mainly interested in motor boats.

“The main drug trafficking route from Iran stretches through the Caspian Sea; therefore, we need high-speed means of transport. Today, we are forced to seek help from border guards,” explained a Federal Drug Control Service (FSKN) staff members.

The drug police are planning to spend just over 5.5 million rubles on the purchase of three motor boats. Based on the price, these will be fairly modest motor boats with a total capacity for 10 people.

The FSKN is asking for an entirely different amount for armor: 185 million rubles for 2012, 210 million rubles for 2013, and about 290 million rubles for 2014. Russia’s drug police officers have never had this type of armor. Meanwhile, the agency is still choosing not to disclose what exactly it plans to purchase.  

“I can only say that we are talking about armored vehicles for the management, because even the FSKN director drives a standard vehicle,” joked one of the agency representatives.

Most likely, the FSKN will follow the Interior Ministry’s example and purchase a batch of Tiger armored vehicles. The base value of this car is approximately 10 million rubles. The Tiger has a 5-grade protection level and is capable of a maximum speed of 140 kilometers per hour. The vehicle can accommodate 6-9 people, with a maximum capacity of 1.2 tons. The crew is able to fire from the sunroof or through armored door and side glass.         

Experts believe that the FSKN plans to use the equipment to engage in special operations abroad.

“The abilities of the Afghani drug traffickers, for example, are well known; therefore, drug police officers should be adequately armed, including with armored vehicles,” said Sergey Goncharov, president of the Alfa Unit Veterans Association.

Recently, the FSKN was actively involved in joint international operations in Afghanistan. In October 2010, US special forces captured a large heroin production lab in the country, but the Russian drug police officers were merely engaged in surveillance and communications. Later, two other joint operations were conducted in Afghanistan with the United States, but the FSKN officers once again played a supporting role. This is partially due to the fact that the drug police did not have their own special equipment.    

In addition to armored vehicles, the FSKN is asking money for guns, machine guns and knives. In 2012, the agency plans to spend 15 million rubles, 17 million rubles in 2013, and 20 million rubles in 2014.

As it turns out, the FSKN also has its own special forces. Several days ago, the agency’s headquarters published an application for 24 sets of sniper shooter mats on the official state procurement site. The mats are multifunctional; they can be laid upon for several hours, or be used to store ammunition or carry a wounded person.

The agency also plans to spend nearly 2 billion rubles in 2012 on the purchase of “other weapons, military and special equipment.” What is hidden behind this obscure phrase remains a mystery. It is possible that the agency will purchase unmanned aerial vehicles, which it has been dreaming of doing for quite some time. They would be used to monitor remote areas from the air and detect drug crops. The FSKN is also planning to equip its units with scanners that can “see” drugs even through a half-meter-thick iron wall.      

Some experts are surprised by the agency’s requests.

“The FSKN does not need armor! We don’t live in Mexico, where drug cartels have their own armies! It would be better if they asked for money for agents,” said Kirill Kabanov, chairman of the National Anti-Corruption Committee. “Moreover, the process of entering into armor supply agreements is fraught with various corruption schemes and kickbacks.”

Retired police colonel and lawyer Yevgeny Chernousov agrees.  

“There are already too many mini-armies in Russia’s federal agencies, including those in possession of heavy armament,” said the lawyer.

OPINION• DAVID JUDSON

Putin’s anti-missile offer is worth a second lookhttp://www.hurriyetdailynews.com/n.php?n=putin8217s-anti-missile-offer-is-worth-a-second-look-2011-09-14

Wednesday, September 14, 2011QABALA, Azerbaijan

Last Thursday I began my day in my hotel room in this city shadowed by the Great Caucasus Mountains reading the Hürriyet Daily News’ story on Iran’s growing anger at Turkey’s decision to host an American missile defense radar system.

Turkey’s agreement, as part of NATO, to host this long-discussed “missile shield” that was originally envisioned for Poland or the Czech Republic is a well-reported story. The backdrop, of course, is that it is really designed to gaze at Iran. Hence the relocation of plans from Central Europe to Turkey to ease (perhaps) the implied distrust of Russia in the earlier proposition.

A few hours later I was back on the road with my wife and an old family friend. We crested a ridge on the meandering country road to exit the forest of plane and chestnut trees. Once I recovered from the “what the hell is that?” shock, the nature of the gleaming

steel building before us – the height of five football fields put end-to-end – was explained to me. A few kilometers away was the “Qabala Radar and Radiolocation Station” built in 1985 when Azerbaijan was still part of the late Soviet Union. Since Azerbaijani independence in 1991, the station has been run by the Russian Space Forces under an agreement renewed in 2002. Currently, Russia pays Azerbaijan $7 million a year to maintain the facility, operated by more than 1,000 personnel.

This Star Wars leviathan rising from the rolling meadowlands was, naturally, the topic of discussion in ensuing stops for tea and in chats with farmers in the village of Qazanlı where my wife wanted to take photographs. The locals shared anecdotes about animals harmed by radiation, which I doubt are true. They also told of wells drying up and water shortages in the vicinity, which I suspect is true knowing a bit about the water consumption used in cooling any high-energy facility.

In any event, I found myself suggesting without seriousness that a solution might be a split-the-difference deal with the Americans. The job of keeping an eye on Iran could be outsourced to Qabala. Or the whole operation on behalf of all could be relocated to Turkey. I doubt the Russian system would actually function if called upon to do so in an emergency. Neither will the American version in Turkey. Anti-missile systems are much loved by generals and defense contractors but prototypes have historically failed every test. They are also a waste of money when low-technology solutions are readily available to evil-doers.

So imagine my surprise a few days later when I found myself again at the Internet, exploring the issue of missile defense. No less than President (now Prime Minister) Vladimir Putin proposed a version of my facetious idea to then-U.S. President George Bush at the June 2007 “G-8 summit” in Germany: Scrap your plans and you can have Qabala, Putin reportedly said. I’m sure there was a catch or two. Still, the offer sounds good to me, especially after reading that Qabala has a range of 6,000 kilometers and can monitor the launch of just about anything in Iran, Iraq, Pakistan, India and Turkey.

Bush is out. Barack Obama is in. Missile defense is a fairy tale anyway. Maybe this offer deserves a second look.

National Economic Trends

Unemployment falls

http://www.rbcnews.com/free/20110915110637.shtml

      RBC, 15.09.2011, Moscow 11:06:37.The number of registered unemployed persons dropped 2.1% in August 25 - September 7 to 1.32m people, the Healthcare and Social Development Ministry reported today.

      The unemployment rate went down in 80 of Russia's 83 regions during this period. The increase in the number of registered jobless persons was registered in the Yamalo-Nenets and Chukotka autonomous districts.

Russia cautious on buying euro zone bondshttp://www.reuters.com/article/2011/09/15/us-russia-eurozone-idUSTRE78E1BG20110915

3:53am EDT

MOSCOW (Reuters) - Russia will be cautious about investing in euro zone bonds, including Spanish and Italian debt, Deputy Finance Minister in charge of the country's debt told Reuters on Thursday.

"It's quite possible, wee need to look at it, but we need to be cautious," Sergei Storchak, Moscow's sherpa to the International Monetary Fund and the Group of Eight most industrialized countries, said in a phone interview.

He also said that Brazil's plan on a common BRIC support to the euro zone was news to Moscow.

"There had been no preliminary talks," Storchak said. "It was all news to me."

Brazil's president, Dilma Rousseff, reiterated on Wednesday that her country was ready to join an international rescue effort, a day after officials said Brazil was in preliminary talks with the four other members of the BRICS group -- Russia, India, China and South Africa -- to make coordinated purchases of bonds of euro zone countries.

But Storchak said that Moscow is ready to participate in such talks during the scheduled September 22 meeting of BRIC finance ministers in Washington.

(Reporting by Lidia Kelly; Editing by Andrew Callus)

Rouble's band not to widen in Sept - cbank sourcehttp://www.reuters.com/article/2011/09/15/russia-cbank-rouble-idUSL5E7KF0EH20110915

3:11am EDT

MOSCOW, Sept 15 (Reuters) - Russia's central bank has no plans to widen the rouble's trading corridor in September, a source at the bank told Reuters on Thursday.

"We will not (widen the band) in September," the high-ranked central bank source said.

The central bank keeps the rouble within a band versus the euro-dollar basket , comprised of 0.55 dollars and 0.45 euros. It buys foreign currencies in the lower part of the corridor to ease upside pressure on the rouble and sells in the upper range to prevent the rouble from falling.

On Wednesday, the central bank narrowed the spread between lending and deposit interest rates and many analysts expected that the regulator would follow with a move in the currency market . (Reporting by Elena Fabrichnaya; Writing by Lidia Kelly)

IMF Sees Russian Economy Growing 4.8% in 2011http://www.bloomberg.com/news/2011-09-14/imf-sees-russian-economy-growing-4-8-in-2011.html

QBy Kevin Costelloe and Sandrine Rastello - Sep 14, 2011 11:38 PM GMT+0200

The International Monetary Fund said today it projects the Russian economy to grow 4.8 percent in 2011.

“The muted outlook reflects expectations that the combination of soaring oil prices and large capital inflows—which, together with procyclical economic policies, propelled credit and powered the boom in the run-up to the crisis—is unlikely to return amid political uncertainty, a still fragile banking system, and increased risk aversion by investors. Inflation is projected to edge down to 8 percent by end-2011, assuming food prices continue to moderate,” the IMF said in a statement released by e-mail in Washington

To contact the editor responsible for this story: Kevin Costelloe at kcostelloe@bloomberg.net

Rouble overvalued, Deputy Econ Minister sayshttp://www.reuters.com/article/2011/09/15/us-russia-summit-rouble-idUSTRE78E0Y420110915

2:03am EDT

By Lidia Kelly and Andrey Ostroukh

MOSCOW (Reuters) - The Russian rouble is significantly overvalued, pushing Russia toward a current account deficit in the medium term, Deputy Economy Minister Andrei Klepach said.

"Our position is that it is overvalued -- I think by at least 10 percent," Klepach told the Reuters Russia Investment Summit.

"Considering the huge gap between imports and domestic production, and given the longer-term risks -- not what is happening right now or early next year but within two years -- we're moving toward a negative current account balance."

Thanks to high oil prices and increased gas exports to Europe, Russia saw a current account surplus of $57.6 billion in the first six months of this year, and the full-year surplus may come to about 4 percent of gross domestic product (GDP), according to official estimates.

But the strong rouble makes imports more attractive, and those are set to rise by more than 30 percent in real terms this year.

It also poses a risk of a costly and a sharp devaluation in order to balance the economy, Klepach said.

BENIGN INFLATION, BAD OUTFLOWS

Russia is on track to reach a post-Soviet record low inflation in 2011 and it may even come below the 6.5 percent-7.0 percent official forecast, Klepach said.

"Our estimate is more or less 6.5 percent, maybe below," Klepach said, adding that consumer prices are likely to decline slightly or stay the same in September, but then should rise somewhat.

Consumer prices have risen 4.6 percent since the start of the year, according to Wednesday's data from the Federal Statistics Service.

But the country, which at the start of the year had hoped for some net capital inflows in 2011, is unlikely to see that happen now. Klepach said he reckons the latest forecast of $35 billion-$40 billion in outflows will stay unchanged.

"We don't count anymore on the substantial inflows in the second half of the year that we had counted on earlier," Klepach said.

(Additional reporting by Maya Dyakina; Writing by Lidia Kelly; Editing by Andrew Callus)

Economist Says Russia Could Be Safe From Euro Debt CrisisThursday, 15 September 2011

http://www.turkishweekly.net/news/123440/economist-says-russia-could-be-safe-from-euro-debt-crisis.html

A growing debt crisis is rocking Europe and threatening the stability of the eurozone. Sergei Seninsky, economics analyst for RFE/RL's Russian Service tells us briefly how the crisis has reached this point and explains why Russia might be better positioned to weather this storm than it was during the 2008 global financial meltdown.

RFE/RL: Why is the financial crisis in Europe being called a "debt crisis"?

Sergei Seninsky: This crisis arose when the volume of state debt accumulated by the individual countries of the eurozone greatly exceeded the maximum level while at the same time their national economies were growing too slowly to bring into state coffers enough money to service that debt. And since there is no single financial-policy center in the eurozone -- that is, there is nothing like a joint finance ministry -- each country conducts its own monetary policy.

And national tax systems can be quite different from one another. As a result, in some European Union countries, state expenditures match state expense, while other countries spend considerably more than they realistically should, considering their revenues. Most importantly, we are talking about the widest range of social programs, as in Greece or Portugal, or about anticrisis measures to help banks, as in Ireland.

The deficits that arose were covered by increasing national debt: more and more loans (financed by the sale of state bonds) were needed to service these debts.

But at some moment a debt becomes so big that a country can no longer service it by itself -- that is, it cannot pay the principle or the interest on time.

That country finds itself in a debt crisis and is forced to ask other countries for financial assistance. In Greece, Ireland, or Portugal, the reasons the debt crisis arose might be different, but the result is exactly the same.

RFE/RL: What is the danger for the eurozone as a whole if Greece defaults?

Seninsky: Most important is the so-called domino effect. The default of one eurozone country would lead to a sharp rise in the cost of new loans on debt markets for other "problem" countries in the region.Hydrocarbons account for 70 percent of Russian exports and the overall demand for them, even during a period of economic contraction in the consuming countries, will fall much more slowly than demand for other goods.

In addition, the major eurozone banks, which earlier invested billions of euros in the bonds of these countries, would suffer because the value of those bonds would fall sharply.

Banks would try to cover these losses by cutting lending to national companies which, in turn, would lead to a great slowdown in economic growth in the eurozone countries.

And finally, more than half of all European exports go to other countries in Europe. So a reduction in demand in some of them would impact the others.

RFE/RL: And what impact on Russia's economy might an expansion of the European financial crisis have?

Seninsky: Even if you suppose the worst-case scenario for Europe -- an economic recession, that is, minimal economic growth or even some decline -- the impact on Russia this time, it appears, would turn out to be rather minimal.

Russia's economy -- like those of the other former Soviet countries, except for the Baltic states -- remains quite isolated both from the European economy and from the global economy at large.

Hydrocarbons -- oil and natural gas -- account for 70 percent of Russian exports and the overall demand for them, even during a period of economic contraction in the consuming countries, will fall much more slowly than demand for other goods.

Gas tanks need to be filled and power stations need to be fueled no matter what. As a result, the global price of oil, if it falls, won't fall catastrophically for producers.

And if it does fall sharply, as it did in 2008, then the decrease won't last long. Three years ago, the global financial crisis impacted on Russia immediately.

In a matter of days, Russian banks lost access to cheap Western loans from -- primarily -- European banks. That was the reason for the economic downturn in Russia in 2008-09.

But now the European banks are unwilling even to give loans to one another, to say nothing of lending to banks in other regions.

Russian banks now have significant domestic reserves that were formed primarily thanks to the recent anticrisis measures by the government and the central bank.

Demand for new loans by Russian companies is only just recovering after the recent economic downturn. As a result, Russian banks have considerable resources available to them.

Business, Energy or Environmental regulations or discussions

Russian markets -- Factors to Watch on Sept 15http://www.reuters.com/article/2011/09/15/russia-factors-idUSL5E7KF01Q20110915

2:06am EDT

Sept 15 (Reuters) - Here are events and news stories that could move Russian markets on Thursday.

You can reach us on:             +7 495 775 1242      

STOCKS CALL (Contributions to moscow.newsroom@reuters.com):

Uralsib: Positive news from Europe shored up markets yesterday and US indices surged by more than 1.3 percent by the end of the session. We expect a marginally positive opening for the Russian market today, but activity will be low ahead of the release of US and European economic statistics.

TROIKA DIALOG: We are opening our prices this morning up 1.5 percent.

ALOR: Technically, MICEX index may test the range of 1,520-1,525 points, which it failed to break through the day before. A further increase facilitate testing the 1,550-1,560 points range.

EVENTS (All times GMT):

MOSCOW - Reuters Investment Summit

SOCHI, Russia - Investment forum starts at the Black Sea resort of Sochi

ASTRAKHAN, Russia - Russian President Dmitry Medvedev to meet his Kazakh counterpart in the Caspian port of Astrakhan

MOSCOW - Head of Russia-Libya business council chairs roundtable on Russian oil interests in Libya postwar

MOSCOW - Foreign Ministry to hold a weekly briefing

MOSCOW - World Bank to brief on its updated outlook on Russia

IN THE PAPERS :

Russia's state development bank VEB is not involved in financing the purchase of coal miner Raspadskaya , the bank's head told Vedomosti business daily in an interview.

Japan's No.3 automaker Honda Motor Co is mulling construction of a car-making plant in Russia, Kommersant business daily reports citing government sources. The paper says Honda will present its project to Economy Ministry today.

TOP STORIES IN RUSSIA AND THE CIS : TOP NEWS: REUTERS-SUMMIT Reuters Russia Investment Summit Speakers at Russia Investment Putin to return as president in 2012 - poll Russia's 2011 WTO entry hinges on EU - Kremlin Rouble overvalued, Deputy Econ Minister says Norilsk sees Trafigura as project Stop stealing - The reform Russia needs most? Sibur looks at Petronas as IPO valuation proxy Medvedev aide favours government reshuffle Euro zone needs a plan before Russia can help Moscow bourse takes on London Russia needs investors not taxes, Potanin says

COMPANIES/MARKETS: Russia bond curve flatter Sistema warns of new wave of turmoil Cherkizovo Q2 net profit rises 15 pct

ECONOMY/POLITICS: Minsk suspected of helping Iran skirt sanctions IMF urges more monetary tightening in Russia ID:nS1E78D24S] BRICS give lukewarm response to Brazil euro plan Obama to name Russia adviser as Moscow envoy OSCE hopes to observe Russian vote C.bank seeks to boost rate policy efficiency

ENERGY: Ukraine sees Russian gas price jumping in 2012

COMMODITIES: EuroChem interested in BASF fertiliser ops Russia to ship extra 200kt Urals in Sept

MARKETS CLOSE/LATEST:

RTS 1,582.3 +0.8 pct

MSCI Russia 808.1 +0.3 pct

MSCI Emerging Markets 955.4 +1.3 pct

Russia 30-year Eurobond yield: 4.166/4.147 pct

EMBI+ Russia 267 basis points over

Rouble/dollar 30.4500

Rouble/euro 41.6723

NYMEX crude CLc1 $88.58 -$0.35

ICE Brent crude LCOc1 $112.10 -$0.30

For Russian bank balances see

For Russian company news, double click on

Treasury news Corporate debt

Russian stocks Russia country guide

All Russian news Scrolling stocks news

Emerging markets top news

Top deals European companies (Reporting by Vladimir Soldatkin)

Kenya Government Endorses Renaissance-Funded Residential Complexhttp://www.bloomberg.com/news/2011-09-15/kenya-government-endorses-renaissance-funded-residential-complex.html

QBy Sarah McGregor - Sep 15, 2011 9:31 AM GMT+0200

Kenya’s Vision 2030 delivery secretariat, which is implementing the country’s economic development plan, formally endorsed Tatu City, a planned $5 billion residential complex outside Nairobi.

Tatu City’s investors include Renaissance Partners, the investment unit of Moscow-based Renaissance Group, and domestic companies, Mugo Kibati, chief executive officer of the Vision 2030 Delivery Secretariat, told reporters in Nairobi today. The city will be privately funded and managed.

More than 70 percent of Kenyans are expected to live in urban areas by 2030, compared with about 30 percent now, Kibati said.

To contact the reporter on this story: Sarah McGregor in Nairobi at jturana@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson in Nairobi at pmrichardson@bloomberg.net.

press release

Russia VEB says not in Raspadskaya deal financing-reporthttp://in.reuters.com/article/2011/09/15/russia-veb-idINL5E7KF02E20110915

MOSCOW, Sept 15 | Thu Sep 15, 2011 10:42am IST

(Reuters) - Russia's state development bank VEB is not involved in financing the purchase of coal miner Raspadskaya , the bank's head told Vedomosti business daily in an interview published on Thursday.

In July, Vladimir Dmitriev said VEB was discussing a financing role but would not buy Raspadskaya itself, commenting on reports that VEB had received a request from an unidentified investor group to help finance the purchase of Raspadskaya.

"Not anymore," Dmitriev said answering the question about Raspadskaya, saying the bank could not be involved in the deal due to regulatory restrictions.

VEB could not immediately be reached by Reuters for comment.

The controlling stake in the miner belongs to a holding company called Corber, which itself is owned by Raspadskaya management and steel company Evraz (HK1q.L), in which tycoons Alexander Abramov and Roman Abramovich are major shareholders.

Evraz put Raspadskaya up for sale earlier this year, but failed to find a buyer for the coking coal producer, which suffered an accident at its main mine in 2010 that killed 67 pit workers. (Reporting by Vladimir Soldatkin; Editing by Vinu Pilakkott)

EuroChem interested in BASF fertiliser ops – reporthttp://www.reuters.com/article/2011/09/14/basf-eurochem-idUSL5E7KE4SA20110914

Wed, Sep 14 2011

FRANKFURT, Sept 14 (Reuters) - EuroChem, a fertiliser company controlled by Russian tycoon Andrei Melnichenko, is interested in buying nitrogen fertiliser assets put on the block by BASF (BASFn.DE: Quote, Profile, Research, Stock Buzz), Russian newswire Interfax reported on Wednesday, citing market sources.

German group BASF said earlier this year it would sell major parts of its nitrogen fertiliser business, which is under pressure from low-cost producers in the Middle East such as Saudi Basic Industries .

Melnichenko told Interfax earlier on Wednesday, in remarks confirmed to Reuters by a EuroChem spokesman, he was eyeing the purchase of a large asset in Europe soon.

"We are negotiating now, and will announce the results next week. We plan to acquire a large asset in Europe, and will close the deal tentatively in the (latter part of September)," Melnichenko was quoted as saying.

The EuroChem spokesman declined to comment further. BASF also declined to comment.

Norwegian company Yara International has repeatedly said it was interested in buying BASF's fertiliser assets, saying they would complement its nitrate business in Europe.

Bloomberg last week reported two people familiar with the matter as saying Yara was the frontrunner in the bidding for the assets while Egyptian group Orascom Construction Industries was also a suitor.

The businesses up for sale, with a combined annual capacity of about 2.5 million tonnes of fertiliser, comprise plants in Antwerp, Belgium, and BASF's 50 percent share in its PEC-Rhin joint venture with French company Total .

BASF said in March the assets it was putting on the block accounted for less than 1 percent of group revenue, which would imply less than 640 million euros ($875 million), based on 2010 results. ($1 = 0.731 euro) (Reporting by Ludwig Burger, Frank Siebelt and Vladimir Soldatkin; Editing by Dan Lalor)

MRSK Holding considers selling MRSK Siberia to Deripaska's EuroSibEnergo

http://www.bne.eu/dispatch_text16582

Renaissance CapitalSeptember 15, 2011

Event: Yesterday (14 September) MRSK Holding CEO Nikolai Shvets said that his company is considering a proposal to either pass over operational control or sell a controlling stake in MRSK Siberia to Oleg Deripaska's EuroSibEnergo. EuroSibEnergo controls 19 GW of generation capacity in Siberia. According to Shvets, MRSK Holding has asked EuroSibEnergo to present its strategy for development of MRSK Siberia and will be evaluating efficiency at Irkutsk Distribution Company, where EuroSibEnergo already has a majority equity stake. Last week Energy Minister Sergei Shmatko disclosed that government is considering reversing the legislation that prevents concurrent ownership of grid and generation businesses in the same region.

Action: Negative for the MRSKs and for the power sector generally, in our view Rationale: In our view, for government to facilitate this deal would be to dismantle yet another principle of the 2003 sector reform plan that was intended to break up opaque, vertically integrated regional power and heat companies and thereby promote diversity, competition and efficiency improvement.

Vladimir Sklyar

Sistema could divest controlling stake in MTS

http://www.rbcnews.com/free/20110915105513.shtml

      RBC, 15.09.2011, Moscow 10:55:13.Russian multi-industry holding AFK Sistema is looking to sell a controlling stake in major Russian mobile operator MTS or merging with a large international mobile operator, RBC Daily reported today citing sources close to the holding.

      Sistema held negotiations with France Telecom, which operates under the Orange brand. The talks yielded no results. Sistema was not satisfied with a number of parameters offered by France Telecom, one of the sources said without elaborating. Sistema is not pressed for time, but it does not rule out selling a stake in MTS and has held talks with various players on the European market, the same source added. Sistema currently owns a 52.8% equity position in MTS.

Sistema may sell MTS

http://www.bne.eu/dispatch_text16582

Alfa BankSeptember 15, 2011

According to RBC Daily, Sistema, a key shareholder of MTS, is in talks with France Telecom regarding a partnership in MTS and potential sale of its MTS stake.

However, no conclusion has been reached so far. According to the paper, Sistema realizes that MTS will not provide as strong of growth as before and that Sistema's financial positions with Bashneft on board are now much stronger than before. All this indicates that it is possible that Sistema will sell control in MTS or conclude a merger similar to that between VimpelCom and Wind Telecom.

We consider this news as NEUTRAL at the moment and believe that, with the strengthening competition on the Russian telecom market, Sistema will follow VimpelCom's example and continue to seek a partnership in MTS with large international operators.

Iouli Matevossov

Carrefour reportedly considers second attempt to enter Russia via franchising

http://www.bne.eu/dispatch_text16582

Alfa BankSeptember 15, 2011

Carrefour, the world's second largest food retailer, is considering a second attempt to enter the attractive Russian food retail market, according to RBC Daily. This time, according to the newspaper's sources, the food retail giant is considering using a franchise business model in Russia.

Among Russian retailers, only the X5 Retail Group is developing franchisee network, but its share in the total revenue of X5 is miniscule.

Although we expect competition in the food retail space to intensify in the medium term, we have doubts about the success of Carrefour's approach. International retailers, such as Carrefour, are unlikely to have tight control over potential franchisees, in our view.

Alexandra Melnikova

Sept. 15, 2011, 2:07 a.m. EDT

Gearing Up for Russian IPOshttp://www.marketwatch.com/story/gearing-up-for-russian-ipos-2011-09-15

MOSCOW, September 15, 2011 /PRNewswire via COMTEX/ -- Ipreo to Sponsor IPO&SPO Forum

The Institute for Development of Financial Markets is holding IPO&SPO Forum on September 22, 2011 at the MICEX Conference Hall in Moscow.

IPO&SPO-2011 Forum is the biggest Russian annual conference designed to address IPO challenges and prospects for Russian companies.

This year has proven difficult one for Russian IPOs. However, Russia still presents great opportunity for issuers and global investors alike. The Forum will focus on discussing the issue of attracting capital into Russia.

Forum participants will have the chance to receive information about further IPO & SPO market developments from regulators, issuers, stock exchanges (both Russian and foreign), and financial consultants.

Alexandre Bykov, who represents Ipreo in Russia and CIS, commented: "The IPO&SPO Forum provides a platform for developing the investment climate in Russia as well as promoting the role of IR professionals."

IPO&SPO-2011 Forum speakers and participants are professionals involved in IPO and SPO processes - representatives of the Federal Financial Markets Service, Bank of Russia, Russian Ministry of Finance, Ministry of Economic Development, Federal Antimonopoly Service, as well as issuers, bank underwriters, legal and consulting companies, rating agencies, investment companies, and, most importantly, a number of stock exchanges - both Russian and foreign.

Contacts: Tamila Molchanova tmolchanova@irfr.ru             +7(495)911-67-00       (ext. 111) http://www.IPOandSPO.ru

SOURCE The Institute for Development of Financial Markets

Copyright (C) 2011 PR Newswire. All rights reserved

Moscow bourse takes on London for Russia listingshttp://in.reuters.com/article/2011/09/14/us-russia-summit-micex-idINTRE78D21Q20110914

Wed, Sep 14 2011

By Andrey Ostroukh

MOSCOW (Reuters) - Russia must attract foreign investment and boost liquidity if it wants to take on London as the primary destination for Russian companies planning IPOs, Ruben Aganbegyan, the head of Moscow's MICEX exchange, told Reuters.

Out of eight Russian company IPOs this year, only one was held in Moscow -- raising just $14 million -- while six others successfully floated on the London Stock Exchange (LSE.L: Quote, Profile, Research) for a combined total of $3 billion. There are currently 48 Russian companies on the LSE's main market out of a total of 1,415 as of the end of July, according to LSE data.

"What is needed is promotional work aimed at all those investors who have not been investing in our market," Aganbegyan said at the Reuters Russia Investment Summit.

"We will have to explain to issuers that liquidity is coming toward this market and they don't need to go elsewhere to seek liquidity," he added.

The rouble-denominated MICEX is in the process of merging with dollar-based rival RTS to create a single national champion -- part of President Dmitry Medvedev's plan to build an international finance center in Moscow.

The MICEX-RTS exchange plans to hold its own Moscow IPO, raising at least $300 million, from the second half of 2012, Aganbegyan said, although it will need a buoyant market to carry out a listing.

Upcoming developments in the creation of the combined bourse include the passing of a law endorsing a long-awaited central depositary from January 1 -- a process aimed at increasing liquidity on the exchange and attracting foreign investment.

"The centralized settlement system is a significant magnet for the liquidity to come," Aganbegyan told the summit held at the Reuters office in Moscow.

"It is going to be the major positive factor for (attracting) IPOs as it will increase the significance of equities versus depositary receipts," he added.

The merger will also help boost the volume of the Russian market, Aganbegyan said. MICEX daily volumes were around $2 billion in 2010, according to fund manager Prosperity Capital.

If the newly merged exchange does not carry out an IPO before the middle of 2013, RTS shareholders can apply to buy back their shares, Aganbegyan said, adding that the central bank, a MICEX shareholder, will retain around 22 percent in the common bourse.

Shareholders of Russia's benchmark RTS stock exchange approved a merger with rival MICEX in a nearly unanimous vote in August, and the Federal Anti-monopoly Service approved the merger of two exchanges in September.

(Editing by John Bowker and Jane Merriman)

press release

Sept. 15, 2011, 12:00 a.m. EDT

Foreign Investor Interest Crystallizing in $15-Billion Tourism Project in Russiahttp://www.marketwatch.com/story/foreign-investor-interest-crystallizing-in-15-billion-tourism-project-in-russia-2011-09-15

--New Agreement Signings Add Impulse to Planned Mega-Development of Caucasus Mountain Skiing, Hot Springs Spa and Caspian Sea Beach Resorts --Cardinal Emphasis on Ecological Sustainability SOCHI, Russia, Sept. 15, 2011 /PRNewswire via COMTEX/ -- Foreign investors will join Russian political and commercial elite in this southern seaside resort town tomorrow at a high-profile government economic conference to sign the first large-scale international agreements toward development of a sustainable tourism industry in the North Caucasus, Europe's most unspoilt alpine region. Against the backdrop of the 10th Annual Sochi International Investment Forum, the first ground-breaking deals involving French, Korean and German companies are scheduled to be inked, providing impetus for the stream of international investment that will be required to implement this $15-billion development project.

President Dmitri Medvedev announced plans earlier this year to build a constellation of varied resorts spanning the several republics of the North Caucasus from here on the Black Sea coast across to the shores of the Caspian, some 600 miles to the southeast. The federal government has committed to develop leisure and ecotourism sites in strictest accordance with international ecological standards to safeguard the territory's natural and cultural heritage, deemed globally significant by conservationists worldwide. A program of state guarantees will be available covering up to 70 percent of investments in the project in special economic zones, which is a part of a comprehensive, top-priority national initiative for the economic and social revitalization of the North Caucasus.

The Sochi Forum, which is to be attended by Prime Minister Vladimir Putin, is expected to attract unprecedented international interest from companies also eyeing opportunities associated with the 2014 Winter Olympic Games, which are set to take place 40 km from here in the Western Caucasus. Emphasis on sustainable development in the Caucasus region will be highlighted at a Forum roundtable entitled "Preserving the North Caucasus

Ecosystem," which will take place under the aegis of the Russian UNESCO Commission atop the ski slopes of Krasnaya Polyana, a future Olympic site.

The gathering will feature speakers from Russian and international environmental groups such as the All-Russia Society for Nature Protection, founded in 1924, and the World Wildlife Fund (WWF), the leading organization in wildlife conservation; experts on ecological policy in the European Alpine nations; federal and regional government officials; and representatives from SC OlympStroi, the state corporation responsible for construction of the Winter Games' sites, and from state-run OJSC Northern Caucasus Resorts Company (NCRC), the overall coordinator for development of the North Caucasus system of tourist complexes, which is to include the largest skiing resort project in the world.

The centerpiece accord scheduled to be signed tomorrow is a strategic joint venture between NCRC and Caisse des Depots, a French state-owned group and long-term investor serving the public interest and the goal of sustainable development. The signing will represent the culmination of a process started by President Medvedev and President Nicolas Sarkozy at the G-8 Summit last May in Deauville aimed at putting French industry's world-leading experience in environmentally secure mountain resort and coastal development at the disposal of Russia.

The gathering will feature speakers from Russian and international environmental groups such as the All-Russia Society for Nature Protection, founded in 1924, and the World Wildlife Fund (WWF), the leading organization in wildlife conservation; experts on ecological policy in the European Alpine nations; federal and regional government officials; and representatives from SC OlympStroi, the state corporation responsible for construction of the Winter Games' sites, and from state-run OJSC Northern Caucasus Resorts Company (NCRC), the overall coordinator for development of the North Caucasus system of tourist complexes, which is to include the largest skiing resort project in the world.

The centerpiece accord scheduled to be signed tomorrow is a strategic joint venture between NCRC and Caisse des Depots, a French state-owned group and long-term investor serving the public interest and the goal of sustainable development. The signing will represent the culmination of a process started by President Medvedev and President Nicolas Sarkozy at the G-8 Summit last May in Deauville aimed at putting French industry's world-leading experience in environmentally secure mountain resort and coastal development at the disposal of Russia.

The joint venture will also act as a strategic consultant to NCRC for defining and packaging projects broadly for other international and Russian investors, which together with the Russian government are collectively expected to spend up to $15 billion to develop the array of skiing, thermal bath spa and seaside resorts across the North Caucasus Federal District, Krasnodar Region and the small pristine forested Republic of Adygea, an enclave that includes Lagonaki, a protected UNESCO World Heritage site. Further details of the terms of the joint venture are expected by the end of November.

Energy-efficient, clean technology for supplying power and heating for the tourism development project is the subject of a memorandum of understanding (MOU) set to be signed tomorrow between NCRC and state-owned Korean Western Power Co., Ltd. (KOWEPO), joined by CHT Korea. It is contemplated that Seoul-based KOWEPO, under a planned joint venture with NCRC, will develop a network of high-tech power plants, prospectively integrating renewable energy from wind and solar sources, across the broad network of travel resorts. KOWEPO advances its commitment to sustainability through participation in the United Nations Global Compact, a public-private initiative dedicated to furthering environmental preservation and other corporate social responsibility principles.

The German 'green' building and engineering company Drees & Sommer AG, in a consortium with the Russian financial advisory firm Astor Capital Group, is set to sign a letter of intent with NCRC for providing a range of building and financial services to support the development of the mountain resorts. The initial focus of business cooperation is expected to be the planned Lagonaki Skiing Resort in Adygea and the Mamison Skiing Resort in the Republic of North Ossetia. With a heritage of 40 years in high-profile building operations, from management consulting to certification, Drees & Sommer covers all sustainable building services, as well as 'green' building labels. NCRC will also signature an MOU at the Forum with Russian developer InvestTourService and the regional government of Adygea for a public- private partnership toward construction of the Lagonaki complex.

Besides Lagonaki and Mamison, NCRC plans to develop mountain resorts at Matlas in the Republic of Dagestan and Arkhyz, known as the 'pearl of the North Caucasus, in the Republic of Karachay-Cherkessia. A fifth resort is planned for Mount Elbrus, in Karachay-Cherkessia and Kabardino-Balkaria, near the Russian border with Georgia. At 5,642 meters in elevation, Elbrus is the tallest mountain in all of Europe. Sport and nature enthusiasts are expected to visit the resorts from Russia and surrounding countries and from Western Europe and the Mideast starting in 2014. The new regional tourist industry, which will provide 200,000 new jobs, is expected to attract up to five million visitors a year.

About OJSC Northern Caucasus Resorts Company (NCRC)

Moscow-based NCRC is a state enterprise charged by the Russian federal government to manage a $15-billion public-private initiative to build and operate five world-class skiing resorts in the Northern Caucasus as part of an official scheme to promote economic and social transformation of the region. Later stages of the project will include medicinal hot springs mountain resorts and beach tourism centers on the Caspian coast. NCRC has been initially capitalized by a Russian government investment of $2.0 billion. Russian Olympic Committee Vice President Akhmed Bilalov serves as NCRC board chairman.

SOURCE Northern Caucasus Resorts Company

Copyright (C) 2011 PR Newswire. All rights reserved

Russian investors should buy EU banks: Deutschehttp://in.reuters.com/article/2011/09/14/us-russia-summit-deutsche-idINTRE78D4VS20110914

Wed, Sep 14 2011

By Nastassia Astrasheuskaya

MOSCOW (Reuters) - Deutsche Bank has been advising Russian investors and financial institutions to buy shares or stakes in crisis-hit European banks but found no takers, the head of the German bank's Russian and CIS operation said.

"I am advising investors to look in this direction. However, they are scared. I think it is between greed and fear. And for the moment fear is outweighing greed," Igor Lojevsky told the Reuters Russia Investment Summit on Wednesday.

He said his clients preferred Russian banks.

"We are trying to flash the opportunity to our clients but do not feel a lot of interest ... Investors still prefer to buy shares of Russian banks than of European banks," Lojevsky said.

"Local (Russian) investors often cannot understand why Europeans do not invest in their home banks and think 'If they do not value their local banks too much, why should I? They must know something I do not'," he said.

Lojevsky said he had talked to respectable Russian institutions about the strategy of investing in western banks, while suggesting Mikhail Fridman's Alfa Bank as a possible buyer.

Last week, Sberbank (SBER03.MM: Quote, Profile, Research), Russia's biggest lender, agreed a deal to buy VBI, the eastern European arm of Austrian lender Oesterreichische Volksbanken (OTVVp.VI: Quote, Profile, Research), stepping up its expansion abroad.

"I think financial investment is not (Sberbank's) priority. They are looking for access to technology and new markets," Lojevsky said, adding Sberbank could make further acquisitions, but its first task would be to integrate VBI and learn how to work outside Russia.

(Reporting By Nastassia Astrasheuskaya; Editing by John Bowker and Dan Lalor)

Tatarstan Islamic finance hub ambitions boostedhttp://in.reuters.com/article/2011/09/14/tatarstan-islamic-finance-idINL5E7KE31G20110914

Wed, Sep 14 2011

By Bakyt Azimkanov

LONDON, Sept 14 (IFR) - Russian republic Tatarstan's ambition to develop a Sharia-compliant market received a boost this week when the Kazan-based AK Bars Bank became the first Tatar credit to secure a murabaha loan.

It was also the first international loan facility compliant with Sharia canons for a Russian bank .

Earlier this year Tatarstan announced an Islamic finance initiative to promote the sector, and the Ba1/NR/BBB- rated Muslim-majority republic backed this up with plans to tap the Sharia-compliant market with sukuk paper.

The Tatar President, Rustam Minnikhanov, is pushing for amendments to Russian Federal legislation that will enable the US$1trn asset class to flourish in the country and in January signed an Islamic finance accord with Amanah Raya, Kuwait Finance House and Linova during a visit to Malaysia.

Kuwait Finance House is seen as a likely lead manager for any Tatar sukuk deal, which would act as a test run for future issuance in the region.

"The government of Tatarstan actively promotes and supports the idea of Sharia-compliant financing and the republic is indeed the best candidate among the Russian regions for sukuk issuance. However, regulatory restrictions on external borrowings for regions, set by the Federal Budget Code, need to be taken into account," said Stepan Amosov, director of emerging markets structuring and credit trading at ING in Moscow.

On the flip side, Russian municipals will be able to borrow abroad from next year and their securities will not be liable to VAT tax.

Resource-rich Bashkortostan, rated Ba1/BB+, is seen as another republic in Russia where Islamic finance could find a home. One-seventh of Russia's population is Muslim, making it the largest religious minority, with most of them residing in the middle of the Volga Basin and North Caucasus.

Companies from the VTB Group , Gazprombank Invest (MENA) and the City of Moscow, among others, have already expressed an interest in tapping the sukuk market in order to diversify their investor bases.

While various Russian credits have ambitions to tap the Islamic market whether many will print transactions is yet to be seen.

There are possible obstacles, such as finding appropriate assets, and achieving legal transfer of ownership to the issuing SPV could prove to be a challenge for credits that see sukuk as one of the means to finance infrastructure projects. (Reporting by Bakyt Azimkanov; editing by Alex Chambers)

Activity in the Oil and Gas sector (including regulatory)

Russia Oct oil duty to fall 7.4 pct to $411.4/Thttp://af.reuters.com/article/commoditiesNews/idAFL5E7KF0LS20110915

Thu Sep 15, 2011 8:00am GMT

* Duties calculated under new tax regime

* Crude export duty to be cut from $444.1/T in September

MOSCOW, Sept 15 (Reuters) - Russia's crude oil export duty will fall from Oct. 1 by 7.37 percent to $411.4 per tonne from $444.1 in September as the government cuts the fees to stimulate more export, finance ministry and Reuters calculations showed on Thursday.

From Oct. 1, the government will use a coefficient of 60 to calculate the crude oil export duty, down from 65.

Oil products will be subject to a flat rate of 66 percent of the crude duty.

The new regime was designed to boost crude exports -- a key source for state coffers in focus ahead of parliamentary elections in December and a presidential poll in March -- and to stimulate production of high-grade oil products.

Under the previous duty regime, fuel oil was charged a lower rate than gasoline and middle distillate, an effective subsidy on simple refiners which held up much-needed refinery upgrades.

The exception is gasoline, which is now subject to a 90 percent rate to keep deficit barrels in the country. Unless it is unexpectedly reduced to the level charged on other products, the October gasoline duty will be set at $370.2 per tonne, down from $399.7 in September the data and calculations showed.

The export rate is officially announced by the government at the end of each month.

The final oil export duty for September is based on the seaborne Urals URL-E crude price from Aug. 15 to Sept. 14 inclusive.

Finance Ministry official Alexander Sakovich told Reuters on Monday that the average oil price for that period stood at $112.26 per barrel, slightly down the price of $112.46 in the previous period. Urals was trading on Thursday at $113.4 per barrel.

Reuters calculations, based on customs tariff regulations and the average oil price estimate, show the October export duty is therefore likely to be set at $411.4 per tonne.

The export duty on crude from some new fields in East Siberia -- apart from the Vankor, Talakan and Verkhechonskoye fields -- and the Caspian Sea, which enjoy a lower rate than Russian crude from other production areas, will be cut to $204.5 per tonne from $205.1 in September.

The unified duty for refined products, excluding gasoline and naphtha, will be set at $271.5 per tonne.

In September, the duty on light products stood at $297.5 per tonne, while the duty on heavy fuels was $207.4 per tonne. (Reporting by Vladimir Soldatkin; editing by Jason Neely)

Putin to Review 60% Oil Export Tax Each Month, Vedomosti Reportshttp://www.bloomberg.com/news/2011-09-15/putin-to-review-60-oil-export-tax-each-month-vedomosti-reports.html

By Yuliya Fedorinova - Sep 15, 2011 7:51 AM GMT+0200

Russian Prime Minister Vladimir will review the use of a 60 percent rate to calculate the oil export tax each month, which is 5 percentage points lower than the current rate, Vedomosti said today, citing people it didn’t identify.

The government isn’t setting the 60 percent rate in law, while Putin signed an order unifying the export tax on refined products at 66 percent of the crude duty, part of the so-called 60-66 measure, the newspaper said.

Russia now taxes crude exports using a 65 percent rate.

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

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

60-66 reforms: 60 component may not be firmly legislated

http://www.bne.eu/dispatch_text16582

Alfa BankSeptember 15, 2011

The 60-66 reform is undergoing some last minute changes, as the government seems to be mulling the idea of not permanently decreasing the crude oil export duty to 60% from the current 65%, according to several Vedomosti reports citing sources in the Ministry of Economic Development. The 60-66 reform is expected to come into force on October 1, as Prime Minister Vladimir Putin already signed the part of the reform unifying export duties on light and dark oil products at 66% of the crude oil export duty. However, in order to enforce amendments to the crude oil export duty, i.e. decreasing it from 65% to 60%, changes have to be introduced into the Law on Customs and Tariffs. However, these modifications have not been planned thus far, according to the reports. According to the sources cited, Deputy Prime Minister Igor Sechin has already announced to oil companies that the government has decided not to amend the law to decrease the crude export duty coefficient from 65% to 60%. Instead, the government will decide on a monthly basis whether or not to decrease the coefficient to 60%, depending on oil companies' "behavior," as the current law allows the government to use any coefficient up to 65%, if the oil price is above $25/bbl.

We treat this news as NEGATIVE for oil companies, as postponement or even cancelation of the crude export duty decrease will not only negatively affect oil company margins but will also once again hamper long-term forecasting and planning. Upstream investments will once again most likely be suspended until certainty is established.

We remind that we briefly touched on the possible but unlikely event that the 60-component would not come into force in our 60-66: The Road Downstream Is Paved with Good Intentions from September 7. In any case, this will simply mean an increase in the downstream tax burden for integrated companies. The only likely beneficiaries of such a development would be Bashneft and Alliance Oil, as well as other minor players who buy feedstock for their refineries from third parties. These companies would see their purchase prices drop from those expected under the 60 component, as a higher export duty means a lower domestic netback, lowering the price they have to pay for purchases. However, in terms of the effect of this news on those stocks, this possible shift is unlikely to provide benefit on the backdrop of broader negative sentiment regarding failing confidence in the government's ability to maintain a transparent and consistent policy

towards the sector.

Pavel Sorokin

Kommersant: EC gives vent to its anger on South Stream http://www.focus-fen.net/index.php?id=n259609

15 September 2011 | 09:04 | FOCUS News AgencyHome / BusinessMoscow. On Friday in the presence of Russian Prime Minister Vladimir Putin shareholders and participants in South Stream gas pipeline – Italy’s ENI, France’s EDF and German’s Wintershall – will sign a legally binding agreement about their involvement in the project, Kommersant writes.But the document, which is a guarantee that the project will be implemented, exerts pressure on the European authorities.European Energy Commissioner Günther Oettinger directly described the project as contradicting to the EU’s interests and threatened Gazprom with problems with contracts, if South Stream impedes the construction of the European pipeline Nabucco. The European Commission will be able to create similar problems, because it plans to grow into a key side in all gas talks in Europe soon, the newspaper reports.

12:27 15/09/2011RUSSIAN PRESS REVIEW

Russia not to abandon South Streamhttp://www.itar-tass.com/en/c142/226100.html

MOSCOW, September 15 (Itar-Tass) — Kommersant writes about the problems that Gazprom’s South Stream project could be facing in the short run. The signing of a shareholder agreement with the project participants – Italy’s ENI, France’s EDF and Germany’s Wintershall – on their entry into the project and guarantees of its launch that is scheduled for September 16 created the news topic.

The newspaper notes that it will be a legally binding document - in contrast to all that have been signed within the project so far. The agreement will be signed in the presence of RF Prime Minister Vladimir Putin. However, the newspaper notes, in the run-up to the appearance of a key document on South Stream, European authorities, which have long been trying to fight the monopoly of Gazprom and are implementing a competing pipeline project Nabucco, have begun to exert unprecedented pressure on the participants in the Russian project.

In particular, the publication writes about a statement EU Energy Commissioner Gunther Oettinger made in Cologne. He assessed South Stream as an attempt by the Russians to prevent the Southern Corridor project, i.e. natural gas delivery to Europe on a route bypassing Russia: from Turkmenistan on the Caspian seabed to Azerbaijan and then through Turkey with the use of the Trans-Caspian pipeline and Nabucco gas pipeline. Gunther Oettinger warned Russia: if it really believes that South Stream “or any other

political pressure on Ashgabat and Baku” will make Europe abandon the Trans-Caspian gas pipeline or Nabucco pipeline, “personally I will have less confidence in long-term gas contracts and will less believe that gas is not a political tool.”

It is not for the first time that the Russian side listens to Gunther Oettinger’s harsh rebuffs, but in Cologne he resorted to what Europe has never done before – exerting an open pressure not only on Gazprom, but also on its European partners in South Stream. The fact that such statements are made by the European commissioner are unpleasant for Moscow also because it is the European Commission that has recently begun to claim the status of the chief negotiator with Russia on the gas import terms, as well as with other countries on the creation of the Southern Corridor.

“They make it clear to us that the Trans-Caspian gas pipeline will appear in any case, and to build South Stream or not in these conditions – it’s up to us,” Rusenergy head Mikhail Krutikhin comments on the situation. “It is only polemics so far, but the risk that South Stream will be frozen or incompletely loaded because of Europe’s strong desire to launch an alternative pipe persists.”

On the other hand, Krutikhin says, giving up of South Stream with the launch of the Southern Corridor will mean for Russia increased dependence on gas transit through Ukraine, and if “today Moscow dictates to Kiev, then the situation will change to exactly the opposite.”

However, head of East European Gas Analysis Mikhail Korchemkin notes that Moscow will not give up South Stream, despite the fact that it is very costly and economically not very advantageous for Gazprom, because it would mean losing face for the Russian side.

South Stream agreement to be signed tomorrow http://www.bne.eu/dispatch_text16582

Alfa BankSeptember 15, 2011

Gazprom will sign a legally binding agreement with South Stream participants ENI, EDF, and Wintershall tomorrow, bringing the pipeline closer to launch. Once operational, the pipeline will transport Russian gas to Europe though the Black Sea. The participants will sign an agreement that will legally distribute rights and responsibilities among them as well as set their shares in the project and establish parameters for possible withdrawals. The first phase of South Stream should be completed by 2015, with an annual transportation capacity of 15.75bcm of natural gas.

However, signing of the agreement may be hindered by significant pressure from European governments, which consider South Stream a rival to the European Nabucco and Trans-Caspian pipeline projects and a further expansion of Gazprom's hold on

Europe. Accordingly, EU Energy Commissioner Gunter Ettinger threatened Gazprom with problems on European contracts if it continues expansion, according to Kommersant. Ettinger's statement clearly shows that Europe would prefer to increase Russian gas imports only if Europe's dependence on Russian resources decreases, i.e. if the Trans-Caspian and Nabucco pipelines are built.

Although we see such threats as hardly realistic under current circumstances, we treat this news as NEUTRAL for Gazprom because they nevertheless do create some tension around the situation. On the other hand, South Stream progress may put more pressure on Ukraine, motivating it to ease its negotiating position with Gazprom, as South Stream completion coupled with Nord Stream reaching full capacity has the potential to strip Ukraine of virtually all its transit revenues.

Pavel Sorokin

Rosneft board chairman cuts stake in company by 60% (Part 2) http://www.interfax.co.uk/

15/09/11 8:30AM GMT

MOSCOW. Sept 15 (Russian Energy News) – Rosneft’s (RTS: ROSN) board chairman, Alexander Nekipelov, has reduced his stake in the oil company by…

Alfa exerting pressure on Rosneft management - Rosnefthttp://en.ria.ru/business/20110915/166860323.html

12:08 15/09/2011

MOSCOW, September 15 (RIA Novosti)

Alfa Group, controlled by billionaire Mikhail Fridman, is putting pressure on the management of Russian oil giant Rosneft and the oil company is ready to prove it in court, Rosneft said on Thursday.

It said that its board of directors had received letters from Cyprus-based NBI Trading accusing them of attempts of diluting its stake in an oil equipment producer.

"An organized public attack on Rosneft connected with ongoing legal proceedings seems to aimed at putting the company and its directors under an informal pressure to solve

issues in their interests, not by legal means and by damaging the company's reputation," Rosneft said in a statement.

"Given threats to interests of the company and its shareholders and attempts to exert pressure on Rosneft's management, the board of directors possesses evidence ... which could be presented in court if necessary to protect the rights and legitimate interests of Rosneft and its shareholders."

Alfa Group is a shareholder in BP's Russian venture TNK-BP and is now at odds with the international giant over its intended cooperation with Rosneft.

Earlier this year, BP struck a $16-billion deal with Rosneft which involved cooperation in developing the Russian Arctic and a share swap. But AAR, the consortium which includes Alfa and controls half of TNK-BP, said BP had violated TNK-BP's shareholder agreement by not offering the Rosneft cooperation possibility to TNK-BP first. The deal fell through and Rosneft signed an Arctic development contract with ExxonMobil instead.

SEPTEMBER 15, 2011, 3:33 A.M. ET

TNK-BP: Plans $45 Bln In Upstream Investment By 2021 http://online.wsj.com/article/BT-CO-20110915-702724.html

MOSCOW (Dow Jones)--Anglo-Russian oil joint venture TNK-BP Ltd. plans by 2021 to invest $45 billion in upstream production and $4 billion in the downstream segment, the company's head of strategy and business development Stan Miroshnik said Thursday.

Miroshnik also said that by 2021, 27% of TNK-BP's overall production will come from the northern Yamal region, while the share of hydrocarbons from the Orenburg region in Western Siberia will fall to around 20% from over 50% today.

-By Jacob Gronholt-Pedersen, Dow Jones Newswires;             +7 495 232-9192      , jacob.pedersen@dowjones.com

(William Mauldin in Moscow contributed to this article.)

15.09.2011

Russneft Production Grows 4 Percent in First Half 2011http://www.oilandgaseurasia.com/news/p/0/news/12946

Russneft increased oil production in the first half of 2011 by 4 percent to 6.552 million tons, the company reported in a news release. Processing in this same period grew 0.1 percent to 2.510 million tons.

Russneft drilled extensively in West Siberia, Udmurtiya, Ulyanovsk and Saratov regions. The company plans to bring 35 new wells on line in Udmurtiya at seven fields.

Additional production from these new wells is expected to reach 333,427 tons of oil.

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

Alliance Oil Company launches production at Kolvinskoye Greenfieldhttp://www.bne.eu/dispatch_text16582

Troika DialogSeptember 14, 2011

Alliance Oil Company announced today that it has successfully launched production at the Kolvinskoye greenfield in Timan Pechora oil province. Initial flow rates of 1,200-1,500 bpd per well are in line with the company's guidance to begin producing 22,000 bpd from 17 wells. The field is running in test mode for now.

The company has guided that Kolvinskoye will produce 4.0 mln bbl this year, meaning about 3.4 mln bbl in 4Q11 and implying a fairly fast ramp-up in flows. The oil from the field pays no MET until 2015. We estimate that if the production guidance is met, Alliance Oil Company could double its EBITDA to $250 mln in 4Q11, implying a total of $660 mln for the year.

Kolvinskoye is also the asset that will rescue Alliance Oil Company from being a victim of the 60-66 tax reforms (except during the initial few months following the new tax system's introduction in October). Starting in 2012, the company's financials are broadly neutral to the export duty rebalancing. We expect that in 2012, crude output will exceed refining throughput for the first time in the company's history.

Alliance Oil Company in the past has repeatedly delayed launching the field, and its commissioning is very timely. The company is now in the middle of an expensive refurbishment of its Khabarovsk refinery and had the launch of Kolvinskoye been delayed, its leverage (total debt/EBITDA) might have slipped above the threshold stipulated by its Eurobond covenants (maximum 3.5, debt incurrence). With the launch of Kolvinskoye, we estimate the total debt EBITDA ratio at end 2011 to be 2.7-3.0.

We think that the news is credit positive for the Alliance Oil 15 Eurobond.

Alexey Bulgakov

Will Exxon Be Safe in Russian Hands?http://www.fool.com/investing/general/2011/09/14/will-exxon-be-safe-in-russian-hands.aspx

By David Lee Smith | More Articles September 14, 2011 | Comments (0)

You may have noticed that OPEC has modestly lowered its expectations for global oil supply and demand. The rationale behind the changes involves a combination of economic slackening in many parts of the world, a weaker-than-normal driving season in the U.S., and an expectation of reduced demand from China.

Actually, I'm inclined to look farther ahead to a Goldman Sachs estimate that crude in the U.S. will average about $126.50 a barrel next year, while prices for (primarily European) Brent oil will average in the vicinity of $130 per barrel in 2012. The key is that, while faltering economies in Europe, Japan, and the U.S. have trimmed prices this year, the intermediate- and longer-term directions are likely to be northerly -- as to both crude prices and the majors' geographic areas of exploration and production activity.

Heading for a big chillBy northerly geographic areas, I'm of course referring to the Arctic waters of Russia, Canada, Alaska, and other places where you and I would prefer not to hang out extensively. But with meaningful new oil finds becoming more and more scarce, Big Oil clearly is inclined to don its protective cold-weather gear and head for the frigid but generally unexplored Arctic locations. 

The entirety of the Arctic region that's now being eyed -- most notably by ExxonMobil (NYSE: XOM  ) and its new partner, Russian state oil company OAO Rosneft -- covers about 12 million square miles, or 6% of our planet's land. At the same time, it likely is hiding more than 400 billion barrels of oil and gas, or 22% of the world's total, beneath its ice caps.

Beginning in about 2015, under an agreement reached earlier this month, Exxon and Rosneft will commence their exploration in water depths of 40 meters to 350 meters in the chilly (winter temperatures that plummet to a -50 degrees Fahrenheit) Kara Sea in the Russian Arctic. There's increasing optimism about finding oil and gas in a stretch that begins at Russia's border with Finland and covers about 1,000 miles to the east, with the Kara Sea sitting about in the middle. Another Arctic area thought to contain significant

hydrocarbon deposits includes the waters north of Alaska and Canada's Northwest Territories.

Rosneft geologists have estimated that the Kara Sea contains about 36 billion barrels of oil and gas. However, not all Big Oil geologists are inclined to blindly accept the Russian company's scientific conclusions. Indeed, in June Chevron (NYSE: CVX  ) withdrew from an agreed-upon venture with Rosneft to explore a portion of the Black Sea known as Shatsky Ridge. The reasons involved a disagreement over geological assessments and a one-sided appropriation of costs.

In my mind, this experience -- along with Russia's history of sharp-elbowed treatment of Western oil companies -- raises a key question about the likely future of the nascent Exxon-Rosneft partnership: Will the two companies live happily ever after, or, once its considerable technological brains have been picked, will ExxonMobil become the victim of typical Russian autocratic treatment of its foreign partners?

Exxon's just a pinch hitter?You likely know that the Exxon-Rosneft partnership replaced a pact agreed to in January between Rosneft and BP (NYSE: BP  ) , which was halted by BP's partners in TNK- BP, an 8-year-old 50-50 joint venture between the British company and a group of Russian billionaires. The Russians maintained that BP's hook-up with Rosneft violated the terms of their agreement with BP -- a contention that was agreed to by a London court. When subsequent negotiations among BP, the Russian partners (who operate as AAR), and Rosneft failed to save the day, the January agreement was scuttled.

Those contretemps followed a series of contentious 2008 events wherein Bob Dudley, BP's current CEO and the then-leader of TNK-BP, was forced by his Russian oligarch partners and the country's authorities to steal away from Russia and run the partnership form an unknown location. He later passed management of the entity to the Russians, and the relationship appeared to improve -- at least until January.

Nor have moods improved since BP bowed out of its Arctic deal with Rosneft. Just this month, court officers in Moscow raided BP's offices in the city in a search for documents for a court case that stems from the now caput deal with Rosneft. It appears that the AAR billionaires, along with a group of minority shareholders, are seeking compensation -- possibly in the billions of dollars -- for "damages" related to what they perceive as a missed opportunity in the Arctic.

As The Wall Street Journal noted following the raid, It "suggests that BP's difficulties in Russia are likely to continue despite its efforts to put the fiasco of the Rosneft deal behind it." BP's ongoing difficulties from its relationship with AAR give me pause relative to owning the London-based company's shares, regardless of the direction taken by events stemming from the company's 2010 Macondo tragedy in the Gulf of Mexico aboard Transocean's (NYSE: RIG  ) Deepwater Horizon rig.

Blew them awayBut back to Rosneft's lingering need to tap Big Oil's technological expertise and experience in order to enhance its efforts in the Arctic. Once it became clear that its partnership with BP was a nonstarter, the company sought proposals from other large integrated oil companies. Reportedly, ExxonMobil's entry materially outshone those of Royal Dutch Shell (NYSE: RDS-B  ) , France's Total (NYSE: TOT  ) , and Norway's Statoil (NYSE: STO  ) .

In assessing the safety and viability of its new Rosneft pact, there are other items you should be aware of relative to Exxon's history in Russia. First, the company has operated with noteworthy success -- if not always tranquility -- on its Sakhalin-1 project on the remote and inhospitable 600-mile-long island east of Russia and has gotten along adequately with Russian authorities.

That's in marked contrast to Shell, which while operating Sakhalin-2 in 2006, was forced to execute a below-market sale of its operating position at bargain prices to Gazprom, the country's giant gas gathering and distribution company. As but one example of the differing perspective of the two companies' approaches, Dimitri Lisitsyn, the chairman of the local Sakhalin Environment Watch, has noted quite simply that, "Exxon addresses issues much better."

Shared opportunitiesFurthermore, the Exxon-Rosneft deal has another side involving participation by the latter in Exxon-operated deepwater projects in the Gulf of Mexico and onshore Texas. Beyond that the Russian company may become a participant in Canada's 33% ExxonMobil-owned Hibernia project. These offsets to the companies' joint efforts in Russia will seemingly offer Exxon an element of counterbalance to Russian heavy-handedness at home.

During his ascendency up the corporate ladder, Exxon CEO Rex Tillerson completed a stint overseeing the company's Russian activities. His ultimate assumption of the giant oil company's top post may therefore provide some indication of the potential and fragility with which activities on the Russian subcontinent are viewed at ExxonMobil's Irving, Texas, headquarters. Under Tillerson, ExxonMobil has demonstrated a willingness to stand up for what it perceives as its rights: It was the only company to fully contest Hugo Chavez's nationalization of the energy industry in Venezuela.

Grandmother Olga?Finally, rumors are beginning to circulate that Russia intends to construct a $65 billion, 64-mile tunnel linking Siberia and Alaska. Whether this turns out to be true, it's easy to imagine the benefits that would come from hordes of U.S. families piling into their automobiles for Thanksgiving drives to Grandmother Olga's toasty home on the Kamchatka Peninsula.

Obviously the last item is somewhat fanciful. Nevertheless, it should be clear that, for a host of reasons, including ExxonMobil's unique ability to distinguish itself in Russia, the

company stands an excellent chance of making its Rosneft deal work to the benefit of both companies. And while things don't occur quickly in the world of international energy, the new partnership nevertheless seems to me to constitute a new reason to include the biggest of Big Oil -- and Big Gas, for that matter -- on your version of My Watchlist.

If you're looking for more stock ideas, The Motley Fool has created a new, special oil report, and you can download it today at no cost to you. In this report, Fool analysts cover three outstanding oil companies To get instant access to the names of the three oil stocks, click here -- it's free.

Gazprom

September 15, 2011 10:34

Iran, Gazprom Neft to mull other firms for Azar projecthttp://www.interfax.com/newsinf.asp?id=273252

MOSCOW. Sept 15 (Interfax) - Gazprom Neft (RTS: SIBN) and the National Iranian Oil Company (NIOC) will spend a month considering the participation of other companies in the Azar oil project, the Russian Energy Ministry said following talks between Energy Minister Sergei Shmatko and Iranian Oil Minister Rostam Qasemi.

"The participation of other companies will be clarified within a month," the ministry said in a press release.

Russia and Iran will decide on the prospects for Gazprom Neft to work on the Azar project within a month, Shmatko said.

Iran has criticized Gazprom Neft for the amount of time it has taken over the Azar field and has suggested handing the rights to the field to a consortium of Iranian companies.

Pr

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

Gazprom reports rise in reserves at Sakhalin-3

http://www.rbcnews.com/free/20110915103158.shtml

      RBC, 15.09.2011, Moscow 10:31:58.The natural gas reserves of the Yuzhno-Kirinsky deposit, a part of Gazprom's Sakhalin-3 offshore oil and gas project in Russia's Far East, are expected to increase 38% to 360bcm, RBC Daily reported today citing Vsevolod Cherepanov, head of Gazprom's upstream department. New data on gas reserves have been obtained as a result of a recently completed exploration, he noted.

      Gazprom intends to transport gas from the Sakhalin-3 project through the Sakhalin-Khabarovsk-Vladivostok gas pipeline, the first part of which was commissioned earlier this month. The reserves of the Sakhalin-3 project are currently estimated at 1.4 trillion cubic meters of gas. Gazprom develops four deposits in the Sea of Okhotsk as part of the project.

09/15/2011 | 02:50 am

Gazprom OAO : Alexey Miller and Kairat Boranbayev discuss prospects for geological exploration of Imashevskoye fieldhttp://www.4-traders.com/GAZPROM-OAO-6491735/news/GAZPROM-OAO-Alexey-Miller-and-Kairat-Boranbayev-discuss-prospects-for-geological-exploration-of-Imas-13798071/

The Gazprom headquarters hosted today a working meeting between , Chairman of the Company's Management Committee and Kairat Boranbayev, Director General – Management Board Chairman of KazRosGaz.

Background

In June 2002 Gazprom and KazMunaiGaz National Company established a joint venture, KazRosGaz, on a parity basis and registered it in the Republic of Kazakhstan. The JV will deal with natural gas purchase, marketing and processing (at Russian gas treatment plants), and other businesses.

On September 7, 2010 Russia and Kazakhstan entered into the Intergovernmental Agreement on joint exploration and prospecting of the cross-border Imashevskoye gas and condensate field (the Agreement was enacted in January 2011). Pursuant to the Agreement, prospecting and exploration will be followed by the reserves estimation.

Gazprom and NK KazMunaiGaz were authorized to implement the Agreement.

In April 2011 Gazprom and NK KazMunaiGaz signed the Agreement identifying KazRosGaz as the Imashevskoye field operator.

The Imashevskoye field is located 60 kilometers northeast of Astrakhan in Russia and 250 kilometers southwest of Atyrau in the Kurmangazy District, Kazakhstan. It contains over 100 billion cubic meters of explored gas reserves with a hydrogen sulfide content of 15 to 17 per cent. The Russian sector of the Imashevskoye field is part of the non-licensed stock of subsurface resources.

Gazprom plans to wrap up OGK-2, OGK-6 merger Nov 1 http://www.interfax.co.uk/

14/09/11 3:48PM GMT

MOSCOW. Sept 14 (Russian Energy News) – Gazprom Energoholding LLC (GEH) will on November 1 merge the generating companies it controls – OJSC…

Gazprom Neft Finishes Construction of Housing Complex in Iraq

http://www.rigzone.com/news/article.asp?a_id=110936

OAO Gazprom Neft|Wednesday, September 14, 2011

Gazprom Neft has finished building the first phase of a housing complex at the Badra oil field, for which the company is the development operator. The permanent complex for workers involved in developing the oil field can accommodate around 100 people. The construction of infrastructure facilities will continue in years 2012-2013, when oil production is expected to begin in Badra. The camp capacity will be extended to 450 people.

The complex currently includes 80 comfortable homes for workers, as well as offices, a health clinic, utility rooms, sports facilities, and independent energy and water supply facilities.

The creation of the complex is the latest phase in preparations for the main stage of developing the oil field, where the drilling of the first wells is expected to be completed in early 2012.